Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 17, 2020 | Jun. 30, 2019 | |
Entity Registrant Name | Biglari Holdings Inc. | ||
Entity Central Index Key | 0001726173 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 137,552,014 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 206,864 | ||
Class B Common Stock | |||
Entity Common Stock, Shares Outstanding | 2,068,640 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Shareholders' equity | ||
Biglari Holdings Inc. shareholders' equity | $ 616,298 | $ 570,455 |
Consolidated | ||
Current assets: | ||
Cash and cash equivalents | 67,772 | 48,557 |
Investments | 44,856 | 33,860 |
Receivables | 21,640 | 15,743 |
Inventories | 4,674 | 7,537 |
Other current assets | 6,449 | 9,236 |
Total current assets | 145,391 | 114,933 |
Property and equipment | 350,627 | 274,716 |
Operating lease assets | 59,719 | 0 |
Goodwill | 40,040 | 40,052 |
Other intangible assets | 27,349 | 28,114 |
Investment partnerships | 505,542 | 557,480 |
Other assets | 10,641 | 14,198 |
Total assets | 1,139,309 | 1,029,493 |
Current liabilities: | ||
Accounts payable and accrued expenses | 121,079 | 117,265 |
Current portion of operating lease liabilities | 11,635 | 0 |
Current portion of notes payable and other borrowings | 7,103 | 5,720 |
Total current liabilities | 139,817 | 122,985 |
Long-term notes payable and other borrowings | 263,182 | 240,001 |
Operating lease liabilities | 53,271 | 0 |
Deferred taxes | 54,230 | 86,871 |
Asset retirement obligations | 10,447 | 0 |
Other liabilities | 2,064 | 9,181 |
Total liabilities | 523,011 | 459,038 |
Shareholders' equity | ||
Common stock | 1,138 | 1,138 |
Additional paid-in capital | 381,788 | 381,904 |
Retained earnings | 611,039 | 564,160 |
Accumulated other comprehensive loss | (2,810) | (2,516) |
Treasury stock, at cost | (374,857) | (374,231) |
Biglari Holdings Inc. shareholders' equity | 616,298 | 570,455 |
Total liabilities and shareholders' equity | $ 1,139,309 | $ 1,029,493 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Consolidated | ||||
Revenues: | ||||
Restaurant operations | $ 610,220 | $ 775,690 | $ 807,153 | |
Insurance premiums and other | 30,083 | 27,628 | 24,943 | |
Oil and gas | 24,436 | 0 | 0 | |
Media and licensing | 4,099 | 6,576 | 7,708 | |
Total revenues | 668,838 | 809,894 | 839,804 | |
Costs and expenses | ||||
Restaurant cost of sales | 500,949 | 636,456 | 661,030 | |
Insurance losses and underwriting expenses | 22,269 | 20,831 | 19,724 | |
Oil and gas production costs | 7,259 | 0 | 0 | |
Media and licensing costs | 3,181 | 4,152 | 6,527 | |
Selling, general and administrative | 100,150 | 127,232 | 129,019 | |
Impairments | 8,186 | 5,677 | 1,789 | |
Depreciation and amortization | 29,578 | 19,318 | 21,448 | |
Total cost and expenses | 671,572 | 813,666 | 839,537 | |
Other income (expenses) | ||||
Interest expense | (12,442) | (11,677) | (11,040) | |
Interest on finance leases and obligations | (7,816) | (8,207) | (9,082) | |
Investment partnership gains | 78,133 | 40,411 | 6,965 | |
Total other income (expenses) | 57,875 | 20,527 | (13,157) | |
Earnings (loss) before income taxes | 55,141 | 16,755 | (12,890) | |
Income tax expense (benefit) | 9,761 | (2,637) | (62,961) | |
Net earnings | $ 45,380 | $ 19,392 | $ 50,071 | |
Earnings per share | ||||
Net earnings per equivalent Class A share | [1] | $ 131.64 | $ 55.71 | $ 136.01 |
[1] | Net earnings per equivalent Class B share outstanding are one-fifth of the equivalent Class A share or $26.33 for 2019, $11.14 for 2018 and $27.20 for 2017. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net earnings | $ 45,380 | $ 19,392 | $ 50,071 |
Other comprehensive income: | |||
Other comprehensive income (loss), net | (294) | (1,112) | 2,180 |
Consolidated | |||
Net earnings | 45,380 | 19,392 | 50,071 |
Other comprehensive income: | |||
Reclassification to earnings | 0 | (73) | 0 |
Applicable income taxes | 0 | 15 | 0 |
Net change in unrealized gains on investments | 0 | 0 | 284 |
Applicable income taxes | 0 | 0 | (89) |
Foreign currency translation | (294) | (1,054) | 1,985 |
Other comprehensive income (loss), net | (294) | (1,112) | 2,180 |
Total comprehensive income | $ 45,086 | $ 18,280 | $ 52,251 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net earnings | $ 45,380 | $ 19,392 | $ 50,071 |
Adjustments to reconcile net earnings to operating cash flows | |||
Depreciation and amortization | 29,578 | 19,318 | 21,448 |
Provision for deferred income taxes | (38,545) | (2,153) | (64,321) |
Asset impairments and other non-cash expenses | 9,113 | 6,481 | 3,860 |
(Gain) loss on disposal of assets | 264 | 993 | (777) |
Investment (gains) losses | (1,172) | (559) | 0 |
Investment partnership gains | (78,133) | (40,411) | (6,965) |
Distributions from investment partnerships | 129,329 | 29,660 | 9,395 |
Changes in operating assets and liabilities | |||
Changes in receivables and inventories | 3,669 | (359) | (2,235) |
Changes in other assets | 10,450 | 536 | 268 |
Changes in accounts payable and accrued expenses | (16,250) | (12,220) | 15,036 |
Net cash provided by operating activities | 93,683 | 20,678 | 25,780 |
Investing activities | |||
Capital expenditures | (17,679) | (15,293) | (8,034) |
Purchases of perpetual lease rights | 0 | (2,503) | 0 |
Proceeds from property and equipment disposals | 4,577 | 2,590 | 1,004 |
Acquisition of business, net of cash acquired | (51,062) | 0 | 0 |
Distributions from investment partnerships | 40,000 | 39,040 | 0 |
Purchases of limited partner interests | (40,000) | (39,040) | (3,707) |
Purchases of investments | (154,848) | (58,642) | (42,648) |
Redemptions of fixed maturity securities | 149,030 | 48,558 | 41,837 |
Net cash used in investing activities | (69,982) | (25,290) | (11,548) |
Financing activities | |||
Payments on revolving credit facility | 0 | (175) | (202) |
Principal payments on long-term debt | (2,200) | (2,200) | (17,200) |
Principal payments on direct financing lease obligations | (5,810) | (5,204) | (5,628) |
Proceeds from exercise of stock options | 0 | 49 | 30 |
Net cash used in financing activities | (8,010) | (7,530) | (23,000) |
Effect of exchange rate changes on cash | (5) | (78) | 165 |
Increase (decrease) in cash, cash equivalents and restricted cash | 15,686 | (12,220) | (8,603) |
Cash, cash equivalents and restricted cash at beginning of period | 55,010 | 67,230 | 75,833 |
Cash, cash equivalents and restricted cash at the end of period | $ 70,696 | $ 55,010 | $ 67,230 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Beginning Balance at Dec. 31, 2016 | $ 1,071 | $ 381,906 | $ 515,433 | $ (3,584) | $ (362,886) | $ 531,940 |
Net earnings | 50,071 | 50,071 | ||||
Other comprehensive income, net | 2,180 | 2,180 | ||||
Adjustment to treasury stock for holdings in investment partnerships | 116 | (13,009) | (12,893) | |||
Exercise of stock options | (8) | 38 | 30 | |||
Ending Balance at Dec. 31, 2017 | 1,071 | 382,014 | 565,504 | (1,404) | (375,857) | 571,328 |
Net earnings | 19,392 | 19,392 | ||||
Adoption of accounting standards | 90 | 90 | ||||
Other comprehensive income, net | (1,112) | (1,112) | ||||
Conversion of common stock | 67 | (67) | (20,826) | 20,826 | 0 | |
Adjustment to treasury stock for holdings in investment partnerships | (19,292) | (19,292) | ||||
Exercise of stock options | (43) | 92 | 49 | |||
Ending Balance at Dec. 31, 2018 | 1,138 | 381,904 | 564,160 | (2,516) | (374,231) | 570,455 |
Net earnings | 45,380 | 45,380 | ||||
Adoption of accounting standards | 1,499 | 1,499 | ||||
Other comprehensive income, net | (294) | (294) | ||||
Adjustment to treasury stock for holdings in investment partnerships | (116) | (626) | (742) | |||
Ending Balance at Dec. 31, 2019 | $ 1,138 | $ 381,788 | $ 611,039 | $ (2,810) | $ (374,857) | $ 616,298 |
Note 1. Summary of Significant
Note 1. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Note 1. Summary of Significant Accounting Policies | Description of Business Biglari Holdings Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, media and licensing, restaurants and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of December 31, 2019, Mr. Biglari’s beneficial ownership was approximately 64.4% of the Company’s outstanding Class A common stock and 55.4% of the Company’s outstanding Class B common stock. Business Acquisition On September 9, 2019, a wholly-owned subsidiary of the Company, Southern Oil Company, acquired the stock of Southern Oil of Louisiana Inc. (collectively “Southern Oil”) for $51,505 in cash. Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico. The Company’s financial results include the results of Southern Oil from the acquisition date to the end of the year. Acquired assets included oil and gas properties of $69,881 and accounts receivable of $6,735. Acquired liabilities included asset retirement obligations of $10,542, income taxes payable of $4,302, deferred tax liabilities of $5,671 and accounts payable of $3,949. Acquisition related expenses were recorded as general and administrative expenses. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western Sizzlin”), Maxim Inc. (“Maxim”), First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”) and Southern Oil. Intercompany accounts and transactions have been eliminated in consolidation. Cash, Cash Equivalents and Restricted Cash Cash equivalents primarily consist of U.S. Government securities and money market accounts, all of which have original maturities of three months or less. Cash equivalents are carried at fair value. The statement of cash flows includes restricted cash with cash and cash equivalents. Cash as reported on the statements of cash flows consists of the following. December 31, 2019 2018 2017 Cash and cash equivalents $ 67,772 $ 48,557 $ 58,577 Restricted cash included in other long-term assets 2,924 6,453 8,653 Cash, cash equivalents and restricted cash $ 70,696 $ 55,010 $ 67,230 Investments Our investments are carried at fair value with net unrealized gains or losses reported in the statements of earnings. Realized gains and losses on disposals of investments are determined by the specific identification of cost of investments sold. Investment Partnerships The Company holds a limited interest in The Lion Fund, L.P. and The Lion Fund II, L.P. (collectively the “investment partnerships”). Biglari Capital Corp. (“Biglari Capital”), an entity solely owned by Mr. Biglari, is the general partner of the investment partnerships. Our interests in the investment partnerships are accounted as equity method investments because of our retained limited partner interests. The Company records investment partnership gains (inclusive of the investment partnerships’ unrealized gains and losses on their securities) as a component of other income based on our proportional ownership interest in the partnerships. The investment partnerships are, for purposes of generally accepted accounting principles (“GAAP”), investment companies under the AICPA Audit and Accounting Guide Investment Companies. Concentration of Equity Price Risk The majority of our investments are conducted through investment partnerships which generally hold common stocks. We also hold marketable securities directly. Through the investment partnerships we hold a concentrated position in the common stock of Cracker Barrel Old Country Store, Inc. A significant decline in the general stock market or in the prices of major investments may have a materially adverse effect on our earnings and on consolidated shareholders’ equity. Receivables Our accounts receivable balance consists primarily of franchisee, customer, and other receivables. We carry our accounts receivable at cost less an allowance for doubtful accounts, which is based on a history of past write-offs and collections and current credit conditions. Allowance for doubtful accounts was $4,857 and $3,901 at December 31, 2019 and 2018, respectively. Inventories Inventories are valued at the lower of cost (first-in, first-out method) or market, and consist primarily of restaurant food items and supply inventory. Property and Equipment Restaurants Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized on the straight-line method over the estimated useful lives of the assets (10 to 30 years for buildings and land improvements, and 3 to 10 years for equipment). Leasehold improvements are amortized on the straight-line method over the shorter of the estimated useful lives of the improvements or the term of the related leases. Interest costs associated with the construction of new restaurants are capitalized. Major improvements are also capitalized while repairs and maintenance are expensed as incurred. We review our long-lived restaurant assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For purposes of this assessment, assets are evaluated at the lowest level for which there are identifiable cash flows which is generally at the individual restaurant level. Assets included in the impairment assessment generally consist of property, equipment and leasehold improvements directly associated with an individual restaurant as well as any related finance or operating lease assets. If the future undiscounted cash flows of an asset are less than the recorded value, an impairment is recorded for the difference between the carrying value and the estimated fair value of the asset. Oil and Gas Properties The successful efforts method is used for crude oil and natural gas exploration and production activities. All costs for development wells, related plant and equipment, proved mineral interests in crude oil and natural gas properties, and related asset retirement obligation assets are capitalized. Costs of exploratory wells are capitalized pending determination of whether the wells found proved reserves. Costs of wells that are assigned proved reserves remain capitalized. Costs also are capitalized for exploratory wells that have found crude oil and natural gas reserves even if the reserves cannot be classified as proved when the drilling is completed, provided the exploratory well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. All other exploratory wells and costs are expensed. There were no capitalized costs for exploratory activities during 2019. The Company continues to capitalize exploratory well costs after the completion of drilling when (a) the well has found a sufficient quantity of reserves to justify completion as a producing well, and (b) whether sufficient progress has been made in assessing the reserves and the economic and operating viability of the project. If either condition is not met or if the Company obtains information that raises substantial doubt about the economic or operational viability of the project, the exploratory well would be assumed to be impaired, and its costs, net of any salvage value, would be charged to expense. Asset retirement obligations Asset retirement obligations relate to future costs associated with the plugging and abandonment of oil and gas wells, the removal of equipment and facilities from leased acreage, and the return of such land to its original condition. The Company determines its asset retirement obligation amounts by calculating the present value of the estimated future cash outflows associated with its plug and abandonment obligations. