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

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

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

| (210) 344-3400                                                                     |
|------------------------------------------------------------------------------------|
| (Registrant’s telephone number, including area code)                         |
|                                                                               |
| Not Applicable                                                                     |
| (Former name, former address and former fiscal year, if changed since last report) |

| Large accelerated filer  ̈                                             | Accelerated filer x         |
|----------------------------------------------------------------------------|-----------------------------|
|                                                                       |                        |
| Non-accelerated filer  ̈ (Do not check if a smaller reporting company) | Smaller reporting company o |

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Table of Contents

BIGLARI 

|                                 |                                                                                        |         |     |
|--------------------------------------|---------------------------------------------------------------------------------------------|--------------|----------|
|                                 |                                                                                        |         | Page No. |
| Part I – Financial Information |                                                                                        |    |
|                                 |                                                                                        |         |     |
| Item 1.                              | Financial Statements                                                                        |         |     |   |
|                                 | Condensed Consolidated Balance Sheets —                                               |         |     |   |
|                                 | July 6, 2011 and September 29, 2010                                                         |         | 2        |   |
|                                 | Condensed Consolidated Statements of Earnings—                                        |         |     |   |
|                                 | Twelve and Forty Weeks Ended July 6, 2011 and July 7, 2010                                  |         | 3        |   |
|                                 | Condensed Consolidated Statements of Cash Flows—                                      |         |     |   |
|                                 | Forty Weeks Ended July 6, 2011 and July 7, 2010                                             |         | 4        |   |
|                                 | Condensed Consolidated Statements of Changes in Shareholders’ Equity—           |         |     |   |
|                                 | Forty Weeks Ended July 6, 2011 and July 7, 2010                                             |         | 5        |   |
|                                 | Notes to Condensed Consolidated Financial Statements                                        |         | 6-18     |   |
| Item 2.                              | Management’s Discussion and Analysis of Financial Condition and Results of Operations |         | 19-26    |   |
| Item 3.                              | Quantitative and Qualitative Disclosures about Market Risk                                  |         | 26       |   |
| Item 4.                              | Controls and Procedures                                                                |         | 27       |   |
|                                 |                                                                                        |         |     |   |
| Part II – Other Information    |                                                                                        |         |     |
|                                 |                                                                                        |         |     |   |
| Item 1A.                             | Risk Factors                                                                           |         | 28       |   |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                 |         | 28       |   |
| Item 6.                              | Exhibits                                                                               |         | 29       |   |
| Signatures                           |                                                                                        | 30           |     |

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Table of Contents

Part 

Item 

CONDENSED 

|                                                                                                                                                                                                                        |   | July 6,     |    |   | September 29, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|---------------|--------|
|                                                                                                                                                                                                                        |   | 2011        |    |   | 2010          |   |
|                                                                                                                                                                                                                        |   | (Unaudited) |    |   |          |   |
| Assets                                                                                                                                                                                                                      |   |        |    |   |          |   |
| Current assets:                                                                                                                                                                                                             |   |        |    |   |          |   |
| Cash and cash equivalents                                                                                                                                                                                                   |   | $           | 17,321  |   |          | $      | 47,563 |   |
| Investments                                                                                                                                                                                                                 |   |        | 116,743 |   |          |   | 32,523 |   |
| Receivables, net of allowance of $521 and $475, respectively                                                                                                                                                                |   |        | 9,625   |   |          |   | 5,818 |   |
| Inventories                                                                                                                                                                                                                 |   |        | 6,129   |   |          |   | 6,061 |   |
| Deferred income taxes                                                                                                                                                                                                       |   |        | 5,180   |   |          |   | 3,802 |   |
| Assets held for sale                                                                                                                                                                                                        |   |        | 7,816   |   |          |   | 9,611 |   |
| Other current assets                                                                                                                                                                                                        |   |        | 4,041   |   |          |   | 4,453 |   |
| Total current assets                                                                                                                                                                                                        |   |        | 166,855 |   |          |   | 109,831 |   |
| Property and equipment, net                                                                                                                                                                                                 |   |        | 375,628 |   |          |   | 386,181 |   |
| Goodwill                                                                                                                                                                                                                    |   |        | 27,529  |   |          |   | 28,759 |   |
| Other intangible assets, net                                                                                                                                                                                                |   |        | 7,125   |   |          |   | 7,959 |   |
| Other assets                                                                                                                                                                                                                |   |        | 5,954   |   |          |   | 7,612 |   |
| Investments held by consolidated affiliated partnerships                                                                                                                                                                    |   |        | 22,237  |   |          |   | 23,497 |   |
| Total assets                                                                                                                                                                                                                |   | $           | 605,328 |   |          | $      | 563,839 |   |
| Liabilities and shareholders’ equity                                                                                                                                                                                  |   |        |    |   |          |   |   |   |
| Liabilities                                                                                                                                                                                                                 |   |        |    |   |          |   |   |   |
| Current liabilities:                                                                                                                                                                                                        |   |        |    |   |          |   |   |   |
| Accounts payable                                                                                                                                                                                                            |   | $           | 30,428  |   |          | $      | 26,752 |   |
| Due to broker                                                                                                                                                                                                               |   |        | 9,390   |   |          |   | 3,903 |   |
| Accrued expenses                                                                                                                                                                                                            |   |        | 50,394  |   |          |   | 37,401 |   |
| Revolving credit                                                                                                                                                                                                            |   |        | 21,000  |   |          |   | 18,000 |   |
| Current portion of obligations under leases                                                                                                                                                                                 |   |        | 4,762   |   |          |   | 4,556 |   |
| Current portion of long-term debt                                                                                                                                                                                           |   |        | 4,169   |   |          |   | 151 |   |
| Total current liabilities                                                                                                                                                                                                   |   |        | 120,143 |   |          |   | 90,763 |   |
| Deferred income taxes                                                                                                                                                                                                       |   |        | 15,930  |   |          |   | 10,309 |   |
| Obligations under leases                                                                                                                                                                                                    |   |        | 117,877 |   |          |   | 124,247 |   |
| Long-term debt                                                                                                                                                                                                              |   |        | 17,430  |   |          |   | 17,781 |   |
| Other long-term liabilities                                                                                                                                                                                                 |   |        | 8,433   |   |          |   | 9,499 |   |
| Total liabilities                                                                                                                                                                                                           |   |        | 279,813 |   |          |   | 252,599 |   |
| Commitments and contingencies                                                                                                                                                                                               |   |        |    |   |          |   |   |   |
| Redeemable noncontrolling interests of consolidated affiliated partnerships                                                                                                                                                 |   |        | 50,309  |   |          |   | 62,245 |   |
| Shareholders’ equity                                                                                                                                                                                                  |   |        |    |   |          |   |   |   |
| Common stock – $0.50 stated value, 2,500,000 shares authorized – 1,511,174 and 1,511,175    shares issued, 1,227,156 and 1,227,654 shares outstanding (net of treasury stock), respectively |   |        | 756     |   |          |   | 756 |   |
| Additional paid-in capital                                                                                                                                                                                                  |   |        | 140,101 |   |          |   | 143,521 |   |
| Retained earnings                                                                                                                                                                                                           |   |        | 219,609 |   |          |   | 195,825 |   |
| Accumulated other comprehensive income (loss)                                                                                                                                                                               |   |        | 5,309   |   |          |   | (1,152 | ) |
| Treasury stock – at cost: 284,018 shares and 283,521 shares (includes 205,743    shares held by consolidated affiliated partnerships) at July 6, 2011 and September 29, 2010, respectively        |   |        | (90,569 | )      |          |   | (89,955 | ) |
| Biglari Holdings Inc. shareholders’ equity                                                                                                                                                                            |   |        | 275,206 |   |          |   | 248,995 |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                            |   | $           | 605,328 |   |          | $      | 563,839 |   |

