INGLES MARKETS INC 10-K

Item 9A. CONTROLS AND PROCEDURES Conclusion Regarding Disclosure Controls and Procedures The Company maintains disclosure controls and procedures designed to provide reasonable assurance to achieve the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that the Company’s system of controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. As required by Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, under the supervision and with participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2023, the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2023. Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in a reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company’s assets that could have a material adverse effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company has assessed the effectiveness of its internal control over financial reporting as of September 30, 2023, using the criteria described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment of the design and related testing of the Company’s internal control over financial reporting management has concluded that, as of September 30, 2023, the Company maintained effective internal control over financial reporting based on the criteria set forth in the COSO framework. The Company’s independent auditors, Deloitte & Touche LLP, a registered public accounting firm, are appointed by the Audit Committee of the Company’s Board of Directors. Deloitte & Touche LLP has audited and reported on the consolidated financial statements of the Company and the Company’s internal control over financial reporting. The reports of the independent auditors are contained in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There has been no change during the Company’s fiscal year ended September 30, 2023, in the Company’s internal control over financial reporting that was identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) which has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 23 As noted above, management has concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2023. Item 9B. OTHER INFORMATION During the three-month period ended September 30, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement”, as defined in Item 408 of Regulation S-K. [In addition, during the three-month period ended September 30, 2023, we did not adopt or terminate any Rule 10b5-1 trading arrangement.] Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item, including the information concerning the Company’s directors and officers, audit committee, and compliance with Section 16 of the Exchange Act, is incorporated herein by reference to the information to be contained in the Company’s definitive Proxy Statement to be used in connection with the solicitation of proxies for the Company's 2024 annual meeting of stockholders. The definitive Proxy Statement will be filed with the Securities and Exchange Commission (the “Commission”) pursuant to Regulation 14A no later than 120 days after September 30, 2023. The Company has adopted a Code of Ethics that applies to its senior financial officers, including without limitation, its Chief Executive Officer, Chief Financial Officer and Controller. The full text of the Code of Ethics is published on the Company’s website at www.ingles-markets.com under the caption “Corporate Information.” In the event that the Company makes any amendments to, or grants any waivers of, a provision of the Code of Ethics applicable to its principal executive officer, principal financial officer or principal accounting officer, the Company intends to disclose such amendment or waiver on its website. Information on the Company’s website, however, does not form a part of this Annual Report on Form 10-K. Item 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated herein by reference to the information to be contained in the Company’s definitive Proxy Statement referred to above in “Item 10. Directors, Executive Officers and Corporate Governance.” Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated herein by reference to the information to be contained in the definitive Proxy Statement referred to above in “Item 10. Directors, Executive Officers and Corporate Governance.” Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated herein by reference to the information to be contained in the definitive Proxy Statement referred to above in “Item 10. Directors, Executive Officers and Corporate Governance.” Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is incorporated herein by reference to the information to be contained in the definitive Proxy Statement referred to above in “Item 10. Directors, Executive Officers and Corporate Governance.” PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Documents filed as part of this report: 1. The following financial statements of the Registrant are included in response to Item 8 of this Annual Report on Form 10-K: Consolidated Balance Sheets as of September 30, 2023 and September 24, 2022; Consolidated Statements of Income and Other Comprehensive Income for the years ended September 30, 2023, September 24, 2022, and September 25, 2021; Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2023, September 24, 2022, and September 25, 2021; 24 Consolidated Statements of Cash Flows for the years ended September 30, 2023, September 24, 2022, and September 25, 2021; Notes to Consolidated Financial Statements. 2. Exhibits (b) Exhibits: 3.1 Composite Articles of Incorporation of Ingles Markets, Incorporated (included as Exhibit 3.1 to Ingles Markets, Incorporated’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 2022, File No. 0-14706, filed with the Commission on May 5, 2022 and incorporated herein by this reference). 