Biglari Holdings Inc.BH-A
Biglari Holdings Inc. Income Taxes Disclosure
Income Taxes
The components of the provision for income taxes consist of the following.
| 2025 | |||||
| Current: | |||||
| Federal | $ | 194 | |||
| State | 1,086 | ||||
| Total current | 1,280 | ||||
| Deferred: | |||||
| Federal | (10,727) | ||||
| State | (756) | ||||
| Total deferred | (11,483) | ||||
| Income tax expense (benefit) | $ | (10,203) | |||
| 2024 | 2023 | ||||||||||
| Current: | |||||||||||
| Federal | $ | 2,702 | $ | 2,197 | |||||||
| State | 1,392 | 544 | |||||||||
| Deferred | (8,489) | 6,567 | |||||||||
| Income tax expense (benefit) | $ | (4,395) | $ | 9,308 | |||||||
We did not have a net tax expense or benefit on income from international operations.
| 2025 | |||||||||||
| Reconciliation of effective income tax: | |||||||||||
| $ | (10,015) | 21.0 | % | ||||||||
State income taxes, net of federal benefit (1) | (47) | 0.1 | % | ||||||||
| Foreign tax effects: | |||||||||||
| Foreign tax rate differences | (184) | 0.4 | % | ||||||||
| Changes in valuation allowance | 1,213 | (2.5) | % | ||||||||
| Federal income tax credits | (220) | 0.4 | % | ||||||||
| Nontaxable or nondeductible | |||||||||||
| Dividends received deduction | (502) | 1.0 | % | ||||||||
| Excess percentage depletion | (518) | 1.1 | % | ||||||||
| Other nontaxable or nondeductible | 236 | (0.5) | % | ||||||||
| Changes in unrecognized tax benefits | 204 | (0.4) | % | ||||||||
| Other | (370) | 0.8 | % | ||||||||
| Income tax expense (benefit) | $ | (10,203) | 21.4 | % | |||||||
(1) State taxes in Indiana and Illinois made up the majority of the tax effect in this category. | |||||||||||
There were no material effects from changes in tax laws or rates enacted in the current period or cross-border tax laws.
| 2024 | 2023 | ||||||||||
| Reconciliation of effective income tax: | |||||||||||
| Tax at U.S. statutory rates | $ | (1,711) | $ | 13,618 | |||||||
| State income taxes, net of federal benefit | (2,485) | 1,572 | |||||||||
| Federal income tax credits | (144) | (1,309) | |||||||||
| Dividends received deduction | (910) | (1,169) | |||||||||
| Valuation allowance | 788 | 709 | |||||||||
| 162(m) compensation limitation | 91 | 1,506 | |||||||||
| Foreign tax rate differences | (118) | (97) | |||||||||
| Abraxas tax attributes | — | (5,660) | |||||||||
| Other | 94 | 138 | |||||||||
| Income tax expense (benefit) | $ | (4,395) | $ | 9,308 | |||||||
During 2023, the Company recognized tax benefits associated with the tax attributes of Abraxas Petroleum’s oil and gas properties.
Income (losses) before income taxes includes the following components.
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (42,792) | $ | (4,955) | $ | 67,736 | |||||||||||
| Foreign | (4,899) | (3,199) | (2,889) | ||||||||||||||
| $ | (47,691) | $ | (8,154) | $ | 64,847 | ||||||||||||
As of December 31, 2025, we had $767 of unrecognized tax benefits, including $150 of interest and penalties, which are included in other long-term liabilities in the consolidated balance sheet. As of December 31, 2024, we had $506 of unrecognized tax benefits, including $91 of interest and penalties, which is included in other long-term liabilities in the consolidated balance sheet. Our continuing practice is to recognize interest expense and penalties related to income tax matters in income tax expense. The unrecognized tax benefits of $767 would impact the effective income tax rate if recognized. Adjustments to the Company’s unrecognized tax benefit for gross increases for the current period tax position, gross decreases for prior period tax positions, and the lapse of statutes of limitations during 2025, 2024, and 2023 were not significant.
We file income tax returns which are periodically audited by various foreign, federal, state, and local jurisdictions. With few exceptions, we are no longer subject to tax examinations for fiscal years prior to 2021. We believe we have certain state income tax exposures related to fiscal years 2021 through 2025.
Deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Our deferred tax assets and liabilities consist of the following.
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Insurance reserves | $ | 509 | $ | 1,572 | |||||||
| Compensation accruals | 346 | 308 | |||||||||
| Gift card accruals | 169 | 214 | |||||||||
| Net operating loss credit carryforward | 21,243 | 20,898 | |||||||||
| Valuation allowance on net operating losses | (15,970) | (15,477) | |||||||||
| Deferred income | 250 | 272 | |||||||||
| Bad debt reserve | 920 | 743 | |||||||||
| Capital loss carryforward | 14,565 | — | |||||||||
| Asset retirement obligation | 1,563 | 573 | |||||||||
| Other | 156 | 820 | |||||||||
| Total deferred tax assets | 23,751 | 9,923 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Investment partnerships | 20,004 | 17,255 | |||||||||
| Investments | (150) | 557 | |||||||||
| Goodwill and intangibles | 18,726 | 19,068 | |||||||||
| Fixed assets and depletable assets basis difference | 3,200 | 2,436 | |||||||||
| Total deferred tax liabilities | 41,780 | 39,316 | |||||||||
| Net deferred tax liability | $ | (18,029) | $ | (29,393) | |||||||
We have foreign, U.S. federal and state net operating loss carryforwards. The foreign net operating loss carryforwards do not expire. The U.S. federal net operating loss carryforwards were acquired as part of the Abraxas acquisition. These net operating loss carryforwards are limited to $1,001 annually. The majority of the state net operating loss carryforwards expire in 2035 through 2037, and others do not expire.
We made federal tax payments of $2,474 and state tax payments of $262 during 2025. No individual state jurisdictions made up more than 5% of the total payments.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 25, 2019 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.