QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||
| ||||||||
Large accelerated filer | ☐ | ☒ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class A common stock – | |||||
Class B common stock – |
Page No. | ||||||||
September 30, 2021 | December 31, 2020 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Investments | |||||||||||
Receivables | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment | |||||||||||
Operating lease assets | |||||||||||
Goodwill and other intangible assets | |||||||||||
Investment partnerships | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and shareholders’ equity | |||||||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | $ | |||||||||
Loss and loss adjustment expenses | |||||||||||
Unearned premiums | |||||||||||
Current portion of lease obligations | |||||||||||
Current portion of notes payable | |||||||||||
Total current liabilities | |||||||||||
Lease obligations | |||||||||||
Deferred taxes | |||||||||||
Asset retirement obligations | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Shareholders’ equity | |||||||||||
Common stock | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost | ( | ( | |||||||||
Biglari Holdings Inc. shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Insurance premiums and other | |||||||||||||||||||||||
Oil and gas | |||||||||||||||||||||||
Media and licensing | |||||||||||||||||||||||
Cost and expenses | |||||||||||||||||||||||
Restaurant cost of sales | |||||||||||||||||||||||
Insurance losses and underwriting expenses | |||||||||||||||||||||||
Oil and gas production costs | |||||||||||||||||||||||
Media and licensing costs | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Impairments | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Interest expense on leases | |||||||||||||||||||||||
Interest expense on notes payable | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Investment gains | |||||||||||||||||||||||
Investment partnership gains (losses) | ( | ( | |||||||||||||||||||||
( | ( | ||||||||||||||||||||||
Earnings (loss) before income taxes | ( | ( | |||||||||||||||||||||
Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
Net earnings (loss) | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Net earnings (loss) per equivalent Class A share * | $ | ( | $ | $ | $ | ( |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||
Net earnings (loss) | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Foreign currency translation | ( | ( | |||||||||||||||||||||
Total comprehensive income (loss) | $ | ( | $ | $ | $ | ( |
First Nine Months | |||||||||||
2021 | 2020 | ||||||||||
(Unaudited) | |||||||||||
Operating activities | |||||||||||
Net earnings (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net earnings (loss) to operating cash flows: | |||||||||||
Depreciation and amortization | |||||||||||
Provision for deferred income taxes | ( | ||||||||||
Asset impairments and other non-cash expenses | |||||||||||
Gains on disposal of assets | ( | ( | |||||||||
Investment gains and investment partnership gains/losses | ( | ||||||||||
Distributions from investment partnerships | |||||||||||
Changes in receivables, inventories and other assets | |||||||||||
Changes in accounts payable and accrued expenses | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from property and equipment disposals | |||||||||||
Acquisition of business, net of cash acquired | ( | ||||||||||
Purchases of limited partner interests | ( | ( | |||||||||
Purchases of investments | ( | ( | |||||||||
Redemptions of fixed maturity securities | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Proceeds from revolving credit facility | |||||||||||
Principal payments on long-term debt | ( | ( | |||||||||
Principal payments on direct financing lease obligations | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash | ( | ( | |||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of year | |||||||||||
Cash, cash equivalents and restricted cash at end of third quarter | $ | $ |
First Nine Months | |||||||||||
2021 | 2020 | ||||||||||
(Unaudited) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash in other long-term assets | |||||||||||
Cash, cash equivalents and restricted cash at end of third quarter | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | |||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | ( | ( | |||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | ( | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | |||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||
Net earnings (loss) | |||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||
Adjustment to treasury stock for holdings in investment partnerships | ( | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||||||||||
Common stock authorized | |||||||||||||||||||||||
Common stock issued and outstanding |
Fair Value | Company Common Stock | Carrying Value | |||||||||||||||
Partnership interest at December 31, 2020 | $ | $ | $ | ||||||||||||||
Investment partnership gains (losses) | |||||||||||||||||
Distributions (net of contributions) | ( | ( | |||||||||||||||
Increase in proportionate share of Company stock held | ( | ||||||||||||||||
Partnership interest at September 30, 2021 | $ | $ | $ |
Fair Value | Company Common Stock | Carrying Value | |||||||||||||||
Partnership interest at December 31, 2019 | $ | $ | $ | ||||||||||||||
Investment partnership gains (losses) | ( | ( | ( | ||||||||||||||
Distributions (net of contributions) | ( | ( | |||||||||||||||
Decrease in proportionate share of Company stock held | ( | ||||||||||||||||
Partnership interest at September 30, 2020 | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Carrying value of investment partnerships | $ | $ | |||||||||
Deferred tax liability related to investment partnerships | ( | ( | |||||||||
Carrying value of investment partnerships net of deferred taxes | $ | $ |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Gains (losses) on investment partnership | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Tax expense (benefit) | ( | ( | |||||||||||||||||||||
Contribution to net earnings | $ | ( | $ | $ | $ | ( |
Equity in Investment Partnerships | |||||||||||
Lion Fund | Lion Fund II | ||||||||||
Total assets as of September 30, 2021 | $ | $ | |||||||||
Total liabilities as of September 30, 2021 | $ | $ | |||||||||
Revenue for the first nine months of 2021 | $ | $ | |||||||||
Earnings for the first nine months of 2021 | $ | $ | |||||||||
Biglari Holdings' ownership interest as of September 30, 2021 | % | % | |||||||||
Total assets as of December 31, 2020 | $ | $ | |||||||||
Total liabilities as of December 31, 2020 | $ | $ | |||||||||
Revenue for the first nine months of 2020 | $ | ( | $ | ( | |||||||
Earnings for the first nine months of 2020 | $ | ( | $ | ( | |||||||
Biglari Holdings' ownership interest as of September 30, 2020 | % | % |
September 30, 2021 | December 31, 2020 | ||||||||||
Land | $ | $ | |||||||||
Buildings | |||||||||||
Land and leasehold improvements | |||||||||||
Equipment | |||||||||||
Oil and gas properties | |||||||||||
Construction in progress | |||||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Goodwill | |||||
Goodwill at December 31, 2020 | $ | ||||
Change in foreign exchange rates during the first nine months of 2021 | ( | ||||
