Biglari Holdings- FY 2015 Annual Meeting
Note: Nothing should be taken as a direct quote. Some of the numbers may be wrong as it was difficult to hear a few times. Unless U nless otherwise indicated, Biglari is speaking.
1:07pm start- went through formalities regarding proposals and introducing directors Pre Q&A Remarks o Good idea to review history to see where we came from o First slide, top part is an email from 2008 stress testing 10% decline in sales [it’s not pretty] o Current CEO was very concerned about the business One of the main reasons for his resignation was the belief that t hat company was going to fail o Steak ‘n Shake (SnS) losing $100k/day, in violation of debt covenants c ovenants o “I’m self-made entrepreneur” Started first business with $15k Parlayed into bigger and bigger sums Phil & I decided to partner up and have always behaved entrepreneurially o Other companies were not interested in taking over SnS ‘We offered them and other individuals generous pay packages’ Made it clear that money was no concern conce rn o SnS resurrected from ashes, now thriving o Prior to our management, traffic declining faster than peers After our management, growing faster than peers pee rs o Minor changes not going to save SnS 10/10 restaurant veterans would have failed in turnaround No time for analysis, needed entrepreneurs o This was not an activist campaign that was successful Activists not interested in, or many that are even capable of, running a company and turning it around We are entrepreneurs first, investors second o We developed a value proposition that we first formed in our own minds We presented the value prop during the proxy battle and were questioned because our prices were higher than competitors We had better quality but the value proposition was still lower bec ause of higher prices o SnS started with $1.6mm of corporate cash in 2008, ended 2015 with $815 million m illion of cash [presents slide showing sources of cash: rights offering, debt, operating cash flow, etc.] o CBRL is our most significant investment Without our pressure on the BOD, investment would have turned out m uch differently Most important change was a moratorium on new stores We didn’t have all the data but could co uld see a productivity decline We prompted management to reveal their return on new restaurant investment
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Showed their calculation in a filing o Running their numbers using Damodaran’s method, return would have been sub 4% Big contention was whether you have to add back G&A o If you add a couple stores maybe you don’t need additional G&A, but beyond that, you absolutely do o Even without G&A, return would be only 9% Beyond 2011 and 2015, CBRL opened 34 3 4 new stores costing $5 million a piece Bet they’re not going too well on that Dividend payout ratio has slowly creeped up, now over 100% Investment a testament to holding company structure Had we opened SnSs instead, wouldn’t have made nearly as much o All decisions we make with idea of increasing per share intrinsic value If our interest was increasing managerial domain we would buy more w hole businesses, not partial stakes o We don’t use committees, consultants, etc. to assist a ssist with capital allocation o We have 23k employees and only 5 at the holding company Don’t burden pursuit of value with bloated cost structure o Ideally we buy great companies like First Guard G uard [compliments First Guard and Ed Campbell at every opportunity] but will get involved with turnaround situations o We have a great capital structure All debt is at subsidiaries Pay a higher cost of debt but safer o Have long term orientation A lot of people talk about this but few have it We think in terms of decades Doesn’t sit well with some, like those t hose managing money for others We look at minimum of 10-year period Benchmark is S&P500 o Our stock performance has been very volatile For a while the stock outperformed o utperformed the business Final analysis: We have outperformed S&P500 [starting from day current management took over] Q&A Begins Q: Humane Society representative- Sounds like you have a remarkable remarka ble story but we are concerned with the way company sources eggs and chickens, c hickens, using small cages. Small cages cause high risk of salmonella and headline risk. Other companies moving away from caged hens. o We respect your opinion but have strong differences o We are guided solely but what customers want and what the law mandates If we misjudge what customer wants, we will lose their business Even if I agreed with you I wouldn’t do it if customers don’t demand it o Phil: I think eventually everyone will be cage free
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Q: Unknown- Chipotle has had a hard time recently. Have you learned anything about how they’ve handled their situation and are we protecting ourselves from the same risk? Also, why are they still valued at 30X earnings? e arnings? o We have been concerned about foodborne illness for years o There are very few risks that could cause a 20-30% decline in traffic- foodborne illness is one o Risk can’t be completely eliminated but we try to avoid systemic problems We don’t source locally Our sources audit the farmers and we are comforted by a robust auditing process They also go to the plant where it is washed You can protect on the supply side and the store side At the restaurant level we make m ake sure incentives are aligned rd o We have 3 party audits and if we find critical violations you will lose your bonus o Customers trust us and we take this very seriously o Everything at every company can be done better, we seek to improve o We have