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BIGLARI HOLDINGS INC.
0001726173
10-Q
2018-03-31
false
--12-31
No
No
Yes
Accelerated Filer
Q1
2018
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<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Investments consisted of the following.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 73%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">March 31, <br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Cost </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          24,099</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $          23,216</td></tr>
<tr style="vertical-align: middle">
<td>Gross unrealized gains </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                    58</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    73</td></tr>
<tr style="vertical-align: middle">
<td>Fair value</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          24,157</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          23,289</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Investments in equity securities and a related put option of $4,463 are included
in other current assets as of March 31, 2018 and in other assets as of December 31, 2017. The investments are recorded at
fair value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
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<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 14%">Fair Value</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Company Common Stock</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 11%">Carrying Value</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at December 31, 2017 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> $            925,279</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $           359,258</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $      566,021</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Investment partnership gains (losses) </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                 (1,850)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                (5,345)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">             3,495</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Contributions (net of distributions) to investment partnerships </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                 (5,200)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            (5,200)</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Increase in proportionate share of Company stock held </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                18,377</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">          (18,377)</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Partnership interest at March 31, 2018</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            918,229</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           372,290</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      545,939</td></tr>
<tr style="vertical-align: bottom">
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Fair Value</td>
<td style="text-align: center"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Company Common Stock</td>
<td style="text-align: center"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Carrying Value</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at December 31, 2016 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> $            972,707</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $           395,070</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $      577,637</td></tr>
<tr>
<td style="vertical-align: middle">Investment partnership gains (losses) </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">               (59,517)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">              (34,549)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">          (24,968)</td></tr>
<tr>
<td style="vertical-align: middle">Contributions (net of distributions) to investment partnerships </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">                 (5,015)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">            (5,015)</td></tr>
<tr>
<td style="vertical-align: middle">Increase in proportionate share of Company stock held </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">                  1,484</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">            (1,484)</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at March 31, 2017 </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            908,175</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           362,005</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      546,170</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The carrying value of the investment partnerships net of deferred
taxes is presented below.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 72%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31, <br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Carrying value of investment partnerships </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $         545,939</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        566,021</td></tr>
<tr style="vertical-align: middle">
<td>Deferred tax liability related to investment partnerships </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">             (96,327)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           (95,309)</td></tr>
<tr style="vertical-align: middle">
<td>Carrying value of investment partnerships net of deferred taxes </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         449,612</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        470,712</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s proportionate share
of Company stock held by investment partnerships at cost is $373,316 and $354,939 at March 31, 2018 and December 31, 2017, respectively,
and is recorded as treasury stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Gains (losses) from investment partnerships recorded in the
Company’s consolidated statements of earnings are presented below.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> First Quarter </td>
<td style="text-align: right"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 73%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 13%"> 2018 </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 11%"> 2017 </td>
<td style="vertical-align: bottom; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Gains (losses) on investment partnership </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $            3,495</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        (24,968)</td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Tax expense (benefit) </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                  420</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">             (9,761)</td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Contribution to net earnings (loss)</td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            3,075</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        (15,207)</td>
<td> </td>
</tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 31 of each year, the general
partner of the investment partnerships, Biglari Capital Corp. (“Biglari Capital”), 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. The Company did not accrue an incentive fee during
the first quarter of 2018 or 2017. Our investments in these partnerships are committed on a rolling 5-year basis. Biglari Capital
is an entity solely owned by Mr. Biglari. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Summarized financial information for The Lion Fund, L.P. and
The Lion Fund II, L.P. is presented below.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Equity in Investment Partnerships</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; width: 63%"> </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Lion Fund</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Lion Fund II</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Total assets as of March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $             198,286</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          1,057,316</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Total liabilities as of March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                 1,481</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $             200,831</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Revenue for the first quarter ended March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $               (4,135)</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                 3,069</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Earnings (loss) for the first quarter ended March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $               (4,151)</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                    922</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Biglari Holdings’ ownership interest as of March 31, 2018 </td>
<td style="font-weight: bold; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">65.1%</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">92.3%</td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td>Total assets as of December 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             203,560</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $          1,060,737</td></tr>
<tr style="vertical-align: middle">
<td>Total liabilities as of December 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $                    157</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             199,974</td></tr>
<tr style="vertical-align: middle">
<td>Revenue for the first quarter ended March 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (15,696)</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (52,652)</td></tr>
<tr style="vertical-align: middle">
<td>Earnings (loss) for the quarter first ended ended March 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (15,716)</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (53,514)</td></tr>
<tr>
<td style="vertical-align: middle">Biglari Holdings’ ownership interest as of March 31, 2017 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">63.6%</td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">92.5%</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue in the above summarized financial
information of the investment partnerships includes investment income and unrealized gains and losses on investments. The investments
held by the investment partnerships are largely concentrated in the common stock of one investee, Cracker Barrel Old Country Store,
Inc.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Property and equipment is composed of
the following. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 73%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">March 31, 2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Land </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $        156,176</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        156,506</td></tr>
<tr style="vertical-align: middle">
<td>Buildings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">151,669</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           152,610</td></tr>
<tr style="vertical-align: middle">
<td>Land and leasehold improvements </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">162,518</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           162,652</td></tr>
<tr style="vertical-align: middle">
<td>Equipment</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">200,240</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           203,145</td></tr>
<tr style="vertical-align: middle">
<td>Construction in progress</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">1,797</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               1,782</td></tr>
<tr style="vertical-align: middle">
<td> </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">           672,400</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           676,695</td></tr>
<tr style="vertical-align: middle">
<td>Less accumulated depreciation and amortization .</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">(380,775)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">(380,895)</td></tr>
<tr style="vertical-align: middle">
<td>Property and equipment, net </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        291,625</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        295,800</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Goodwill</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill consists of the excess of the
purchase price over the fair value of the net assets acquired in connection with business acquisitions.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">A reconciliation of the change in the
carrying value of goodwill is as follows.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 33%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 5%"> Restaurants </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 6%"> Other </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 5%"> Total </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Goodwill at December 31, 2017 </td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="text-align: right"> $        28,168</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="text-align: right"> $          11,913</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="text-align: right"> $      40,081</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Change in foreign exchange rates during first quarter 2018</td>
<td> </td>
<td style="font-weight: bold; text-align: right">                  18</td>
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: right">                    -   </td>
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: right">                18</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Goodwill at March 31, 2018</td>
<td> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        28,186</td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          11,913</td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      40,099</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We are required to assess goodwill and
any indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have
occurred. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine whether it is more
likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is
not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we test for potential impairment
using a two-step approach. The first is the estimation of fair value of each reporting unit. If step one indicates that impairment
potentially exists, the second step is performed to measure the amount of impairment, if any. Goodwill impairment occurs when the
estimated fair value of goodwill is less than its carrying value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 the first three months of 2018 or 2017.<br />
<br />
</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Other Intangible Assets</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Other intangible assets are composed
of the following.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td> </td>
<td> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="5" style="border-bottom: Black 0.5pt solid; text-align: center">December 31, 2017</td></tr>
<tr>
<td style="padding-left: 9px; vertical-align: middle; text-align: left; width: 38%"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Gross carrying amount</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">Accumulated amortization</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Gross carrying amount</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 10%">Accumulated amortization</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td></tr>