Goodwill at September 30, 2021 | $ |
Trade Names | Lease Rights | Total | |||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ||||||||||||||
Change in foreign exchange rates during the first nine months of 2021 | ( | ( | |||||||||||||||
Balance at September 30, 2021 | $ | $ | $ |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Franchise partner fees | |||||||||||||||||||||||
Franchise royalties and fees | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
$ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Accounts payable | $ | $ | |||||||||
Gift card liability | |||||||||||
Insurance accruals | |||||||||||
Salaries, wages and vacation | |||||||||||
Deferred revenue | |||||||||||
Taxes payable | |||||||||||
Professional fees | |||||||||||
Other | |||||||||||
Accounts payable and accrued expenses | $ | $ |
Current portion of lease obligations | September 30, 2021 | December 31, 2020 | |||||||||
Finance lease liabilities | $ | $ | |||||||||
Finance obligations | |||||||||||
Operating lease liabilities | |||||||||||
Total current portion of lease obligations | $ | $ | |||||||||
Long-term lease obligations | |||||||||||
Finance lease liabilities | $ | $ | |||||||||
Finance obligations | |||||||||||
Operating leases liabilities | |||||||||||
Total long-term lease obligations | $ | $ |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Finance lease costs: | |||||||||||||||||||||||
Amortization of right-of-use assets | $ | $ | $ | $ | |||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Operating lease costs * | |||||||||||||||||||||||
Total lease costs | $ | $ | $ | $ |
First Nine Months | |||||||||||
2021 | 2020 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Financing cash flows from finance leases | $ | $ | |||||||||
Operating cash flows from finance leases | $ | $ | |||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating lease liabilities | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
Finance leases: | |||||||||||
Property and equipment, net | $ | $ |
September 30, 2021 | |||||
Weighted-average remaining lease terms: | |||||
Finance leases | |||||
Operating leases | |||||
Weighted-average discount rates: | |||||
Finance leases | % | ||||
Operating leases | % |
Year | Operating Leases | Finance Leases | ||||||||||||
2021 | $ | $ | ||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
After 2025 | ||||||||||||||
Total lease payments | ||||||||||||||
Less interest | ||||||||||||||
Total lease liabilities | $ | $ |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating lease income | $ | $ | $ | $ | |||||||||||||||||||
Variable lease income | |||||||||||||||||||||||
Total lease income | $ | $ | $ | $ |
Operating Leases | ||||||||||||||
Year | Subleases | Owned Properties | ||||||||||||
2021 | $ | $ | ||||||||||||
2022 | ||||||||||||||
2023 | ||||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
After 2025 | ||||||||||||||
Total future minimum receipts | $ | $ | ||||||||||||
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer goods | |||||||||||||||||||||||||||||||||||||||||||||||
Insurance | |||||||||||||||||||||||||||||||||||||||||||||||
Bonds | |||||||||||||||||||||||||||||||||||||||||||||||
Government | |||||||||||||||||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||||||||||||||
Options on equity securities | |||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation plan investments | |||||||||||||||||||||||||||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | $ | $ | $ | $ |
Revenue | |||||||||||||||||||||||
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating Businesses: | |||||||||||||||||||||||
Restaurant Operations: | |||||||||||||||||||||||
Steak n Shake | $ | $ | $ | $ | |||||||||||||||||||
Western Sizzlin | |||||||||||||||||||||||
Total Restaurant Operations | |||||||||||||||||||||||
Insurance Operations: | |||||||||||||||||||||||
First Guard | |||||||||||||||||||||||
Southern Pioneer | |||||||||||||||||||||||
Total Insurance Operations | |||||||||||||||||||||||
Southern Oil | |||||||||||||||||||||||
Maxim | |||||||||||||||||||||||
$ | $ | $ | $ |
Earnings (Losses) Before Income Taxes | |||||||||||||||||||||||
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating Businesses: | |||||||||||||||||||||||
Restaurant Operations: | |||||||||||||||||||||||
Steak n Shake | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Western Sizzlin | ( | ( | |||||||||||||||||||||
Total Restaurant Operations | ( | ( | ( | ||||||||||||||||||||
Insurance Operations: | |||||||||||||||||||||||
First Guard | |||||||||||||||||||||||
Southern Pioneer | |||||||||||||||||||||||
Total Insurance Operations | |||||||||||||||||||||||
Southern Oil | |||||||||||||||||||||||
Maxim | ( | ||||||||||||||||||||||
Interest expense not allocated to segments | ( | ( | ( | ||||||||||||||||||||
Total Operating Businesses | ( | ||||||||||||||||||||||
Corporate and Investments: | |||||||||||||||||||||||
Corporate and other | ( | ( | ( | ( | |||||||||||||||||||
Investment gains | |||||||||||||||||||||||
Investment partnership gains (losses) | ( | ( | |||||||||||||||||||||
Total Corporate and Investments | ( | ( | |||||||||||||||||||||
$ | ( | $ | $ | $ | ( |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating businesses: | |||||||||||||||||||||||
Restaurant | $ | (1,515) | $ | (15) | $ | 5,146 | $ | (6,199) | |||||||||||||||
Insurance | 2,985 | 2,204 | 8,902 | 6,819 | |||||||||||||||||||
Oil and gas | 2,325 | 389 | 7,016 | 1,278 | |||||||||||||||||||
Media and licensing | (43) | 885 | 662 | 1,236 | |||||||||||||||||||
Interest expense | — | (1,612) | (841) | (5,219) | |||||||||||||||||||
Total operating businesses | 3,752 | 1,851 | 20,885 | (2,085) | |||||||||||||||||||
Corporate and other | (2,526) | (2,081) | (6,649) | (5,762) | |||||||||||||||||||
Investment gains | 3,390 | 276 | 4,896 | 1,468 | |||||||||||||||||||
Investment partnership gains (losses) | (15,285) | 21,055 | 21,169 | (67,939) | |||||||||||||||||||
$ | (10,669) | $ | 21,101 | $ | 40,301 | $ | (74,318) |
Steak n Shake | Western Sizzlin | ||||||||||||||||||||||||||||||||||
Company- operated | Franchise Partner | Traditional Franchise | Company- operated | Franchise | Total | ||||||||||||||||||||||||||||||
Total stores as of December 31, 2020 | 276 | 86 | 194 | 3 | 39 | 598 | |||||||||||||||||||||||||||||
Corporate stores transitioned | (54) | 54 | — | — | — | — | |||||||||||||||||||||||||||||
Net restaurants opened (closed) | (1) | — | (15) | — | (1) | (17) | |||||||||||||||||||||||||||||
Total stores as of September 30, 2021 | 221 | 140 | 179 | 3 | 38 | 581 | |||||||||||||||||||||||||||||
Total stores as of December 31, 2019 | 368 | 29 | 213 | 4 | 48 | 662 | |||||||||||||||||||||||||||||
Corporate stores transitioned | (41) | 40 | 1 | — | — | — | |||||||||||||||||||||||||||||
Net restaurants opened (closed) | (67) | — | (15) | (1) | (9) | (92) | |||||||||||||||||||||||||||||
Total stores as of September 30, 2020 | 260 | 69 | 199 | 3 | 39 | 570 |
Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 41,916 | $ | 67,617 | $ | 146,269 | $ | 241,832 | |||||||||||||||||||||||||||||||||||||||
Franchise partner fees | 11,508 | 6,894 | 31,744 | 14,775 | |||||||||||||||||||||||||||||||||||||||||||
Franchise royalties and fees | 4,865 | 4,421 | 14,594 | 13,704 | |||||||||||||||||||||||||||||||||||||||||||
