On this page of StockholderLetter.com we present the latest annual shareholder letter from Biglari Holdings Inc. — ticker symbol BH. Reading current and past BH letters to shareholders can bring important insights into the investment thesis.
2024
Dear Shareholders of Biglari Holdings Inc.: Biglari Holdings is a collection of controlled and noncontrolled businesses a group we seek to build upon with companies possessing excellent economics and exceptional management. Constructing a corporation is much like constructing an edifice: the stronger the foundation, the higher one can build. Our subsidiary businesses operate independently but their combined profits form a solid base from which the corporation can grow. Our path to prosperity the purchase of businesses in their entirety but also, secondarily, the purchase of partial business ownership via the stock market is based on opportunity. An inherent advantage of a controlled company is that it empowers us to allocate capital. But a selection of marketable common stocks has its own advantages. It provides a wide range of options from which to choose and can sometimes offer quality businesses at uncommonly low prices. We would rather own a fraction of an outstanding business than 100% of a mediocre one. Guided by the North Star of maximizing per-share intrinsic value, Biglari Holdings enhances capital allocation by channeling resources into any industry, any company, anywhere.1 Our growing collection of operating companies began in 2008, when present management gained control of Steak n Shake and turned it into the profitable base of a new holding company. From that small foundation, Biglari Holdings grew through a series of acquisitions. Over the years, we added Western Sizzlin Corporation, Maxim Inc., First Guard Insurance Company, Southern Oil Company, Southern Pioneer Property & Casualty Insurance Company, and Abraxas Petroleum Corporation, listed in order of acquisition. In 2024, Biglari Holdings garnered pre-tax operating earnings of $32.6 million from its seven first-line businesses. Biglari Holdings is a group of unrelated businesses united by a common purpose. By design, we centralize the control of capital and decentralize managerial operations. Only a decentralized structure will enable our corporation to scale with a modicum of staff at headquarters. It also allows for the retention of the very people responsible for the success of the acquired companies. The conventional thinking of most managers is to reinvest profit where it was earned. A manager of, say, a sand business may take its earned profit, pay some of it to shareholders, and plow the rest back into the sand business. Even if we posit that sand is an attractive business to be in today, one earning high returns on capital, it cannot sustain such returns on incremental capital over the long run. Our scope of activity extends beyond the confines of any particular industry, enabling us to pursue those possibilities that yield the highest payoff. This rational allocation of capital diverges from that of the single-line business, whose manager s head may be proverbially stuck in the sand. The ideal business is one that earns very high returns on capital and continues to generate high returns on incremental capital. But businesses of this sort are exceedingly rare, and it is even rarer to purchase one at a reasonable valuation. There is a class of businesses that earns satisfactory returns and substantial cash but lacks the opportunity to generate returns of similar magnitude on incremental capital. The architecture of Biglari Holdings makes such businesses appealing because we can reallocate the excess cash they generate to buy other businesses. Therefore, our corporate structure allows us to replicate the very economics of the ideal business. 1 Intrinsic value is measured by taking all future cash flows into and out of the business and discounting the net figures at an appropriate interest rate. 1 1
Despite the powerful structural advantages we enjoy, our corporate form alone is insufficient to achieve our objectives; it merely sets the stage for business and investment activity. Deploying capital intelligently is the essence of our business. The upshot is that none of our subsidiaries need to grow in order for the holding company s capital to grow. We constantly compare one investment alternative against a multitude of others in determining capital utilization. As a consequence of our seizing remunerative business and investment opportunities over the past sixteen years, Biglari Holdings cash and investments grew from $1.6 million to $790.0 million even while allocating funds toward the acquisition of businesses. The tabulation below shows the year-by-year development of cash and investments. The third column represents our interests in two affiliated investment partnerships, The Lion Fund, L.P., and The Lion Fund II, L.P., which throughout this letter will be referred to as The Lion Fund. 2008......................................... 2009......................................... 2010......................................... 2011......................................... 2012......................................... 2013......................................... 2014......................................... 2015......................................... 2016......................................... 2017......................................... 2018......................................... 2019......................................... 2020......................................... 2021......................................... 2022......................................... 2023......................................... 2024......................................... (In Millions) Marketable Securities The Lion Fund Cash and Cash Equivalents $ 1.6 51.4 47.6 99.0 60.4 94.6 124.3 56.5 75.8 58.6 48.6 67.8 24.5 42.3 37.5 28.0 30.7 3.0 32.5 115.3 269.9 85.5 21.5 23.8 26.8 27.7 38.3 44.9 94.9 83.1 69.5 91.9 103.0 38.6 38.5 48.3 455.3 620.8 734.7 972.7 925.3 715.1 666.1 590.9 474.2 383.0 472.8 656.3 Total Investments 1.6 54.4 118.7 252.8 378.6 635.4 766.6 815.0 1,075.3 1,011.6 802.0 778.8 710.3 599.6 490.0 592.7 790.0 Notes: Data are for calendar years with these exceptions: 2008 ended on July 2, 2008; 2009 through 2014 ended on the last Wednesday in September. Biglari Holdings investments in The Lion Fund, L.P., and The Lion Fund II, L.P., do not include other limited partners interests. If The Lion Fund distributed the shares of Biglari Holdings it owns to its limited partners, the corporation s shares outstanding would be reduced to 263,428 Class A equivalents (as opposed to the 620,592 shares outstanding) at year-end.2 Correspondingly, the value of total investments would be adjusted to $335.4 million, which is the carrying value as opposed to the fair value ($790.0 million) presented in the preceding table. The difference between fair value and carrying value is the sum of Biglari Holdings stock owned by the corporation through The Lion Fund. 2 All per-share figures used in this report apply to Biglari Holdings A shares. The B shares have an economic interest equal to 1/5th that of the A shares. 2 2
