What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-06-24 compared with 2021-06-25 · 271 added, 211 removed, 568 unchanged (46% of the section changed)

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the self-insurance claim liability for workers’ compensation

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rates, required complex auditor judgment due to the significant measurement uncertainty.

Specialized skill and knowledge were necessary to evaluate the methods and key assumptions used to determine the liability.

Specialized skill and knowledge was necessary to evaluate the methods and key assumptions used to determine the liability.

The following are the primary procedures we performed to address this critical audit matter.

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• evaluating the loss development factors and expected loss rates used by the Company by comparing them to industry trends.

Evaluation of the value allocated to land in certain business combinations

As discussed in Note 2 to the consolidated financial statements, the Company acquired Buchanan Energy and several stores from Pilot Corporation during the year ended April 30, 2022.

These acquisitions met the criteria to be recorded as business combinations.

The significant assets acquired include buildings, equipment, and land.

The Company primarily values buildings and equipment using the cost method and land using comparable land sales.

The Company assigned $306,818 thousand and $67,365 thousand to property and equipment in the Buchanan Energy and Pilot acquisitions, which includes the value allocated to land.

We identified the evaluation of the fair value of land acquired in the Buchanan Energy and Pilot business combinations as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the relevance of comparable land sales that were used to determine the fair value of the acquired land.

This matter required the assistance of valuation professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s land value estimation process in business combinations.

This included controls related to the identification and selection of the publicly available comparable land sales.

For a sample of land acquired we involved valuation professionals with specialized skills and knowledge, who assisted in developing independent ranges of fair value estimates using publicly available land sales and comparing them to the Company’s fair value estimates.

We have served as the Company’s auditor since 1987.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 30, 2022 and 2021, the related consolidated statements of income, shareholders’ equity, and cash flows for each of the years in the three-year period ended April 30, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated June 24, 2022 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Buchanan Energy, Circle K Stores Inc., and Pilot Corporation during fiscal year 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2022, Buchanan Energy, Circle K Stores Inc., and Pilot Corporation’s internal control over financial reporting associated with assets of 18% and revenues of 9% of the total assets and total revenues included in the consolidated financial statements of the Company as of and for the year ended April 30, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Buchanan Energy, Circle K Stores Inc., and Pilot Corporation.

Basis for Opinion

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Current liabilities

Lines of credit $ — $ 120,000

Current maturities of long-term debt and finance lease obligations $ 24,466 $ 2,354

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Common stock, no par value, 37,111,667 and 36,949,878 shares issued and outstanding at April 30, 2022 and 2021, respectively

79,412 58,951

Retained earnings 2,161,426 1,873,728

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$ 1.39 $ 1.32 $ 1.28

(a) Includes excise taxes of approximately:

$ 1,053,000 $ 1,063,000 $ 988,000

See accompanying Notes to Consolidated Financial Statements.

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Balance at April 30, 2019 36,664,521 $ 15,600 $ 1,393,169 $ 1,408,769

Implementation of ASU 2014-09

— — ( 4,140 ) ( 4,140 )

Net income — — 263,846 263,846

Dividends declared ($ 1.28 per share)

— — ( 47,096 ) ( 47,096 )

Exercise of stock options 66,638 2,958 — 2,958

Repurchase of common stock ( 352,592 ) — ( 35,247 ) ( 35,247 )

Stock-based compensation 71,245 13,310 — 13,310

Stock-based compensation (net of tax withholding on employee share-based awards) 75,166 14,728 — 14,728

Balance at April 30, 2020 36,806,325 $ 33,286 $ 1,609,919 $ 1,643,205

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Dividends declared ($ 1.32 per share)

— — ( 49,091 ) ( 49,091 )

Exercise of stock options 40,189 1,784 — 1,784

Stock-based compensation 75,166 14,728 — 14,728

Stock-based compensation (net of tax withholding on employee share-based awards) 103,364 23,881 — 23,881

Balance at April 30, 2021 36,949,878 $ 58,951 $ 1,873,728 $ 1,932,679

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Dividends declared ($ 1.39 per share)

— — ( 52,092 ) ( 52,092 )

Exercise of stock options 3,000 133 — 133

Stock-based compensation 103,364 23,881 — 23,881

Stock-based compensation (net of tax withholding on employee share-based awards) 158,789 20,328 — 20,328

Balance at April 30, 2022 37,111,667 $ 79,412 $ 2,161,426 $ 2,240,838

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Stock-based compensation 37,976 31,986 18,129

Loss on disposal of assets and impairment charges 9,680 3,495 1,384

(Gain) loss on disposal of assets and impairment charges ( 1,201 ) 9,680 3,495

Deferred income taxes 82,721 4,123 49,810

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Payments of cash dividends ( 51,212 ) ( 47,971 ) ( 45,951 )

Repurchase of common stock — — ( 37,479 )

Tax withholdings on employee stock-based awards ( 17,648 ) ( 8,105 ) ( 7,224 )

Net cash used in financing activities ( 101,478 ) ( 22,693 ) ( 63,167 )

Net increase in cash and cash equivalents 258,270 14,979 9,617

Net cash provided by (used in) financing activities 191,587 ( 101,478 ) ( 22,693 )

Net (decrease) increase in cash and cash equivalents ( 177,667 ) 258,270 14,979

Cash and cash equivalents at beginning of year 336,545 78,275 63,296

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Cash paid during the year for interest, net of amount capitalized $ 54,499 $ 48,508 $ 54,277

Cash paid (received) for income taxes, net 80,916 9,364 ( 11,433 )

Cash paid for income taxes, net 49,565 80,916 9,364

Noncash investing and financing activities

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Casey’s General Stores, Inc.

and its subsidiaries (the Company/Casey’s) operate 2,243 convenience stores in 16 Midwest states.

The stores are located primarily in smaller communities, many with populations of less than 5,000 .

Retail revenue in 2021 by category are as follows:

55 % fuel, 31 % grocery and other merchandise, 13 % prepared food and fountain, and 1 % other.

and its subsidiaries (the Company/Casey’s) operate 2,452 convenience stores in 16 states, primarily in the Midwest.

Many of the stores are located in smaller communities, often with populations of less than 5,000 .

Principles of consolidation:

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and its wholly-owned subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

All material intercompany balances and transactions have been eliminated in consolidation.

Use of estimates:

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Uncollectible accounts were immaterial during the periods presented.