Other revenue | 855 | 742 | 3,817 | 2,271 | |||||||||||||||||||||||||||||||||||||||||||
Total revenue | 59,144 | 79,674 | 196,424 | 272,582 | |||||||||||||||||||||||||||||||||||||||||||
Restaurant cost of sales | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of food | 13,123 | 31.3 | % | 19,508 | 28.9 | % | 43,404 | 29.7 | % | 70,880 | 29.3 | % | |||||||||||||||||||||||||||||||||||
Restaurant operating costs | 24,496 | 58.4 | % | 30,451 | 45.0 | % | 71,751 | 49.1 | % | 110,903 | 45.9 | % | |||||||||||||||||||||||||||||||||||
Occupancy costs | 4,075 | 9.7 | % | 4,103 | 6.1 | % | 14,142 | 9.7 | % | 12,954 | 5.4 | % | |||||||||||||||||||||||||||||||||||
Total cost of sales | 41,694 | 54,062 | 129,297 | 194,737 | |||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 9,255 | 15.6 | % | 12,059 | 15.1 | % | 27,416 | 14.0 | % | 30,146 | 11.1 | % | |||||||||||||||||||||||||||||||||||
Marketing | 2,302 | 3.9 | % | 3,891 | 4.9 | % | 10,212 | 5.2 | % | 18,406 | 6.8 | % | |||||||||||||||||||||||||||||||||||
Other expenses | 1,332 | 2.3 | % | 454 | 0.6 | % | 2,266 | 1.2 | % | 1,721 | 0.6 | % | |||||||||||||||||||||||||||||||||||
Total selling, general and administrative | 12,889 | 21.8 | % | 16,404 | 20.6 | % | 39,894 | 20.3 | % | 50,273 | 18.4 | % | |||||||||||||||||||||||||||||||||||
Impairments | — | (3,698) | (559) | (21,817) | |||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (5,811) | (4,376) | (15,615) | (14,088) | |||||||||||||||||||||||||||||||||||||||||||
Gain on debt extinguishment | — | — | — | 5,713 | |||||||||||||||||||||||||||||||||||||||||||
Interest on finance leases and obligations | (1,462) | (1,593) | (4,619) | (4,679) | |||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) before income taxes | (2,712) | (459) | 6,440 | (7,299) | |||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (1,197) | (444) | 1,294 | (1,100) | |||||||||||||||||||||||||||||||||||||||||||
Contribution to net earnings | $ | (1,515) | $ | (15) | $ | 5,146 | $ | (6,199) |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Underwriting gain attributable to: | |||||||||||||||||||||||
First Guard | $ | 2,832 | $ | 2,077 | $ | 7,922 | $ | 6,953 | |||||||||||||||
Southern Pioneer | 397 | 60 | 1,511 | (229) | |||||||||||||||||||
Pre-tax underwriting gain | 3,229 | 2,137 | 9,433 | 6,724 | |||||||||||||||||||
Income tax expense | 681 | 449 | 1,984 | 1,412 | |||||||||||||||||||
Net underwriting gain | $ | 2,548 | $ | 1,688 | $ | 7,449 | $ | 5,312 |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Premiums written | $ | 13,901 | $ | 13,427 | $ | 41,166 | $ | 35,590 | |||||||||||||||
Insurance losses | 6,657 | 7,419 | 20,040 | 18,494 | |||||||||||||||||||
Underwriting expenses | 4,015 | 3,871 | 11,693 | 10,372 | |||||||||||||||||||
Pre-tax underwriting gain | 3,229 | 2,137 | 9,433 | 6,724 | |||||||||||||||||||
Other income and expenses | |||||||||||||||||||||||
Investment income and commissions | 646 | 817 | 2,033 | 2,749 | |||||||||||||||||||
Other expenses | (33) | (284) | (68) | (822) | |||||||||||||||||||
Total other income | 613 | 533 | 1,965 | 1,927 | |||||||||||||||||||
Earnings before income taxes | 3,842 | 2,670 | 11,398 | 8,651 | |||||||||||||||||||
Income tax expense | 857 | 466 | 2,496 | 1,832 | |||||||||||||||||||
Contribution to net earnings | $ | 2,985 | $ | 2,204 | $ | 8,902 | $ | 6,819 |
Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||
Premiums written | $ | 8,458 | 100.0 | % | $ | 7,505 | 100.0 | % | $ | 24,760 | 100.0 | % | $ | 22,195 | 100.0 | % | |||||||||||||||||||||||||||||||
Insurance losses | 3,935 | 46.5 | % | 3,736 | 49.8 | % | 11,746 | 47.4 | % | 10,268 | 46.3 | % | |||||||||||||||||||||||||||||||||||
Underwriting expenses | 1,691 | 20.0 | % | 1,692 | 22.5 | % | 5,092 | 20.6 | % | 4,974 | 22.4 | % | |||||||||||||||||||||||||||||||||||
Total losses and expenses | 5,626 | 66.5 | % | 5,428 | 72.3 | % | 16,838 | 68.0 | % | 15,242 | 68.7 | % | |||||||||||||||||||||||||||||||||||
Pre-tax underwriting gain | $ | 2,832 | $ | 2,077 | $ | 7,922 | $ | 6,953 |
Third Quarter | First Nine Months | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||
Premiums written | $ | 5,443 | 100.0 | % | $ | 5,922 | 100.0 | % | $ | 16,406 | 100.0 | % | $ | 13,395 | 100.0 | % | |||||||||||||||||||||||||||||||
Insurance losses | 2,722 | 50.0 | % | 3,683 | 62.2 | % | 8,294 | 50.6 | % | 8,226 | 61.4 | % | |||||||||||||||||||||||||||||||||||
Underwriting expenses | 2,324 | 42.7 | % | 2,179 | 36.8 | % | 6,601 | 40.2 | % | 5,398 | 40.3 | % | |||||||||||||||||||||||||||||||||||
Total losses and expenses | 5,046 | 92.7 | % | 5,862 | 99.0 | % | 14,895 | 90.8 | % | 13,624 | 101.7 | % | |||||||||||||||||||||||||||||||||||
Pre-tax underwriting gain | $ | 397 | $ | 60 | $ | 1,511 | $ | (229) |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Interest, dividends and other investment income: | |||||||||||||||||||||||
First Guard | $ | 54 | $ | 75 | $ | 84 | $ | 246 | |||||||||||||||
Southern Pioneer | 141 | 121 | 568 | 821 | |||||||||||||||||||
Pre-tax investment income | 195 | 196 | 652 | 1,067 | |||||||||||||||||||
Income tax expense | 41 | 41 | 137 | 224 | |||||||||||||||||||
Net investment income | $ | 154 | $ | 155 | $ | 515 | $ | 843 |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Oil and gas revenue | $ | 7,353 | $ | 6,029 | $ | 24,310 | $ | 19,554 | |||||||||||||||
Oil and gas production costs | 2,050 | 2,171 | 6,957 | 6,570 | |||||||||||||||||||
Depreciation, depletion and accretion | 1,717 | 2,804 | 6,286 | 9,651 | |||||||||||||||||||
General and administrative expenses | 604 | 462 | 2,020 | 1,978 | |||||||||||||||||||
Earnings before income taxes | 2,982 | 592 | 9,047 | 1,355 | |||||||||||||||||||
Income tax expense | 657 | 203 | 2,031 | 77 | |||||||||||||||||||
Contribution to net earnings | $ | 2,325 | $ | 389 | $ | 7,016 | $ | 1,278 |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Media and licensing revenue | $ | 863 | $ | 1,719 | $ | 2,695 | $ | 3,209 | |||||||||||||||
Media and licensing costs | 880 | 548 | 1,749 | 1,491 | |||||||||||||||||||
General and administrative expenses | 39 | 21 | 79 | 113 | |||||||||||||||||||
Earnings before income taxes | (56) | 1,150 | 867 | 1,605 | |||||||||||||||||||
Income tax expense (benefit) | (13) | 265 | 205 | 369 | |||||||||||||||||||
Contribution to net earnings | $ | (43) | $ | 885 | $ | 662 | $ | 1,236 |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Investment partnership gains (losses) | $ | (20,231) | $ | 27,218 | $ | 27,344 | $ | (89,276) | |||||||||||||||
Tax expense (benefit) | (4,946) | 6,163 | 6,175 | (21,337) | |||||||||||||||||||
Contribution to net earnings | $ | (15,285) | $ | 21,055 | $ | 21,169 | $ | (67,939) |
Third Quarter | First Nine Months | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Interest expense on notes payable | $ | — | $ | 2,150 | $ | 1,121 | $ | 6,973 | |||||||||||||||
Tax benefit | — | 538 | 280 | 1,754 | |||||||||||||||||||
Interest expense net of tax | $ | — | $ | 1,612 | $ | 841 | $ | 5,219 |
September 30, 2021 | December 31, 2020 | ||||||||||
Cash and cash equivalents | $ | 27,795 | $ | 24,503 | |||||||
Investments | 99,006 | 94,861 | |||||||||
Fair value of interest in investment partnerships | 533,996 | 590,926 | |||||||||
Total cash and investments | 660,797 | 710,290 | |||||||||