Our balance sheet reflects low levels of debt and high levels of investment. We manage our affairs to withstand adversity. We do not know nor do we believe that others know what the future holds. We pay heed to the counsel of Bette Davis in the 1950 classic All About Eve: Fasten your seatbelts. It s going to be a bumpy night. The cash generation of our operating businesses, along with a rock-solid balance sheet, permits us not only to make it through the troughs but also to take advantage of the transfers of wealth they precipitate. We welcome a bumpy ride if it leads to a better destination. Review of the Corporation s History To understand the metamorphosis of the corporation, we must first look back roughly sixteen years that is, from August 5, 2008, through December 31, 2024. When we took over the predecessor corporation, Steak n Shake, in August 2008, its net worth was about $293 million, a figure based on the prior fiscal quarter. Book value, or net worth, represents the capital invested in a company by its owners; it is an accounting term that reflects the capital that has built up in the corporation. But the company could not sell anywhere close to that sum in 2007 or 2008. We can state this with certainty because Steak n Shake tried to find a buyer in 2007, with Merrill Lynch as its advisor, and failed. All bids were below book value. Therefore, in August 2008, Steak n Shake s book value clearly overstated its going-concern value and its liquidation value; the enterprise was at that time a money-losing restaurant operation saddled with substantial lease liabilities. We turned Steak n Shake around in the midst of the Great Recession, and we made it a subsidiary of the holding company we created, Biglari Holdings. Steak n Shake has gone on to generate aggregate pre-tax earnings of $314 million over a sixteen-year period. Steak n Shake s history has seen long stretches of earnings interrupted by a few periods of losses. By the end of 2024, Steak n Shake had a book value of just $177 million, as cash dividends to its parent company exceeded net earnings during this time frame. Notwithstanding, we believe the intrinsic value of Steak n Shake today to be far in excess of its carrying value. During our tenure, we have acquired six businesses in various industries through negotiated transactions. As a group, the businesses we control are worth more than their carrying value. We have also built up liquid assets, mainly marketable stocks, which are carried on our books as if those investments were liquidated at year-end values after paying corporate income tax. Thus, it is the businesses we control that account for the disconnect between the company s intrinsic value and its book value. Whereas book value represents what has been put into the business, intrinsic value represents the discounted present value of cash that can be taken out of the business over its life. Between 2008 and 2024, Biglari Holdings transformed from a company whose resources were committed to a dying restaurant business and whose intrinsic value was far less than its book value into a dynamic corporation with diverse sources of earnings that is worth more than its book. As a consequence, the gain in per-share book value understates the gain in per-share intrinsic value. Of important note is the near 38% reduction in the share count of Biglari Holdings since 2008. The 263,428 Class A equivalent shares at year-end are comparable to the 424,325 shares outstanding prior to present management assuming responsibility. At year-end 2024, Biglari Holdings net worth was about $573 million, or $2,175 on a per-share basis. Our stock currently sells at a discount to book value, which means that any repurchase of shares increases our per-share intrinsic value. In effect, when we buy shares at a price that is lower than their intrinsic worth, we are returning cash to select shareholders those who are selling in a way that 3 3
benefits the continuing shareholders. Phil Cooley, Vice Chairman of Biglari Holdings, and I will focus our efforts on growing per-share intrinsic value, knowing that in the long term, the market price will arrive at about the same destination. Let us examine the two quantitative figures we believe to be critical for evaluating the company: its investments and its operating businesses. It is as if Biglari Holdings were split in two, with one side holding the corporation s investments (cash, marketable securities, and investments in The Lion Fund) and the other its operating businesses, where all interest and corporate expenses are incurred. To calculate pre-tax operating earnings per share, we exclude the dividends, interest, and capital gains produced by our investments. Investments Per Share 2008 ................................................................................. 2021 ................................................................................. 2022 ................................................................................. 2023 ................................................................................. 2024 ................................................................................. Annual Growth Rate, 2008-2024..................................... One-Year Growth Rate, 2023-2024................................. 4 1,236 899 1,121 1,273 41.8% 13.6% Pre-tax Operating Earnings Per Share $ (82.07) 76.31 117.23 138.36 102.52 N.A. (25.9)% As the preceding table conveys, the corporation in 2008 was a small enterprise compared with the present-day Biglari Holdings. In 2024, our investments per share increased by 13.6% to $1,273, and our pre-tax operating earnings per share from businesses decreased by 25.9% to $102.52. In last year s report, we had predicted that, barring a major acquisition, operating earnings would decline. Unfortunately, our prediction was realized. Of course, Phil and I continue to search for sensible acquisitions that will advance operating earnings over time. Since 2008, our compounded annual increase in investments per share has been 41.8%, a figure that is distorted by the paucity of assets with which we started. The growth rate of our investments is almost certain to decline. But one factor that should augment it is the expansion of our insurance business, which by its nature will boost investment holdings. Otherwise, year-to-year changes in investments will be most affected by fluctuations in the value of our marketable securities. Our acquisition activity undoubtedly impacts the growth rate of investments and operating earnings in any given year. Phil and I will do our best to achieve satisfactory growth in both operations and investments, as measured in decades and on a per-share basis. Investments By the end of 2024, total investments (cash, marketable securities, and Biglari Holdings investments in The Lion Fund) amounted to $790.0 million at fair value; most of that sum came from investment profits. Our investment activities are largely conducted through The Lion Fund, whose origin dates from the year 2000 when I founded it. 4 4
 • shareholder letter icon 3/25/2025 Letter Continued (Full PDF)
 • stockholder letter icon 4/13/2023 BH Stockholder Letter
 • stockholder letter icon 3/19/2024 BH Stockholder Letter
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BH Shareholder/Stockholder Letter Transcript:

