Note 3. Earnings Per Share

9 Months Ended

Sep. 30, 2016

Earnings per share

Note 3. Earnings Per Share

Earnings per share of common stock is based on the weighted average number of shares outstanding during the year. The shares of Company stock attributable to our limited partner interest in The Lion Fund, L.P. and The Lion Fund II, L.P. — 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.

From December 18, 2014 to September 30, 2016, The Lion Fund, L.P. and The Lion Fund II, L.P. (collectively, the “investment partnerships”) purchased an aggregate of 716,237 shares of the Company’s common stock pursuant to Rule 10b5-1 Trading Plans and a tender offer, of which 37,925 shares were purchased during the first nine months of 2016. All of the shares purchased by the investment partnerships remain legally outstanding. As of September 30, 2016, Mr. Biglari’s beneficial ownership of the Company’s outstanding common stock was approximately 51.3%.

The following table presents a reconciliation of basic and diluted weighted average common shares.

	Third Quarter		First Nine Months
	2016	2015	2016	2015
Basic earnings per share:
Weighted average common shares ......................................................	1,215,296	1,263,320	1,227,624	1,655,532
Diluted earnings per share:
Weighted average common shares ......................................................	1,215,296	1,263,320	1,227,624	1,655,532
Dilutive effect of stock awards ..........................................................	-	2,008	1,311	2,254
Weighted average common and incremental shares ............................	1,215,296	1,265,328	1,228,935	1,657,786
Number of share-based awards excluded from the calculation of earning per share (shares were anti-dilutive due to the Company's net loss in the third quarter of 2016) ................................................................................	3,177	-	-	-

The Company’s common stock is $0.50 stated value. The following table presents shares authorized, issued and outstanding.

	September 30, 2016	December 31, 2015
Common stock authorized ............................................................................................................	2,500,000	2,500,000
Common stock issued ...................................................................................................................	2,142,202	2,142,202
Treasury stock held by the Company ..........................................................................................	(75,237)	(75,511)
Outstanding shares ........................................................................................................................	2,066,965	2,066,691
Proportional ownership of the Company's common stock in investment partnerships...................	(861,028)	(807,069)
Net outstanding shares for financial reporting purposes ..............................................................	1,205,937	1,259,622