Less: portion of Company stock held by investment partnerships | (260,907) | (171,376) | |||||||||
Carrying value of cash and investments on balance sheet | $ | 399,890 | $ | 538,914 |
First Nine Months | |||||||||||
2021 | 2020 | ||||||||||
Net cash provided by operating activities | $ | 211,245 | $ | 106,367 | |||||||
Net cash used in investing activities | (55,782) | (112,081) | |||||||||
Net cash used in financing activities | (154,586) | (26,381) | |||||||||
Effect of exchange rate changes on cash | (85) | (13) | |||||||||
Increase (decrease) in cash, cash equivalents and restricted cash | $ | 792 | $ | (32,108) |
Total Number of Class A Shares Purchased | Average Price Paid per Class A Share | Total Number of Class B Shares Purchased | Average Price Paid per Class B Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs | ||||||||||||||||||||||||||||||
July 1, 2021 – July 31, 2021 | — | $ | — | — | $ | — | — | — | |||||||||||||||||||||||||||
August 1, 2021 – August 31, 2021 | 1,618 | $ | 850.71 | 12,937 | $ | 171.59 | — | — | |||||||||||||||||||||||||||
September 1, 2021 – September 30, 2021 | — | $ | — | — | $ | — | — | — | |||||||||||||||||||||||||||
Total | 1,618 | 12,937 | — |
Exhibit Number | Description | |||||||
101 | Interactive Data Files. | |||||||
104 | Cover page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) |
* | Furnished herewith. |
Biglari Holdings Inc. | |||||||||||
Date: November 5, 2021 | By: | /s/ BRUCE LEWIS | |||||||||
Bruce Lewis | |||||||||||
Controller |
Date: November 5, 2021 | /s/ Sardar Biglari | ||||||||||
Sardar Biglari | |||||||||||
Chairman and Chief Executive Officer |
Date: November 5, 2021 | By: | /s/ Bruce Lewis | ||||||||||||
Bruce Lewis | ||||||||||||||
Controller |
/s/ Sardar Biglari | |||||
Sardar Biglari | |||||
Chairman and Chief Executive Officer | |||||
Date: November 5, 2021 |
/s/ Bruce Lewis | |||||
Bruce Lewis | |||||
Controller | |||||
Date: November 5, 2021 |
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|||
Revenues | ||||||
Restaurant operations | $ 59,144 | $ 79,674 | $ 196,424 | $ 272,582 | ||
Insurance premiums and other | 14,723 | 14,413 | 43,729 | 38,692 | ||
Oil and gas | 7,353 | 6,029 | 24,310 | 19,554 | ||
Media and licensing | 863 | 1,719 | 2,695 | 3,209 | ||
Total revenues | 82,083 | 101,835 | 267,158 | 334,037 | ||
Cost and expenses | ||||||
Restaurant cost of sales | 41,694 | 54,062 | 129,297 | 194,737 | ||
Insurance losses and underwriting expenses | 10,672 | 11,290 | 31,733 | 28,866 | ||
Oil and gas production costs | 2,050 | 2,171 | 6,957 | 6,570 | ||
Media and licensing costs | 880 | 548 | 1,749 | 1,491 | ||
Selling, general and administrative | 16,889 | 19,902 | 50,848 | 54,974 | ||
Impairments | 0 | 3,698 | 559 | 21,817 | ||
Depreciation and amortization | 7,682 | 7,275 | 22,239 | 24,284 | ||
Interest expense on leases | 1,462 | 1,593 | 4,619 | 4,679 | ||
Interest expense on notes payable | 0 | 2,150 | 1,121 | 6,973 | ||
Total cost and expenses | 81,329 | 102,689 | 249,122 | 344,391 | ||
Other income | ||||||
Investment gains | 4,534 | 354 | 6,465 | 1,863 | ||
Investment partnership gains (losses) | (20,231) | 27,218 | 27,344 | (89,276) | ||
Total other income (expenses) | (15,697) | 27,572 | 33,809 | (87,413) | ||
Earnings (loss) before income taxes | (14,943) | 26,718 | 51,845 | (97,767) | ||
Income tax expense (benefit) | (4,274) | 5,617 | 11,544 | (23,449) | ||
Net earnings (loss) | $ (10,669) | $ 21,101 | $ 40,301 | $ (74,318) | ||
Earnings per share | ||||||
Revenue from Contract with Customer, Product and Service [Extensible List] | Product and Service [Domain] | |||||
Common Class A | ||||||
Earnings per share | ||||||
Net earnings (loss) per equivalent Class A share, basic (in dollars per share) | [1] | $ (33.74) | $ 60.07 | $ 125.79 | $ (213.31) | |
Net earnings (loss) per equivalent Class A share, diluted (in dollars per share) | (33.74) | 60.07 | 125.79 | (213.31) | ||
Common Class B | ||||||
Earnings per share | ||||||
Net earnings (loss) per equivalent Class A share, basic (in dollars per share) | (6.75) | 12.01 | 25.16 | (42.66) | ||
Net earnings (loss) per equivalent Class A share, diluted (in dollars per share) | $ (6.75) | $ 12.01 | $ 25.16 | $ (42.66) | ||
|
CONSOLIDATED STATEMENTS OF EARNINGS (Parenthetical) - Common Class B |
9 Months Ended |
---|---|
Sep. 30, 2021
$ / shares
| |
Net earnings (loss) per equivalent Class B share, basic (in dollars per share) | $ 25.16 |
Net earnings (loss) per equivalent Class B share, diluted (in dollars per share) | $ 25.16 |
Net earnings (loss) per equivalent share ratio | 0.2 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ (10,669) | $ 21,101 | $ 40,301 | $ (74,318) |
Other Comprehensive Income (Loss), Tax [Abstract] | ||||
Foreign currency translation | (49) | 344 | (378) | 834 |
Total comprehensive income (loss) | $ (10,718) | $ 21,445 | $ 39,923 | $ (73,484) |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business The accompanying unaudited consolidated financial statements of Biglari Holdings Inc. 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, 2020. Biglari Holdings is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, media and licensing, restaurants, and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings was founded and is 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 investment and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of September 30, 2021, Mr. Biglari beneficially owns shares of the Company that represent approximately 65.0% of the economic interest and 70.3% of the voting interest. Overview of the Impact of COVID-19 The novel coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization in March of 2020. Government and private sector responses to contain its spread began to affect our operating businesses significantly that same month. The COVID-19 pandemic has adversely affected nearly all of our operations, although the effects are varying significantly. The risks and uncertainties resulting from the pandemic may continue to affect our future earnings, cash flows and financial condition. The extent of such effects over the long term cannot be reasonably estimated at this time. Business Acquisition On March 9, 2020, Biglari Holdings acquired the stock of Southern Pioneer Property & Casualty Insurance Company, and its agency, Southern Pioneer Insurance Agency, Inc. (collectively “Southern Pioneer”). Southern Pioneer underwrites garage liability insurance, commercial property, as well as homeowners and dwelling fire insurance. The financial results for Southern Pioneer are included from the date of acquisition. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc., Western Sizzlin Corporation, First Guard Insurance Company, Maxim Inc., Southern Pioneer, and Southern Oil Company. Intercompany accounts and transactions have been eliminated in consolidation. Change in Presentation Gain on debt extinguishment of $0 and $5,713 during the third quarter and first nine months of 2020, respectively, have been reclassified from other income to selling, general and administrative expenses. Loss and loss adjustment expenses and unearned premiums are reflected separately from accrued expenses on the consolidated balance sheet.
