Biglari (BH) 10-Q 3 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 01, 2019
Entity Registrant Name	Biglari Holdings Inc.
Entity Central Index Key	0001726173
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019
Class A Common Stock
Trading Symbol	BH.A
Entity Common Stock, Shares Outstanding		206,864
Class B Common Stock
Trading Symbol	BH
Entity Common Stock, Shares Outstanding		2,068,640

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 31,093	$ 48,557
Investments	40,718	33,860
Receivables	8,864	15,743
Inventories	6,544	7,537
Other current assets	5,374	9,236
Total current assets	92,593	114,933
Property and equipment	296,513	274,716
Goodwill and other intangible assets	67,806	68,166
Investment partnerships	591,520	557,480
Operating lease assets	66,201	0
Other assets	14,070	14,198
Total assets	1,128,703	1,029,493
Current liabilities:
Accounts payable and accrued expenses	121,500	117,265
Current portion of notes payable and other borrowings	7,030	5,720
Current portion of operating lease liabilities	12,023	0
Total current liabilities	140,553	122,985
Long-term notes payable and other borrowings	264,345	240,001
Operating lease liabilities	60,271	0
Deferred taxes	79,699	86,871
Other liabilities	2,481	9,181
Total liabilities	547,349	459,038
Shareholders' equity
Common stock	1,138	1,138
Additional paid-in capital	381,904	381,904
Retained earnings	575,477	564,160
Accumulated other comprehensive loss	(2,820)	(2,516)
Treasury stock, at cost	(374,345)	(374,231)
Biglari Holdings Inc. shareholders' equity	581,354	570,455
Total liabilities and shareholders' equity	$ 1,128,703	$ 1,029,493

CONSOLIDATED STATEMENTS OF EARN

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Revenues
Restaurant operations		$ 173,775	$ 193,934
Insurance premiums and other		7,207	6,547
Media advertising and other		877	1,744
Total revenues		181,859	202,225
Cost and expenses
Restaurant cost of sales		152,449	158,350
Insurance losses and underwriting expenses		5,625	5,928
Media cost of sales		948	1,517
Selling, general and administrative		34,891	32,650
Depreciation and amortization		5,471	4,946
Total cost and expenses		199,384	203,391
Other income (expenses)
Interest expense		(3,058)	(2,754)
Interest on finance leases and obligations		(2,009)	(2,186)
Investment partnership gains		34,154	3,495
Total other income (expenses)		29,087	(1,445)
Earnings (loss) before income taxes		11,562	(2,611)
Income tax expense (benefit)		1,744	(797)
Net earnings (loss)		$ 9,818	$ (1,814)
Earnings per share
Net earnings (loss) per equivalent Class A share	[1]	$ 28.36	$ (5.15)
[1]	Net earnings (loss) per equivalent Class B share outstanding are one-fifth of the equivalent Class A share or $5.67 for the first quarter of 2019 and $(1.03) for the first quarter of 2018.

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Consolidated Statements Of Comprehensive Income
Net earnings (loss)	$ 9,818	$ (1,814)
Other comprehensive income:
Reclassification to earnings	0	(73)
Applicable income taxes	0	15
Foreign currency translation	(304)	496
Other comprehensive income (loss), net	(304)	438
Total comprehensive income (loss)	$ 9,514	$ (1,376)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net earnings (loss)	$ 9,818	$ (1,814)
Adjustments to reconcile net earnings (loss) to operating cash flows:
Depreciation and amortization	5,471	4,946
Provision for deferred income taxes	(7,415)	380
Asset impairments and other non-cash expenses	2,139	239
(Gains) losses on disposal of assets	(185)	96
Investment partnership (gains) losses	(34,154)	(3,495)
Distributions from investment partnerships	0	5,200
Changes in receivables and inventories	7,842	3,861
Changes in other assets	53	1,121
Changes in accounts payable and accrued expenses	6,394	(19,979)
Net cash used in operating activities	(10,037)	(9,445)
Investing activities
Capital expenditures	(3,564)	(2,452)
Proceeds from property and equipment disposals	320	1,524
Distributions from investment partnerships	40,000	0
Purchases of limited partner interests	(40,000)	0
Purchases of investments	(23,510)	(18,340)
Redemptions of fixed maturity securities	21,300	17,492
Net cash used in investing activities	(5,454)	(1,776)
Financing activities
Payments on revolving credit facility	0	(39)
Principal payments on long-term debt	(550)	(550)
Principal payments on direct financing lease obligations	(1,418)	(1,400)
Proceeds from exercise of stock options	0	42
Net cash used in financing activities	(1,968)	(1,947)
Effect of exchange rate changes on cash	(5)	35
Decrease in cash, cash equivalents and restricted cash	(17,464)	(13,133)
Cash, cash equivalents and restricted cash at beginning of year	55,010	67,230
Cash, cash equivalents and restricted cash at end of first quarter	$ 37,546	$ 54,097

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance at Dec. 31, 2017	$ 1,071	$ 382,014	$ 565,504	$ (1,404)	$ (375,857)	$ 571,328
Net earnings (loss)			(1,814)			(1,814)
Adoption of accounting standards			90			90
Other comprehensive income, net				438		438
Adjustment to treasury stock for holdings in investment partnerships					(18,377)	(18,377)
Exercise of stock options		(39)			81	42
Balance at Mar. 31, 2018	1,071	381,975	563,780	(966)	(394,153)	551,707
Balance at Dec. 31, 2018	1,138	381,904	564,160	(2,516)	(374,231)	570,455
Net earnings (loss)			9,818			9,818
Adoption of accounting standards			1,499			1,499
Other comprehensive income, net				(304)		(304)
Adjustment to treasury stock for holdings in investment partnerships					(114)	(114)
Balance at Mar. 31, 2019	$ 1,138	$ 381,904	$ 575,477	$ (2,820)	$ (374,345)	$ 581,354

Note 1. Summary of Significant

Note 1. Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Note 1. Summary of Significant Accounting Policies	Description of Business The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018. Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major operating, investment, and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of March 31, 2019, Mr. Biglari’s beneficial ownership was approximately 56.9% of the Company’s outstanding Class A common stock and 54.3% of the Company’s outstanding Class B common stock. Issuance of Dual Class Common Stock On April 30, 2018, the Company implemented a dual class structure of its common stock. Since May 1, 2018, the shares of the Company’s Class A common stock have traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A” and the shares of the Company’s Class B common stock have traded on the NYSE under the ticker symbol “BH”. The consolidated financial position and results of operations of the Company have been included in the consolidated financial statements on a historical basis, except for earnings per share which is impacted by the issuance of the new common shares. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western Sizzlin”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”). Intercompany accounts and transactions have been eliminated in consolidation.