4 3.2 Amended and Restated By-Laws of Ingles Markets, Incorporated (included as Exhibit 99.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on August 30, 2007 and incorporated herein by this reference). 4.1 Articles 4 and 9 of the Articles of Incorporation of Ingles Markets, Incorporated (included as Exhibit 3.1 to Ingles Markets, Incorporated’s Registration Statement on Form S-1, File No. 33-23919, (filed on paper – hyperlink is not required pursuant to Rule 105 of Regulation S-T) and Exhibit 3.3 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 25, 2004, File No. 0-14706, respectively, each of which were previously filed with the Commission and are incorporated herein by this reference). 4.2 Articles 2, 3, 10, 11 and 14 of the Amended and Restated By-Laws of Ingles Markets, Incorporated (included as Exhibit 99.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on August 30, 2007 and incorporated herein by this reference). 4.3 Indenture, dated as of June 17, 2021, by and between Ingles Markets, Incorporated and Truist Bank, as Trustee, governing the 4.000% Senior Notes Due 2031, including the Form of 4.00% Senior Notes Due 2031 (filed as Exhibit 4.1 to Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, filed with the Commission on June 21, 2021 and incorporated herein by this reference). 4.4 * Description of Capital Stock (included as Exhibit 4.5 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 26, 2020, File No. 0-14706, previously filed with the commission and incorporated herein by reference). 10.1 Amended and Restated Ingles Markets, Incorporated Investment/Profit Sharing Plan effective September 29, 2002 (included as Exhibit 10.11 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 28, 2002, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.2 Second Amendment to the Ingles Markets, Incorporated Investment/Profit Sharing Plan dated November 2, 2011 (included as Exhibit 10.5 to the Ingles Markets, Incorporated Annual Report on Form 10-K for the fiscal year ended September 24, 2011, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.3 Ingles Markets, Incorporated Non-qualified Plan dated May 30, 2005 (included as Exhibit 10.5 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 24, 2005, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.4 Ingles Markets, Incorporated Executive Non-qualified Excess Plan amended and restated Effective January 1, 2013, dated November 1, 2012 (included as Exhibit 10.10 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 29, 2012, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 25 10.5 Ingles Markets, Incorporated Investment/Profit Sharing Plan (Amended and Restated effective January 1, 2017) (included as Exhibit 10.9 to the Ingles Markets, Incorporated’s Quarterly Report on Form 10-Q for the quarter ended December 30, 2017, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference ). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.6 Ingles Markets, Incorporated Investment/Profit Sharing Plan Description (included as Exhibit 10.10 to the Ingles Markets, Incorporated’s Quarterly Report on Form 10-Q for the quarter ended December 30, 2017, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference ). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.7 Amendment to Investment/Profit Sharing Plan to Permit In-Plan Roth Transfers (included as Exhibit 10.11 to the Ingles Markets, Incorporated’s Quarterly Report on Form 10-Q for the quarter ended December 30, 2017, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.8 Participation Agreement for Milkco, Inc. (Amended and Restated effective January 1, 2017) (included as Exhibit 10.12 to the Ingles Markets, Incorporated’s Quarterly Report on Form 10-Q for the quarter ended December 30, 2017, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 10.9 Credit Agreement, dated as of June 17, 2021, by and among Ingles Markets, Incorporated, as borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other agents and lenders party thereto (included as Exhibit 10.1 to the Ingles Markets, Incorporated’s Current Report on Form 8-K, File No. 0-14706, previously filed with the Commission on June 21, 2021 and incorporated herein by this reference). (Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) of Form 10-K. ) 21.1 Subsidiaries of Ingles Markets, Incorporated (included as Exhibit 21.1 to Ingles Markets, Incorporated’s Annual Report on Form 10-K for the fiscal year ended September 29, 2012, File No. 0-14706, previously filed with the Commission and incorporated herein by this reference). 31.1 * Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002. 31.2 * Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002. 32.1 * Certification by Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 32.2 * Certification by Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 101 * The following financial information from the Annual Report on Form 10-K for the fiscal year ended September 30, 2023 formatted as Inline XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Income; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Changes in Stockholders’ Equity; and (v) the Notes to the Consolidated Financial Statements. 