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred, and the cost of such liability increases the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period through charges to depreciation, depletion and amortization expense, and the capitalized cost is depleted on a unit-of-production basis over the proved developed reserves of the related asset. If an asset retirement obligation is settled for an amount other than the recorded amount, a gain or loss is recognized. Goodwill and Other Intangible Assets Goodwill and indefinite life intangible assets are not amortized, but are tested for potential impairment on an annual basis, or more often if events or circumstances change that could cause goodwill or indefinite life intangible assets to become impaired. Other purchased intangible assets are amortized over their estimated useful lives, generally on a straight-line basis. We perform reviews for impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. When an impairment is identified, we reduce the carrying value of the asset to its estimated fair value. No impairments were recorded on goodwill or intangible assets during 2019, 2018 or 2017. Refer to Note 7 for information regarding our goodwill and other intangible assets. Dual Class Common Stock Beginning in 2018, the Company has two classes of common stock, designated Class A common stock and Class B common stock. Each Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5 th The following table presents shares authorized, issued and outstanding. December 31, 2019 December 31, 2018 Class A Class B Class A Class B December 31, 2017 Common stock authorized 500,000 10,000,000 500,000 10,000,000 2,500,000 Common stock issued 206,864 2,068,640 206,864 2,068,640 2,142,202 Treasury stock held by the Company — — — — (74,589 ) Outstanding shares 206,864 2,068,640 206,864 2,068,640 2,067,613 On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of December 31, 2019 and 2018, and 620,284 shares outstanding as of December 31, 2017. 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 investment partnerships — 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. The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “ Earnings Per Share Revenue Recognition In May 2014, the Financial Accounting Standards Board (‘‘FASB’') issued Accounting Standards Update (“ASU’') 2014-09, Revenue from Contracts with Customers (Topic 606). On January 1, 2018, we adopted Accounting Standards Codification Topic 606 (“ASC 606”). In accordance with ASC 606, we changed certain characteristics of our revenue recognition accounting policy as described below. ASC 606 was applied using the modified retrospective method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Comparative prior periods have not been adjusted. The impact of ASC 606 on the Company’s balance sheet as of December 31, 2018 was not material. The cumulative change in retained earnings as of January 1, 2018 was $90. Upon adoption of ASC 606, the Company changed its restaurant operations accounting policies for the recognition of franchise fees, recording of advertising arrangements, and recognition of gift card revenue. The adoption of ASC 606 did not have any significant impact on our insurance or media/licensing businesses. Restaurant operations Restaurant operations revenues were disaggregated as follows. 2019 2018 2017 Net sales $ 578,164 $ 740,922 $ 781,856 Franchise royalties and fees 27,189 30,998 20,773 Other 4,867 3,770 4,524 $ 610,220 $ 775,690 $ 807,153 Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of earnings as revenue. Franchise royalties and fees are composed of royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalties are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. During the years ended December 31, 2019 and 2018, restaurant operations recognized $1,725 and $3,096, respectively, in revenue related to initial franchise fees. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to franchise fees of $7,976 and $9,075, respectively. Restaurant operations expects to recognize approximately $928 in 2020 and the balance in the years 2021 through 2040. Our advertising arrangements with franchisees are reported in franchise royalties and fees. During the years ended December 31, 2019 and 2018, restaurant operations recognized $7,815 and $9,675, respectively, in revenue related to franchisee advertising fees. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to franchisee advertising fees of $3,043 and $2,255, respectively. Restaurant operations expects to recognize approximately $1,522 of deferred revenue during 2020 and the balance in 2021. Restaurant operations sells gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimates breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage. For the years ended December 31, 2019 and 2018, restaurant operations recognized $22,869 and $27,081, respectively, of revenue from gift card redemptions. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to unredeemed gift cards of $20,730 and $22,685, respectively. The Company expects to recognize approximately $15,931 in 2020 and the balance in the years 2021 through 2023. Insurance premiums and commissions Insurance premiums are earned over the terms of the related policies. Expenses incurred in connection with acquiring new insurance business, including acquisition costs, are charged to operations as incurred. Premiums earned are stated net of amounts ceded to reinsurer. Oil and gas Revenues are derived from the sale of produced oil and natural gas. Revenue is recognized when the performance obligation is satisfied, which typically occurs at the point in time when control of the product transfers to the customer. Payment is due within 30 days of delivery. Media advertising and other Magazine subscription and advertising revenues are recognized at the magazine cover date. The unearned portion of magazine subscriptions is deferred until the magazine’s cover date, at which time a proportionate share of the gross subscription price is recognized as revenues, net of any commissions paid to subscription agents. Also included in subscription revenues are revenues generated from single-copy sales of magazines through retail outlets such as newsstands, supermarkets, convenience stores and drugstores and on certain digital devices, which may or may not result in future subscription sales. Revenues from retail outlet sales are recognized based on gross sales less a provision for estimated returns. License revenue is recognized when earned. We derive value and revenues from intellectual property assets through a range of licensing and business activities, including licensing and syndication of our trademarks and copyrights in the United States and internationally. Restaurant Cost of Sales Cost of sales includes the cost of food, restaurant operating costs and restaurant rent expense. Cost of sales excludes depreciation and amortization, which is presented as a separate line item on the consolidated statement of earnings. Insurance Losses and Underwriting Expenses Liabilities for estimated unpaid losses and loss adjustment expenses with respect to claims occurring on or before the balance sheet date are established under insurance contracts issued by our insurance subsidiaries. Such estimates include provisions for reported claims or case estimates, provisions for incurred but not reported claims and legal and administrative costs to settle claims. The estimates of unpaid losses and amounts recoverable under reinsurance are established and continually reviewed by using a variety of actuarial, statistical and analytical techniques. Reinsurance contracts do not relieve the ceding company of its obligations to indemnify policyholders with respect to the underlying insurance contracts. Liabilities for insurance losses of $3,211 and $1,891 are included in accrued expenses in the consolidated balance sheet as of December 31, 2019 and 2018, respectively. Oil and Gas Production Costs Oil and gas production costs are composed of lease operating expenses and production taxes. Marketing Expense Advertising costs are charged to expense at the later of the date the expenditure is incurred or the date the promotional item is first communicated. Marketing expense is included in selling, general and administrative expenses in the consolidated statement of earnings. Insurance Reserves We self-insure a significant portion of expected losses under our workers’ compensation, general liability, auto, directors and officers liability, and medical liability insurance programs, and record a reserve for our estimated losses on all unresolved open claims and our estimated incurred but not reported claims at the anticipated cost to us. Insurance reserves are recorded in accrued expenses in the consolidated balance sheet. Savings Plans Several of our subsidiaries also sponsor deferred compensation and defined contribution retirement plans, such as 401(k) or profit sharing plans. Employee contributions to the plans are subject to regulatory limitations and the specific plan provisions. Some of the plans allow for discretionary contributions as determined by management. Employer contributions expensed with respect to these plans were not material. Foreign Currency Translation The Company has certain subsidiaries located in foreign jurisdictions. For subsidiaries whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in accumulated other comprehensive income, as a component of equity. Use of Estimates Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates. New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases Leases Leases In adopting and applying ASC 842, we elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows us to carry forward the historical lease classification. In addition, we elected certain practical expedients and accounting policies, including an accounting policy election to keep leases with an initial term of 12 months or less from the balance sheet. We recognize those lease payments in the consolidated statements of earnings on a straight-line basis over the lease term. |
Note 2. Investments
Note 2. Investments | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Note 2. Investments | Investments were $44,856 and $33,860 as of December 31, 2019 and 2018, respectively. Investments in equity securities and a related derivative position of $4,463 are included in other current assets as of December 31, 2018. The investments are recorded at fair value. |
Note 3. Investment Partnerships
Note 3. Investment Partnerships | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Note 3. 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 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. Biglari Capital is the general partner of the investment partnerships and is an entity solely owned by Mr. Biglari. The fair value and adjustment for Company common stock held by the investment partnerships to determine carrying value of our partnership interest is presented below. Fair Value Company Common Stock Carrying Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (41,740 ) (48,705 ) 6,965 Distributions (net of contributions of $3,707) (5,688 ) (5,688 ) Increase in proportionate share of Company stock held 12,893 (12,893 ) Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (180,517 ) (220,928 ) 40,411 Distributions (net of reinvestments of $39,040) (29,660 ) (29,660 ) Increase in proportionate share of Company stock held 19,292 (19,292 ) Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains (losses) 80,350 2,217 78,133 Distributions (net of reinvestments of $40,000) (129,329 ) (129,329 ) Increase in proportionate share of Company stock held 742 (742 ) Partnership interest at December 31, 2019 $ 666,123 $ 160,581 $ 505,542 The carrying value of the investment partnerships net of deferred taxes is presented below. December 31, 2019 2018 Carrying value of investment partnerships $ 505,542 $ 557,480 Deferred tax liability related to investment partnerships (56,518 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 449,024 $ 464,777 The Company’s proportionate share of Company stock held by investment partnerships at cost is $374,857 and $374,231 at December 31, 2019 and 2018, respectively, and is recorded as treasury stock. The carrying value of the partnership interest approximates fair value adjusted by the value of held Company stock. Fair value is according to our proportional ownership interest of the fair value of investments held by the investment partnerships. The fair value measurement is classified as level 3 within the fair value hierarchy. Gains/losses from investment partnerships recorded in the Company’s consolidated statements of earnings are presented below. 2019 2018 2017 Gains from investment partnerships $ 78,133 $ 40,411 $ 6,965 Tax expense (benefit) 17,360 7,171 (4,115 ) Contribution to net earnings $ 60,773 $ 33,240 $ 11,080 On December 31 of each year, the general partner of the investment partnerships, Biglari Capital, 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 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. Our investments in these partnerships are committed on a rolling 5-year basis. There were no incentive reallocations from Biglari Holdings to Biglari Capital during 2019, 2018 and 2017. 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 December 31, 2019 $ 117,135 $ 758,663 Total liabilities as of December 31, 2019 $ 158 $ 114,639 Revenue for the year ended December 31, 2019 $ 10,637 $ 85,831 Earnings for the year ended December 31, 2019 $ 10,567 $ 78,604 Biglari Holdings’ ownership interest 66.1 % 92.9 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the year ended December 31, 2018 $ (92,093 ) $ (120,431 ) Earnings for the year ended December 31, 2018 $ (92,159 ) $ (130,193 ) Biglari Holdings’ ownership interest 65.9 % 92.2 % Total assets as of December 31, 2017 $ 203,560 $ 1,060,737 Total liabilities as of December 31, 2017 $ 157 $ 199,974 Revenue for the year ended December 31, 2017 $ (13,322 ) $ (25,283 ) Earnings for the year ended December 31, 2017 $ (13,383 ) $ (35,740 ) Biglari Holdings’ ownership interest 64.3 % 92.3 % Revenue in the above summarized financial information of the investment partnerships includes investment income and unrealized gains and losses on investments. |
Note 4. Other Current Assets
Note 4. Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Other Assets [Abstract] | |
Note 4. Other Current Assets | Other current assets include the following. December 31, 2019 2018 Deferred commissions on gift cards sold by third parties $ 3,379 $ 3,218 Prepaid contractual obligations 3,070 1,555 Investment in equity security and related derivative position — 4,463 Other current assets $ 6,449 $ 9,236 |
Note 5. Property and Equipment