Note 2. New Accounting Standard

Note 2. New Accounting Standards	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Note 2. New Accounting Standards	In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases Leases (Topic 842): Targeted Improvements, The guidance permits the use of a modified retrospective approach, which requires an entity to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented. Alternatively, the guidance permits a “Comparatives Under 840 Option” that changes the date of initial application to the beginning of the period of adoption. We elected the Comparatives Under 840 Option in which we apply ASC 840 to all comparative periods, including disclosures, and recognize the effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings as of the effective date of January 1, 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carry forward the historical lease classification. In addition, we elected certain practical expedients and accounting policies, including an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We recognize those lease payments in the consolidated statements of earnings on a straight-line basis over the lease term. The new lease standard was applied on January 1, 2019, and includes a cumulative-effect adjustment of $1,499 to retained earnings in the period of adoption. All periods prior to January 1, 2019 were presented in accordance with the previous ASC Topic 840, Leases, and no retrospective adjustments were made to the comparative periods presented. Adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease assets of $63,261 and operating lease liabilities of $69,671 as of January 1, 2019 and due to the recording of finance lease assets of $11,638 and finance lease liabilities of $11,784. The difference between the asset and the liability amounts primarily relates to previously recorded deferred/prepaid rent. The standard had a material impact on our consolidated balance sheets, but did not have a material impact on our consolidated statements of earnings and statements of cash flow. The most significant impact was the recognition of right-of-use assets and lease liabilities for operating leases.

Note 3. Earnings Per Share

Note 3. Earnings Per Share	3 Months Ended
	Mar. 31, 2019
Earnings per share
Note 3. Earnings Per Share	Earnings per share of common stock is based on the weighted average number of shares outstanding during the year. The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P. and The Lion Fund II, L.P. (collectively, the “investment partnerships”) — based on our proportional ownership during this period — are considered treasury stock on the consolidated balance sheet and thereby deemed not to be included in the calculation of weighted average common shares outstanding. However, these shares are legally outstanding. As a result of the implementation of the dual class structure on April 30, 2018, the Company has outstanding Class A common stock and Class B common stock. The treasury shares outstanding on April 30, 2018 were retired. The following table presents shares authorized, issued and outstanding on March 31, 2019 and December 31, 2018. March 31, 2019 December 31, 2018 Class A Class B Class A Class B Common stock authorized 500,000 10,000,000 500,000 10,000,000 Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640 The issuance of dual class common stock on April 30, 2018 is applied on a retrospective basis for the calculation of earnings per share for the first quarter of 2018. The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of March 31, 2019 and December 31, 2018. There are no dilutive securities outstanding. For financial reporting purposes, the proportional ownership of the Company’s common stock owned by the investment partnerships is excluded in the earnings per share calculation. After giving effect for the investment partnerships’ proportional ownership of common stock, the equivalent Class A weighted average common shares during the first quarters of 2019 and 2018 were 346,223 and 352,191, respectively. Each Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5 th

Note 4. Investments

Note 4. Investments	3 Months Ended
	Mar. 31, 2019
Schedule of Investments [Abstract]
Note 4. Investments	Available for sale investments were $36,255 and $33,860 as of March 31, 2019 and December 31, 2018, respectively. Investments in equity securities and a related derivative position of $4,463 are included in investments as of March 31, 2019 and in other current assets as of December 31, 2018. The investments are recorded at fair value.

Note 5. Investment Partnerships

Note 5. Investment Partnerships	3 Months Ended
	Mar. 31, 2019
Note 5. Investment Partnerships
Note 5. Investment Partnerships	The Company reports on the limited partnership interests in investment partnerships under the equity method of accounting. We record our proportional share of equity in the investment partnerships but exclude Company common stock held by said partnerships. The Company’s pro-rata share of its common stock held by the investment partnerships is recorded as treasury stock even though they are legally outstanding. The Company records gains/losses from investment partnerships (inclusive of the investment partnerships’ unrealized gains and losses on their securities) in the consolidated statements of earnings based on our carrying value of these partnerships. The fair value is calculated net of the general partner’s accrued incentive fees. Gains and losses on Company common stock included in the earnings of these partnerships are eliminated because they are recorded as treasury stock. Biglari Capital Corp. (“Biglari Capital”) is the general partner of the investment partnerships and is an entity solely owned by Mr. Biglari. The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest is presented below. Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains 73,096 38,942 34,154 Increase in proportionate share of Company stock held 114 (114 ) Partnership interest at March 31, 2019 $ 788,198 $ 196,678 $ 591,520 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (1,850 ) (5,345 ) 3,495 Contributions (net of distributions) to investment partnerships (5,200 ) (5,200 ) Increase in proportionate share of Company stock held 18,377 (18,377 ) Partnership interest at March 31, 2018 $ 918,229 $ 372,290 $ 545,939 The carrying value of the investment partnerships net of deferred taxes is presented below. March 31, December 31, 2018 Carrying value of investment partnerships $ 591,520 $ 557,480 Deferred tax liability related to investment partnerships (86,888 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 504,632 $ 464,777 The Company’s proportionate share of Company stock held by investment partnerships at cost is $374,345 and $374,231 at March 31, 2019 and December 31, 2018, respectively, and is recorded as treasury stock. The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value is according to our proportional ownership interest of the fair value of investments held by the investment partnerships. The fair value measurement is classified as level 3 within the fair value hierarchy. Gains (losses) from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below. First Quarter 2019 2018 Gains on investment partnership $ 34,154 $ 3,495 Tax expense 7,917 420 Contribution to net earnings $ 26,237 $ 3,075 On December 31 of each year, the general partner of the investment partnerships will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above a hurdle rate of 6% over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. The Company did not accrue an incentive fee during the first quarters of 2019 or 2018. Our investments in these partnerships are committed on a rolling 5-year basis. Summarized financial information for The Lion Fund, L.P. and The Lion Fund II, L.P. is presented below. Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of March 31, 2019 $ 126,453 $ 925,178 Total liabilities as of March 31, 2019 $ 230 $ 161,096 Revenue for the first quarter ended March 31, 2019 $ 19,764 $ 67,550 Earnings for the first quarter ended March 31, 2019 $ 19,748 $ 65,102 Biglari Holdings’ ownership interest as of March 31, 2019 66.1 % 92.2 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the first quarter ended March 31, 2018 $ (4,135 ) $ 3,069 Earnings (loss) for the first quarter ended March 31, 2018 $ (4,151 ) $ 922 Biglari Holdings’ ownership interest as of March 31, 2018 65.1 % 92.3 % Revenue in the above summarized financial information of the investment partnerships includes investment income and unrealized gains and losses on investments. The investments held by the investment partnerships are largely concentrated in the common stock of one investee, Cracker Barrel Old Country Store, Inc. Transactions with The Lion Fund II, L.P. were as follows. First Quarter 2019 2018 Contributions $ 40,000 $ — Distributions (40,000 ) (5,200 ) $ — $ (5,200 )

Note 6. Property and Equipment

Note 6. Property and Equipment	3 Months Ended
	Mar. 31, 2019
Property, Plant and Equipment [Abstract]
Note 6. Property and Equipment	Property and equipment is composed of the following. March 31, 2019 December 31, 2018 Land $ 151,828 $ 146,015 Buildings 143,877 142,658 Land and leasehold improvements 162,848 158,938 Equipment 199,455 201,738 Construction in progress 1,749 1,703 659,757 651,052 Less accumulated depreciation and amortization (363,244 ) (376,336 ) Property and equipment, net $ 296,513 $ 274,716 The Company recorded an impairment to long-lived assets of $1,900 in selling, general and administrative expenses in the first quarter of 2019 and no impairment to long-lived assets in the first quarter of 2018. The fair value of the long-lived assets was determined based on Level 2 inputs using a discounted cash flow model and quoted prices for the properties. The fair value of the assets impaired was not material for any of the applicable periods.

