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Item 8. Financial Statements and Supplementary Data

2023-06-23 compared with 2022-06-24 · 148 added, 208 removed, 631 unchanged (36% of the section changed)

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

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 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.

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:

(1) relates 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 a 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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

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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, 2023 and 2022, the related consolidated statements of income, shareholders’ equity, and cash flows for each of the years in the three-year period ended April 30, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated June 23, 2023 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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Deferred income taxes 543,598 520,472

Deferred compensation 12,746 15,094

Insurance accruals, net of current portion 32,312 27,957

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Total revenue $ 15,094,475 $ 12,952,594 $ 8,707,189

Cost of goods sold (exclusive of depreciation and amortization, shown separately below) (a) 10,189,880 6,350,754 7,030,612

Cost of goods sold (exclusive of depreciation and amortization, shown separately below) 12,022,069 10,189,880 6,350,754

Operating expenses 2,119,942 1,961,473 1,637,191

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— — ( 57,488 ) ( 57,488 )

Exercise of stock options 3,000 133 — 133

Stock-based compensation (net of tax withholding on employee share-based awards) 151,581 30,625 — 30,625

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Stock-based compensation 47,024 37,976 31,986

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

Loss (gain) on disposal of assets and impairment charges 6,871 ( 1,201 ) 9,680

Deferred income taxes 23,126 82,721 4,123

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Repayments of long-term debt ( 40,970 ) ( 188,537 ) ( 571,661 )

Net (payments) borrowings of short-term debt — ( 120,000 ) 45,000

Repayments of short-term debt — — ( 120,000 )

Payment of debt issuance costs ( 3,940 ) ( 1,149 ) ( 5,525 )

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Payments of cash dividends ( 55,617 ) ( 51,212 ) ( 47,971 )

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

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

Tax withholdings on employee share-based awards ( 16,399 ) ( 17,648 ) ( 8,105 )

Net cash (used in) provided by financing activities ( 116,926 ) 191,587 ( 101,478 )

Net increase (decrease) in cash and cash equivalents 219,991 ( 177,667 ) 258,270

Cash and cash equivalents at beginning of year 158,878 336,545 78,275

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SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

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

Cash paid for interest, net of amount capitalized $ 56,799 $ 54,499 $ 48,508

Cash paid for income taxes, net 90,398 49,565 80,916

Noncash investing and financing activities

Noncash additions from adoption of ASC 842 — — 22,635

Purchased property and equipment in accounts payable 27,905 46,659 9,204

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Casey’s General Stores, Inc.

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

and its subsidiaries (collectively referred to as the "Company") operate 2,521 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 .

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

Certain amounts in prior year have been reclassified to conform to current year presentation.

Use of estimates:

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We consider all highly liquid investments with a maturity at purchase of three months or less to be cash equivalents.

Included in cash equivalents are money market funds and credit card, debit card and electronic benefits transfer transactions that process within three days.

Included in cash equivalents are money market funds, treasury bills, and credit card, debit card and electronic benefits transfer transactions that process within three days.

Receivables :

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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:

Below is a summary of the receivable values at April 30, 2023 and 2022:

Years ended April 30,

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Other 18,717 10,259

Total $ 108,028 $ 79,698

Total receivables $ 120,547 $ 108,028

Inventories and cost of goods sold:

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

For fuel, cost is determined through the use of the first-in, first-out (FIFO) method.

For fuel inventories, cost is determined through the use of the first-in, first-out (FIFO) method.

For merchandise inventories, cost is determined through the use of the last-in, first-out (LIFO) method.

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Merchandise 260,990 264,376

Total inventory $ 396,199 $ 286,598

Total inventories $ 376,085 $ 396,199

The Company often receives vendor allowances on the basis of quantitative contract terms that vary by product and vendor or directly on the basis of purchases made.

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

Renewable Identification Numbers (RINs) are recorded as a reduction in cost of goods sold in the period when the Company commits to a price and agrees to sell the RIN.

The Company does not record an asset on the balance sheet related to RINs that have not been validated and contracted.

Renewable identification numbers (“RINs”) are assigned to gallons of renewable fuels produced and are used to track compliance with the renewable fuel standard.

At times, we purchase fuel components (ethanol, gasoline, biodiesel or diesel) and blend those components into a finished product in a fuel truck.