Note 5. Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Note 5. Property and Equipment | Property and equipment is composed of the following. December 31, 2019 2018 Land $ 150,147 $ 146,015 Buildings 144,243 142,658 Land and leasehold improvements 157,141 158,938 Equipment 196,264 201,738 Oil and gas properties 77,475 — Construction in progress 3,789 1,703 729,059 651,052 Less accumulated depreciation and amortization (378,432 ) (376,336 ) Property and equipment, net $ 350,627 $ 274,716 Depreciation and amortization expense for property and equipment for 2019, 2018 and 2017 was $18,881, $18,646 and $20,706, respectively. Depletion expense related to oil and gas properties was $8,077 during 2019 and is included in depreciation and amortization within the consolidated statement of earnings. The Company recorded an impairment to restaurant long-lived assets of $8,186, $5,677 and $1,789 during 2019, 2018 and 2017, respectively. The fair value of the long-lived assets was determined based on Level 3 inputs using a discounted cash flow model and quoted prices for the properties. The fair value of the assets impaired was not material for any of the applicable periods. The property and equipment cost related to finance obligations as of December 31, 2019 is as follows: $59,104 of buildings, $49,891 of land, $26,924 of land and leasehold improvements, and $52,240 of accumulated depreciation. |
Note 6. Asset Retirement Obliga
Note 6. Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
Note 6. Asset Retirement Obligations | A reconciliation of the ending aggregate carrying amount of asset retirement obligations is as follows. December 31, 2019 Acquired balance $ 10,542 Liabilities settled (88 ) Accretion expense 177 Asset retirement obligation $ 10,631 As of December 31, 2019, $184 is classified as current and is included in accounts payable and accrued expenses in the consolidated balance sheets. |
Note 7. Goodwill and Other Inta
Note 7. Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Note 7. Goodwill and Other Intangible Assets | Goodwill Goodwill consists of the excess of the purchase price over the fair value of the net assets acquired in connection with business acquisitions. No goodwill was recorded with the acquisition of Southern Oil. A reconciliation of the change in the carrying value of goodwill is as follows. Restaurants Other Total Goodwill at December 31, 2016 $ 28,090 $ 11,913 $ 40,003 Change in foreign exchange rates during 2017 78 — 78 Goodwill at December 31, 2017 $ 28,168 $ 11,913 $ 40,081 Change in foreign exchange rates during 2018 (29 ) — (29 ) Goodwill at December 31, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during 2019 (12 ) — (12 ) Goodwill at December 31, 2019 $ 28,127 $ 11,913 $ 40,040 We evaluate goodwill and any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. Goodwill impairment occurs when the estimated fair value of goodwill is less than its carrying value. The valuation methodology and underlying financial information included in our determination of fair value require significant management judgments. We use both market and income approaches to derive fair value. The judgments in these two approaches include, but are not limited to, comparable market multiples, long-term projections of future financial performance, and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results. No impairment charges for goodwill were recorded in 2019, 2018 or 2017. Other Intangible Assets Other intangible assets are composed of the following. December 31, 2019 2018 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (5,178 ) $ 132 $ 5,310 $ (4,647 ) $ 663 Other 810 (792 ) 18 810 (774 ) 36 Total 6,120 (5,970 ) 150 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,323 — 11,323 11,539 — 11,539 Total intangible assets $ 33,319 $ (5,970 ) $ 27,349 $ 33,535 $ (5,421 ) $ 28,114 Intangible assets subject to amortization consist of franchise agreements connected with the purchase of Western Sizzlin as well as rights to favorable leases related to prior acquisitions. These intangible assets are being amortized over their estimated weighted average of useful lives ranging from eight to twelve years. Amortization expense for 2019, 2018 and 2017 was $549, $562 and $567, respectively. The Company’s intangible assets with definite lives will fully amortize in 2020. During 2018, the Company purchased lease rights totaling $2,503. |
Note 8. Accounts Payable and Ac
Note 8. Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Note 8. Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses include the following. December 31, 2019 2018 Accounts payable $ 32,626 $ 41,967 Gift card liability 20,745 22,685 Salaries, wages, and vacation 10,667 13,107 Deferred revenue 10,454 11,681 Taxes payable 29,275 11,214 Self-insurance accruals 11,070 8,394 Other 6,242 8,217 Accounts payable and accrued expenses $ 121,079 $ 117,265 |
Note 9. Other Liabilities
Note 9. Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Note 9. Other Liabilities | Other liabilities include the following. December 31, 2019 2018 Non qualified deferred compensation $ 1,716 $ 1,801 Other 348 912 Deferred rent expense — 6,468 Other liabilities $ 2,064 $ 9,181 |
Note 10. Income Taxes
Note 10. Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Note 10. Income Taxes | The components of the provision for income taxes consist of the following. 2019 2018 2017 Current: Federal $ 41,005 $ (1,688 ) $ 544 State 7,301 1,204 816 Deferred (38,545 ) (2,153 ) (64,321 ) Total income taxes $ 9,761 $ (2,637 ) $ (62,961 ) Reconciliation of effective income tax: Tax at U.S. statutory rates $ 11,579 $ 3,519 $ (4,512 ) State income taxes, net of federal benefit 1,573 741 259 Tax rate changes — (1,342 ) (51,707 ) Federal income tax credits (3,004 ) (4,587 ) (3,158 ) Dividends received deduction (955 ) (2,142 ) (6,304 ) Valuation allowance 441 658 742 Foreign tax rate differences 116 349 1,598 Other 11 167 121 Total income taxes $ 9,761 $ (2,637 ) $ (62,961 ) On December 22, 2017, new federal income tax legislation, the Tax Cuts and Jobs Act (“Act”), was signed into law. Effective January 1, 2018, the U.S. corporate federal statutory income tax rate was reduced from 35.0% to 21.0% and required re-measurement of deferred balances to the new statutory rates as of December 31, 2017. The Act also imposed a mandatory one-time transition tax on undistributed international earnings. We do not expect to have any additional tax liability related to a transition tax. The Company did not have a net tax expense or benefit on income from international operations. Earnings (losses) before income taxes derived from domestic operations during 2019, 2018 and 2017 were $57,877, $21,700 and $(6,230), respectively. Losses before income taxes derived from international operations during 2019, 2018 and 2017 were $2,736, $4,945, and $6,660, respectively. As of December 31, 2019, we had $348 of unrecognized tax benefits, including $62 of interest and penalties, which are included in other long-term liabilities in the consolidated balance sheet. As of December 31, 2018, we had $341 of unrecognized tax benefits, including $43 of interest and penalties, which are included in other long-term liabilities in the consolidated balance sheet. Our continuing practice is to recognize interest expense and penalties related to income tax matters in income tax expense. The unrecognized tax benefits of $348 would impact the effective income tax rate if recognized. Adjustments to the Company’s unrecognized tax benefit for gross increases for the current period tax position, gross decreases for prior period tax positions and the lapse of statute of limitations during 2019, 2018 and 2017 were not significant. We file income tax returns which are periodically audited by various foreign, federal, state, and local jurisdictions. With few exceptions, we are no longer subject to federal, state, and local tax examinations for fiscal years prior to 2016. We believe we have certain state income tax exposures related to fiscal years 2015 through 2019. Because of the expiration of the various state statutes of limitations for these fiscal years, it is possible that the total amount of unrecognized tax benefits will decrease by approximately $157 within 12 months. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our deferred tax assets and liabilities consist of the following. December 31, 2019 2018 Deferred tax assets: Insurance reserves $ 1,304 $ 1,816 Compensation accruals 438 677 Gift card accruals 3,280 2,515 Net operating loss credit carryforward 6,017 5,547 Valuation allowance on net operating losses (5,419 ) (4,978 ) Fixed assets and depletable assets basis difference 4,776 — Income tax credit carryforward 6,300 4,965 Other (36 ) 953 Total deferred tax assets 16,660 11,495 Deferred tax liabilities: Investments 56,519 92,743 Fixed asset basis difference — 934 Goodwill and intangibles 14,371 4,689 Total deferred tax liabilities 70,890 98,366 Net deferred tax liability $ (54,230 ) $ (86,871 ) Accrued expenses on the balance sheet include income taxes payable of $17,767 as of December 31, 2019. Receivables on the balance sheet include income taxes receivable of $2,022 as of December 31, 2018. Income taxes paid during 2019, 2018 and 2017 were $30,375, $810 and $3,211, respectively. Income tax refunds during 2019, 2018 and 2017 were $1,546, $8 and $0, respectively. |
Note 11. Notes Payable and Othe
Note 11. Notes Payable and Other Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Note 11. Notes Payable and Other Borrowings | Notes payable and other borrowings include the following. December 31, 2019 2018 Current portion of notes payable and other borrowings Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (348 ) (334 ) Unamortized debt issuance costs (634 ) (609 ) Finance obligations 4,252 4,463 Finance lease liabilities 1,633 — Total current portion of notes payable and other borrowings $ 7,103 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 179,298 $ 181,498 Unamortized original issue discount (89 ) (438 ) Unamortized debt issuance costs (163 ) (796 ) Finance obligations 74,497 59,737 Finance lease liabilities 9,639 — Total long-term notes payable and other borrowings $ 263,182 $ 240,001 Steak n Shake Credit Facility On March 19, 2014, Steak n Shake and its subsidiaries entered into a credit agreement which provided for a senior secured term loan facility in an aggregate principal amount of $220,000. The term loan is scheduled to mature on March 19, 2021. As of December 31, 2019, $181,498 was outstanding. The Company is evaluating refinancing options. Alternative financing may not be available on terms commensurate with its current financing arrangement. Biglari Holdings is not a guarantor under the credit facility. The term loan amortizes in equal quarterly installments at an annual rate of 1.0% of the original principal amount of the term loan, subject to mandatory prepayments from excess cash flow, asset sales and other events described in the credit agreement. The balance will be due at maturity. Borrowings bear interest at a rate per annum equal to a base rate or a Eurodollar rate (minimum of 1%) plus an applicable margin. Interest on the term loan is based on a Eurodollar rate plus an applicable margin of 3.75% or on the prime rate plus an applicable margin of 2.75%. The interest rate on the term loan was 5.55% as of December 31, 2019. The credit agreement includes customary affirmative and negative covenants and events of default. Steak n Shake’s credit facility contains restrictions on its ability to pay dividends to Biglari Holdings. The term loan is secured by first priority security interests in substantially all the assets of Steak n Shake. Disruptions in debt capital markets that restrict access to funding when needed could adversely affect the results of operations, liquidity and capital resources of Steak n Shake. Expected principal payments for notes payable as of December 31, 2019, are as follows. 2020 2,200 2021 179,298 Total $ 181,498 The fair value of long-term debt, excluding capitalized lease obligations, was approximately $145,000 at December 31, 2019. The fair value of our debt was estimated based on quoted market prices. The fair value was determined to be a Level 3 fair value measurement. Western Sizzlin Revolver As of December 31, 2019 and 2018, Western Sizzlin had no debt outstanding under its revolver. Interest Interest paid on debt and obligations under leases are as follows. 2019 2018 2017 Interest paid on debt $ 11,273 $ 10,655 $ 9,969 Interest paid on obligations under leases $ 7,816 $ 8,207 $ 9,132 |
Note 12. Leased Assets and Leas
Note 12. Leased Assets and Lease Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Note 12. Leased Assets and Lease Commitments | The Company adopted ASC 842 on January 1, 2019, as discussed in Note 1. Under ASC 842, leases are generally classified as either operating right-of-use assets or finance lease assets. Right-of-use assets represent the Company's right to use an underlying asset during the lease term. Right-of-use liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and liabilities are calculated by using the net present value of fixed lease payments over the lease term. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The Company applied an incremental borrowing rate to determine the present value of lease payments. Finance lease agreements include an interest rate that is used to determine the present value of future lease payments. A significant portion of our operating and finance lease portfolio includes restaurant locations. The Company’s operating leases with a term of 12 months or greater were recognized as operating right-of-use assets and liabilities and recorded as operating lease assets and operating lease liabilities. Historical capital leases and certain historical build-to-suit leases were reclassified from obligations under leases to finance lease assets and liabilities. Finance lease assets are recorded in property and equipment and finance lease liabilities are recorded in notes payable and other borrowings. Historical sale-and-leaseback transactions in which the Company is deemed to have a continued interest in the leased asset are recorded as property and equipment and as finance obligations. Finance obligations are recorded in notes payable and other borrowings. Operating lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term. Total lease cost consists of the following. 2019 Finance lease costs: Amortization of right-of-use assets $ 1,952 Interest on lease liabilities 828 Operating lease costs * 16,483 Total lease costs $ 19,263 *Includes short-term leases, variable lease costs and sublease income, which are immaterial. Supplemental cash flow information related to leases is as follows. Year Ended Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 1,610 Operating cash flows from finance leases $ 828 Operating cash flows from operating leases $ 16,863 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 11,069 Supplemental balance sheet information related to leases is as follows. December 31, 2019 Finance leases: Property and equipment, net $ 10,783 Current portion of notes payable and other borrowings $ 1,633 Long-term notes payable and other borrowings 9,639 Total finance lease liabilities $ 11,272 Weighted-average lease terms and discount rates are as follows. 2019 Weighted-average remaining lease terms: Finance leases 8.4 years Operating leases 6.4 years Weighted-average discount rates: Finance leases 7.1% Operating leases 6.9% Maturities of lease liabilities as of December 31, 2019 are as follows. Year Operating Finance 2020 $ 15,584 $ 2,377 2021 14,759 2,358 2022 12,622 1,869 2023 10,794 1,669 2024 8,680 1,633 After 2024 18,576 5,170 Total lease payments 81,015 15,076 Less interest 16,109 3,804 Total lease liabilities $ 64,906 $ 11,272 On December 31, 2018, obligations under non-cancelable finance obligations, capital leases, and operating leases (excluding real estate taxes, insurance and maintenance costs) require the following minimum future rental payments. Operating Leases Year Finance Obligations Capital Leases Total Operating Property Non-Operating Property 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737 Rent expense is presented below. 2019 2018 2017 Minimum rent $ 17,968 $ 20,158 $ 18,157 Contingent rent 1,050 1,470 1,839 Rent expense $ 19,018 $ 21,628 $ 19,996 |