Note 7. Goodwill and Other Inta

Note 7. Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Note 7. Goodwill and Other Intangible Assets	Goodwill Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions. A reconciliation of the change in the carrying value of goodwill is as follows. Restaurants Other Total Goodwill at December 31, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during the first quarter of 2019 (12 ) — (12 ) Goodwill at March 31, 2019 $ 28,127 $ 11,913 $ 40,040 We are required to assess goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Goodwill impairment occurs when the estimated fair value of goodwill is less than its carrying value. The valuation methodology and underlying financial information included in our determination of fair value require significant management judgments. We use both market and income approaches to derive fair value. The judgments in these two approaches include, but are not limited to, comparable market multiples, long-term projections of future financial performance, and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results. No impairment charges for goodwill were recorded in the first quarters of 2019 or 2018. Other Intangible Assets Other intangible assets are composed of the following. March 31, 2019 December 31, 2018 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (4,779 ) $ 531 $ 5,310 $ (4,647 ) $ 663 Other 810 (779 ) 31 810 (774 ) 36 Total 6,120 (5,558 ) 562 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,328 — 11,328 11,539 — 11,539 Total intangible assets $ 33,324 $ (5,558 ) $ 27,766 $ 33,535 $ (5,421 ) $ 28,114 Intangible assets subject to amortization consist of franchise agreements connected with the purchase of Western Sizzlin as well as rights to favorable leases related to prior acquisitions. These intangible assets are being amortized over their estimated weighted average of useful lives ranging from eight to twelve years. Amortization expense for the first quarters of 2019 and 2018 was $137 and $140, respectively. The Company’s intangible assets with definite lives will fully amortize in 2020. Total annual amortization expense for 2019 is expected to be approximately $500. Intangible assets with indefinite lives consist of trade names, franchise rights as well as lease rights.

Note 8. Restaurant Operations R

Note 8. Restaurant Operations Revenues	3 Months Ended
	Mar. 31, 2019
Note 8. Restaurant Operations Revenues
Note 8. Restaurant Operations Revenues	Restaurant operations revenues were as follows. First Quarter 2019 2018 Net sales $ 165,631 $ 185,571 Franchise royalties and fees 6,912 7,102 Other 1,232 1,261 $ 173,775 $ 193,934 Net sales Net sales were composed of retail sales of food through Company-owned stores. Company-owned store revenues are recognized when control of the food items are transferred to our customers at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of income as revenue. Franchise royalties and fees Franchise royalties and fees are composed of royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalty revenues are based on a percentage of franchise sales and are recognized when the retail food items are purchased by franchise customers. Initial franchise fees received are deferred when amounts are received and recognized as revenue on a straight-line basis over the term of each respective franchise agreement, which is typically 20 years. Our advertising arrangements with franchisees are reported in franchise royalties and fees. Gift card revenue Restaurant operations sells gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimates breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage.

Note 9. Accounts Payable and Ac

Note 9. Accounts Payable and Accrued Expenses	3 Months Ended
	Mar. 31, 2019
Payables and Accruals [Abstract]
Note 9. Accounts Payable and Accrued Expenses	Accounts payable and accrued expenses include the following. March 31, December 31, Accounts payable $ 38,791 $ 41,967 Gift card liability 18,242 22,685 Salaries, wages, and vacation 14,776 13,107 Taxes payable 19,145 11,214 Workers' compensation and other self-insurance accruals 7,805 8,394 Deferred revenue 14,788 11,681 Other 7,953 8,217 Accounts payable and accrued expenses $ 121,500 $ 117,265

Note 10. Notes Payable and Othe

Note 10. Notes Payable and Other Borrowings	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Note 10. Notes Payable and Other Borrowings	Notes payable and other borrowings include the following. Current portion of notes payable and other borrowings March 31, December 31, 2018 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (338) (334) Unamortized debt issuance costs (615) (609) Finance obligations 3,748 4,463 Finance lease liabilities 2,035 - Total current portion of notes payable and other borrowings $ 7,030 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 180,948 $ 181,498 Unamortized original issue discount (352) (438) Unamortized debt issuance costs (640) (796) Finance obligations 73,945 59,737 Finance lease liabilities 10,444 - Total long-term notes payable and other borrowings $ 264,345 $ 240,001 Steak n Shake Credit Facility On March 19, 2014, Steak n Shake and its subsidiaries entered into a credit agreement which provided for a senior secured term loan facility in an aggregate principal amount of $220,000. The term loan is scheduled to mature on March 19, 2021. It amortizes at an annual rate of 1.0% in equal quarterly installments, beginning June 30, 2014, at 0.25% of the original principal amount of the term loan, subject to mandatory prepayments from excess cash flow, asset sales and other events described in the credit agreement. The balance will be due at maturity. Steak n Shake has the right to request an incremental term loan facility from participating lenders and/or eligible assignees at any time, up to an aggregate total principal amount not to exceed $70,000 if certain customary conditions within the credit agreement are met. Interest on the term loan is based on a Eurodollar rate plus an applicable margin of 3.75% or on the prime rate plus an applicable margin of 2.75%. The interest rate on the term loan was 6.25% as of March 31, 2019. The credit agreement includes customary affirmative and negative covenants and events of default. Steak n Shake’s credit facility contains restrictions on its ability to pay dividends to Biglari Holdings. The term loan is secured by first priority security interests in substantially all the assets of Steak n Shake. Disruptions in debt capital markets that restrict access to funding when needed could adversely affect the results of operations, liquidity and capital resources of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility. As of March 31, 2019, $183,148 was outstanding under the term loan. Western Sizzlin Revolver As of March 31, 2019, Western Sizzlin had no debt outstanding under the revolver.

