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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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INDIANA
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37-0684070
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(State or other jurisdiction of incorporation)
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(I.R.S. Employer Identification No.)
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17802 IH 10, Suite 400
San Antonio, Texas
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78257
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, stated value $.50 per share
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New York Stock Exchange
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Item 15. Exhibits and Financial Statement Schedules
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1
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Signatures
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11
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Index to Exhibits
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12
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THE LION FUND II, L.P.
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(A Delaware Limited Partnership)
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STATEMENT OF ASSETS AND LIABILITIES
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December 31, 2015
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December 31, 2014
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|||||||
ASSETS:
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||||||||
Investments in securities — at fair value
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$ | 816,623,168 | $ | 683,828,584 | ||||
Cash
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2,700,311 | 35,515,384 | ||||||
Total assets
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$ | 819,323,479 | $ | 719,343,968 | ||||
LIABILITIES:
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||||||||
Forward contract liability
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$ | 140,350,204 | $ | - | ||||
Accounts payable
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923,722 | 43,722 | ||||||
Total liabilities
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$ | 141,273,926 | $ | 43,722 | ||||
PARTNERS’ CAPITAL
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$ | 678,049,553 | $ | 719,300,246 |
THE LION FUND II, L.P.
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(A Delaware Limited Partnership)
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STATEMENT OF OPERATIONS
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FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
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AND FOR THE PERIOD FROM JULY 1, 2013
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(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 2013
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2015
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2014
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2013
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INVESTMENT INCOME:
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Dividends and interest
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$ | 34,114,436 | $ | 16,000,887 | $ | 5,568,906 | ||||||
EXPENSES:
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Professional fees
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4,962,534 | 48,180 | 30,020 | |||||||||
NET INVESTMENT INCOME
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29,151,902 | 15,952,707 | 5,538,886 | |||||||||
UNREALIZED GAINS (LOSSES):
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||||||||||||
Net change in unrealized appreciation
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(132,247,595 | ) | 156,495,772 | 49,798,755 | ||||||||
NET INCREASE (DECREASE) IN PARTNERS’ CAPITAL
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RESULTING FROM OPERATIONS
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$ | (103,095,693 | ) | $ | 172,448,479 | $ | 55,337,641 |
THE LION FUND II, L.P.
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(A Delaware Limited Partnership)
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STATEMENT OF CHANGES IN PARTNERS’ CAPITAL
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FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
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AND FOR THE PERIOD FROM JULY 1, 2013
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(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 2013
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General
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Limited
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|||||||||||
Partner
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Partners
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Total
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PARTNERS’ CAPITAL — June 30, 2013
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$ | - | $ | - | $ | - | ||||||
Capital contributions
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- | 386,365,067 | 386,365,067 | |||||||||
Capital distributions
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- | (5,560,953 | ) | (5,560,953 | ) | |||||||
Net increase from operations
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1,651 | 55,335,990 | 55,337,641 | |||||||||
Performance reallocation
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10,743,191 | (10,743,191 | ) | - | ||||||||
PARTNERS’ CAPITAL — December 31, 2013
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$ | 10,744,842 | $ | 425,396,913 | $ | 436,141,755 | ||||||
Capital contributions
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- | 134,418,240 | 134,418,240 | |||||||||
Capital distributions
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(12,742,938 | ) | (10,965,290 | ) | (23,708,228 | ) | ||||||
Net increase from operations
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2,408,260 | 170,040,219 | 172,448,479 | |||||||||
Performance reallocation
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34,405,750 | (34,405,750 | ) | - | ||||||||
PARTNERS’ CAPITAL — December 31, 2014
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$ | 34,815,914 | $ | 684,484,332 | $ | 719,300,246 | ||||||
Capital contributions
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- | 83,000,000 | 83,000,000 | |||||||||
Capital distributions
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(920,000 | ) | (20,235,000 | ) | (21,155,000 | ) | ||||||
Net decrease from operations
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(4,492,534 | ) | (98,603,159 | ) | (103,095,693 | ) | ||||||
Performance reallocation
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23,982 | (23,982 | ) | - | ||||||||
PARTNERS’ CAPITAL — December 31, 2015
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$ | 29,427,362 | $ | 648,622,191 | $ | 678,049,553 |
THE LION FUND II, L.P.
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(A Delaware Limited Partnership)
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STATEMENT OF CASH FLOWS
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FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
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AND FOR THE PERIOD FROM JULY 1, 2013
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(DATE OPERATIONS COMMENCED) TO DECEMBER 31, 2013
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2015
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2014
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2013
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net increase (decrease) in partners’ capital resulting from operations
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$ | (103,095,693 | ) | $ | 172,448,479 | $ | 55,337,641 | |||||
Adjustments to reconcile net increase (decrease) in partners’ capital resulting
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from operations to net cash (used in) provided by operating activities:
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Net change in unrealized appreciation
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132,247,595 | (156,495,772 | ) | (49,798,755 | ) | |||||||
Purchases of investments in securities
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(259,787,475 | ) | (16,750,750 | ) | - | |||||||
Advance on forward contract
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135,095,500 | - | - | |||||||||
Increase in accounts payable
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880,000 | 19,222 | 24,500 | |||||||||
Net cash (used in) provided by operating activities
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(94,660,073 | ) | (778,821 | ) | 5,563,386 | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
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Contributions from partners
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83,000,000 | 60,000,000 | - | |||||||||
Distributions to partners
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(21,155,000 | ) | (23,708,228 | ) | (5,560,953 | ) | ||||||
Net cash provided by (used in) financing activities
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61,845,000 | 36,291,772 | (5,560,953 | ) | ||||||||
NET (DECREASE) INCREASE IN CASH
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(32,815,073 | ) | 35,512,951 | 2,433 | ||||||||
CASH — Beginning of period
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35,515,384 | 2,433 | - | |||||||||
CASH — End of period
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$ | 2,700,311 | $ | 35,515,384 | $ | 2,433 | ||||||
SUPPLEMENTAL DISCLOSURE:
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Non-cash contribution of securities from Limited Partners
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$ | - | $ | 74,418,240 | $ | 386,365,067 |
THE LION FUND II, L.P.
