| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

|  BIGLARI HOLDINGS INC.(Exact name of registrant as specified in its charter) |
|-----------------------------------------------------------------------------------|

| INDIANA                                        | 37-0684070                           |
|------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |

| 175 East Houston Street, Suite 1300      |       |
|------------------------------------------|------------|
| San Antonio, Texas                       | 78205      |
| (Address of principal executive offices) | (Zip code) |

| (210) 344-3400(Registrant’s telephone number, including area code)  |
|--------------------------------------------------------------------------------|

| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o  |
|---------------------------|---------------------|-------------------------|-----------------------------------|

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|                                 |                                                                                        |         | Page No. |
|--------------------------------------|---------------------------------------------------------------------------------------------|--------------|----------|
| Part I – Financial Information |                                                                                        |    |
|                                 |                                                                                        |         |     |
| Item 1.                              | Financial Statements                                                                        |         |     |   |
|                                 | Condensed Consolidated Balance Sheets —                                               |         |     |   |
|                                 | December 22, 2010 and September 29, 2010                                                    |         | 2        |   |
|                                 | Condensed Consolidated Statements of Earnings—                                        |         |     |   |
|                                 | Twelve Weeks Ended December 22, 2010 and December 23, 2009                                  |         | 3        |   |
|                                 | Condensed Consolidated Statements of Cash Flows—                                      |         |     |   |
|                                 | Twelve Weeks Ended December 22, 2010 and December 23, 2009                                  |         | 4        |   |
|                                 | Condensed Consolidated Statements of Changes in Shareholders’ Equity—           |         |     |   |
|                                 | Twelve Weeks Ended December 22, 2010 and December 23, 2009                                  |         | 5        |   |
|                                 | Notes to Condensed Consolidated Financial Statements                                        |         | 6-18     |   |
| Item 2.                              | Management’s Discussion and Analysis of Financial Condition and Results of Operations |         | 19-25    |   |
| Item 3.                              | Quantitative and Qualitative Disclosures about Market Risk                                  |         | 25       |   |
| Item 4.                              | Controls and Procedures                                                                |         | 26       |   |
|                                 |                                                                                        |         |     |   |
| Part II – Other Information    |                                                                                        |         |     |
|                                 |                                                                                        |         |     |   |
| Item 1.                              | Legal Proceedings                                                                           |         | 27       |   |
| Item 1A.                             | Risk Factors                                                                           |         | 27       |   |
| Item 6.                              | Exhibits                                                                               |         | 27       |   |
| Signatures                           |                                                                                        | 28           |     |

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Part I Financial Information

Ite

CO

|                                                                                                                                                                                                                        |   | December 22,2010 |    |   | September 29,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                        |   | (Unaudited)      |    |   |              |   |
| Assets                                                                                                                                                                                                                      |   |             |    |   |              |   |
| Current assets:                                                                                                                                                                                                             |   |             |    |   |              |   |
| Cash and cash equivalents                                                                                                                                                                                                   |   | $                | 79,426  |   |              | $      | 47,563 |   |
| Investments                                                                                                                                                                                                                 |   |             | 7,435   |   |              |   | 32,523 |   |
| Receivables, net of allowance of $475 and $475, respectively                                                                                                                                                                |   |             | 5,072   |   |              |   | 5,818 |   |
| Inventories                                                                                                                                                                                                                 |   |             | 5,729   |   |              |   | 6,061 |   |
| Deferred income taxes                                                                                                                                                                                                       |   |             | 5,068   |   |              |   | 3,802 |   |
| Assets held for sale                                                                                                                                                                                                        |   |             | 8,529   |   |              |   | 9,611 |   |
| Other current assets                                                                                                                                                                                                        |   |             | 3,253   |   |              |   | 4,453 |   |
| Total current assets                                                                                                                                                                                                        |   |             | 114,512 |   |              |   | 109,831 |   |
| Property and equipment, net                                                                                                                                                                                                 |   |             | 381,848 |   |              |   | 386,181 |   |
| Goodwill                                                                                                                                                                                                                    |   |             | 28,759  |   |              |   | 28,759 |   |
| Other intangible assets, net                                                                                                                                                                                                |   |             | 7,767   |   |              |   | 7,959 |   |
| Other assets                                                                                                                                                                                                                |   |             | 7,170   |   |              |   | 7,612 |   |
| Investments held by consolidated affiliated partnerships                                                                                                                                                                    |   |             | 9,891   |   |              |   | 23,497 |   |
| Total assets                                                                                                                                                                                                                |   | $                | 549,947 |   |              | $      | 563,839 |   |
| Liabilities and shareholders’ equity                                                                                                                                                                                  |   |             |    |   |              |   |   |   |
| Liabilities                                                                                                                                                                                                                 |   |             |    |   |              |   |   |   |
| Current liabilities:                                                                                                                                                                                                        |   |             |    |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                            |   | $                | 30,184  |   |              | $      | 26,752 |   |
| Due to broker                                                                                                                                                                                                               |   |             | — |   |              |   | 3,903 |   |
| Accrued expenses                                                                                                                                                                                                            |   |             | 32,396  |   |              |   | 37,401 |   |
| Revolving credit                                                                                                                                                                                                            |   |             | 14,250  |   |              |   | 18,000 |   |
| Current portion of obligations under leases                                                                                                                                                                                 |   |             | 4,588   |   |              |   | 4,556 |   |
| Current portion of long-term debt                                                                                                                                                                                           |   |             | 167     |   |              |   | 151 |   |
| Total current liabilities                                                                                                                                                                                                   |   |             | 81,585  |   |              |   | 90,763 |   |
| Deferred income taxes                                                                                                                                                                                                       |   |             | 12,831  |   |              |   | 10,309 |   |
| Obligations under leases                                                                                                                                                                                                    |   |             | 121,806 |   |              |   | 124,247 |   |
| Long-term debt                                                                                                                                                                                                              |   |             | 17,741  |   |              |   | 17,781 |   |
| Other long-term liabilities                                                                                                                                                                                                 |   |             | 10,364  |   |              |   | 9,499 |   |
| Total liabilities                                                                                                                                                                                                           |   |             | 244,327 |   |              |   | 252,599 |   |
| Commitments and contingencies                                                                                                                                                                                               |   |             |    |   |              |   |   |   |
| Redeemable noncontrolling interests of consolidated affiliated partnerships                                                                                                                                                 |   |             | 51,406  |   |              |   | 62,245 |   |
| Shareholders’ equity                                                                                                                                                                                                  |   |             |    |   |              |   |   |   |
| Common stock – $0.50 stated value, 2,500,000 shares authorized – 1,511,175   shares issued, 1,227,884 and 1,227,654 shares outstanding (net of treasury   stock), respectively         |   |             | 756     |   |              |   | 756 |   |
| Additional paid-in capital                                                                                                                                                                                                  |   |             | 137,573 |   |              |   | 143,521 |   |
| Retained earnings                                                                                                                                                                                                           |   |             | 205,288 |   |              |   | 195,825 |   |
| Accumulated other comprehensive income (loss)                                                                                                                                                                               |   |             | 564     |   |              |   | (1,152 | ) |
| Treasury stock – at cost: 283,291 shares and 283,521 shares (includes 205,743   shares held by consolidated affiliated partnerships) at December 22, 2010 and    September 29, 2010, respectively |   |             | (89,967 | )      |              |   | (89,955 | ) |
| Biglari Holdings Inc. shareholders’ equity                                                                                                                                                                            |   |             | 254,214 |   |              |   | 248,995 |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                            |   | $                | 549,947 |   |              | $      | 563,839 |   |