104 * Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ___________________________________ * Filed herewith. Item 16. FORM 10-K SUMMARY ‎ None. ‎ 26 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Ingles Markets, Incorporated Black Mountain, North Carolina Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Ingles Markets, Incorporated and subsidiaries (the "Company") as of September 30, 2023 and September 24, 2022, the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity, and cash flows for each of the three fiscal years in the period ended September 30, 2023 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and September 24, 2022, and the results of its operations and its cash flows for each of the three fiscal years in the period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 29, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the 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 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 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. Vendor Allowances – Refer to Note 1 to the consolidated financial statements. Critical Audit Matter Description The Company receives funds for a variety of merchandising activities from certain vendors whose products the Company buys for resale in its stores. These incentives and allowances are primarily comprised of volume or purchase based incentives, advertising allowances, slotting fees, and promotional discounts. These allowances generally relate to short term arrangements with vendors, often relating to a period of a month or less and are negotiated on a purchase-by-purchase or transaction-by-transaction basis. Vendor discounts and allowances that relate to buying and merchandising activities are recorded as a reduction of inventory cost and recognized in cost of goods sold when the related inventory is sold. Vendor advertising allowances that represent a reimbursement of specific identifiable incremental costs of advertising the vendor’s specific products are recorded as a reduction to the related expense in the period that the related expense is incurred. We identified vendor allowances as a critical audit matter because of the number and diversity of individual vendors agreements. This required an increased extent of effort when performing procedures to evaluate whether the vendor allowances were recorded in accordance with the terms of the vendor agreements. ‎ 27 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to whether vendor allowances were recorded in accordance with the terms of the vendor agreements included the following, among others: • We tested the operating effectiveness of controls over vendor allowances, including management’s controls over the accrual and recording of vendor allowances as a reduction to the cost of inventory, cost of sales, or advertising expense in accordance with the terms of the vendor agreements. • We selected a sample of transactions and tested for the appropriateness of recorded reductions to inventory, cost of sales or advertising expense. • We selected a sample of vendors and sent confirmations to test the completeness of programs as well as the accuracy of amounts earned and terms of the agreement directly with the vendor. /s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina November 29, 2023 We have served as the Company's auditor since 2012. 28 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Ingles Markets, Incorporated Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Ingles Markets, Incorporated and subsidiaries (the “Company”) as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended September 30, 2023, of the Company and our report dated November 29, 2023, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina November 29, 2023 ‎ 29 INGLES MARKETS, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2023 AND SEPTEMBER 24, 2022 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 328,539,922 $ 267,198,517 Receivables (less allowance for doubtful accounts of $ 143,753 – 2023 and ‎ $ 382,657 – 2022) 107,570,690 97,157,614 Inventories 493,859,775 457,945,539 Other 22,585,958 15,830,032 Total current assets 952,556,345 838,131,702 PROPERTY AND EQUIPMENT, NET 1,431,872,289 1,374,031,169 OPERATING LEASE RIGHT OF USE ASSETS 39,602,202 38,594,968 OTHER ASSETS 49,814,897 44,752,886 TOTAL ASSETS $ 2,473,845,733 $ 2,295,510,725 2023 2022 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 17,526,289 $ 17,620,789 Current portion of operating lease liabilities 7,594,971 7,797,975 Current portion of finance lease liabilities 635,559 — Accounts payable - trade 204,040,546 213,388,385 Accrued expenses and current portion of other long-term liabilities 100,735,784 94,969,902 Total current liabilities 330,533,149 333,777,051 DEFERRED INCOME TAXES 67,187,000 73,578,000 LONG-TERM DEBT 532,631,960 554,287,420 NONCURRENT OPERATING LEASE LIABILITIES 34,016,670 32,794,609 NONCURRENT FINANCE LEASE LIABILITIES 3,059,938 — OTHER LONG-TERM LIABILITIES 47,444,876 41,479,220 Total liabilities $ 1,014,873,593 $ 1,035,916,300 COMMITMENTS AND CONTINGENCIES — — STOCKHOLDERS’ EQUITY: Preferred stock, $ 0.05 par value; 10,000,000 shares authorized; no shares issued or outstanding — — Common stocks: Class A, $ 0.05 par value; 150,000,000 shares authorized; issued and outstanding, ‎ 14,497,075 shares for 2023, 14,377,575 shares for 2022 724,854 718,879 Class B, convertible to Class A, $ 0.05 par value; 100,000,000 shares authorized; ‎ issued and outstanding, 4,497,301 shares for 2023, 4,616,801 shares for 2022 224,865 230,840 Paid-in capital in excess of par value — — Accumulated other comprehensive income 13,233,631 12,406,551 Retained earnings 1,444,788,790 1,246,238,155 Total stockholders’ equity 1,458,972,140 1,259,594,425 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,473,845,733 $ 2,295,510,725 See Notes to Consolidated Financial Statements. 