<tr style="vertical-align: bottom">
<td>Franchise agreement </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $     5,310</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $           (4,248)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $    1,062</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $     5,310</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $       (4,116)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $    1,194</td></tr>
<tr style="vertical-align: bottom">
<td>Other </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">           810</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 (751)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">            59</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           810</td>
<td style="text-align: right"> </td>
<td style="text-align: right">             (743)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">            67</td></tr>
<tr style="vertical-align: bottom">
<td>Total </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">        6,120</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">              (4,999)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">       1,121</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">        6,120</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">          (4,859)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">       1,261</td></tr>
<tr style="vertical-align: bottom">
<td>Intangible assets with indefinite lives:</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td>Trade names </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">      15,876</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                     -   </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">     15,876</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">      15,876</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 -   </td>
<td style="text-align: right"> </td>
<td style="text-align: right">     15,876</td></tr>
<tr style="vertical-align: bottom">
<td>Other assets with indefinite lives </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">        9,678</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                     -   </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">       9,678</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">        9,427</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 -   </td>
<td style="text-align: right"> </td>
<td style="text-align: right">       9,427</td></tr>
<tr style="vertical-align: bottom">
<td>Total intangible assets</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   31,674</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           (4,999)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  26,675</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   31,423</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $       (4,859)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  26,564</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets subject to amortization
consist of franchise agreements connected with the purchase of Western 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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Amortization expense for each of the
first quarters of 2018 and 2017 was $140 and $142, respectively. The Company’s intangible assets with definite lives will
fully amortize in 2020. Total annual amortization expense for 2019 is expected to be approximately $500.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets with indefinite lives
consist of trade names, franchise rights as well as lease rights.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Restaurant
operations revenues were as follows.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="font: bold 8pt Times New Roman, Times, Serif; border-bottom: Black 0.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">First
Quarter</font></td>
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: middle; width: 73%; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; text-align: center; width: 1%; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 12%"><font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: center; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; font: 8pt Times New Roman, Times, Serif; text-align: center; width: 12%"><font style="font: 8pt Times New Roman, Times, Serif">2017</font></td>
<td style="vertical-align: bottom; width: 1%; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Net
sales</font></td>
<td style="vertical-align: middle; text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> $          185,571</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> $          189,051</font></td>
<td style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Franchise
royalties and fees</font></td>
<td style="vertical-align: middle; text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">                 7,102</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">                 5,556</font></td>
<td style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Other</font></td>
<td style="vertical-align: middle; text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">                    1,261</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">                 1,087</font></td>
<td style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: middle; text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> $          193,934</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; vertical-align: middle; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; font: 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> $          195,694</font></td>
<td style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
</tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif">The
Company’s accounting policies and practices related to restaurant operations revenues consist of the following under ASC
606.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Net
sales</i></b></font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Net
sales were comprised of retail sales of food through Company-owned stores. Company-owned store revenues are recognized when control
of the food items are transferred to our customers 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 income as revenue.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Franchise
royalties and fees</i></b></font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Franchise
royalties and fees are comprised of royalties and fees from Steak n Shake and Western Sizzlin franchisees. Royalty revenues are
based on a percentage of franchise sales and are recognized when the retail food items are purchased by franchise customers. Initial
franchise fees received are deferred when amounts are received and recognized as revenue on a straight-line basis over the term
of each respective franchise agreement, which is typically 20 years. This represents a change in methodology for we have historically
recognized initial franchise fees upon the opening of a franchise restaurant.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">During
the quarter ended March 31, 2018, restaurant operations recognized $369 in revenue related to initial franchise fees. As of March
31, 2018 and January 1, 2018, restaurant operations had deferred revenue related to franchise fees of $10,818 and $10,581, respectively.
Restaurant operations expects to recognize approximately $450 of deferred revenue balance during the remainder of 2018, approximately
$600 in 2019 and the balance in the years 2020 through 2037.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Our
advertising arrangements with franchisees are reported in franchise royalties and fees. This represents a change in methodology
as we have historically reported advertising funds from the franchisees as an offset to marketing expense in our consolidated
statement of earnings.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">During
the quarter ended March 31, 2018, restaurant operations recognized $2,437 in revenue related to franchise advertising fees. As
of March 31, 2018 and January 1, 2018, restaurant operations had deferred revenue related to franchisee advertising fees of $2,065
and $2,064, respectively. Restaurant operations expect to recognize approximately $900 of deferred revenue balance during the
remainder of 2018 and the balance in 2019.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Gift
card revenue</i></b></font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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.
This represents a change in the methodology used to estimate breakage as we have historically recognized breakage for the portion
of the gift card balances that remained outstanding following 48 months of issuance.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">For
the quarter ended March 31, 2018, restaurant operations recognized $9,287 of revenue from gift card redemptions. As of March 31,
2018 and January 1, 2018, restaurant operations had deferred revenue related to unredeemed gift cards of $14,993 and $20,968,
respectively. The Company expects to recognize approximately $8,700 of deferred revenue balance during the remainder of 2018,
approximately $4,200 in 2019, and the balance in the years 2020 through 2022.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts payable and accrued expenses
include the following. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 72%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31,<br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 13%">December 31, 2017</td></tr>
<tr style="vertical-align: bottom">
<td>Accounts payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $            36,342</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $            40,616</td></tr>
<tr style="vertical-align: middle">
<td>Gift card liability </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               14,993</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">               27,436</td></tr>
<tr>
<td style="vertical-align: middle">Salaries, wages, and vacation </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">               9,389</td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">               22,875</td></tr>
<tr style="vertical-align: middle">
<td>Taxes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               11,786</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">               10,571</td></tr>
<tr style="vertical-align: middle">
<td>Workers' compensation and other self-insurance accruals </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 7,915</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                 9,047</td></tr>
<tr style="vertical-align: middle">
<td>Deferred revenue </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               17,744</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 9,522</td></tr>
<tr style="vertical-align: middle">
<td>Other </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 8,539</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 8,677</td></tr>
<tr style="vertical-align: middle">
<td>Accounts payable and accrued expenses </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          106,708</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          128,744</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Notes payable and other borrowings include the following. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr>
<td style="font-weight: bold; vertical-align: bottom; width: 71%">Current portion of notes payable and other borrowings</td>
<td style="vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31, <br />
2018</td>
<td style="font-weight: bold; vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 14%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Notes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $              2,200</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: right"> $               2,200</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized original issue discount </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (324)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (321)</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized debt issuance costs </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (591)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (585)</td></tr>
<tr style="vertical-align: middle">
<td>Obligations under leases</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 5,103</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                  5,279</td></tr>
<tr style="vertical-align: middle">
<td>Western revolver </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                    136</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                     175</td></tr>
<tr style="vertical-align: middle">
<td>Total current portion of notes payable and other borrowings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $              6,524</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $               6,748</td></tr>
<tr style="vertical-align: middle">
<td style="text-align: right"> </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td></tr>
<tr>
<td style="font-weight: bold; vertical-align: bottom">Long-term notes payable and other borrowings</td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td>Notes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          183,148</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $           183,698</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized original issue discount </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (690)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (772)</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized debt issuance costs</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               (1,255)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 (1,405)</td></tr>
<tr style="vertical-align: middle">
<td>Obligations under leases</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               73,785</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                75,473</td></tr>
<tr style="vertical-align: middle">
<td>Total long-term notes payable and other borrowings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          254,988</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           256,994</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Steak n Shake Credit Facility</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 and a senior secured revolving credit facility in an aggregate principal amount of up to
$30,000. On October 27, 2017, Steak n Shake determined to end the use of its senior secured revolving credit facility. In
2017, Steak n Shake deposited $8,628 to satisfy required collateral for casualty insurance previously collateralized by
letters of credit issued through the revolving credit facility. The deposits are recorded in other assets as restricted cash
in the consolidated balance sheets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The term loan is scheduled to mature
on March 19, 2021. It amortizes at an annual rate of 1.0% in equal quarterly installments, beginning June 30, 2014, at 0.25% 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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Steak n Shake has the right to request
an incremental term loan facility from participating lenders and/or eligible assignees at any time, up to an aggregate total principal
amount not to exceed $70,000 if certain customary conditions within the credit agreement are met.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The interest rate on the term loan was
5.40% as of March 31, 2018.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The term loan is secured by first priority
security interests in substantially all the assets of Steak n Shake. Biglari Holdings is not a guarantor under the credit facility.