over 20,000 employees em ployees and 500 units so issues will come up, but we guard against them o Phil: CMG has a 30 PE and SHAK has a huge multiple, but that’s Mr. Market The board of directors discusses risks like this Q: Unknown shareholder since 2009- In the short term the market is a voting machine, m achine, in the long term a weighing machine. My 14-year-old is interested in investing and he asks me why the stock is where it is. My conclusion c onclusion is that it’s the way BH has morphed with the Lion Fund. My IQ is not 140; could you please go over how we got to where we are? o We are focused on value not price The price-to-value over the long term has less effect effec t on returns than compounding $1 billion compounds to $66 billion at 15%/year o If this price is only 50% of fair value then the n total compounding, should that gap close, only increases to 17-18% Focus should be on the value creation side, not price side o If price doesn’t reach value then we will continue to take action, say if the stock is less than $500/share [later walks this back, saying you should not read anything into $500/share] o Read pages 615 and 616 of Security Se curity Analysis, 3rd edition o Last year we conducted a tender at a 14% premium I think we’ll make very good money at that level o Phil: Since we took over, the stock has beaten the S&P Q: same questioner continues- We want a short history lesson o In 2008 the company had years of underperformance We ran a proxy contest; 74% voted in our favor Our plan was to make improvements but we underestimated shortfalls
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I debated with the board to take less money because the company could not afford it We paid vendors in stock o If stock went to $0, what were we giving up? This was not a situation where we could sit at the board level and pontificate about capital allocation o Once we turned SnS around, we realized we could use the company to augment value o I had to make a decision dec ision about whether to raise money at the Lion Fund or move to the holding company In an ideal scenario we could have all the assets under one umbrella So I decided to sell the Lion Fund for $1 o Later became clear for regulatory and financial reasons this wasn’t going to work Selling it for $1 and buying it back for $1.6mm was a personal error o When you run things entrepreneurially you test things out A dual class structure would make things easier to explain Doing things as we have invites criticism because it’s complicated You can watch the chef’s movements or you can just enjoy the meal o Phil: We really should have an abridged version Q: Long time shareholder- You did a tender offer o ffer at $420/share. In ’13 you y ou did a rights offering; we issued shares for $250, and then the n bought back at $420. Why hold these shares in the Lion Fund instead of at the hold co. because you will wi ll end up getting ¼ of our 15% return? ret urn? o You answered the last part yourself o We need to figure out who we ’re running the company for Long-term likeminded shareholders When we deal with the Ed Campbells, stability of ownership is extreme ly important. Last year was a great example A guy w/ no business skills, terrible ideas, and a small amount of s tock runs a proxy contest o Not in the interest of long term shareholders o We priced the tender at a pretty good spot because we came c ame within a few thousand shares of a full tender This was luck o Long term shareholders should welcome the price decline o If we had put CBRL money in BH at the time, we would have done much worse Tax liability on CBRL gain is a government loan Our swap is even allowing us to borrow against the tax liability o We will use all tools available Q: Unknown- Is it your preference to buy on the open market or to te nder for shares? o Wouldn’t you like to know o Phil: without control we can’t adhere to our mission We become just another company managing quarter to quarter Q: Humane Society representative again- Don’t hurt the chickens c hickens plz o [Gave my hand a break]
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Q: Andrew from London- Is there any probability of the company going private, and is it possible that you could move from the incentive agreement to an ownership payment system [i.e. paid by increasing the value of the shares you own a la Warren Buffett]? o We have long believed there are advantages to running a transparent company the SEC, auditors, etc. This also reduces our cost of debt We get the advantages of being a public company with the private advantage of control o I have no qualms about copying great business people but any comparison between us and Warren Buffett is doing a disservice to Mr. Buffett I’ve gotten more ideas from Sam Walton If we were looking to copy, we wouldn’t have bought an insurance company with no float and own restaurants The pricing philosophy of a Sam Walton or Henry Ford is much more applicable to the restaurant business We have taken ideas from a number of people o Phil: It’s odd to compare BH to Berkshire Henry Singleton and Warren Buffett are great gr eat people to learn from, as is Buffett B uffett o Sam Walton is very remarkable Opens first store in Arkansas at age 44 1st year does $250k in sales and $30k $ 30k in profit 10 years later Walmart is doing $44 million in sales o Sears is doing ~$9 billion In one story, there is a meeting of regional retail CEOs One guy is doing $40 million in sales, another doing $100mm in sales Each is asked what they think their sales will be in 10 years o $40 million guy says $80 million, $100 million guy says $160 million o Sam says $2 billion and everyone laughs First he took out the local guys Played it harder than anyone else These days, sales/sq. ft. is $1100 for Costco and $700 for Sam’s club Sam’s club is lagging Goes to show how brutal the business is and how wonderful Walton’s achievement was Q: same questioner continues- Please give me a more mor e categorical answer to the going private question. o I articulated the benefits Dual advantages exist, and there’s no reason to modify that for the long run Q: Unknown- Please explain the difference between depreciation and capital expenditures. o Capital expenditures are low partly because we don’t open new stores o We do not defer maintenance capex o When we took over there was no soul to the restaurant We put on new paint and added music