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|                                                              |   | Twelve Weeks Ended |      |
|-------------------------------------------------------------------|--------|--------------------|-----------|
|                                                              |   | 2010               |      |   | 2009 |   |
|                                                              |   | (Unaudited)        |      |
| Net revenues                                                      |   |               |      |   |   |   |
| Restaurant Operations:                                            |   |               |      |   |   |   |
| Net sales                                                         |   | $                  | 153,059   |   |   | $ | 147,924 |   |
| Franchise fees                                                    |   |               | 2,045     |   |   |   | 919 |   |
| Other revenue                                                     |   |               | 511       |   |   |   | 515 |   |
| Total                                                             |   |               | 155,615   |   |   |   | 149,358 |   |
| Investment Management Operations:                                 |   |               |      |   |   |   |   |   |
| Management fee income                                             |   |               | 110       |   |   |   | — |   |
| Consolidated Affiliated Partnerships:                             |   |               |      |   |   |   |   |   |
| Investment gains/losses                                           |   |               | 2,687     |   |   |   | — |   |
| Other income                                                      |   |               | 310       |   |   |   | — |   |
| Total                                                             |   |               | 3,107     |   |   |   | — |   |
| Total net revenues                                                |   |               | 158,722   |   |   |   | 149,358 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Costs and expenses                                                |   |               |      |   |   |   |   |   |
| Cost of sales                                                     |   |               | 41,280    |   |   |   | 38,479 |   |
| Restaurant operating costs                                        |   |               | 72,689    |   |   |   | 73,238 |   |
| General and administrative                                        |   |               | 11,014    |   |   |   | 8,785 |   |
| Depreciation and amortization                                     |   |               | 6,609     |   |   |   | 6,923 |   |
| Marketing                                                         |   |               | 8,951     |   |   |   | 7,727 |   |
| Rent                                                              |   |               | 3,896     |   |   |   | 3,708 |   |
| Pre-opening costs                                                 |   |               | 42        |   |   |   | — |   |
| Asset impairments and provision for restaurant closings           |   |               | 283       |   |   |   | 171 |   |
| (Gain) Loss on disposal of assets                                 |   |               | 104       |   |   |   | (23 | ) |
| Other operating expense (income)                                  |   |               | 822       |   |   |   | (63 | ) |
| Total costs and expenses, net                                     |   |               | 145,690   |   |   |   | 138,945 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Other income (expense)                                            |   |               |      |   |   |   |   |   |
| Interest, dividend and other investment income                    |   |               | 35        |   |   |   | 75 |   |
| Interest on obligations under leases                              |   |               | (2,449    | ) |   |   | (2,476 | ) |
| Interest expense                                                  |   |               | (565      | ) |   |   | (146 | ) |
| Realized investment gains/losses                                  |   |               | 2,878     |   |   |   | 312 |   |
| Derivative gains/losses                                           |   |               | 175       |   |   |   | — |   |
| Total other income (expense)                                      |   |               | 74        |   |   |   | (2,235 | ) |
|                                                              |   |               |      |   |   |   |   |   |
| Earnings before income taxes                                      |   |               | 13,106    |   |   |   | 8,178 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Income taxes                                                      |   |               | 4,341     |   |   |   | 2,684 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Net earnings                                                      |   |               | 8,765     |   |   |   | 5,494 |   |
| Earnings attributable to noncontrolling interest                  |   |               | —   |   |   |   | (17 | ) |
| Earnings/loss attributable to redeemable noncontrolling interest: |   |               |      |   |   |   |   |   |
| Income allocation                                                 |   |               | (1,812    | ) |   |   | — |   |
| Incentive fee reallocation                                        |   |               | 2,510     |   |   |   | — |   |
| Total loss attributable to redeemable noncontrolling interest     |   |               | 698       |   |   |   | — |   |
| Net earnings attributable to Biglari Holdings Inc.                |   | $                  | 9,463     |   |   | $ | 5,477 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Earnings per share attributable to Biglari Holdings Inc.          |   |               |      |   |   |   |   |   |
| Basic earnings per common and common equivalent share             |   | $                  | 7.13      |   |   | $ | 3.84 |   |
| Diluted earnings per common and common equivalent share           |   | $                  | 7.08      |   |   | $ | 3.82 |   |
|                                                              |   |               |      |   |   |   |   |   |
| Weighted average shares and equivalents                           |   |               |      |   |   |   |   |   |
| Basic                                                             |   |               | 1,327,207 |   |   |   | 1,426,684 |   |
| Diluted                                                           |   |               | 1,335,982 |   |   |   | 1,433,995 |   |