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Table of Contents

BIGLARI 

|                                                                    |   | Twelve Weeks Ended |      |   | Forty Weeks Ended |   |
|-------------------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                                    |   | 2011               |      |   | 2010              |   |   | 2011 |   |   | 2010 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |
|                                                                    |   | (Unaudited)        |      |   | (Unaudited)       |   |
| Net revenues                                                            |   |               |      |   |              |   |   |   |   |   |   |   |
| Restaurant Operations:                                                  |   |               |      |   |              |   |   |   |   |   |   |   |
| Net sales                                                               |   | $                  | 166,893   |   |              | $      | 160,067 |   |   | $ | 527,848 |   |   | $ | 505,248 |   |
| Franchise fees                                                          |   |               | 2,065     |   |              |   | 1,877 |   |   |   | 6,415 |   |   |   | 3,988 |   |
| Other revenue                                                           |   |               | 606       |   |              |   | 519 |   |   |   | 1,828 |   |   |   | 1,701 |   |
| Total                                                                   |   |               | 169,564   |   |              |   | 162,463 |   |   |   | 536,091 |   |   |   | 510,937 |   |
| Investment Management Operations:                                       |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Management fee income                                                   |   |               | —   |   |              |   | 137 |   |   |   | 224 |   |   |   | 137 |   |
| Consolidated Affiliated Partnerships:                                   |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Investment gains/losses                                                 |   |               | 1,231     |   |              |   | (1,675 | ) |   |   | 4,177 |   |   |   | (1,675 | ) |
| Other income/loss                                                       |   |               | 66        |   |              |   | (13 | ) |   |   | 368 |   |   |   | (13 | ) |
| Total                                                                   |   |               | 1,297     |   |              |   | (1,551 | ) |   |   | 4,769 |   |   |   | (1,551 | ) |
| Total net revenues                                                      |   |               | 170,861   |   |              |   | 160,912 |   |   |   | 540,860 |   |   |   | 509,386 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses                                                      |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales                                                           |   |               | 48,144    |   |              |   | 44,197 |   |   |   | 146,967 |   |   |   | 136,836 |   |
| Restaurant operating costs                                              |   |               | 78,317    |   |              |   | 74,367 |   |   |   | 253,646 |   |   |   | 246,081 |   |
| General and administrative                                              |   |               | 12,082    |   |              |   | 9,908 |   |   |   | 37,691 |   |   |   | 30,302 |   |
| Depreciation and amortization                                           |   |               | 6,563     |   |              |   | 6,712 |   |   |   | 21,855 |   |   |   | 22,597 |   |
| Marketing                                                               |   |               | 10,031    |   |              |   | 9,020 |   |   |   | 29,762 |   |   |   | 26,629 |   |
| Rent                                                                    |   |               | 3,980     |   |              |   | 4,010 |   |   |   | 13,000 |   |   |   | 12,706 |   |
| Pre-opening costs                                                       |   |               | —   |   |              |   | — |   |   |   | 76 |   |   |   | — |   |
| Asset impairments and provision for restaurant closings                 |   |               | 2         |   |              |   | 43 |   |   |   | 15 |   |   |   | 186 |   |
| Loss (gain) on disposal of assets                                       |   |               | 232       |   |              |   | (137 | ) |   |   | 489 |   |   |   | (38 | ) |
| Other operating (income) expense                                        |   |               | (1,659    | )      |              |   | (8 | ) |   |   | (894 | ) |   |   | (479 | ) |
| Total costs and expenses, net                                           |   |               | 157,692   |   |              |   | 148,112 |   |   |   | 502,607 |   |   |   | 474,820 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                  |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest, dividend and other investment income                          |   |               | 86        |   |              |   | 114 |   |   |   | 239 |   |   |   | 343 |   |
| Interest on obligations under leases                                    |   |               | (2,436    | )      |              |   | (2,559 | ) |   |   | (8,146 | ) |   |   | (8,512 | ) |
| Interest expense                                                        |   |               | (602      | )      |              |   | (936 | ) |   |   | (2,034 | ) |   |   | (1,279 | ) |
| Realized investment gains/losses                                        |   |               | 1,433     |   |              |   | 986 |   |   |   | 4,677 |   |   |   | 1,820 |   |
| Derivative and short sale gains/losses                                  |   |               | (499      | )      |              |   | 176 |   |   |   | (292 | ) |   |   | 176 |   |
| Total other income (expense)                                            |   |               | (2,018    | )      |              |   | (2,219 | ) |   |   | (5,556 | ) |   |   | (7,452 | ) |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings before income taxes                                            |   |               | 11,151    |   |              |   | 10,581 |   |   |   | 32,697 |   |   |   | 27,114 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes                                                            |   |               | 1,836     |   |              |   | 3,337 |   |   |   | 8,864 |   |   |   | 8,859 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings                                                            |   |               | 9,315     |   |              |   | 7,244 |   |   |   | 23,833 |   |   |   | 18,255 |   |
| Earnings attributable to noncontrolling interest                        |   |               | —   |   |              |   | — |   |   |   | — |   |   |   | (10 | ) |
| Earnings/loss attributable to redeemable noncontrolling interests:      |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income/loss allocation                                                  |   |               | (639      | )      |              |   | 1,447 |   |   |   | (2,559 | ) |   |   | 1,447 |   |
| Incentive fee reallocation                                              |   |               | —   |   |              |   | — |   |   |   | 2,510 |   |   |   | — |   |
| Total earnings/loss attributable to redeemable noncontrolling interests |   |               | (639      | )      |              |   | 1,447 |   |   |   | (49 | ) |   |   | 1,447 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings attributable to Biglari Holdings Inc.                      |   | $                  | 8,676     |   |              | $      | 8,691 |   |   | $ | 23,784 |   |   | $ | 19,692 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share attributable to Biglari Holdings Inc.                |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per common and common equivalent share                   |   | $                  | 6.52      |   |              | $      | 6.27 |   |   | $ | 17.90 |   |   | $ | 13.91 |   |
| Diluted earnings per common and common equivalent share                 |   | $                  | 6.49      |   |              | $      | 6.23 |   |   | $ | 17.79 |   |   | $ | 13.82 |   |
|                                                                    |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares and equivalents                                 |   |               |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                   |   |               | 1,331,434 |   |              |   | 1,387,134 |   |   |   | 1,328,666 |   |   |   | 1,415,676 |   |
| Diluted                                                                 |   |               | 1,336,253 |   |              |   | 1,395,015 |   |   |   | 1,336,851 |   |   |   | 1,424,637 |   |