30 INGLES MARKETS, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FISCAL YEARS ENDED SEPTEMBER 30, 2023, SEPTEMBER 24, 2022 AND SEPTEMBER 25, 2021 2023 2022 2021 Net sales $ 5,892,781,732 $ 5,678,835,032 $ 4,987,919,603 Cost of goods sold 4,487,866,518 4,263,066,672 3,684,486,289 Gross profit 1,404,915,214 1,415,768,360 1,303,433,314 Operating and administrative expenses 1,115,380,833 1,040,193,885 963,331,599 Gain from sale or disposal of assets 2,769,751 1,358,109 9,955,890 Income from operations 292,304,132 376,932,584 350,057,605 Other income, net 8,269,117 5,845,479 2,971,629 Interest expense 22,068,290 21,508,135 24,332,143 Loss on early extinguishment of debt — — 1,082,633 Income before income taxes 278,504,959 361,269,928 327,614,458 Income tax expense 67,693,000 88,511,000 77,883,000 Net income $ 210,811,959 $ 272,758,928 $ 249,731,458 Other comprehensive income: Change in fair value of interest rate swap $ 1,094,080 $ 20,951,691 $ 9,031,156 Income tax expense ( 267,000 ) ( 5,119,000 ) ( 2,206,000 ) Other comprehensive income, net of tax 827,080 15,832,691 6,825,156 Comprehensive income $ 211,639,039 $ 288,591,619 $ 256,556,614 Per-share amounts: Class A Common Stock Basic earnings per common share $ 11.35 $ 14.69 $ 13.06 Diluted earnings per common share $ 11.10 $ 14.36 $ 12.73 Class B Common Stock Basic earnings per common share $ 10.32 $ 13.35 $ 11.87 Diluted earnings per common share $ 10.32 $ 13.35 $ 11.87 Cash dividends per common share: Class A $ 0.66 $ 0.66 $ 0.66 Class B $ 0.60 $ 0.60 $ 0.60 See Notes to Consolidated Financial Statements. 31 INGLES MARKETS, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FISCAL YEARS ENDED SEPTEMBER 30, 2023, SEPTEMBER 24, 2022 AND SEPTEMBER 25, 2021 PAID-IN ACCUMULATED CLASS A CLASS B CAPITAL IN OTHER COMMON STOCK COMMON STOCK EXCESS OF COMPREHENSIVE RETAINED SHARES AMOUNT SHARES AMOUNT PAR VALUE LOSS EARNINGS TOTAL Balance, September 26, 2020 14,212,360 $ 710,618 6,047,416 $ 302,371 $ 12,311,249 $ ( 10,251,296 ) $ 816,258,015 $ 819,330,957 Net income — — — — — — 249,731,458 249,731,458 Other comprehensive income net of tax 6,825,156 6,825,156 Cash dividends Class A — — — — — — ( 9,396,169 ) ( 9,396,169 ) Class B — — — — — — ( 3,234,276 ) ( 3,234,276 ) Stock repurchases, at cost — — ( 1,265,400 ) ( 63,270 ) ( 12,311,249 ) — ( 67,624,069 ) ( 79,998,588 ) Common stock conversions 58,975 2,949 ( 58,975 ) ( 2,949 ) — — — — Balance, September 25, 2021 14,271,335 $ 713,567 4,723,041 $ 236,152 $ — $ ( 3,426,140 ) $ 985,734,959 $ 983,258,538 Net income — — — — — — 272,758,928 272,758,928 Other comprehensive income net of tax 15,832,691 15,832,691 Cash dividends Class A — — — — — — ( 9,450,149 ) ( 9,450,149 ) Class B — — — — — — ( 2,805,583 ) ( 2,805,583 ) Common stock conversions 106,240 5,312 ( 106,240 ) ( 5,312 ) — — — — Balance, September 24, 2022 14,377,575 $ 718,879 4,616,801 $ 230,840 $ — $ 12,406,551 $ 1,246,238,155 $ 1,259,594,425 Net income — — — — — — 210,811,959 210,811,959 Other comprehensive income net of tax 827,080 827,080 Cash dividends Class A — — — — — — ( 9,511,647 ) ( 9,511,647 ) Class B — — — — — — ( 2,749,677 ) ( 2,749,677 ) Common stock conversions 119,500 5,975 ( 119,500 ) ( 5,975 ) — — — — Balance, September 30, 2023 14,497,075 $ 724,854 4,497,301 $ 224,865 $ — $ 13,233,631 $ 1,444,788,790 $ 1,458,972,140 See Notes to Consolidated Financial Statements. ‎ 32 INGLES MARKETS, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FISCAL YEARS ENDED SEPTEMBER 30, 2023, SEPTEMBER 24, 2022 AND SEPTEMBER 25, 2021 2023 2022 2021 Cash Flows From Operating Activities: Net income $ 210,811,959 $ 272,758,928 $ 249,731,458 Adjustments to reconcile net income to net cash provided ‎ by operating activities: Depreciation and amortization expense 115,979,172 117,801,654 117,103,658 Non cash operating lease cost 6,878,571 7,935,225 8,006,820 Gain from sale or disposal of assets ( 2,769,751 ) ( 1,358,109 ) ( 9,955,890 ) Loss on early extinguishment of debt — — 1,082,633 Receipt of advance payments on purchases contracts 4,154,945 2,766,995 2,328,167 Recognition of advance payments on purchase contracts ( 3,156,909 ) ( 3,037,321 ) ( 2,889,553 ) Deferred income taxes ( 6,658,000 ) ( 4,309,000 ) ( 2,772,000 ) Changes in operating assets and liabilities Receivables ( 10,413,074 ) ( 2,075,600 ) ( 13,723,657 ) Inventory ( 35,914,236 ) ( 67,992,082 ) ( 23,129,018 ) Other assets ( 10,743,707 ) 2,708,240 ( 3,948,861 ) Operating lease liabilities ( 6,866,749 ) ( 8,316,444 ) ( 8,384,435 ) Accounts payable and accrued expenses 5,109,120 22,615,984 ( 7,152,634 ) Net Cash Provided By Operating Activities 266,411,341 339,498,470 306,296,688 Cash Flows From Investing Activities: Proceeds from sales of property and equipment 3,495,707 2,618,907 17,612,326 Purchase from short term investments — ( 110,210,267 ) ( 295,000,000 ) Proceeds of short term investments — 115,210,267 290,000,000 Capital expenditures ( 173,591,468 ) ( 119,608,974 ) ( 140,597,162 ) Net Cash Used By Investing Activities ( 170,095,761 ) ( 111,990,067 ) ( 127,984,836 ) Cash Flows From Financing Activities: Proceeds from short-term borrowings — — 653,623,780 Payments on short-term borrowings — — ( 692,507,850 ) Debt issuance costs — — ( 5,576,832 ) Proceeds from issuance of bonds — — 350,000,000 Repayment of Financing Lease ( 231,291 ) — — Principal payments on long-term borrowings ( 22,481,560 ) ( 18,367,504 ) ( 327,812,521 ) Stock repurchases — — ( 79,998,588 ) Dividends ( 12,261,324 ) ( 12,255,732 ) ( 12,630,446 ) Net Cash Used By Financing Activities ( 34,974,175 ) ( 30,623,236 ) ( 114,902,457 ) Increase in Cash and Cash Equivalents 61,341,405 196,885,167 63,409,395 Cash and Cash Equivalents at Beginning of Year 267,198,517 70,313,350 6,903,955 Cash and Cash Equivalents at End of Year $ 328,539,922 $ 267,198,517 $ 70,313,350 See Notes to Consolidated Financial Statements. ‎ 33 Ingles Markets, Incorporated and Subsidiaries Notes To Consolidated Financial Statements Fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021 1. Summary of Significant