Below is a summary of the accounts receivable values at April 30, 2022 and 2021:

Years ended April 30,

Credit cards $ 57,724 $ 28,471

Vendor rebates 40,045 40,222

Other 10,259 11,005

Total $ 108,028 $ 79,698

Inventories, which consist of merchandise and fuel, are stated at the lower of cost or market.

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Vendor allowances include rebates and other funds received from vendors to promote their products.

Vendor rebates, including billbacks, are treated as a reduction in cost of goods sold and are recognized primarily based on the purchase of product or shipment of product from the warehouse to the store, or sale of product to our guests.

These are recognized in the period earned based on the applicable rebate agreement.

These amounts are recognized in the period earned based on the applicable rebate agreement.

Reimbursements of an operating expense (e.g., advertising) are recorded as reductions of the related expense.

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Capitalized software implementation costs:

The Company capitalizes expenditures related to the implementation of software as incurred.

These costs are expensed on a straight-line basis within operating expenses over the contractual life of the contract with the related software provider.

The Company capitalizes expenditures related to the implementation of software-as-a-service as incurred.

These costs are expensed on a straight-line basis within operating expenses, typically over the contractual life of the related software.

The useful lives utilized for capitalized software implementation costs range from 3 - 13 years.

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The outstanding balance is recognized in other assets on the consolidated balance sheets.

Goodwill and intangible assets with indefinite lives are tested for impairment at least annually.

The Company assesses impairment at least annually at year-end using a market based approach to establish fair value.

All of the goodwill assigned to the individual stores is aggregated into a single reporting unit due to the similar economic characteristics of the stores.

As of both April 30, 2021 and 2020, there was $ 161,075 of goodwill recognized.

Goodwill is tested for impairment at least annually.

The Company assesses impairment at least annually at year-end using a qualitative approach.

As of April 30, 2022 and 2021, there was $ 612,934 and $ 161,075 of goodwill recognized, respectively.

The goodwill acquired during the year was primarily related to the acquisition of Buchanan Energy, 48 stores from Circle K, and 40 stores from Pilot (see Note 2 for additional discussion).

Management’s analysis of recoverability completed as of the fiscal year-end indicated no evidence of impairment for the years ended April 30, 2022, 2021, and 2020.

Contractual customer relationships :

As the result of the current year acquisition of Buchanan Energy (see Note 2 for additional discussion), the Company recognized approximately $ 31,100 of contractual customer relationships.

These assets were valued using the multi-period excess earnings method.

The contractual customer relationships will be amortized on a straight-line basis over a useful life of 15 years and are included within other assets, net of amortization in the consolidated balance sheets as of April 30, 2022.

As of April 30, 2022 there was $ 29,027 of contractual customer relationships recognized, which was net of accumulated amortization of $ 2,073 .

The Company expects to recognize $ 2,073 of annual amortization expense related to contractual customer relationships over the next 5-years.

Depreciation and amortization:

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Store closings and asset impairment:

The Company writes down property and equipment of stores it is closing to estimated net realizable value at the time management commits to a plan to close such stores and begins active marketing of the stores.

The Company bases the estimated net realizable value of property and equipment on its experience in utilizing and/or disposing of similar assets, as well as estimates provided by its own and/or third-party real estate experts.

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If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recognized to the extent carrying value of the assets exceeds their estimated fair value.

Fair value is based on management’s estimate of the price that would be received to sell an asset in an orderly transaction between market participants.

Fair value is typically based on management’s estimate of the price that would be received to sell an asset in an orderly transaction between market participants.

The estimate is derived from offers, actual sale or disposition of assets subsequent to year-end, and other indications of fair value, which are considered Level 3 inputs (see Note 3).

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Impairment charges are a component of operating expenses.

Excise taxes:

Excise taxes approximating $ 1,053,000 , $ 1,063,000 , and $ 988,000 on retail fuel sales are included in total revenue and cost of goods sold for fiscal 2021, 2020, and 2019, respectively.

Income taxes:

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Revenue recognition:

The Company recognizes retail sales of fuel, grocery and other merchandise, prepared food and fountain and other revenue at the time of the sale to the guest.

The Company recognizes retail sales of fuel, grocery and general merchandise, prepared food and dispensed beverage and other revenue at the time of the sale to the guest.

Sales taxes collected from guests and remitted to the government are recorded on a net basis in the consolidated financial statements.

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Gift card breakage revenue is recognized based on the estimated gift card breakage rate over the pro rata usage of the card.

As of April 30, 2022 and April 30, 2021, the Company recognized a liability of $ 15,509 and $ 13,096 , respectively, related to outstanding gift cards, which is included in other accrued expenses on the consolidated balance sheets.

Net income per common share:

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The Company records a discounted liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of a long-lived asset at the time an underground storage tank is installed.

The Company amortizes the amount added to property and equipment on a straight-line basis and recognizes accretion expense in connection with the discounted liability over the remaining life of the tank.

The Company depreciates the amount added to property and equipment on a straight-line basis and recognizes accretion expense in connection with the discounted liability over the remaining life of the tank.

The estimates of the anticipated future costs for removal of an underground storage tank are based on our prior experience with removal.

Because these estimates are subjective and are currently based on historical costs with adjustments for estimated future changes in the associated costs, we expect the dollar amount of these obligations to change as more information is obtained.

The discounted liability was $ 24,411 and $ 22,658 at April 30, 2021 and 2020, respectively, and is recorded in other long-term liabilities.

The discounted liability was $ 28,604 and $ 24,411 at April 30, 2022 and 2021, respectively, and is recorded in other long-term liabilities in the consolidated balance sheets.

Self-insurance:

The Company is primarily self-insured for Team Member healthcare, workers’ compensation, general liability, and automobile claims.

The self-insurance claim liability for workers’ compensation, general liability, and automobile claims is determined actuarially at each year end based on claims filed and an estimate of claims incurred but not yet reported.

The self-insurance claim liability for workers’ compensation, general liability, and automobile claims is determined using actuarial methods at each year end based on claims filed and an estimate of claims incurred but not yet reported.

Actuarial projections of the losses are employed due to the potential of variability in the liability estimates.

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From time to time, we participate in a forward buy of certain commodities - see further discussion in Note 9.

These are not accounted for as derivatives under the normal purchase and sale exclusions within the applicable accounting guidance.

These are not accounted for as derivatives under the normal purchases and sale exclusions within the applicable accounting guidance.

Stock-based compensation:

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The market-based awards are achieved based on our relative performance to a pre-determined peer group.

The fair value of these awards is determined using a Monte Carlo simulation as of

the date of the grant.

