Biglari 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 03, 2017
Document And Entity Information
Entity Registrant Name	BIGLARI HOLDINGS INC.
Entity Central Index Key	93,859
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		2,067,613
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 68,560	$ 75,808
Investments	20,702	22,297
Receivables	8,670	14,195
Inventories	7,096	6,773
Other current assets	7,474	8,716
Total current assets	112,502	127,789
Property and equipment	309,577	312,264
Goodwill and other intangible assets	66,040	66,054
Investment partnerships	546,170	577,637
Other assets	13,653	13,223
Total assets	1,047,942	1,096,967
Current liabilities:
Accounts payable and accrued expenses	107,791	112,882
Current portion of notes payable and other borrowings	7,067	7,129
Total current liabilities	114,858	120,011
Long-term notes payable and other borrowings	264,511	281,555
Deferred taxes	142,143	152,315
Other liabilities	11,456	11,146
Total liabilities	532,968	565,027
Shareholders' equity
Common stock - 2,067,613 and 2,067,193 shares outstanding	1,071	1,071
Additional paid-in capital	382,014	381,906
Retained earnings	499,612	515,433
Accumulated other comprehensive loss	(3,275)	(3,584)
Treasury stock, at cost	(364,448)	(362,886)
Biglari Holdings Inc. shareholders' equity	514,974	531,940
Total liabilities and shareholders' equity	$ 1,047,942	$ 1,096,967

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, shares outstanding	2,067,613	2,067,193

CONSOLIDATED STATEMENTS OF EARN

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues
Restaurant operations	$ 195,694	$ 200,295
Insurance premiums and other	6,080	5,499
Media advertising and other	1,619	2,448
Total revenues	203,393	208,242
Cost and expenses
Restaurant cost of sales	157,298	155,737
Insurance losses and underwriting expenses	5,020	4,103
Media cost of sales	1,493	5,019
Selling, general and administrative	29,486	30,365
Depreciation and amortization	5,621	6,047
Total cost and expenses	198,918	201,271
Other income (expenses)
Interest expense	(2,824)	(2,922)
Interest on obligations under leases	(2,280)	(2,281)
Investment partnership gains (losses)	(24,968)	78,973
Total other income (loss)	(30,072)	73,770
Earnings (loss) before income taxes	(25,597)	80,741
Income tax expense (benefit)	(9,776)	29,578
Net earnings (loss)	$ (15,821)	$ 51,163
Earnings per share
Basic earnings per common share	$ (12.82)	$ 41.20
Diluted earnings per common share	$ (12.82)	$ 41.16
Weighted average shares and equivalents
Basic	1,234,478	1,241,733
Diluted	1,234,478	1,242,938

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements Of Comprehensive Income
Net earnings (loss)	$ (15,821)	$ 51,163
Other comprehensive income:
Net change in unrealized gains and losses on investments	191	(401)
Applicable income taxes	(67)	145
Foreign currency translation	185	331
Other comprehensive income, net	309	75
Total comprehensive income (loss)	$ (15,512)	$ 51,238

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net earnings (loss)	$ (15,821)	$ 51,163
Adjustments to reconcile net earnings (loss) to operating cash flows:
Depreciation and amortization	5,621	6,047
Provision for deferred income taxes	(10,281)	26,307
Asset impairments and other non-cash expenses	435	415
Loss on disposal of assets	99	265
Investment partnership gains/losses	24,968	(78,973)
Distributions from investment partnerships	5,015	4,750
Changes in receivables and inventories	5,202	7,923
Changes in other assets	(114)	(2,085)
Changes in accounts payable and accrued expenses	(5,261)	1,443
Net cash provided by operating activities	9,863	17,255
Investing activities
Capital expenditures	(1,990)	(2,859)
Proceeds from property and equipment disposals	50	854
Purchases of investments	(16,945)	(24,472)
Redemptions of fixed maturity securities	18,653	12,989
Net cash used in investing activities	(232)	(13,488)
Financing activities
Payments on revolving credit facility	(20)	(96)
Principal payments on long-term debt	(15,550)	(2,201)
Principal payments on direct financing lease obligations	(1,356)	(1,461)
Proceeds from exercise of stock options	30	1
Net cash used in financing activities	(16,896)	(3,757)
Effect of exchange rate changes on cash	17	48
Increase (decrease) in cash and cash equivalents	(7,248)	58
Cash and cash equivalents at beginning of year	75,808	56,523
Cash and cash equivalents at end of first quarter	$ 68,560	$ 56,581

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, 2015	$ 1,071	$ 391,853	$ 415,982	$ (3,679)	$ (353,855)	$ 451,372
Net earnings			51,163			51,163
Other comprehensive income, net				75		75
Adjustment to treasury stock for holdings in investment partnerships					(10,930)	(10,930)
Exercise of stock options		(5)			6	1
Balance at Mar. 31, 2016	1,071	391,848	467,145	(3,604)	(364,779)	491,681
Balance at Dec. 31, 2016	1,071	381,906	515,433	(3,584)	(362,886)	531,940
Net earnings			(15,821)			(15,821)
Other comprehensive income, net				309		309
Adjustment to treasury stock for holdings in investment partnerships		116			(1,600)	(1,484)
Exercise of stock options		(8)			38	30
Balance at Mar. 31, 2017	$ 1,071	$ 382,014	$ 499,612	$ (3,275)	$ (364,448)	$ 514,974

Note 1. Summary of Significant

Note 1. Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
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, 2016. 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 Biglari Holdings and its major operating subsidiaries. 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, 2017, Mr. Biglari’s beneficial ownership of the Company’s outstanding common stock was approximately 51.3%. 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”), 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, 2017
Accounting Policies [Abstract]
Note 2. New Accounting Standards	In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In October 2016, the FASB issued ASU 2016-17, Interests Held through Related Parties That Are under Common Control. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02 Leases after December 15, 2018, with early adoption permitted. We are currently evaluating the effect this amended guidance will have on our results of operations. We anticipate the ASU will have a material impact on our balance sheet, but the ASU is non-cash in nature and will not affect our cash position. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In July 2015, the FASB voted to defer the effective date of this ASU by one year, which would make the guidance effective for our first quarter fiscal year 2018 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. We currently expect to adopt ASU 2014-09 as of January 1, 2018 under the modified retrospective method where the cumulative effect is recognized at the date of initial application. Our evaluation of ASU 2014-09 is ongoing and not complete. The FASB has issued, and may issue in the future, interpretative guidance that may cause our evaluation to change. While we anticipate some changes to revenue recognition for certain transactions, we do not currently believe ASU 2014-09 will have a material effect on our consolidated financial statements. The Company consolidated goodwill and intangible assets into a single line item on the balance sheet at March 31, 2017 and changed the December 31, 2016 presentation to conform.

