Executive Summary

Q4 2024 headline: pre-tax operating earnings were $3.90M, essentially flat YoY (+2%), but a $(21.86)M investment loss drove a net loss of $(10.27)M versus $44.64M profit in Q4 2023; management emphasizes separating volatile investment marks from operating performance .
Across 2024, operating businesses generated $24.1M of net operating earnings while investment partnership losses created full-year volatility; restaurants posted 6.4% same-store sales growth at company-operated Steak n Shake units .
No quarterly earnings call or guidance; the company communicates through its Annual Report/letter and explicitly does not provide guidance or hold quarterly calls, limiting estimate frameworks and near-term catalysts tied to guidance changes .
Notable 2024 themes relevant into Q4: (i) insurance underwriting pressure at First Guard from higher claim severity, (ii) lower oil & gas revenue partly offset by gains on sale of undeveloped reserves, and (iii) material weaknesses in internal control cited by auditors—risk factors for investor perception .

What Went Well and What Went Wrong

What Went Well
- Operating execution steady despite market-driven investment volatility: Q4 pre-tax operating earnings of $3.90M vs $3.81M in Q4 2023 (+2%) .
- Restaurants: Steak n Shake same-store sales rose 6.4% YoY at company-operated units in 2024; total restaurant revenue edged up to $251.4M (from $250.9M) despite mix shift toward franchise partners .
- Oil & Gas: Abraxas recognized a $16.7M gain on sale of undeveloped reserves in 2024 (after a similar 2023 transaction), highlighting capital-light monetization potential .
- Management message: “We do not regard the quarterly or annual fluctuations in our investments to be meaningful,” underscoring focus on operating trends rather than mark-to-market noise .
What Went Wrong
- Q4 investment loss of $(21.86)M overwhelmed operating profits, yielding a $(10.27)M quarterly net loss; full-year investment partnership losses of $(41.06)M drove overall volatility .
- Insurance: First Guard underwriting gain fell 58% YoY on “significant increases in average claim severity,” pressuring the combined ratio despite written premium growth .
- Brand licensing (Maxim) revenue fell by $1.09M in 2024 on weakness in a key licensing arrangement, producing a segment loss .
- Controls: Auditors issued an adverse opinion on internal control over financial reporting with multiple material weaknesses, a governance overhang .

Quarterly trend (oldest → newest):

Metric ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Pre-tax operating earnings	$19.70	$3.27	$3.90
Investment gains (losses)	$(82.62)	$40.05	$(21.86)
Net earnings (loss) attributable to BH	$(48.19)	$32.13	$(10.27)
S&P Global revenue consensus	n/a (unavailable)	n/a (unavailable)	n/a (unavailable)
S&P Global EPS consensus	n/a (unavailable)	n/a (unavailable)	n/a (unavailable)

Segment contribution context (annual; oldest → newest):

Segment Contribution to Net Earnings ($USD Thousands)	FY 2023	FY 2024
Restaurant	$21,831	$15,470
Insurance	$10,262	$7,169
Oil & Gas	$25,406	$15,458
Brand Licensing	$8	$(884)
Interest expense (net of tax)	$(531)	$(589)
Corporate & other	$(17,814)	$(12,503)
Total operating businesses	$39,162	$24,121
Investment partnership gains (losses)	$14,646	$(28,119)
Investment gains (losses)	$1,731	$239
Net earnings (loss) attributable to BH	$54,948	$(3,759)

Selected KPIs (annual; oldest → newest):

KPI	FY 2023	FY 2024
Steak n Shake company-operated SSS growth	n/a	+6.4%
Restaurant total revenue ($M)	$250.9	$251.4
Franchise partner units (year-end)	181	173
Traditional franchise units (year-end)	128	107
Insurance premiums written ($M)	$63.06	$68.39
Oil & gas revenue ($M)	$45.07	$36.95
Gain on sale of oil & gas properties ($M)	$13.56	$16.70

Notes: S&P Global quarterly consensus estimates were unavailable in this session.

Metric	Period	Previous Guidance	Current Guidance	Change
Corporate policy on guidance	Ongoing	n/a	The company does not provide earnings guidance or hold quarterly conference calls	Maintained policy

(Biglari does not hold quarterly calls; themes reflect Q2/Q3 press releases and FY commentary.)

Topic	Previous Mentions (Q2 2024 and Q3 2024)	Current Period (Q4/FY 2024)	Trend
Investment volatility vs. operations	Press releases separate operating results from investment gains/losses	Reiterated; Q4 loss driven by $(21.86)M investment loss despite operating profit	Stable messaging
Restaurants: SSS and franchise model	Minimal in Q2/Q3 releases	6.4% SSS growth; continued transition effects on reported revenue; higher food/labor costs	Mixed: SSS up, costs up
Insurance underwriting	Not detailed in Q2/Q3 releases	First Guard severity increased; premiums written up; underwriting gain down	Pressure from severity
Oil & gas portfolio actions	Not detailed in Q2/Q3 releases	Lower revenue; gains on undeveloped reserve sales; shut-ins amid lower gas prices	Mixed: monetization offsets price
Governance/controls	n/a in Q2/Q3 releases	Adverse ICFR opinion; material weaknesses enumerated	Negative spotlight

“We do not regard the quarterly or annual fluctuations in our investments to be meaningful. Therefore, our operating businesses are best analyzed before the impact of investment gains.” — Q4 2024 press release .
“We do not provide earnings guidance or hold quarterly conference calls… My communications with shareholders are generally limited to the annual report and the annual meeting.” — 2024 Annual Report, Chairman’s Letter .
“To better convey performance… we separate changes in investment values from the earnings of the operating businesses.” — 2024 Annual Report .
“Steak n Shake’s same-store sales increased 6.4% at its company-operated units [in 2024].” — 10-K MD&A .

No quarterly earnings call is held; therefore, no Q&A or guidance clarifications. Management communicates via the Annual Report and annual meeting only .

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable in this session. Biglari’s practice of no guidance and no quarterly calls, along with minimal quarterly disclosures, typically limits near-term estimate granularity .

Focus on operating earnings: Q4’s $(10.27)M net loss was driven by investment marks; operating pre-tax earnings were positive and slightly up YoY, consistent with management’s emphasis on separating investment volatility from business performance .
Restaurants show demand resilience (SSS +6.4%) but cost inflation persists; mix shift to franchise partners continues to alter reported revenue composition and margin profile .
Insurance severity is a watch item: First Guard’s underwriting gain fell on higher claim severity even as premiums grew; monitor rate adequacy and loss trends into 2025 .
Oil & gas remains levered to commodity prices; gains on royalty/undeveloped sales support earnings but are episodic—expect continued volatility tied to pricing and asset optimization .
Governance risk: Adverse ICFR opinion and enumerated material weaknesses increase control risk; remediation progress will be an important non-financial catalyst for re-rating .
Liquidity/capital: Two lines of credit totaled $45M drawn at year-end (7.1–7.8% rates), providing flexibility but modestly increasing leverage; continued attention to capital allocation into and out of investment partnerships is warranted .
Near-term trading setup lacks guidance/call catalysts; stock narrative will skew to: (i) investment partnership performance, (ii) restaurant SSS and cost trajectory, (iii) insurance severity normalization, and (iv) progress on control remediation .