What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-06-24 compared with 2023-06-23 · 146 added, 208 removed, 571 unchanged (38% of the section changed)

24 unchanged sentences

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

As discussed in Notes 1 and 10 to the consolidated financial statements, at April 30, 2023, the Company was primarily self-insured for workers’ compensation claims.

The self-insurance claim liability for workers’ compensation is determined actuarially based on claims filed and an estimate of claims incurred but not yet reported.

Factors affecting the uncertainty of the claim liability include the (1) loss development factors, which include the development time frame and settlement patterns, and (2) expected loss rates, which include litigation and adjudication direction, and medical treatment and cost trends.

As discussed in Notes 1 and 10 to the consolidated financial statements, the Company reported a self-insurance claim liability of $61,168 thousand, which included the self-insurance claim liability for workers’ compensation.

We identified the assessment of the self-insurance claim liability for workers’ compensation as a critical audit matter.

The evaluation of the key assumptions used to estimate the liability, specifically the loss development factors and expected loss

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

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

Sufficiency of audit evidence over merchandise inventory quantities at store locations

As discussed in Note 1 to the consolidated financial statements, the Company held $306,783 thousand of merchandise inventory as of April 30, 2024, the majority of which was held at 2,658 store locations.

The Company’s processes to track and determine store merchandise inventory quantities involves the interaction of information technology (IT) systems.

We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of merchandise inventory at store locations as a critical audit matter.

Evaluating the sufficiency of audit evidence over quantities of merchandise inventory at store locations required challenging auditor judgment to determine the nature and extent of procedures to be performed over the quantity of merchandise inventory, including determining the number of store locations visited, and also the need to involve IT professionals with specialized skills and knowledge due to the interaction of IT systems that track and record merchandise inventory quantities by store location.

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 process to determine the self-insurance claim liability for workers’ compensation.

This included controls related to the selection of the methods used to determine the liability, and the evaluation of the loss development factors and expected loss rates.

We involved actuarial professionals with specialized skill and knowledge, who assisted in:

• assessing the methods used by the Company by comparing them to generally accepted actuarial methods

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

We applied auditor judgment to determine the nature and extent of procedures to be performed over quantities of merchandise inventory at store locations by evaluating:

• homogeneity of the locations

• historical locations visited and results of prior physical counts

• the Company’s merchandise inventory count results, including results of monitoring and compliance with the count program by store location.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the quantity of merchandise inventory held at store locations, including certain controls related to the Company’s merchandise inventory count process.

We involved IT professionals with specialized skills and knowledge who assisted in testing certain IT application controls, as well as certain controls related to access to programs and data, program changes, interfaces, and computer operations that support the various IT systems involved in tracking and recording merchandise inventory quantities by store location.

We tested the existence and completeness of merchandise inventory by counting inventory quantities on a sample basis through store location visits during the year to evaluate the Company’s inventory records.

In addition, we evaluated the overall sufficiency of audit evidence obtained over the quantities of merchandise inventory at store locations.

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

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Total revenue $ 14,862,913 $ 15,094,475 $ 12,952,594

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

Cost of goods sold (excluding depreciation and amortization, shown separately below) 11,515,002 12,022,069 10,189,880

Operating expenses 2,288,513 2,119,942 1,961,473

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Diluted $ 13.43 $ 11.91 $ 9.10

Dividends declared per share

$ 1.52 $ 1.39 $ 1.32

See accompanying Notes to Consolidated Financial Statements.

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Exercise of stock options 3,000 133 — 133

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

Share-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

2 unchanged sentences

— — ( 57,488 ) ( 57,488 )

Exercise of stock options 3,000 133 — 133

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

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

Balance at April 30, 2023 37,263,248 110,037 2,550,629 2,660,666

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— — ( 64,673 ) ( 64,673 )

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

Repurchase of common stock ( 392,290 ) ( 105,451 ) — ( 105,451 )

Share-based compensation (net of tax withholding on employee share-based awards) 137,530 22,867 — 22,867

Balance at April 30, 2024 37,008,488 $ 27,453 $ 2,987,928 $ 3,015,381

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Amortization of debt issuance costs 1,111 1,789 2,527

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

Change in excess replacement cost over LIFO inventory valuation 12,499 24,231 21,573