Note 13. Related Party Transact
Note 13. Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Note 13. Related Party Transactions | Services Agreement During 2017, the Company entered into a services agreement with Biglari Enterprises LLC and Biglari Capital Corp. (collectively, the “Biglari Entities”) under which the Biglari Entities provide business and administrative related services to the Company. The Biglari Entities are owned by Mr. Biglari. The services agreement has a five-year term, effective on October 1, 2017. The fixed fee is $700 per month for the first year with adjustments in years two through five. The monthly fee remained at $700 during 2019. The Company paid Biglari Enterprises $8,400 in service fees during 2019 and 2018. The services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital Corp. by the Company. Investments in The Lion Fund, L.P. and The Lion Fund II, L.P. Contributions to and distributions from The Lion Fund, L.P. and The Lion Fund II, L.P. were as follows. 2019 2018 2017 Contributions of cash $ 40,000 $ 39,040 $ 3,707 Distributions of cash (169,329 ) (68,700 ) (9,395 ) $ (129,329 ) $ (29,660 ) $ (5,688 ) As the general partner of the investment partnerships, Biglari Capital on December 31 of each year will earn an incentive reallocation fee for the Company’s investments equal to 25% of the net profits above a hurdle rate of 6% over the previous high-water mark. Our policy is to accrue an estimated incentive fee throughout the year. In 2019, 2018 and 2017, no incentive reallocation was earned. License Agreement During 2013, the Company entered into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The Company and its subsidiaries paid no royalties to Mr. Biglari under the License Agreement during its term. The License Agreement was terminated on March 26, 2019. Incentive Agreement Amendment The Incentive Agreement was amended on March 26, 2019 to remove the annual limitation on Mr. Biglari’s incentive compensation, as well as the requirement of Mr. Biglari to use 30% of his incentive payments to purchase shares of the Company. In connection with the amendment, the change of control and severance provisions contained in the Incentive Agreement were eliminated and the License Agreement was terminated. The amendment was effective in 2019. |
Note 14. Commitments and Contin
Note 14. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 14. Commitments and Contingencies | We are involved in various legal proceedings and have certain unresolved claims pending. We believe, based on examination of these matters and experiences to date, that the ultimate liability, if any, in excess of amounts already provided in our consolidated financial statements is not likely to have a material effect on our results of operations, financial position or cash flow. On January 29, 2018, a shareholder of the Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari as a result of the dual class structure. On March 26, 2018, a shareholder of the Company filed a purported class action complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. This shareholder generally alleges claims of breach of fiduciary duty by the members of our Board of Directors. This shareholder sought to enjoin the shareholder vote on April 26, 2018 to approve the dual class structure. On April 16, 2018, the shareholder withdrew their motion to enjoin the shareholder vote on April 26, 2018. On May 17, 2018, the shareholders who filed the January 29, 2018 complaint and the March 26, 2018 complaint filed a new, consolidated complaint against the Company and the members of our Board of Directors in the Superior Court of Hamilton County, Indiana. The shareholders generally allege claims of breach of fiduciary duty by the members of our Board of Directors and unjust enrichment to Mr. Biglari arising out of the dual class structure. The shareholders seek, for themselves and on behalf of all other shareholders as a class, a declaration that the defendants breached their duty to the shareholders and the class, and to recover unspecified damages, pre-judgment and post-judgment interest, and an award of their attorneys’ fees and other costs. On December 14, 2018, the judge of the Superior Court of Hamilton County, Indiana issued an order granting the Company’s motion to dismiss the shareholders’ lawsuits. On January 11, 2019, the shareholders filed an appeal of the judge’s order dismissing the lawsuits. On December 4, 2019, the Indiana Court of Appeals issued a unanimous decision affirming the trial court’s decision to dismiss the shareholder litigation. On January 20, 2020, the shareholders filed a petition to transfer with the Indiana Supreme Court seeking review of the decision of the Court of Appeals. The Company opposed the petition. The Indiana Supreme Court has not ruled upon the petition to transfer. On September 8, 2014, two former restaurant manager employees filed a purported class action lawsuit against Steak n Shake (Drake v. Steak n Shake). On January 30, 2017, a former restaurant manager employee filed a purported class action lawsuit against Steak n Shake (Clendenen v. Steak n Shake). The plaintiffs generally allege claims that Steak n Shake improperly classified its managerial employees as exempt. On July 26, 2019, the Company agreed to settle both cases for $8,350 and the Court approved the terms of the settlement. The settlement is reflected in selling, general and administrative expenses in the consolidated statement of earnings. |
Note 15. Fair Value of Financia
Note 15. Fair Value of Financial Assets | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Note 15. Fair Value of Financial Assets | The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below. · Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. · Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations and yields for other instruments of the issuer or entities in the same industry sector. · Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities. The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheet: Cash equivalents: Equity securities: Bonds: Non-qualified deferred compensation plan investments: Derivative instruments: As of December 31, 2019 and 2018 the fair values of financial assets were as follows. December 31, 2019 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 43,095 $ — $ — $ 43,095 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods — 6,397 — 6,397 1,708 4,100 — 5,808 Insurance 25 — 25 — — — — Bonds 38,911 — — 38,911 32,404 — — 32,404 Options on equity securities — 2,166 — 2,166 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,175 — — 2,175 2,149 — — 2,149 Total assets at fair value $ 84,206 $ 8,563 $ — $ 92,769 $ 57,709 $ 6,855 $ — $ 64,564 There were no changes in our valuation techniques used to measure fair values on a recurring basis. |
Note 16. Accumulated Other Comp
Note 16. Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2019 | |
AOCI Attributable to Parent [Abstract] | |
Note 16. Accumulated Other Comprehensive Income | Changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, were as follows. 2019 2018 Foreign Currency Translation Adjustments Investment Accumulated Foreign Currency Translation Adjustments Investment Accumulated Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — (58 ) (58 ) Foreign currency translation (294 ) (294 ) (1,054 ) (1,054 ) Ending Balance $ (2,810 ) $ — $ (2,810 ) $ (2,516 ) $ — $ (2,516 ) 2017 Foreign Currency Translation Adjustments Investment Accumulated Beginning Balance $ (3,447 ) $ (137 ) $ (3,584 ) Other comprehensive income (loss) before reclassifications 195 195 Foreign currency translation 1,985 1,985 Ending Balance $ (1,462 ) $ 58 $ (1,404 ) There were no reclassifications from accumulated other comprehensive income to earnings during 2019 and 2017. Reclassifications made from accumulated other comprehensive income to the statement of earnings were $58 of income to earnings during 2018. |
Note 17. Business Segment Repor
Note 17. Business Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Note 17. Business Segment Reporting | Our reportable business segments are organized in a manner that reflects how management views those business activities. Our restaurant operations include Steak n Shake and Western Sizzlin. The Company also reports segment information for First Guard, Southern Oil and Maxim. Other business activities not specifically identified with reportable business segments are presented in “other” within total operating businesses. We report our earnings from investment partnerships separate from our corporate expenses. We assess and measure segment operating results based on segment earnings as disclosed below. Segment earnings from operations are neither necessarily indicative of cash available to fund cash requirements, nor synonymous with cash flow from operations. The tabular information that follows shows data of our reportable segments reconciled to amounts reflected in the consolidated financial statements. A disaggregation of our consolidated data for each of the three most recent years is presented in the tables which follow. Revenue 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 595,004 $ 760,565 $ 792,827 Western 15,216 15,125 14,326 Total Restaurant Operations 610,220 775,690 807,153 First Guard 30,083 27,628 24,943 Southern Oil 24,436 — — Maxim 4,099 6,576 7,708 $ 668,838 $ 809,894 $ 839,804 Earnings (Loss) Before Income Taxes 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ (18,575 ) $ (10,657 ) $ 431 Western 1,756 2,046 1,860 Total Restaurant Operations (16,819 ) (8,611 ) 2,291 First Guard 7,103 6,215 4,770 Southern Oil 8,032 — — Maxim 742 1,068 (439 ) Other 994 635 669 Total Operating Businesses 52 (693 ) 7,291 Corporate and investments: Corporate (10,602 ) (11,286 ) (16,106 ) Investment partnership gains 78,133 40,411 6,965 Total corporate 67,531 29,125 (9,141 ) Interest expense on notes payable and other borrowings (12,442 ) (11,677 ) (11,040 ) $ 55,141 $ 16,755 $ (12,890 ) Capital Expenditures 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 9,951 $ 14,982 $ 7,565 Western 72 61 410 Total Restaurant Operations 10,023 15,043 7,975 First Guard 43 236 43 Southern Oil 7,594 — — Maxim — — — Other 19 14 16 Total Operating Businesses 17,679 15,293 8,034 Corporate — — — Consolidated results $ 17,679 $ 15,293 $ 8,034 Depreciation and Amortization 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 20,533 $ 18,180 $ 19,987 Western 641 651 636 Total Restaurant Operations 21,174 18,831 20,623 First Guard 85 76 56 Southern Oil (includes depletion expenses of 8,077) 8,218 — — Maxim — 27 50 Other 66 287 287 Total Operating Businesses 29,543 19,221 21,016 Corporate 35 97 432 Consolidated results $ 29,578 $ 19,318 $ 21,448 A disaggregation of our consolidated assets is presented in the table that follows. Identifiable Assets December 31, 2019 2018 Reportable segments: Restaurant Operations: Steak n Shake $ 385,259 $ 330,100 Western 18,322 16,444 Total Restaurant Operations 403,581 346,544 First Guard 58,808 51,565 Southern Oil 82,257 — Maxim 16,549 18,143 Other 20,732 19,774 Corporate 51,840 35,987 Investment partnerships 505,542 557,480 Total assets $ 1,139,309 $ 1,029,493 |
Note 18. Quarterly Financial Da
Note 18. Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Note 18. Quarterly Financial Data (Unaudited) | 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter For the year ended December 31, 2019 Total revenues $ 181,859 $ 168,343 $ 160,216 $ 158,420 Gross profit 22,837 30,454 38,467 43,307 Costs and expenses 199,384 169,518 157,272 145,398 Earnings (loss) before income taxes 11,562 27,870 (631 ) 16,340 Net earnings (loss) 9,818 21,974 (17 ) 13,605 Net earnings (loss) per equivalent Class A share $ 28.36 $ 63.50 $ (0.05 ) $ 39.64 For the year ended December 31, 2018 Total revenues $ 202,225 $ 208,739 $ 203,582 $ 195,348 Gross profit 36,430 42,727 36,153 33,145 Costs and expenses 203,391 203,778 204,518 201,979 Earnings (loss) before income taxes (2,611 ) (8,429 ) (24,902 ) 52,697 Net earnings (loss) (1,814 ) (7,539 ) (13,703 ) 42,448 Net earnings (loss) per equivalent Class A share $ (5.15 ) $ (21.73 ) $ (39.50 ) $ 122.53 We define gross profit as net revenue less restaurant cost of sales, media cost of sales, oil and natural gas production costs and insurance losses and underwriting expenses, which excludes depreciation and amortization. |
Note 19. Supplemental Disclosur
Note 19. Supplemental Disclosures of Cash Flow Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Note 19. Supplemental Disclosures of Cash Flow Information | Capital expenditures in accounts payable at December 31, 2019, 2018 and 2017 were $339, $1,776 and $1,036, respectively. In 2019, we had new finance lease obligations of $5,026 and lease retirements of $940. In 2018, we had new capital lease obligations of $1,000 and lease retirements of $11,557. During 2017, we had new capital lease obligations of $1,952 and lease retirements of $5,030. |
Note 1. Summary of Significan_2
Note 1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business | Biglari Holdings Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance, media and licensing, restaurants and oil and gas. The Company’s largest operating subsidiaries are involved in the franchising and operating of restaurants. Biglari Holdings is founded and led by Sardar Biglari, Chairman and Chief Executive Officer of the Company. The Company’s long-term objective is to maximize per-share intrinsic value. All major investment and capital allocation decisions are made for the Company and its subsidiaries by Mr. Biglari. As of December 31, 2019, Mr. Biglari’s beneficial ownership was approximately 64.4% of the Company’s outstanding Class A common stock and 55.4% of the Company’s outstanding Class B common stock. |