Note 3. Earnings Per Share

Note 3. Earnings Per Share	3 Months Ended
	Mar. 31, 2017
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. The following table presents a reconciliation of basic and diluted weighted average common shares. First Quarter 2017 2016 Basic earnings per share: Weighted average common shares 1,234,478 1,241,733 Diluted earnings per share: Weighted average common shares 1,234,478 1,241,733 Dilutive effect of stock awards — 1,205 Weighted average common and incremental shares 1,234,478 1,242,938 Anti-dilutive stock awards excluded from the calculation of earnings per share 1,497 — The Company’s common stock is $0.50 stated value. The following table presents shares authorized, issued and outstanding. March 31, 2017 December 31, 2016 Common stock authorized 2,500,000 2,500,000 Common stock issued 2,142,202 2,142,202 Treasury stock held by the Company (74,589 ) (75,009 ) Outstanding shares 2,067,613 2,067,193 Proportional ownership of the Company's common stock in investment partnerships (838,012 ) (834,889 ) Net outstanding shares for financial reporting purposes 1,229,601 1,232,304

Note 4. Investments

Note 4. Investments	3 Months Ended
	Mar. 31, 2017
Schedule of Investments [Abstract]
Note 4. Investments	Investments consisted of the following. March 31, 2017 December 31, 2016 Cost $ 20,722 $ 22,508 Gross unrealized gains 5 24 Gross unrealized losses (25 ) (235 ) Fair value $ 20,702 $ 22,297 Investment gains/losses are recognized when investments are sold (as determined on a specific identification basis) or as otherwise required by GAAP. The timing of realized gains and losses from sales can have a material effect on periodic earnings. However, such realized gains or losses usually have little, if any, impact on total shareholders’ equity because the investments are carried at fair value with any unrealized gains/losses included as a component of accumulated other comprehensive income in shareholders’ equity. We believe that realized investment gains/losses are often meaningless in terms of understanding reported results. Short-term investment gains/losses have caused and may continue to cause volatility in our results. Investments in equity securities and a related put option of $4,463 are included in other assets and recorded at fair value.

Note 5. Investment Partnerships

Note 5. Investment Partnerships	3 Months Ended
	Mar. 31, 2017
Note 5. Investment Partnerships Details Narrative
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. The fair value and adjustment for Company common stock held by the investment partnerships to determine carrying value of our partnership interest is presented below. Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (59,517 ) (34,549 ) (24,968 ) Contributions (net of distributions) to investment partnerships (5,015 ) (5,015 ) Increase in proportionate share of Company stock held 1,484 (1,484 ) Partnership interest at March 31, 2017 $ 908,175 $ 362,005 $ 546,170 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2015 $ 734,668 $ 262,979 $ 471,689 Investment partnership gains 115,894 36,921 78,973 Contributions (net of distributions) to investment partnerships 6,750 6,750 Increase in proportionate share of Company stock held 10,930 (10,930 ) Partnership interest at March 31, 2016 $ 857,312 $ 310,830 $ 546,482 The carrying value of the investment partnerships net of deferred taxes is presented below. March 31, 2017 December 31, 2016 Carrying value of investment partnerships $ 546,170 $ 577,637 Deferred tax liability related to investment partnerships (144,676 ) (155,553 ) Carrying value of investment partnerships net of deferred taxes $ 401,494 $ 422,084 The Company’s proportionate share of Company stock held by investment partnerships at cost is $343,530 and $341,930 at March 31, 2017 and December 31, 2016, 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 from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below. First Quarter 2017 2016 Investment partnership gains (losses) $ (24,968 ) $ 78,973 Tax expense (benefit) (9,761 ) 28,585 Contribution to net earnings (loss) $ (15,207 ) $ 50,388 On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp. (“Biglari Capital”), will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above an annual 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 quarter of 2017. During the first quarter of 2016, the Company accrued incentive fees for Biglari Capital of $2,921. Our investments in these partnerships are committed on a rolling 5-year basis. Biglari Capital is an entity solely owned by Mr. Biglari. 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, 2017 $ 203,202 $ 1,041,405 Total liabilities as of March 31, 2017 $ 202 $ 199,443 Revenue for the first quarter ending March 31, 2017 $ (15,696 ) $ (52,652 ) Earnings (loss) for the first quarter ending March 31, 2017 $ (15,716 ) $ (53,514 ) Biglari Holdings’ Ownership Interest 63.6 % 92.5 % Total assets as of December 31, 2016 $ 221,676 $ 1,109,465 Total liabilities as of December 31, 2016 $ 2,694 $ 201,460 Revenue for the first quarter ending March 31, 2016 $ (1,738 ) $ 130,525 Earnings (loss) for the first quarter ending March 31, 2016 $ (1,771 ) $ 129,285 Biglari Holdings’ Ownership Interest 63.4 % 93.5 % 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.