Note 11. Leases

Note 11. Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Note 11. Leases	The Company adopted ASC 842 on January 1, 2019, as discussed in Note 2. Under ASC 842, leases are generally classified as either operating right-of-use assets or finance lease assets. Right-of-use assets represent the Company's right to use an underlying asset during the lease term. Right-of-use liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and liabilities are calculated by using the net present value of fixed lease payments over the lease term. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company applied an incremental borrowing rate to determine the present value of lease payments. Finance lease agreements include an interest rate that is used to determine the present value of future lease payments. A significant portion of our operating and finance lease portfolio includes restaurant locations. The Company’s operating leases with a term of 12 months or greater were recognized as operating right-of-use assets and liabilities and recorded as operating lease assets and operating lease liabilities. Historical capital leases and certain historical build-to-suit leases were reclassified from obligations under leases to finance lease assets and liabilities. Finance lease assets are recorded in property and equipment and finance lease liabilities are recorded in notes payable and other borrowings. Historical sale-and-leaseback transactions in which the Company is deemed to have a continued interest in the leased asset are recorded as property and equipment and as finance obligations. Finance obligations are recorded in notes payable and other borrowings. Operating lease expense and finance lease depreciation expense are recognized on a straight line basis over the lease term. Total lease cost consists of the following. First Quarter 2019 Finance lease costs: Amortization of right-of-use assets $ 492 Interest on lease liabilities 207 Operating lease costs * 3,857 Total lease costs $ 4,556 *Includes short term leases, variable lease costs and sublease income, which are immaterial. Supplemental cash flow information related to leases is as follows. First Quarter 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 402 Operating cash flows from finance leases $ 207 Operating cash flows from operating leases $ 4,191 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 5,570 Supplemental balance sheet information related to leases is as follows. March 31, 2019 Finance leases: Property and equipment, net $ 12,243 Current portion of notes payable and other borrowings $ 2,035 Long-term notes payable and other borrowings 10,444 Total finance lease liablities $ 12,479 Weighted-average lease terms and discount rates are as follows. March 31, 2019 Weighted-average remaining lease terms: Finance leases 8.8 years Operating leases 7.0 years Weighted-average discount rates: Finance leases 7.1 % Operating leases 6.9 % Maturities of lease liabilities as of March 31, 2019 are as follows. Year Operating Leases Finance Leases 2019 $ 12,584 $ 1,827 2020 15,541 2,377 2021 14,424 2,358 2022 12,172 1,869 2023 10,321 1,669 After 2023 27,146 6,800 Total lease payments 92,188 16,900 Less interest 19,894 4,421 Total lease liabilities $ 72,294 $ 12,479 On December 31, 2018, obligations under non-cancelable finance obligations, capital leases, and operating leases (excluding real estate taxes, insurance and maintenance costs) require the following minimum future rental payments. Operating Leases Year Finance Obligations Capital Leases Total Operating Property Non-Operating Property 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737

Note 12. Accumulated Other Comp

Note 12. Accumulated Other Comprehensive Income	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Note 12. Accumulated Other Comprehensive Income	During the first quarters of 2019 and 2018, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. Three months ended March 31, 2019 Three months ended March 31, 2018 Foreign currency translation adjustments Investment gain (loss) Accumulated other comprehensive income (loss) Foreign currency translation adjustments Investment gain (loss) Accumulated other comprehensive income (loss) Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — — — — (58 ) (58 ) Foreign currency translation (304 ) (304 ) 496 — 496 Ending Balance $ (2,820 ) $ — $ (2,820 ) $ (966 ) $ — $ (966 ) Reclassifications made from accumulated other comprehensive income to earnings during the first quarter of 2018 were $58; there were no reclassifications from accumulated other comprehensive income to earnings during the first quarter of 2019.

Note 13. Income Taxes

Note 13. Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Note 13. Income Taxes	In determining the quarterly provision for income taxes, the Company used a discrete effective tax rate method based on statutory tax rates for the first quarter of 2019 and an estimated annual effective tax rate for the first quarter of 2018. Our periodic effective income tax rate is affected by the relative mix of pre-tax earnings or losses and underlying income tax rates applicable to the various taxing jurisdictions. Income tax expense for the first quarter of 2019 was $1,744 compared to an income tax benefit of $797 for the first quarter of 2018. The variance in income taxes between 2019 and 2018 is attributable to taxes on income generated by the investment partnerships. As of March 31, 2019 and December 31, 2018, we had approximately $347 and $341, respectively, of unrecognized tax benefits, which are included in other liabilities in the consolidated balance sheets.

Note 14. Commitments and Contin

Note 14. Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Note 14. Commitments and Contingencies	We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements is not likely to have a material effect on our results of operations, financial position or cash flow. On January 29, 2018, a shareholder of the Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari as a result of the dual class structure. On March 26, 2018, a shareholder of the Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. This shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors. This shareholder sought to enjoin the shareholder vote on April 26, 2018 to approve the dual class structure. On April 16, 2018, the shareholders withdrew their motions to enjoin the shareholder vote on April 26, 2018. On May 17, 2018, the shareholders who filed the January 29, 2018 complaint and the March 26, 2018 complaint filed a new, consolidated complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholders generally allege claims of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari arising out of the dual class structure. The shareholders seek, for themselves and on behalf of all other shareholders as a class, a declaration that the defendants breached their duty to the shareholders and the class, and to recover unspecified damages, pre-judgment and post-judgment interest, and an award of their attorneys’ fees and other costs. On December 14, 2018, the judge of the Superior Court of Hamilton County, Indiana issued an order granting the Company’s motion to dismiss the shareholders’ lawsuits. On January 11, 2019, the shareholders filed an appeal of the judge’s order dismissing the lawsuits. On September 8, 2014, two former restaurant manager employees filed a purported class action lawsuit against Steak n Shake in the United States District Court for the Eastern District of Missouri (Drake v. Steak n Shake). The plaintiffs generally allege claims that Steak n Shake improperly classified its managerial employees as exempt and failed to pay overtime. On February 28, 2019, a jury returned a verdict in this case against Steak n Shake. The trial is currently in post-trial proceedings. Steak n Shake plans to appeal the verdict and vigorously defend our position in this action. On January 30, 2017, a former restaurant manager employee filed a purported class action lawsuit against Steak n Shake in the United States District Court for the Central District of Illinois (Clendenen v. Steak n Shake). On May 12, 2017 the case was transferred to the United States District Court for the Eastern District of Missouri. The plaintiff generally alleges claims that Steak n Shake improperly classified its managerial employees as exempt and failed to pay overtime. The case is currently conditionally certified as a national class and therefore includes all Steak n Shake managers not previously included in the Drake v. Steak n Shake lawsuit. The Company believes the claims in each case are without merit and intends to defend these cases vigorously.