The fair value of these awards is determined using a Monte Carlo simulation as of the date of the grant.

For market-based awards, the stock-based compensation expense will not be adjusted should the target awards vary from actual awards.

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Our stores sell similar products and services, use similar processes to sell those products and services, and sell their products and services to similar classes of guests.

We make specific disclosures concerning the three broad merchandise categories of fuel, grocery and other merchandise, and prepared food and fountain because it makes it easier for us to discuss trends and operational initiatives within our business and industry.

We make specific disclosures concerning the three broad merchandise categories of fuel, grocery and general merchandise, and prepared food and dispensed beverage because it makes it easier for us to discuss trends and operational initiatives within our business and industry.

Although we can separate revenues and cost of goods sold within these categories (and further sub-categories), the operating expenses associated with operating a store that sells these products are not separable by these three categories.

Recent accounting pronouncements:

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).

As a result of this update, we recognized a right-of-use asset representing its right to use the underlying asset for the lease term and a lease liability for the obligation to make lease payments.

Both the right-of-use asset and lease liability are measured at the present value of the lease payments, with subsequent measurement dependent on the classification of the lease as either a finance or an operating lease.

In July 2018, the FASB issued ASU 2018-10, Leases (Topic 842) - Codification Improvements which contains several FASB Codification improvements for ASC Topic 842 , including several implementation issues and ASU 2018-11, "Leases (Topic 842) - Targeted Improvements" which provides entities with an additional transition method for implementing ASC Topic 842 .

This update provided the option to apply the new standard at the adoption date, recognizing a cumulative-effect adjustment to the opening balance of retained earnings along with the modified retrospective approach previously identified, both of which include a number of practical expedients that companies may elect to apply.

Under the cumulative-effect adjustment approach, comparative periods would not be restated.

Under the modified retrospective approach, leases are recognized and measured under the noted guidance at the beginning of the earliest period presented.

We adopted this guidance in the first quarter of fiscal 2020, using the modified retrospective approach and elected the cumulative-effect adjustment practical expedient.

As a result of the transition method selected, the Company did not restate previously reported comparable periods.

Please refer to Note 7 for additional information regarding ASC Topic 842 .

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract.

The amendments in the update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license.

The Company early adopted this guidance retrospectively, in the first quarter of fiscal 2019.

The adoption did not have a material impact on our consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes .

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes .

The standard includes changes that eliminate certain exceptions related to the approach for intraperiod tax allocation and the methodology for calculating income taxes in an interim period.

It also simplifies aspects of the accounting for franchise taxes, certain transactions that result in a step-up in the tax basis of goodwill, and enacted changes in tax laws or rates.

The Company is required to adopt this guidance in the first quarter of its fiscal 2022, with early adoption permitted.

The Company does not expect the adoption of this standard to have a material impact on our consolidated financial statements.

The Company was required to adopt this guidance in the first quarter of this fiscal year.

The adoption of this standard did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

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The new standard is effective for all entities through December 31, 2022.

The Company does not expect this standard to have a material impact on our consolidated financial statements.

The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2021, the FASB issued ASU 2022-10, Governmental Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance .

The standard is an effort to increase transparency of government assistance by requiring disclosures related to the type of assistance, the accounting treatment for the assistance, and the effect of the assistance on the financial statements.

The new standard is effective for the Company on May 1, 2022.

While the new standard could result in enhanced disclosures, we do not expect the new standard to materially impact the consolidated financial statements.

During the year ended April 30, 2022, the Company acquired 207 stores.

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The majority of these acquisitions meet the criteria to be considered business combinations.

The purchase price of the stores were valued using a discounted cash flow model on a location by location basis.

The purchase price of the stores was determined using a discounted cash flow model on a location by location basis.

The acquisitions were recorded in the financial statements by allocating the purchase price to the assets acquired, including intangible assets, and liabilities assumed, based on their estimated fair values at the acquisition date as determined by third party appraisals or internal estimates.

Fair values were determined

using Level 3 inputs (see Note 3).

Fair values were determined using Level 3 inputs (see Note 3).

The excess of the cost of the acquisition over the net amounts assigned to the fair value of the assets acquired and the liabilities assumed is recorded as goodwill if the acquisition is considered to be a business combination.

No goodwill was recognized as the result of the current year acquisitions.

Allocation of the purchase price for the transactions in aggregate for the year ended April 30, 2021 is as follows (in thousands):

Acquisition-related transaction costs are recognized as period costs as incurred.

We accounted for the Buchanan Energy, Circle K, and Pilot acquisitions as business combinations - see additional discussion below.

Buchanan Energy

On May 13, 2021, the Company closed on the acquisition of 100 % of the equity interest in Buchanan Energy (and certain of its related subsidiaries and affiliated entities), owner of Bucky’s Convenience Stores.

The transaction included 92 retail locations (consisting of 24 stores in Nebraska, 56 in Illinois, five in Iowa, three in Missouri, and four in Texas), a dealer network of 81 stores where Casey’s will manage fuel wholesale supply agreements to these stores, as well as several parcels of land which may be used for new store construction.

Three of the retail locations were divested shortly after closing as part of a consent order with the Federal Trade Commission.

During the fourth quarter of the fiscal year, the Company sold four stores and one parcel of land in Texas for an aggregate sale price of $ 41,000 , subject to customary post-closing adjustments.

We did no t record a material gain or loss related to the sale.

The Company expects to achieve certain synergies over time, in part, through the reduction of duplicate processes, improvements in purchasing power, installing our kitchens, and expanding merchandise offerings.

The aggregate purchase price for the acquisition totaled $ 571,842 , which is net of a working capital adjustment of $ 5,400 .

Upon closing, $ 577,242 was paid in cash using available cash on hand, proceeds from the $ 300 million term loan (as discussed in Note 3) and a draw on its revolving credit facility.

The draw on the revolving credit facility was repaid during the first quarter of the fiscal year.

The working capital adjustment was received during the fourth quarter of the fiscal year.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

We utilized a third-party valuation specialist to assist in valuing the contractual customer relationships, leases, and property and equipment acquired.