As of March 31, 2018, $185,348 was outstanding under the term loan.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Western Revolver</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2018, Western has $136
due June 13, 2018.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Fair Value of Debt</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of long-term debt, excluding
capitalized lease obligations, was approximately $165,000 at March 31, 2018. 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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During the first quarters of 2018 and
2017, the changes in the balances of each component of accumulated other comprehensive income, net of tax, were as follows. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Three months ended March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Three months ended March 31, 2017</td></tr>
<tr>
<td style="vertical-align: bottom; width: 27%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 11%">Foreign currency translation adjustments</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 10%"><br />
<br />
Investment gain (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 15%">Accumulated other comprehensive income (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 10%">Foreign currency translation adjustments</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 8%"><br />
<br />
Investment gain (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 13%">Accumulated<br />
other<br />
comprehensive income (loss)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Beginning Balance </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $        (1,462)</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $            58</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $                (1,404)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $     (3,447)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $     (137)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $            (3,584)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Other comprehensive income</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">(loss) before reclassifications </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                -   </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                          -   </td>
<td> </td>
<td style="text-align: right">                  </td>
<td> </td>
<td style="text-align: right">         124</td>
<td> </td>
<td style="text-align: right">                    124</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Reclassification to</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">(earnings) loss </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                  -   </td>
<td> </td>
<td style="font-weight: bold; text-align: right">              (58)</td>
<td> </td>
<td style="font-weight: bold; text-align: right">                        (58)</td>
<td> </td>
<td style="text-align: right">               -   </td>
<td> </td>
<td style="text-align: right">            -   </td>
<td> </td>
<td style="text-align: right">                       -   </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Foreign currency translation</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">               496</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                        496</td>
<td> </td>
<td style="text-align: right">             185</td>
<td> </td>
<td style="text-align: right">               </td>
<td> </td>
<td style="text-align: right">                    185</td></tr>
<tr style="vertical-align: middle">
<td style="text-align: left">Ending Balance </td>
<td> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           (966)</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $             -   </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $                   (966)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $     (3,262)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $       (13)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            (3,275)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Reclassifications made from accumulated
other comprehensive income to the consolidated statement of earnings during the first quarter of 2018 were $58;  there were no
reclassifications from accumulated other comprehensive income to earnings during the first quarter of 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The hierarchy for measuring fair value
consists of Levels 1 through 3, which are described below.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td style="text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Level 1 – Inputs
represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets. </font></td></tr></table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td style="text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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.</font></td></tr></table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td style="text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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.</font></td></tr></table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><br />
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:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Cash equivalents:</i> Cash equivalents
primarily consist of money market funds which are classified within Level 1 of the fair value hierarchy.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Equity securities: </i>The Company’s
investments in equity securities are classified within Level 1 of the fair value hierarchy. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Bonds:</i> The Company’s investments
in bonds are classified within Level 2 of the fair value hierarchy.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Non-qualified deferred compensation
plan investments: </i>The assets of the non-qualified plan are set up in a rabbi trust. They represent mutual funds and are classified
within Level 1 of the fair value hierarchy.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i>Derivative instruments:</i> Options
related to equity securities are marked to market each reporting period and are classified within Level 2 of the fair value hierarchy.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2018 and December 31,
2017, the fair values of financial assets were as follows.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="7" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="7" style="border-bottom: Black 0.5pt solid; text-align: center">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td colspan="7" style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td colspan="7" style="border-top: Black 0.5pt solid; text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; width: 26%"> </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Level 1</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 2</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 3</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Total</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 1</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 2</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 3</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Assets</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: middle">
<td>Cash equivalents </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $     4,997</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $     4,997</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $    5,785</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $    5,785</td></tr>
<tr>
<td style="vertical-align: middle">Equity securities:</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td></tr>
<tr style="vertical-align: middle">
<td style="padding-left: 9px; text-align: left">Consumer goods </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,290</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,290</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,445</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,445</td></tr>
<tr style="vertical-align: middle">
<td>Bonds </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">              -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">     26,767</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">      26,767</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">     25,901</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">     25,901</td></tr>
<tr style="vertical-align: middle">
<td>Options on equity securities </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">              -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">       2,173</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,173</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,018</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,018</td></tr>
<tr style="vertical-align: middle">
<td>Non-qualified deferred</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td style="padding-left: 9px; text-align: left">compensation plan</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td></tr>
<tr>
<td style="padding-left: 9px; vertical-align: middle; text-align: left">investments </td>
<td style="font-weight: bold; vertical-align: middle; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">        3,277</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">        3,277</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">       3,459</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">       3,459</td></tr>
<tr style="vertical-align: middle">
<td>Total assets at fair value</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   10,564</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  28,940</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   39,504</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  11,689</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  27,919</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  39,608</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><br />
</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">There were no changes in our valuation
techniques used to measure fair values on a recurring basis.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Services Agreement</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 15, 2017, the Company entered
into a services agreement with Biglari Enterprises LLC and Biglari Capital (collectively, the “Biglari Entities”).
The Biglari Entities are owned by Mr. Biglari. The services agreement replaces the shared services agreement between the Company
and Biglari Capital dated July 1, 2013. The services agreement was executed in connection with a review of the relationships and
transactions between the Company and Biglari Capital. After careful consideration, including an assessment by a public accounting
firm of administrative-related costs incurred by the Company in connection with its investments, the Company’s Governance,
Compensation and Nominating Committee, comprised solely of independent board members, approved the services agreement. Under the
terms of the services agreement, the Company will no longer provide business and administrative-related services to Biglari Capital.
Instead, the Biglari Entities will assume the responsibility to provide the services and the Company will pay a fixed fee to the
Biglari Entities.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 services agreement does not alter the hurdle rate connected with the incentive reallocation paid to Biglari Capital by the
Company.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Investments in The Lion Fund, L.P.
and The Lion Fund II, L.P.</i></b><br />
As of March 31, 2018, the Company’s investments in The Lion Fund, L.P. and The Lion Fund II, L.P. had a fair value of $918,229.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Distributions from The Lion Fund II,
L.P. were $5,200 and $5,015 during the first quarters of 2018 and 2017, respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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. The Company did not accrue incentive fees for Biglari Capital during the first quarters of 2018
and 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><i> </i></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Incentive Agreement Amendment</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">During 2013, Biglari Holdings and Mr.
Biglari entered into an amendment to the Incentive Agreement to exclude earnings by the investment partnerships from the calculation
of Mr. Biglari’s incentive bonus. Under the Amended and Restated Incentive Agreement Mr. Biglari would receive a payment
of approximately $14,700 if an event occurred entitling him to a severance payment.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>License Agreement</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 11, 2013, the Company entered
into a Trademark License Agreement (the “License Agreement”) with Mr. Biglari. The License Agreement was unanimously
approved by the Governance, Nominating and Compensation Committee (comprised of independent members of the Company’s Board
of Directors). In addition, the license under the License Agreement is provided on a royalty-free basis in the absence of specified
extraordinary events described below. Accordingly, the Company and its subsidiaries have paid no royalties to Mr. Biglari under
the License Agreement since its inception.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Under the License Agreement, Mr. Biglari
granted to the Company an exclusive license to use the Biglari and Biglari Holdings names (the “Licensed Marks”) in
association with various products and services (collectively the “Products and Services”). Upon (a) the expiration
of twenty years from the date of the License Agreement (subject to extension as provided in the License Agreement), (b) Mr. Biglari’s
death, (c) the termination of Mr. Biglari’s employment by the Company for Cause (as defined in</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">the License Agreement), or (d) Mr. Biglari’s
resignation from his employment with the Company absent an Involuntary Termination Event (as defined in the License Agreement),
the Licensed Marks for the Products and Services will transfer from Mr. Biglari to the Company, without any compensation, if the
Company is continuing to use the Licensed Marks in the ordinary course of its business. Otherwise, the rights will revert to Mr.