Note 15. Fair Value of Financia

Note 15. Fair Value of Financial Assets	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Note 15. Fair Value of Financial Assets	The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below. · Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. · Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector. · Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheet: Cash equivalents: Equity securities: Bonds: Non-qualified deferred compensation plan investments: Derivative instruments: As of March 31, 2019 and December 31, 2018, the fair values of financial assets were as follows. March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 14,319 $ — $ — $ 14,319 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods 1,188 4,100 — 5,288 1,708 4,100 — 5,808 Bonds 34,785 — — 34,785 32,404 — — 32,404 Options on equity securities — 3,275 — 3,275 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,135 — — 2,135 2,149 — — 2,149 Total assets at fair value $ 52,427 $ 7,375 $ — $ 59,802 $ 57,709 $ 6,855 $ — $ 64,564 There were no changes in our valuation techniques used to measure fair values on a recurring basis.

Note 16. Related Party Transact

Note 16. Related Party Transactions	3 Months Ended
	Mar. 31, 2019
Related Party Transactions [Abstract]
Note 16. Related Party Transactions	Services Agreement During 2017, the Company entered into a services agreement with Biglari Enterprises LLC and Biglari Capital (collectively, the “Biglari Entities”) under which the Biglari Entities provide business and administrative related services to the Company. The Biglari Entities are owned by Mr. Biglari. The services agreement has a five-year term, effective on October 1, 2017. The fixed fee is $700 per month for the first year with adjustments in years two through five. The Company paid Biglari Enterprises $8,400 in service fees during 2018. The monthly fee will remain at $700 during 2019. The services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital by the Company. Incentive Agreement Amendment The Incentive Agreement was amended on March 26, 2019 to remove the $10,000 annual limitation on Mr. Biglari’s incentive compensation, as well as the requirement of Mr. Biglari to use 30% of his incentive payments to purchase shares of the Company. In connection with the amendment, the change of control and severance provisions contained in the Incentive Agreement were eliminated and the License Agreement was terminated. The amendment is effective in 2019. License Agreement During 2013, the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The license under the License Agreement was provided on a royalty-free basis in the absence of specified extraordinary events. The Company and its subsidiaries paid no royalties to Mr. Biglari under the License Agreement during its term. The License Agreement was terminated by the Company on March 26, 2019.

Note 17. Business Segment Repor

Note 17. Business Segment Reporting	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Note 17. Business Segment Reporting	Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations include Steak n Shake and Western Sizzlin. The Company also reports segment information for First Guard and Maxim. Other business activities not specifically identified with reportable business segments are presented in “other” within total operating businesses. We report our earnings from investment partnerships separate from our corporate expenses. We assess and measure segment operating results based on segment earnings as disclosed below. Segment earnings from operations are neither necessarily indicative of cash available to fund cash requirements, nor synonymous with cash flow from operations. The tabular information that follows shows data of our reportable segments reconciled to amounts reflected in the consolidated financial statements. Revenue for the first quarters of 2019 and 2018 were as follows. Revenue First Quarter 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ 170,111 $ 190,293 Western Sizzlin 3,664 3,641 Total Restaurant Operations 173,775 193,934 First Guard 7,207 6,547 Maxim 877 1,744 $ 181,859 $ 202,225 Earnings (losses) before income taxes for the first quarters of 2019 and 2018 were as follows. Earnings (Losses) Before Income Taxes First Quarter 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ (18,858 ) $ (992 ) Western Sizzlin 383 374 Total Restaurant Operations (18,475 ) (618 ) First Guard 1,544 510 Maxim (112 ) (217 ) Other 139 139 Total Operating Businesses (16,904 ) (186 ) Corporate and Investments: Corporate (2,630 ) (3,166 ) Investment partnership gains 34,154 3,495 Total Corporate and Investments 31,524 329 Interest expense on notes payable and other borrowings (3,058 ) (2,754 ) $ 11,562 $ (2,611 )

Note 1. Summary of Significan_2

Note 1. Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Description of Business	The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments. The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018. Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major operating, investment, and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of March 31, 2019, Mr. Biglari’s beneficial ownership was approximately 56.9% of the Company’s outstanding Class A common stock and 54.3% of the Company’s outstanding Class B common stock.
Issuance of Dual Class Common Stock	On April 30, 2018, the Company implemented a dual class structure of its common stock. Since May 1, 2018, the shares of the Company’s Class A common stock have traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A” and the shares of the Company’s Class B common stock have traded on the NYSE under the ticker symbol “BH”. The consolidated financial position and results of operations of the Company have been included in the consolidated financial statements on a historical basis, except for earnings per share which is impacted by the issuance of the new common shares.
Principles of Consolidation	The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western Sizzlin”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”). Intercompany accounts and transactions have been eliminated in consolidation.

Note 3. Earnings Per Share (Tab

Note 3. Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings per share
Summary of outstanding shares	March 31, 2019 December 31, 2018 Class A Class B Class A Class B Common stock authorized 500,000 10,000,000 500,000 10,000,000 Common stock issued and outstanding 206,864 2,068,640 206,864 2,068,640

Note 5. Investment Partnershi_2

Note 5. Investment Partnerships (Tables)	3 Months Ended
	Mar. 31, 2019
Note 5. Investment Partnerships
Fair value and carrying value of our partnership interest	Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains 73,096 38,942 34,154 Increase in proportionate share of Company stock held 114 (114 ) Partnership interest at March 31, 2019 $ 788,198 $ 196,678 $ 591,520 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (1,850 ) (5,345 ) 3,495 Contributions (net of distributions) to investment partnerships (5,200 ) (5,200 ) Increase in proportionate share of Company stock held 18,377 (18,377 ) Partnership interest at March 31, 2018 $ 918,229 $ 372,290 $ 545,939
Carrying value of investment partnerships net of deferred taxes	March 31, December 31, 2018 Carrying value of investment partnerships $ 591,520 $ 557,480 Deferred tax liability related to investment partnerships (86,888 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 504,632 $ 464,777
Gains (loss) from investment partnerships	First Quarter 2019 2018 Gains on investment partnership $ 34,154 $ 3,495 Tax expense 7,917 420 Contribution to net earnings $ 26,237 $ 3,075
Summarized financial information for equity in investment partnerships	Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of March 31, 2019 $ 126,453 $ 925,178 Total liabilities as of March 31, 2019 $ 230 $ 161,096 Revenue for the first quarter ended March 31, 2019 $ 19,764 $ 67,550 Earnings for the first quarter ended March 31, 2019 $ 19,748 $ 65,102 Biglari Holdings’ ownership interest as of March 31, 2019 66.1 % 92.2 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the first quarter ended March 31, 2018 $ (4,135 ) $ 3,069 Earnings (loss) for the first quarter ended March 31, 2018 $ (4,151 ) $ 922 Biglari Holdings’ ownership interest as of March 31, 2018 65.1 % 92.3 %
Contributions to and distributions from the investment partnerships	First Quarter 2019 2018 Contributions $ 40,000 $ — Distributions (40,000 ) (5,200 ) $ — $ (5,200 )