Assets acquired:

Cash and cash equivalents $ 5,092

Receivables 225

Inventories 18,516

Prepaid expenses 150

Property and equipment 306,818

Contractual customer relationships 31,100

Deferred income taxes 1,343

Finance lease right-of-use assets 9,421

Operating lease right-of-use assets 11,236

Other assets 1,774

Goodwill 254,679

Total assets 640,354

Liabilities assumed:

Accounts payable 30,212

Accrued expenses 8,395

Finance lease liabilities 11,101

Operating lease liabilities 15,087

Other long-term liabilities 3,717

Total liabilities 68,512

Net tangible assets acquired 9,356

Total consideration paid $ 9,356

Net assets acquired and total purchase price $ 571,842

The goodwill acquired was assigned to the retail reporting unit in the amount of $ 245,516 and the fuel wholesale reporting unit in the amount of $ 9,163 .

The goodwill recognized is primarily attributable to the location of the seller’s stores in relation to our footprint and expected synergies due to expanded inside store offerings and improved purchasing power.

Almost all of the goodwill acquired as the result of this transaction will be deductible for income tax purposes over 15 years.

The Company incurred total acquisition-related transaction costs of approximately $ 8.6 million.

This includes approximately $ 6.7 million incurred during the year ended April 30, 2022, which are included in the consolidated statements of income within operating expenses.

The Company recognized approximately $ 901,461 of revenue related to the acquired Buchanan Energy locations in the consolidated statements of income for the year ended April 30, 2022.

The amount of net income related to the acquired Buchanan Energy locations was not material for the year ended April 30, 2022.

Throughout June 2021, the Company closed on the acquisition of 48 stores located in Oklahoma from Circle K pursuant to the terms and conditions of an asset purchase agreement.

The aggregate purchase price for the acquisition totaled $ 41,416 , which was paid in cash upon closing using available cash on hand.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

We utilized a third-party valuation specialist to assist in valuing the leases acquired.

Assets acquired:

Inventories $ 5,299

Property and equipment 6,150

Finance lease right-of-use assets 37,086

Operating lease right-of-use assets 24,113

Deferred income taxes 316

Goodwill 31,346

Total assets 104,310

Liabilities assumed:

Accrued expenses and other long-term liabilities 545

Finance lease liabilities 46,576

Operating lease liabilities 15,773

Total liabilities 62,894

Net assets acquired and total consideration paid $ 41,416

The goodwill recognized from this transaction is primarily attributable to the location of the seller's stores in relation to our footprint and expected synergies due, in part, to expanded inside store and fuel offerings.

Almost all of the goodwill acquired as a result of this transaction will be deductible for income tax purposes over 15 years.

The Company recognized approximately $ 146,894 of revenue related to the acquired Circle K locations in the consolidated statements of income for the year ended April 30, 2022.

The amount of net income related to the acquired Circle K locations was not material for the year ended April 30, 2022.

On December 16, 2021, the Company closed on the acquisition of 40 stores from Pilot Corporation pursuant to the terms and conditions of an asset purchase agreement.

The transaction included 39 stores located in Tennessee and one store located in Kentucky.

The aggregate purchase price for the acquisition totaled $ 226,624 , which was paid in cash using available cash on hand and certain incremental proceeds from the $ 150 million term loan, as discussed in Note 3.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

We utilized a third-party valuation specialist to assist in valuing the property and equipment and leases acquired.

Assets acquired:

Cash and cash equivalents $ 95

Inventories 6,556

Prepaid expenses 87

Property and equipment 67,365

Deferred income taxes 311

Operating lease right-of-use assets 28,002

Goodwill 154,223

Total assets 256,639

Liabilities assumed:

Accrued expenses and other long-term liabilities 883

Operating lease liabilities 29,132

Total liabilities 30,015

Net assets acquired and total consideration paid $ 226,624

Almost all of the goodwill acquired as a result of this transaction will be deductible for income tax purposes over 15 years.

The Company recognized approximately $ 98,010 of revenue related to the acquired Pilot locations in the consolidated statements of income for the year ended April 30, 2022.

The amount of net income related to the acquired Pilot locations was not material for the year ended April 30, 2022.

Pro Forma Information

The following unaudited pro forma information presents a summary of our consolidated statements of income as if the Buchanan Energy, Circle K, and Pilot transactions referenced above occurred on May 1, 2020 (amounts in thousands, except per share data):

For the year ended April 30,

Total revenue 13,189,991 9,923,287

Net income 361,373 332,532

Net income per common share

Basic 9.73 8.97

Diluted 9.67 8.90

FAIR VALUE OF FINANCIAL INSTRUMENTS AND LONG-TERM DEBT

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The carrying amount approximates fair value due to the short maturity of these instruments or the recent purchase of the instruments at current rates of interest.

Long-term debt and finance lease obligations:

Long-term debt:

The fair value of the Company’s long-term debt and finance lease obligations (including current maturities) is estimated based on the current rates offered to the Company for debt of the same or similar issues.

The fair value of the Company’s long-term debt and capital lease obligations was approximately $ 1,408,000 and $ 1,341,000 , respectively, at April 30, 2021 and 2020.

The fair value of the Company’s long-term debt was approximately $ 1,508,000 and $ 1,391,000 , respectively, at April 30, 2022 and 2021.

The fair value calculated excludes finance lease obligations of $ 74,234 and $ 14,085 outstanding at April 30, 2022 and April 30, 2021, respectively, which are grouped with long-term debt on the consolidated balance sheets.

Term Loan Facilities

In order to fund the acquisition of Buchanan Energy (see Note 2) the Company drew a senior unsecured term loan in the aggregate principal amount of $ 300 million during the first quarter of fiscal 2022.

During the third quarter, the Company amended its existing credit agreement to (a) provide for a new senior unsecured term loan in the aggregate principal amount of $ 150 million (collectively with the $ 300 million term loan, the "Term Loan Facilities") and (b) decrease the minimum index for LIBOR-based loans, which includes both the Term Loan Facilities and the Revolver Facility, discussed below.

The proceeds of the $ 150 million term loan were, in-part, utilized to fund the acquisition of 40 stores from Pilot Corporation (see Note 2).

Amounts borrowed under the Term Loan Facilities bear interest at variable rates based upon, at the Company’s option, either:

(i) the Adjusted LIBO Rate, plus a margin ranging from 1.55 % to 2.60 %;

or (ii) the ABR Rate, plus a margin ranging from 0.20 % to 1.60 %.

The Company currently has elected the Adjusted LIBO Rate, and there is an option to elect either rate in subsequent interest periods.

The applicable margins are dependent upon the Company's Consolidated Leverage Ratio, as defined in the credit agreement establishing the Term Loan Facilities as calculated quarterly.

The outstanding principal balance is required to be repaid in equal quarterly installments in an amount equal to 1.25 % of the original principal amount, on the last day of each March, June, September and December, with the balance of the Term Loan Facilities due on January 6, 2026.