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You’d visit a store and there’d be an older couple in a booth whispering so they weren’t heard throughout the restaurant Some units’ booths were taped up because the co. had deferred capex We don’t have this problem now o Next year we are going to be redoing 150 parking lots, 75 7 5 awnings, etc. o We have a culture of trying try ing to save money o Cutting capex when we took over would wo uld have bankrupted the company o At the Western Sizzlin in Parkersburg West Wes t Virginia, summer of ’14, the trust that owned the restaurant was bankrupt Restaurant was up for auction and we sent a guy down to bid Bid $800k, ultimately bought it for $1 million Our CFO found a bank to lend to them at 3.5% o Hence the Western Sizzlin revolver in the 10k o We told CFO to use cash c ash flows to pay down debt We ended up putting in another $100k in capex c apex This year we did $250k in profit and will do about $300k next year o Phil: We only open a new store to seed an area France, Santa Monica, NYC, Italy, Spain Q: Unknown- I recently reread Setting Sett ing the Table [book by Danny Meyer, founder of Shake Shack] and the author cites SnS as an inspiration. Where do you see the industry heading? o There are two ways of achieving ac hieving a high ROIC One is a brand with high equity and no substitute If there is a close c lose substitute it becomes a commodity and you must be the low cost producer Many brands think they have more equity than they do For SnS to have a competitive advantage we need a far superior cost structure First Guard markets directly o No agents means a cost advantage o SnS is a brand for everyone There are a number of brands going after afte r a higher demographic Shake Shack has a stated ambition to reach a unit count on par with ours We have ambitions for much higher unit counts I wrote that we wanted 1,000 franchised units o We have 934 to go o At our current pace, Phil will be 140 years old by then o We need to pick up the pace Q: Unknown- We’ve invested heavily in franchising. Where are we in the process of reaching 1,000 units? o We have a long way to go but the question now is are we profitable on franchising Answer is yes o We plowed $33mm into franchising over 5 years In 2006 franchising revenue was $4 million, five years later was $4 million This year we will go north of $16 million
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We should have 50% margins on the business That’s a reasonable return that should increase over time Q: Unknown- Minimum wage could be raised to $15/hour. Does counter service m odel at competitors put us at a disadvantage? o We do have the counter service model at all of our overseas units o If minimum wage goes up, we will not be affected alone and we’ll manage better than others in the industry Q: Robin- What are your thoughts on AIRT and ISIG, since it seemed like a revenge investment? o People look good from afar but you see the imperfections up close We saw the negative imperfections of ‘that individual’ [Nick Swenson] His attacks on BH were fallacious so we had reason to believe that he was holding back the value of those two other entities o Phil: We bought stock during the proxy battle but not because bec ause of the proxy battle Q: Sid from Richmond- Now that you have control, it seems like you will want to buy more stock back at these prices. I tell my friends about this stock and I’m afraid you might miss the boat. o Don’t worry about what your friends say o I am properly incentivized Performance is linked to fees o By the way, First Guard is doing outstanding Fabulous management, serving a niche within a niche, and hitting it out of the park We assumed more of the business by ceding less les s to reinsurers Reinsurers really love Ed They were even saying that we should s hould cancel the treaties They were happy to take our business but they knew it was best for the company We will do better than $20 million of written premiums o SnS will have record earnings o We expect Maxim to have positive earnings going into 2017 Q: Matthew, 13 years old, shareholder since Tuesday- Why do you need to take a 25% fee? o The 25% fee is a performance fee It is meritocratic o Over the next 10-20 years, the stock market is not going to do 6% annualized In a 0% interest rate environment, 6% is very high If we can exceed exce ed 6%, that should be allocated fairly o Charlie Munger had a 0% hurdle and took 1/3 rd of the profits o Other managers take 1-2% of AUM and 20% of profits with no hurdle A 1-2% management fee would be $8-$16mm $ 8-$16mm just for showing up o I set the Lion Fund up when I was 22 I didn’t want to be paid if I didn’t make any money How would we want to be treated if the roles were reversed Q: Mike David from Boston- Owned the stock for a long time. You say that the holding company causes diversification, but isn’t the money allocated to the tender putting all of the eggs in one basket?