Note 6. Property and Equipment

Note 6. Property and Equipment	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Note 6. Property and Equipment	Property and equipment is composed of the following. March 31, 2017 December 31, 2016 Land $ 160,219 $ 160,328 Buildings 156,168 156,723 Land and leasehold improvements 164,287 163,817 Equipment 201,452 200,214 Construction in progress 1,695 1,539 683,821 682,621 Less accumulated depreciation and amortization (374,244 ) (370,357 ) Property and equipment, net $ 309,577 $ 312,264

Note 7. Goodwill and Other Inta

Note 7. Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2017
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, 2016 $ 28,090 $ 11,913 $ 40,003 Change in foreign exchange rates during first quarter 2017 9 — 9 Goodwill at March 31, 2017 $ 28,099 $ 11,913 $ 40,012 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. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we test for potential impairment using a two-step approach. The first is the estimation of fair value of each reporting unit. If step one indicates that impairment potentially exists, the second step is performed to measure the amount of impairment, if any. 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 three months of 2017 or 2016. Other Intangible Assets Other intangible assets are composed of the following. March 31, 2017 December 31, 2016 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (3,717 ) $ 1,593 $ 5,310 $ (3,585 ) $ 1,725 Other 810 (717 ) 93 810 (707 ) 103 Total 6,120 (4,434 ) 1,686 6,120 (4,292 ) 1,828 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 8,466 — 8,466 8,347 — 8,347 Total intangible assets $ 30,462 $ (4,434 ) $ 26,028 $ 30,343 $ (4,292 ) $ 26,051 Intangible assets subject to amortization consist of franchise agreements connected with the purchase of Western 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 2017 and 2016 was $142 and $141, respectively. The Company’s intangible assets with definite lives will fully amortize in 2020. Total annual amortization expense for each of 2018 and 2019 will approximate $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, 2017
Note 8. Restaurant Operations Revenues
Note 8. Restaurant Operations Revenues	Restaurant operations revenues were as follows. First Quarter 2017 2016 Net sales $ 189,051 $ 195,067 Franchise royalties and fees 5,556 4,350 Other 1,087 878 $ 195,694 $ 200,295

Note 9. Accounts Payable and Ac

Note 9. Accounts Payable and Accrued Expenses	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Note 9. Accounts Payable and Accrued Expenses	Accounts payable and accrued expenses include the following. March 31, 2017 December 31, 2016 Accounts payable $ 36,622 $ 33,961 Gift card liability 20,360 25,321 Salaries, wages, and vacation 9,076 15,618 Taxes payable 13,529 12,254 Workers' compensation and other self-insurance accruals 9,870 9,960 Deferred revenue 10,350 7,407 Other 7,984 8,361 Accounts payable and accrued expenses $ 107,791 $ 112,882

Note 10. Borrowings

Note 10. Borrowings	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Note 10. Borrowings	Notes payable and other borrowings include the following. Current portion of notes payable and other borrowings March 31, 2017 December 31, 2016 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (312 ) (308 ) Unamortized debt issuance costs (716 ) (711 ) Obligations under leases 5,538 5,571 Western revolver 357 377 Total current portion of notes payable and other borrowings $ 7,067 $ 7,129 Long-term notes payable and other borrowings Notes payable $ 185,348 $ 200,898 Unamortized original issue discount (1,014 ) (1,093 ) Unamortized debt issuance costs (1,996 ) (2,177 ) Obligations under leases 82,173 83,927 Total long-term notes payable and other borrowings $ 264,511 $ 281,555 Steak n Shake Credit Facility On March 19, 2014, Steak n Shake and its subsidiaries entered into the current credit agreement. The credit agreement provides for a senior secured term loan facility in an aggregate principal amount of $220,000 and a senior secured revolving credit facility in an aggregate principal amount of up to $30,000. 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. The revolver will be available on a revolving basis until March 19, 2019. 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. Borrowings bear interest at a rate per annum equal to a base rate or a Eurodollar rate (minimum of 1%) plus an applicable margin. 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%. Interest on loans under the revolver is based on a Eurodollar rate plus an applicable margin ranging from 2.75% to 4.25% or on the prime rate plus an applicable margin ranging from 1.75% to 3.25%. The applicable margins on revolver loans are contingent on Steak n Shake’s total leverage ratio. The revolver also carries a commitment fee ranging from 0.40% to 0.50% per annum, depending on Steak n Shake’s total leverage ratio, on the unused portion of the revolver. The interest rate on the term loan was 4.75% as of March 31, 2017. The credit agreement includes customary affirmative and negative covenants and events of default, as well as a financial maintenance covenant, solely with respect to the revolver, relating to the maximum total leverage ratio. Steak n Shake’s credit facility contains restrictions on its ability to pay dividends to Biglari Holdings. Both the term loan and the revolver have been secured by first priority security interests in substantially all the assets of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility. As of March 31, 2017, $187,548 was outstanding under the term loan, and no amount was outstanding under the revolver. Steak n Shake had $10,893 in standby letters of credit outstanding as of March 31, 2017 and December 31, 2016. Western Revolver As of March 31, 2017, Western has $357 due June 13, 2017. Fair Value of Debt The carrying amounts for debt reported in the consolidated balance sheet did not differ materially from their fair values at March 31, 2017 and December 31, 2016. The fair value was determined to be a Level 3 fair value measurement.

Note 11. Accumulated Other Comp

Note 11. Accumulated Other Comprehensive Income	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Note 11. Accumulated Other Comprehensive Income	During the first quarters of 2017 and 2016, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. Three months ended March 31, 2017 Three months ended March 31, 2016 Foreign Currency Translation Adjustments Investment Gain (Loss) Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustments Accumulated Beginning Balance $ (3,447 ) $ (137 ) $ (3,584 ) $ (2,992 ) $ (687 ) $ (3,679 ) Other comprehensive income (loss) before reclassifications 185 124 309 331 (256 ) 75 Ending Balance $ (3,262 ) $ (13 ) $ (3,275 ) $ (2,661 ) $ (943 ) $ (3,604 ) There were no reclassifications made from accumulated other comprehensive income to the consolidated statement of earnings during the first quarters of 2017 and 2016.