This process enables the Company to take title to the RIN assigned to each gallon of ethanol or biodiesel produced.

RINs are recorded as a reduction in cost of goods sold at the contracted sales price, in the period when the Company transfers the RIN.

The Company does not record inventories on the balance sheet related to RINs, as they are acquired at no cost to the Company.

The Company includes in cost of goods sold the costs incurred to acquire fuel and merchandise, including excise taxes, less vendor allowances and rebates and RINs.

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As of April 30, 2023 and April 30, 2022, the Company had recognized $ 42,495 and $ 41,337 of capitalized software implementation costs, respectively.

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

Goodwill is tested for impairment at least annually.

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

The outstanding balance is recognized in other assets, net of amortization on the consolidated balance sheets.

The Company has recognized amortization of $ 12,302 in fiscal 2023, $ 9,449 in fiscal 2022 and $ 8,553 in fiscal 2021 within operating expenses on the consolidated statements of income.

As of April 30, 2023 and 2022, there was $ 615,342 and $ 612,934 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).

Goodwill is tested for impairment at least annually.

The Company used a qualitative approach to assess the recoverability of goodwill at year-end.

Management’s analysis of recoverability completed as of the fiscal year-end indicated no evidence of impairment for the years ended April 30, 2023, 2022, and 2021.

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.

As the result of the prior year acquisition of Buchanan Energy, 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 contractual customer relationships are 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, 2023.

As of April 30, 2023 and April 30, 2022, the Company has recognized $ 26,953 and $ 29,027 of contractual customer relationships, which was net of accumulated amortization of $ 4,147 and $ 2,073 respectively.

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

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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 actively 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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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income in the period that includes the enactment date.

The Company calculates its current and deferred tax provision based on estimates and assumptions that could differ from actual results reflected in income tax returns filed in subsequent years.

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Basic earnings per share have been computed by dividing net income by the weighted average shares outstanding during each of the years.

Unvested shares under equity awards are treated as common shares within the basic earnings per share calculation when a Team Member has met certain requirements in the award agreement.

For example, if retirement provisions are satisfied which allow a Team Member to avoid forfeiture of the award upon a normal retirement from the Company, it is included in the basic earnings per share calculation .

Unvested shares under equity awards are treated as common shares within the basic earnings per share calculation when a recipient has met certain requirements in the award agreement.

For example, if retirement provisions are satisfied which allow a recipient to avoid forfeiture of the award upon a normal retirement from the Company, it is included in the basic earnings per share calculation .

The calculation of diluted earnings per share treats stock options and unvested restricted stock units with time-based restrictions as potential common shares to the extent they are dilutive.

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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 $ 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.

The discounted liability was $ 36,978 and $ 28,604 at April 30, 2023 and 2022, respectively, and is recorded in other long-term liabilities on the consolidated balance sheets.

Self-insurance:

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The cost of the award is recognized ratably in the consolidated statements of income over the vesting period of the award, adjusted for certain retirement provisions.

Forfeitures are recognized as they occur.

Additionally, certain awards include performance and market conditions.

The majority of performance-based awards are based on either the achievement of a three-year average return on invested capital (ROIC) or a three-year cumulative earnings before interest, income taxes, depreciation, and amortization.

The majority of performance-based awards are based on either the achievement of a three-year average return on invested capital (ROIC) or three-year cumulative earnings before interest, income taxes, depreciation, and amortization (EBITDA).

For these awards, stock-based compensation expense is estimated based on the probable outcome of shares to be awarded adjusted as necessary at each reporting period.

Additionally, if the Company's relative total shareholder return over the performance period is in the bottom or top quartile of the applicable peer group, the performance-based shares included will be adjusted downward by 25%, or upward by 25%, respectively (the "TSR Modifier").

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

Additionally, if the Company's relative total shareholder return over the performance period is in the bottom or top quartile of the companies comprising the S&P 500, the performance-based shares included will be adjusted downward by 25%, or upward by 25%, respectively (the "TSR Modifier").

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.

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

Segment reporting:

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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 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.

We make specific disclosures concerning the three broad 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 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 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.

The standard included optional guidance for a limited period of time to help ease the burden in accounting for the effects of reference rate reform.

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

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 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 September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50).