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Even SnS has been diversifying Franchising has helped diversify Also licensing revenue o Over time we will buy more companies which will diversify us o Over the next decade, cash flows could exceed $1/2 billion o We don’t agree with the accounting but we have to follow it Q: Unknown- Please expand on franchising. o We spent $16.9 million in the prior year o We expect costs to go down this year and revenues to go up o We will generate a profit even though foreign franchisees will generate a loss until we get to 50-60 units o Infrastructure is in place for foreign and domestic units o We improved on unit costs for a SnS S nS o We viewed previous expenses as investments Q: same questioner continues- How fast can we grow g row and what ROIC are franchisees achieving? o We have several [7? – couldn’t hear] international inter national opening in the next 8 weeks o Our domestic pace is better this year than last We could have opened more units if we accepted ac cepted all applicants o Our French unit is doing over $3 million in sales Netting $400k, cost $1.2 million o Average unit volume growing at SnS o Our trouble has been on the investment side – denominator [of ROIC] enlarges quickly We have reduced total expenditure to $1.7mm $ 1.7mm going forward o The top quartile does 2.5 million of unit volume and profit north of $500k Q: Unknown- If BH’s price increases, do you get ge t a fee on shares held in the Lion Fund? o Yes, but the BH stock is not treated in isolation, apart from the other holdings Q: Unknown- You stated that you expect Maxim to be profitable by the end of ’16, where is growth projected to come from? o We bought the Maxim brand, it just came with an interesting magazine asset We could have sold the magazine for more than we w e paid for the entire company o We’ve moved to a more sophisticated brand We include articles not just on spending s pending money but also on making money o December newsstand sales of 102,000, higher than any m en’s magazine in any month in 2015 o We are trying to develop a licensing business Will operate the magazine so long as it’s at an expense ratio that competitors can’t match o Maxim expenses in the past don’t reflect expenses going forward fo rward Could be down 50% this year We’ve compressed five years of turnaround expenses into two years o Total capital outlay is $39 million pretax, $25 million post tax This is an important advantage of the holding company structure We could sell the asset for $20 million in a second Netting those out should give you an example of the downside o
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Nothing is guaranteed but these are my expectations ex pectations o Every step they said we were crazy: c razy: $15,000 business to the Lion Fund to Friendly’s Fr iendly’s Ice Cream to Western Sizzlin to SnS… One analyst told us SnS would take $200 million m illion to fix You look like a genius after the fact but during you look like a goat Q: Unknown- My retirement depends on this investment. You mentioned $500/share, what was the significance of that? o If the security trades at a material discount, we will continue to communicate the value of the business directly o If I find a huge value discrepancy, we will take advantage Q: Unknown- Can you give us hard data on Maxim so we can feel comfortable with the projections? o Revenue minus expenses is what you need o There is going to be a lag effect between the customer response re sponse and the advertiser response o We used to assemble events at the Super Bowl and have 1,000-3,000 people attend Today this is licensed out and we are guaranteed a profit o I could give you a number of facts that may m ay misguide you o There’s still a lot that we plan to do- we need to do it Q: same questioner continues- Two years ago you said it would take t hree years. What margin profile do you think it will stabilize at? o Phil: You’re asking detailed questions about an ongoing process and it’s very hard to say It’s in process and there are reasons to be optimistic We believe the probabilities have changed to make it more m ore likely that it’s a success o We do not know what the margins m argins will look like Moving the needle at BH may not occur oc cur in the early phases Q: John, an individual investor- You talk a lot about cutting costs, but we’re in a gilded room [St. Regis Hotel, NYC], and your annual report stock is ex tremely heavy. o We don’t have an investor relations person who could easily cost $250,000+ We have five people at the holding company We do this once a year, let’s not meet in a dungeon o Maybe we should put together a better annual report We are a publishing company One of the reasons we haven’t is because it would require more of my time o There are things we could get into about saving pennies but you need to look at the bigger picture We have a brand If we are off on the freezer temperature by one degree, we lose one milkshake out of a tube of 37 That alone costs us $1 million o We have no M&A department, no general counsel, c ounsel, etc. Q: Unknown- Why is the front of the report re port the same as Berkshire’s? o