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|                                                                                                                                                 |   | Twelve Weeks Ended |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                                                                                 |   | 2010               |    |   | 2009 |   |
|                                                                                                                                                 |   | (Unaudited)        |    |
| Operating activities                                                                                                                                 |   |               |    |   |   |   |
| Net earnings                                                                                                                                         |   | $                  | 8,765   |   |   | $ | 5,494 |   |
| Adjustments to reconcile net earnings to operating cash flows (excluding investment   operations of consolidated affiliated partnerships): |   |               |    |   |   |   |   |   |
| Depreciation and amortization                                                                                                                        |   |               | 6,609   |   |   |   | 6,923 |   |
| Provision for deferred income taxes                                                                                                                  |   |               | 158     |   |   |   | — |   |
| Asset impairments and provision for restaurant closings                                                                                              |   |               | 283     |   |   |   | 171 |   |
| Stock-based compensation and other non-cash expenses                                                                                                 |   |               | 301     |   |   |   | 360 |   |
| (Gain) loss on disposal of assets                                                                                                                    |   |               | 104     |   |   |   | (23 | ) |
| Realized investment (gains)                                                                                                                          |   |               | (2,878  | ) |   |   | (312 | ) |
| Derivative gains/losses                                                                                                                              |   |               | (175    | ) |   |   | — |   |
| Changes in receivables and inventories                                                                                                               |   |               | 1,273   |   |   |   | 679 |   |
| Changes in other assets                                                                                                                              |   |               | 1,161   |   |   |   | 1,107 |   |
| Changes in accounts payable and accrued expenses                                                                                                     |   |               | (742    | ) |   |   | 5,287 |   |
| Investment operations of consolidated affiliated partnerships:                                                                                       |   |               |    |   |   |   |   |   |
| Purchases of investments                                                                                                                             |   |               | (16,997 | ) |   |   | — |   |
| Sales of investments                                                                                                                                 |   |               | 31,447  |   |   |   | — |   |
| Realized investment (gains), net                                                                                                                     |   |               | (2,462  | ) |   |   | — |   |
| Unrealized losses on marketable securities held by consolidated affiliated partnerships                                                              |   |               | (225    | ) |   |   | — |   |
| Changes in cash equivalents held by consolidated affiliated partnerships                                                                             |   |               | 401     |   |   |   | — |   |
| Net cash provided by operating activities                                                                                                            |   |               | 27,023  |   |   |   | 19,686 |   |
| Investing activities                                                                                                                                 |   |               |    |   |   |   |   |   |
| Additions of property and equipment                                                                                                                  |   |               | (2,051  | ) |   |   | (3,068 | ) |
| Proceeds from property and equipment disposals                                                                                                       |   |               | 917     |   |   |   | 711 |   |
| Purchases of investments                                                                                                                             |   |               | (2,554  | ) |   |   | (8,174 | ) |
| Sales of investments                                                                                                                                 |   |               | 33,439  |   |   |   | 3,050 |   |
| Changes in due to/from broker                                                                                                                        |   |               | (3,903  | ) |   |   | — |   |
| Net cash provided by (used in)  investing activities                                                                                       |   |               | 25,848  |   |   |   | (7,481 | ) |
| Financing activities                                                                                                                                 |   |               |    |   |   |   |   |   |
| Proceeds from revolving credit facility                                                                                                              |   |               | 53,550  |   |   |   | — |   |
| Payments on revolving credit facility                                                                                                                |   |               | (57,300 | ) |   |   | — |   |
| Principal payments on long-term debt                                                                                                                 |   |               | (24     | ) |   |   | (5 | ) |
| Proceeds from property sale-leasebacks                                                                                                               |   |               | — |   |   |   | — |   |
| Principal payments on direct financing lease obligations                                                                                             |   |               | (2,398  | ) |   |   | (753 | ) |
| Proceeds and tax benefits from exercise of stock options and employees stock purchase plan                                                           |   |               | 28      |   |   |   | 128 |   |
| Cash paid in lieu of fractional shares                                                                                                               |   |               | — |   |   |   | (711 | ) |
| Repurchase of employee shares for tax withholding                                                                                                    |   |               | (14     | ) |   |   | (15 | ) |
| Distributions to noncontrolling interest                                                                                                             |   |               | — |   |   |   | (53 | ) |
| Financing activities of consolidated affiliated partnerships:                                                                                        |   |               |    |   |   |   |   |   |
| Contributions from noncontrolling interests                                                                                                          |   |               | 166     |   |   |   | — |   |
| Distributions to noncontrolling interests                                                                                                            |   |               | (15,016 | ) |   |   | — |   |
| Net cash used in financing activities                                                                                                                |   |               | (21,008 | ) |   |   | (1,409 | ) |
| Increase in cash and cash equivalents                                                                                                                |   |               | 31,863  |   |   |   | 10,796 |   |
| Cash and cash equivalents at beginning of period                                                                                                     |   |               | 47,563  |   |   |   | 51,395 |   |
| Cash and cash equivalents at end of period                                                                                                           |   | $                  | 79,426  |   |   | $ | 62,191 |   |