Share-based compensation 41,379 47,024 37,976

Loss (gain) on disposal of assets and impairment charges 6,414 6,871 ( 1,201 )

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Proceeds from long-term debt — — 450,000

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

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

Payments of long-term debt and finance lease obligations ( 53,656 ) ( 40,970 ) ( 188,537 )

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

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Payments of cash dividends ( 62,918 ) ( 55,617 ) ( 51,212 )

Repurchase of common stock ( 104,898 ) — —

Tax withholdings on employee share-based awards ( 18,512 ) ( 16,399 ) ( 17,648 )

Net cash (used in) provided by financing activities ( 239,984 ) ( 116,926 ) 191,587

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

Net (decrease) increase in cash and cash equivalents ( 172,387 ) 219,991 ( 177,667 )

Cash and cash equivalents at beginning of year 378,869 158,878 336,545

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generally accepted accounting principles ("U.S.

GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

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Receivables :

Receivables is primarily comprised of balances outstanding from credit card companies which are not processed within three days and balances outstanding from vendor rebates.

Receivables are primarily comprised of balances outstanding from credit card companies which are not processed within three days and balances outstanding from vendor rebates.

The Company records credit card receivables at the time of the related sale to the guest.

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Years ended April 30,

Credit cards $ 46,851 $ 57,724

Vendor rebates $ 87,423 $ 54,979

Credit cards 35,455 46,851

Other 28,915 18,717

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The useful lives utilized for capitalized software implementation costs range from 2 - 13 years.

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

As of April 30, 2024 and 2023, the Company had recognized $ 37,619 and $ 42,495 of capitalized software implementation costs, respectively.

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

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Contractual customer relationships :

As the result of the prior year acquisition of Buchanan Energy, the Company recognized approximately $ 31,100 of contractual customer relationships.

As the result of a prior acquisition, 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 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, 2024.

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.

As of April 30, 2024 and 2023, the Company has recognized $ 24,880 and $ 26,953 of contractual customer relationships, which was net of accumulated amortization of $ 6,220 and $ 4,147 , 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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The Company incurred impairment charges of $ 4,057 in fiscal 2024, $ 3,500 in fiscal 2023, and $ 1,056 in fiscal 2022.

Impairment charges are a component of operating expenses.

Impairment charges are recognized as a component of operating expenses.

Income taxes:

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Revenue recognition:

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.

A portion of revenue from sales that include a redeemable digital box top coupon or points under our Casey’s Rewards program is deferred.

The deferred portion of the sale represents the value of the estimated future redemption of the digital box top coupon or points.

The amounts related to redeemable digital box top coupons and points are deferred until their redemption or expiration.

Revenue related to the digital box top coupons and points issued is expected to be recognized less than one year from the original sale to the guest.

As of April 30, 2023 and April 30, 2022, the Company recognized a contract liability of $ 55,561 and $ 41,577 , respectively, related to the outstanding digital box top coupons and Casey's Rewards points, which is included in other accrued expenses on the consolidated balance sheets.

The Company recognizes retail sales of prepared food and dispensed beverage, grocery and general merchandise, fuel 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 statements of income.

A portion of revenue from sales that include points under our Casey’s Rewards program is deferred.

The deferred portion of the sale represents the value of the estimated future redemption of the points.

The amounts related to points are deferred until their redemption or expiration.

Revenue related to the points issued is expected to be recognized less than one year from the original sale to the guest.

As of April 30, 2024 and 2023, the Company recognized a contract liability of $ 52,934 and $ 55,561 , respectively, related to the outstanding Casey's Rewards program, which is included in other accrued expenses on the consolidated balance sheets.

During fiscal 2024, the digital box top program was discontinued and outstanding digital box tops were converted to points.

Gift card related revenue is recognized as the gift cards are used by the guest.

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, 2023 and April 30, 2022, the Company recognized a liability of $ 17,463 and $ 15,509 , respectively, related to outstanding gift cards, which is included in other accrued expenses on the consolidated balance sheets.

As of April 30, 2024 and 2023, the Company recognized a liability of $ 17,985 and $ 17,463 , 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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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.

The calculation of diluted earnings per share treats unvested restricted stock units with time-based restrictions as potential common shares.