Business Acquisition | On September 9, 2019, a wholly-owned subsidiary of the Company, Southern Oil Company, acquired the stock of Southern Oil of Louisiana Inc. (collectively “Southern Oil”) for $51,505 in cash. Southern Oil primarily operates oil and natural gas properties offshore in the shallow waters of the Gulf of Mexico. The Company’s financial results include the results of Southern Oil from the acquisition date to the end of the year. Acquired assets included oil and gas properties of $69,881 and accounts receivable of $6,735. Acquired liabilities included asset retirement obligations of $10,542, income taxes payable of $4,302, deferred tax liabilities of $5,671 and accounts payable of $3,949. Acquisition related expenses were recorded as general and administrative expenses. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries including Steak n Shake Inc. (“Steak n Shake”), Western Sizzlin Corporation (“Western Sizzlin”), Maxim Inc. (“Maxim”), First Guard Insurance Company and its agency, 1st Guard Corporation (collectively “First Guard”) and Southern Oil. Intercompany accounts and transactions have been eliminated in consolidation. |
Cash, Cash Equivalents and Restricted Cash | Cash equivalents primarily consist of U.S. Government securities and money market accounts, all of which have original maturities of three months or less. Cash equivalents are carried at fair value. The statement of cash flows includes restricted cash with cash and cash equivalents. Cash as reported on the statements of cash flows consists of the following. December 31, 2019 2018 2017 Cash and cash equivalents $ 67,772 $ 48,557 $ 58,577 Restricted cash included in other long-term assets 2,924 6,453 8,653 Cash, cash equivalents and restricted cash $ 70,696 $ 55,010 $ 67,230 |
Investments | Our investments are carried at fair value with net unrealized gains or losses reported in the statements of earnings. Realized gains and losses on disposals of investments are determined by the specific identification of cost of investments sold. |
Investment Partnerships | The Company holds a limited interest in The Lion Fund, L.P. and The Lion Fund II, L.P. (collectively the “investment partnerships”). Biglari Capital Corp. (“Biglari Capital”), an entity solely owned by Mr. Biglari, is the general partner of the investment partnerships. Our interests in the investment partnerships are accounted as equity method investments because of our retained limited partner interests. The Company records investment partnership gains (inclusive of the investment partnerships’ unrealized gains and losses on their securities) as a component of other income based on our proportional ownership interest in the partnerships. The investment partnerships are, for purposes of generally accepted accounting principles (“GAAP”), investment companies under the AICPA Audit and Accounting Guide Investment Companies. |
Concentration of Equity Price Risk | The majority of our investments are conducted through investment partnerships which generally hold common stocks. We also hold marketable securities directly. Through the investment partnerships we hold a concentrated position in the common stock of Cracker Barrel Old Country Store, Inc. A significant decline in the general stock market or in the prices of major investments may have a materially adverse effect on our earnings and on consolidated shareholders’ equity. |
Receivables | Our accounts receivable balance consists primarily of franchisee, customer, and other receivables. We carry our accounts receivable at cost less an allowance for doubtful accounts, which is based on a history of past write-offs and collections and current credit conditions. Allowance for doubtful accounts was $4,857 and $3,901 at December 31, 2019 and 2018, respectively. |
Inventories | Inventories are valued at the lower of cost (first-in, first-out method) or market, and consist primarily of restaurant food items and supply inventory. |
Property and Equipment | Restaurants Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized on the straight-line method over the estimated useful lives of the assets (10 to 30 years for buildings and land improvements, and 3 to 10 years for equipment). Leasehold improvements are amortized on the straight-line method over the shorter of the estimated useful lives of the improvements or the term of the related leases. Interest costs associated with the construction of new restaurants are capitalized. Major improvements are also capitalized while repairs and maintenance are expensed as incurred. We review our long-lived restaurant assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For purposes of this assessment, assets are evaluated at the lowest level for which there are identifiable cash flows which is generally at the individual restaurant level. Assets included in the impairment assessment generally consist of property, equipment and leasehold improvements directly associated with an individual restaurant as well as any related finance or operating lease assets. If the future undiscounted cash flows of an asset are less than the recorded value, an impairment is recorded for the difference between the carrying value and the estimated fair value of the asset. |
Oil and Gas Properties | The successful efforts method is used for crude oil and natural gas exploration and production activities. All costs for development wells, related plant and equipment, proved mineral interests in crude oil and natural gas properties, and related asset retirement obligation assets are capitalized. Costs of exploratory wells are capitalized pending determination of whether the wells found proved reserves. Costs of wells that are assigned proved reserves remain capitalized. Costs also are capitalized for exploratory wells that have found crude oil and natural gas reserves even if the reserves cannot be classified as proved when the drilling is completed, provided the exploratory well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. All other exploratory wells and costs are expensed. There were no capitalized costs for exploratory activities during 2019. The Company continues to capitalize exploratory well costs after the completion of drilling when (a) the well has found a sufficient quantity of reserves to justify completion as a producing well, and (b) whether sufficient progress has been made in assessing the reserves and the economic and operating viability of the project. If either condition is not met or if the Company obtains information that raises substantial doubt about the economic or operational viability of the project, the exploratory well would be assumed to be impaired, and its costs, net of any salvage value, would be charged to expense. |
Asset Retirement Obligations | Asset retirement obligations relate to future costs associated with the plugging and abandonment of oil and gas wells, the removal of equipment and facilities from leased acreage, and the return of such land to its original condition. The Company determines its asset retirement obligation amounts by calculating the present value of the estimated future cash outflows associated with its plug and abandonment obligations. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred, and the cost of such liability increases the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period through charges to depreciation, depletion and amortization expense, and the capitalized cost is depleted on a unit-of-production basis over the proved developed reserves of the related asset. If an asset retirement obligation is settled for an amount other than the recorded amount, a gain or loss is recognized. |
Goodwill and Other Intangible Assets | Goodwill and indefinite life intangible assets are not amortized, but are tested for potential impairment on an annual basis, or more often if events or circumstances change that could cause goodwill or indefinite life intangible assets to become impaired. Other purchased intangible assets are amortized over their estimated useful lives, generally on a straight-line basis. We perform reviews for impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying value. When an impairment is identified, we reduce the carrying value of the asset to its estimated fair value. No impairments were recorded on goodwill or intangible assets during 2019, 2018 or 2017. Refer to Note 7 for information regarding our goodwill and other intangible assets. |
Dual Class Common Stock | Beginning in 2018, the Company has two classes of common stock, designated Class A common stock and Class B common stock. Each Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5 th The following table presents shares authorized, issued and outstanding. December 31, 2019 December 31, 2018 Class A Class B Class A Class B December 31, 2017 Common stock authorized 500,000 10,000,000 500,000 10,000,000 2,500,000 Common stock issued 206,864 2,068,640 206,864 2,068,640 2,142,202 Treasury stock held by the Company — — — — (74,589 ) Outstanding shares 206,864 2,068,640 206,864 2,068,640 2,067,613 On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of December 31, 2019 and 2018, and 620,284 shares outstanding as of December 31, 2017. |
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 investment partnerships — 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. The Company has applied the “two-class method” of computing earnings per share as prescribed in Accounting Standards Codification (“ASC”) 260, “ Earnings Per Share |
Revenue Recognition | In May 2014, the Financial Accounting Standards Board (‘‘FASB’') issued Accounting Standards Update (‘‘ASU’') 2014-09, Revenue from Contracts with Customers (Topic 606). On January 1, 2018, we adopted Accounting Standards Codification Topic 606 (“ASC 606”). In accordance with ASC 606, we changed certain characteristics of our revenue recognition accounting policy as described below. ASC 606 was applied using the modified retrospective method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Comparative prior periods have not been adjusted. The impact of ASC 606 on the Company’s balance sheet as of December 31, 2018 was not material. The cumulative change in retained earnings as of January 1, 2018 was $90. Upon adoption of ASC 606, the Company changed its restaurant operations accounting policies for the recognition of franchise fees, recording of advertising arrangements, and recognition of gift card revenue. The adoption of ASC 606 did not have any significant impact on our insurance or media/licensing businesses. Restaurant operations Restaurant operations revenues were disaggregated as follows. 2019 2018 2017 Net sales $ 578,164 $ 740,922 $ 781,856 Franchise royalties and fees 27,189 30,998 20,773 Other 4,867 3,770 4,524 $ 610,220 $ 775,690 $ 807,153 Net sales are composed of retail sales of food through company-operated stores. Company-operated store revenues are recognized, net of discounts and sales taxes, when our obligation to perform is satisfied at the point of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s consolidated statements of earnings as revenue. Franchise royalties and fees are composed of royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalties are based upon a percentage of sales of the franchise restaurant and are recognized as earned. Franchise royalties are billed on a monthly basis. Initial franchise fees when a new restaurant opens or at the start of a new franchise term are recorded as deferred revenue when received and recognized as revenue over the term of the franchise agreement. During the years ended December 31, 2019 and 2018, restaurant operations recognized $1,725 and $3,096, respectively, in revenue related to initial franchise fees. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to franchise fees of $7,976 and $9,075, respectively. Restaurant operations expects to recognize approximately $928 in 2020 and the balance in the years 2021 through 2040. Our advertising arrangements with franchisees are reported in franchise royalties and fees. During the years ended December 31, 2019 and 2018, restaurant operations recognized $7,815 and $9,675, respectively, in revenue related to franchisee advertising fees. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to franchisee advertising fees of $3,043 and $2,255, respectively. Restaurant operations expects to recognize approximately $1,522 of deferred revenue during 2020 and the balance in 2021. Restaurant operations sells gift cards to customers which can be redeemed for retail food sales within our stores. Gift cards are recorded as deferred revenue when issued and are subsequently recorded as net sales upon redemption. Restaurant operations estimates breakage related to gift cards when the likelihood of redemption is remote. This estimate utilizes historical trends based on the vintage of the gift card. Breakage on gift cards is recorded as other revenue in proportion to the rate of gift card redemptions by vintage. For the years ended December 31, 2019 and 2018, restaurant operations recognized $22,869 and $27,081, respectively, of revenue from gift card redemptions. As of December 31, 2019 and 2018, restaurant operations had deferred revenue recorded in accrued expenses related to unredeemed gift cards of $20,730 and $22,685, respectively. The Company expects to recognize approximately $15,931 in 2020 and the balance in the years 2021 through 2023. Insurance premiums and commissions Insurance premiums are earned over the terms of the related policies. Expenses incurred in connection with acquiring new insurance business, including acquisition costs, are charged to operations as incurred. Premiums earned are stated net of amounts ceded to reinsurer. Oil and gas Revenues are derived from the sale of produced oil and natural gas. Revenue is recognized when the performance obligation is satisfied, which typically occurs at the point in time when control of the product transfers to the customer. Payment is due within 30 days of delivery. Media advertising and other Magazine subscription and advertising revenues are recognized at the magazine cover date. The unearned portion of magazine subscriptions is deferred until the magazine’s cover date, at which time a proportionate share of the gross subscription price is recognized as revenues, net of any commissions paid to subscription agents. Also included in subscription revenues are revenues generated from single-copy sales of magazines through retail outlets such as newsstands, supermarkets, convenience stores and drugstores and on certain digital devices, which may or may not result in future subscription sales. Revenues from retail outlet sales are recognized based on gross sales less a provision for estimated returns. License revenue is recognized when earned. We derive value and revenues from intellectual property assets through a range of licensing and business activities, including licensing and syndication of our trademarks and copyrights in the United States and internationally. |