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| (Unaudited)                                                                          |   | Common Stock |   |   | Additional Paid-In Capital |   |    | Retained Earnings |   |   | Accumulated Other Comprehensive Income |   |   | Treasury Stock |   |   | Total  |   |
|--------------------------------------------------------------------------------------|--------|--------------|--------|--------|----------------------------|--------|---------|-------------------|--------|--------|----------------------------------------|--------|--------|----------------|--------|--------|--------|--------|
|                                                                                 |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           |   |   |   |   |
| Balance at September 29, 2010                                                        |   | $            | 756    |   |                       | $      | 143,521 |              |   | $      | 195,825                                |   |   | $              | (1,152 | )      |   | $      | (89,955 | ) |   | $ | 248,995 |   |
| Net earnings attributable to Biglari Holdings Inc.                                   |   |         |   |   |                       |   |    |              |   |   | 9,463                                  |   |   |           |   |   |   |   |   |   |   |   | 9,463 |   |
| Reclassification of investment appreciation in net earnings, net of $818 tax         |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           | 1,280  |   |   |   |   |   |   |   | 1,280 |   |
| Net change in unrealized gains and losses on investments, net of $279 tax            |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           | 436    |   |   |   |   |   |   |   | 436 |   |
| Total comprehensive income                                                           |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | 11,179 |   |
| Exercise of stock options and other stock compensation transactions                  |   |         |   |   |                       |   | 182     |              |   |   |                                   |   |   |           |   |   |   |   | (12 | ) |   |   | 170 |   |
| Adjustment to redeemable noncontrolling interest to reflect maximum redemption value |   |         |   |   |                       |   | (6,130  | )                 |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | (6,130 | ) |
| Balance at December 22, 2010                                                         |   | $            | 756    |   |                       | $      | 137,573 |              |   | $      | 205,288                                |   |   | $              | 564    |   |   | $      | (89,967 | ) |   | $ | 254,214 |   |
|                                                                                 |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2009                                                        |   | $            | 757    |   |                       | $      | 143,691 |              |   | $      | 167,731                                |   |   | $              | 112    |   |   | $      | (20,430 | ) |   | $ | 291,861 |   |
| Net earnings attributable to Biglari Holdings Inc.                                   |   |         |   |   |                       |   |    |              |   |   | 5,477                                  |   |   |           |   |   |   |   |   |   |   |   | 5,477 |   |
| Net change in unrealized gains and losses on investments, net of $291 tax            |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           | 455    |   |   |   |   |   |   |   | 455 |   |
| Total comprehensive income                                                           |   |         |   |   |                       |   |    |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | 5,932 |   |
| Exercise of stock options and other stock compensation transactions                  |   |         |   |   |                       |   | 319     |              |   |   |                                   |   |   |           |   |   |   |   | (49 | ) |   |   | 270 |   |
| Cash paid in lieu of fractional shares                                               |   |         |   |   |                       |   | (711    | )                 |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | (711 | ) |
| Balance at December 23, 2009                                                         |   | $            | 757    |   |                       | $      | 143,299 |              |   | $      | 173,208                                |   |   | $              | 567    |   |   | $      | (20,479 | ) |   | $ | 297,352 |   |

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|                                                                        |   | Purchase Allocation |    |
|-----------------------------------------------------------------------------|--------|---------------------|---------|
| Investments                                                                 |   | $                   | 10,926  |   |
| Company debentures                                                          |   |                | 7,540   |   |
| Total assets acquired                                                       |   |                | 18,466  |   |
|                                                                        |   |                |    |   |
| Current liabilities                                                         |   |                | 66      |   |
| Redeemable noncontrolling interests of consolidated affiliated partnerships |   |                | 44,193  |   |
| Treasury stock                                                              |   |                | (29,900 | ) |
| Total liabilities assumed and treasury stock acquired                       |   |                | 14,359  |   |
| Net assets acquired                                                         |   | $                   | 4,107   |   |