Biglari.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">If (i) a Change of Control (as defined
in the License Agreement) of the Company; (ii) the termination of Mr. Biglari’s employment by the Company without Cause;
or (iii) Mr. Biglari’s resignation from his employment with the Company due to an Involuntary Termination Event (each, a
“Triggering Event”) were to occur, Mr. Biglari would be entitled to receive a 2.5% royalty on “Revenues”
with respect to the “Royalty Period.” The royalty payment to Mr. Biglari would not apply to all revenues received by
Biglari Holdings and its subsidiaries nor would it apply retrospectively (<i>i.e.</i>, to revenues received with respect to the
period prior to the Triggering Event). The royalty would apply to revenues recorded by the Company on an accrual basis under GAAP,
solely with respect to the defined period of time after the Triggering Event equal to the Royalty Period, from a covered Product,
Service or business that (1) has used the Biglari Holdings or Biglari name at any time during the term of the License Agreement,
whether prior to or after a Triggering Event, or (2) the Company has specifically identified, prior to a Triggering Event, will
use the name Biglari or Biglari Holdings.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">“Revenues” means all revenues
received, on an accrual basis under GAAP, by the Company, its subsidiaries and affiliates from the following: (1) all Products
and Services covered by the License Agreement bearing or associated with the names Biglari and Biglari Holdings at any time (whether
prior to or after a Triggering Event). This category would include, without limitation, the use of Biglari or Biglari Holdings
in the public name of a business providing any covered Product or Service; and (2) all covered Products, Services and businesses
that the Company has specifically identified, prior to a Triggering Event, will bear, use or be associated with the name Biglari
or Biglari Holdings.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Governance, Nominating and Compensation
Committee unanimously approved the association of the Biglari name and mark with all of Steak n Shake’s restaurants (including
Company operated and franchised locations), products and brands. On May 14, 2013, the Company, Steak n Shake, LLC and Steak n Shake
Enterprises, Inc. entered into a Trademark Sublicense Agreement in connection therewith. Accordingly, revenues received by the
Company, its subsidiaries and affiliates from Steak n Shake’s restaurants, products and brands would come within the definition
of Revenues for purposes of the License Agreement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The “Royalty Period” is a
defined period of time, after the Triggering Event, calculated as follows: (i) if, following three months after a Triggering Event,
the Company or any of its subsidiaries or affiliates continues to use the Biglari or Biglari Holdings name in connection with any
covered product or service, or continues to use Biglari as part of its corporate or public company name, then the Royalty Period
will equal (a) the period of time during which the Company or any of its subsidiaries or affiliates continues any such use, plus
(b) a period of time after the Company, its subsidiaries and affiliates have ceased all uses of the names Biglari and Biglari Holdings
equal to the length of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering
Event occurs five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings
names two years after the Triggering Event, the Royalty Period will equal a total of ten years (the sum of two years after the
Triggering Event during which the Biglari and Biglari Holdings names are being used, plus a period of time equal to the five years
prior to the Triggering Event, plus three years); or (ii) if the Company, its subsidiaries and affiliates cease all uses of the
Biglari and Biglari Holdings names within three months after a Triggering Event, then the Royalty Period will equal the length
of the term of the License Agreement prior to the Triggering Event, plus three years. As an example, if a Triggering Event occurs
five years after the date of the License Agreement, and the Company ceases all uses of the Biglari and Biglari Holdings names two
months after the Triggering Event, the Royalty Period will equal a total of eight years (the sum of the period of time equal to
the five years prior to the Triggering Event, plus three years). Notwithstanding the above methods of determining the Royalty Period,
the minimum Royalty Period is five years after a Triggering Event.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The actual amount of royalties paid to
Mr. Biglari following the occurrence of a Triggering Event (as defined in the License Agreement) would depend on the Company’s
revenues during the applicable period following the Triggering Event, and, therefore, depends on material assumptions and estimates
regarding future operations and revenues. Assuming for purposes of illustration a Triggering Event occurred on December 31, 2017,
using revenue from 2017 as an estimate of future revenue and calculated according to terms of the License Agreement, Mr. Biglari
would receive approximately $20,000 in royalty payments annually. At a minimum, the royalties would be earned on revenue generated
from January 1, 2018 through December 21, 2024. Royalty payments beyond the minimum period would be subject to the licensee's continued
use of the licensed marks.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our reportable business segments are
organized in a manner that reflects how management views those business activities.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our restaurant operations includes Steak
n Shake and Western. The Company also reports segment information for First Guard 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.   </p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The tabular information that follows
shows data of our reportable segments reconciled to amounts reflected in the consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><i> </i></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue and earnings (losses) before
income taxes for the first quarters of 2018 and 2017 were as follows.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> Revenue </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">First Quarter</td>
<td style="font-weight: bold"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 75%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 11%">2018</td>
<td style="text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 11%">2017</td>
<td style="font-weight: bold; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Operating Businesses:</td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Restaurant Operations:</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Steak n Shake </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $        190,293</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $        192,690</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Western </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               3,641</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               3,004</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Total Restaurant Operations </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">           193,934</td>
<td style="text-align: right"> </td>
<td style="text-align: right">           195,694</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">First Guard </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">               6,547</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               6,080</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Maxim </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               1,744</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               1,619</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"> $        202,225</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"> $        203,393</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> Earnings (Losses) Before Income Taxes </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">First Quarter</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 73%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2018</td>
<td style="text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2017</td>
<td style="font-weight: bold; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Operating Businesses:</td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Restaurant Operations:</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Steak n Shake </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $          (922)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $            3,352</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Western </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">                  374</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">                  450</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Total Restaurant Operations </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">             (618)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               3,802</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">First Guard </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                  510</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                  969</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Maxim </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                (217)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                (324)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Other </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">                  139</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">                  148</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Total Operating Businesses </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">             (186)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               4,595</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Corporate and Investments:</td>
<td style="font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Corporate </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">             (3,166)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">             (2,400)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Investment partnership gains </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               3,495</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">           (24,968)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Total Corporate and Investments </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt">                  329</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt">           (27,368)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Interest expense on notes payable and other borrowings </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">             (2,754)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">             (2,824)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right"> $          (2,611)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right"> $        (25,597)</td>
<td style="text-align: right"> </td>
</tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 73%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">March 31, <br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Cost </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          24,099</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $          23,216</td></tr>
<tr style="vertical-align: middle">
<td>Gross unrealized gains </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                    58</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    73</td></tr>
<tr style="vertical-align: middle">
<td>Fair value</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          24,157</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          23,289</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 59%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 14%">Fair Value</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Company Common Stock</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 11%">Carrying Value</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at December 31, 2017 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> $            925,279</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $           359,258</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $      566,021</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Investment partnership gains (losses) </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                 (1,850)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                (5,345)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">             3,495</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Contributions (net of distributions) to investment partnerships </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                 (5,200)</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            (5,200)</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Increase in proportionate share of Company stock held </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                18,377</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">          (18,377)</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Partnership interest at March 31, 2018</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            918,229</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           372,290</td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      545,939</td></tr>
<tr style="vertical-align: bottom">
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Fair Value</td>
<td style="text-align: center"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Company Common Stock</td>
<td style="text-align: center"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center">Carrying Value</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at December 31, 2016 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> $            972,707</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $           395,070</td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> $      577,637</td></tr>
<tr>
<td style="vertical-align: middle">Investment partnership gains (losses) </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">               (59,517)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">              (34,549)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">          (24,968)</td></tr>
<tr>
<td style="vertical-align: middle">Contributions (net of distributions) to investment partnerships </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">                 (5,015)</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">            (5,015)</td></tr>
<tr>
<td style="vertical-align: middle">Increase in proportionate share of Company stock held </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">                  1,484</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right">            (1,484)</td></tr>
<tr>
<td style="vertical-align: middle">Partnership interest at March 31, 2017 </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            908,175</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           362,005</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      546,170</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 72%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31, <br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Carrying value of investment partnerships </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $         545,939</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        566,021</td></tr>