Restaurant Cost of Sales | Cost of sales includes the cost of food, restaurant operating costs and restaurant rent expense. Cost of sales excludes depreciation and amortization, which is presented as a separate line item on the consolidated statement of earnings. |
Insurance Losses and Underwriting Expenses | Liabilities for estimated unpaid losses and loss adjustment expenses with respect to claims occurring on or before the balance sheet date are established under insurance contracts issued by our insurance subsidiaries. Such estimates include provisions for reported claims or case estimates, provisions for incurred but not reported claims and legal and administrative costs to settle claims. The estimates of unpaid losses and amounts recoverable under reinsurance are established and continually reviewed by using a variety of actuarial, statistical and analytical techniques. Reinsurance contracts do not relieve the ceding company of its obligations to indemnify policyholders with respect to the underlying insurance contracts. Liabilities for insurance losses of $3,211 and $1,891 are included in accrued expenses in the consolidated balance sheet as of December 31, 2019 and 2018, respectively. |
Oil and Gas Production Costs | Oil and gas production costs are composed of lease operating expenses and production taxes. |
Marketing Expense | Advertising costs are charged to expense at the later of the date the expenditure is incurred or the date the promotional item is first communicated. Marketing expense is included in selling, general and administrative expenses in the consolidated statement of earnings. |
Insurance Reserves | We self-insure a significant portion of expected losses under our workers’ compensation, general liability, auto, directors and officers liability, and medical liability insurance programs, and record a reserve for our estimated losses on all unresolved open claims and our estimated incurred but not reported claims at the anticipated cost to us. Insurance reserves are recorded in accrued expenses in the consolidated balance sheet. |
Savings Plans | Several of our subsidiaries also sponsor deferred compensation and defined contribution retirement plans, such as 401(k) or profit sharing plans. Employee contributions to the plans are subject to regulatory limitations and the specific plan provisions. Some of the plans allow for discretionary contributions as determined by management. Employer contributions expensed with respect to these plans were not material. |
Foreign Currency Translation | The Company has certain subsidiaries located in foreign jurisdictions. For subsidiaries whose functional currency is other than the U.S. dollar, the translation of functional currency statements to U.S. dollar statements uses end-of-period exchange rates for assets and liabilities, weighted average exchange rates for revenue and expenses, and historical rates for equity. The resulting currency translation adjustment is recorded in accumulated other comprehensive income, as a component of equity. |
Use of Estimates | Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates. |
New Accounting Standards | In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In February 2016, the FASB issued ASU 2016-02, Leases Leases Leases In adopting and applying ASC 842, we elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows us to carry forward the historical lease classification. In addition, we elected certain practical expedients and accounting policies, including an accounting policy election to keep leases with an initial term of 12 months or less from the balance sheet. We recognize those lease payments in the consolidated statements of earnings on a straight-line basis over the lease term. |
Note 1. Summary of Significan_3
Note 1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Cash, cash equivalents and restricted cash | December 31, 2019 2018 2017 Cash and cash equivalents $ 67,772 $ 48,557 $ 58,577 Restricted cash included in other long-term assets 2,924 6,453 8,653 Cash, cash equivalents and restricted cash $ 70,696 $ 55,010 $ 67,230 |
Common stock | December 31, 2019 December 31, 2018 Class A Class B Class A Class B December 31, 2017 Common stock authorized 500,000 10,000,000 500,000 10,000,000 2,500,000 Common stock issued 206,864 2,068,640 206,864 2,068,640 2,142,202 Treasury stock held by the Company — — — — (74,589 ) Outstanding shares 206,864 2,068,640 206,864 2,068,640 2,067,613 |
Summary of restaurant operations revenues | 2019 2018 2017 Net sales $ 578,164 $ 740,922 $ 781,856 Franchise royalties and fees 27,189 30,998 20,773 Other 4,867 3,770 4,524 $ 610,220 $ 775,690 $ 807,153 |
Note 3. Investment Partnershi_2
Note 3. Investment Partnerships (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments [Abstract] | |
Fair value and carrying value of our partnership interest | Fair Value Company Common Stock Carrying Partnership interest at December 31, 2016 $ 972,707 $ 395,070 $ 577,637 Investment partnership gains (losses) (41,740 ) (48,705 ) 6,965 Distributions (net of contributions of $3,707) (5,688 ) (5,688 ) Increase in proportionate share of Company stock held 12,893 (12,893 ) Partnership interest at December 31, 2017 $ 925,279 $ 359,258 $ 566,021 Investment partnership gains (losses) (180,517 ) (220,928 ) 40,411 Distributions (net of reinvestments of $39,040) (29,660 ) (29,660 ) Increase in proportionate share of Company stock held 19,292 (19,292 ) Partnership interest at December 31, 2018 $ 715,102 $ 157,622 $ 557,480 Investment partnership gains (losses) 80,350 2,217 78,133 Distributions (net of reinvestments of $40,000) (129,329 ) (129,329 ) Increase in proportionate share of Company stock held 742 (742 ) Partnership interest at December 31, 2019 $ 666,123 $ 160,581 $ 505,542 |
Carrying value of investment partnerships net of deferred taxes | December 31, 2019 2018 Carrying value of investment partnerships $ 505,542 $ 557,480 Deferred tax liability related to investment partnerships (56,518 ) (92,703 ) Carrying value of investment partnerships net of deferred taxes $ 449,024 $ 464,777 |
Gains from investment partnerships | 2019 2018 2017 Gains from investment partnerships $ 78,133 $ 40,411 $ 6,965 Tax expense (benefit) 17,360 7,171 (4,115 ) Contribution to net earnings $ 60,773 $ 33,240 $ 11,080 |
Summarized financial information for equity in investment partnerships | Equity in Investment Partnerships Lion Fund Lion Fund II Total assets as of December 31, 2019 $ 117,135 $ 758,663 Total liabilities as of December 31, 2019 $ 158 $ 114,639 Revenue for the year ended December 31, 2019 $ 10,637 $ 85,831 Earnings for the year ended December 31, 2019 $ 10,567 $ 78,604 Biglari Holdings’ ownership interest 66.1 % 92.9 % Total assets as of December 31, 2018 $ 107,207 $ 901,750 Total liabilities as of December 31, 2018 $ 447 $ 202,770 Revenue for the year ended December 31, 2018 $ (92,093 ) $ (120,431 ) Earnings for the year ended December 31, 2018 $ (92,159 ) $ (130,193 ) Biglari Holdings’ ownership interest 65.9 % 92.2 % Total assets as of December 31, 2017 $ 203,560 $ 1,060,737 Total liabilities as of December 31, 2017 $ 157 $ 199,974 Revenue for the year ended December 31, 2017 $ (13,322 ) $ (25,283 ) Earnings for the year ended December 31, 2017 $ (13,383 ) $ (35,740 ) Biglari Holdings’ ownership interest 64.3 % 92.3 % |
Note 4. Other Current Assets (T
Note 4. Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Assets [Abstract] | |
Schedule of other current assets | December 31, 2019 2018 Deferred commissions on gift cards sold by third parties $ 3,379 $ 3,218 Prepaid contractual obligations 3,070 1,555 Investment in equity security and related derivative position — 4,463 Other current assets $ 6,449 $ 9,236 |
Note 5. Property and Equipment
Note 5. Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | December 31, 2019 2018 Land $ 150,147 $ 146,015 Buildings 144,243 142,658 Land and leasehold improvements 157,141 158,938 Equipment 196,264 201,738 Oil and gas properties 77,475 — Construction in progress 3,789 1,703 729,059 651,052 Less accumulated depreciation and amortization (378,432 ) (376,336 ) Property and equipment, net $ 350,627 $ 274,716 |
Note 6. Asset Retirement Obli_2
Note 6. Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligations | December 31, 2019 Acquired balance $ 10,542 Liabilities settled (88 ) Accretion expense 177 Asset retirement obligation $ 10,631 |
Note 7. Goodwill and Other In_2
Note 7. Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Restaurants Other Total Goodwill at December 31, 2016 $ 28,090 $ 11,913 $ 40,003 Change in foreign exchange rates during 2017 78 — 78 Goodwill at December 31, 2017 $ 28,168 $ 11,913 $ 40,081 Change in foreign exchange rates during 2018 (29 ) — (29 ) Goodwill at December 31, 2018 $ 28,139 $ 11,913 $ 40,052 Change in foreign exchange rates during 2019 (12 ) — (12 ) Goodwill at December 31, 2019 $ 28,127 $ 11,913 $ 40,040 |
Schedule of definite and indefinite lived intangible assets | December 31, 2019 2018 Gross carrying amount Accumulated amortization Total Gross carrying amount Accumulated amortization Total Franchise agreement $ 5,310 $ (5,178 ) $ 132 $ 5,310 $ (4,647 ) $ 663 Other 810 (792 ) 18 810 (774 ) 36 Total 6,120 (5,970 ) 150 6,120 (5,421 ) 699 Intangible assets with indefinite lives: Trade names 15,876 — 15,876 15,876 — 15,876 Other assets with indefinite lives 11,323 — 11,323 11,539 — 11,539 Total intangible assets $ 33,319 $ (5,970 ) $ 27,349 $ 33,535 $ (5,421 ) $ 28,114 |
Note 8. Accounts Payable And _2
Note 8. Accounts Payable And Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | December 31, 2019 2018 Accounts payable $ 32,626 $ 41,967 Gift card liability 20,745 22,685 Salaries, wages, and vacation 10,667 13,107 Deferred revenue 10,454 11,681 Taxes payable 29,275 11,214 Self-insurance accruals 11,070 8,394 Other 6,242 8,217 Accounts payable and accrued expenses $ 121,079 $ 117,265 |
Note 9. Other Liabilities (Tabl
Note 9. Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other liabilities | December 31, 2019 2018 Non qualified deferred compensation $ 1,716 $ 1,801 Other 348 912 Deferred rent expense — 6,468 Other liabilities $ 2,064 $ 9,181 |
Note 10. Income Taxes (Tables)
Note 10. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | 2019 2018 2017 Current: Federal $ 41,005 $ (1,688 ) $ 544 State 7,301 1,204 816 Deferred (38,545 ) (2,153 ) (64,321 ) Total income taxes $ 9,761 $ (2,637 ) $ (62,961 ) Reconciliation of effective income tax: Tax at U.S. statutory rates $ 11,579 $ 3,519 $ (4,512 ) State income taxes, net of federal benefit 1,573 741 259 Tax rate changes — (1,342 ) (51,707 ) Federal income tax credits (3,004 ) (4,587 ) (3,158 ) Dividends received deduction (955 ) (2,142 ) (6,304 ) Valuation allowance 441 658 742 Foreign tax rate differences 116 349 1,598 Other 11 167 121 Total income taxes $ 9,761 $ (2,637 ) $ (62,961 ) |
Schedule of deferred tax assets and liabilities | December 31, 2019 2018 Deferred tax assets: Insurance reserves $ 1,304 $ 1,816 Compensation accruals 438 677 Gift card accruals 3,280 2,515 Net operating loss credit carryforward 6,017 5,547 Valuation allowance on net operating losses (5,419 ) (4,978 ) Fixed assets and depletable assets basis difference 4,776 — Income tax credit carryforward 6,300 4,965 Other (36 ) 953 Total deferred tax assets 16,660 11,495 Deferred tax liabilities: Investments 56,519 92,743 Fixed asset basis difference — 934 Goodwill and intangibles 14,371 4,689 Total deferred tax liabilities 70,890 98,366 Net deferred tax liability $ (54,230 ) $ (86,871 ) |
Note 11. Notes Payable and Ot_2
Note 11. Notes Payable and Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and other borrowings | December 31, 2019 2018 Current portion of notes payable and other borrowings Notes payable $ 2,200 $ 2,200 Unamortized original issue discount (348 ) (334 ) Unamortized debt issuance costs (634 ) (609 ) Finance obligations 4,252 4,463 Finance lease liabilities 1,633 — Total current portion of notes payable and other borrowings $ 7,103 $ 5,720 Long-term notes payable and other borrowings Notes payable $ 179,298 $ 181,498 Unamortized original issue discount (89 ) (438 ) Unamortized debt issuance costs (163 ) (796 ) Finance obligations 74,497 59,737 Finance lease liabilities 9,639 — Total long-term notes payable and other borrowings $ 263,182 $ 240,001 |
Expected principle payment | 2020 2,200 2021 179,298 Total $ 181,498 |
Interest on debt obligations | 2019 2018 2017 Interest paid on debt $ 11,273 $ 10,655 $ 9,969 Interest paid on obligations under leases $ 7,816 $ 8,207 $ 9,132 |
Note 12. Leased Assets and Le_2
Note 12. Leased Assets and Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of lease cost | 2019 Finance lease costs: Amortization of right-of-use assets $ 1,952 Interest on lease liabilities 828 Operating lease costs * 16,483 Total lease costs $ 19,263 *Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Schedule of supplemental cash flow information related to leases | Year Ended Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 1,610 Operating cash flows from finance leases $ 828 Operating cash flows from operating leases $ 16,863 Right-of-use assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,097 Operating lease liabilities $ 11,069 |
Schedule of supplemental balance sheet information related to leases | December 31, 2019 Finance leases: Property and equipment, net $ 10,783 Current portion of notes payable and other borrowings $ 1,633 Long-term notes payable and other borrowings 9,639 Total finance lease liabilities $ 11,272 |
Schedule of weighted-average lease terms and discount rates | 2019 Weighted-average remaining lease terms: Finance leases 8.4 years Operating leases 6.4 years Weighted-average discount rates: Finance leases 7.1% Operating leases 6.9% |
Schedule of maturities of lease liabilities | Year Operating Finance 2020 $ 15,584 $ 2,377 2021 14,759 2,358 2022 12,622 1,869 2023 10,794 1,669 2024 8,680 1,633 After 2024 18,576 5,170 Total lease payments 81,015 15,076 Less interest 16,109 3,804 Total lease liabilities $ 64,906 $ 11,272 |
Schedule of future minimum lease payments | Operating Leases Year Finance Obligations Capital Leases Total Operating Property Non-Operating Property 2019 $ 11,114 $ 55 $ 11,169 $ 17,914 $ 483 2020 8,040 55 8,095 16,691 554 2021 5,925 55 5,980 16,787 578 2022 2,951 5 2,956 15,603 599 2023 1,587 — 1,587 14,071 539 After 2023 1,673 — 1,673 36,709 1,790 Total minimum future rental payments 31,290 170 31,460 $ 117,775 $ 4,543 Less amount representing interest 18,004 60 18,064 Total principal obligations under leases 13,286 110 13,396 Less current portion 4,433 30 4,463 Non-current principal obligations under leases 8,853 80 8,933 Residual value at end of lease term 50,744 60 50,804 Obligations under leases $ 59,597 $ 140 $ 59,737 |