Note 12. Income Taxes

Note 12. Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Note 12. Income Taxes	In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring items are separately recognized during the quarter in which they occur. Income tax for the first quarter of 2017 was a benefit of $9,776 compared to an expense of $29,578 for the first quarter of 2016. The variance in income taxes between the first quarters of 2017 and 2016 is primarily attributable to taxes on income and losses from investment partnerships. As of March 31, 2017 and December 31, 2016, we had approximately $396 of unrecognized tax benefits, which are included in other liabilities in the consolidated balance sheets.

Note 13. Commitments and Contin

Note 13. Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Note 13. 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 flows.

Note 14. Fair Value of Financia

Note 14. Fair Value of Financial Assets and Liabilities	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Note 14. Fair Value of Financial Assets and Liabilities	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 and liabilities 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, 2017 and December 31, 2016, the fair values of financial assets and liabilities were as follows. March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 2,293 $ — $ — $ 2,293 $ 471 $ — $ — $ 471 Equity securities: Consumer goods 2,445 — — 2,445 2,018 — — 2,018 Bonds — 23,037 — 23,037 — 24,904 — 24,904 Options on equity securities — 2,018 — 2,018 — 2,445 — 2,445 Non-qualified deferred compensation plan investments 3,081 — — 3,081 2,872 — — 2,872 Total assets at fair value $ 7,819 $ 25,055 $ — $ 32,874 $ 5,361 $ 27,349 $ — $ 32,710 There were no changes in our valuation techniques used to measure fair values on a recurring basis.

Note 15. Related Party Transact

Note 15. Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions [Abstract]
Note 15. Related Party Transactions	Shared Services Agreement During fiscal 2013, Biglari Holdings and Biglari Capital entered into the Shared Services Agreement pursuant to which Biglari Holdings provides certain services to Biglari Capital. Biglari Capital is an entity solely owned by Mr. Biglari. The Shared Services Agreement runs for an initial five-year term, and automatically renews for successive five-year periods, unless terminated by either party effective at the end of the initial or the renewed term, as applicable. The term of the Shared Services Agreement coincides with the lock-up period for the Company’s investments in The Lion Fund, L.P. and The Lion Fund II, L.P. under their respective partnership agreements. During the first quarters of 2017 and 2016, the Company provided services for Biglari Capital under the Shared Services Agreement costing an aggregate of $227, and $301, respectively. Investments in The Lion Fund, L.P. and The Lion Fund II, L.P. Contributions to and distributions from The Lion Fund, L.P. and The Lion Fund II, L.P. were as follows. First Quarter 2017 2016 Contributions of cash $ — $ 11,500 Distributions of cash (5,015 ) (4,750 ) $ (5,015 ) $ 6,750 As the general partner of the investment partnerships, Biglari Capital on December 31 of each year will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above an annual 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 incentive fees for Biglari Capital during the first quarter of 2017. The Company accrued $2,921 in incentive fees for Biglari Capital during the first quarter of 2016. Incentive Agreement Amendment During 2013, Biglari Holdings and Mr. Biglari entered into an amendment to the Incentive Agreement to exclude earnings by the investment partnerships from the calculation of Mr. Biglari’s incentive bonus. Under the Amended and Restated Incentive Agreement Mr. Biglari would receive a payment of approximately $14,700 if an event occurred entitling him to a severance payment. License Agreement On January 11, 2013, the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The License Agreement was unanimously approved by the Governance, Nominating and Compensation Committee (comprised of independent members of the Company’s Board of Directors). In addition, the license under the License Agreement is provided on a royalty-free basis in the absence of specified extraordinary events described below. Accordingly, the Company and its subsidiaries have paid no royalties to Mr. Biglari under the License Agreement since its inception. Under the License Agreement, Mr. Biglari granted to the Company an exclusive license to use the Biglari and Biglari Holdings names (the “Licensed Marks”) in association with various products and services (collectively the “Products and Services”). Upon (a) the expiration of twenty years from the date of the License Agreement (subject to extension as provided in the License Agreement), (b) Mr. Biglari’s death, (c) the termination of Mr. Biglari’s employment by the Company for Cause (as defined in the License Agreement), or (d) Mr. Biglari’s resignation from his employment with the Company absent an Involuntary Termination Event (as defined in the License Agreement), the Licensed Marks for the Products and Services will transfer from Mr. Biglari to the Company, without any compensation, if the Company is continuing to use the Licensed Marks in the ordinary course of its business. Otherwise, the rights will revert to Mr. Biglari. If (i) a Change of Control (as defined in the License Agreement) of the Company; (ii) the termination of Mr. Biglari’s employment by the Company without Cause; or (iii) Mr. Biglari’s resignation from his employment with the Company due to an Involuntary Termination Event (each, a “Triggering Event”) were to occur, Mr. Biglari would be entitled to receive a 2.5% royalty on “Revenues” with respect to the “Royalty Period.” The royalty payment to Mr. Biglari would not apply to all revenues received by Biglari Holdings and its subsidiaries nor would it apply retrospectively ( i.e. “Revenues” means all revenues received, on an accrual basis under GAAP, by the Company, its subsidiaries and affiliates from the following: (1) all Products and Services covered by the License Agreement bearing or associated with the names Biglari and Biglari Holdings at any time (whether prior to or after a Triggering Event). This category would include, without limitation, the use of Biglari or Biglari Holdings in the public name of a business providing any covered Product or Service; and (2) all covered Products, Services and businesses that the Company has specifically identified, prior to a Triggering Event, will bear, use or be associated with the name Biglari or Biglari Holdings. The Governance, Nominating and Compensation Committee unanimously approved the association of the Biglari name and mark with all of Steak n Shake’s restaurants (including Company operated and franchised locations), products and brands. On May 14, 2013, the Company, Steak n Shake, LLC and Steak n Shake Enterprises, Inc. entered into a Trademark Sublicense Agreement in connection therewith. Accordingly, revenues received by the Company, its subsidiaries and affiliates from Steak n Shake’s restaurants, products and brands would come within the definition of Revenues for purposes of the License Agreement. The “Royalty Period” is a defined period of time, after the Triggering Event, calculated as follows: (i) if, following three months after a Triggering Event, the Company or any of its subsidiaries or affiliates continues to use the Biglari or Biglari Holdings name in connection with any covered product or service, or continues to use Biglari as part of its corporate or public company name, then the “Royalty Period” will equal (a) the period of time during which the Company or any of its subsidiaries or affiliates continues any such use, plus (b) a period of time after the Company, its subsidiaries and affiliates have ceased all uses of the names Biglari and Biglari Holdings equal to the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings names two years after the Triggering Event, the Royalty Period will equal a total of ten years (the sum of two years after the Triggering Event during which the Biglari and Biglari Holdings names are being used, plus a period of time equal to the five years prior to the Triggering Event, plus three years); or (ii) if the Company, its subsidiaries and affiliates cease all uses of the Biglari and Biglari Holdings names within three months after a Triggering Event, then the “Royalty Period” will equal the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings names two months after the Triggering Event, the Royalty Period will equal a total of eight years (the sum of the period of time equal to the five years prior to the Triggering Event, plus three years). Notwithstanding the above methods of determining the Royalty Period, the minimum Royalty Period is five years after a Triggering Event. The actual amount of royalties paid to Mr. Biglari following the occurrence of a Triggering Event (as defined in the License Agreement) would depend on the Company’s revenues during the applicable period following the Triggering Event, and, therefore, depends on material assumptions and estimates regarding future operations and revenues. Assuming for purposes of illustration a Triggering Event occurred on December 31, 2016, using revenue from 2016 as an estimate of future revenue and calculated according to terms of the License Agreement, Mr. Biglari would receive approximately $20,300 in royalty payments annually. At a minimum, the royalties would be earned on revenue generated from January 1, 2017 through December 21, 2023. Royalty payments beyond the minimum period would be subject to the licensee's continued use of the licensed marks.