<tr style="vertical-align: middle">
<td>Deferred tax liability related to investment partnerships </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">             (96,327)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           (95,309)</td></tr>
<tr style="vertical-align: middle">
<td>Carrying value of investment partnerships net of deferred taxes </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         449,612</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        470,712</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 33%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 5%"> Restaurants </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 6%"> Other </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 5%"> Total </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Goodwill at December 31, 2017 </td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="text-align: right"> $        28,168</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="text-align: right"> $          11,913</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="text-align: right"> $      40,081</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Change in foreign exchange rates during first quarter 2018</td>
<td> </td>
<td style="font-weight: bold; text-align: right">                  18</td>
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: right">                    -   </td>
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: right">                18</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Goodwill at March 31, 2018</td>
<td> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        28,186</td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          11,913</td>
<td style="padding-left: 9px; font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $      40,099</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td> </td>
<td> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="5" style="border-bottom: Black 0.5pt solid; text-align: center">December 31, 2017</td></tr>
<tr>
<td style="padding-left: 9px; vertical-align: middle; text-align: left; width: 38%"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Gross carrying amount</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">Accumulated amortization</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Gross carrying amount</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 10%">Accumulated amortization</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: bottom; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td></tr>
<tr style="vertical-align: bottom">
<td>Franchise agreement </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $     5,310</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $           (4,248)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $    1,062</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $     5,310</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $       (4,116)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $    1,194</td></tr>
<tr style="vertical-align: bottom">
<td>Other </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">           810</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 (751)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">            59</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           810</td>
<td style="text-align: right"> </td>
<td style="text-align: right">             (743)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">            67</td></tr>
<tr style="vertical-align: bottom">
<td>Total </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">        6,120</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">              (4,999)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right">       1,121</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">        6,120</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">          (4,859)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; text-align: right">       1,261</td></tr>
<tr style="vertical-align: bottom">
<td>Intangible assets with indefinite lives:</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td>Trade names </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">      15,876</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                     -   </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">     15,876</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">      15,876</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 -   </td>
<td style="text-align: right"> </td>
<td style="text-align: right">     15,876</td></tr>
<tr style="vertical-align: bottom">
<td>Other assets with indefinite lives </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">        9,678</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                     -   </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right">       9,678</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">        9,427</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right">                 -   </td>
<td style="text-align: right"> </td>
<td style="text-align: right">       9,427</td></tr>
<tr style="vertical-align: bottom">
<td>Total intangible assets</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   31,674</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           (4,999)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  26,675</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   31,423</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $       (4,859)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  26,564</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="7" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="7" style="border-bottom: Black 0.5pt solid; text-align: center">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td colspan="7" style="font-weight: bold; border-top: Black 0.5pt solid; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td colspan="7" style="border-top: Black 0.5pt solid; text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; width: 26%"> </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Level 1</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 2</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 3</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 9%">Total</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 1</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 2</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Level 3</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 8%">Total</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Assets</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: middle">
<td>Cash equivalents </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $     4,997</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> $     4,997</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $    5,785</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> $    5,785</td></tr>
<tr>
<td style="vertical-align: middle">Equity securities:</td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-weight: bold; font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td>
<td style="font-family: Calibri, Helvetica, Sans-Serif; vertical-align: bottom"> </td></tr>
<tr style="vertical-align: middle">
<td style="padding-left: 9px; text-align: left">Consumer goods </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,290</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,290</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,445</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,445</td></tr>
<tr style="vertical-align: middle">
<td>Bonds </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">              -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">     26,767</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">      26,767</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">     25,901</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">     25,901</td></tr>
<tr style="vertical-align: middle">
<td>Options on equity securities </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">              -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">       2,173</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right">        2,173</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,018</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">            -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right">       2,018</td></tr>
<tr style="vertical-align: middle">
<td>Non-qualified deferred</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td style="padding-left: 9px; text-align: left">compensation plan</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="text-align: right"> </td></tr>
<tr>
<td style="padding-left: 9px; vertical-align: middle; text-align: left">investments </td>
<td style="font-weight: bold; vertical-align: middle; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">        3,277</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right">        3,277</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">       3,459</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">            -   </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: justify"> </td>
<td style="vertical-align: bottom; text-align: right">       3,459</td></tr>
<tr style="vertical-align: middle">
<td>Total assets at fair value</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   10,564</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  28,940</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $   39,504</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  11,689</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  27,919</td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $         -   </td>
<td style="font-weight: bold; text-align: justify"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $  39,608</td></tr>
</table>
2500000
2500000
2142202
2142202
74589
73667
23216000
24099000
58000
73000
23289000
24157000
918229000
372290000
545939000
908175000
362005000
546170000
0
18377000
-18377000
0
1484000
-1484000
-5200000
0
-5200000
-5015000
0
-5015000
3495000
-24968000
-1850000
-5345000
3495000
-59517000
-34549000
-24968000
566021000
545939000
-95309000
-96327000
470712000
449612000
3075000
-15207000
420000
-9761000
0.651
0.923
0.636
0.925
1481000
200831000
157000
199974000
198286000
1057316000
203560000
1060737000
-4135000
3069000
-15696000
-52652000
-4151000
922000
-15716000
-53514000
354939000
373316000
380895000
380775000
676695000
672400000
1782000
1797000
203145000
200240000
162652000
162518000
152610000
151669000
156506000
156176000
40081000
40099000
28168000
11913000
28186000
11913000
18000
18000
0
26564000
1194000
1062000
67000
9678000
15876000
15876000
26675000
1121000
1261000
59000
9427000
-4859000
-4116000
-4248000
-743000
0
0
0
-4999000
-4999000
-4859000
-751000
0
31423000
5310000
5310000
810000
9678000
15876000
15876000
31674000
6120000
6120000
810000
9427000
140000
142000
500000
1261000
1087000
1261000
279000
982000
7102000
5556000
185571000
189051000
8677000
8539000
9522000
17744000
9047000
7915000
10571000
11786000
22875000
9389000
27436000
14993000
40616000
36342000
6748000
6524000
175000
136000
5279000
5103000
-585000
-591000
-321000
-324000
2200000
2200000
75473000
73785000
772000
690000
183698000
183148000
0
124000
0
0
0
124000
-58000
0
0
-58000
0
0
496000
185000
496000
0
185000
0
357000
363000
5785000
5785000
4997000
0
0
0
0
4997000
2445000
2445000
2290000
0
0
0
0
2290000
2018000
0
0
2018000
2173000
0
0
2173000
25901000
0
0
25901000
26767000
0
0
26767000
39608000
11689000
10564000
27919000
28940000
0
0
39504000
3459000
3459000
3277000
0
0
0
0
3277000
190293000
192690000
3641000
3004000
193934000
195694000
202225000
203393000
6547000
6080000
1744000
1619000
-2611000
-25597000
-992000
3352000
374000
450000
-618000
3802000
-2754000
-2824000
510000
969000
-217000
-324000
-186000
4595000
3495000
-24968000
148000
139000
329000
-27368000
-3166000
-2400000
-2611000
126000
-2737000
0.0540
185348000
206864
2068640
7102000
2369000
4733000
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">First Quarter</td>
<td> </td>
</tr>
<tr>
<td style="vertical-align: middle; width: 73%"> </td>
<td style="vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2018</td>
<td style="font-weight: bold; vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2017</td>
<td style="vertical-align: bottom; width: 1%"> </td>
</tr>
<tr>
<td style="vertical-align: middle">Net sales </td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> $          185,571</td>
<td style="font-weight: bold; vertical-align: middle; text-align: center"> </td>
<td style="vertical-align: middle; text-align: right"> $          189,051</td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: middle">Franchise royalties and fees </td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                 7,102</td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">                 5,556</td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: middle">Other</td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">                    1,261</td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">                 1,087</td>
<td style="vertical-align: bottom"> </td>
</tr>
<tr>
<td style="vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          193,934</td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          195,694</td>
<td style="vertical-align: bottom"> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 72%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31,<br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 13%">December 31, 2017</td></tr>
<tr style="vertical-align: bottom">
<td>Accounts payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $            36,342</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $            40,616</td></tr>
<tr style="vertical-align: middle">
<td>Gift card liability </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               14,993</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">               27,436</td></tr>
<tr>
<td style="vertical-align: middle">Salaries, wages, and vacation </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">               9,389</td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">               22,875</td></tr>
<tr style="vertical-align: middle">
<td>Taxes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               11,786</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">               10,571</td></tr>
<tr style="vertical-align: middle">
<td>Workers' compensation and other self-insurance accruals </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 7,915</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                 9,047</td></tr>
<tr style="vertical-align: middle">
<td>Deferred revenue </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               17,744</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 9,522</td></tr>
<tr style="vertical-align: middle">
<td>Other </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 8,539</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 8,677</td></tr>
<tr style="vertical-align: middle">
<td>Accounts payable and accrued expenses </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          106,708</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          128,744</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr>
<td style="font-weight: bold; vertical-align: bottom; width: 71%">Current portion of notes payable and other borrowings</td>
