Investment Partnerships

6 Months Ended

Jun. 30, 2025

Equity Method Investments and Joint Ventures [Abstract]

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.