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Table of Contents

BIGLARI 

|                                                                                                                                                       |   | Forty Weeks Ended |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|
|                                                                                                                                                       |   | 2011              |     |   | 2010 |   |
|                                                                                                                                                       |   | (Unaudited)       |     |
| Operating activities                                                                                                                                       |   |              |     |   |   |   |
| Net earnings                                                                                                                                               |   | $                 | 23,833   |   |   | $ | 18,255 |   |
| Adjustments to reconcile net earnings to operating cash flows (excluding investment    operations of consolidated affiliated partnerships): |   |              |     |   |   |   |   |   |
| Depreciation and amortization                                                                                                                              |   |              | 21,855   |   |   |   | 22,597 |   |
| Provision for deferred income taxes                                                                                                                        |   |              | 1,305    |   |   |   | 1,758 |   |
| Asset impairments and provision for restaurant closings                                                                                                    |   |              | 15       |   |   |   | 186 |   |
| Stock-based compensation and other non-cash expenses                                                                                                       |   |              | 741      |   |   |   | 1,402 |   |
| Loss (gain) on disposal of assets                                                                                                                          |   |              | 489      |   |   |   | (38 | ) |
| Gain on sale of subsidiary                                                                                                                                 |   |              | (1,559   | ) |   |   | — |   |
| Realized investment gains, net                                                                                                                             |   |              | (4,677   | ) |   |   | (1,820 | ) |
| Derivative (gains) losses                                                                                                                                  |   |              | 292      |   |   |   | (176 | ) |
| Changes in receivables and inventories                                                                                                                     |   |              | (3,669   | ) |   |   | 260 |   |
| Changes in other assets                                                                                                                                    |   |              | 878      |   |   |   | (8 | ) |
| Changes in accounts payable and accrued expenses                                                                                                           |   |              | 6,836    |   |   |   | 5,144 |   |
| Investment operations of consolidated affiliated partnerships:                                                                                             |   |              |     |   |   |   |   |   |
| Purchases of investments                                                                                                                                   |   |              | (47,548  | ) |   |   | (17,389 | ) |
| Sales of investments                                                                                                                                       |   |              | 50,092   |   |   |   | 13,345 |   |
| Realized investment gains, net                                                                                                                             |   |              | (3,316   | ) |   |   | (209 | ) |
| Unrealized (gains) losses on marketable securities held by consolidated affiliated partnerships                                                            |   |              | (861     | ) |   |   | 1,884 |   |
| Changes in cash equivalents held by consolidated affiliated partnerships                                                                                   |   |              | 5,114    |   |   |   | 3,541 |   |
| Change in due to/from broker                                                                                                                               |   |              | —  |   |   |   | 943 |   |
| Net cash provided by operating activities                                                                                                                  |   |              | 49,820   |   |   |   | 49,675 |   |
| Investing activities                                                                                                                                       |   |              |     |   |   |   |   |   |
| Additions of property and equipment                                                                                                                        |   |              | (10,521  | ) |   |   | (6,766 | ) |
| Proceeds from property and equipment disposals                                                                                                             |   |              | 2,006    |   |   |   | 864 |   |
| Proceeds from sale of joint venture                                                                                                                        |   |              | —  |   |   |   | 457 |   |
| Proceeds from sale of subsidiary, net of cash on hand                                                                                                      |   |              | 196      |   |   |   | — |   |
| Purchases of investments                                                                                                                                   |   |              | (127,553 | ) |   |   | (51,866 | ) |
| Sales of investments                                                                                                                                       |   |              | 64,642   |   |   |   | 30,751 |   |
| Changes in due to/from broker                                                                                                                              |   |              | 5,487    |   |   |   | 1,898 |   |
| Cash from merger activities                                                                                                                                |   |              | —  |   |   |   | (2,903 | ) |
| Net cash used in investing activities                                                                                                                      |   |              | (65,743  | ) |   |   | (27,565 | ) |
| Financing activities                                                                                                                                       |   |              |     |   |   |   |   |   |
| Proceeds from revolving credit facility                                                                                                                    |   |              | 179,045  |   |   |   | 500 |   |
| Payments on revolving credit facility                                                                                                                      |   |              | (176,045 | ) |   |   | (1,000 | ) |
| Borrowings on long-term debt                                                                                                                               |   |              | 20,000   |   |   |   | — |   |
| Principal payments on long-term debt                                                                                                                       |   |              | (16,333  | ) |   |   | (44 | ) |
| Principal payments on direct financing lease obligations                                                                                                   |   |              | (6,153   | ) |   |   | (3,403 | ) |
| Proceeds and tax benefits from exercise of stock options and employees stock purchase plan                                                                 |   |              | 543      |   |   |   | 342 |   |
| Cash paid in lieu of fractional shares                                                                                                                     |   |              | —  |   |   |   | (711 | ) |
| Repurchase of employee shares for tax withholding                                                                                                          |   |              | (541     | ) |   |   | (224 | ) |
| Distributions to noncontrolling interest                                                                                                                   |   |              | —  |   |   |   | (221 | ) |
| Financing activities of consolidated affiliated partnerships:                                                                                              |   |              |     |   |   |   |   |   |
| Purchase of shares of Company stock by consolidated affiliated partnerships                                                                                |   |              | —  |   |   |   | (37,046 | ) |
| Proceeds from sale of shares of Company stock by consolidated affiliated partnerships                                                                      |   |              | —  |   |   |   | 2,651 |   |
| Contributions from noncontrolling interests                                                                                                                |   |              | 1,018    |   |   |   | 1,813 |   |
| Distributions to noncontrolling interests                                                                                                                  |   |              | (15,853  | ) |   |   | (1,005 | ) |
| Net cash used in financing activities                                                                                                                      |   |              | (14,319  | ) |   |   | (38,348 | ) |
| Decrease in cash and cash equivalents                                                                                                                      |   |              | (30,242  | ) |   |   | (16,238 | ) |
| Cash and cash equivalents at beginning of period                                                                                                           |   |              | 47,563   |   |   |   | 51,395 |   |
| Cash and cash equivalents at end of period                                                                                                                 |   | $                 | 17,321   |   |   | $ | 35,157 |   |