2024

Dear Shareholders of Biglari Holdings Inc.:
Biglari Holdings is a collection of controlled and noncontrolled businesses     a group we seek
to build upon with companies possessing excellent economics and exceptional management.
Constructing a corporation is much like constructing an edifice: the stronger the foundation, the higher
one can build. Our subsidiary businesses operate independently but their combined profits form a solid
base from which the corporation can grow.
Our path to prosperity     the purchase of businesses in their entirety but also, secondarily, the
purchase of partial business ownership via the stock market     is based on opportunity. An inherent
advantage of a controlled company is that it empowers us to allocate capital. But a selection of
marketable common stocks has its own advantages. It provides a wide range of options from which to
choose and can sometimes offer quality businesses at uncommonly low prices. We would rather own a
fraction of an outstanding business than 100% of a mediocre one. Guided by the North Star of
maximizing per-share intrinsic value, Biglari Holdings enhances capital allocation by channeling
resources into any industry, any company, anywhere.1
Our growing collection of operating companies began in 2008, when present management
gained control of Steak n Shake and turned it into the profitable base of a new holding company. From
that small foundation, Biglari Holdings grew through a series of acquisitions. Over the years, we added
Western Sizzlin Corporation, Maxim Inc., First Guard Insurance Company, Southern Oil Company,
Southern Pioneer Property & Casualty Insurance Company, and Abraxas Petroleum Corporation, listed
in order of acquisition. In 2024, Biglari Holdings garnered pre-tax operating earnings of $32.6 million
from its seven first-line businesses.
Biglari Holdings is a group of unrelated businesses united by a common purpose. By design, we
centralize the control of capital and decentralize managerial operations. Only a decentralized structure
will enable our corporation to scale with a modicum of staff at headquarters. It also allows for the
retention of the very people responsible for the success of the acquired companies.
The conventional thinking of most managers is to reinvest profit where it was earned. A manager
of, say, a sand business may take its earned profit, pay some of it to shareholders, and plow the rest back
into the sand business. Even if we posit that sand is an attractive business to be in today, one earning
high returns on capital, it cannot sustain such returns on incremental capital over the long run. Our scope
of activity extends beyond the confines of any particular industry, enabling us to pursue those
possibilities that yield the highest payoff. This rational allocation of capital diverges from that of the
single-line business, whose manager   s head may be proverbially stuck in the sand.
The ideal business is one that earns very high returns on capital and continues to generate high
returns on incremental capital. But businesses of this sort are exceedingly rare, and it is even rarer to
purchase one at a reasonable valuation. There is a class of businesses that earns satisfactory returns    
and substantial cash     but lacks the opportunity to generate returns of similar magnitude on incremental
capital. The architecture of Biglari Holdings makes such businesses appealing because we can reallocate
the excess cash they generate to buy other businesses. Therefore, our corporate structure allows us to
replicate the very economics of the ideal business.
1
Intrinsic value is measured by taking all future cash flows into and out of the business and discounting the net
figures at an appropriate interest rate.
1
1