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On the idea of choosing a name [referring [refe rring to Biglari Holding’s initials and Berkshire Hathaway’s initials], there are only so many names to pick Enterprises, Holdings, etc. I was given Biglari, I can’t c an’t help that o No one went out and said, can you copy Berkshire’s Berks hire’s report Similarities are because of simplicity o On the substantive matters we are different than Berkshire What we buy, how we run companies, etc. o Singleton started in 1960, in 10 years he was doing $1.6 billion in sales Assets grew 100%/year, equity compounded at 94% He also was concerned with brand building Started all company names with Teledyne We will take ideas from everyone just j ust like Singleton did Singleton took the idea of a financing arm from GE Q: Unknown- I get the branding. I get the lifestyle. Everything is great, but I bought a Maxim and left it out on my counter. counter . My wife walked by and asked, what are you reading?? I would like to hear more about where we could be in five years and also about the effects e ffects of the minimum wage increase in New York on the t he SnS here. o The NYC restaurant is not really comparable to others We engaged in a lot of price experimentation so the average price is much higher o Drive though at SnS has grown same store s tore sales 8% Now 41% of revenue Used to be in the low 30%s in 2007 Margin is seven points better on drive through No plates/dishwasher, etc. o Used to have average sales of $1.6 $1 .6 million, $289,000 contribution margin on stores Now do $1.9 million of average sales, $320,000 of contribution margin Margins went from 18% to 17% o We are not trying to raise prices Double steak burger, fries, and drink at same s ame price as 16 years ago o Our branding/reputation increases when we acquire something like First Guard You want to win your first two hands at poker to set your table image How many acquired companies increase earnings 50% the next year? Usually you acquire and find something unpleasant o Great business people can read through the nonsense People get jealous of success and they create rumor The press doesn’t care, it wants to make a story We plan to remain disciplined and create value Q: What do you say about critics who think your eg o gets in the way? o Humility has never been my strong suit o We don’t live in fantasy land, we live in Biglari land We see success as success s uccess and failure as failure We try to arrive at the truth o
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We have made mistakes, I have made m ade mistakes Products we’ve tried Marketing, Red Velvet shakes… o Times can be hard Raising money from my pediatrician back in San Antonio o The reason I’m here sixteen years ye ars later is because I always thought about the downside This is why we have no debt at the holding company We have to avoid the catastrophes Especially with a concentrated portfolio o Phil: When you manage the money of your friends and family, father in law, pediatrician, you’re motivated Sardar has always been motivated Q: Unknown- What do you think of Trump’s campaign? o Next question Q: Unknown- Where do we stand on CBRL C BRL board representation? o We are not on the board o Last year I said they should save $50 million m illion in costs Six days later they announced a $50 million cost cutting c utting program Maybe I should say $100 million next time o Holler and Dash is a new CBRL concept It’s a new brand with a new delivery system trying to reach a new audience Bureaucrats trying to do an entrepreneur’s job This will fail miserably While distracted on this concept, CBRL traffic fell 2.8% o Between ’05 and ’11, traffic t raffic is down 15% Is flat now o To think CBRL will succeed at an entrepreneurial e ntrepreneurial venture is the height of arrogance How much money has been poured into this hole? A bureaucratic organization needs to analyze and re-analyze o Phil: It’s very concerning; even the name; I don’t get it I get biscuits, grits, but I don’t see the brand/brand equity It’s a bad signal We own 20% of the company, we want them to do well Shows a lack of trust in the brand We met the CBRL CB RL co-founder Denny Evins who died recently Bureaucracy can be useful in some places like the military Not in startups o When we took over SnS, marketing marke ting came in with a 200-page PowerPoint about why price wasn’t an issue I outlawed PowerPoint You just go into the restaurant and talk ta lk to the manager This dreadful CBRL behavior might cause ‘someone’ to launch a proxy fight Q: Unknown- Are you going to try to instate a dual class structure? o We have said we like it and will remove the cap on compensation o