Accounting Policies Nature of Operations – Ingles Markets, Incorporated (“Ingles” or the “Company”), a leading supermarket chain in the southeast United States, operates 198 supermarkets in North Carolina ( 75 ), Georgia ( 65 ), South Carolina ( 35 ), Tennessee ( 21 ), Virginia ( 1 ) and Alabama ( 1 ). Principles of Consolidation – The consolidated financial statements include the accounts of Ingles Markets, Incorporated and its wholly owned subsidiaries, Sky King, Inc., Ingles Markets Investments, Inc., Milkco, Inc., Land O Sky, LLC, Shopping Center Financing, LLC, and Shopping Center Financing II, LLC. All significant inter-company balances and transactions are eliminated in consolidation. Fiscal Year – The Company’s fiscal year ends on the last Saturday in September. Fiscal year 2023 was 53 weeks. Fiscal years 2022 and 2021 each consisted of 52 weeks. Segment Information – The Company operates one primary business segment, retail grocery sales (representing the aggregation of individual retail stores). The “Other” segment includes our remaining operations -- fluid dairy and shopping center rentals. The Company defines its segments as those operations for which the Company’s chief operating decision maker regularly reviews results to analyze performance and allocate resources. New Accounting Pronouncements – 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 ASU provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting in response to the risk of cessation of the London Interbank Offered Rate (“LIBOR”). This amendment provides for optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedging relationships that are affected by LIBOR and other reference rates. The ASU generally allows for hedge accounting to continue if the hedge was highly effective or met other standards prior to reference rate reform. Entities are permitted to apply the amendments to all contracts, cash flow and net investment hedge relationships that existed as of March 12, 2020. The relief provided in this ASU extends through December 31, 2024. The U.S. Dollar LIBOR panel ceased following June 30, 2023, and the Company’s debt agreements and interest rate swaps that utilized LIBOR discontinued the use of LIBOR and adopted the Secured Overnight Financing Rate (“SOFR”), which did not materially impact our consolidated audited financial statements. Cash and Cash Equivalents – Outstanding checks in excess of bank balances are included in the line item “Accounts payable – trade” on the Consolidated Balance Sheets. There were no such balances at September 30, 2023 and September 24, 2022, respectively. At September 30, 2023 demand deposits aggregating approximately $ 323.5 million in five banks exceed the $ 250,000 FDIC insurance limit per bank. Short Term Investments – From time to time, the Company purchases financial products that can be readily converted into cash and the Company accounts for such financial products as short-term investments. Financial products include money market funds, bonds, and mutual funds. The carrying values of the Company’s short-term investments approximate fair value because of their liquidity. Interest Rate Swaps – The Company utilizes interest rate swap contracts to reduce its exposure to fluctuations in variable interest rates applicable to some of its debt instruments. For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions about counterparty risk. The fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data including interest rate curves. The Company has designated its swaps as cash flow hedges, for which the Company records the effective portions of changes in its fair value, net of tax, in other comprehensive income (expense). To the extent interest rate swaps are determined to be ineffective, the Company recognizes the change in the estimated fair value of the swaps in earnings. Allowance for Doubtful Accounts – Accounts receivable are primarily from vendor allowances, customer charges and pharmacy insurance company reimbursements. Accounts receivable are stated net of an allowance for uncollectible accounts, which is determined through analysis of the aging of accounts receivable at the date of the consolidated financial statements and assessments of the collectability based upon historical collection activity adjusted for current conditions. Inventories – Substantially all of the Company’s inventory consists of finished goods. Warehouse inventories are valued at the lower of average cost or market. Store inventories are valued using the retail method under which inventories at cost (and the resulting gross margins) are determined by applying a calculated cost-to-retail ratio to the retail value of inventories. As an integral part of valuing inventory at cost, management makes certain judgments and estimates for gross margins, allowances for vendor consideration, markdowns and shrinkage. Warehousing and distribution costs are not included in the valuation of inventories. The Company reviews its judgments and estimates regularly and makes adjustments where facts and circumstances dictate. 