The standard included guidance related to supplier finance programs and requires the buyer in a supplier finance program to disclose qualitative and quantitative information about the program.

The new standard is effective for the Company on May 1, 2023.

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.

Of the 207 stores acquired, 204 were re-opened as a Casey's store during the 2022 fiscal year, and the remaining 3 will be opened during the 2023 fiscal year.

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

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

The standard extends the period of time preparers can utilize the reference rate reform relief guidance in Topic 848, and became effective immediately.

During the year, we entered into a new credit agreement which, in part, removed the LIBO Rate from applicable debt agreements.

See Note 3 for additional information related to the new credit agreement (see “New Credit Agreement” section).

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

A CQUISITIONS

Current Period Acquisitions

During the year ended April 30, 2023, the Company acquired 47 stores, of which 26 stores were acquired from Minit Mart LLC pursuant to the terms and conditions of an asset purchase agreement.

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

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).

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.

Goodwill of $ 2,408 was recognized as the result of the current year acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies.

All of the goodwill associated with these transactions will be deductible for income tax purposes over 15 years.

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.

The aggregate purchase price for the acquisitions totaled $ 85,569 , which was paid in cash upon closing using available cash on hand.

Allocation of the purchase price for the transactions in aggregate for the year ended April 30, 2023, is as follows (in thousands):

Assets acquired:

Inventories $ 3,976

Property and equipment 79,556

Goodwill 2,408

Total assets 85,940

Total liabilities 371

Net assets acquired and total purchase price $ 85,569

The Company recognized approximately $ 17,325 of revenue related to the acquired locations in the consolidated statements of income for the year ended April 30, 2023.

The amount of net income related to the acquired locations was not material for the year ended April 30, 2023.

Pro Forma Information

The following unaudited pro forma information presents a summary of our consolidated results of operations as if the transactions referenced above occurred at the beginning of the first fiscal year of the periods presented (amounts in thousands, except per share data):

For the year ended April 30,

Total revenue $ 15,438,809 $ 13,302,097

Net income $ 447,320 $ 341,235

Net income per common share

Basic $ 12.00 $ 9.18

Diluted $ 11.92 $ 9.13

Prior Period Acquisitions

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.

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 manages 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 2022 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.

We did not 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.

Upon closing, $ 577,242 was paid in cash using available cash on hand, proceeds from a $ 300 million term loan and a draw on a revolving credit facility.

The draw on the revolving credit facility was repaid during the first quarter of the 2022 fiscal year.

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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.

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

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

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Net assets acquired and total consideration paid $ 226,624

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.

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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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 (including current maturities) is estimated based on the current rates offered to the Company for debt of the same or similar issuances which are considered Level 2 inputs.

The fair value of the Company’s long-term debt was approximately $ 1,437,000 and $ 1,508,000 , respectively, at April 30, 2023 and 2022.

The fair value calculated excludes finance lease obligations of $ 95,072 and $ 74,234 outstanding at April 30, 2023 and April 30, 2022, 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.

Prior Credit Agreement

During the fourth quarter, the Company made a $ 15,625 prepayment on the existing term loan facility under its credit agreement dated January 11, 2019, as amended, by and among the Company, the lenders party thereto and Royal Bank of Canada, as administrative agent (the “Prior Credit Agreement”).

On April 21, 2023, the Company subsequently terminated the Prior Credit Agreement, and repaid in full, all outstanding indebtedness thereunder (which as of such date was $ 250,000 under the term loan facility and $ 0 under the revolving credit facility).

New Credit Agreement

On April 21, 2023, the Company entered into a new credit agreement, by among the lenders thereto and Wells Fargo Bank, National Association, as administrative agent (the “New Credit Agreement”), to provide for (a) a $ 250 million unsecured term loan (the “Term Loan Facility”) and (b) an $ 850 million unsecured revolving credit facility (the “Revolving Facility” and together with the Term Loan Facility, the “Credit Facilities”).

The Term Loan Facility was used to refinance the existing term loan under the Prior Credit Agreement, as noted above, and to pay fees and expenses in connection therewith.

The Revolving Facility is available for working capital and other general corporate purposes of the Company and its subsidiaries.

The transaction was primarily treated as a debt modification for accounting purposes.