During the fourth quarter of the fiscal year, the Company made prepayments of $ 167,500 on the Term Loan Facilities.

As a result of the prepayment, the Company has fully paid each of the quarterly installments required and as such, no amounts have been recognized in current maturities and no amounts are due until January 6, 2026.

The Company had an outstanding principal balance of $ 265,625 on the Term Loan Facilities at April 30, 2022.

Revolving Facility

The Company has a committed unsecured revolving credit facility in the aggregate principal amount of $ 450,000 (the "Revolving Facility").

The maturity date for the revolving facility is January 11, 2024.

Amounts borrowed under the Revolving Facility bear interest at variable rates based upon, at the Company’s option, either:

(a) the LIBO Rate adjusted for statutory reserve requirements (but no less than 0.50 %), plus a margin ranging from 1.05 % to 1.85 %;

or (b) an alternate base rate, which is the higher of (i) the prime rate announced by the Administrative Agent, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) the one-month LIBO Rate plus 1.00 %, plus a margin ranging from 0.05 % to 0.85 %.

The Revolving Facility also carries a facility fee of 0.20 % to 0.40 % per annum.

The applicable margins and facility fee are dependent upon the Company’s Consolidated Leverage Ratio, as noted above.

The Company had $ 0 outstanding under the Revolving Facility at April 30, 2022 and April 30, 2021.

The Company has an additional unsecured bank line of credit (the "Bank Line") with availability up to $ 25,000 .

The $ 25,000 availability under the Bank Line is encumbered by a $ 5,492 of letter of credit (refer to Note 10 for further discussion).

The Bank Line bears interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate.

There was $ 0 outstanding at April 30, 2022 and 2021.

The Bank Line is due upon demand.

The carrying amount of the Company’s long-term debt and finance lease obligations by issuance is as follows:

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Finance lease liabilities (Note 7) $ 74,234 $ 14,085

5.22% Senior notes due August 9, 2020 $ — 569,000

3.67 % Senior notes (Series A) due in 7 installments beginning June 17, 2022, and ending June 15, 2028

$ 150,000 150,000

3.75 % Senior notes (Series B) due in 7 installments beginning December 17, 2022 and ending December 18, 2028

50,000 50,000

3.65 % Senior notes (Series C) due in 7 installments beginning May 2, 2025 and ending May 2, 2031

50,000 50,000

3.72 % Senior notes (Series D) due in 7 installments beginning October 28, 2025 and ending October 28, 2031

50,000 50,000

3.51 % Senior notes (Series E) due June 13, 2025

150,000 150,000

3.77 % Senior notes (Series F) due August 22, 2028

250,000 250,000

2.85 % Senior notes (Series G) due August 7, 2030

325,000 325,000

2.96 % Senior notes (Series H) due August 6, 2032

325,000 325,000

Variable rate Term Loan Facilities, due January 6, 2026 265,625 —

Debt issuance costs ( 1,990 ) ( 336 )

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$ 1,663,403 $ 1,361,395

(1) Current maturities is presented gross in the table above, but net of unamortized debt issuance costs of $ 964 on the consolidated balance sheets for the year ended April 30, 2020.

Interest expense is net of interest income of $ 48 , $ 168 , and $ 860 for the years ended April 30, 2022, 2021, and 2020, respectively.

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At April 30, 2022, the Company was in compliance with all such operating and financial covenants.

Listed below are the aggregate maturities of long-term debt, including finance lease obligations, for the 5 years commencing May 1, 2021 and thereafter:

Years ended April 30, Finance Leases Senior Notes Total

2022 $ 2,354 $ — $ 2,354

2023 2,484 20,000 22,484

2024 2,060 32,000 34,060

2025 734 32,000 32,734

Listed below are the aggregate maturities of long-term debt, excluding finance lease obligations (refer to Note 7 for future minimum payments under finance leases), for the 5 years commencing May 1, 2022 and thereafter:

Years ended April 30,

2023 $ 20,000

Thereafter 1,026,000

$ 14,085 $ 1,350,000 $ 1,364,085

On June 30, 2020, the Company entered into a note purchase agreement with respect to the issuance of $ 650,000 aggregate principal amount of senior notes, consisting of:

(i) $ 325,000 aggregate principal amount of 2.85 % Senior Notes, Series G (the “Series G Notes”);

and (ii) $ 325,000 aggregate principal amount of 2.96 % Senior Notes, Series H (the “Series H Notes”) (collectively, the “Notes”).

The Notes were issued on August 7, 2020.

The Series G Notes bear interest at the rate of 2.85 % per annum, payable semi-annually on February 7 and August 7 of each year, and mature on August 7, 2030.

The Series H Notes bear interest at the rate of 2.96 % per annum, payable semi-annually on February 7 and August 7 of each year, and mature on August 6, 2032.

The Company used a portion of the proceeds of the Notes to pay off the $ 569,000 5.22 % senior notes that matured on August 9, 2020.

On November 8, 2020, the Company entered into a commitment letter (“Commitment Letter”) with Goldman Sachs Bank USA (“Goldman”), pursuant to which Goldman committed to lend the Company up to $ 100 million under a new senior unsecured 364-day bridge loan facility (the “Bridge Loan”).

As a result of, and concurrent with the effectiveness of the second amendment of the Credit Agreement discussed below, the commitments under the Commitment Letter were reduced, and are now expired, in accordance with the terms thereof.

Credit Agreement

As noted above, on December 23, 2020, the Company entered into a second amendment (“the Amendment”) to its existing credit agreement dated January 11, 2019, as amended June 30, 2020 (together with the Amendment, the “Credit Agreement”) to:

(a) increase the revolving commitments thereunder to an aggregate principal amount of $ 450 million (the “Revolving Facility Increase”, and together with the existing revolving commitments the “Revolving Facility”);

and (b) provide for a senior unsecured delayed-draw term loan facility in an aggregate principal amount of up to $ 300 million (the “Term Loan Facility”).

Revolving Facility Increase :

The Amendment increased the total borrowing capacity under the Revolving Facility by an aggregate principal amount of $ 150 million, from $ 300 million to $ 450 million.

The maturity date of the Revolving Facility remains unchanged, at January 11, 2024.

Amounts borrowed under the Revolving Facility bear interest at variable rates based upon, at the Company’s option, either:

(a) the LIBO Rate adjusted for statutory reserve requirements (but no less than 0.75 %) (the “Adjusted LIBO Rate”), plus a margin ranging from 1.05 % to 1.85 %;

The Revolving Facility also carries a facility fee of 0.20 % to 0.40 % per annum.