Despite the powerful structural advantages we enjoy, our corporate form alone is insufficient to
achieve our objectives; it merely sets the stage for business and investment activity. Deploying capital
intelligently is the essence of our business. The upshot is that none of our subsidiaries need to grow in
order for the holding company   s capital to grow.
We constantly compare one investment alternative against a multitude of others in determining
capital utilization. As a consequence of our seizing remunerative business and investment opportunities
over the past sixteen years, Biglari Holdings    cash and investments grew from $1.6 million to
$790.0 million     even while allocating funds toward the acquisition of businesses. The tabulation below
shows the year-by-year development of cash and investments. The third column represents our interests
in two affiliated investment partnerships, The Lion Fund, L.P., and The Lion Fund II, L.P., which
throughout this letter will be referred to as The Lion Fund.
2008.........................................
2009.........................................
2010.........................................
2011.........................................
2012.........................................
2013.........................................
2014.........................................
2015.........................................
2016.........................................
2017.........................................
2018.........................................
2019.........................................
2020.........................................
2021.........................................
2022.........................................
2023.........................................
2024.........................................
(In Millions)
Marketable
Securities
The Lion Fund
Cash and
Cash Equivalents
$ 1.6
51.4
47.6
99.0
60.4
94.6

124.3
56.5
75.8
58.6
48.6
67.8
24.5
42.3
37.5
28.0
30.7

3.0
32.5
115.3
269.9
85.5
21.5
23.8
26.8
27.7
38.3
44.9
94.9
83.1
69.5
91.9
103.0


38.6
38.5
48.3
455.3
620.8
734.7
972.7
925.3
715.1
666.1
590.9
474.2
383.0
472.8
656.3
Total
Investments

1.6
54.4
118.7
252.8
378.6
635.4
766.6
815.0
1,075.3
1,011.6
802.0
778.8
710.3
599.6
490.0
592.7
790.0
Notes: Data are for calendar years with these exceptions: 2008 ended on July 2, 2008; 2009 through 2014 ended on the last Wednesday in
September. Biglari Holdings    investments in The Lion Fund, L.P., and The Lion Fund II, L.P., do not include other limited partners    interests.
If The Lion Fund distributed the shares of Biglari Holdings it owns to its limited partners, the
corporation   s shares outstanding would be reduced to 263,428 Class A equivalents (as opposed to the
620,592 shares outstanding) at year-end.2 Correspondingly, the value of total investments would be
adjusted to $335.4 million, which is the carrying value as opposed to the fair value ($790.0 million)
presented in the preceding table. The difference between fair value and carrying value is the sum of
Biglari Holdings stock owned by the corporation through The Lion Fund.
2
All per-share figures used in this report apply to Biglari Holdings    A shares. The B shares have an economic
interest equal to 1/5th that of the A shares.
2
2

