Note 4. Investments

12 Months Ended

Dec. 31, 2015

Investments [Abstract]

Note 4. Investments

Investments consisted of the following.

	December 31,
	2015			2014
Cost	$	24,842		$	11,056
Gross unrealized gains		10			11
Gross unrealized losses		(1,102	)		(267	)
Fair value	$	23,750		$	10,800

Investment gains/losses are recognized when investments are sold (as determined on a specific identification basis) or as otherwise required by GAAP. The timing of realized gains and losses from sales can have a material effect on periodic earnings. However, such realized gains or losses usually have little, if any, impact on total shareholders’ equity because the investments are carried at fair value with any unrealized gains/losses included as a component of accumulated other comprehensive income in shareholders’ equity.  We believe that realized investment gains/losses are often meaningless in terms of understanding reported results. Short-term investment gains/losses have caused and may continue to cause significant volatility in our results.

Investment gains were as follows.

		Fiscal Year
		2014		2013
Gain on contributions to investment partnerships	$	29,524	$	182,746
Gross realized gains on sales		—		1
Other than temporary impairment		—		(570	)
Investment gains (including contributions)	$	29,524	$	182,177

The Company did not recognize any investment gains during 2015 or during the 2014 and 2013 transition periods.

The Company recognized a pre-tax gain of $29,524 ($18,305 net of tax) on a contribution of $74,418 in securities and $182,746 ($114,931 net of tax) on a contribution of $375,936 in securities to the investment partnerships during fiscal years 2014 and 2013, respectively. The gains had a material accounting effect on the Company’s fiscal years 2014 and 2013 earnings. However, these gains had no impact on total shareholders’ equity because the investments were carried at fair value prior to the contribution, with the unrealized gains included as a component of accumulated other comprehensive income.

In connection with the acquisition of First Guard during fiscal year 2014, we acquired $15,043 of investments.

Beginning July 1, 2013, as a result of the sale of Biglari Capital 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.