Schedule of rent expense | 2019 2018 2017 Minimum rent $ 17,968 $ 20,158 $ 18,157 Contingent rent 1,050 1,470 1,839 Rent expense $ 19,018 $ 21,628 $ 19,996 |
Note 13. Related Party Transa_2
Note 13. Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Contributions to and distributions from the investment partnerships | 2019 2018 2017 Contributions of cash $ 40,000 $ 39,040 $ 3,707 Distributions of cash (169,329 ) (68,700 ) (9,395 ) $ (129,329 ) $ (29,660 ) $ (5,688 ) |
Note 15. Fair Value of Financ_2
Note 15. Fair Value of Financial Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets | December 31, 2019 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 43,095 $ — $ — $ 43,095 $ 21,448 $ — $ — $ 21,448 Equity securities: Consumer goods — 6,397 — 6,397 1,708 4,100 — 5,808 Insurance 25 — 25 — — — — Bonds 38,911 — — 38,911 32,404 — — 32,404 Options on equity securities — 2,166 — 2,166 — 2,755 — 2,755 Non-qualified deferred compensation plan investments 2,175 — — 2,175 2,149 — — 2,149 Total assets at fair value $ 84,206 $ 8,563 $ — $ 92,769 $ 57,709 $ 6,855 $ — $ 64,564 |
Note 16. Accumulated Other Co_2
Note 16. Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
AOCI Attributable to Parent [Abstract] | |
Component of accumulated other comprehensive income | 2019 2018 Foreign Currency Translation Adjustments Investment Accumulated Foreign Currency Translation Adjustments Investment Accumulated Beginning Balance $ (2,516 ) $ — $ (2,516 ) $ (1,462 ) $ 58 $ (1,404 ) Reclassification to (earnings) loss — (58 ) (58 ) Foreign currency translation (294 ) (294 ) (1,054 ) (1,054 ) Ending Balance $ (2,810 ) $ — $ (2,810 ) $ (2,516 ) $ — $ (2,516 ) 2017 Foreign Currency Translation Adjustments Investment Accumulated Beginning Balance $ (3,447 ) $ (137 ) $ (3,584 ) Other comprehensive income (loss) before reclassifications 195 195 Foreign currency translation 1,985 1,985 Ending Balance $ (1,462 ) $ 58 $ (1,404 ) |
Note 17. Business Segment Rep_2
Note 17. Business Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenue by segment | Revenue 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 595,004 $ 760,565 $ 792,827 Western 15,216 15,125 14,326 Total Restaurant Operations 610,220 775,690 807,153 First Guard 30,083 27,628 24,943 Southern Oil 24,436 — — Maxim 4,099 6,576 7,708 $ 668,838 $ 809,894 $ 839,804 |
Schedule of earnings (loss) by segment | Earnings (Loss) Before Income Taxes 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ (18,575 ) $ (10,657 ) $ 431 Western 1,756 2,046 1,860 Total Restaurant Operations (16,819 ) (8,611 ) 2,291 First Guard 7,103 6,215 4,770 Southern Oil 8,032 — — Maxim 742 1,068 (439 ) Other 994 635 669 Total Operating Businesses 52 (693 ) 7,291 Corporate and investments: Corporate (10,602 ) (11,286 ) (16,106 ) Investment partnership gains 78,133 40,411 6,965 Total corporate 67,531 29,125 (9,141 ) Interest expense on notes payable and other borrowings (12,442 ) (11,677 ) (11,040 ) $ 55,141 $ 16,755 $ (12,890 ) |
Schedule of consolidated capital expenditure, depreciation and amortization captions | A disaggregation of our consolidated capital expenditures for 2019, 2018 and 2017 is presented in the table that follows. Capital Expenditures 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 9,951 $ 14,982 $ 7,565 Western 72 61 410 Total Restaurant Operations 10,023 15,043 7,975 First Guard 43 236 43 Southern Oil 7,594 — — Maxim — — — Other 19 14 16 Total Operating Businesses 17,679 15,293 8,034 Corporate — — — Consolidated results $ 17,679 $ 15,293 $ 8,034 A disaggregation of our consolidated depreciation and amortization captions for 2019, 2018 and 2017 is presented in the table that follows. Depreciation and Amortization 2019 2018 2017 Operating Businesses: Restaurant Operations: Steak n Shake $ 20,533 $ 18,180 $ 19,987 Western 641 651 636 Total Restaurant Operations 21,174 18,831 20,623 First Guard 85 76 56 Southern Oil 8,218 — — Maxim — 27 50 Other 66 287 287 Total Operating Businesses 29,543 19,221 21,016 Corporate 35 97 432 Consolidated results $ 29,578 $ 19,318 $ 21,448 |
Schedule of consolidated asset captions | Identifiable Assets December 31, 2019 2018 Reportable segments: Restaurant Operations: Steak n Shake $ 385,259 $ 330,100 Western 18,322 16,444 Total Restaurant Operations 403,581 346,544 First Guard 58,808 51,565 Southern Oil 82,257 — Maxim 16,549 18,143 Other 20,732 19,774 Corporate 51,840 35,987 Investment partnerships 505,542 557,480 Total assets $ 1,139,309 $ 1,029,493 |
Note 18. Quarterly Financial _2
Note 18. Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter For the year ended December 31, 2019 Total revenues $ 181,859 $ 168,343 $ 160,216 $ 158,420 Gross profit 22,837 30,454 38,467 43,307 Costs and expenses 199,384 169,518 157,272 145,398 Earnings (loss) before income taxes 11,562 27,870 (631 ) 16,340 Net earnings (loss) 9,818 21,974 (17 ) 13,605 Net earnings (loss) per equivalent Class A share $ 28.36 $ 63.50 $ (0.05 ) $ 39.64 For the year ended December 31, 2018 Total revenues $ 202,225 $ 208,739 $ 203,582 $ 195,348 Gross profit 36,430 42,727 36,153 33,145 Costs and expenses 203,391 203,778 204,518 201,979 Earnings (loss) before income taxes (2,611 ) (8,429 ) (24,902 ) 52,697 Net earnings (loss) (1,814 ) (7,539 ) (13,703 ) 42,448 Net earnings (loss) per equivalent Class A share $ (5.15 ) $ (21.73 ) $ (39.50 ) $ 122.53 |
Note 1. Summary of Significan_4
Note 1. Summary of Significant Accounting Policies (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 67,772 | $ 48,557 | $ 58,577 | |
Restricted cash included in other long-term assets | 2,924 | 6,453 | 8,653 | |
Cash, cash equivalents and restricted cash | $ 70,696 | $ 55,010 | $ 67,230 | $ 75,833 |
Note 1. Summary of Significan_5
Note 1. Summary of Significant Accounting Policies (Details 1) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated | |||
Common stock authorized | 2,500,000 | ||
Common stock issued | 2,142,202 | ||
Treasury stock held by the Company | (74,589) | ||
Outstanding shares | 2,067,613 | ||
Class A Common Stock | |||
Common stock authorized | 500,000 | 500,000 | |
Common stock issued | 206,864 | 206,864 | |
Treasury stock held by the Company | 0 | 0 | |
Outstanding shares | 206,864 | 206,864 | |
Class B Common Stock | |||
Common stock authorized | 10,000,000 | 10,000,000 | |
Common stock issued | 2,068,640 | 2,068,640 | |
Treasury stock held by the Company | 0 | 0 | |
Outstanding shares | 2,068,640 | 2,068,640 |
Note 1. Summary of Significan_6
Note 1. Summary of Significant Accounting Policies (Details 2) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | $ 578,164 | $ 740,922 | $ 781,856 |
Franchise royalties and fees | 27,189 | 30,998 | 20,773 |
Other | 4,867 | 3,770 | 4,524 |
Total revenue from restaurant operations | $ 610,220 | $ 775,690 | $ 807,153 |
Note 2. Investments (Details Na
Note 2. Investments (Details Narrative) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available for sale investments | $ 44,856 | $ 33,860 |
Investments in equity securities and a related derivative position | $ 4,463 | $ 4,463 |
Note 3. Investment Partnershi_3
Note 3. Investment Partnerships (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value | |||
Fair value of partnership interest, beginning | $ 715,102 | $ 925,279 | $ 972,707 |
Investment partnership gains (losses) | 80,350 | (180,517) | (41,740) |
Distributions, net of reinvestments | (129,329) | (29,660) | (5,688) |
Increase in proportionate share of Company stock held | 0 | 0 | 0 |
Partnership interest, ending | 666,123 | 715,102 | 925,279 |
Company Common Stock | |||
Fair value of partnership interest, beginning | 157,622 | 359,258 | 395,070 |
Investment partnership gains (losses) | 2,217 | (220,928) | (48,705) |
Distributions, net of reinvestments | 0 | 0 | 0 |
Increase in proportionate share of Company stock held | 742 | 19,292 | 12,893 |
Partnership interest, ending | 160,581 | 157,622 | 359,258 |
Carry Value | |||
Fair value of partnership interest, beginning | 557,480 | 566,021 | 577,637 |
Investment partnership gains (losses) | 78,133 | 40,411 | 6,965 |
Distributions, net of reinvestments | (129,329) | (29,660) | (5,688) |
Increase in proportionate share of Company stock held | (742) | (19,292) | (12,893) |
Partnership interest, ending | $ 505,542 | $ 557,480 | $ 566,021 |
Note 3. Investment Partnershi_4
Note 3. Investment Partnerships (Details 1) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying value of investment partnerships | $ 505,542 | $ 557,480 |
Deferred tax liability related to investment partnerships | (56,518) | (92,703) |
Carrying value of investment partnerships net of deferred taxes | $ 449,024 | $ 464,777 |
Note 3. Investment Partnershi_5
Note 3. Investment Partnerships (Details 2) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gains from investment partnerships | $ 78,133 | $ 40,411 | $ 6,965 |
Tax expense (benefit) | 17,360 | 7,171 | (4,115) |
Contribution to net earnings | $ 60,773 | $ 33,240 | $ 11,080 |
Note 3. Investment Partnershi_6
Note 3. Investment Partnerships (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lion Fund, L.P. | |||
Total assets | $ 117,135 | $ 107,207 | $ 203,560 |
Total liabilities | 158 | 447 | 157 |
Revenue for the period | 10,637 | (92,093) | (13,322) |
Earnings for the period | $ 10,567 | $ (92,159) | $ (13,383) |
Biglari Holding's ownership interest | 66.10% | 65.90% | 64.30% |
Lion Fund II, L.P. | |||
Total assets | $ 758,663 | $ 901,750 | $ 1,060,737 |
Total liabilities | 114,639 | 202,770 | 199,974 |
Revenue for the period | 85,831 | (120,431) | (25,283) |
Earnings for the period | $ 78,604 | $ (130,193) | $ (35,740) |
Biglari Holding's ownership interest | 92.90% | 92.20% | 92.30% |
Note 4. Other Current Assets (D
Note 4. Other Current Assets (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred commissions on gift cards sold by third parties | $ 3,379 | $ 3,218 |
Prepaid contractual obligations | 3,070 | 1,555 |
Investment in equity security and related derivative position | 0 | 4,463 |
Other current assets | $ 6,449 | $ 9,236 |
Note 5. Property and Equipmen_2
Note 5. Property and Equipment (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Land | $ 150,147 | $ 146,015 |
Buildings | 144,243 | 142,658 |
Land and leasehold improvements | 157,141 | 158,938 |
Equipment | 196,264 | 201,738 |
Oil and gas properties | 77,475 | 0 |
Construction in progress | 3,789 | 1,703 |
Property and equipment, gross | 729,059 | 651,052 |
Less accumulated depreciation and amortization | (378,432) | (376,336) |
Property and equipment, net | $ 350,627 | $ 274,716 |
Note 5. Property and Equipmen_3
Note 5. Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated depreciation | $ 52,240 | ||
Building | |||
Property and equipment related costs | 59,104 | ||
Land | |||
Property and equipment related costs | 49,891 | ||
Land and leasehold improvements | |||
Property and equipment related costs | 26,924 | ||
Consolidated | |||
Depreciation and amortization expense | 18,881 | $ 18,646 | $ 20,706 |
Depletion expense | 8,077 | ||
Impairment to long-lived assets | $ 8,186 | $ 5,677 | $ 1,789 |
Note 6. Asset Retirement Obli_3
Note 6. Asset Retirement Obligations (Details) - Consolidated $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Acquired balance | $ 10,542 |
Liabilities settled | (88) |
Accretion expense | 177 |
Asset retirement obligation | $ 10,631 |
Note 6. Asset Retirement Obli_4
Note 6. Asset Retirement Obligations (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Consolidated | |
Asset retirement obligations, current | $ 184 |
Note 7. Goodwill and Other In_3
Note 7. Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated | |||
Balance at beginning of year | $ 40,052 | $ 40,081 | $ 40,003 |
Change in foreign exchange rates | (12) | (29) | 78 |
Balance at end of year | 40,040 | 40,052 | 40,081 |
Restaurant | |||
Balance at beginning of year | 28,139 | 28,168 | 28,090 |
Change in foreign exchange rates | (12) | (29) | 78 |
Balance at end of year | 28,127 | 28,139 | 28,168 |
Other | |||
Balance at beginning of year | 11,913 | 11,913 | 11,913 |
Change in foreign exchange rates | 0 | 0 | 0 |
Balance at end of year | $ 11,913 | $ 11,913 | $ 11,913 |
Note 7. Goodwill and Other In_4
Note 7. Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated | ||
Gross carrying amount | $ 33,319 | $ 33,535 |
Accumulated amortization | (5,970) | (5,421) |
Total intangible assets | 27,349 | 28,114 |
Franchise Agreement | ||
Gross carrying amount | 5,310 | 5,310 |
Accumulated amortization | (5,178) | (4,647) |
Total intangible assets | 132 | 663 |
Other | ||
Gross carrying amount | 810 | 810 |
Accumulated amortization | (792) | (774) |
Total intangible assets | 18 | 36 |
Finite Lived Intangible Assets | ||
Gross carrying amount | 6,120 | 6,120 |
Accumulated amortization | (5,970) | (5,421) |
Total intangible assets | 150 | 699 |
Trade Names | ||
Gross carrying amount | 15,876 | 15,876 |
Accumulated amortization | 0 | 0 |
Total intangible assets | 15,876 | 15,876 |
Other Assets With Indefinite Lives | ||
Gross carrying amount | 11,323 | 11,539 |
Accumulated amortization | 0 | 0 |
Total intangible assets | $ 11,323 | $ 11,539 |
Note 7. Goodwill and Other In_5
Note 7. Goodwill and Other Intangible Assets (Details Narrative) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization expense | $ 549 | $ 562 | $ 567 |
Purchases of perpetual lease rights | $ 0 | $ (2,503) | $ 0 |
Note 8. Accounts Payable and _3
Note 8. Accounts Payable and Accrued Expenses (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts payable | $ 32,626 | $ 41,967 |
Gift card liability | 20,745 | 22,685 |
Salaries, wages, and vacation | 10,667 | 13,107 |
Deferred revenue | 10,454 | 11,681 |
Taxes payable | 29,275 | 11,214 |
Self insurance accruals | 11,070 | 8,394 |
Other | 6,242 | 8,217 |
Accounts payable and accrued expenses | $ 121,079 | $ 117,265 |
Note 9. Other Liabilities (Deta
Note 9. Other Liabilities (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non qualified deferred compensation | $ 1,716 | $ 1,801 |
Other | 348 | 912 |
Deferred rent expense | 0 | 6,468 |
Other liabilities | $ 2,064 | $ 9,181 |
Note 10. Income Taxes (Details)
Note 10. Income Taxes (Details) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 41,005 | $ (1,688) | $ 544 |
State | 7,301 | 1,204 | 816 |
Deferred | (38,545) | (2,153) | (64,321) |
Total income taxes | 9,761 | (2,637) | (62,961) |
Reconciliation of effective income tax: | |||
Tax at U.S. statutory rates | 11,579 | 3,519 | (4,512) |
State income taxes, net of federal benefit | 1,573 | 741 | 259 |
Tax rate changes | 0 | (1,342) | (51,707) |
Federal income tax credits | (3,004) | (4,587) | (3,158) |
Dividends received deduction | (955) | (2,142) | (6,304) |
Valuation allowance | 441 | 658 | 742 |
Foreign tax rate differences | 116 | 349 | 1,598 |
Other | 11 | 167 | 121 |
Income tax expense (benefit) | $ 9,761 | $ (2,637) | $ (62,961) |
Note 10. Income Taxes (Details
Note 10. Income Taxes (Details 1) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Insurance reserves | $ 1,304 | $ 1,816 |
Compensation accruals | 438 | 677 |
Gift card accruals | 3,280 | 2,515 |