<td style="vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">March 31, <br />
2018</td>
<td style="font-weight: bold; vertical-align: middle; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; width: 14%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Notes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $              2,200</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: right"> $               2,200</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized original issue discount </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (324)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (321)</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized debt issuance costs </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (591)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (585)</td></tr>
<tr style="vertical-align: middle">
<td>Obligations under leases</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                 5,103</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                  5,279</td></tr>
<tr style="vertical-align: middle">
<td>Western revolver </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                    136</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                     175</td></tr>
<tr style="vertical-align: middle">
<td>Total current portion of notes payable and other borrowings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $              6,524</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $               6,748</td></tr>
<tr style="vertical-align: middle">
<td style="text-align: right"> </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td></tr>
<tr>
<td style="font-weight: bold; vertical-align: bottom">Long-term notes payable and other borrowings</td>
<td style="vertical-align: middle; text-align: center"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td>Notes payable </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          183,148</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $           183,698</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized original issue discount </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">                  (690)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                    (772)</td></tr>
<tr style="vertical-align: middle">
<td>Unamortized debt issuance costs</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               (1,255)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                 (1,405)</td></tr>
<tr style="vertical-align: middle">
<td>Obligations under leases</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">               73,785</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">                75,473</td></tr>
<tr style="vertical-align: middle">
<td>Total long-term notes payable and other borrowings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $          254,988</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           256,994</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Three months ended March 31, 2018</td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="5" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Three months ended March 31, 2017</td></tr>
<tr>
<td style="vertical-align: bottom; width: 27%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 11%">Foreign currency translation adjustments</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 10%"><br />
<br />
Investment gain (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 15%">Accumulated other comprehensive income (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 10%">Foreign currency translation adjustments</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 8%"><br />
<br />
Investment gain (loss)</td>
<td style="vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 13%">Accumulated<br />
other<br />
comprehensive income (loss)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Beginning Balance </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $        (1,462)</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $            58</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> $                (1,404)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $     (3,447)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $     (137)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $            (3,584)</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Other comprehensive income</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">(loss) before reclassifications </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                -   </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                          -   </td>
<td> </td>
<td style="text-align: right">                  </td>
<td> </td>
<td style="text-align: right">         124</td>
<td> </td>
<td style="text-align: right">                    124</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Reclassification to</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">(earnings) loss </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                  -   </td>
<td> </td>
<td style="font-weight: bold; text-align: right">              (58)</td>
<td> </td>
<td style="font-weight: bold; text-align: right">                        (58)</td>
<td> </td>
<td style="text-align: right">               -   </td>
<td> </td>
<td style="text-align: right">            -   </td>
<td> </td>
<td style="text-align: right">                       -   </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Foreign currency translation</td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">               496</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                        496</td>
<td> </td>
<td style="text-align: right">             185</td>
<td> </td>
<td style="text-align: right">               </td>
<td> </td>
<td style="text-align: right">                    185</td></tr>
<tr style="vertical-align: middle">
<td style="text-align: left">Ending Balance </td>
<td> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $           (966)</td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $             -   </td>
<td style="text-align: right"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $                   (966)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $     (3,262)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $       (13)</td>
<td style="text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            (3,275)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In determining the quarterly provision
for income taxes, the Company uses an estimated annual effective tax rate based on expected annual income, statutory tax rates,
and available tax planning opportunities in the various jurisdictions in which the Company operates. Unusual or infrequently occurring
items are separately recognized during the quarter in which they occur.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Income tax benefit for the first quarter
of 2018 was $797 compared to $9,776 for the first quarter of 2017. The Tax Cuts and Jobs Act was signed into law on December
22, 2017. The U.S. corporate federal statutory income tax rate was reduced from 35.0% to 21.0% for tax years beginning in 2018.
The variance in income taxes between 2018 and 2017 is attributable to the reduced corporate tax rate and taxes on income and losses
generated by the investment partnerships.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2018 and December 31,
2017, we had approximately $363 and $357, respectively, of unrecognized tax benefits, which are included in other liabilities in
the consolidated balance sheets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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 flows.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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 for breach
of fiduciary duty by the individual defendants and unjust enrichment to Mr. Biglari as a result of the agreement with NBHSA Inc.
and the issuance of dual class common stock. The shareholder seeks, for himself and on behalf of all other shareholders as a class
(other than the individual defendants and those related to or affiliated with them), to seek a declaration that the defendants
breached their duty to the shareholder and the class and that Mr. Biglari would be unjustly enriched, and to recover unspecified
damages, pre-judgment and post-judgment interest, and an award of their attorneys’ fees and other costs.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
March 26, 2018, a second shareholder of the Company filed a purported class action complaint against the Company, the members
of our Board of Directors, New BH, and Merger Sub 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 28, 2018 to approve the agreement with NBHSA Inc. and the issuance of dual class common stock. On April 16, 2018,
the shareholder withdrew his motion to enjoin the special meeting.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company believes the claims in each case are without merit and intends to defend these cases vigorously.</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> Revenue </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold"> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">First Quarter</td>
<td style="font-weight: bold"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 75%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 11%">2018</td>
<td style="text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 11%">2017</td>
<td style="font-weight: bold; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Operating Businesses:</td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Restaurant Operations:</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Steak n Shake </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $        190,293</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $        192,690</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Western </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               3,641</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               3,004</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Total Restaurant Operations </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">           193,934</td>
<td style="text-align: right"> </td>
<td style="text-align: right">           195,694</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">First Guard </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">               6,547</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               6,080</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Maxim </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               1,744</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               1,619</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"> $        202,225</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"> $        203,393</td>
<td style="padding-left: 9px; text-align: left"> </td>
</tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> Earnings (Losses) Before Income Taxes </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">First Quarter</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; width: 73%"> </td>
<td style="font-weight: bold; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2018</td>
<td style="text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">2017</td>
<td style="font-weight: bold; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Operating Businesses:</td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
<td style="text-align: center"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Restaurant Operations:</td>
<td> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Steak n Shake </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $          (922)</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $            3,352</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Western </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">                  374</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">                  450</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Total Restaurant Operations </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">             (618)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               3,802</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">First Guard </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                  510</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                  969</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Maxim </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">                (217)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                (324)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Other </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">                  139</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">                  148</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Total Operating Businesses </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">             (186)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               4,595</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left">Corporate and Investments:</td>
<td style="font-weight: bold; text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Corporate </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; text-align: right">             (3,166)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">             (2,400)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Investment partnership gains </td>
<td style="padding-left: 9px; text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">               3,495</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">           (24,968)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Total Corporate and Investments </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt">                  329</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right; border-top-color: Black; border-top-width: 0.5pt">           (27,368)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Interest expense on notes payable and other borrowings </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">             (2,754)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">             (2,824)</td>
<td style="text-align: right"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right"> $          (2,611)</td>
<td style="text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right"> $        (25,597)</td>
<td style="text-align: right"> </td>
</tr>
</table>
-15000
0
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center"> First Quarter </td>
<td style="text-align: right"> </td>
</tr>
<tr>
<td style="vertical-align: bottom; width: 73%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="font-weight: bold; vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 13%"> 2018 </td>
<td style="font-weight: bold; vertical-align: bottom; text-align: center; width: 1%"> </td>
<td style="vertical-align: middle; border-bottom: Black 0.5pt solid; text-align: center; border-top-color: Black; border-top-width: 0.5pt; width: 11%"> 2017 </td>
<td style="vertical-align: bottom; width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Gains (losses) on investment partnership </td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; text-align: right"> $            3,495</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        (24,968)</td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Tax expense (benefit) </td>
<td> </td>