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

(a) either Term SOFR or Daily Simple SOFR, in each case plus 0.10 % (with a floor of 0.00 %) for the interest period in effect, plus an applicable margin ranging from 1.10 % to 1.70 % or (b) an alternate base rate, which generally equals the highest of (i) the prime commercial lending rate announced by the Administrative Agent as its “prime rate”, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) Adjusted Daily Simple SOFR plus 1.00 %, each plus an applicable margin ranging from 0.10 % to 0.70 % and each with a floor of 1.00 %.

The Revolving Facility carries a facility fee of 0.15 % to 0.30 % per annum.

The applicable margins and facility fee, in each case, are dependent upon the Company’s quarterly Consolidated Leverage Ratio, as defined in the New Credit Agreement.

The outstanding principal balance 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, with the balance of the Credit Facilities due on April 21, 2028.

The New Credit Agreement contains an expansion option permitting the Company to request an increase of either of the Credit Facilities from time to time not to exceed the greater of (a) $ 900 million and (b) 100 % of Consolidated EBITDA (as defined in the New Credit Agreement) of the Company for the four most recently completed fiscal quarters, from the lenders or other financial institutions acceptable to the Company and the administrative agent, upon the satisfaction of certain conditions, including the consent of the lenders whose commitments would increase.

Under the Prior Credit Agreement, the Company had $ 0 outstanding on the revolving facility, and $ 265,625 outstanding on the term loan facility at April 30, 2022.

Under the New Credit Agreement, the Company had $ 0 outstanding on the Revolving Facility and $ 250,000 outstanding on the Term Loan Facility at April 30, 2023.

The Company has an additional unsecured bank line of credit (the "Bank Line") with availability up to $ 25,000 at April 30, 2023.

The $ 25,000 availability under the Bank Line is encumbered by a $ 432 letter of credit.

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, 2023 and 2022.

The Bank Line is due upon demand.

Subsequent to year-end, and effective June 1, 2023, the Bank Line was increased from $ 25,000 to $ 50,000 .

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

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325,000 325,000

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

Variable rate term loan facility, requiring quarterly installments ending April 21, 2028 250,000 265,625

Debt issuance costs ( 1,698 ) ( 1,990 )

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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 1,661,530 shares available for grant at April 30, 2023, under the 2018 Plan.

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.

We recognize these amounts as an operating expense in our consolidated statements of income ratably over the requisite service period using the straight-line method, as adjusted for certain retirement provisions, and updated estimates of shares to be issued under performance-based awards.

All awards have been granted at no cost to the grantee and/or non-employee member of the Board.

The following table summarizes the equity-related grants made during the three-year period ended April 30, 2022:

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

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

June 4, 2019 Restricted Stock Units (1) 59,579 Officers June 4, 2022 $ 9,097

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 $ 919

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

Fiscal 2020 -Various Restricted Stock Units (4) 8,444 Officers Various (4) $ 1,368

Fiscal 2020 -Various Restricted Stock Units (5) 1,763 Officers Various (5) $ 354

Fiscal 2021 -Various Restricted Stock Units 80,050 Key Employees Vests ratably on anniversary date over three-year period $ 13,417

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 $ 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.

The performance-based awards represent 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 “target".

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 $ 2.8 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.

The market-based award incorporates market conditions in determining fair value on the grant date and will range from 0 % to 200 % of target.

Total market-based expense of approximately $ 1.8 million will be recognized on a straight-line basis over the vesting period.

(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.

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.

The grants were comprised of time-based awards and vest in accordance with the vesting schedules in the award agreements, ranging from January 2021 to January 2023.

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

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

The performance-based awards represent 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 “target".

Total performance-based expense of approximately $ 354 (compared to a grant date fair value of $ 177 ) will be recognized on a straight-line basis over the vesting period.

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 $ 177 will be recognized on a straight-line basis over the vesting period.

(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.

The time-based awards vest ratably over a three-year period commencing on the first anniversary of the grant date.

The time-based awards most commonly vest ratably over a three-year period commencing on the first anniversary of the grant date.

The performance-based awards represent 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 “target".

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

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".

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

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, 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:

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." The performance-based awards are also subject to the TSR Modifier (see Note 1 for additional information).

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.

All awards have been granted at no cost to the grantee.