Note 16. Business Segment Repor

Note 16. Business Segment Reporting	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Note 16. Business Segment Reporting	Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations includes Steak n Shake and Western. As a result of the acquisitions of First Guard and Maxim, the Company reports segment information for these businesses. 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 and earnings before income taxes for the first quarters of 2017 and 2016 were as follows. Revenue First Quarter 2017 2016 Operating Businesses: Restaurant Operations: Steak n Shake $ 192,690 $ 196,898 Western 3,004 3,397 Total Restaurant Operations 195,694 200,295 First Guard 6,080 5,499 Maxim 1,619 2,448 $ 203,393 $ 208,242 Earnings Before Income Taxes First Quarter 2017 2016 Operating Businesses: Restaurant Operations: Steak n Shake $ 3,352 $ 8,362 Western 450 586 Total Restaurant Operations 3,802 8,948 First Guard 969 1,327 Maxim (324 ) (3,515 ) Other 148 125 Total Operating Businesses 4,595 6,885 Corporate and Investments: Corporate (2,400 ) (2,195 ) Investment partnership gains (losses) (24,968 ) 78,973 Total Corporate and Investments (27,368 ) 76,778 Interest expense on notes payable and other borrowings (2,824 ) (2,922 ) $ (25,597 ) $ 80,741

Note 1. Summary of Significan24

Note 1. Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
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, 2016. 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 Biglari Holdings and its major operating subsidiaries. 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, 2017, Mr. Biglari’s beneficial ownership of the Company’s outstanding common stock was approximately 51.3%.
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”), 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, 2017
Earnings per share
Reconciliation of basic and diluted weighted average common shares	First Quarter 2017 2016 Basic earnings per share: Weighted average common shares 1,234,478 1,241,733 Diluted earnings per share: Weighted average common shares 1,234,478 1,241,733 Dilutive effect of stock awards — 1,205 Weighted average common and incremental shares 1,234,478 1,242,938 Anti-dilutive stock awards excluded from the calculation of earnings per share 1,497 —
Summary of outstanding shares	March 31, December 31, Common stock authorized 2,500,000 2,500,000 Common stock issued 2,142,202 2,142,202 Treasury stock held by the Company (74,589 ) (75,009 ) Outstanding shares 2,067,613 2,067,193 Proportional ownership of the Company's common stock in investment partnerships (838,012 ) (834,889 ) Net outstanding shares for financial reporting purposes 1,229,601 1,232,304

Note 4. Investments (Tables)

Note 4. Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Schedule of Investments [Abstract]
Schedule of fair value of Investments	March 31, December 31, Cost $ 20,722 $ 22,508 Gross unrealized gains 5 24 Gross unrealized losses (25 ) (235 ) Fair value $ 20,702 $ 22,297

Note 5. Investment Partnershi27

Note 5. Investment Partnerships (Tables)	3 Months Ended
	Mar. 31, 2017
Note 5. Investment Partnerships Details Narrative
Fair value and carrying value of our partnership interest	Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (59,517 ) (34,549 ) (24,968 ) Contributions (net of distributions) to investment partnerships (5,015 ) (5,015 ) Increase in proportionate share of Company stock held 1,484 (1,484 ) Partnership interest at March 31, 2017 $ 908,175 $ 362,005 $ 546,170 Fair Value Company Common Stock Carrying Value Partnership interest at December 31, 2015 $ 734,668 $ 262,979 $ 471,689 Investment partnership gains 115,894 36,921 78,973 Contributions (net of distributions) to investment partnerships 6,750 6,750 Increase in proportionate share of Company stock held 10,930 (10,930 ) Partnership interest at March 31, 2016 $ 857,312 $ 310,830 $ 546,482
Carrying value of investment partnerships net of deferred taxes	March 31, 2017 December 31, 2016 Carrying value of investment partnerships $ 546,170 $ 577,637 Deferred tax liability related to investment partnerships (144,676 ) (155,553 ) Carrying value of investment partnerships net of deferred taxes $ 401,494 $ 422,084
Gains from investment partnerships	First Quarter 2017 2016 Investment partnership gains (losses) $ (24,968 ) $ 78,973 Tax expense (benefit) (9,761 ) 28,585 Contribution to net earnings (loss) $ (15,207 ) $ 50,388
Summarized financial information for Equity in Investment Partnerships	Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of March 31, 2017 $ 203,202 $ 1,041,405 Total liabilities as of March 31, 2017 $ 202 $ 199,443 Revenue for the first quarter ending March 31, 2017 $ (15,696 ) $ (52,652 ) Earnings (loss) for the first quarter ending March 31, 2017 $ (15,716 ) $ (53,514 ) Biglari Holdings’ Ownership Interest 63.6 % 92.5 % Total assets as of December 31, 2016 $ 221,676 $ 1,109,465 Total liabilities as of December 31, 2016 $ 2,694 $ 201,460 Revenue for the first quarter ending March 31, 2016 $ (1,738 ) $ 130,525 Earnings (loss) for the first quarter ending March 31, 2016 $ (1,771 ) $ 129,285 Biglari Holdings’ Ownership Interest 63.4 % 93.5 %