Our balance sheet reflects low levels of debt and high levels of investment. We manage our
affairs to withstand adversity. We do not know     nor do we believe that others know     what the future
holds. We pay heed to the counsel of Bette Davis in the 1950 classic All About Eve:    Fasten your
seatbelts. It   s going to be a bumpy night.    The cash generation of our operating businesses, along with
a rock-solid balance sheet, permits us not only to make it through the troughs but also to take advantage
of the transfers of wealth they precipitate. We welcome a bumpy ride if it leads to a better destination.
Review of the Corporation   s History
To understand the metamorphosis of the corporation, we must first look back roughly sixteen
years     that is, from August 5, 2008, through December 31, 2024.
When we took over the predecessor corporation, Steak n Shake, in August 2008, its net worth
was about $293 million, a figure based on the prior fiscal quarter. Book value, or net worth, represents
the capital invested in a company by its owners; it is an accounting term that reflects the capital that has
built up in the corporation. But the company could not sell anywhere close to that sum in 2007 or 2008.
We can state this with certainty because Steak n Shake tried to find a buyer in 2007, with Merrill Lynch
as its advisor, and failed. All bids were below book value. Therefore, in August 2008, Steak n Shake   s
book value clearly overstated its going-concern value and its liquidation value; the enterprise was at that
time a money-losing restaurant operation saddled with substantial lease liabilities.
We turned Steak n Shake around in the midst of the Great Recession, and we made it a subsidiary
of the holding company we created, Biglari Holdings. Steak n Shake has gone on to generate aggregate
pre-tax earnings of $314 million over a sixteen-year period. Steak n Shake   s history has seen long
stretches of earnings interrupted by a few periods of losses. By the end of 2024, Steak n Shake had a
book value of just $177 million, as cash dividends to its parent company exceeded net earnings during
this time frame. Notwithstanding, we believe the intrinsic value of Steak n Shake today to be far in
excess of its carrying value.
During our tenure, we have acquired six businesses in various industries through negotiated
transactions. As a group, the businesses we control are worth more than their carrying value. We have
also built up liquid assets, mainly marketable stocks, which are carried on our books as if those
investments were liquidated at year-end values after paying corporate income tax. Thus, it is the
businesses we control that account for the disconnect between the company   s intrinsic value and its book
value. Whereas book value represents what has been put into the business, intrinsic value represents the
discounted present value of cash that can be taken out of the business over its life.
Between 2008 and 2024, Biglari Holdings transformed from a company whose resources were
committed to a dying restaurant business     and whose intrinsic value was far less than its book
value     into a dynamic corporation with diverse sources of earnings that is worth more than its
book. As a consequence, the gain in per-share book value understates the gain in per-share intrinsic
value.
Of important note is the near 38% reduction in the share count of Biglari Holdings since 2008.
The 263,428 Class A equivalent shares at year-end are comparable to the 424,325 shares outstanding
prior to present management assuming responsibility. At year-end 2024, Biglari Holdings    net worth
was about $573 million, or $2,175 on a per-share basis.
Our stock currently sells at a discount to book value, which means that any repurchase of shares
increases our per-share intrinsic value. In effect, when we buy shares at a price that is lower than their
intrinsic worth, we are returning cash to select shareholders     those who are selling     in a way that
3
3

benefits the continuing shareholders. Phil Cooley, Vice Chairman of Biglari Holdings, and I will focus
our efforts on growing per-share intrinsic value, knowing that in the long term, the market price will
arrive at about the same destination.
Let us examine the two quantitative figures we believe to be critical for evaluating the company:
its investments and its operating businesses. It is as if Biglari Holdings were split in two, with one side
holding the corporation   s investments (cash, marketable securities, and investments in The Lion Fund)
and the other its operating businesses, where all interest and corporate expenses are incurred. To
calculate pre-tax operating earnings per share, we exclude the dividends, interest, and capital gains
produced by our investments.
Investments
Per Share
2008 .................................................................................
2021 .................................................................................
2022 .................................................................................
2023 .................................................................................
2024 .................................................................................
Annual Growth Rate, 2008-2024.....................................
One-Year Growth Rate, 2023-2024.................................

4
1,236
899
1,121
1,273
41.8%
13.6%
Pre-tax Operating
Earnings Per Share
$ (82.07)
76.31
117.23
138.36
102.52
N.A.
(25.9)%
As the preceding table conveys, the corporation in 2008 was a small enterprise compared with
the present-day Biglari Holdings.
In 2024, our investments per share increased by 13.6% to $1,273, and our pre-tax operating
earnings per share from businesses decreased by 25.9% to $102.52. In last year   s report, we had
predicted that, barring a major acquisition, operating earnings would decline. Unfortunately, our
prediction was realized. Of course, Phil and I continue to search for sensible acquisitions that will
advance operating earnings over time.
Since 2008, our compounded annual increase in investments per share has been 41.8%, a figure
that is distorted by the paucity of assets with which we started. The growth rate of our investments is
almost certain to decline. But one factor that should augment it is the expansion of our insurance
business, which by its nature will boost investment holdings. Otherwise, year-to-year changes in
investments will be most affected by fluctuations in the value of our marketable securities.
Our acquisition activity undoubtedly impacts the growth rate of investments and operating
earnings in any given year. Phil and I will do our best to achieve satisfactory growth in both operations
and investments, as measured in decades and on a per-share basis.
Investments
By the end of 2024, total investments (cash, marketable securities, and Biglari Holdings   
investments in The Lion Fund) amounted to $790.0 million at fair value; most of that sum came from
investment profits. Our investment activities are largely conducted through The Lion Fund, whose origin
dates from the year 2000 when I founded it.
4
4



shareholder letter icon 3/25/2025 Letter Continued (Full PDF)
 

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