Biglari Holdings Inc.BH-A

Biglari Holdings Inc. Fair Value Disclosure

10-KFiled Mar 2, 20263 min read
Fair Value of Financial Assets
The fair values of substantially all of our financial instruments were measured using market or income approaches. Considerable judgment may be required in interpreting the market data used to develop the estimates of fair value. Accordingly, the fair values presented are not necessarily indicative of the amounts that could be realized in an actual current market exchange. The use of alternative market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.
The hierarchy for measuring fair value consists of Levels 1 through 3, which are described below.
•Level 1 – Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.
•Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs), such as quoted prices for similar assets or liabilities exchanged in active or inactive markets; quoted prices for identical assets or liabilities exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets or liabilities, such as interest rates and yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates; and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. Pricing evaluations generally reflect discounted expected future cash flows, which incorporate yield curves for instruments with similar characteristics, such as credit ratings, estimated durations, and yields for other instruments of the issuer or entities in the same industry sector.
•Level 3 – Inputs include unobservable inputs used in the measurement of assets and liabilities. Management is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets or liabilities and we may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in pricing assets or liabilities.

The following methods and assumptions were used to determine the fair value of each class of the following assets recorded at fair value in the consolidated balance sheets:
Cash equivalents: Cash equivalents primarily consist of money market funds, which are classified within Level 1 of the fair value hierarchy.
Equity securities: The Company’s investments in equity securities are classified within Level 1 or Level 3 of the fair value hierarchy. 
Bonds: The Company’s investments in bonds consist of both corporate and government debt. Bonds may be classified as Level 1 or Level 2 of the fair value hierarchy.
As of December 31, 2025 and 2024, the fair values of financial assets were as follows.
December 31,
20252024
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
Cash equivalents$249,825 $— $— $249,825 $11,684 $— $— $11,684 
Equity securities:
Consumer goods42,891 — — 42,891 39,706 — — 39,706 
Other6,777 — 4,000 10,777 5,569 — — 5,569 
Bonds:
Government12,835 2,142 — 14,977 52,328 5,245 — 57,573 
Corporate— 554 — 554 — 750 — 750 
Total assets at fair value$312,328 $2,696 $4,000 $319,024 $109,287 $5,995 $— $115,282 
There were no changes in the valuation techniques used to measure fair values on a recurring basis.
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Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Mar 3, 2025
2023Feb 26, 2024
2022Feb 27, 2023
2021Feb 28, 2022
2020Mar 1, 2021
2019Feb 24, 2020
2018Feb 25, 2019

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsNew StandardsNEO Compensation Adjustments