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Table of Contents

BIGLARI 

| (Unaudited)                                                                           |   | Common Stock |   |   | Additional Paid-In Capital |   |    | Retained Earnings |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | 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.                                    |   |         |   |   |                       |   |    |              |   |   | 23,784                                        |   |   |           |   |   |   |   |   |   |   |   | 23,784 |   |
| Reclassification of investment appreciation in net earnings, net of $789 tax          |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           | 1,235  |   |   |   |   |   |   |   | 1,235 |   |
| Net change in unrealized gains and losses on investments, net of $3,342 tax           |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           | 5,226  |   |   |   |   |   |   |   | 5,226 |   |
| Total comprehensive income                                                            |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   | 30,245 |   |
| Exercise of stock options and other stock compensation transactions                   |   |         |   |   |                       |   | 851     |              |   |   |                                          |   |   |           |   |   |   |   | (614 | ) |   |   | 237 |   |
| Adjustment to redeemable noncontrolling interests to reflect maximum redemption value |   |         |   |   |                       |   | (4,271  | )                 |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   | (4,271 | ) |
| Balance at July 6, 2011                                                               |   | $            | 756    |   |                       | $      | 140,101 |              |   | $      | 219,609                                       |   |   | $              | 5,309  |   |   | $      | (90,569 | ) |   | $ | 275,206 |   |
|                                                                                  |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Balance at September 30, 2009                                                         |   | $            | 757    |   |                       | $      | 143,691 |              |   | $      | 167,731                                       |   |   | $              | 112    |   |   | $      | (20,430 | ) |   | $ | 291,861 |   |
| Net earnings attributable to Biglari Holdings Inc.                                    |   |         |   |   |                       |   |    |              |   |   | 19,692                                        |   |   |           |   |   |   |   |   |   |   |   | 19,692 |   |
| Reclassification of investment appreciation in net earnings, net of $58 tax           |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           | (92    | )      |   |   |   |   |   |   | (92 | ) |
| Net change in unrealized gains and losses on investments, net of $393 tax             |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           | (614   | )      |   |   |   |   |   |   | (614 | ) |
| Total comprehensive income                                                            |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   | 18,986 |   |
| Exercise of stock options and other stock compensation transactions                   |   |         |   |   |                       |   | 1,062   |              |   |   |                                          |   |   |           |   |   |   |   | (265 | ) |   |   | 797 |   |
| Retirement of shares held by subsidiary                                               |   |         | (1     | )      |                       |   | 1       |              |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   | — |   |
| Cash paid in lieu of fractional shares                                                |   |         |   |   |                       |   | (711    | )                 |   |   |                                          |   |   |           |   |   |   |   |   |   |   |   | (711 | ) |
| Reacquired shares from acquisition                                                    |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   | (34,146 | ) |   |   | (34,146 | ) |
| Purchase of Company shares by consolidated affiliated partnerships                    |   |         |   |   |                       |   |    |              |   |   |                                          |   |   |           |   |   |   |   | (37,046 | ) |   |   | (37,046 | ) |
| Sale of Company shares by consolidated affiliated partnerships                        |   |         |   |   |                       |   | (685    | )                 |   |   |                                          |   |   |           |   |   |   |   | 3,336 |   |   |   | 2,651 |   |
| Balance at July 7, 2010                                                               |   | $            | 756    |   |                       | $      | 143,358 |              |   | $      | 187,423                                       |   |   | $              | (594   | )      |   | $      | (88,551 | ) |   | $ | 242,392 |   |

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BIGLARI 

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Table of Contents

|                                                                        |   | 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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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Amounts     |   |   | Measurement |   |    | Amounts at |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|-------------|--------|---------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Previously  |   |   | Period      |   |    | July 6,    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Recognized1 |   |   | Adjustments |   |    | 2011       |   |
| Current assets                                                                                                                                                                  |   | $           | 3,310  |   |        | $      | — |       |   | $ | 3,310 |   |
| Property and equipment, net                                                                                                                                                     |   |        | 4,874  |   |        |   |    |       |   |   | 4,874 |   |
| Investments, including marketable securities held by consolidated affiliated partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | 13,037 |   |        |   |    |       |   |   | 13,037 |   |
| Goodwill2                                                                                                                                                                       |   |        | 14,256 |   |        |   | (1,230  | )          |   |   | 13,026 |   |
| Intangible assets                                                                                                                                                               |   |        | 6,880  |   |        |   |    |       |   |   | 6,880 |   |
| Other assets2                                                                                                                                                                   |   |        | 586    |   |        |   | 77      |       |   |   | 663 |   |
|     Total assets acquired                                                                                                                                   |   |        | 42,943 |   |        |   | (1,153  | )          |   |   | 41,790 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |        |   |   |        |   |    |       |   |   |   |   |
| Current liabilities                                                                                                                                                             |   |        | 1,966  |   |        |   |    |       |   |   | 1,966 |   |
| Debt                                                                                                                                                                            |   |        | 2,595  |   |        |   |    |       |   |   | 2,595 |   |
| Other long-term liabilities2                                                                                                                                                    |   |        | 3,787  |   |        |   | (1,153  | )          |   |   | 2,634 |   |
| Redeemable noncontrolling interests of consolidated affiliated partnerships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |        | 15,882 |   |        |   |    |       |   |   | 15,882 |   |
| Treasury stock                                                                                                                                                                  |   |        | (4,246 | )      |        |   |    |       |   |   | (4,246 | ) |
|     Total liabilities assumed and treasury stock acquired                                                                                                   |   |        | 19,984 |   |        |   | (1,153  | )          |   |   | 18,831 |   |
| Net assets acquired                                                                                                                                                             |   | $           | 22,959 |   |        | $      | — |       |   | $ | 22,959 |   |