Note 6. Property and Equipment

Note 6. Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2019
Property, Plant and Equipment [Abstract]
Schedule of property, plant and equipment	March 31, December 31, 2018 Land $ 151,828 $ 146,015 Buildings 143,877 142,658 Land and leasehold improvements 162,848 158,938 Equipment 199,455 201,738 Construction in progress 1,749 1,703 659,757 651,052 Less accumulated depreciation and amortization (363,244 ) (376,336 ) Property and equipment, net $ 296,513 $ 274,716

Note 7. Goodwill and Other In_2

Note 7. Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of goodwill	Restaurants Other Total Goodwill at December 31, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during the first quarter of 2019 (12 ) — (12 ) Goodwill at March 31, 2019 $ 28,127 $ 11,913 $ 40,040
Schedule of other intangible assets	March 31, 2019 December 31, 2018 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (4,779 ) $ 531 $ 5,310 $ (4,647 ) $ 663 Other 810 (779 ) 31 810 (774 ) 36 Total 6,120 (5,558 ) 562 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,328 — 11,328 11,539 — 11,539 Total intangible assets $ 33,324 $ (5,558 ) $ 27,766 $ 33,535 $ (5,421 ) $ 28,114

Note 8. Restaurant Operations_2

Note 8. Restaurant Operations Revenues (Tables)	3 Months Ended
	Mar. 31, 2019
Note 8. Restaurant Operations Revenues
Summary of restaurant operations revenues	First Quarter 2019 2018 Net sales $ 165,631 $ 185,571 Franchise royalties and fees 6,912 7,102 Other 1,232 1,261 $ 173,775 $ 193,934

Note 9. Accounts Payable And _2

Note 9. Accounts Payable And Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2019
Note 9. Accounts Payable And Accrued Expenses
Schedule of accounts payable and accrued expenses	March 31, December 31, Accounts payable $ 38,791 $ 41,967 Gift card liability 18,242 22,685 Salaries, wages, and vacation 14,776 13,107 Taxes payable 19,145 11,214 Workers' compensation and other self-insurance accruals 7,805 8,394 Deferred revenue 14,788 11,681 Other 7,953 8,217 Accounts payable and accrued expenses $ 121,500 $ 117,265

Note 10. Notes Payable and Ot_2

Note 10. Notes Payable and Other Borrowings (Tables)	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Schedule of notes payable and other borrowings	Current portion of notes payable and other borrowings March 31, December 31, 2018 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (338) (334) Unamortized debt issuance costs (615) (609) Finance obligations 3,748 4,463 Finance lease liabilities 2,035 - Total current portion of notes payable and other borrowings $ 7,030 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 180,948 $ 181,498 Unamortized original issue discount (352) (438) Unamortized debt issuance costs (640) (796) Finance obligations 73,945 59,737 Finance lease liabilities 10,444 - Total long-term notes payable and other borrowings $ 264,345 $ 240,001

Note 11. Leases (Tables)

Note 11. Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Schedule of lease cost	First Quarter Finance lease costs: Amortization of right-of-use assets $ 492 Interest on lease liabilities 207 Operating lease costs * 3,857 Total lease costs $ 4,556 *Includes short term leases, variable lease costs and sublease income, which are immaterial.
Schedule of supplemental cash flow information related to leases	First Quarter 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 402 Operating cash flows from finance leases $ 207 Operating cash flows from operating leases $ 4,191 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 5,570
Schedule of supplemental balance sheet information related to leases	March 31, Finance leases: Property and equipment, net $ 12,243 Current portion of notes payable and other borrowings $ 2,035 Long-term notes payable and other borrowings 10,444 Total finance lease liablities $ 12,479
Schedule of weighted-average lease terms and discount rates	March 31, Weighted-average remaining lease terms: Finance leases 8.8 years Operating leases 7.0 years Weighted-average discount rates: Finance leases 7.1 % Operating leases 6.9 %
Schedule of maturities of lease liabilities	Year Operating Leases Finance 2019 $ 12,584 $ 1,827 2020 15,541 2,377 2021 14,424 2,358 2022 12,172 1,869 2023 10,321 1,669 After 2023 27,146 6,800 Total lease payments 92,188 16,900 Less interest 19,894 4,421 Total lease liabilities $ 72,294 $ 12,479
Schedule of future minimum lease payments	Operating Leases Year Finance Obligations Capital Leases Total Operating Property Non-Operating Property 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737

Note 12. Accumulated Other Co_2

Note 12. Accumulated Other Comprehensive Income (Tables)	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Component of accumulated other comprehensive income	Three months ended March 31, 2019 Three months ended March 31, 2018 Foreign currency translation adjustments Investment gain (loss) Accumulated other comprehensive income (loss) Foreign currency translation adjustments Investment gain (loss) Accumulated other comprehensive income (loss) Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — — — — (58 ) (58 ) Foreign currency translation (304 ) (304 ) 496 — 496 Ending Balance $ (2,820 ) $ — $ (2,820 ) $ (966 ) $ — $ (966 )

Note 15. Fair Value of Financ_2

Note 15. Fair Value of Financial Assets (Tables)	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Schedule of fair value assets	March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 14,319 $ — $ — $ 14,319 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods 1,188 4,100 — 5,288 1,708 4,100 — 5,808 Bonds 34,785 — — 34,785 32,404 — — 32,404 Options on equity securities — 3,275 — 3,275 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,135 — — 2,135 2,149 — — 2,149 Total assets at fair value $ 52,427 $ 7,375 $ — $ 59,802 $ 57,709 $ 6,855 $ — $ 64,564

Note 17. Business Segment Rep_2

Note 17. Business Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Schedule of revenue by segment	Revenue First Quarter 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ 170,111 $ 190,293 Western Sizzlin 3,664 3,641 Total Restaurant Operations 173,775 193,934 First Guard 7,207 6,547 Maxim 877 1,744 $ 181,859 $ 202,225
Schedule of earnings (losses) before income taxes by segment	Earnings (Losses) Before Income Taxes First Quarter 2019 2018 Operating Businesses: Restaurant Operations: Steak n Shake $ (18,858 ) $ (992 ) Western Sizzlin 383 374 Total Restaurant Operations (18,475 ) (618 ) First Guard 1,544 510 Maxim (112 ) (217 ) Other 139 139 Total Operating Businesses (16,904 ) (186 ) Corporate and Investments: Corporate (2,630 ) (3,166 ) Investment partnership gains 34,154 3,495 Total Corporate and Investments 31,524 329 Interest expense on notes payable and other borrowings (3,058 ) (2,754 ) $ 11,562 $ (2,611 )

Note 3. Earnings Per Share (Det

Note 3. Earnings Per Share (Details) - shares	Mar. 31, 2019	Dec. 31, 2018
Class A Common Stock
Common stock authorized	500,000	500,000
Common stock issued	206,864	206,864
Common stock outstanding	206,864	206,864
Class B Common Stock
Common stock authorized	10,000,000	10,000,000
Common stock issued	2,068,640	2,068,640
Common stock outstanding	2,068,640	2,068,640