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|                                                                                      |   | Purchase Allocation |   |
|-------------------------------------------------------------------------------------------|--------|---------------------|--------|
| Current assets                                                                            |   | $                   | 3,310  |   |
| Property and equipment, net                                                               |   |                | 4,874  |   |
| Investments, including marketable securities held by consolidated affiliated partnerships |   |                | 13,037 |   |
| Goodwill                                                                                  |   |                | 14,256 |   |
| Intangible assets                                                                         |   |                | 6,880  |   |
| Other assets                                                                              |   |                | 586    |   |
| Total assets acquired                                                                     |   |                | 42,943 |   |
|                                                                                      |   |                |   |   |
| Current liabilities                                                                       |   |                | 1,966  |   |
| Debt                                                                                      |   |                | 2,595  |   |
| Other long-term liabilities                                                               |   |                | 3,787  |   |
| Redeemable noncontrolling interests of consolidated affiliated partnerships               |   |                | 15,882 |   |
| Treasury stock                                                                            |   |                | (4,246 | ) |
| Total liabilities assumed and treasury stock acquired                                     |   |                | 19,984 |   |
| Net assets acquired                                                                       |   | $                   | 22,959 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | Twelve Weeks Ended |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 22,2010   |    |   | December 23,2009 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               |    |   | (Pro forma) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               |    |   |   |   |
| Net revenues                                                                                                                              |   | $                  | 158,722 |   |   | $ | 153,152 |   |
| Net earnings                                                                                                                              |   | $                  | 9,463   |   |   | $ | 2,769 |   |
| Basic earnings per share                                                                                                                  |   | $                  | 7.13    |   |   | $ | 1.97 |   |
| Diluted earnings per share                                                                                                                |   | $                  | 7.08    |   |   | $ | 1.96 |   |

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|   | · | Reclassification of $2,622 from interest expense previously included in Costs and expenses to Interest on obligations under leases and Interest expense within Other income; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reclassification of $515 from Other operating income to Other revenue within restaurant operations, primarily representing revenue generated from rental income; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reclassification of $338 from Other operating income to Net sales, primarily representing revenue from ancillary sources. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                 |   | Twelve Weeks Ended |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|
|                                                                                                                                                                                                 |   |               |      |   |   |   |
|                                                                                                                                                                                                 |   | December 22,       |      |   | December 23, |   |
|                                                                                                                                                                                                 |   | 2010               |      |   | 2009 |   |
| Basic earnings per share:                                                                                                                                                                            |   |               |      |   |   |   |
| Weighted average common shares                                                                                                                                                                       |   |               | 1,327,207 |   |   |   | 1,426,684 |   |
| Diluted earnings per share:                                                                                                                                                                          |   |               |      |   |   |   |   |   |
| Weighted average common shares                                                                                                                                                                       |   |               | 1,327,207 |   |   |   | 1,426,684 |   |
| Dilutive effect of stock awards                                                                                                                                                                      |   |               | 8,775     |   |   |   | 7,311 |   |
| Weighted average common and incremental shares                                                                                                                                                       |   |               | 1,335,982 |   |   |   | 1,433,995 |   |
| Number of share-based awards excluded from the calculation of earnings per share as the awards’ exercise prices were greater than the average market price of the Company’s common stock |   |               | 1,378     |   |   |   | 17,827 |   |

|                    |   | December 22, |   |   | September 29, |   |
|-------------------------|--------|--------------|--------|--------|---------------|--------|
|                    |   | 2010         |   |   | 2010          |   |
| Cost                    |   | $            | 6,510  |   |          | $      | 34,412 |   |
| Gross unrealized gains  |   |         | 930    |   |          |   | 657 |   |
| Gross unrealized losses |   |         | (5     | )      |          |   | (2,546 | ) |
| Fair value              |   | $            | 7,435  |   |          | $      | 32,523 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Twelve Weeks Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | December 22,       |   |   | December 23, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2010               |   |   | 2009 |   |
| Gross realized gains on sales                                                                                                                  |   | $                  | 2,884  |   |   | $ | 312 |   |
| Gross realized losses on sales                                                                                                                 |   | $                  | (6     | ) |   | $ | — |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December 22,2010 |   |   | September 29,2010 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|--------|--------|-------------------|--------|
| Equity securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |             |   |   |              |   |
| Cost                                                                                                                 |   | $                | 2,173  |   |              | $      | 14,725 |   |
| Fair value                                                                                                           |   | $                | 2,424  |   |              | $      | 15,627 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Twelve Weeks Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | December 22,       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2010               |   |
| Gross unrealized gains                                                                                                                                       |   | $                  | 264    |   |
| Gross unrealized losses                                                                                                                                      |   | $                  | (39    | ) |
| Net realized gains/losses from sale                                                                                                                          |   | $                  | 2,462  |   |

| Carrying value at September 29, 2010                                      |   | $      | 62,245  |   |
|---------------------------------------------------------------------------|--------|--------|---------|--------|
| Contributions from noncontrolling interests                               |   |   | 166     |   |
| Distributions to noncontrolling interests                                 |   |   | (16,437 | )      |
| Incentive fee reallocation                                                |   |   | (2,510  | )      |
| Income / loss allocation                                                  |   |   | 1,812   |   |
| Adjustment to noncontrolling interest to reflect maximum redemption value |   |   | 6,130   |   |
| Carrying value at December 22, 2010                                       |   | $      | 51,406  |   |