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Just because we haven’t done these things doesn’t mean they’re they’ re off the table o Phil: Control issue is over At this point it would be an acquisition currency We know when to not use equity as an acquisition currency Q: Unknown- If you removed the pay cap would it m ake the Lion Fund and holding company the same? o Yes, they would be at parity Q: Unknown- Is there a way to avoid paying the deferred tax liability on CBRL? o We look at the tax liability as an asset The value will never equal the liability o The BH stock we own in the Lion L ion Fund has no liability We do not pay tax on those gains o We used a prepaid agreement The dividends from shares covered by the swap are taxed at the full effective rate Q: Unknown- I understand the reasons for the licensing agreement in the past but if it didn’t exist today, would you need to create cre ate it? o Licensing agreement is not about control o Now that we do have control, however, the t he risk may not be there anymore a nymore o It is on the table Q: Unknown- I am impressed with Chick-Fil-A. They have a lot of events like meetup nights with high school kids and middle school s chool kids. o We can learn from good competitors like that one I hope the CFO is taking notes in the back Q: Matthew Goodman- You talked about refranchising in the past. With 3G working its magic on Burger King, do you have any new thoughts? o We favor company operated stores because we set strategic direction o Franchisees are unable to make the argument arg ument that we have conflicting interest [due to franchisee fees as % of revenue] o Our average volume went from 1.4 million to 1.9 million If we move to 2.5 2 .5 million, the amount of cash flow dropping through is enormous If we move up 400,000 – 550,000, we’re talking $70 million flowing through If we refranchise we get $44 million, but there’s a cost to that o Add the after-tax dollars from selling the stores to the franchisees and it’s still not worth it Q: Unknown- Why did the number of employees drop by 1,000 from the transition 10K to the FY ’15 10K? o Could be seasonal, could be Maxim, could be many things o Nothing really analyzable about what’s going on there o There was also a company initiative to reduce full time employees e mployees that may have had an impact o Stores with lower turnover in the top quartile are experiencing 8% same store sales There is tremendous value to be gained by lowering turnover
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We are focused on fixing this Q: Unknown- Please talk about First Guard. o Owner operators of trucking rigs/trailers contract with a trucking company Trucking company buys insurance for the contents First Guard insures the tractor/trailer for owner operator o We have pretty good market share Progressive is another direct underwriter but we are a pure direct underwriter o We also insure non-trucking liability This would be physical damage to the tractor/trailer when the owner is not working on a contract Think of this as the following situation: It’s the weekend and the tr ucker takes his rig to church. On the way there is an accident, and he injures someone else o We had 13,500 accounts two years ago, and are now at 14,500 o 2009 combined ratio was 69.4 This is analogous to SnS’s very low food costs in 2006 of o f 22.6% Margins can expand for the wrong reasons SnS prices were high and quality was low Truckers weren’t driving their rigs under contract but hadn’t canceled the policy Now we are hitting record earnings with normalized margins Q: Unknown- Have you read any good books? I read Tales of National Indemnity… “No bad risk, just bad rates”. o We have the lowest cost structure and maybe the best underwriting We should continue to gain business but not by chasing it o I have received five Singleton books in the last two years o I am looking forward to Ed Thorp’s [author of Beat t he Dealer] new book o Phil: Recently finished Richard Thaler’s Misbehaving On behavioral economics My dissertation at Ohio State was behavioral related I used to read a lot of psychology and it turns out that’s mainstream today Q: Joe, individual investor- I assume you looked at multiple types of transactions: tender, privately negotiated, etc. for the share repurchase. What were those internal conversations like? o I would point you to the tender documents and you will see what the board reviewed Q: Unknown- I searched through all of EDGAR and c ouldn’t find another company that used the term “net outstanding shares for financial reporting purposes”. No other company uses that terminology, so what share count should we use to a nalyze BH? o We follow GAAP and tell you what we would wo uld use o What we use is in the slides Q: Unknown- What Maxim assets do you own? The magazine is printed in 100 countries; how does that work? o We have the rights to a lot of countries o We use about 10 international publishers In Costa Rica we don’t publish but can protect the brand
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Non-publishing Non-publishing revenue is growing quite quickly [Left at 5:15, meeting likely went until 6pm] o
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