The diluted earnings per share calculation does not take into effect any shares that have not met performance or market conditions as of the reporting period.

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The liability is not discounted.

The balance of our self-insurance reserves was $ 61,168 and $ 53,752 for the years ended April 30, 2023 and 2022, respectively.

The balance of our self-insurance reserves was $ 57,369 and $ 61,168 as of April 30, 2024 and 2023, respectively.

See additional discussion in Note 10.

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The Company accrues for environmental remediation liabilities when it is probable a liability has been incurred and the amount of loss can be reasonably estimated.

At April 30, 2024 and 2023 we had an accrued liability of $ 299 and $ 268 , respectively, which is recorded in other accrued expenses on the consolidated balance sheets.

Derivative instruments:

There were no options or futures contracts as of or during the years ended April 30, 2024, 2023, or 2022.

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

From time to time, we participate in a forward buy of certain commodities.

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

Stock-based compensation:

Stock-based compensation is recorded based upon the fair value of the award on the grant date.

Share-based compensation:

Share-based compensation is recorded based upon the fair value of the award on the grant date.

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.

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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 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.

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, share-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 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 the market-based portion of these 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 share-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 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.

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

Although we can separate revenue 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 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 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 new standard was effective for the Company beginning May 1, 2023.

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.

The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss.

The new standard is effective for the Company's annual periods beginning May 1, 2024, and interim periods beginning May 1, 2025, with early adoption permitted.

The Company is currently evaluating ASU 2023-07 to determine its impact on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

The standard includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The new standard is effective for the Company's annual periods beginning May 1, 2025, with early adoption permitted.

The Company is currently evaluating ASU 2023-09 to determine its impact on our disclosures.

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.

During the year ended April 30, 2024, the Company acquired 112 stores through a variety of transactions, pursuant to the terms and conditions of the individual asset purchase agreements.

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 internal estimates.

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

The purchase price for each transaction was paid in cash upon closing using available cash on hand.

Fair values were determined using Level 3 inputs, which are unobservable inputs that are not corroborated by market data.

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.

Goodwill of $ 37,321 was recognized as the result of the current period acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies.

Almost 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.

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):

The Company incurred total acquisition-related transaction costs of $ 8,920 for fiscal 2024 which are recorded within operating expenses on the consolidated statements of income.

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 majority of other assets, leases and property and equipment acquired.

Assets acquired:

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Property and equipment 279,396

Finance lease right-of-use assets 3,194

Operating lease right-of-use assets 7,201

Other assets 2,137

Goodwill 37,321

Total assets $ 342,600

Liabilities assumed:

Accrued expenses and other long-term liabilities $ 982

Finance lease liabilities 5,004

Operating lease liabilities 7,041

Total liabilities 13,027

Net assets acquired and total purchase price $ 85,569

Net assets acquired and total consideration paid $ 329,573

Payments for acquisition of businesses, net of cash acquired, on the consolidated statements of cash flows includes payments made for acquisitions that are closing shortly after the year-end.

Such payments are not included in the total consideration paid in the table above, as those acquisitions have not yet closed as of the end of the year.

The Company recognized approximately $ 237,529 of revenue related to the acquired locations in the consolidated statements of income for the year ended April 30, 2024.

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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):

The following unaudited pro forma information presents a summary of our consolidated statements of income as if the transactions referenced above occurred at the beginning of fiscal 2023 (amounts in thousands, except per share data):

For the year ended April 30,

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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 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 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 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.

The working capital adjustment was received during the fourth quarter of the 2022 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.

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.

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.

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, was as follows (in thousands):

Assets acquired:

Cash and cash equivalents $ 5,092

Receivables 225

Inventories $ 3,976

Prepaid expenses 150

Property and equipment 79,556

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 2,408

Total assets 85,940

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 371

Net assets acquired and total purchase price $ 85,569

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.

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.

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 a $ 150 million term loan.

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.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND LONG-TERM DEBT

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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.

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 fair value of the Company’s long-term debt was approximately $ 1,375,000 and $ 1,437,000 at April 30, 2024 and 2023, respectively.

The fair value calculated excludes finance lease obligations of $ 101,818 and $ 95,072 outstanding at April 30, 2024 and 2023, respectively, which are grouped with long-term debt on the consolidated balance sheets.