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|                            |   | December 22, |   |   | September 29, |   |
|---------------------------------|--------|--------------|--------|--------|---------------|--------|
|                            |   | 2010         |   |   | 2010          |   |
| Land and buildings              |   | $            | 7,758  |   |          | $      | 8,789 |   |
| Land and leasehold improvements |   |         | 771    |   |          |   | 822 |   |
| Total assets held for sale      |   | $            | 8,529  |   |          | $      | 9,611 |   |

|                                           |   | December 22,2010 |     |   | September 29,2010 |   |
|------------------------------------------------|--------|------------------|----------|--------|-------------------|--------|
| Land                                           |   | $                | 158,351  |   |              | $      | 158,526 |   |
| Buildings                                      |   |             | 148,595  |   |              |   | 148,718 |   |
| Land and leasehold improvements                |   |             | 154,921  |   |              |   | 155,166 |   |
| Equipment                                      |   |             | 203,399  |   |              |   | 203,757 |   |
| Construction in progress                       |   |             | 2,316    |   |              |   | 1,261 |   |
|                                           |   |             | 667,582  |   |              |   | 667,428 |   |
| Less accumulated depreciation and amortization |   |             | (285,734 | )      |              |   | (281,247 | ) |
| Property and equipment, net                    |   | $                | 381,848  |   |              | $      | 386,181 |   |

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|                                    |   | December 22, 2010     |   |   | September 29, 2010       |   |
|-----------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|
|                                    |   | Gross carrying amount |   |   | Accumulated amortization |   |   | Total |   |   | Gross carrying amount |   |   | Accumulated amortization |   |   | Total |   |
| Right to operate                        |   | $                     | 1,480  |   |                     | $      | (1,026 | ) |   | $ | 454 |   |   | $ | 1,480 |   |   | $ | (999 | ) |   | $ | 481 |   |
| Franchise agreement                     |   |                  | 5,310  |   |                     |   | (399 | ) |   |   | 4,911 |   |   |   | 5,310 |   |   |   | (266 | ) |   |   | 5,044 |   |
| Other                                   |   |                  | 1,136  |   |                     |   | (478 | ) |   |   | 658 |   |   |   | 1,136 |   |   |   | (446 | ) |   |   | 690 |   |
| Total                                   |   |                  | 7,926  |   |                     |   | (1,903 | ) |   |   | 6,023 |   |   |   | 7,926 |   |   |   | (1,711 | ) |   |   | 6,215 |   |
| Intangible assets with indefinite lives |   |                  | 1,744  |   |                     |   | — |   |   |   | 1,744 |   |   |   | 1,744 |   |   |   | — |   |   |   | 1,744 |   |
| Total intangible assets                 |   | $                     | 9,670  |   |                     | $      | (1,903 | ) |   | $ | 7,767 |   |   | $ | 9,670 |   |   | $ | (1,711 | ) |   | $ | 7,959 |   |

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|   | • | Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.                                                                                                                                 |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • | Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. |
|   | • | Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.                                                                                       |

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|                                                            |   | December 22, 2010 |   |   | September 29, 2010 |   |
|-----------------------------------------------------------------|--------|-------------------|--------|--------|--------------------|--------|
|                                                            |   | Level 1           |   |   | Level 2            |   |   | Level 3 |   |   | Total |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets                                                          |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash equivalents                                                |   | $                 | 1,057  |   |               | $      | 44,564 |   |   | $ | - |   |   | $ | 45,621 |   |   | $ | 6,845 |   |   | $ | 38,134 |   |   | $ | - |   |   | $ | 44,979 |   |
| Equity securities:                                              |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restaurant/Retail                                               |   |              | 882    |   |               |   | - |   |   |   | - |   |   |   | 882 |   |   |   | 26,789 |   |   |   | - |   |   |   | - |   |   |   | 26,789 |   |
| Other                                                           |   |              | 6,553  |   |               |   | - |   |   |   | - |   |   |   | 6,553 |   |   |   | 5,734 |   |   |   | - |   |   |   | - |   |   |   | 5,734 |   |
| Equity securities held by consolidated affiliated partnerships: |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restaurant/Retail                                               |   |              | 1,241  |   |               |   | - |   |   |   | - |   |   |   | 1,241 |   |   |   | 5,559 |   |   |   | - |   |   |   | - |   |   |   | 5,559 |   |
| Other                                                           |   |              | 852    |   |               |   | - |   |   |   | - |   |   |   | 852 |   |   |   | 8,931 |   |   |   | 814 |   |   |   | - |   |   |   | 9,745 |   |
| Non-qualified deferred compensation plan investments            |   |              | 534    |   |               |   | - |   |   |   | - |   |   |   | 534 |   |   |   | 476 |   |   |   | - |   |   |   | - |   |   |   | 476 |   |
| Investment held by consolidated affiliated partnership          |   |              | -      |   |               |   | - |   |   |   | 331 |   |   |   | 331 |   |   |   | - |   |   |   | - |   |   |   | 323 |   |   |   | 323 |   |
| Total assets at fair value                                      |   | $                 | 11,119 |   |               | $      | 44,564 |   |   | $ | 331 |   |   | $ | 56,014 |   |   | $ | 54,334 |   |   | $ | 38,948 |   |   | $ | 323 |   |   | $ | 93,605 |   |
|                                                            |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                     |   |              |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivatives                                                     |   | $                 | -      |   |               | $      | 5 |   |   | $ | - |   |   | $ | 5 |   |   | $ | - |   |   | $ | 97 |   |   | $ | - |   |   | $ | 97 |   |
| Total liabilities at fair value                                 |   | $                 | -      |   |               | $      | 5 |   |   | $ | - |   |   | $ | 5 |   |   | $ | - |   |   | $ | 97 |   |   | $ | - |   |   | $ | 97 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | December 22, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2010         |   |
| Beginning of period balance                                                                                                                                 |   | $            | 323    |   |
| Gain included in earnings                                                                                                                                   |   |         | 8      |   |
| End of period balance                                                                                                                                       |   | $            | 331    |   |