34 Property, Equipment and Depreciation – Property and equipment are stated at cost and depreciated over the estimated useful lives by the straight-line method. Buildings are generally depreciated over 30 years . Store, office and warehouse equipment is generally depreciated over three years to 10 years. Transportation equipment is generally depreciated over three years to five years . Leasehold improvements are depreciated over the shorter of the subject lease term or the useful life of the asset, generally from three years to 30 years. Depreciation and amortization expense totaled $ 116.0 million , $ 117.8 million and $ 117.1 million for fiscal years 2023, 2022 and 2021, respectively. Asset Impairments – The Company accounts for the impairment of long-lived assets in accordance with FASB Accounting Standards Codification (“FASB ASC”) Topic 360. Asset groups are primarily comprised of individual store and shopping center properties. For assets to be held and used, the Company tests for impairment using undiscounted cash flows and calculates the amount of impairment using discounted cash flows. For assets held for sale, impairment is recognized based on the excess of remaining book value over expected recovery value. The recovery value is the fair value as determined by independent quotes or expected sales prices developed by internal associates, less costs to sell. Estimates of future cash flows and expected sales prices are judgments based upon the Company’s experience and knowledge of local operations and cash flows that are projected for several years into the future. These estimates can fluctuate significantly due to changes in real estate market conditions, the economic environment, capital spending decisions and inflation. The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether any indicators of impairment have occurred. Nonqualified Investment Plan – The purpose of the Executive Nonqualified Excess Plan is to provide retirement benefits similar to the Company’s Investment/Profit Sharing Plan to certain of the Company’s management associates who are otherwise subject to limited participation in the 401(k) feature of the Company’s Investment/Profit Sharing Plan. Participant retirement account balances are liabilities of the Company. Assets of the plan are assets of the Company and are held in trust for associates and distributed upon retirement, death, disability, in-service distributions, or termination of employment. In accordance with the trust, the Company may not use these assets for general corporate purposes. Life insurance policies and marketable securities held in the trust are included in the caption “Other assets” in the Consolidated Balance Sheets. The liability to plan participants totaled $ 21.8 million at September 30, 2023 and $ 18.4 million at September 24, 2022. The settlement of this obligation is dependent upon participant elections to withdraw funds, which cannot be predicted. Self-Insurance – The Company is self-insured for workers’ compensation, general liability and group medical and dental benefits. There are risks and uncertainties associated with self-insurance; however, the Company has limited its exposure by maintaining excess liability coverage of $ 1,000,000 per occurrence for workers’ compensation, and for general liability, and $ 500,000 per covered person for medical care benefits for a policy year. Self-insurance liabilities are established based on claims filed and estimates of claims incurred but not reported. The estimates are based on data provided by the respective claims administrators, which is then applied to appropriate actuarial methods. These estimates can fluctuate if historical trends are not predictive of the future. The Company’s self-insurance reserves totaled $ 32.9 million and $ 31.0 million for employee group insurance, workers’ compensation insurance and general liability insurance at September 30, 2023 and September 24, 2022, respectively. These amounts include expected recoveries from excess cost insurance or other sources of $ 4.3 million at September 30, 2023 and $ 4.0 million at September 24, 2022, and are recorded as receivables. The Company is required in certain cases to pledge certificates of deposit or obtain surety bonds to support its self-insured status. The Company carries casualty insurance on only those properties for which it is required to do so. The Company has elected to self-insure its other properties. Income Taxes – The Company accounts for income taxes under FASB ASC Topic 740. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates. The Company accounts for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken on a tax return. The Company files income tax returns with federal and various state jurisdictions. With few exceptions, the Company is no longer subject to federal or state income tax examinations by tax authorities for the years before tax year 2019. Examinations may challenge certain of the Company’s tax positions. Actual results could materially differ from these estimates and could significantly affect the effective tax rate and cash flows in the future years. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not expected to be realized. Gross unrecognized tax benefits as well as interest and penalties related to uncertain tax positions could affect the Company’s effective tax rate. These amounts are insignificant for fiscal years 2023, 2022, and 2021. Pre-Opening Costs – Costs associated with the opening of new stores are expensed when incurred. Per-Share Amounts – The Company calculates earnings per share using the two-class method in accordance with FASB ASC Topic 260. 