The applicable margins and facility fee are dependent upon the Company’s Consolidated Leverage Ratio, as calculated quarterly in accordance with the Credit Agreement (the “Consolidated Leverage Ratio”).

The Company had $ 0 and $ 120,000 outstanding under the line of credit at April 30, 2021 and 2020, respectively.

Term Loan Facility :

The Amendment also provides for a new senior unsecured delayed-draw term loan facility in an aggregate principal amount of up to $ 300 million.

The Term Loan Facility has a maturity date of January 6, 2026 (the “Term Loan Maturity Date”) and its proceeds may be used to finance the acquisition of Buchanan Energy (see additional discussion at Note 11), as well as working capital needs, capital expenditures, share repurchases and general corporate purposes.

Amounts borrowed under the Term Loan Facility will bear interest at variable rates based upon, at the Company’s option, either:

(i) the Adjusted LIBO Rate, plus a margin ranging from 1.55 % to 2.60 %;

or (ii) the ABR Rate, plus a margin ranging from 0.20 % to 1.60 %.

The Term Loan Facility also carries a facility fee of 0.20 % to 0.40 % per annum.

The applicable margins and facility fee are dependent upon the Consolidated Leverage Ratio.

The outstanding principal balance of the loan drawn on the Term Loan Facility is required to be repaid in equal quarterly installments in an amount equal to 1.25 % of the original principal amount, on the last day of each March, June, September and December following its funding date, with the balance due on the Term Loan Maturity Date.

The Company had not yet drawn on the Term Loan Facility as of April 30, 2021.

Subsequent to fiscal 2021, the Company drew $ 300 million on the Term Loan Facility to partially fund the Buchanan Energy acquisition - refer to Note 11 for additional details.

The Company has an unsecured bank line of credit (the "Bank Line") with availability up to $ 25,000 .

The Bank Line bears interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate (the “Index”).

The interest rate to be applied to the unpaid principal balance of the Bank Line was at a rate of 1.0 % over the Index.

There was $ 0 outstanding at April 30, 2021 and 2020.

The Bank Line is due upon demand .

PREFERRED AND COMMON STOCK

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The Company has 1,000,000 authorized shares of preferred stock, of which 250,000 shares have been designated as Series A Serial Preferred Stock.

No shares have been issued.

No shares of preferred stock have been issued.

Common stock:

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Stock incentive plans:

The 2018 Stock Incentive Plan (the “2018 Plan”) was approved by the Company's shareholders on September 5, 2018 ("the "2018 Plan Effective Date").

The 2018 Plan replaced the 2009 Stock Incentive Plan (the "2009 Plan") under which no new awards are allowed to be granted as of the 2018 Plan Effective Date.

The 2018 Stock Incentive Plan (the “2018 Plan”) was approved by the Company's shareholders on September 5, 2018.

Awards under the 2018 Plan may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other equity-based and equity-related awards.

Each share issued pursuant to a stock option and each share with respect to which a stock-settled stock appreciation right is exercised (regardless of the number of shares actually delivered) is counted as one share against the maximum limit under the 2018 Plan, and each share issued pursuant to an award of restricted stock or restricted stock units is counted as two shares against the maximum limit.

Restricted stock is transferred immediately upon grant (and may be subject to a holding period), whereas restricted stock units have a vesting period that must expire, and in some cases performance or market conditions that must be satisfied before the stock is transferred.

Restricted stock is transferred immediately upon grant (and may be subject to a holding period), whereas restricted stock units have a vesting period that must

expire, and in some cases performance or market conditions that must be satisfied before the stock is transferred.

There were 1,972,306 shares available for grant at April 30, 2022, under the 2018 Plan.

We account for stock-based compensation by estimating the grant date fair value of stock options using the Black Scholes model, and the fair value of time-based and performance-based restricted stock unit awards using the closing price of our common stock on the applicable grant date, or the date on which performance goals for performance-based units are established, if after the grant date.

We account for stock-based compensation by estimating the grant date fair value of time-based and performance-based restricted stock unit awards using the closing price of our common stock on the applicable grant date, or the date on which performance goals for performance-based units are established, if after the grant date.

For market-based awards, we use a Monte Carlo approach to estimate the value of the awards, which simulates the prices of the Company’s and each member of the performance peer groups' common stock price at the end of the relevant performance period, taking into account volatility and the specifics surrounding each total shareholder return metric under the relevant plan.

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Date of Grant Type of Grant Shares Granted Recipients Vesting Date Fair Value at Grant Date

May 24, 2018 Restricted Stock Units 88,846 Key Employees May 24, 2021 $ 8,593

June 8, 2018 Restricted Stock Units (1) 75,402 Officers June 8, 2021 $ 7,571

September 5, 2018 Restricted Stock Units 7,984 Non-Employee Board Members 2019 Annual Shareholders' Meeting Date $ 920

June 4, 2019 Restricted Stock Units 75,959 Key Employees June 4, 2022 $ 9,886

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June 24, 2019 Restricted Stock Units (2) 32,786 CEO Various (2) $ 5,700

September 4, 2019 Restricted Stock Units 5,504 Non-Employee Board Members 2020 Annual Shareholders' Meeting Date $ 919

September 4, 2019 Restricted Stock Units 5,504 Non-Employee Board Members 2020 Annual Shareholders' Meeting $ 919

December 23, 2019 Restricted Stock Units (3) 5,000 CEO Various (3) $ 788

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Fiscal 2021 -Various Restricted Stock Units (6) 94,756 Officers Various (6) $ 17,856

September 2, 2020 Restricted Stock Units 5,240 Non-Employee Board Members 2021 Annual Shareholders' Meeting Date $ 951

September 2, 2020 Restricted Stock Units 5,240 Non-Employee Board Members 2021 Annual Shareholders' Meeting $ 951

Fiscal 2021 -Various Restricted Stock Units (7) 29,890 Key Employees and Officers Various (7) $ 5,153

May 3, 2021 Restricted Stock Units 5,053 Officers June 15, 2021 $ 1,760

Fiscal 2022 -Various Restricted Stock Units 54,525 Key Employees Vests ratably on anniversary date over three-year period $ 11,654

Fiscal 2022 -Various Restricted Stock Units (6) 88,224 Officers Various (6) $ 19,629

September 1, 2021 Restricted Stock Units 5,275 Non-Employee Board Members 2022 Annual Shareholders' Meeting $ 1,081

Fiscal 2022 -Various Restricted Stock Units (7) 1,201 Key Employees and Officers Various (7) $ 227

(1) This grant of restricted stock units ("RSUs") includes time-based, performance-based and market-based awards.