The following table presents a summary of our RSU activity during the three-year period ended April 30, 2023:

Weighted-Average

Grant Date Fair

Shares Value per Share

Unvested at April 30, 2020

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Unvested at April 30, 2023

550,840 $ 212

Total compensation costs recorded for employees and non-employee board members for the restricted stock unit awards for the years ended April 30, 2023, 2022 and 2021 were $ 47,024 , $ 37,976 , and $ 31,986 , 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.

As of April 30, 2023, there was $ 41,422 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 2026, with a weighted average remaining term of 1.0 year.

The fair value of restricted stock unit awards vested for the years ended April 30, 2023, 2022 and 2021 were $ 46,943 , $ 51,046 , and, $ 24,520 , respectively, as of the applicable vest date.

At April 30, 2023, there were no stock options outstanding.

On, and effective as of, March 3, 2022, the Board authorized a share repurchase program, whereby the Company was authorized to repurchase its outstanding common stock from time-to-time, for an aggregate amount of up to $ 400 million, exclusive of fees, commissions or other expenses.

The Repurchase Program has no set expiration date.

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

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

NET INCOME PER COMMON SHARE

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Diluted earnings per common share $ 11.91 $ 9.10 $ 8.38

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.

There were no stock options outstanding at April 30, 2023 and 2022.

In previous years, there were no stock options considered antidilutive;

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

Income tax expense attributable to earnings consisted of the following components:

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Accrued liabilities and reserves $ 7,031 $ 11,699

Deferred revenue 15,565 11,893

Accrued bonus compensation 9,361 7,340

Workers compensation 11,500 9,922

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Equity compensation 8,305 9,567

State net operating losses & tax credits 4,021 928

State net operating losses and tax credits 1,807 4,021

Other 3,551 3,548

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In addition, the Company had state tax credit carryforwards of approximately $ 1,868 , which begin to expire in 2026.

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.

The valuation allowance for state net operating loss and state tax credit deferred tax assets as of April 30, 2023 and 2022 was $ 250 .

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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ASU 2016-09 benefit (stock-based compensation) ( 0.3 ) % ( 1.0 ) % ( 0.6 ) %

Nondeductible executive compensation 1.1 % 1.2 % 0.9 %

Other ( 0.1 ) % 0.5 % ( 0.1 ) %

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Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company had a total of $ 10,259 and $ 9,316 in gross unrecognized tax benefits at April 30, 2022 and 2021, respectively, which is recorded in other long-term liabilities in the consolidated balance sheet.

The Company had a

total of $ 10,957 and $ 10,259 in gross unrecognized tax benefits at April 30, 2023 and 2022, respectively, which is recorded in other long-term liabilities in the consolidated balance sheet.

Of this amount, $ 8,656 represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate.

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Tax years 2013 and forward are subject to audit by state tax authorities depending on open statute of limitations waivers and the tax code of each state.

The Company is a lessee in situations where we lease property and equipment, most commonly land or building, from a lessor.

The Company is a lessee in situations where we lease property and equipment, most commonly land, building or store equipment, from a lessor.

The Company is a lessor in situations where the Company owns land or building and leases a portion or all of the property or equipment to a tenant.

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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 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.

The Company records operating lease liabilities in other 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.

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Present value of net minimum lease payments $ 95,072 $ 105,929

Effective during the third quarter of fiscal year 2020, Casey’s Marketing Company, and the City of Joplin, Missouri (“Joplin”) entered into an agreement in which Joplin agreed to issue up to $ 51.4 million of taxable industrial development revenue bonds for the purpose of acquiring, constructing, improving, purchasing, equipping and installing a warehouse and distribution facility, which is to be developed and used by the Company.

As title transfers to Joplin throughout development and the Company subsequently leases the related asset from Joplin, we have accounted for the transaction under the sale-and-leaseback guidance included in ASC 842-40 .

Effective during the third quarter of fiscal year 2020, Casey’s Marketing Company, and the City of Joplin, Missouri (“Joplin”) entered into an agreement in which Joplin agreed to issue up to $ 51,400 of taxable industrial development revenue bonds for the purpose of acquiring, constructing, improving, purchasing, equipping and installing a warehouse and distribution facility, which has been completed and is currently being used by the Company.