Note 6. Property and Equipment

Note 6. Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Schedule of Property, Plant and Equipment	March 31, 2017 December 31, 2016 Land $ 160,219 $ 160,328 Buildings 156,168 156,723 Land and leasehold improvements 164,287 163,817 Equipment 201,452 200,214 Construction in progress 1,695 1,539 683,821 682,621 Less accumulated depreciation and amortization (374,244 ) (370,357 ) Property and equipment, net $ 309,577 $ 312,264

Note 7. Goodwill and Other In29

Note 7. Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	Restaurants Other Total Goodwill at December 31, 2016 $ 28,090 $ 11,913 $ 40,003 Change in foreign exchange rates during first quarter 2017 9 — 9 Goodwill at March 31, 2017 $ 28,099 $ 11,913 $ 40,012
Schedule of Other Intangible Assets	March 31, 2017 December 31, 2016 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (3,717 ) $ 1,593 $ 5,310 $ (3,585 ) $ 1,725 Other 810 (717 ) 93 810 (707 ) 103 Total 6,120 (4,434 ) 1,686 6,120 (4,292 ) 1,828 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 8,466 — 8,466 8,347 — 8,347 Total intangible assets $ 30,462 $ (4,434 ) $ 26,028 $ 30,343 $ (4,292 ) $ 26,051

Note 8. Restaurant Operations30

Note 8. Restaurant Operations Revenues (Tables)	3 Months Ended
	Mar. 31, 2017
Note 8. Restaurant Operations Revenues
Summary of restaurant operations revenues	First Quarter 2017 2016 Net sales $ 189,051 $ 195,067 Franchise royalties and fees 5,556 4,350 Other 1,087 878 $ 195,694 $ 200,295

Note 9. Accounts Payable And 31

Note 9. Accounts Payable And Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2017
Note 9. Accounts Payable And Accrued Expenses Tables
Schedule of Accounts Payable and Accrued Expenses	March 31, 2017 December 31, 2016 Accounts payable $ 36,622 $ 33,961 Gift card liability 20,360 25,321 Salaries, wages, and vacation 9,076 15,618 Taxes payable 13,529 12,254 Workers' compensation and other self-insurance accruals 9,870 9,960 Deferred revenue 10,350 7,407 Other 7,984 8,361 Accounts payable and accrued expenses $ 107,791 $ 112,882

Note 10. Borrowings (Tables)

Note 10. Borrowings (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of notes payable and other borrowings	Current portion of notes payable and other borrowings March 31, 2017 December 31, 2016 Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (312 ) (308 ) Unamortized debt issuance costs (716 ) (711 ) Obligations under leases 5,538 5,571 Western revolver 357 377 Total current portion of notes payable and other borrowings $ 7,067 $ 7,129 Long-term notes payable and other borrowings Notes payable $ 185,348 $ 200,898 Unamortized original issue discount (1,014 ) (1,093 ) Unamortized debt issuance costs (1,996 ) (2,177 ) Obligations under leases 82,173 83,927 Total long-term notes payable and other borrowings $ 264,511 $ 281,555

Note 11. Accumulated Other Co33

Note 11. Accumulated Other Comprehensive Income (Tables)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Component of accumulated other comprehensive income	Three months ended March 31, 2017 Three months ended March 31, 2016 Foreign Currency Translation Adjustments Investment Gain (Loss) Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustments Accumulated Beginning Balance $ (3,447 ) $ (137 ) $ (3,584 ) $ (2,992 ) $ (687 ) $ (3,679 ) Other comprehensive income (loss) before reclassifications 185 124 309 331 (256 ) 75 Ending Balance $ (3,262 ) $ (13 ) $ (3,275 ) $ (2,661 ) $ (943 ) $ (3,604 )

Note 14. Fair Value of Financ34

Note 14. Fair Value of Financial Assets and Liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Schedule Of Fair Value Assets And Liabilities	March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 2,293 $ — $ — $ 2,293 $ 471 $ — $ — $ 471 Equity securities: Consumer goods 2,445 — — 2,445 2,018 — — 2,018 Bonds — 23,037 — 23,037 — 24,904 — 24,904 Options on equity securities — 2,018 — 2,018 — 2,445 — 2,445 Non-qualified deferred compensation plan investments 3,081 — — 3,081 2,872 — — 2,872 Total assets at fair value $ 7,819 $ 25,055 $ — $ 32,874 $ 5,361 $ 27,349 $ — $ 32,710

Note 15. Related Party Transa35

Note 15. Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2017
Note 15. Related Party Transactions Tables
Contributions to and distributions from the investment partnerships	First Quarter 2017 2016 Contributions of cash $ — $ 11,500 Distributions of cash (5,015 ) (4,750 ) $ (5,015 ) $ 6,750