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the final amount earned is based on the satisfaction of certain performance measures over a three-year performance period and will range from 0 % to 200 % of “target".

Total performance-based expense of approximatel y $ 4.2 million for the 2018 grant and $ 6.9 million for the 2019 grant (compared to a grant date fair value of $ 2.8 million and $ 3.4 million, respectively), will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

Total performance-based expense of approximatel y $ 6.9 million (compared to a grant date fair value of $ 3.4 million) will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

The market-based awards incorporate market conditions in determining fair value as of the grant date, and will also range from 0 % to 200 % of "target".

Total market-based expense of approximately $ 2.6 million for the 2018 grant and $ 3.1 million for the 2019 grant, will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

Total market-based expense of approximately $ 2.8 million will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

(2) This grant of RSUs includes time-based awards that vest ratably on each June 24, 2020 through 2022, along with a market-based award vesting June 24, 2022.

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(3) This grant of RSUs includes performance-based awards which are calculated based upon targets achieved over a performance period of January 1, 2020 to December 31, 2020.

If the performance targets are met, the units vest ratably on each January 15, 2021 through 2023.

Now that the performance targets are met, the units vest ratably on each January 15, 2021 through 2023.

(4) These grants of RSUs were issued to various officers throughout the 2020 fiscal year.

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(5) These grants of RSUs were issued to various officers throughout the 2020 fiscal year.

The grants include time-based, performance-based and market-based awards.

The grants include performance-based and market-based awards.

The performance-based awards represent a “target” amount;

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Total market-based expense of approximately $ 177 will be recognized on a straight-line basis over the vesting period.

(6) These grants of RSUs were issued to officers throughout the year.

(6) These grants of RSUs were issued to officers throughout the 2021 and 2022 fiscal years.

The grants include time-based awards and performance-based awards.

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In addition, the performance-based award is subject to the TSR Modifier.

Total performance-based expense of approximately $ 24.1 million (compared to a grant date fair value of $ 13.9 million) will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

(7) These grants of RSUs were issued to officers and key employees throughout the year.

The grants includes primarily time-based awards, as well as a performance-based award.

The time-based awards vest in accordance with the vesting schedules in the award agreements, ranging from June 2021 to June 2023.

The grant also includes one performance-based award that represents a “target” amount;

Total performance-based expense of approximately $ 25.3 million for the 2021 grant and $ 14.0 million for the 2022 grant (compared to a grant date fair value of $ 13.9 million and $ 14.7 million, respectively) will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

(7) These grants of RSUs were issued to officers and key employees throughout the 2021 and 2022 fiscal years.

The grants include primarily time-based awards, as well as a performance-based award.

The time-based awards vest in accordance with the vesting schedules in the award agreements, ranging from June 2021 to March 2024.

The grants also include one performance-based award that represents a “target” amount;

the final amount earned is based on the satisfaction of certain performance measures over a three-year performance period and will range from 0 % to 200 % of the “target".

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Total performance-based expense of approximately $ 2.6 million (compared to a grant date fair value of $ 1.3 million) will be recognized on a straight-line basis over the vesting period, subject to acceleration for retirement provisions.

At April 30, 2021, stock options for 3,000 shares (which expire on June 23, 2021) were outstanding.

All stock option shares issued are previously unissued authorized shares.

Information concerning the issuance of stock options under the 2009 Plan is presented in the following table (no stock option awards have been granted under the 2018 Plan):

of option shares Weighted

average option

exercise price

Outstanding at April 30, 2018 181,673 $ 39.48

Exercised ( 71,546 ) 32.02

Forfeited ( 300 ) 25.26

Outstanding at April 30, 2019 109,827 $ 44.39

Exercised ( 66,638 ) 44.39

Outstanding at April 30, 2020 43,189 $ 44.39

Exercised ( 40,189 ) 44.39

Outstanding at April 30, 2021 3,000 $ 44.39

At April 30, 2021, all outstanding options had an aggregate intrinsic value of $ 533 and a remaining contractual life of 0.17 years.

The weighted average exercise price for all remaining outstanding options is $ 44.39 .

All options are vested as of April 30, 2021.

The aggregate intrinsic value for the total of all options exercised during the year ended April 30, 2021 was $ 5,297 .

Information concerning the issuance of restricted stock units under the 2018 Plan and the 2009 Plan is presented in the following table:

At April 30, 2022, there were no stock options outstanding.

There were 3,000 stock options exercised during the fiscal year ended April 30, 2022, with an aggregate intrinsic value of $ 529 .

Information concerning the issuance of restricted stock units under the 2018 Plan is presented in the following table:

Unvested at April 30, 2019 388,800

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Unvested at April 30, 2022 526,394

Total compensation costs recorded for employees and non-employee board members for the stock options, restricted stock, and restricted stock unit awards for the years ended April 30, 2021, 2020 and 2019 were $ 31,986 , $ 18,129 , and $ 16,410 , respectively.

As of April 30, 2021, there was $ 36,717 of total unrecognized compensation costs related to the 2018 Plan and 2009 Plan for costs related to restricted stock units which are expected to be recognized ratably through fiscal 2023.

During the fourth quarter of the fiscal year ended April 30, 2017, the Company began a share repurchase program, wherein the Company was authorized to repurchase up to an aggregate of $ 300 million of the Company's outstanding common stock.

The share repurchase authorization was valid for a period of two years .

From its inception on March 9, 2017, through May 2018, the company completed the $ 300 million authorization by repurchasing 2,794,192 shares of its common stock.

In March 2018, the Company announced a second share repurchase program with an aggregate $ 300 million share repurchase program.

The share repurchase authorization was valid for a period of two years .

On March 6, 2020, the authorization was extended through the end of the Company’s 2022 fiscal year.

The timing and number of repurchase transactions under the program depends on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements.

The program can be suspended or discontinued at any time.

No repurchases were made on that program in fiscal 2021.

Total compensation costs recorded for employees and non-employee board members for the restricted stock unit awards for the years ended April 30, 2022, 2021 and 2020 were $ 37,976 , $ 31,986 , and $ 18,129 , respectively.

As of April 30, 2022, there was $ 30,514 of total unrecognized compensation costs related to the 2018 Plan for costs related to restricted stock units which are expected to be recognized ratably through fiscal 2025.