35 Advertising – The Company expenses advertising as incurred. Advertising and promotion expenses, net of vendor allowance reimbursements, totaled $ 14.6 million, $ 20.8 million and $ 18.6 million for fiscal years 2023, 2022 and 2021, respectively. Use of Estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Such estimates include the allowance for doubtful accounts, various inventory reserves, realizability of deferred tax assets, and self-insurance reserves. Cost of Goods Sold – In addition to the direct product cost, cost of goods sold for the grocery segment includes inbound freight charges and costs of the Company’s distribution network. Milk processing is a manufacturing process. Therefore, cost of goods sold include direct product and production costs, inbound freight, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, and other costs of distribution. Depreciation expense included in costs of goods sold totaled $ 15.2 million, $ 15.0 million and $ 16.4 million for fiscal years 2023, 2022 and 2021, respectively. Operating and Administrative Expenses – Operating and administrative expenses include costs incurred for store and administrative labor, occupancy, depreciation (to the extent not included in Cost of Goods Sold), insurance and general administration. Revenue Recognition – The Company recognizes revenues from grocery segment sales at the point of sale to its customers. Sales taxes collected from customers are not included in reported revenues. Discounts provided to customers by the Company at the point of sale, including discounts provided in connection with loyalty cards, are recognized as a reduction in sales as the products are sold. Product returns are not significant. The Company recognizes fluid dairy revenues at the time the risk of loss shifts to the customer pursuant to our terms of sale. Therefore, approximately 43 % of fluid dairy revenues are recognized when the product is picked up by the customer at our facility. The remaining fluid dairy revenues are recognized when the product is received at the customer’s facility upon delivery via transportation arranged by the Company. Rental income, including contingent rentals, is recognized on the accrual basis. Upfront consideration paid by either the Company as lessor or by the lessee is recognized as an adjustment to net rental income using the straight line method over the term of the lease. Vendor Allowances – The Company receives funds for a variety of merchandising activities from the many vendors whose products the Company buys for resale in its stores. These incentives and allowances are primarily composed of volume or purchase based incentives, advertising allowances, slotting fees, and promotional discounts. The purpose of these incentives and allowances is generally to help defray the costs incurred by the Company for stocking, advertising, promoting and selling the vendors’ products. These allowances generally relate to short term arrangements with vendors, often relating to a period of a month or less, and are negotiated on a purchase-by-purchase or transaction-by-transaction basis. Whenever practical, vendor discounts and allowances that relate to buying and merchandising activities are recorded as a component of item cost in inventory and recognized in merchandise costs when the item is sold. Due to system constraints, the use of the retail method for store inventory, and the nature of certain allowances, it is sometimes not practicable to apply allowances to the item cost of inventory. In those instances, the allowances are applied as a reduction of merchandise costs using a rational and systematic methodology, which results in the recognition of these incentives when the inventory related to the vendor consideration received is sold. Vendor allowances applied as a reduction of merchandise costs totaled $ 128.9 million, $ 110.6 million and $ 116.3 million for the fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021, respectively. Vendor advertising allowances that represent a reimbursement of specific identifiable incremental costs of advertising the vendor’s specific products are recorded as a reduction to the related expense in the period that the related expense is incurred. Vendor advertising allowances recorded as a reduction of advertising expense totaled $ 8.5 million, $ 7.1 million, and $ 8.1 million for the fiscal years ended September 30, 2023, September 24, 2022 and September 25, 2021, respectively. During fiscal years 2022 and 2021, the continuing effects of the COVID-19 pandemic contributed to an increase in the Company’s sales. As a result, vendors offered a lower level of incentives for the Company to sell their products. If vendor advertising allowances were substantially reduced or eliminated, the Company would likely consider other methods of advertising as well as the volume and frequency of its product advertising, which could increase or decrease its expenditures. Similarly, the Company is not able to assess the impact of vendor advertising allowances on the creation of additional revenue; as such allowances do not directly generate revenue for its stores . 36 2. Income Taxes Deferred Income Tax Liabilities and Assets – Deferred income taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax laws and rates. Significant components of the Company’s deferred tax liabilities and assets were as follows: 2023 2022 Deferred tax liabilities: Property and equipment tax/book differences $ 78,008,000 $ 82,457,000 Interest rate swaps 4,278,000 4,011,000 Property tax method 1,462,000 1,450,000 Total deferred tax liabilities 83,748,000 87,918,000 Deferred tax assets: Insurance reserves 5,115,000 4,303,000 Advance payments on purchases contracts 731,000 487,000 Vacation accrual 1,724,000 1,977,000 Inventory 1,777,000 1,571,000 Deferred compensation 5,282,000 4,483,000 Other 1,932,000 1,519,000 Total deferred tax assets 16,561,000 14,340,000 Net deferred tax liabilities $ 67,187,000 $ 73,578,000 Refundable current income taxes totaling $ 8.0 million and $ 4.2 million at September 30, 2023 and September 24, 2022, respectively are included in the line item “Other current assets” on the Consolidated Balance Sheets. Income Tax Expense - Income tax expense differs from the amounts computed by applying the statutory federal rates to income before income taxes. The reasons for the differences were as follows: 2023 2022 2021 