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Investment Partnerships | 6 Months Ended
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Jun. 30, 2025
Equity Method Investments and Joint Ventures [Abstract] |
Investment Partnerships | Investment Partnerships 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 these shares 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. Biglari Capital Corp. is the general partner of the investment partnerships. Biglari Capital Corp. is solely owned by Mr. Biglari. Under the terms of their partnership agreements, each contribution made by the Company to the investment partnerships is subject to a rolling five year lock-up period. The lock-up period can be waived by the general partner in its sole discretion. The fair value and adjustment for Company common stock held by the investment partnerships to determine the carrying value of our partnership interest are presented below.
| Fair Value |  | Company Common Stock |  | Carrying Value
Partnership interest at December 31, 2024 | $ | 656,266 |  |  | $ | 454,539 |  |  | $ | 201,727 |
Investment partnership gains (losses) | 68,515 |  |  | 59,603 |  |  | 8,912 |
Distributions (net of contributions) | (4,935) |  |  |  |  | (4,935) |
Changes in proportionate share of Company stock held |  |  | 2,811 |  |  | (2,811) |
Partnership interest at June 30, 2025 | $ | 719,846 |  |  | $ | 516,953 |  |  | $ | 202,893 |
| Fair Value |  | Company Common Stock |  | Carrying Value
Partnership interest at December 31, 2023 | $ | 472,772 |  |  | $ | 273,669 |  |  | $ | 199,103 |
Investment partnership gains (losses) | (12,645) |  |  | 45,260 |  |  | (57,905) |
Contributions (net of distributions) | 21,924 |  |  |  |  | 21,924 |
Changes in proportionate share of Company stock held |  |  | 4,391 |  |  | (4,391) |
Partnership interest at June 30, 2024 | $ | 482,051 |  |  | $ | 323,320 |  |  | $ | 158,731 |
The carrying value of the investment partnerships net of deferred taxes is presented below.
| June 30, 2025 |  | December 31, 2024
Carrying value of investment partnerships | $ | 202,893 |  |  | $ | 201,727 |
Deferred tax liability related to investment partnerships | (30,030) |  |  | (17,255) |
Carrying value of investment partnerships net of deferred taxes | $ | 172,863 |  |  | $ | 184,472 |
We expect that a majority of the $30,030 deferred tax liability enumerated above will not become due until the dissolution of the investment partnerships. The Company’s proportionate share of Company stock held by investment partnerships at cost was $441,409 and $438,598 at June 30, 2025 and December 31, 2024, respectively. The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value of our partnership interest is assessed according to our proportional ownership interest of the fair value of investments held by the investment partnerships. Unrealized gains and losses on marketable securities held by the investment partnerships affect our net earnings. Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below.
| Second Quarter |  | First Six Months |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Gains (losses) from investment partnerships | $ | 58,504 |  |  | $ | (79,890) |  |  | $ | 8,912 |  |  | $ | (57,905) |  |  |  |  |
Tax expense (benefit) | 12,310 |  |  | (19,142) |  |  | 2,144 |  |  | (14,305) |  |  |  |  |
Contribution to net earnings (loss) | $ | 46,194 |  |  | $ | (60,748) |  |  | $ | 6,768 |  |  | $ | (43,600) |  |  |  |  |
On December 31 of each year, the general partner of the investment partnerships, Biglari Capital Corp., will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above an annual hurdle rate of 6% over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. The total incentive reallocation from Biglari Holdings to Biglari Capital Corp. includes gains on the Company’s common stock. Gains and losses on the Company’s common stock and the related incentive reallocations are eliminated in our financial statements. There were no incentive reallocations accrued during the first six months of 2025 and 2024. Summarized financial information for The Lion Fund, L.P. and The Lion Fund II, L.P. is presented below.
| Equity in Investment Partnerships
| Lion Fund |  | Lion Fund II
Total assets as of June 30, 2025 | $ | 623,894 |  |  | $ | 365,151 |
Total liabilities as of June 30, 2025 | $ | 15,173 |  |  | $ | 178,988 |
Revenue for the first six months of 2025 | $ | 58,537 |  |  | $ | 23,257 |
Earnings for the first six months of 2025 | $ | 57,970 |  |  | $ | 18,396 |
Biglari Holdings’ ownership interest as of June 30, 2025 | 91.6 | % |  | 87.8 | %
Total assets as of December 31, 2024 | $ | 567,387 |  |  | $ | 367,630 |
Total liabilities as of December 31, 2024 | $ | 20,609 |  |  | $ | 188,202 |
Revenue for the first six months of 2024 | $ | 33,316 |  |  | $ | (42,355) |
Earnings for the first six months of 2024 | $ | 32,417 |  |  | $ | (48,207) |
Biglari Holdings’ ownership interest as of June 30, 2024 | 90.2 | % |  | 87.3 | %
Revenue in the financial information of the investment partnerships, summarized above, includes investment income and unrealized gains and losses on investments.

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