Note 4. Investments (Details Na

Note 4. Investments (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Investments [Abstract]
Available for sale investments	$ 36,255	$ 33,860
Investments in equity securities and a related derivative position	$ 4,463	$ 4,463

Note 5. Investment Partnershi_3

Note 5. Investment Partnerships (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investment partnership gains (losses)	$ 34,154	$ 3,495
Fair Value
Partnership interest, beginning	715,102	925,279
Investment partnership gains (losses)	73,096	(1,850)
Contributions (net of distributions) to investment partnerships		(5,200)
Increase in proportionate share of Company stock held	0	0
Partnership interest, ending	788,198	918,229
Company common Stock
Partnership interest, beginning	157,622	359,258
Investment partnership gains (losses)	38,942	(5,345)
Contributions (net of distributions) to investment partnerships		0
Increase in proportionate share of Company stock held	114	18,377
Partnership interest, ending	196,678	372,290
Carrying Value
Partnership interest, beginning	557,480	566,021
Investment partnership gains (losses)	34,154	3,495
Contributions (net of distributions) to investment partnerships		(5,200)
Increase in proportionate share of Company stock held	(114)	(18,377)
Partnership interest, ending	$ 591,520	$ 545,939

Note 5. Investment Partnershi_4

Note 5. Investment Partnerships (Details 1) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Note 5. Investment Partnerships
Carrying value of investment partnerships	$ 591,520	$ 557,480
Deferred tax liability related to investment partnerships	(86,888)	(92,703)
Carrying value of investment partnerships net of deferred taxes	$ 504,632	$ 464,777

Note 5. Investment Partnershi_5

Note 5. Investment Partnerships (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Note 5.Investment Partnerships Details 2Abstract
Gains on investment partnership	$ 34,154	$ 3,495
Tax expense	7,917	420
Contributions to net earnings	$ 26,237	$ 3,075

Note 5. Investment Partnershi_6

Note 5. Investment Partnerships (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Lion Fund
Total assets	$ 126,453		$ 107,207
Total liabilities	230		447
Revenue for the first quarter	19,764	$ (4,135)
Earnings (loss) for the first quarter	$ 19,748	$ (4,151)
Biglari Holdings' ownership interest	66.10%	65.10%
Lion Fund II
Total assets	$ 925,178		901,750
Total liabilities	161,096		$ 202,770
Revenue for the first quarter	67,550	$ 3,069
Earnings (loss) for the first quarter	$ 65,102	$ 922
Biglari Holdings' ownership interest	92.20%	92.30%

Note 5. Investment Partnershi_7

Note 5. Investment Partnerships (Details 4) - Lion Fund II - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Contributions	$ 40,000	$ 0
Distributions	(40,000)	(5,200)
Total contributions and distributions	$ 0	$ (5,200)

Note 5. Investment Partnershi_8

Note 5. Investment Partnerships (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Note 5. Investment Partnerships
Proportionate share of Company stock held by investment partnerships at cost	$ 374,345	$ 374,231

Note 6. Property and Equipmen_2

Note 6. Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Land	$ 151,828	$ 146,015
Buildings	143,877	142,658
Land and leasehold improvements	162,848	158,938
Equipment	199,455	201,738
Construction in progress	1,749	1,703
Property and equipment, gross	659,757	651,052
Less accumulated depreciation and amortization	(363,244)	(376,336)
Property and equipment, net	$ 296,513	$ 274,716

Note 7. Goodwill and Other In_3

Note 7. Goodwill and Other Intangible Assets (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Goodwill, beginning	$ 40,052
Change in foreign exchange rates during first quarter of 2019	(12)
Goodwill, ending	40,040
Restaurant
Goodwill, beginning	28,139
Change in foreign exchange rates during first quarter of 2019	(12)
Goodwill, ending	28,127
Other
Goodwill, beginning	11,913
Change in foreign exchange rates during first quarter of 2019	0
Goodwill, ending	$ 11,913

Note 7. Goodwill and Other In_4

Note 7. Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Gross carrying amount	$ 33,324	$ 33,535
Accumulated amortization	(5,558)	(5,421)
Total intangible assets	27,766	28,114
Finite-Lived Intangible Assets [Member]
Gross carrying amount	6,120	6,120
Accumulated amortization	(5,558)	(5,421)
Total intangible assets	562	699
Franchise Agreement | Finite-Lived Intangible Assets [Member]
Gross carrying amount	5,310	5,310
Accumulated amortization	(4,779)	(4,647)
Total intangible assets	531	663
Other | Finite-Lived Intangible Assets [Member]
Gross carrying amount	810	810
Accumulated amortization	(779)	(774)
Total intangible assets	31	36
Other | Indefinite-lived Intangible Assets [Member]
Gross carrying amount	11,328	11,539
Accumulated amortization	0	0
Total intangible assets	11,328	11,539
Trade names [Member] | Indefinite-lived Intangible Assets [Member]
Gross carrying amount	15,876	15,876
Accumulated amortization	0	0
Total intangible assets	$ 15,876	$ 15,876

Note 7. Goodwill and Other In_5

Note 7. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 137	$ 140
Total annual amortization expense for 2019	$ 500

Note 8. Restaurant Operations_3

Note 8. Restaurant Operations Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Note 8. Restaurant Operations Revenues
Net sales	$ 165,631	$ 184,571
Franchise royalties and fees	6,912	7,102
Other	1,232	1,261
Restaurant operations revenue	$ 173,775	$ 193,934

Note 9. Accounts Payable and _3

Note 9. Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable	$ 38,791	$ 41,967
Gift card liability	18,242	22,685
Salaries, wages, and vacation	14,776	13,107
Taxes payable	19,145	11,214
Workers' compensation and other self insurance accruals	7,805	8,394
Deferred revenue	14,788	11,681
Other	7,953	8,217
Accounts payable and accrued expenses	$ 121,500	$ 117,265

Note 10. Notes Payable and Ot_3

Note 10. Notes Payable and Other Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current portion of notes payable and other borrowings
Notes payable	$ 2,200	$ 2,200
Unamortized original issue discount	(338)	(334)
Unamortized debt issuance costs	(615)	(609)
Finance obligations	3,748	4,463
Finance lease liabilities	2,035	0
Total current portion of notes payable and other borrowings	7,030	5,720
Long-term notes payable and other borrowings
Notes payable	180,948	181,498
Unamortized original issue discount	(352)	(438)
Unamortized debt issuance costs	(640)	(796)
Finance obligations	73,945	59,737
Finance lease liabilities	10,444	0
Total long-term notes payable and other borrowings	$ 264,345	$ 240,001

Note 10. Notes Payable and Ot_4

Note 10. Notes Payable and Other Borrowings (Details Narrative) $ in Thousands	Mar. 31, 2019USD ($)
Western revolver	$ 0
Steak n Shake Agreement 2014 [Member]
Interest rate	6.25%
Outstanding debt	$ 183,148

Note 11. Leases (Details)

Note 11. Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Finance lease costs:
Amortization of right-of-use assets	$ 492
Interest on lease liabilities	207
Operating lease costs	3,857	[1]
Total lease costs	$ 4,556
[1]	Includes short term leases, variable lease costs and sublease income, which are immaterial.

