17. Business Segment Reporting

9 Months Ended

Jul. 04, 2012

Notes to Financial Statements

Business Segment Reporting

Note 17. Business Segment Reporting

Net revenue, earnings before income taxes and noncontrolling interest, and net earnings attributable to Biglari Holdings Inc. for the twelve and forty weeks ended July 4, 2012 and July 6, 2011 were as follows:

	Net Revenue
	Twelve Weeks				Forty Weeks
		2012		2011		2012		2011
Operating Business:
Restaurant Operations:
Steak n Shake	$	170,925	$	165,228	$	549,338	$	524,266
Western		4,261		4,336		11,789		11,825
Total Restaurant Operations		175,186		169,564		561,127		536,091
Investment Management:
Management fees		—		—		—		224
Consolidated affiliated partnerships		587		1,297		4,720		4,545
Total Investment Management Operations		587		1,297		4,720		4,769
	$	175,773	$	170,861	$	565,847	$	540,860

	Earnings before income taxes and noncontrolling interest												Net earnings attributable to Biglari Holdings Inc.
	Twelve Weeks						Forty Weeks						Twelve Weeks						Forty Weeks
		2012			2011			2012			2011			2012			2011				2012			2011
Operating Business:
Restaurant Operations:
Steak n Shake	$	9,018		$	10,091		$	35,737		$	29,122		$	6,961		$	7,571			$	24,658		$	20,938
Western		682			828			1,536			1,705			437			506				965			1,044
Total Restaurant Operations		9,700			10,919			37,273			30,827			7,398			8,077				25,623			21,982
Investment Management:
Biglari Capital Corp. (incentive fee)		—			—			36			2,510			—			—				22			1,535
Management fees		—			—			—			224			—			—				—			139
Consolidated affiliated partnerships		325			2,702			3,899			4,543			108			1,889				624			1,810
Total Investment Management Operations		325			2,702			3,935			7,277			108			1,889				646			3,484
Corporate and Other:
Corporate and other		(3,454	)		(2,802	)		(11,766	)		(5,248	)		(1,671	)		(1,824	)			(6,853	)		(3,379	)
Investment and derivative gains/losses		227			934			4,200			4,385			141			589				2,604			2,763
Total Corporate and Other		(3,227	)		(1,868	)		(7,566	)		(863	)		(1,530	)		(1,235	)			(4,249	)		(616	)
Reconciliation of segments to consolidated amount:
Eliminations		—			—			(36	)		(2,510	)		—			318				—			195
Interest expense, excluding interest allocated to operating businesses		(1,812	)		(602	)		(6,200	)		(2,034	)		(1,123	)		(373	)			(3,844	)		(1,261	)
	$	4,986		$	11,151		$	27,406		$	32,697		$	4,853		$	8,676			$	18,176		$	23,784

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.

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.