Credit Agreement

In the prior fiscal year, the Company entered into a credit agreement 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 Company's previous term loan under a prior credit agreement, 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:

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

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

The Company had $ 0 outstanding on the Revolving Facility at April 30, 2024 and 2023, and $ 237,500 and $ 250,000 outstanding on the Term Loan Facility at April 30, 2024 and 2023, respectively.

The Company has an additional unsecured bank line of credit (the "Bank Line") with availability of up to $ 50,000 .

As of April 30, 2024, the availability under the Bank Line is encumbered by letters of credits totaling $ 308 .

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 under the Bank Line at April 30, 2024 and 2023.

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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$ 1,582,758 $ 1,620,513

Interest expense is net of interest income of $ 7,823 , $ 48 , and $ 168 for the years ended April 30, 2023, 2022, and 2021, respectively.

Interest expense is also net of interest capitalized of $ 3,631 , $ 2,031 , and $ 4,537 during the years ended April 30, 2023, 2022, and 2021, respectively.

Interest, net on the consolidated statements of income is net of interest income of $ 11,736 , $ 7,823 , and $ 48 for the years ended April 30, 2024, 2023, and 2022, respectively.

Interest, net is also net of interest capitalized of $ 3,363 , $ 3,631 , and $ 2,031 during the years ended April 30, 2024, 2023, and 2022, respectively.

The agreements relating to the above long-term debt contain certain operating and financial covenants.

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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.

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.

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.

At April 30, 2024, there were 1,135,976 shares available for grant under the 2018 Plan.

We account for share-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.

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

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

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.

1 unchanged sentence

The following table presents a summary of our RSU activity during the three-year period ended April 30, 2024.

At April 30, 2024, there were no stock options outstanding.

Weighted-Average

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491,862 $ 229

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.

Total share-based compensation costs recorded for employees and non-employee board members for the restricted stock unit awards for the years ended April 30, 2024, 2023 and 2022 were $ 41,379 , $ 47,024 , and $ 37,976 , respectively.

As of April 30, 2024, there was $ 38,910 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 2027, 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, 2024, 2023 and 2022 were $ 49,631 , $ 46,943 , and, $ 51,046 , 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.

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

During fiscal 2024, the Company repurchased and retired 392,290 shares of our common stock under our share repurchase program for a total of $ 104.9 million, excluding fees, commissions and other costs.

As of April 30, 2024, $ 295.1 million remained available for future purchases under this share repurchase program.

NET INCOME PER COMMON SHARE

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Diluted earnings per common share $ 13.43 $ 11.91 $ 9.10

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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Net deferred tax liability $ ( 596,850 ) $ ( 543,598 )

At April 30, 2023, the Company had net operating loss carryforwards for state income tax purposes of approximately $ 94,897 , which are available to offset future state taxable income.

At April 30, 2024, the Company had net operating loss carryforwards for state income tax purposes of $ 126,681 , which are available to offset future state taxable income.

The state net operating loss carryforwards begin to expire in 2031.

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, 2023 and 2022 was $ 250 .

In addition, the Company had state tax credit carryforwards of $ 2,319 , which begin to expire in 2027.

The valuation allowance for state net operating loss and state tax credit deferred tax assets as of April 30, 2024 and 2023 was $ 550 and $ 250 , 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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Impact of phased-in state law changes, net of federal benefit ( 1.0 ) % ( 0.4 ) % ( 0.8 ) %

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

ASU 2016-09 benefit (share-based compensation) ( 0.1 ) % ( 0.3 ) % ( 1.0 ) %

Nondeductible executive compensation 0.9 % 1.1 % 1.2 %

4 unchanged sentences

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

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.

Unrecognized tax benefits increased $ 698 during the twelve months ended April 30, 2023, due primarily to the increase associated with income tax filing positions for the current year exceeding the decrease related to the expiration of certain statute of limitations.

The Company had a total of $ 10,747 and $ 10,957 in gross unrecognized tax benefits at April 30, 2024 and 2023, respectively, which is recorded in other long-term liabilities in the consolidated balance sheets.

Of this amount, $ 8,490 represents the amount of unrecognized tax

benefits that, if recognized, would impact our effective tax rate.