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Earnings Per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per ShareEarnings 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 shares authorized, issued and outstanding on September 30, 2021 and December 31, 2020.
On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of September 30, 2021 and December 31, 2020. The Company has applied the "two-class method" of computing earnings per share as prescribed in Accounting Standards Codification ("ASC") 260, "Earnings Per Share". The equivalent Class A common stock applied for computing earnings per share excludes the proportional shares of Biglari Holdings' stock held by the investment partnerships. The equivalent Class A common stock for the earnings per share calculation during the third quarters of 2021 and 2020 was 316,236 and 351,288, respectively. The equivalent Class A common stock for the earnings per share calculation during the first nine months of 2021 and 2020 was 320,377 and 348,396, respectively.
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Investments |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments were $99,006 and $94,861 as of September 30, 2021 and December 31, 2020, respectively. We classify investments in fixed maturity securities at the acquisition date as either available-for-sale or held-to-maturity and re-evaluate the classification at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Realized gains and losses on disposals of investments are determined on a specific identification basis. Dividends earned on investments are reported as investment income by our insurance companies. We consider investment income as a component of our aggregate insurance operating results. However, we consider investment gains and losses, whether realized or unrealized, as non-operating. Investment gains for the third quarter and first nine months of 2021 were $4,534 and $6,465, respectively, which include a $5,047 gain on the sale of real estate. The Company purchased 26 acres of land in Murfreesboro, Tennessee in 2014 for $2,145 and sold it in the third quarter of 2021. Investment gains for the third quarter and first nine months of 2020 were $354 and $1,863, respectively.
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Investment Partnerships |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Partnerships | 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.
The carrying value of the investment partnerships net of deferred taxes is presented below.
The Company’s proportionate share of Company stock held by investment partnerships at cost is $395,802 and $389,617 at September 30, 2021 and December 31, 2020, 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 of our partnership interests is assessed according to our proportional ownership interest of the fair value of investments held by the investment partnerships. Unrealized gains and losses on marketable securities held by the investment partnerships affect our net earnings. Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.
On December 31 of each year, the general partner of the investment partnerships, 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 total incentive reallocation from Biglari Holdings to Biglari Capital includes gains on the Company’s common stock. Gains and losses on the Company’s common stock and the related incentive reallocations are eliminated in our consolidated financial statements. There were no incentive reallocations from Biglari Holdings to Biglari Capital during the first nine months of 2021 and 2020. Summarized financial information for The Lion Fund, L.P. and The Lion Fund II, L.P. is presented below.
Revenue in the above summarized financial information of the investment partnerships includes investment income and unrealized gains and losses on investments.
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment is composed of the following.
Depletion expense related to oil and gas properties was $5,875 and $9,249 during the first nine months of 2021 and 2020, respectively, and is included in depreciation and amortization within the consolidated statement of earnings. During the first nine months of 2021, the Company recorded impairment charges of $559 related to closed stores. The Company recorded impairment charges of $18,117 in the first nine months of 2020. The fair value of the long-lived assets was determined based on Level 3 inputs using a discounted cash flow model and quoted prices for the properties.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | 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.
We evaluate 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. In response to the adverse effects of the COVID-19 pandemic, during 2020 we considered whether goodwill needed to be evaluated for impairment for certain restaurant reporting units. We considered the available facts and made qualitative assessments and judgments for what we believed represented reasonably possible outcomes. No impairment charges for goodwill were recorded in the first nine months of 2021 or 2020. Western Sizzlin has experienced a decline in its franchised units for several years. If Western Sizzlin's franchised units continue to decline, an impairment of its goodwill may be necessary. Other Intangible Assets Intangible assets with indefinite lives are composed of the following.
During the first nine months of 2020, the Company recorded impairment charges of $3,700 on lease rights related to our international restaurant operations. Fair values were determined using Level 3 inputs and available market data.
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Restaurant Operations Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restaurant Operations Revenues | Restaurant Operations Revenues Restaurant operations revenues were as follows.
Net Sales Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied 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 earnings as revenue. Franchise Partner Fees Franchise partner fees are composed of up to 15% of sales as well as 50% of profits. We are therefore fully affected by the operating results of the business, unlike in a traditional franchising arrangement, where the franchisor obtains a royalty fee based on sales only. We generate most of our revenue from our share of the franchise partners’ profits. An initial franchise fee of ten thousand dollars is recognized when the operator becomes a franchise partner. The Company recognizes franchise partner fees monthly as underlying restaurant sales occur. The Company leases or subleases property and equipment to franchisees under lease arrangements. Both real estate and equipment rental payments are charged to franchisees and are recognized in accordance with ASC 842, "Leases". During the third quarter of 2021 and 2020, restaurant operations recognized $4,277 and $1,606, respectively, in franchise partner fees related to rental fees. During the nine months ended September 30, 2021, and September 30, 2020, restaurant operations recognized $10,910 and $3,617, respectively, in franchise partner fees related to rental fees. Franchise Royalties and Fees Franchise royalties and fees from Steak n Shake and Western Sizzlin franchisees are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. Other 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.