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|                       |   | Twelve Weeks Ended |    |   | Forty Weeks Ended |   |
|----------------------------|--------|--------------------|---------|--------|-------------------|--------|
|                       |   | July 6,2011        |    |   | July 7,2010       |   |   | July 6,2011 |   |   | July 7,2010 |   |
|                       |   |               |    |   | (Pro forma)       |   |   |   |   |   | (Pro forma) |   |
|                       |   |               |    |   |              |   |   |   |   |   |   |   |
| Net revenues               |   | $                  | 170,861 |   |              | $      | 161,151 |   |   | $ | 540,860 |   |   | $ | 518,981 |   |
| Net earnings               |   | $                  | 8,676   |   |              | $      | 7,304 |   |   | $ | 23,784 |   |   | $ | 20,749 |   |
| Basic earnings per share   |   | $                  | 6.52    |   |              | $      | 5.14 |   |   | $ | 17.90 |   |   | $ | 14.59 |   |
| Diluted earnings per share |   | $                  | 6.49    |   |              | $      | 5.11 |   |   | $ | 17.79 |   |   | $ | 14.49 |   |

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|   | · | Reclassification of $3,495 and $9,791, respectively, from interest expense previously included in Costs and expenses to Interest on obligations under leases and Interest expense within Other income; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reclassification of $519 and $1,701, respectively, from Other operating income to Other revenue within restaurant operations, primarily representing revenue generated from rental income; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reclassification of $374 and $1,319, respectively, from Other operating income to Net sales, primarily representing revenue from ancillary sources. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                 |   | Twelve Weeks Ended |   | Forty Weeks Ended |      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|-------------------|-----------|
|                                                                                                                                                                                                 |   |               |   |              |      |
|                                                                                                                                                                                                 |   | July 6,            |   |              | July 7,   |   | July 6, |   |   | July 7, |   |
|                                                                                                                                                                                                 |   | 2011               |   |              | 2010      |   | 2011 |   |   | 2010 |   |
| Basic earnings per share:                                                                                                                                                                            |   |               |   |              |      |   |     |   |   |    |   |
| Weighted average common shares                                                                                                                                                                       |   | 1,331,434          |   |              | 1,387,134 |   | 1,328,666 |   |   | 1,415,676 |   |
| Diluted earnings per share:                                                                                                                                                                          |   |               |   |              |      |   |   |   |   |    |   |
| Weighted average common shares                                                                                                                                                                       |   | 1,331,434          |   |              | 1,387,134 |   | 1,328,666 |   |   | 1,415,676 |   |
| Dilutive effect of stock awards                                                                                                                                                                      |   | 4,819              |   |              | 7,881     |   | 8,185 |   |   | 8,961 |   |
| Weighted average common and incremental shares                                                                                                                                                       |   | 1,336,253          |   |              | 1,395,015 |   | 1,336,851 |   |   | 1,424,637 |   |
| 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 |   | 963                |   |              | 14,369    |   | 963 |   |   |  15,067 |   |

|                    |   | July 6, |        |   | September 29, |   |
|-------------------------|--------|---------|-------------|--------|---------------|--------|
|                    |   | 2011    |        |   | 2010          |   |
| Cost                    |   | $       | 108,039     |   |          | $      | 34,412 |   |
| Gross unrealized gains  |   |    |  9,004 |   |          |   | 657 |   |
| Gross unrealized losses |   |    | (300        | )      |          |   | (2,546 | ) |
| Fair value              |   | $       | 116,743     |   |          | $      | 32,523 |   |

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|                           |   | Twelve Weeks Ended |   |   | Forty Weeks Ended |   |
|--------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                           |   |               |   |   |              |   |
|                           |   | July 6,            |   |   | July 7,           |   |   | July 6, |   |   | July 7, |   |
|                           |   | 2011               |   |   | 2010              |   |   | 2011 |   |   | 2010 |   |
| Gross realized gains on sales  |   | $                  | 1,444  |   |              | $      | 989 |   |   | $ | 4,694 |   |   | $ | 1,823 |   |
| Gross realized losses on sales |   | $                  | (11    | )      |              | $      | (3 | ) |   | $ | (17 | ) |   | $ | (3 | ) |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | July 6,2011 |   |   | September 29, 2010 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------|--------|
| Equity securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        |   |   |               |   |
| Cost                                                                                                                 |   | $           | 18,174 |   |               | $      | 14,725 |   |
| Fair value                                                                                                           |   | $           | 19,483 |   |               | $      | 15,627 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Twelve Weeks Ended |   |   | Forty Weeks Ended |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               |   |   |              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | July 6, 2011       |   |   | July 7, 2010      |   |   | July 6,2011 |   |   | July 7, 2010 |   |
| Gross unrealized gains                                                                                               |   | $                  | 1,064  |   |              | $      | 137 |   |   | $ | 1,504 |   |   | $ | 137 |   |
| Gross unrealized losses                                                                                              |   | $                  | (582   | )      |              | $      | (2,021 | ) |   | $ | (643 | ) |   | $ | (2,021 | ) |
| Net realized gains/losses from sale                                                                                  |   | $                  | 749    |   |              | $      | 209 |   |   | $ | 3,316 |   |   | $ | 209 |   |

| Carrying value at September 29, 2010                                       |   | $      | 62,245  |   |
|----------------------------------------------------------------------------|--------|--------|---------|--------|
| Contributions from noncontrolling interests                                |   |   | 1,018   |   |
| Distributions to noncontrolling interests                                  |   |   | (17,274 | )      |
| Incentive fee reallocation                                                 |   |   | (2,510  | )      |
| Income / loss allocation                                                   |   |   | 2,559   |   |
| Adjustment to noncontrolling interests to reflect maximum redemption value |   |   | 4,271   |   |
| Carrying value at July 6, 2011                                             |   | $      | 50,309  |   |