<td style="font-weight: bold; text-align: right">                  420</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">             (9,761)</td>
<td> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: left">Contribution to net earnings (loss)</td>
<td style="text-align: left"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $            3,075</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        (15,207)</td>
<td> </td>
</tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center">Equity in Investment Partnerships</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold; width: 63%"> </td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Lion Fund</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 13%">Lion Fund II</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Total assets as of March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $             198,286</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $          1,057,316</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Total liabilities as of March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                 1,481</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $             200,831</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Revenue for the first quarter ended March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $               (4,135)</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                 3,069</td></tr>
<tr style="vertical-align: middle">
<td style="font-weight: bold">Earnings (loss) for the first quarter ended March 31, 2018 </td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $               (4,151)</td>
<td style="font-weight: bold; text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $                    922</td></tr>
<tr>
<td style="font-weight: bold; vertical-align: middle">Biglari Holdings’ ownership interest as of March 31, 2018 </td>
<td style="font-weight: bold; vertical-align: bottom"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">65.1%</td>
<td style="font-weight: bold; vertical-align: bottom; text-align: right"> </td>
<td style="font-weight: bold; vertical-align: middle; text-align: right">92.3%</td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td>Total assets as of December 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             203,560</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $          1,060,737</td></tr>
<tr style="vertical-align: middle">
<td>Total liabilities as of December 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $                    157</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             199,974</td></tr>
<tr style="vertical-align: middle">
<td>Revenue for the first quarter ended March 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (15,696)</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (52,652)</td></tr>
<tr style="vertical-align: middle">
<td>Earnings (loss) for the quarter first ended ended March 31, 2017 </td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (15,716)</td>
<td style="text-align: center"> </td>
<td style="text-align: right"> $             (53,514)</td></tr>
<tr>
<td style="vertical-align: middle">Biglari Holdings’ ownership interest as of March 31, 2017 </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: middle; text-align: right">63.6%</td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td style="vertical-align: middle; text-align: right">92.5%</td></tr>
</table>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 73%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">March 31, 2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: middle">
<td>Land </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> $        156,176</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> $        156,506</td></tr>
<tr style="vertical-align: middle">
<td>Buildings </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">151,669</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           152,610</td></tr>
<tr style="vertical-align: middle">
<td>Land and leasehold improvements </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">162,518</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           162,652</td></tr>
<tr style="vertical-align: middle">
<td>Equipment</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">200,240</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           203,145</td></tr>
<tr style="vertical-align: middle">
<td>Construction in progress</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">1,797</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">               1,782</td></tr>
<tr style="vertical-align: middle">
<td> </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">           672,400</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">           676,695</td></tr>
<tr style="vertical-align: middle">
<td>Less accumulated depreciation and amortization .</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">(380,775)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">(380,895)</td></tr>
<tr style="vertical-align: middle">
<td>Property and equipment, net </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        291,625</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-top: Black 0.5pt solid; border-bottom: Black 2pt double; text-align: right"> $        295,800</td></tr>
</table>
1405000
1255000
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2017, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, <i>Intangibles - Goodwill
and Other: Simplifying the Test for Goodwill Impairment.</i> ASU 2017-04 provides for the elimination of Step 2 from the goodwill
impairment test. If impairment charges are recognized, the amount recorded will be the amount by which the carrying amount exceeds
the reporting unit’s fair value with certain limitations. The ASU is effective for public companies for annual periods, and
interim periods within those annual periods, beginning after December 15, 2020. The Company does not currently anticipate ASU 2017-04
will have a material impact on the consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2016, the FASB issued ASU 2016-13,
<i>Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments</i>. ASU 2016-13 amends guidance
on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale
debt securities, credit losses should be measured in a manner similar to current GAAP; however ASU 2016-13 will require that credit
losses be presented as an allowance rather than as a write-down. The amendments in this update are effective for financial statements
issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently
evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and related disclosures.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU
2016-02, <i>Leases</i>. ASU 2016-02 requires a lessee to recognize lease assets and lease liabilities on the balance sheet, along
with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for annual and interim periods beginning after
December 15, 2018, with early adoption permitted. We are currently evaluating the effect this amended guidance will have on our
consolidated balance sheet and results of operations. We anticipate the ASU will have a material impact on our balance sheet, but
the ASU is non-cash in nature and will not affect our cash position.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In August 2016, the FASB issued ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The objective of the update is
to reduce diversity in how certain transactions are classified in the statement of cash flows. The amendments in this update are
effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those
fiscal years. The adoption of ASU 2016-15 did not have a material effect on our consolidated financial statements. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU 2014-09,
<i>Revenue from Contracts with Customers (Topic 606)</i>. On January 1, 2018, we adopted FASB 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.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the impact
of the adoption of ASC 606 on revenues, operating expenses and net earnings for the three months ended March 31, 2018.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 64%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>As Reported</b></font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Adjustments</b></font><br />
<font style="font: 8pt Times New Roman, Times, Serif"><b>for the </b></font><br />
<font style="font: 8pt Times New Roman, Times, Serif"><b>Adoption of</b></font><br />
<font style="font: 8pt Times New Roman, Times, Serif"><b>ASC 606</b></font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amounts without</b></font><br />
<font style="font: 8pt Times New Roman, Times, Serif"><b>Adoption of</b></font><br />
<font style="font: 8pt Times New Roman, Times, Serif"><b>ASC 606</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Statements of Earnings</b></font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 6.75pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Revenues </font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: center; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 13.5pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Restaurant operations </font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20.25pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Net sales</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"> $        185,571</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"> $                  -   </font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"> $        185,571</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20.25pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Franchise royalties and fees</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">               7,102</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">               2,369</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">               4,733</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 20.25pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Other</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">               1,261</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                  279</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                  982</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 6.75pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Selling, general and administrative</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">             32,650</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">               2,522</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">             30,128</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 6.75pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Earnings (loss) before income taxes</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">              (2,611)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                  126</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">              (2,737)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 6.75pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Income tax expense (benefit)</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                 (797)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                    31</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                 (828)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 6.75pt; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Net earnings (loss)</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">              (1,814)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">                    95</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">              (1,909)</font></td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The impact of ASC 606 on the Company’s
balance sheet as of March 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. See additional revenue disclosures in Note 8 Restaurant
Operations Revenues. The adoption of ASC 606 did not have any significant impact on our insurance or media businesses.</p>
<p style="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"> </p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 61%"> </td>
<td style="width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">As Reported</td>
<td style="width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">Adjustments<br />
for the <br />
Adoption of<br />
ASC 606</td>
<td style="width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">Amounts without<br />
Adoption of<br />
ASC 606</td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Statements of Earnings</td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Revenues </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td>
<td> </td>
<td style="font-weight: bold; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 18px; text-align: left">Restaurant operations </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27px; text-align: left">Net sales </td>
<td> </td>
<td style="text-align: right"> $        185,571</td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $                  -   </td>
<td style="text-align: right"> </td>
<td style="text-align: right"> $        185,571</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27px; text-align: left">Franchise royalties and fees</td>
<td> </td>
<td style="text-align: right">               7,102</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               2,369</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               4,733</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 27px; text-align: left">Other </td>
<td> </td>
<td style="text-align: right">               1,261</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                  279</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                  982</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Selling, general and administrative </td>
<td> </td>
<td style="text-align: right">             32,650</td>
<td style="text-align: right"> </td>
<td style="text-align: right">               2,522</td>
<td style="text-align: right"> </td>
<td style="text-align: right">             30,128</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Earnings (loss) before income taxes</td>
<td> </td>
<td style="text-align: right">              (2,611)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                  126</td>
<td style="text-align: right"> </td>
<td style="text-align: right">              (2,737)</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Income tax expense (benefit) </td>
<td> </td>
<td style="text-align: right">                 (797)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                    31</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                 (828)</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9px; text-align: left">Net earnings (loss) </td>
<td> </td>
<td style="text-align: right">              (1,814)</td>
<td style="text-align: right"> </td>
<td style="text-align: right">                    95</td>
<td style="text-align: right"> </td>
<td style="text-align: right">              (1,909)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">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 Lion Fund, L.P. and The Lion Fund II, L.P. (collectively, 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.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
September 16, 2017, The Lion Fund II, L.P. entered into a Rule 10b5-1 trading plan to purchase up to an aggregate of 110,000 shares
of Biglari Holdings common stock at prevailing market prices. During the first quarter of 2018, 45,302 shares were purchased.