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Accounts Payable and Accrued Expenses |
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Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses include the following.
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Notes Payable and Lease Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable and Lease Obligations | Notes Payable and Lease Obligations 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 was scheduled to mature on March 19, 2021. As of December 31, 2020, $152,506 was outstanding. The Company repaid Steak n Shake's outstanding balance in full on February 19, 2021. Lease obligations include the following.
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Notes Payable and Lease Obligations | Notes Payable and Lease Obligations 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 was scheduled to mature on March 19, 2021. As of December 31, 2020, $152,506 was outstanding. The Company repaid Steak n Shake's outstanding balance in full on February 19, 2021. Lease obligations include the following.
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Leased Assets and Lease Commitments |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leased Assets and Lease Commitments | Leased Assets and Lease Commitments Nature of Leases The Company operates restaurants that are located on sites owned by us and leased from third parties. In addition, the Company owns sites and leases sites from third parties that are leased and/or subleased to franchisees. Company as Lessee A significant portion of our operating and finance lease portfolio includes restaurant locations. 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.
*Includes short-term leases, variable lease costs and sublease income. Supplemental cash flow information related to leases is as follows.
Supplemental balance sheet information related to leases is as follows.
Weighted-average lease terms and discount rates are as follows.
Maturities of lease liabilities as of September 30, 2021 are as follows.
Company as Lessor The components of lease income are as follows.
The following table displays the Company's future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2021. Franchise partner leases and subleases are short-term leases and have been excluded from the table.
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Leased Assets and Lease Commitments | Leased Assets and Lease Commitments Nature of Leases The Company operates restaurants that are located on sites owned by us and leased from third parties. In addition, the Company owns sites and leases sites from third parties that are leased and/or subleased to franchisees. Company as Lessee A significant portion of our operating and finance lease portfolio includes restaurant locations. 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.
*Includes short-term leases, variable lease costs and sublease income. Supplemental cash flow information related to leases is as follows.
Supplemental balance sheet information related to leases is as follows.
Weighted-average lease terms and discount rates are as follows.
Maturities of lease liabilities as of September 30, 2021 are as follows.
Company as Lessor The components of lease income are as follows.
The following table displays the Company's future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2021. Franchise partner leases and subleases are short-term leases and have been excluded from the table.
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Accumulated Other Comprehensive Income |
9 Months Ended |
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Sep. 30, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomeAccumulated other comprehensive loss increased $49 and decreased $344 during the third quarters of 2021 and 2020, respectively. During the first nine months of 2021, accumulated other comprehensive loss increased by $378 and decreased by $834 during the first nine months of 2020. As of September 30, 2021 and 2020, the balances in accumulated other comprehensive loss were $1,909 and $1,976, respectively. There were no reclassifications from accumulated other comprehensive loss to earnings during the first nine months of 2021 and 2020. All changes in accumulated other comprehensive loss were due to foreign currency translation adjustments. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesIn determining the quarterly provision for income taxes, the Company used a discrete effective tax rate method based on statutory tax rates for the first nine months of 2021 and 2020. 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 benefit for the third quarter of 2021 was $4,274 compared to an income tax expense of $5,617 for the third quarter of 2020. Income tax expense for the first nine months of 2021 was $11,544 compared to a benefit of $23,449 for the first nine months of 2020. The variance in income taxes between 2021 and 2020 is attributable to taxes on income generated by the investment partnerships. Investment partnership pretax gains were $27,344 during the first nine months of 2021 compared to pretax losses of $89,276 during the first nine months of 2020. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesWe 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. |
Fair Value of Financial Assets |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets | 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 sheets: Cash equivalents: Cash equivalents primarily consist of money market funds which are classified within Level 1 of the fair value hierarchy. Equity securities: The Company’s investments in equity securities are classified within Levels 1 and 2 of the fair value hierarchy. Bonds: The Company’s investments in bonds consist of both corporate and government debt. Bonds are classified within Level l or Level 2 of the fair value hierarchy. Non-qualified deferred compensation plan investments: The assets of the non-qualified plan are set up in a rabbi trust. They represent mutual funds and publicly traded securities, each of which are classified within Level 1 of the fair value hierarchy. Derivative instruments: Options related to equity securities are marked to market each reporting period and are classified within Level 2 of the fair value hierarchy depending on the instrument. As of September 30, 2021 and December 31, 2020, the fair values of financial assets were as follows.
There were no changes in our valuation techniques used to measure fair values on a recurring basis.
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Service Agreement The Company is party to a service agreement with Biglari Enterprises LLC and Biglari Capital Corp. (collectively, the “Biglari Entities”) under which the Biglari Entities provide services to the Company. The service agreement has a -year term, effective on October 1, 2017. The Company paid Biglari Enterprises $6,300 in service fees during the first nine months of 2021 and 2020. The service agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp. The Biglari Entities are owned by Mr. Biglari. Incentive Agreement The Incentive Agreement establishes a performance-based annual incentive payment for Mr. Biglari contingent upon the growth in adjusted equity in each year attributable to our operating businesses. In order for Mr. Biglari to receive any incentive, our operating businesses must achieve an annual increase in shareholders’ equity in excess of 6% (the “Hurdle Rate”) above the previous highest level (the “High Water Mark”). Mr. Biglari will receive 25% of any incremental book value created above the High Water Mark plus the Hurdle Rate. In any year in which book value declines, our operating businesses must completely recover their deficit from the previous High Water Mark, along with attaining the Hurdle Rate, before Mr. Biglari becomes eligible to receive any further incentive payment.
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Business Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Reporting | Business Segment ReportingOur 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. Our insurance operations include First Guard and Southern Pioneer. The Company also reports segment information for Maxim and Southern Oil. Other business activities not specifically identified with reportable business segments are presented in corporate. 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. A disaggregation of our consolidated data for the third quarters and first nine months of 2021 and 2020 is presented in the tables that follow.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Business Acquisition | Business AcquisitionOn March 9, 2020, Biglari Holdings acquired the stock of Southern Pioneer Property & Casualty Insurance Company, and its agency, Southern Pioneer Insurance Agency, Inc. (collectively “Southern Pioneer”). Southern Pioneer underwrites garage liability insurance, commercial property, as well as homeowners and dwelling fire insurance. The financial results for Southern Pioneer are included from the date of acquisition. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc., Western Sizzlin Corporation, First Guard Insurance Company, Maxim Inc., Southern Pioneer, and Southern Oil Company. Intercompany accounts and transactions have been eliminated in consolidation.
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Changes in Presentation | Change in Presentation Gain on debt extinguishment of $0 and $5,713 during the third quarter and first nine months of 2020, respectively, have been reclassified from other income to selling, general and administrative expenses. Loss and loss adjustment expenses and unearned premiums are reflected separately from accrued expenses on the consolidated balance sheet.