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|                       |   | July 6, |   |   | September 29, |   |
|----------------------------|--------|---------|--------|--------|---------------|--------|
|                       |   | 2011    |   |   | 2010          |   |
| Land and buildings         |   | $       | 7,195  |   |          | $      | 8,789 |   |
| Improvements               |   |    | 621    |   |          |   | 822 |   |
| Total assets held for sale |   | $       | 7,816  |   |          | $      | 9,611 |   |

|                                           |   | July 6, |     |   | September 29, |   |
|------------------------------------------------|--------|---------|----------|--------|---------------|--------|
|                                           |   | 2011    |     |   | 2010          |   |
| Land                                           |   | $       | 160,967  |   |          | $      | 158,526 |   |
| Buildings                                      |   |    | 149,879  |   |          |   | 148,718 |   |
| Land and leasehold improvements                |   |    | 154,557  |   |          |   | 155,166 |   |
| Equipment                                      |   |    | 203,488  |   |          |   | 203,757 |   |
| Construction in progress                       |   |    | 1,392    |   |          |   | 1,261 |   |
|                                           |   |    | 670,283  |   |          |   | 667,428 |   |
| Less accumulated depreciation and amortization |   |    | (294,655 | )      |          |   | (281,247 | ) |
| Property and equipment, net                    |   | $       | 375,628  |   |          | $      | 386,181 |   |

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|                                    |   | July 6, 2011          |   |   | September 29, 2010       |   |
|-----------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|
|                                    |   |                  |   |   |                     |   |
|                                    |   | Gross carrying amount |   |   | Accumulated amortization |   |   | Total |   |   | Gross carrying amount |   |   | Accumulated amortization |   |   | Total |   |
| Right to operate                        |   | $                     | 1,480  |   |                     | $      | (1,090 | ) |   | $ | 390 |   |   | $ | 1,480 |   |   | $ | (999 | ) |   | $ | 481 |   |
| Franchise agreement                     |   |                  | 5,310  |   |                     |   | (664 | ) |   |   | 4,646 |   |   |   | 5,310 |   |   |   | (266 | ) |   |   | 5,044 |   |
| Other                                   |   |                  | 810    |   |                     |   | (465 | ) |   |   | 345 |   |   |   | 1,136 |   |   |   | (446 | ) |   |   | 690 |   |
| Total                                   |   |                  | 7,600  |   |                     |   | (2,219 | ) |   |   | 5,381 |   |   |   | 7,926 |   |   |   | (1,711 | ) |   |   | 6,215 |   |
| Intangible assets with indefinite lives |   |                  | 1,744  |   |                     |   | — |   |   |   | 1,744 |   |   |   | 1,744 |   |   |   | — |   |   |   | 1,744 |   |
| Total intangible assets                 |   | $                     | 9,344  |   |                     | $      | (2,219 | ) |   | $ | 7,125 |   |   | $ | 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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|                                                            |   | July 6, 2011 |    |   | September 29, 2010 |   |
|-----------------------------------------------------------------|--------|--------------|---------|--------|--------------------|--------|
|                                                            |   | Level 1      |    |   | Level 2            |   |   | Level 3 |   |   | Total |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets                                                          |   |         |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash equivalents                                                |   | $            | -       |   |               | $      | 9,432 |   |   | $ | - |   |   | $ | 9,432 |   |   | $ | 6,845 |   |   | $ | 38,134 |   |   | $ | - |   |   | $ | 44,979 |   |
| Equity securities:                                              |   |         |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restaurant/Retail                                               |   |         | 99,914  |   |               |   | - |   |   |   | - |   |   |   | 99,914 |   |   |   | 26,789 |   |   |   | - |   |   |   | - |   |   |   | 26,789 |   |
| Other                                                           |   |         | 16,829  |   |               |   | - |   |   |   | - |   |   |   | 16,829 |   |   |   | 5,734 |   |   |   | - |   |   |   | - |   |   |   | 5,734 |   |
| Equity securities held by consolidated affiliated partnerships: |   |         |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restaurant/Retail                                               |   |         | 9,932   |   |               |   | - |   |   |   | - |   |   |   | 9,932 |   |   |   | 5,559 |   |   |   | - |   |   |   | - |   |   |   | 5,559 |   |
| Other                                                           |   |         | 9,362   |   |               |   | - |   |   |   | - |   |   |   | 9,362 |   |   |   | 8,931 |   |   |   | 814 |   |   |   | - |   |   |   | 9,745 |   |
| Non-qualified deferred compensation plan investments            |   |         | 576     |   |               |   | - |   |   |   | - |   |   |   | 576 |   |   |   | 476 |   |   |   | - |   |   |   | - |   |   |   | 476 |   |
| Investment held by consolidated affiliated partnership          |   |         | -       |   |               |   | - |   |   |   | 189 |   |   |   | 189 |   |   |   | - |   |   |   | - |   |   |   | 323 |   |   |   | 323 |   |
| Total assets at fair value                                      |   | $            | 136,613 |   |               | $      | 9,432 |   |   | $ | 189 |   |   | $ | 146,234 |   |   | $ | 54,334 |   |   | $ | 38,948 |   |   | $ | 323 |   |   | $ | 93,605 |   |
|                                                            |   |         |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                     |   |         |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities sold, not yet purchased                              |   | $            | 10,068  |   |               | $      | - |   |   | $ | - |   |   | $ | 10,068 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Investment derivatives                                          |   |         | -       |   |               |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 97 |   |   |   | - |   |   |   | 97 |   |
| Interest rate swaps                                             |   |         | -       |   |               |   | 309 |   |   |   | - |   |   |   | 309 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total liabilities at fair value                                 |   | $            | 10,068  |   |               | $      | 309 |   |   | $ | - |   |   | $ | 10,377 |   |   | $ | - |   |   | $ | 97 |   |   | $ | - |   |   | $ | 97 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | July 6, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 2011    |   |
| Beginning of period balance                                                                                                                                 |   | $       | 323    |   |
| Sale of assets                                                                                                                                              |   |    | (124   | ) |
| Loss included in earnings                                                                                                                                   |   |    | (10    | ) |
| End of period balance                                                                                                                                       |   | $       | 189    |   |

