Business Segment Reporting

6 Months Ended

Apr. 11, 2012

Notes to Financial Statements

Business Segment Reporting

17. Business Segment Reporting

Net revenue and earnings before income taxes and noncontrolling interests for the sixteen and twenty-eight weeks ended April 11, 2012 and April 13, 2011 were as follows:

	Net Revenue
	Sixteen Weeks				Twenty-Eight Weeks
		2012		2011		2012		2011
Operating Business:
Restaurant Operations:
Steak n Shake	$	217,921	$	207,142	$	378,413	$	359,038
Western		3,830		3,770		7,528		7,489
Total Restaurant Operations		221,751		210,912		385,941		366,527
Investment Management:
Management fees		—		114		—		224
Consolidated affiliated partnerships		1,933		251		4,133		3,248
Total Investment Management Operations		1,933		365		4,133		3,472
	$	223,684	$	211,277	$	390,074	$	369,999

The earnings presentation was adjusted from the prior year to show interest expense, excluding interest allocated to operating businesses, as a reconciliation of segments to consolidated amounts in order to more accurately reflect the earnings before and after tax of the restaurant operations.

	Earnings before income taxes												Net earnings attributable to Biglari Holdings Inc.
	Sixteen Weeks						Twenty-Eight Weeks						Sixteen Weeks						Twenty-Eight Weeks
		2012			2011			2012			2011			2012			2011			2012			2011
Operating Business:
Restaurant Operations:
Steak n Shake	$	13,070		$	9,475		$	26,719		$	19,031		$	8,738		$	6,778		$	17,697		$	13,367
Western		463			454			854			877			287			281			528			538
Total Restaurant Operations		13,533			9,929			27,573			19,908			9,025			7,059			18,225			13,905
Investment Management:
Biglari Capital Corp. (Incentive Fee)		—			—			36			2,510			—			—			22			1,535
Management fees		—			114			—			224			—			71			—			139
Consolidated affiliated partnerships		1,476			50			3,574			1,841			191			2			467			(79	)
Total Investment Management Operations		1,476			164			3,610			4,575			191			73			489			1,595
Corporate and Other:
Corporate and other		(5,187	)		(1,184	)		(8,312	)		(2,446	)		(3,351	)		(737	)		(5,133	)		(1,555	)
Investment and derivative gains/losses		378			398			3,973			3,451			234			251			2,463			2,174
Total Corporate and Other		(4,809	)		(786	)		(4,339	)		1,005			(3,117	)		(486	)		(2,670	)		619
Reconciliation of segments to consolidated amount:
Eliminations		—			—			(36	)		(2,510	)		—			(463	)		—			(123	)
Interest expense, excluding interest allocated to operating businesses		(2,533	)		(867	)		(4,388	)		(1,432	)		(1,571	)		(538	)		(2,721	)		(888	)
	$	7,667		$	8,440		$	22,420		$	21,546		$	4,528		$	5,645		$	13,323		$	15,108

Biglari Capital, the general partner of the Lion Fund, earned a $36 incentive reallocation fee at December 31, 2011. At December 31, 2010, Biglari Capital earned a $5,199 incentive reallocation fee; however, $2,689 was eliminated, for that amount represents the Company’s fee as a limited partner, which was uncharged because the Company owns the general partner. The remaining $2,510 is an incentive fee that was charged and reallocated from outside limited partners of the Lion Fund. The incentive fee is assessed only once a year, on December 31, and no predictability of such earnings exists because the Lion Fund annual performance is unpredictable.