Note 16. Business Segment Rep36

Note 16. Business Segment Reporting (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Schedule Of Revenue by Segment	Revenue First Quarter 2017 2016 Operating Businesses: Restaurant Operations: Steak n Shake $ 192,690 $ 196,898 Western 3,004 3,397 Total Restaurant Operations 195,694 200,295 First Guard 6,080 5,499 Maxim 1,619 2,448 $ 203,393 $ 208,242
Schedule of earnings (loss) before income taxes by segment	Earnings Before Income Taxes First Quarter 2017 2016 Operating Businesses: Restaurant Operations: Steak n Shake $ 3,352 $ 8,362 Western 450 586 Total Restaurant Operations 3,802 8,948 First Guard 969 1,327 Maxim (324 ) (3,515 ) Other 148 125 Total Operating Businesses 4,595 6,885 Corporate and Investments: Corporate (2,400 ) (2,195 ) Investment partnership gains (losses) (24,968 ) 78,973 Total Corporate and Investments (27,368 ) 76,778 Interest expense on notes payable and other borrowings (2,824 ) (2,922 ) $ (25,597 ) $ 80,741

Note 3. Earnings Per Share (Det

Note 3. Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Basic earnings per share:
Weighted average common shares	1,234,478	1,241,733
Diluted earnings per share:
Weighted average common shares	1,234,478	1,241,733
Dilutive effect of stock awards	0	1,205
Weighted average common and incremental shares	1,234,478	1,242,938
Anti-dilutive stock awards excluded from the calculation of earnings per share	1,497	0

Note 3. Earnings Per Share (D38

Note 3. Earnings Per Share (Details 1) - shares	Mar. 31, 2017	Dec. 31, 2016
Note 3. Earnings Per Share Details 1
Common stock authorized	2,500,000	2,500,000
Common stock issued	2,142,202	2,142,202
Treasury stock held by the Company	(74,589)	(75,009)
Outstanding shares	2,067,613	2,067,193
Proportional ownership of the Company's common stock in investment partnerships	(838,012)	(834,889)
Net outstanding shares for financial reporting purposes	1,229,601	1,232,304

Note 4. Investments (Details)

Note 4. Investments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Schedule of Investments [Abstract]
Cost	$ 20,722	$ 22,508
Gross unrealized gains	5	24
Gross unrealized losses	(25)	(235)
Fair value	$ 20,702	$ 22,297

Note 5. Investment Partnershi40

Note 5. Investment Partnerships (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Partnership interest, beginning	$ 577,637
Investment partnership gains (losses)	(24,968)	$ 78,973
Partnership interest, ending	546,170
Fair Value
Partnership interest, beginning	972,707	734,668
Investment partnership gains (losses)	(59,517)	115,894
Contributions (net of distributions) to investment partnerships	(5,015)	6,750
Partnership interest, ending	908,175	857,312
Company common Stock
Partnership interest, beginning	395,070	262,979
Investment partnership gains (losses)	(34,549)	36,921
Increase in proportionate share of Company stock held	1,484	10,930
Partnership interest, ending	362,005	310,830
Carrying Value
Partnership interest, beginning	577,637	471,689
Investment partnership gains (losses)	(24,968)	78,973
Contributions (net of distributions) to investment partnerships	(5,015)	6,750
Increase in proportionate share of Company stock held	(1,484)	(10,930)
Partnership interest, ending	$ 546,170	$ 546,482

Note 5. Investment Partnershi41

Note 5. Investment Partnerships (Details 1) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Note 5. Investment Partnerships Details Narrative
Carrying value of investment partnerships	$ 546,170	$ 577,637
Deferred tax liability related to investment partnerships	(144,676)	(155,553)
Carrying value of investment partnerships net of deferred taxes	$ 401,494	$ 422,084

Note 5. Investment Partnershi42

Note 5. Investment Partnerships (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Note 5. Investment Partnerships Details 2
Investment partnership gains (loss)	$ (24,968)	$ 78,973
Tax expense (benefit)	(9,761)	28,585
Contributions to net earnings (loss)	$ (15,207)	$ 50,388

Note 5. Investment Partnershi43

Note 5. Investment Partnerships (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Lion Fund
Total Assets	$ 203,202		$ 221,676
Total Liabilities	202		2,694
Revenue for the first quarter	(15,696)	$ (1,738)
Earnings (loss) for the first quarter	$ (15,716)	$ (1,771)
Biglari Holdings' Ownership Interest	63.60%	63.40%
Lion Fund II
Total Assets	$ 1,041,405		1,109,465
Total Liabilities	199,443		$ 201,460
Revenue for the first quarter	(52,652)	$ 130,525
Earnings (loss) for the first quarter	$ (53,514)	$ 129,285
Biglari Holdings' Ownership Interest	92.50%	93.50%

Note 5. Investment Partnershi44

Note 5. Investment Partnerships (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Note 5. Investment Partnerships Details Narrative
Proportionate share of Company stock held by investment partnerships at cost	$ 343,530	$ 341,930
Accrued incentive fee	$ 0		$ 2,921

Note 6. Property and Equipmen45

Note 6. Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Land	$ 160,219	$ 160,328
Buildings	156,168	156,723
Land and leasehold improvements	164,287	163,817
Equipment	201,452	200,214
Construction in progress	1,695	1,539
Property and equipment, gross	683,821	682,621
Less accumulated depreciation and amortization	(374,244)	(370,357)
Property and equipment, net	$ 309,577	$ 312,264

Note 7. Goodwill and Other In46

Note 7. Goodwill and Other Intangible Assets (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Balance at beginning of year	$ 40,003
Change in foreign exchange rates during first quarter 2017	9
Balance at end of period	40,012
Restaurant
Balance at beginning of year	28,090
Change in foreign exchange rates during first quarter 2017	9
Balance at end of period	28,099
Other
Balance at beginning of year	11,913
Change in foreign exchange rates during first quarter 2017	0
Balance at end of period	$ 11,913