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|                                   |   | Net Revenue  |    |
|----------------------------------------|--------|--------------|---------|
|                                   |   |         |    |   |   |   |   |   |   |   |   |   |
|                                   |   | Twelve Weeks |    |   | Forty Weeks |   |
|                                   |   | 2011         |    |   | 2010 |   |   | 2011 |   |   | 2010 |   |
| Operating Business:                    |   |         |    |   |   |   |   |   |   |   |   |   |
| Restaurant Operations:                 |   |         |    |   |   |   |   |   |   |   |   |   |
| Steak n Shake                          |   | $            | 165,228 |   |   | $ | 158,047 |   |   | $ | 524,266 |   |   | $ | 506,521 |   |
| Western                                |   |         | 4,336   |   |   |   | 4,416 |   |   |   | 11,825 |   |   |   | 4,416 | * |
| Total Restaurant Operations            |   |         | 169,564 |   |   |   | 162,463 |   |   |   | 536,091 |   |   |   | 510,937 |   |
|                                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Management:                 |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management fees                        |   |         | — |   |   |   | 137 |   |   |   | 224 |   |   |   | 137 |   |
| Consolidated affiliated partnerships   |   |         | 1,297   |   |   |   | (1,688 | ) |   |   | 4,545 |   |   |   | (1,688 | ) |
| Total Investment Management Operations |   |         | 1,297   |   |   |   | (1,551 | ) |   |   | 4,769 |   |   |   | (1,551 | ) |
|                                   |   | $            | 170,861 |   |   | $ | 160,912 |   |   | $ | 540,860 |   |   | $ | 509,386 |   |

|                                               |   | Earnings before income taxes andnoncontrolling interests |    |   | Net earnings attributable toBiglari Holdings Inc. |   |
|----------------------------------------------------|--------|----------------------------------------------------------|---------|--------|---------------------------------------------------|--------|
|                                               |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   | Twelve Weeks                                             |    |   | Forty Weeks                                       |   |   | Twelve Weeks |   |   | Forty Weeks |   |
|                                               |   | 2011                                                     |    |   | 2010                                              |   |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |   | 2011 |   |   | 2010 |   |
| Operating Business:                                |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restaurant Operations:                             |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Steak n Shake                                      |   | $                                                        | 9,534   |   |                                              | $      | 12,034 |   |   | $ | 28,294 |   |   | $ | 28,586 |   |   | $ | 7,226 |   |   | $ | 7,981 |   |   | $ | 20,425 |   |   | $ | 19,404 |   |
| Western                                            |   |                                                     | 818     |   |                                              |   | 488 |   |   |   | 1,681 |   |   |   | 488 | * |   |   | 500 |   |   |   | 251 |   |   |   | 1,029 |   |   |   | 251 | * |
| Total Restaurant Operations                        |   |                                                     | 10,352  |   |                                              |   | 12,522 |   |   |   | 29,975 |   |   |   | 29,074 |   |   |   | 7,726 |   |   |   | 8,232 |   |   |   | 21,454 |   |   |   | 19,655 |   |
|                                               |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment Management:                             |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management fees                                    |   |                                                     | — |   |                                              |   | 137 |   |   |   | 224 |   |   |   | 137 |   |   |   | — |   |   |   | 85 |   |   |   | 139 |   |   |   | 85 |   |
| Incentive fee reallocation                         |   |                                                     | — |   |                                              |   | — |   |   |   | 2,510 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 1,535 |   |   |   | — |   |
| Consolidated affiliated partnerships               |   |                                                     | 2,702   |   |                                              |   | (1,457 | ) |   |   | 4,543 |   |   |   | (1,457 | ) |   |   | 1,889 |   |   |   | 481 |   |   |   | 2,154 |   |   |   | 481 |   |
| Total Investment Management Operations             |   |                                                     | 2,702   |   |                                              |   | (1,320 | ) |   |   | 7,277 |   |   |   | (1,320 | ) |   |   | 1,889 |   |   |   | 566 |   |   |   | 3,828 |   |   |   | 566 |   |
|                                               |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and Other:                               |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate and other                                |   |                                                     | (2,837  | )      |                                              |   | (1,783 | ) |   |   | (6,430 | ) |   |   | (2,636 | ) |   |   | (1,846 | ) |   |   | (797 | ) |   |   | (4,456 | ) |   |   | (1,786 | ) |
| Investment and derivative gains/losses             |   |                                                     | 934     |   |                                              |   | 1,162 |   |   |   | 4,385 |   |   |   | 1,996 |   |   |   | 589 |   |   |   | 690 |   |   |   | 2,763 |   |   |   | 1,257 |   |
| Total Corporate and Other                          |   |                                                     | (1,903  | )      |                                              |   | (621 | ) |   |   | (2,045 | ) |   |   | (640 | ) |   |   | (1,257 | ) |   |   | (107 | ) |   |   | (1,693 | ) |   |   | (529 | ) |
|                                               |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation of segments to consolidated amount: |   |                                                     |    |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Eliminations                                       |   |                                                     | — |   |                                              |   | — |   |   |   | (2,510 | ) |   |   | — |   |   |   | 318 |   |   |   | — |   |   |   | 195 |   |   |   | — |   |
|                                               |   | $                                                        | 11,151  |   |                                              | $      | 10,581 |   |   | $ | 32,697 |   |   | $ | 27,114 |   |   | $ | 8,676 |   |   | $ | 8,691 |   |   | $ | 23,784 |   |   | $ | 19,692 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Company-owned |   |   | Franchised |   |   | Total  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|------------|--------|--------|--------|--------|
| Steak n Shake                                                                                                        |   |          | 413    |   |       |   | 75     |   |   |   | 488 |   |
| Western                                                                                                              |   |          | 5      |   |       |   | 89     |   |   |   | 94 |   |
| Total                                                                                                                |   |          | 418    |   |       |   | 164    |   |   |   | 582 |   |