As the title of the development was transferred to Joplin and the Company is subsequently leasing the related asset from Joplin, we have accounted for the transaction under the sale-and-leaseback guidance included in ASC 842-40 .

We have a purchase option included in the lease agreement for below the fair value of the asset, which prevents the transfer of the assets to Joplin from being recognized as a sale.

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As of April 30, 2023, we have recognized the full amount of bonds available as property and equipment on the consolidated balance sheets related to this agreement.

BENEFIT PLANS

The Company provides Team Members with a defined contribution 401(k) Plan.

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Shares held by the 401(k) Plan are treated as outstanding in the computation of net income per common share.

Supplemental executive retirement plan:

The Company has a nonqualified supplemental executive retirement plan (SERP) for two of its former executive officers, one of whom retired April 30, 2003 and the other on April 30, 2008.

The SERP provides for the Company to pay annual retirement benefits, up to 50 % of base compensation until death of the officer.

If death occurs within twenty years of retirement, the benefits become payable to the officer’s spouse (at a reduced level) until the spouse’s death or twenty years from the date of the officer’s retirement, whichever comes first.

The Company recorded the deferred compensation over the term of employment.

The amounts accrued at April 30, 2022 and 2021, respectively, were $ 2,211 and $ 2,866 .

The discount rates were based off of the Company's incremental borrowing rate, and ranged from 3.35 % to 4.18 % for the year ended April 30, 2022.

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

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.

The Company has entered into employment agreements with its Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, each of which require minimum annual compensation, exclusive of incentive payments.

The Company has entered into employment agreements with its Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, each of which require minimum annual compensation.

The Company also has entered into change of control agreements with its Chief Executive Officer and 31 other officers, providing for certain payments in the event of termination in connection with a change of control of the Company, as defined therein.

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We have entered into forward contracts for cheese in order to fix the price per pound for a portion of our expected supply.

As of April 30, 2023, the forward contracts run through July 2023.

The commitment under these contracts is approximately $ 14,574 .

These contracts are not accounted for as derivatives as they meet the normal purchases and sales exclusion under derivative accounting.

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The Company is named as a defendant in a lawsuit filed in the United States District Court for the Northern District of Indiana, titled McColley v.

Casey’s General Stores, Inc.

, in which the plaintiff alleges that the Company misclassified its Store Managers as exempt employees under the Fair Labor Standards Act (FLSA).

Casey’s General Stores, Inc., in which the plaintiff alleges that the Company misclassified its Store Managers as exempt employees under the Fair Labor Standards Act (FLSA).

The complaint seeks unpaid wages, liquidated damages and attorneys’ fees for the plaintiff and all similarly situated Store Managers who worked at the Company from February 16, 2015 to the present.

On March 31, 2021, the Court granted conditional certification, and to-date, 1,953 current and/or former Store Managers (representing less than 1/3 of those eligible) have opted to participate in the lawsuit.

On March 31, 2021, the Court granted conditional certification, and to-date, approximately 1,400 current and/or former Store Managers (representing less than 1/4 of those eligible) remain opted-in to participate in the lawsuit.

The Company believes that adequate provisions have been made for probable losses related to this matter, and that those, and the reasonably possible losses in excess of amounts accrued, where such range of loss can be estimated, are not material to the Company’s financial position, results of operations or cash flows.

The Company believes that its Store Managers are properly classified as exempt employees under the FLSA and it intends to continue to vigorously defend the matter.

At April 30, 2022, the Company was primarily self-insured for workers’ compensation claims in all but two states of its marketing territory.

In 2023, the Company received a $ 15,297 one-time payment from the resolution of a legal matter.

These proceeds were recognized as a reduction to operating expenses in the consolidated statements of income.

At April 30, 2023, the Company was primarily self-insured for workers’ compensation claims in all but two states of its operating territory.

In North Dakota and Ohio, the Company is required to participate in an exclusive, state managed fund for all workers compensation claims.

The Company was also partially self-insured for general liability and auto liability under an agreement that provides for annual stop-loss limits equal to or exceeding $ 2,000 for auto liability and $ 1,000 for general liability and workers' compensation.

To facilitate this agreement, letters of credit approximating $ 5,492 were issued and outstanding at April 30, 2022 on the insurance company’s behalf.

Additionally, the Company is self-insured for its portion of Team Member medical expenses.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data