Note 7. Goodwill and Other In47

Note 7. Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Gross carrying amount	$ 30,462	$ 30,343
Accumulated amortization	(4,434)	(4,292)
Total intangible assets	26,028	26,051
Finite-Lived Intangible Assets [Member]
Gross carrying amount	6,120	6,120
Accumulated amortization	(4,434)	(4,292)
Total intangible assets	1,686	1,828
Franchise Agreement | Finite-Lived Intangible Assets [Member]
Gross carrying amount	5,310	5,310
Accumulated amortization	(3,717)	(3,585)
Total intangible assets	1,593	1,725
Other | Finite-Lived Intangible Assets [Member]
Gross carrying amount	810	810
Accumulated amortization	(717)	(707)
Total intangible assets	93	103
Other | Indefinite-lived Intangible Assets [Member]
Gross carrying amount	8,466	8,347
Accumulated amortization	0	0
Total intangible assets	8,466	8,347
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 In48

Note 7. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 142	$ 141
Total annual amortization expense for years 2018 through 2019	$ 500

Note 8. Restaurant Operations49

Note 8. Restaurant Operations Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Note 8. Restaurant Operations Revenues
Net sales	$ 189,051	$ 195,067
Franchise royalties and fees	5,556	4,350
Other	1,087	878
Restaurant operations revenue	$ 195,694	$ 200,295

Note 9. Accounts Payable and 50

Note 9. Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Notes to Financial Statements
Accounts payable	$ 36,622	$ 33,961
Gift card liability	20,360	25,321
Salaries, wages, and vacation	9,076	15,618
Taxes payable	13,529	12,254
Workers' compensation and other self insurance accruals	9,870	9,960
Deferred revenue	10,350	7,407
Other	7,984	8,361
Accounts payable and accrued expenses	$ 107,791	$ 112,882

Note 10. Borrowings (Details)

Note 10. Borrowings (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current portion of notes payable and other borrowings
Notes payable	$ 2,200	$ 2,200
Unamortized original issue discount	(312)	(308)
Unamortized debt issue costs	(716)	(711)
Obligations under leases	5,538	5,571
Western revolver	357	377
Total current portion of notes payable and other borrowings	7,067	7,129
Long-term notes payable and other borrowings
Notes payable	185,348	200,898
Unamortized original issue discount	(1,014)	(1,093)
Unamortized debt issue costs	(1,996)	(2,177)
Obligations under leases	82,173	83,927
Total long-term notes payable and other borrowings	$ 264,511	$ 281,555

Note 10. Borrowings (Details Na

Note 10. Borrowings (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Western revolver	$ 357	$ 377
Term Loan
Outstanding debt	$ 187,548
Interest rate	4.75%
Steak n Shake Agreement 2014 [Member]
Standby letters of credit	$ 10,893	$ 10,893

Note 11. Accumulated Other Co53

Note 11. Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Beginning Balance	$ (3,584)	$ (3,679)
Other comprehensive income (loss) before reclassifications	309	75
Ending Balance	(3,275)	(3,604)
Foreign Currency Translation Adjustments
Beginning Balance	(3,447)	(2,992)
Other comprehensive income (loss) before reclassifications	185	331
Ending Balance	(3,262)	(2,661)
Investment Gain (Loss)
Beginning Balance	(137)	(687)
Other comprehensive income (loss) before reclassifications	124	(256)
Ending Balance	$ (13)	$ (943)

Note 12. Income Taxes (Details

Note 12. Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (9,776)	$ 29,578
Unrecognized tax benefits	$ 396		$ 396

Note 14. Fair Value of Financ55

Note 14. Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash equivalents	$ 2,293	$ 471
Equity securities: Consumer goods	2,445	2,018
Bonds	23,037	24,904
Options on equity securities	2,018	2,445
Non-qualified deferred compensation plan investments	3,081	2,872
Total assets at fair value	32,874	32,710
Level 1
Assets
Cash equivalents	2,293	471
Equity securities: Consumer goods	2,445	2,018
Bonds	0	0
Options on equity securities	0	0
Non-qualified deferred compensation plan investments	3,081	2,872
Total assets at fair value	7,819	5,361
Level 2
Assets
Cash equivalents	0	0
Equity securities: Consumer goods	0	0
Bonds	23,037	24,904
Options on equity securities	2,018	2,445
Non-qualified deferred compensation plan investments	0	0
Total assets at fair value	25,055	27,349
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 15. Related Party Transa56

Note 15. Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Note 15. Related Party Transactions Details
Contributions of cash	$ 0	$ 11,500
Distributions of cash	(5,015)	(4,750)
Total investments and distributions	$ (5,015)	$ 6,750

Note 16. Business Segment Rep57

Note 16. Business Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Steak n Shake
Revenue	$ 192,690	$ 196,898
Western
Revenue	3,004	3,397
Total Restaurant Operations
Revenue	195,694	200,295
First Guard
Revenue	6,080	5,499
Maxim
Revenue	1,619	2,448
Total Revenue
Revenue	$ 203,393	$ 208,242

Note 16. Business Segment Rep58

Note 16. Business Segment Reporting (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings before income taxes and noncontrolling interests	$ (25,597)	$ 80,741
Restaurant | Steak n Shake
Earnings before income taxes and noncontrolling interests	3,352	8,362
Restaurant | Western
Earnings before income taxes and noncontrolling interests	450	586
Restaurant | Total Restaurant Operations
Earnings before income taxes and noncontrolling interests	3,802	8,948
Operating Business
Earnings before income taxes and noncontrolling interests	4,595	6,885
Operating Business | First Guard
Earnings before income taxes and noncontrolling interests	969	1,327
Operating Business | Maxim
Earnings before income taxes and noncontrolling interests	(324)	(3,515)
Operating Business | Other
Earnings before income taxes and noncontrolling interests	148	125
Corporate | Corporate
Earnings before income taxes and noncontrolling interests	(2,400)	(2,195)
Corporate | Investment Partnership Gains (Losses) [Member]
Earnings before income taxes and noncontrolling interests	(24,968)	78,973
Corporate | Total Corporate And Investments [Member]
Earnings before income taxes and noncontrolling interests	(27,368)	76,778
Reconciliation Of Segments | Interest expense on notes payable and other borrowings [Member]
Earnings before income taxes and noncontrolling interests	$ (2,824)	$ (2,922)