All of the shares to be purchased under the trading plan remain legally outstanding.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
April 30, 2018 the Company's shareholders exchanged their shares of Company common stock for dual common stock - Class A common
stock and Class B common stock. The following table presents shares authorized, issued and outstanding on March 31, 2018 and December
31, 2017. </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif">
<td style="width: 73%; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center; width: 1%; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; border-bottom: Black 0.5pt solid; text-align: center; width: 12%"><font style="font: 8pt Times New Roman, Times, Serif">March
31, <br />
2018</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: center; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 0.5pt solid; font: 8pt Times New Roman, Times, Serif; text-align: center; width: 12%"><font style="font: 8pt Times New Roman, Times, Serif">December
31, 2017</font></td></tr>
<tr style="vertical-align: bottom; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Common
stock authorized</font></td>
<td style="text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"><font style="font: 8pt Times New Roman, Times, Serif">        2,500,000</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2pt double; font: 8pt Times New Roman, Times, Serif; text-align: right; border-top-color: Black; border-top-width: 0.5pt"><font style="font: 8pt Times New Roman, Times, Serif">        2,500,000</font></td></tr>
<tr style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif">
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Common
stock issued</font></td>
<td style="text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">        2,142,202</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">        2,142,202</font></td></tr>
<tr style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Treasury
stock held by the Company</font></td>
<td style="text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; border-bottom: Black 0.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">           (73,667)</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 0.5pt solid; font: 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">           (74,589)</font></td></tr>
<tr style="vertical-align: middle; font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif">Outstanding
shares</font></td>
<td style="text-align: center; font: 8pt Times New Roman, Times, Serif"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt"><font style="font: 8pt Times New Roman, Times, Serif">        2,068,535</font></td>
<td style="font: bold 8pt Times New Roman, Times, Serif; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: Black 2pt double; font: 8pt Times New Roman, Times, Serif; text-align: right; border-top-color: Black; border-top-width: 0.5pt"><font style="font: 8pt Times New Roman, Times, Serif">        2,067,613</font></td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
issuance of dual class common stock on April 30, 2018 is applied on a retrospective basis for the calculation of earnings per
share. Accordingly, earnings per share for the first quarters of 2018 and 2017 are impacted by the issuance of the new common
shares. The Company has applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings
Per Share.”</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">As
of March 31, 2018, the total outstanding shares of the Company were 2,068,535. The calculation of earnings per share reflects
an exchange of 2,068,535 outstanding shares of the Company for 206,854 shares of New BH Class A common stock and 2,068,535 shares
of New BH Class B common stock. On an equivalent Class A common stock basis, there were 620,592 shares outstanding as of March
31, 2018 and 620,284 shares outstanding as of December 31, 2017.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">For
financial reporting purposes, the proportional ownership of the Company’s common stock owned by the investment partnerships
is excluded in the earnings per share calculation. After giving effect for the investment partnerships’ proportional ownership
of New BH’s common stock, the equivalent Class A weighted average common shares during the first quarter of 2018 and 2017
were 352,191 and 370,344, respectively.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Each
Class A common share is entitled to one vote. Class B common stock possesses economic rights equal to one-fifth (1/5th) of such
rights of Class A common stock; however, Class B common stock has no voting rights.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; border-collapse: collapse; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: middle">
<td style="width: 73%"> </td>
<td style="text-align: center; width: 1%"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: center; width: 12%">March 31, <br />
2018</td>
<td style="font-weight: bold; text-align: center; width: 1%"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: center; width: 12%">December 31, 2017</td></tr>
<tr style="vertical-align: bottom">
<td>Common stock authorized </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt">        2,500,000</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt">        2,500,000</td></tr>
<tr style="vertical-align: middle">
<td style="text-align: right"> </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right"> </td></tr>
<tr style="vertical-align: middle">
<td>Common stock issued</td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: right">        2,142,202</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="text-align: right">        2,142,202</td></tr>
<tr style="vertical-align: middle">
<td>Treasury stock held by the Company </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-bottom: Black 0.5pt solid; text-align: right">           (73,667)</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-bottom: Black 0.5pt solid; text-align: right">           (74,589)</td></tr>
<tr style="vertical-align: middle">
<td>Outstanding shares </td>
<td style="text-align: center"> </td>
<td style="font-weight: bold; border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt">        2,068,535</td>
<td style="font-weight: bold; text-align: right"> </td>
<td style="border-bottom: Black 2pt double; text-align: right; border-top-color: Black; border-top-width: 0.5pt">        2,067,613</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Description of Business</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited consolidated
financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared
in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to
interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered
necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments.
The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements
contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual
report on Form 10-K for the year ended December 31, 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Biglari Holdings is a holding company
owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants.
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 operating, investment, and capital allocation decisions are made for the Company
and its subsidiaries by Mr. Biglari. As of March 31, 2018, Mr. Biglari’s beneficial ownership of the Company’s outstanding
common stock was approximately 54.8%.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 5, 2018, the Company entered
into an agreement with NBHSA Inc. (“New BH”), a direct, wholly owned subsidiary of the Company, and BH Merger Company
(“Merger Sub”), a wholly owned subsidiary of New BH. Pursuant to the agreement, on April 30, 2018, Merger Sub merged
with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of New BH. Upon
completion of the merger, New BH changed its name to “Biglari Holdings Inc.” and replaced the Company as the publicly
held corporation through which our collection of businesses is conducted.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">New BH has two classes of common stock
designated Class A common stock and Class B common stock. A share of Class B common stock has economic rights equivalent to 1/5<sup>th</sup> of
a share of Class A common stock; however, Class B common stock has no voting rights.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of the April 30, 2018 transaction,
the current shareholders of the Company became shareholders of New BH and received, for every ten (10) shares of common stock
of the Company they owned on April 30, 2018, (i) ten (10) shares of Class B common stock of New BH and (ii) one
(1) share of Class A common stock of New BH. In other words, shareholders received for a share of common stock of the Company
(i) one (1) share of Class B common stock of New BH and (ii) 1/10<sup>th </sup>of one share of Class A common
stock of New BH.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Starting on May 1, 2018, the shares of
New BH Class A common stock trade on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A,”
whereas the New BH Class B common stock trades on the NYSE under the ticker symbol “BH,” which is the former
ticker symbol for the Company’s common stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For accounting purposes, the April 30,
2018 transaction will be treated as a merger of entities under common control. Accordingly, the consolidated financial position
and results of operations of the Company will be included in the consolidated financial statements of New BH on the same basis
as currently presented, except for earnings per share which is impacted by the issuance of the new common shares. The Company has
applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.”</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Principles of Consolidation</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its
agency, 1st Guard Corporation (collectively “First Guard”).  Intercompany accounts and transactions have been
eliminated in consolidation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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”), Maxim Inc. (“Maxim”) and First Guard Insurance Company and its
agency, 1st Guard Corporation (collectively “First Guard”).  Intercompany accounts and transactions have been
eliminated in consolidation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited consolidated
financial statements of Biglari Holdings Inc. (“Biglari Holdings” or the “Company”) have been prepared
in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to
interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and notes required by GAAP for complete financial statements. In our opinion, all adjustments considered
necessary to present fairly the results of the interim periods have been included and consist only of normal recurring adjustments.
The results for the interim periods shown are not necessarily indicative of results for the entire fiscal year. The financial statements
contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our annual
report on Form 10-K for the year ended December 31, 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Biglari Holdings is a holding company
owning subsidiaries engaged in a number of diverse business activities, including media, property and casualty insurance, and restaurants.
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 operating, investment, and capital allocation decisions are made for the Company
and its subsidiaries by Mr. Biglari. As of March 31, 2018, Mr. Biglari’s beneficial ownership of the Company’s outstanding
common stock was approximately 54.8%.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 5, 2018, the Company entered
into an agreement with NBHSA Inc. (“New BH”), a direct, wholly owned subsidiary of the Company, and BH Merger Company
(“Merger Sub”), a wholly owned subsidiary of New BH. Pursuant to the agreement, on April 30, 2018, Merger Sub merged
with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of New BH. Upon
completion of the merger, New BH changed its name to “Biglari Holdings Inc.” and replaced the Company as the publicly
held corporation through which our collection of businesses is conducted.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">New BH has two classes of common stock
designated Class A common stock and Class B common stock. A share of Class B common stock has economic rights equivalent to 1/5<sup>th</sup> of
a share of Class A common stock; however, Class B common stock has no voting rights.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As a result of the April 30, 2018 transaction,
the current shareholders of the Company became shareholders of New BH and received, for every ten (10) shares of common stock
of the Company they owned on April 30, 2018, (i) ten (10) shares of Class B common stock of New BH and (ii) one
(1) share of Class A common stock of New BH. In other words, shareholders received for a share of common stock of the Company
(i) one (1) share of Class B common stock of New BH and (ii) 1/10<sup>th </sup>of one share of Class A common
stock of New BH.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Starting on May 1, 2018, the shares of
New BH Class A common stock trade on the New York Stock Exchange (“NYSE”) under the ticker symbol “BH.A,”
whereas the New BH Class B common stock trades on the NYSE under the ticker symbol “BH,” which is the former
ticker symbol for the Company’s common stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For accounting purposes, the April 30,
2018 transaction will be treated as a merger of entities under common control. Accordingly, the consolidated financial position
and results of operations of the Company will be included in the consolidated financial statements of New BH on the same basis
as currently presented, except for earnings per share which is impacted by the issuance of the new common shares. The Company has
applied the “two-class method” of computing earnings per share as prescribed in ASC 260, “Earnings Per Share.” </p>