On March 7, 2018, the Company announced a share repurchase program, whereby the Company was authorized to repurchase up to an aggregate of $ 300 million of the Company’s outstanding common stock (the "Existing Repurchase Program").

No repurchases have been made under the Existing Repurchase Program and it was set to expire on April 30, 2022.

On, and effective as of, March 3, 2022, the Board authorized an extension and expansion of the Existing Repurchase Program by $ 100 million, for a total amount of up to $ 400 million, exclusive of fees, commissions or other expenses, under which the Company may repurchase its outstanding common stock from time-to-time (the "Updated Repurchase Program");

the Updated Repurchase Program has no set expiration date.

The timing and number of repurchase transactions under the Updated Repurchase Program depends on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements.

The Updated Repurchase Program can be suspended or discontinued at any time.

NET INCOME PER COMMON SHARE

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Diluted earnings per common share $ 9.10 $ 8.38 $ 7.10

There were no options considered antidilutive;

There were no options outstanding at April 30, 2022.

In previous years, there were no options considered antidilutive;

therefore, all options were included in the computation of dilutive earnings per share for fiscal 2021 and fiscal 2020, respectively.

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In addition, the Company had state tax credit carryforwards of approximately $ 1,525 , which begin to expire in 2026.

The valuation allowance for state net operating loss deferred tax assets as of April 30, 2021 and 2020 was $ 0 and $ 47 , respectively.

The valuation allowance for state net operating loss and state tax credit deferred tax assets as of April 30, 2022 and 2021 was $ 250 and $ 0 , respectively.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the deferred tax assets will not be realized.

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Income taxes at the statutory rates 21.0 % 21.0 % 21.0 %

Impact of Tax Reform Act — % — % 0.4 %

Federal tax credits ( 1.8 ) % ( 1.5 ) % ( 1.9 ) %

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For leases with a term of twelve months or less, we have elected to not recognize lease assets and lease liabilities and will recognize lease expense on a straight-line basis over the lease term.

The Company records the operating lease liability in accrued expenses and other long-term liabilities and records the finance lease liability within current maturities of long-term debt and long-term debt and finance lease obligations on the consolidated balance sheets.

We have elected to adopt

the package of practical expedients, as well as the land easement practical expedient.

The Company records operating lease liabilities in accrued expenses and other long-term liabilities and records finance lease liabilities within current maturities of

long-term debt and long-term debt and finance lease obligations on the consolidated balance sheets.

All lessor related activity is considered immaterial to the consolidated financial statements.

The leases initially recorded under ASC 842 were recognized, at the time of adoption, at an amount equal to the present value of the lease payments using the incremental borrowing rate of debt based upon the remaining term of the lease.

New leases are recognized at the present value of the lease payments using the implicit rate in the lease agreement when it is readily determinable.

In the case the implicit rate is not readily determinable, the Company uses the incremental borrowing rate of debt based on the term of the lease.

The Company also has options to renew or extend the current lease arrangement on many of our leases.

In these situations, if it was reasonably certain the lease would be extended, we have included those extensions within the remaining lease payments at the time of measurement.

In the case the implicit rate is not readily determinable, the Company uses our incremental borrowing rate of debt based on the term of the lease.

The Company commonly has options to renew or extend the current lease arrangement on many of our leases.

In these situations, if it is reasonably certain the lease would be extended, we have included those extensions within the remaining lease payments at the time of measurement.

When acquiring leases in a business combination, we retain the lease classification utilized by the seller if it was determined using acceptable methods under ASC 842 .

As part of the allocation of the purchase price in a business combination, lease terms are compared to market terms utilizing an income approach to determine if leases are favorable or unfavorable.

Any favorable or unfavorable leasehold interests identified increase (favorable) or reduce (unfavorable) the right-of-use lease asset and are recognized over the life of the related right-of-use asset.

Lease right-of-use assets outstanding as of April 30, 2022 and 2021 consisted of the following:

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Operating lease right-of-use assets Other assets $ 104,579 $ 20,145

Weighted average remaining lease terms, weighted average discount rates, and supplementary cash flow information for outstanding leases were as follows:

The summary of lease-related costs included on the consolidated statements of income is included below:

Years ended April 30,

2022 2021 2020

Operating lease cost 6,721 2,290 2,299

Finance lease cost:

Amortization of right-of-use assets 4,489 2,870 3,308

Interest on lease liabilities 2,337 612 625

Weighted average remaining lease terms, weighted average discount rates, and supplementary cash flow information or outstanding leases were as follows:

April 30, 2022 April 30, 2021

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Right-of-use assets obtained in exchange for new operating lease liabilities $ 87,723 $ 1,109

Future minimum payments under the finance leases and operating leases with initial or remaining terms of one year or more consisted of the following at April 30, 2021:

Future minimum payments under the finance leases and operating leases consisted of the following at April 30, 2022:

Years ended April 30, Finance leases Operating leases

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Furthermore, we have not derecognized the transferred assets and continue to recognize them in property and equipment on the consolidated balance sheets.

The Company has the right and intends to set-off

any obligations to make payments under the lease, with proceeds due from the industrial revenue bonds.

The Company has the right and intends to set-off any obligations to make payments under the lease, with proceeds due from the industrial revenue bonds.

As of April 30, 2022, we have recognized the full amount of bonds available as property and equipment on the consolidated balance sheets related to this agreement.

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The Company contributions consist of matching amounts in Company stock and are allocated based on Team Member contributions.

Contributions to the 401(k) Plan were $ 10,382 , $ 10,571 , and $ 9,918 for the years ended April 30, 2021, 2020, and 2019, respectively.

Contributions to the 401(k) Plan w ere $ 10,983 , $ 10,382 , and $ 10,571 for the years ended April 30, 2022, 2021, and 2020, respectively.

On April 30, 2022 and 2021, 807,396 and 909,161 shares of common stock, respectively, were held by the trustee of the 401(k) Plan in trust for distribution to eligible participants upon death, disability, retirement, or termination of employment.

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The discount rates used for the year ended April 30, 2021 ranged from 1.36 % to 2.52 %.

The Company expects to pay $ 637 per year for each of the next two years, and $ 354 in the third through fifth years.

The Company expects to pay $ 637 next year, and $ 355 in each of the four years thereafter.

The expense incurred in fiscal 2022, 2021, and 2020 related to those agreements was $ 18 , $ 67 , and $ 269 , respectively.

What changed 10-K

Item 8. Financial Statements and Supplementary Data