Net operating loss credit carryforward | 6,017 | 5,547 |
Valuation allowance on net operating losses | (5,419) | (4,978) |
Fixed assets and depletable assets basis difference | 4,776 | 0 |
Income tax credit carryforward | 6,300 | 4,965 |
Other | (36) | 953 |
Total deferred tax assets | 16,660 | 11,495 |
Deferred tax liabilities: | ||
Investments | 56,519 | 92,743 |
Fixed asset basis difference | 0 | 934 |
Goodwill and intangibles | 14,371 | 4,689 |
Total deferred tax liabilities | 70,890 | 98,366 |
Net deferred tax liability | $ (54,230) | $ (86,871) |
Note 10. Income Taxes (Detail_2
Note 10. Income Taxes (Details Narrative) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings (losses) before income taxes, domestic | $ 57,877 | $ 21,700 | $ (6,230) |
Earnings (losses) before income taxes, foreign | 2,736 | 4,945 | 6,660 |
Unrecognized tax benefits | 348 | 341 | |
Interest and penalties | 62 | 43 | |
Income taxes payable | 17,767 | ||
Income taxes receivable | 2,022 | ||
Income taxes paid | 30,375 | 810 | 3,211 |
Income tax refunds | $ 1,546 | $ 8 | $ 0 |
Note 11. Notes Payable and Ot_3
Note 11. Notes Payable and Other Borrowings (Details) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Notes payable | $ 2,200 | $ 2,200 |
Unamortized original issue discount | (348) | (334) |
Unamortized debt issuance costs | (634) | (609) |
Finance obligations | 4,252 | 4,463 |
Finance lease liabilities | 1,633 | 0 |
Total current portion of notes payable and other borrowings | 7,103 | 5,720 |
Notes payable | 179,298 | 181,498 |
Unamortized original issue discount | (89) | (438) |
Unamortized debt issuance costs | (163) | (796) |
Finance obligations | 74,497 | 59,737 |
Finance lease liabilities | 9,639 | 0 |
Total long-term notes payable and other borrowings | $ 263,182 | $ 240,001 |
Note 11. Notes Payable and Ot_4
Note 11. Notes Payable and Other Borrowings (Details 1) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 2,200 |
2021 | 179,298 |
Total | $ 181,498 |
Note 11. Notes Payable and Ot_5
Note 11. Notes Payable and Other Borrowings (Details 2) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest paid on debt | $ 11,273 | $ 10,655 | $ 9,969 |
Interest paid on obligations under leases | $ 7,816 | $ 8,207 | $ 9,132 |
Note 12. Leased Assets and Le_3
Note 12. Leased Assets and Lease Commitments (Details) - Consolidated $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Finance lease costs: | ||
Amortization of right-of-use assets | $ 1,952 | |
Interest on lease liabilities | 828 | |
Operating lease costs | 16,483 | [1] |
Total lease costs | $ 19,263 | |
[1] | Includes short-term leases, variable lease costs and sublease income, which are immaterial. |
Note 12. Leased Assets and Le_4
Note 12. Leased Assets and Lease Commitments (Details 1) - Consolidated $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liablities: | |
Financing cash flows from finance leases | $ 1,610 |
Operating cash flows from finance leases | 828 |
Operating cash flows from operating leases | 16,863 |
Right-of-use assets obtained in exchange for lease obligations: | |
Finance lease liabilities | 1,097 |
Operating lease liabilities | $ 11,069 |
Note 12. Leased Assets and Le_5
Note 12. Leased Assets and Lease Commitments (Details 2) - Consolidated - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finance leases: | ||
Property and equipment, net | $ 10,783 | |
Current portion of notes payable and other borrowings | 1,633 | $ 0 |
Long-term notes payable and other borrowings | 9,639 | $ 0 |
Total finance lease liablities | $ 11,272 |
Note 12. Leased Assets and Le_6
Note 12. Leased Assets and Lease Commitments (Details 3) - Consolidated | Dec. 31, 2019 |
Weighted-average remaining lease terms: | |
Finance leases | 8 years 4 months 24 days |
Operating leases | 6 years 4 months 24 days |
Weighted-average discount rates: | |
Finance leases | 7.10% |
Operating leases | 6.90% |
Note 12. Leased Assets and Le_7
Note 12. Leased Assets and Lease Commitments (Details 4) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 15,584 |
2021 | 14,759 |
2022 | 12,622 |
2023 | 10,794 |
2024 | 8,680 |
After 2024 | 18,576 |
Total lease payments | 81,015 |
Less interest | 16,109 |
Total lease liabilities | 64,906 |
Finance Leases | |
2020 | 2,377 |
2021 | 2,358 |
2022 | 1,869 |
2023 | 1,669 |
2024 | 1,633 |
After 2024 | 5,170 |
Total lease payments | 15,076 |
Less interest | 3,804 |
Total lease liabilities | $ 11,272 |
Note 12. Leased Assets and Le_8
Note 12. Leased Assets and Lease Commitments (Details 5) $ in Thousands | Dec. 31, 2018USD ($) |
2019 | $ 11,169 |
2020 | 8,095 |
2021 | 5,980 |
2022 | 2,956 |
2023 | 1,587 |
After 2023 | 1,673 |
Total minimum future rental payments | 31,460 |
Less amount representing interest | 18,064 |
Total principal obligations under leases | 13,396 |
Less current portion | 4,463 |
Non-current principal obligations under leases | 8,933 |
Residual value at end of lease term | 50,804 |
Obligations under leases | 59,737 |
Finance Obligations | |
2019 | 11,114 |
2020 | 8,040 |
2021 | 5,925 |
2022 | 2,951 |
2023 | 1,587 |
After 2023 | 1,673 |
Total minimum future rental payments | 31,290 |
Less amount representing interest | 18,004 |
Total principal obligations under leases | 13,286 |
Less current portion | 4,433 |
Non-current principal obligations under leases | 8,853 |
Residual value at end of lease term | 50,744 |
Obligations under leases | 59,597 |
Capital Leases | |
2019 | 55 |
2020 | 55 |
2021 | 55 |
2022 | 5 |
2023 | 0 |
After 2023 | 0 |
Total minimum future rental payments | 170 |
Less amount representing interest | 60 |
Total principal obligations under leases | 110 |
Less current portion | 30 |
Non-current principal obligations under leases | 80 |
Residual value at end of lease term | 60 |
Obligations under leases | 140 |
Operating Property | |
2019 | 17,914 |
2020 | 16,691 |
2021 | 16,787 |
2022 | 15,603 |
2023 | 14,071 |
After 2023 | 36,709 |
Total minimum future rental payments | 117,775 |
Non-Operating Property | |
2019 | 483 |
2020 | 554 |
2021 | 578 |
2022 | 599 |
2023 | 539 |
After 2023 | 1,790 |
Total minimum future rental payments | $ 4,543 |
Note 12. Leased Assets and Le_9
Note 12. Leased Assets and Lease Commitments (Details 6) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum rent | $ 17,968 | $ 20,158 | $ 18,157 |
Contingent rent | 1,050 | 1,470 | 1,839 |
Rent expense | $ 19,018 | $ 21,628 | $ 19,996 |
Note 13. Related Party Transa_3
Note 13. Related Party Transactions (Details) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Contributions of cash | $ 40,000 | $ 39,040 | $ 3,707 |
Distributions of cash | (169,329) | (68,700) | (9,395) |
Total contributions and distributions | $ (129,329) | $ (29,660) | $ (5,688) |
Note 15. Fair Value of Financ_3
Note 15. Fair Value of Financial Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash equivalents | $ 43,095 | $ 21,448 |
Equity Securities | ||
Consumer goods | 6,397 | 5,808 |
Insurance | 25 | 0 |
Bonds | 38,911 | 32,404 |
Options on equity securities | 2,166 | 2,755 |
Non-qualified deferred compensation plan Investments | 2,175 | 2,149 |
Total assets at fair value | 92,769 | 64,564 |
Level 1 | ||
Assets | ||
Cash equivalents | 43,095 | 21,448 |
Equity Securities | ||
Consumer goods | 0 | 1,708 |
Insurance | 25 | 0 |
Bonds | 38,911 | 32,404 |
Options on equity securities | 0 | 0 |
Non-qualified deferred compensation plan Investments | 2,175 | 2,149 |
Total assets at fair value | 84,206 | 57,709 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Equity Securities | ||
Consumer goods | 6,397 | 4,100 |
Insurance | 0 | 0 |
Bonds | 0 | 0 |
Options on equity securities | 2,166 | 2,755 |
Non-qualified deferred compensation plan Investments | 0 | 0 |
Total assets at fair value | 8,563 | 6,855 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Equity Securities | ||
Consumer goods | 0 | 0 |
Insurance | 0 | 0 |
Bonds | 0 | 0 |
Options on equity securities | 0 | 0 |
Non-qualified deferred compensation plan Investments | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Note 16. Accumulated Other Co_3
Note 16. Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign Currency Translation Adjustments | |||
Beginning Balance | $ (2,516) | $ (1,462) | $ (3,447) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 |
Reclassification to (earnings) loss | 0 | 0 | |
Foreign currency translation | (294) | (1,054) | 1,985 |
Ending Balance | (2,810) | (2,516) | (1,462) |
Investment Gain | |||
Beginning Balance | 0 | 58 | (137) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 195 |
Reclassification to (earnings) loss | 0 | (58) | 0 |
Foreign currency translation | 0 | 0 | |
Ending Balance | 0 | 0 | 58 |
Accumulated Other Comprehensive Income (Loss) | |||
Beginning Balance | (2,516) | (1,404) | (3,584) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 195 |
Reclassification to (earnings) loss | 0 | (58) | |
Foreign currency translation | (294) | (1,054) | 1,985 |
Ending Balance | $ (2,810) | $ (2,516) | $ (1,404) |
Note 17. Business Segment Rep_3
Note 17. Business Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net revenue | $ 158,420 | $ 160,216 | $ 168,343 | $ 181,859 | $ 195,348 | $ 203,582 | $ 208,739 | $ 202,225 | |||
Consolidated | |||||||||||
Net revenue | $ 668,838 | $ 809,894 | $ 839,804 | ||||||||
Operating Businesses | Steak n Shake | |||||||||||
Net revenue | 595,004 | ||||||||||
Operating Businesses | Steak n Shake | |||||||||||
Net revenue | 760,565 | 792,827 | |||||||||
Operating Businesses | Western | |||||||||||
Net revenue | 15,216 | 15,125 | 14,326 | ||||||||
Operating Businesses | Restaurant | |||||||||||
Net revenue | 610,220 | 775,690 | 807,153 | ||||||||
Operating Businesses | First Guard | |||||||||||
Net revenue | 30,083 | 27,628 | 24,943 | ||||||||
Operating Businesses | Southern Oil | |||||||||||
Net revenue | 24,436 | 0 | 0 | ||||||||
Operating Businesses | Maxim | |||||||||||
Net revenue | $ 4,099 | $ 6,576 | $ 7,708 |
Note 17. Business Segment Rep_4
Note 17. Business Segment Reporting (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings (loss) before income taxes | $ 16,340 | $ (631) | $ 27,870 | $ 11,562 | $ 52,697 | $ (24,902) | $ (8,429) | $ (2,611) | |||
Consolidated | |||||||||||
Earnings (loss) before income taxes | $ 55,141 | $ 16,755 | $ (12,890) | ||||||||
Restaurant Operations - SteakNShake | |||||||||||
Earnings (loss) before income taxes | (18,575) | (10,657) | 431 | ||||||||
Restaurant Operations - Western | |||||||||||
Earnings (loss) before income taxes | 1,756 | 2,046 | 1,860 | ||||||||
Interest Expense on Notes Payable and Other Borrowings | |||||||||||
Earnings (loss) before income taxes | (12,442) | (11,677) | (11,040) | ||||||||
Operating Businesses | |||||||||||
Earnings (loss) before income taxes | 52 | (693) | 7,291 | ||||||||
Operating Businesses | Restaurant | |||||||||||
Earnings (loss) before income taxes | (16,819) | (8,611) | 2,291 | ||||||||
Operating Businesses | First Guard | |||||||||||
Earnings (loss) before income taxes | 7,103 | 6,215 | 4,770 | ||||||||
Operating Businesses | Southern Oil | |||||||||||
Earnings (loss) before income taxes | 8,032 | 0 | 0 | ||||||||
Operating Businesses | Maxim | |||||||||||
Earnings (loss) before income taxes | 742 | 1,068 | (439) | ||||||||
Operating Businesses | Other | |||||||||||
Earnings (loss) before income taxes | 994 | 635 | 669 | ||||||||
Corporate and Investments | Corporate | |||||||||||
Earnings (loss) before income taxes | (10,602) | (11,286) | (16,106) | ||||||||
Corporate and Investments | Investment partnerships gains | |||||||||||
Earnings (loss) before income taxes | 78,133 | 40,411 | 6,965 | ||||||||
Corporate and Investments | Total Corporate | |||||||||||
Earnings (loss) before income taxes | $ 67,531 | $ 29,125 | $ (9,141) |
Note 17. Business Segment Rep_5
Note 17. Business Segment Reporting (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated | |||
Capital expenditures | $ 17,679 | $ 15,293 | $ 8,034 |
Depreciation and amortization | 29,578 | 19,318 | 21,448 |
Restaurant Operations - SteakNShake | |||
Capital expenditures | 9,951 | 14,982 | 7,565 |
Depreciation and amortization | 20,533 | 18,180 | 19,987 |
Restaurant Operations - Western | |||
Capital expenditures | 72 | 61 | 410 |
Depreciation and amortization | 641 | 651 | 636 |
Operating Businesses | |||
Capital expenditures | 17,679 | 15,293 | 8,034 |
Depreciation and amortization | 29,543 | 19,221 | 21,016 |
Operating Businesses | Restaurant | |||
Capital expenditures | 10,023 | 15,043 | 7,975 |
Depreciation and amortization | 21,174 | 18,831 | 20,623 |
Operating Businesses | First Guard | |||
Capital expenditures | 43 | 236 | 43 |
Depreciation and amortization | 85 | 76 | 56 |
Operating Businesses | Southern Oil | |||
Capital expenditures | 7,594 | 0 | 0 |
Depreciation and amortization | 8,218 | 0 | 0 |
Operating Businesses | Maxim | |||
Capital expenditures | 0 | 0 | 0 |
Depreciation and amortization | 0 | 27 | 50 |
Operating Businesses | Other | |||
Capital expenditures | 19 | 14 | 16 |
Depreciation and amortization | 66 | 287 | 287 |
Corporate | Corporate | |||
Capital expenditures | 0 | 0 | 0 |
Depreciation and amortization | $ 35 | $ 97 | $ 432 |
Note 17. Business Segment Rep_6
Note 17. Business Segment Reporting (Details 3) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated | ||
Identifiable assets | $ 1,139,309 | $ 1,029,493 |
Other | ||
Identifiable assets | 20,732 | 19,774 |
Corporate | ||
Identifiable assets | 51,840 | 35,987 |
Restaurant Operations - SteakNShake | ||
Identifiable assets | 385,259 | 330,100 |
Western | ||
Identifiable assets | 18,322 | 16,444 |
Restaurant | ||
Identifiable assets | 403,581 | 346,544 |
First Guard | ||
Identifiable assets | 58,808 | 51,565 |
Southern Oil | ||
Identifiable assets | 82,257 | 0 |
Maxim | ||
Identifiable assets | 16,549 | 18,143 |
Investment Partnerships | ||
Identifiable assets | $ 505,542 | $ 557,480 |
Note 18. Quarterly Financial _3
Note 18. Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 158,420 | $ 160,216 | $ 168,343 | $ 181,859 | $ 195,348 | $ 203,582 | $ 208,739 | $ 202,225 | |||
Gross profit | 43,307 | 38,467 | 30,454 | 22,837 | 33,145 | 36,153 | 42,727 | 36,430 | |||
Costs and expenses | 145,398 | 157,272 | 169,518 | 199,384 | 201,979 | 204,518 | 203,778 | 203,391 | |||
Earnings (loss) before income taxes | 16,340 | (631) | 27,870 | 11,562 | 52,697 | (24,902) | (8,429) | (2,611) | |||
Net earnings (loss) | $ 13,605 | $ (17) | $ 21,974 | $ 9,818 | $ 42,448 | $ (13,703) | $ (7,539) | $ (1,814) | $ 45,380 | $ 19,392 | $ 50,071 |
Net earnings (loss) per equivalent Class A share | $ 39.64 | $ (0.05) | $ 63.50 | $ 28.36 | $ 122.53 | $ (39.50) | $ (21.73) | $ (5.15) |
Note 19. Supplemental Disclos_2
Note 19. Supplemental Disclosures of Cash Flow Information (Details Narrative) - Consolidated - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capital expenditures in accounts payable | $ 339 | $ 1,776 | $ 1,036 |
Finance lease obligations | 5,026 | 1,000 | 1,952 |
Finance lease retirements | $ 940 | $ 11,557 | $ 5,030 |