Unrecognized tax benefits decreased $ 210 during the twelve months ended April 30, 2024, due primarily to the expiration of certain statute of limitation exceeding the increase associated with income tax filing positions for the current year.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

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The total net amount of accrued interest and penalties for such unrecognized tax benefits was $ 350 and $ 386 at April 30, 2024 and 2023, respectively, and is included in other long-term liabilities.

Net interest and penalties included in income tax expense for the twelve month periods ended April 30, 2023 and 2022 was an increase in tax expense of $ 15 and $ 1 , respectively.

Net interest and penalties included in income tax expense for the twelve month periods ended April 30, 2024 and 2023 was an decrease in tax expense of $ 36 and an increase in tax expense of $ 15 , respectively.

A number of years may elapse before an uncertain tax position is audited and ultimately settled.

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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 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.

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 finance lease obligations 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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Lease right-of-use assets outstanding as of April 30, 2024 and 2023 consisted of the following:

Classification April 30, 2023 April 30, 2022

Finance lease right-of-use assets Property and equipment $ 79,344 $ 59,677

Operating lease right-of-use assets Other assets 107,994 104,579

Years ended April 30,

Classification 2024 2023

Finance lease right-of-use assets Net property and equipment $ 83,714 $ 79,344

Operating lease right-of-use assets Other assets, net of amortization 115,819 107,994

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

5 unchanged sentences

Interest on lease liabilities 4,491 2,966 2,337

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

April 30, 2023 April 30, 2022

The summary of cash paid for amounts included in the measurement of liabilities included on the consolidated statements of cash flows and supplementary cash flow information are included below:

Years ended April 30,

2024 2023 2022

Operating cash flows required by operating leases $ 8,693 $ 7,725 $ 5,468

Operating cash flows required by finance leases 4,491 2,966 2,337

Financing cash flows required by finance leases 9,156 5,345 4,162

Right-of-use assets obtained in exchange for new finance lease liabilities $ 17,626 $ 25,166 $ 52,525

Right-of-use assets obtained in exchange for new operating lease liabilities 14,646 14,642 87,723

Weighted average remaining lease terms and weighted average discount rates on outstanding leases were as follows:

Weighted-average remaining lease-term - finance lease 15.4 15.1

2 unchanged sentences

Weighted-average discount rate - operating lease 4.91 % 4.33 %

Right-of-use assets obtained in exchange for new finance lease liabilities $ 25,166 $ 52,525

Right-of-use assets obtained in exchange for new operating lease liabilities 14,642 87,723

Future minimum payments under the finance leases and operating leases consisted of the following at April 30, 2024:

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The Company also has entered into change of control agreements with its Chief Executive Officer and 32 other officers, providing for certain payments in the event of termination in connection with a change of control of the Company, as defined therein.

We have entered into various purchase agreements related to our fuel supply, which include varying volume commitments.

Prices included in the purchase agreements are indexed to market prices.

While volume commitments are included in the contracts, we do not have a history of incurring material penalties related to these provisions.

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

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.

CONTINGENCIES

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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, 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.

On March 31, 2021, the Court granted conditional certification, and to-date, approximately 1,400 current and/or former Store Managers remain opted-in to participate in the McColley lawsuit.

The Company is also named in a related lawsuit filed in the Southern District of Illinois, titled Kessler v.

Casey’s Marketing Company, et al., with substantially the same allegations and seeking the same relief, but instead for the plaintiff and all similarly situated Store Managers located in the state of Illinois from December 19, 2019, to the present.

On October 13, 2023, the Court approved conditional certification, and to-date, approximately 550 current and/or former Store Managers remain opted-in to participate in the Kessler lawsuit.

Discovery in both cases is currently underway.

The Company believes that adequate provisions have been made for probable losses related to these matters, 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 these matters.

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

1 unchanged sentence

At April 30, 2024, 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.

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.

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

At April 30, 2023 and 2022, the Company had $ 61,168 and $ 53,752 , respectively, outstanding for estimated claims relating to self-insurance, the majority of which has been actuarially determined.

At April 30, 2024 and 2023, the Company had $ 57,369 and $ 61,168 , respectively, accrued for estimated claims relating to self-insurance, the majority of which has been actuarially determined.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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