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|                                                                                                                            |   | Twelve Weeks Ended |          |   | Forty Weeks Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------------|--------|-------------------|--------|
|                                                                                                                            |   | July 6,2011        |          |   | July 7,2010       |   |   | July 6,2011 |   |   | July 7,2010 |   |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |
| Net revenues                                                                                                                    |   |               |          |   |              |   |   |   |   |   |   |   |
| Restaurant Operations:                                                                                                          |   |               |          |   |              |   |   |   |   |   |   |   |
| Net sales                                                                                                                       |   |               | 97.7          | %      |              |   | 99.5 | % |   |   | 97.6 | % |   |   | 99.2 | % |
| Franchise fees                                                                                                                  |   |               | 1.2           |   |              |   | 1.2 |   |   |   | 1.2 |   |   |   | 0.8 |   |
| Other revenue                                                                                                                   |   |               | 0.4           |   |              |   | 0.3 |   |   |   | 0.3 |   |   |   | 0.3 |   |
| Total                                                                                                                           |   |               | 99.2          |   |              |   | 101.0 |   |   |   | 99.1 |   |   |   | 100.3 |   |
| Investment Management Operations:                                                                                               |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Management fee income                                                                                                           |   |               | —       |   |              |   | 0.1 |   |   |   | 0.0 |   |   |   | 0.0 |   |
| Consolidated Affiliated Partnerships:                                                                                           |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Investment gains/losses                                                                                                         |   |               | 0.7           |   |              |   | (1.0 | ) |   |   | 0.8 |   |   |   | (0.3 | ) |
| Other income/loss                                                                                                               |   |               | 0.0           |   |              |   | 0.0 |   |   |   | 0.1 |   |   |   | 0.0 |   |
| Total                                                                                                                           |   |               | 0.8           |   |              |   | (1.0 | ) |   |   | 0.9 |   |   |   | (0.3 | ) |
| Total net revenues                                                                                                              |   |               | 100.0         |   |              |   | 100.0 |   |   |   | 100.0 |   |   |   | 100.0 |   |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses                                                                                                              |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Cost of sales (1)                                                                                                               |   |               | 28.8          |   |              |   | 27.6 |   |   |   | 27.8 |   |   |   | 27.1 |   |
| Restaurant operating costs (1)                                                                                                  |   |               | 46.9          |   |              |   | 46.5 |   |   |   | 48.1 |   |   |   | 48.7 |   |
| General and administrative                                                                                                      |   |               | 7.1           |   |              |   | 6.2 |   |   |   | 7.0 |   |   |   | 5.9 |   |
| Depreciation and amortization                                                                                                   |   |               | 3.8           |   |              |   | 4.2 |   |   |   | 4.0 |   |   |   | 4.4 |   |
| Marketing                                                                                                                       |   |               | 5.9           |   |              |   | 5.6 |   |   |   | 5.5 |   |   |   | 5.2 |   |
| Rent                                                                                                                            |   |               | 2.3           |   |              |   | 2.5 |   |   |   | 2.4 |   |   |   | 2.5 |   |
| Pre-opening costs                                                                                                               |   |               | —       |   |              |   | — |   |   |   | 0.0 |   |   |   | — |   |
| Asset impairments and provision for restaurant closings                                                                         |   |               | 0.0           |   |              |   | 0.0 |   |   |   | 0.0 |   |   |   | 0.0 |   |
| Loss (gain) on disposal of assets                                                                                               |   |               | 0.1           |   |              |   | (0.1 | ) |   |   | 0.1 |   |   |   | 0.0 |   |
| Other operating (income) expense                                                                                                |   |               | (1.0          | )      |              |   | (0.0 | ) |   |   | (0.2 | ) |   |   | (0.1 | ) |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                                                                          |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest, dividend and other investment income                                                                                  |   |               | 0.1           |   |              |   | 0.1 |   |   |   | 0.0 |   |   |   | 0.1 |   |
| Interest on obligations under leases                                                                                            |   |               | (1.4          | )      |              |   | (1.6 | ) |   |   | (1.5 | ) |   |   | (1.7 | ) |
| Interest expense                                                                                                                |   |               | (0.4          | )      |              |   | (0.6 | ) |   |   | (0.4 | ) |   |   | (0.3 | ) |
| Realized investment gains/losses                                                                                                |   |               | 0.8           |   |              |   | 0.6 |   |   |   | 0.9 |   |   |   | 0.4 |   |
| Derivative and short sale gains/losses                                                                                          |   |               | (0.3          | )      |              |   | 0.1 |   |   |   | (0.1 | ) |   |   | 0.0 |   |
| Total other income (expense)                                                                                                    |   |               | (1.2          | )      |              |   | (1.4 | ) |   |   | (1.0 | ) |   |   | (1.5 | ) |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Earnings before income taxes                                                                                                    |   |               | 6.5           |   |              |   | 6.6 |   |   |   | 6.0 |   |   |   | 5.3 |   |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes                                                                                                                    |   |               | 1.1           |   |              |   | 2.1 |   |   |   | 1.6 |   |   |   | 1.7 |   |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings                                                                                                                    |   |               | 5.5           |   |              |   | 4.5 |   |   |   | 4.4 |   |   |   | 3.6 |   |
| Earnings attributable to noncontrolling interest                                                                                |   |               | —       |   |              |   | — |   |   |   | — |   |   |   | (0.0 | ) |
| Earnings/loss attributable to redeemable noncontrolling interests:                                                              |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Income/loss allocation                                                                                                          |   |               | (0.4          | )      |              |   | 0.9 |   |   |   | (0.5 | ) |   |   | 0.3 |   |
| Incentive fee reallocation                                                                                                      |   |               |  — |   |              |   | — |   |   |   |  0.5 |   |   |   |  — |   |
| Total earnings/loss attributable to redeemable noncontrolling interests                                                         |   |               | (0.4          | )      |              |   | 0.9 |   |   |   | (0.0 | ) |   |   | 0.3 |   |
|                                                                                                                            |   |               |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings attributable to Biglari Holdings Inc.                                                                              |   |               | 5.1           | %      |              |   | 5.4 | % |   |   | 4.4 | % |   |   | 3.9 | % |
| ______________________________(1) Cost of sales and Restaurant operating costs are expressed as a percentage of Net sales. |   |

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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. |
|--------|--------|-----------------------------------------------------------------------------------------------------|

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| Period                              |   | TotalNumber ofSharesPurchased |    | AveragePrice Paidper Share |   |   | Total Numberof SharesPurchased asPart of Publicly AnnouncedPlans orPrograms |   | Maximum Number(or ApproximateDollar Value) ofShares that May YetBe Purchased Underthe Plans orPrograms |   |
|-------------------------------------|--------|-------------------------------|---------|----------------------------|--------|--------|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------|--------|
| April 14, 2011 – May 11, 2011 |   |                          | — |                       |   | $      | —                                                                     |   |                                                                                                   |   | — |   |   | $ | — |   |
| May 12, 2011 – June 8, 2011   |   |                          | 117     |                       |   | $      | 412.81                                                                      |   |                                                                                                   |   | — |   |   | $ | — |   |
| June 9, 2011 – July 6, 2011   |   |                          | — |                       |   | $      | —                                                                     |   |                                                                                                   |   | — |   |   | $ | — |   |

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| 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 101            |   | The following financial information from Biglari Holdings Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended July 6, 2011, formatted in XBRL (Extensible Business Reporting Language), includes: (i) the Condensed Consolidated Balance Sheets as of July 6, 2011 and September 29, 2010, (ii) the Condensed Consolidated Statements of Earnings for the Twelve and Forty Weeks Ended July 6, 2011 and July 7, 2010, (iii) the Condensed Consolidated Statements of Cash Flows for the Forty Weeks Ended July 6, 2011 and July 7, 2010, (v) the Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Forty Weeks Ended July 6, 2011 and July 7, 2010, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text  (to be filed within 30 days after the filing date of this Quarterly Report on Form 10-Q in accordance with Rule 405(a)(2) of Regulation S-T). |

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SIGNATURES

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

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