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|                                               |   | Revenue |    |   | Earnings before income taxesand noncontrolling interests |   |    | Net earnings attributableto Biglari Holdings Inc |   |
|----------------------------------------------------|--------|---------|---------|--------|----------------------------------------------------------|--------|---------|--------------------------------------------------|--------|
|                                               |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |
|                                               |   | 2010    |    |   | 2009                                                     |   |    | 2010                                             |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
| Operating Business:                                |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |
| Restaurant Operations:                             |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |
| Steak n Shake                                      |   | $       | 151,896 |   |                                                     | $      | 149,358 |                                             |   | $ | 9,461 |   |   | $ | 8,460 |   |   | $ | 6,530 |   |   | $ | 5,653 |   |
| Western                                            |   |    | 3,719   |   |                                                     |   | — |                                             |   |   | 414 |   |   |   | — |   |   |   | 252 |   |   |   | — |   |
| Total Restaurant Operations                        |   |    | 155,615 |   |                                                     |   | 149,358 |                                             |   |   | 9,875 |   |   |   | 8,460 |   |   |   | 6,782 |   |   |   | 5,653 |   |
|                                               |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Management:                             |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management fees                                    |   |    | 110     |   |                                                     |   | — |                                             |   |   | 110 |   |   |   | — |   |   |   | 68 |   |   |   | — |   |
| Incentive fee reallocation                         |   |    | — |   |                                                     |   | — |                                             |   |   | 2,510 |   |   |   | — |   |   |   | 1,535 |   |   |   | — |   |
| Consolidated affiliated partnerships               |   |    | 2,997   |   |                                                     |   | — |                                             |   |   | 1,791 |   |   |   | — |   |   |   | 81 |   |   |   | — |   |
| Total Investment Management Operations             |   |    | 3,107   |   |                                                     |   | — |                                             |   |   | 4,411 |   |   |   | — |   |   |   | 1,684 |   |   |   | — |   |
|                                               |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and Other:                               |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and other                                |   |    | — |   |                                                     |   | — |                                             |   |   | (1,723 | ) |   |   | (594 | ) |   |   | (1,266 | ) |   |   | (369 | ) |
| Investment and derivative gains/losses             |   |    | — |   |                                                     |   | — |                                             |   |   | 3,053 |   |   |   | 312 |   |   |   | 1,923 |   |   |   | 193 |   |
| Total Corporate and Other                          |   |    | — |   |                                                     |   | — |                                             |   |   | 1,330 |   |   |   | (282 | ) |   |   | 657 |   |   |   | (176 | ) |
|                                               |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation of segments to consolidated amount: |   |    |    |   |                                                     |   |    |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Eliminations                                       |   |    | — |   |                                                     |   | — |                                             |   |   | (2,510 | ) |   |   | — |   |   |   | 340 |   |   |   | — |   |
|                                               |   | $       | 158,722 |   |                                                     | $      | 149,358 |                                             |   | $ | 13,106 |   |   | $ | 8,178 |   |   | $ | 9,463 |   |   | $ | 5,477 |   |