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Outstanding Roll Forward | The following table presents shares authorized, issued and outstanding on September 30, 2021 and December 31, 2020.
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Investment Partnerships (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value and carrying value of our partnership interest | 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.
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Carrying value of investment partnerships net of deferred taxes | The carrying value of the investment partnerships net of deferred taxes is presented below.
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Schedule of Gains (Losses) from Investment Partnerships | Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.
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Schedule of Summarized Financial Information | Summarized financial information for The Lion Fund, L.P. and The Lion Fund II, L.P. is presented below.
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Property and Equipment (Tables) |
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Schedule of Property and Equipment | Property and equipment is composed of the following.
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | A reconciliation of the change in the carrying value of goodwill is as follows.
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Schedule of Finite-Lived Intangible Assets | Intangible assets with indefinite lives are composed of the following.
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Restaurant Operations Revenues (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restaurant operations revenues | Restaurant operations revenues were as follows.
|
Accounts Payable And Accrued Expenses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accounts payable and accrued expenses include the following.
|
Notes Payable and Lease Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Lease obligations include the following.
|
Leased Assets and Lease Commitments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost | Total lease cost consists of the following.
*Includes short-term leases, variable lease costs and sublease income.
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Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow information related to leases is as follows.
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Schedule of supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases is as follows.
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Schedule of weighted-average lease terms and discount rates | Weighted-average lease terms and discount rates are as follows.
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Schedule of Lease Maturities | Maturities of lease liabilities as of September 30, 2021 are as follows.
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Operating Lease, Lease Income | The components of lease income are as follows.
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Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | The following table displays the Company's future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2021. Franchise partner leases and subleases are short-term leases and have been excluded from the table.
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Fair Value of Financial Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of September 30, 2021 and December 31, 2020, the fair values of financial assets were as follows.
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Business Segment Reporting (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | A disaggregation of our consolidated data for the third quarters and first nine months of 2021 and 2020 is presented in the tables that follow.
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Schedule of earnings (losses) before income taxes by segment |
|
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
|
|
Gain on extinguishment of debt | $ 0 | $ 5,713 |
Mr. Biglari | Common Class A | ||
Biglari Holdings' ownership interest | 65.00% | 65.00% |
Mr. Biglari | Common Class B | ||
Biglari Holdings' ownership interest | 70.30% | 70.30% |
Earnings Per Share (Details) - shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Common Class A | ||
Common stock authorized (in shares) | 500,000 | 500,000 |
Common stock issued and outstanding (in shares) | 206,864 | 206,864 |
Common Class B | ||
Common stock authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock issued and outstanding (in shares) | 2,068,640 | 2,068,640 |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Earnings Per Share [Abstract] | |||||
Equivalent class A common stock outstanding (in shares) | 620,592 | 620,592 | 620,592 | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 316,236 | 351,288 | 320,377 | 348,396 |
Investments - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2014
USD ($)
a
|
Dec. 31, 2020
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | ||||
Available-for-sale investments | $ 99,006 | $ 99,006 | $ 94,861 | |
Gain on investment | 4,534 | 6,465 | ||
Gain on sale of real estate investment | $ 5,047 | $ 5,047 | ||
Area of land | a | 26 | |||
Payments to acquire land | $ 2,145 |
Investment Partnerships - Carrying Value (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Equity Method Investments and Joint Ventures [Abstract] | ||
Carrying value of investment partnerships | $ 273,089 | $ 419,550 |
Deferred tax liability related to investment partnerships | (54,432) | (44,805) |
Carrying value of investment partnerships net of deferred taxes | $ 218,657 | $ 374,745 |
Investment Partnerships - Gains and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Equity Method Investments and Joint Ventures [Abstract] | ||||
Gains (losses) on investment partnership | $ (20,231) | $ 27,218 | $ 27,344 | $ (89,276) |
Tax expense (benefit) | (4,946) | 6,163 | 6,175 | (21,337) |
Contribution to net earnings | $ (15,285) | $ 21,055 | $ 21,169 | $ (67,939) |
Investment Partnerships - Summarized Financial Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Schedule of Equity Method Investments [Line Items] | |||||||||
Total assets | $ 919,371 | $ 919,371 | $ 1,017,968 | ||||||
Total liabilities | 320,805 | 320,805 | 453,140 | ||||||
Total revenues | 82,083 | $ 101,835 | 267,158 | $ 334,037 | |||||
Total earnings | (10,669) | $ (20,737) | $ 71,707 | $ 21,101 | $ 42,466 | $ (137,885) | |||
Lion Fund, L.P. | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Total assets | 132,351 | 132,351 | 112,970 | ||||||
Total liabilities | $ 1,490 | 1,490 | 189 | ||||||
Total revenues | 35,639 | (18,941) | |||||||
Total earnings | $ 35,584 | $ (18,992) | |||||||
Biglari Holdings' ownership interest | 62.40% | 66.20% | 62.40% | 66.20% | |||||
Lion Fund II, L.P. | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Total assets | $ 583,989 | $ 583,989 | 566,663 | ||||||
Total liabilities | $ 101,956 | 101,956 | $ 25,453 | ||||||
Total revenues | 94,078 | $ (119,644) | |||||||
Total earnings | $ 93,548 | $ (120,849) | |||||||
Biglari Holdings' ownership interest | 93.90% | 95.30% | 93.90% | 95.30% |
Investment Partnerships - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Equity Method Investments and Joint Ventures [Abstract] | ||
Proportionate share of Company stock held by investment partnerships at cost | $ 395,802 | $ 389,617 |
Incentive reallocation fee, percentage | 25.00% | |
Hurdle rate, percentage | 6.00% |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 144,774 | $ 142,601 |
Buildings | 147,947 | 138,734 |
Land and leasehold improvements | 148,296 | 141,351 |
Equipment | 223,815 | 192,735 |
Oil and gas properties | 73,752 | 75,900 |
Construction in progress | 2,482 | 1,032 |