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(A Delaware Limited Partnership)
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CONDENSED SCHEDULE OF INVESTMENTS
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AS OF DECEMBER 31, 2015:
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Shares
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Amount
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INVESTMENTS IN COMMON STOCK AT FAIR VALUE:
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United States:
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Diversified:
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Biglari Holdings Inc. (29.6%)
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616,312 | $ | 200,806,776 | |||||
Restaurant:
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Cracker Barrel Old Country Store, Inc. (88.6%)
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4,737,794 | 600,894,413 | ||||||
Other
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14,921,979 | |||||||
TOTAL SECURITIES OWNED (cost $737,321,532) (120.4%)
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$ | 816,623,168 | ||||||
FORWARD CONTRACT LIABILITY (proceeds $135,095,500) (20.7%)
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$ | 140,350,204 | ||||||
(United States, Restaurant, Cracker Barrel Old Country Store, Inc.)
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Percentages shown are computed based on the classification value
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compared to partners’ capital at December 31, 2015.
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AS OF DECEMBER 31, 2014:
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Shares
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Amount
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INVESTMENTS IN COMMON STOCK AT FAIR VALUE:
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United States:
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Restaurant:
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Cracker Barrel Old Country Store, Inc. (92.7%)
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4,737,794 | $ | 666,891,883 | |||||
Other
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16,936,701 | |||||||
TOTAL SECURITIES OWNED (cost $477,534,057) (95.1%)
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$ | 683,828,584 | ||||||
Percentages shown are computed based on the classification value
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compared to partners’ capital at December 31, 2014.
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1.
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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2.
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CONCENTRATIONS OF CREDIT RISK
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3.
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RELATED-PARTY TRANSACTIONS
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4.
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FAIR VALUE MEASUREMENTS
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5.
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SUBSEQUENT EVENTS
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6.
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FINANCIAL HIGHLIGHTS
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2015
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2014
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2013
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Total return before performance reallocation
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(13.31 | )% | 28.59 | % | 15.49 | % | ||||||
Performance reallocation
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0.00 | (6.15 | ) | (2.85 | ) | |||||||
Total return after performance reallocation
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(13.31 | )% | 22.44 | % | 12.64 | % |
Supplemental Data
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2015
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2014
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2013
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Annual gross partnership return
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(12.94 | )% | 40.22 | % | 30.88 | % | ||||||
Annual net partnership return
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(13.59 | )% | 40.21 | % | 30.87 | % |
2015
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2014
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2013
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Ratio to average partners’ capital:
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Expenses before performance reallocation
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0.66 | % | 0.01 | % | 0.02 | % | ||||||
Performance reallocation
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0.00 | 7.21 | 5.11 | |||||||||
Expenses including performance reallocation
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0.66 | % | 7.22 | % | 5.13 | % | ||||||
Net investment income
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3.89 | % | 3.28 | % | 2.65 | % |
Biglari Holdings inc.
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By:
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/s/ Bruce Lewis
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Bruce Lewis
Controller
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Title
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/s/ Sardar Biglari
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Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
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Sardar Biglari
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/s/ Bruce Lewis
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Controller (Principal Financial and Accounting Officer)
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Bruce Lewis
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/s/ Philip Cooley
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Director
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Philip Cooley
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/s/ Kenneth R. Cooper
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Director
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Kenneth R. Cooper
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/s/ William L. Johnson
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Director
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William L. Johnson
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/s/ James P. Mastrian
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Director
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James P. Mastrian
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/s/ Dr. Ruth J. Person
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Director
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Dr. Ruth J. Person
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Exhibit Number
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Description
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23.01
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Consent of Independent Auditors
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31.01
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Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
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31.02
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Rule 13a-14(a)/15d-14(a) Certification of Controller
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32.01
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Section 1350 Certifications
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99.01
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Consent of The Lion Fund II, L.P.
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/s/ DELOITTE & TOUCHE LLP
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Indianapolis, Indiana
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March 30, 2016
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(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 30, 2016
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/s/ Sardar Biglari
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Sardar Biglari
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Chairman and Chief Executive Officer
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(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 30, 2016
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/s/ Bruce Lewis
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Bruce Lewis
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Controller
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/s/ Sardar Biglari
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Sardar Biglari
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Chairman and Chief Executive Officer
March 30, 2016
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/s/ Bruce Lewis
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Bruce Lewis
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Controller
March 30, 2016
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The Lion Fund II, L.P.
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By:
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Biglari Capital Corp., its general partner
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By:
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/s/ Sardar Biglari
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Name:
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Sardar Biglari
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Title:
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Chairman and Chief Executive Officer
March 30, 2016
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