Note 11. Leases (Details 1)

Note 11. Leases (Details 1) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Cash paid for amounts included in the measurement of lease liablities:
Financing cash flows from finance leases	$ 402
Operating cash flows from finance leases	207
Operating cash flows from operating leases	4,191
Right-of-use assets obtained in exchange for lease obligations:
Finance lease liabilities	1,097
Operating lease liabilities	$ 5,570

Note 11. Leases (Details 2)

Note 11. Leases (Details 2) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Finance leases:
Property and equipment, net	$ 12,243
Current portion of notes payable and other borrowings	2,035	$ 0
Long-term notes payable and other borrowings	10,444	$ 0
Total finance lease liablities	$ 12,479

Note 11. Leases (Details 3)

Note 11. Leases (Details 3)	Mar. 31, 2019
Weighted-average remaining lease terms:
Finance leases	8 years 9 months 19 days
Operating leases	7 years
Weighted-average discount rates:
Finance leases	7.10%
Operating leases	6.90%

Note 11. Leases (Details 4)

Note 11. Leases (Details 4) $ in Thousands	Mar. 31, 2019USD ($)
Operating Leases
2019	$ 12,584
2020	15,541
2021	14,424
2022	12,172
2023	10,321
After 2023	27,146
Total lease payments	92,188
Less interest	19,894
Total lease liabilities	72,294
Finance Leases
2019	1,827
2020	2,377
2021	2,358
2022	1,869
2023	1,669
After 2023	6,800
Total lease payments	16,900
Less interest	4,421
Total lease liabilities	$ 12,479

Note 11. Leases (Details 5)

Note 11. Leases (Details 5) $ in Thousands	Mar. 31, 2019USD ($)
2019	$ 11,169
2020	8,095
2021	5,980
2022	2,956
2023	1,587
After 2023	1,673
Total minimum future rental payments	31,460
Less amount representing interest	18,064
Total principal obligations under leases	13,396
Less current portion	4,463
Non-current principal obligations under leases	8,933
Residual value at end of lease term	50,804
Obligations under leases	59,737
Finance Obligations
2019	11,114
2020	8,040
2021	5,925
2022	2,951
2023	1,587
After 2023	1,673
Total minimum future rental payments	31,290
Less amount representing interest	18,004
Total principal obligations under leases	13,286
Less current portion	4,433
Non-current principal obligations under leases	8,853
Residual value at end of lease term	50,744
Obligations under leases	59,597
Capital Leases
2019	55
2020	55
2021	55
2022	5
2023	0
After 2023	0
Total minimum future rental payments	170
Less amount representing interest	60
Total principal obligations under leases	110
Less current portion	30
Non-current principal obligations under leases	80
Residual value at end of lease term	60
Obligations under leases	140
Operating Property
2019	17,914
2020	16,691
2021	16,787
2022	15,603
2023	14,071
After 2023	36,709
Total minimum future rental payments	117,775
Non-Operating Property
2019	483
2020	554
2021	578
2022	599
2023	539
After 2023	1,790
Total minimum future rental payments	$ 4,543

Note 12. Accumulated Other Co_3

Note 12. Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Beginning balance	$ (2,516)	$ (1,404)
Reclassification to (earnings) loss	0	(58)
Foreign currency translation	(304)	496
Ending balance	(2,820)	(966)
Foreign Currency Translation Adjustments
Beginning balance	(2,516)	(1,462)
Reclassification to (earnings) loss	0	0
Foreign currency translation	(304)	496
Ending balance	(2,820)	(966)
Investment Gain (Loss)
Beginning balance	0	58
Reclassification to (earnings) loss	0	(58)
Foreign currency translation	0	0
Ending balance	$ 0	$ 0

Note 13. Income Taxes (Details

Note 13. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ 1,744	$ (797)
Unrecognized tax benefits	$ 347		$ 341

Note 15. Fair Value of Financ_3

Note 15. Fair Value of Financial Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash equivalents	$ 14,319	$ 21,448
Equity securities: Consumer goods	5,288	5,808
Bonds	34,785	32,404
Options on equity securities	3,275	2,755
Non-qualified deferred compensation plan investments	2,135	2,149
Total assets at fair value	59,802	64,564
Level 1
Assets
Cash equivalents	14,319	21,448
Equity securities: Consumer goods	1,188	1,708
Bonds	34,785	32,404
Options on equity securities	0	0
Non-qualified deferred compensation plan investments	2,135	2,149
Total assets at fair value	52,427	57,709
Level 2
Assets
Cash equivalents	0	0
Equity securities: Consumer goods	4,100	4,100
Bonds	0	0
Options on equity securities	3,275	2,755
Non-qualified deferred compensation plan investments	0	0
Total assets at fair value	7,375	6,855
Level 3
Assets
Cash equivalents	0	0
Equity securities: Consumer goods	0	0
Bonds	0	0
Options on equity securities	0	0
Non-qualified deferred compensation plan investments	0	0
Total assets at fair value	$ 0	$ 0

Note 17. Business Segment Rep_3

Note 17. Business Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue	$ 181,859	$ 202,225
Steak n Shake
Revenue	170,111	190,293
Western Sizzlin
Revenue	3,664	3,641
Total Restaurant Operations
Revenue	173,775	193,934
First Guard
Revenue	7,207	6,547
Maxim
Revenue	877	1,744
Total Revenue
Revenue	$ 181,859	$ 202,225

Note 17. Business Segment Rep_4

Note 17. Business Segment Reporting (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings (loss) before income taxes	$ 11,562	$ (2,611)
Restaurant | Steak n Shake
Earnings (loss) before income taxes	(18,858)	(992)
Restaurant | Western Sizzlin
Earnings (loss) before income taxes	383	374
Restaurant | Total Restaurant Operations
Earnings (loss) before income taxes	(18,475)	(618)
Operating Business
Earnings (loss) before income taxes	(16,904)	(186)
Operating Business | First Guard
Earnings (loss) before income taxes	1,544	510
Operating Business | Maxim
Earnings (loss) before income taxes	(112)	(217)
Operating Business | Other
Earnings (loss) before income taxes	139	139
Corporate | Corporate
Earnings (loss) before income taxes	(2,630)	(3,166)
Corporate | Investment Partnership Gains (Losses) [Member]
Earnings (loss) before income taxes	34,154	3,495
Corporate | Total Corporate And Investments [Member]
Earnings (loss) before income taxes	31,524	329
Reconciliation Of Segments | Interest expense on notes payable and other borrowings [Member]
Earnings (loss) before income taxes	$ (3,058)	$ (2,754)