Total property and equipment | 741,066 | 692,353 |
Less accumulated depreciation and amortization | (388,244) | (376,231) |
Property and equipment, net | $ 352,822 | $ 316,122 |
Property and Equipment (Details Narrative) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Property, Plant and Equipment [Abstract] | ||
Depletion | $ 5,875 | $ 9,249 |
Impairments charges | $ 559 | $ 18,117 |
Goodwill and Other Intangible Assets - Reconciliation of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill at December 31, 2020 | $ 53,596 |
Change in foreign exchange rates during the first nine months of 2021 | (36) |
Goodwill at September 30, 2021 | $ 53,560 |
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2021
USD ($)
| |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at December 31, 2020 | $ 24,065 |
Changes in foreign exchange rates during the first nine months of 2021 | (446) |
Balance at September 30, 2021 | 23,619 |
Trade Names | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at December 31, 2020 | 15,876 |
Changes in foreign exchange rates during the first nine months of 2021 | 0 |
Balance at September 30, 2021 | 15,876 |
Lease Rights | |
Finite-lived Intangible Assets [Roll Forward] | |
Balance at December 31, 2020 | 8,189 |
Changes in foreign exchange rates during the first nine months of 2021 | (446) |
Balance at September 30, 2021 | $ 7,743 |
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Goodwill [Line Items] | ||
Goodwill and intangible asset impairment | $ 0 | $ 0 |
International Restaurant Operations | ||
Goodwill [Line Items] | ||
Goodwill and intangible asset impairment | $ 3,700,000 |
Restaurant Operations Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||
Restaurant operations | $ 59,144 | $ 79,674 | $ 196,424 | $ 272,582 |
Net sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Restaurant operations | 41,916 | 67,617 | 146,269 | 241,832 |
Franchise partner fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Restaurant operations | 11,508 | 6,894 | 31,744 | 14,775 |
Franchise royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Restaurant operations | 4,865 | 4,421 | 14,594 | 13,704 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Restaurant operations | $ 855 | $ 742 | $ 3,817 | $ 2,271 |
Restaurant Operations Revenues - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Revenue from Contract with Customer [Abstract] | ||||
Franchise partner fees sales percent | 15.00% | |||
Franchise partner fees profits percent | 50.00% | |||
Initial franchise partner fee | $ 10,000 | |||
Rental fees | $ 4,277,000 | $ 1,606,000 | $ 10,910,000 | $ 3,617,000 |
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 42,307 | $ 26,537 |
Gift card liability | 21,174 | 21,822 |
Insurance accruals | 6,221 | 6,559 |
Salaries, wages and vacation | 8,378 | 8,285 |
Deferred revenue | 7,546 | 9,324 |
Taxes payable | 4,317 | 10,922 |
Professional fees | 6,169 | 5,882 |
Other | 4,786 | 1,561 |
Accounts payable and accrued expenses | $ 100,898 | $ 90,892 |
Notes Payable and Lease Obligations (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Current portion of lease obligations | ||
Finance lease liabilities | $ 1,536 | $ 1,897 |
Finance obligations | 4,948 | 4,854 |
Operating lease liabilities | 10,746 | 10,614 |
Total current portion of lease obligations | 17,230 | 17,365 |
Long-term lease obligations | ||
Finance lease liabilities | 5,627 | 7,034 |
Finance obligations | 64,315 | 68,148 |
Operating leases liabilities | 38,007 | 36,463 |
Total long-term lease obligations | $ 107,949 | $ 111,645 |
Notes Payable and Lease Obligations - Narrative (Details) - Steak n Shake Credit Facility - USD ($) $ in Thousands |
Dec. 31, 2020 |
Mar. 19, 2014 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt instrument principal amount | $ 220,000 | |
Debt instrument fair value | $ 152,506 |
Leased Assets and Lease Commitments - Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Finance lease costs: | ||||
Amortization of right-of-use assets | $ 404 | $ 279 | $ 1,205 | $ 1,087 |
Interest on lease liabilities | 126 | 136 | 399 | 392 |
Operating lease costs | 240 | 2,096 | 1,403 | 8,321 |
Total lease costs | $ 770 | $ 2,511 | $ 3,007 | $ 9,800 |
Leased Assets and Lease Commitments - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Financing cash flows from finance leases | $ 1,226 | $ 1,132 |
Operating cash flows from finance leases | 384 | 463 |
Operating cash flows from operating leases | 9,806 | 10,382 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating lease liabilities | $ 0 | $ 73 |
Leased Assets and Lease Commitments - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Property and equipment, net | $ 6,005 | $ 6,501 |
Leased Assets and Lease Commitments - Weighted Average Lease Terms and Discount Rates (Details) |
Sep. 30, 2021 |
---|---|
Weighted-average remaining lease terms: | |
Finance leases | 5 years 2 months 12 days |
Operating leases | 5 years 3 months 18 days |
Weighted-average discount rates: | |
Finance leases | 7.00% |
Operating leases | 6.90% |
Leased Assets and Lease Commitments - Lease Maturity Schedule (Details) $ in Thousands |
Sep. 30, 2021
USD ($)
|
---|---|
Operating Leases | |
2021 | $ 4,217 |
2022 | 12,457 |
2023 | 11,204 |
2024 | 9,244 |
2025 | 7,605 |
After 2025 | 13,699 |
Total lease payments | 58,426 |
Less interest | 9,673 |
Total lease liabilities | 48,753 |
Finance Leases | |
2021 | 543 |
2022 | 1,816 |
2023 | 1,551 |
2024 | 1,534 |
2025 | 1,298 |
After 2025 | 1,814 |
Total lease payments | 8,556 |
Less interest | 1,393 |
Total lease liabilities | $ 7,163 |
Leased Assets and Lease Commitments - Lease Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Leases [Abstract] | ||||
Operating lease income | $ 3,211 | $ 1,428 | $ 8,471 | $ 3,259 |
Variable lease income | 1,370 | 449 | 3,375 | 1,183 |
Total lease income | $ 4,581 | $ 1,877 | $ 11,846 | $ 4,442 |
Leased Assets and Lease Commitments - Future Minimum Rental Receipts (Details) $ in Thousands |
Sep. 30, 2021
USD ($)
|
---|---|
Subleases | |
Operating Leases | |
2021 | $ 190 |
2022 | 725 |
2023 | 537 |
2024 | 454 |
2025 | 454 |
After 2025 | 1,916 |
Total future minimum receipts | 4,276 |
Owned Properties | |
Operating Leases | |
2021 | 62 |
2022 | 247 |
2023 | 247 |
2024 | 247 |
2025 | 250 |
After 2025 | 1,052 |
Total future minimum receipts | $ 2,105 |
Accumulated Other Comprehensive Income - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Accumulated other comprehensive loss increase/(decrease) | $ 49 | $ (115) | $ 444 | $ (344) | $ (802) | $ 312 | ||||
Biglari Holdings Inc. shareholders' equity | (598,566) | (613,492) | (639,140) | (538,218) | (522,550) | (479,190) | $ (598,566) | $ (538,218) | $ (564,828) | $ (616,298) |
Accumulated Other Comprehensive Income (Loss) | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Accumulated other comprehensive loss increase/(decrease) | 49 | (115) | 444 | (344) | (802) | 312 | 378 | (834) | ||
Biglari Holdings Inc. shareholders' equity | $ 1,909 | $ 1,860 | $ 1,975 | $ 1,976 | $ 2,320 | $ 3,122 | $ 1,909 | $ 1,976 | $ 1,531 | $ 2,810 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (4,274) | $ 5,617 | $ 11,544 | $ (23,449) |
Investment partnership pretax gains (losses) | $ 27,344 | $ (89,276) |
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Related Party Transaction [Line Items] | ||
Hurdle rate, percentage | 6.00% | |
Incentive reallocation fee, percentage | 25.00% | |
Biglari Entities | ||
Related Party Transaction [Line Items] | ||
Term of agreement | 5 years | |
Hurdle rate, percentage | 6.00% | |
Incentive reallocation fee, percentage | 25.00% | |
Biglari Entities | Services Agreement | ||
Related Party Transaction [Line Items] | ||
Management fee expense | $ 6,300 | $ 6,300 |
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