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| Item 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations  |
|---------------|---------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Company-owned |   |   | Franchised |   |   | Total  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------|--------|--------|--------|--------|
| Steak n Shake                                                                                                        |   |          | 412    |   |       |   | 75     |   |   |   | 487 |   |
| Western                                                                                                              |   |          | 5      |   |       |   | 90     |   |   |   | 95 |   |
| Total                                                                                                                |   |          | 417    |   |       |   | 165    |   |   |   | 582 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Twelve Weeks Ended |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | December 22, 2010  |   | December 23, 2009 |
| Net revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |   |   |
| Restaurant Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |   |   |   |   |   |   |
| Net sales                                                                                                                                                                      |   |               | 96.4 | % |   |   | 99.0 | % |
| Franchise fees                                                                                                                                                                 |   |               | 1.3 |   |   |   | 0.6 |   |
| Other revenue                                                                                                                                                                  |   | 0.3                |   |   | 0.3 |   |
| Total                                                                                                                                                           |   | 98.0               |   |   | 100.0 |   |
| Investment Management Operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |   |   |   |   |
| Management fee income                                                                                                                                                          |   |               | 0.1 |   |   |   | 0.0 |   |
| Consolidated Affiliated Partnerships:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |               |   |   |   |   |   |   |
| Investment gains/losses                                                                                                                                                        |   |               | 1.7 |   |   |   | 0.0 |   |
| Other income                                                                                                                                                                   |   | 0.2                |   |   | 0.0 |   |
| Total                                                                                                                                                           |   | 2.0                |   |   | 0.0 |   |
| Total net revenues                                                                                                                                              |   | 100.0              |   |   | 100.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |
| Costs and expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               |   |   |   |   |   |   |
| Cost of sales (1)                                                                                                                                                              |   |               | 27.0 |   |   |   | 26.0 |   |
| Restaurant operating costs (1)                                                                                                                                                 |   |               | 47.5 |   |   |   | 49.5 |   |
| General and administrative                                                                                                                                                     |   |               | 6.9 |   |   |   | 5.9 |   |
| Depreciation and amortization                                                                                                                                                  |   |               | 4.2 |   |   |   | 4.6 |   |
| Marketing                                                                                                                                                                      |   |               | 5.6 |   |   |   | 5.2 |   |
| Rent                                                                                                                                                                           |   |               | 2.5 |   |   |   | 2.5 |   |
| Pre-opening costs                                                                                                                                                              |   |               | 0.0 |   |   |   | 0.0 |   |
| Asset impairments and provision for restaurant closings                                                                                                                        |   |               | 0.2 |   |   |   | 0.1 |   |
| Loss on disposal of assets                                                                                                                                                     |   |               | 0.1 |   |   |   | 0.0 |   |
| Other operating income                                                                                                                                                         |   |               | 0.5 |   |   |   | 0.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |   |   |
| Other income (expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |   |   |   |   |   |   |
| Interest, dividend and other investment income                                                                                                                                 |   |               | 0.0 |   |   |   | 0.1 |   |
| Interest on obligations under leases                                                                                                                                           |   |               | (1.5 | ) |   |   | (1.7 | ) |
| Interest expense                                                                                                                                                               |   |               | (0.4 | ) |   |   | (0.1 | ) |
| Realized investment gains/losses                                                                                                                                               |   |               | 1.8 |   |   |   | 0.2 |   |
| Derivative gains/losses                                                                                                                                                        |   | 0.1                |   |   | 0.0 |   |
| Total other income (expense)                                                                                                                                    |   | 0.0                |   |   | (1.5 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |
| Earnings before income taxes                                                                                                                                    |   |               | 8.3 |   |   |   | 5.5 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |   |   |
| Income taxes                                                                                                                                                    |   | 2.7                |   |   | 1.8 |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |   |   |
| Net earnings                                                                                                                                                    |   |               | 5.5 |   |   |   | 3.7 |   |
| Earnings attributable to noncontrolling interest                                                                                                                |   |               | 0.0 |   |   |   | 0.0 |   |
| Earnings/loss attributable to redeemable noncontrolling interest:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |   |   |   |   |   |   |
| Income/loss allocation                                                                                                                                                    |   |               | (1.1 | ) |   |   | 0.0 |   |
| Incentive fee reallocation                                                                                                                                                |   | 1.6                |   |   | 0.0 |   |
| Total loss attributable to redeemable noncontrolling interest                                                                                                             |   | 0.4                |   |   | 0.0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |   |   |   |   |
| Net earnings attributable to Biglari Holdings Inc.                                                                                                              |   | 6.0                | % |   | 3.7 | % |

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|   | · | the ability of the restaurant operations to increase store traffic on a profitable basis; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | competition in the restaurant industry for customers, staff, locations, and new products; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | disruptions in the overall economy and the financial markets; |
|--------|--------|---------------------------------------------------------------|

|   | · | the Company’s ability to comply with the restrictions and covenants to its debt agreements; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | declines in the market price of our common stock, which could adversely affect our goodwill impairment analysis; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | the potential to recognize additional impairment charges on our long−lived assets; |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | fluctuations in food commodity and energy prices and the availability of food commodities; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | the ability of our franchisees to operate profitable restaurants; |
|--------|--------|-------------------------------------------------------------------|

|   | · | the poor performance or closing of even a small number of restaurants; |
|--------|--------|------------------------------------------------------------------------|

|   | · | changes in customer preferences, tastes, and dietary habits; |
|--------|--------|--------------------------------------------------------------|

|   | · | changes in minimum wage rates and the availability and cost of qualified personnel; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | harsh weather conditions or losses due to casualties; |
|--------|--------|-------------------------------------------------------|

|   | · | unfavorable publicity relating to food safety or food−borne illness; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | exposure to liabilities related to the ownership and leasing of significant amounts of real estate; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | our ability to comply with existing and future governmental regulations; |
|--------|--------|--------------------------------------------------------------------------|

|   | · | our ability to adequately protect our trademarks, service marks, and other components of our brand; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | changes in market prices of our investments; and |
|--------|--------|--------------------------------------------------|

|   | · | other risks identified in the periodic reports we file with the Securities and Exchange Commission. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk  |
|---------------|------------------------------------------------------------------|

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| Item 4.  | Controls and Procedures   |
|---------------|-------------------------------------|

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Table of Contents

Par

| Item 1.  | Legal Proceedings  |
|---------------|-------------------------|

| Item 1A.  | Risk Factors  |
|----------------|--------------------|

| Item 6. | Exhibits |
|---------|----------|

| Exhibit Number |   | Description                                                         |
|----------------|--------|---------------------------------------------------------------------|
|           |   |                                                                |
| 31.01          |   | Rule 13(a)-14(a)/15d-14(a) Certification of Chief Executive Officer |
|           |   |                                                                |
| 31.02          |   | Rule 13(a)-14(a)/15d-14(a) Certification of Chief Financial Officer |
|           |   |                                                                |
| 32.01          |   | Section 1350 Certifications                                         |

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SIG

| BIGLARI HOLDINGS INC. |
|-----------------------|
|                  |   |
| By:                   | /s/ Duane E. Geiger |
|                  | Duane E. Geiger |
|                  | Interim Chief Financial Officer |

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