Federal tax at statutory rate $ 58,396,000 $ 75,783,000 $ 68,818,000 State income tax, net of federal tax benefits 9,247,000 12,032,000 10,872,000 Federal tax credits ( 1,449,000 ) ( 1,500,000 ) ( 1,700,000 ) Other 1,499,000 2,196,000 ( 107,000 ) Total $ 67,693,000 $ 88,511,000 $ 77,883,000 Current and deferred income tax expense (benefit) was as follows: 2023 2022 2021 Current: Federal $ 61,562,000 $ 76,647,000 $ 66,526,000 State 12,789,000 16,173,000 14,129,000 Total current expense 74,351,000 92,820,000 80,655,000 Deferred: Federal ( 5,802,000 ) ( 3,565,000 ) ( 2,482,000 ) State ( 856,000 ) ( 744,000 ) ( 290,000 ) Total deferred (benefit) expense ( 6,658,000 ) ( 4,309,000 ) ( 2,772,000 ) Total expense $ 67,693,000 $ 88,511,000 $ 77,883,000 3. Property and Equipment Property and equipment, net, consisted of the following: 2023 2022 Land $ 457,048,257 $ 417,414,333 Construction in progress 43,281,401 38,591,661 Buildings 1,414,696,772 1,350,593,056 Store, office and warehouse equipment 1,053,056,285 1,045,266,039 Transportation equipment 78,531,980 75,163,558 Leasehold improvements 60,950,486 60,958,847 Finance lease right-of-use assets 3,656,078 — Total 3,111,221,259 2,987,987,494 Less accumulated depreciation and amortization 1,679,348,970 1,613,956,325 Property and equipment - net $ 1,431,872,289 $ 1,374,031,169 37 4. Property Held for Lease and Rental Income At September 30, 2023, the Company owned and operated 93 shopping centers in conjunction with its supermarket operations. The Company leases a portion of its shopping center properties to third parties. The leases are non-cancelable operating lease agreements for periods ranging up to 20 years. Rental income is included in the line item “Net sales” on the Consolidated Statements of Income. Depreciation on owned properties leased to others and other shopping center expenses are included in the line item “Cost of goods sold” on the Consolidated Statements of Income. 2023 2022 2021 Rents earned on owned and subleased properties: Base rentals $ 24,964,305 $ 20,091,776 $ 19,146,124 Variable rentals 203,823 166,890 271,569 Total 25,168,128 20,258,666 19,417,693 Depreciation on owned properties leased to others ( 7,788,344 ) ( 6,318,888 ) ( 5,855,749 ) Other shopping center expenses ( 3,752,407 ) ( 2,968,660 ) ( 3,299,391 ) Total $ 13,627,377 $ 10,971,118 $ 10,262,553 Owned properties leased or held for lease to others under operating leases by major classes are summarized as follows: September 30, September 24, 2023 2022 Land $ 111,407,692 $ 91,607,085 Buildings 286,022,850 241,280,289 Total 397,430,542 332,887,374 Less accumulated depreciation ( 120,412,929 ) ( 112,986,048 ) Total $ 277,017,613 $ 219,901,326 The above amounts are included on the Consolidated Balance Sheets in the caption “Property and equipment, net.” The following is a schedule of minimum future rental income on non-cancelable operating leases as of September 30, 2023: Fiscal Year 2024 $ 17,423,525 2025 15,644,942 2026 12,295,836 2027 9,476,486 2028 6,968,550 Thereafter 26,637,601 Total minimum future rental income $ 88,446,940 5. Leases and Rental Expense The Company conducts part of its retail operations from leased facilities. The initial term of the leases is generally 20 years. The majority of the leases include one or more renewal options and provide that the Company pay property taxes, utilities, repairs and certain other costs incidental to occupation of the premises. Several leases contain clauses calling for percentage rentals based upon gross sales of the supermarket occupying the leased space. Step rent provisions, escalation clauses, capital improvements and other lease concessions are taken into account in computing lease payments. Operating lease expense is recognized on a straight-line basis over the minimum lease term. Operating Leases - Rent expense for all operating leases of $ 10.6 million, $ 10.9 million and $ 11.1 million for fiscal years 2023, 2022 and 2021, respectively, is included in operating and administrative expenses. This amount included short-term (less than one year) leases, common area expenses, and variable lease costs, all of which are insignificant. Cash paid for lease liabilities in operating activities approximates operating lease cost. Sub-lease rental income of $ 0.3 million for each of fiscal years 2023, 2022 and 2021, is included as a reduction of rental expense. Finance Leases – Finance lease cost of $ 270.7 thousand included amortization expense of $ 231.3 thousand, included in operating and administrative expense, and $ 87.2 thousand of interest expense for fiscal year 2023. No finance lease cost was incurred during fiscal years 2022 and 2021. 38 Future maturities of lease liabilities as of September 30, 2023 were as follows: Fiscal Year Operating Leases Finance Leases 2024 $ 8,752,051 $ 840,000 2025 7,955,926 840,000 2026 6,673,979 840,000 2027 5,823,729 840,000 2028 4,281,763 840,000 Thereafter 19,744,205 101,500 Total lease payments 53,231,653 4,301,500 Less amount representing interest 11,620,013 606,003 Present value of lease liabilities $ 41,611,640 $ 3,695,497 On the Consolidated Balance Sheets, lease extensions exercised during fiscal year 2023 increased the line items “Operating lease right of use assets” and “Noncurrent operating lease liabilities” by $ 7.9 million each during the year ended September 30, 2023. The weighted average remaining lease term for the Company’s operating leases is 12.2 years. New financing leases entered into during fiscal year 2023 increased the line item “Property and equipment” by $ 3.9 million and “Current portion of financing lease liabilities” by $ 0.6 million and “Noncurrent financing lease liabilities” by $ 3.1 million. The weighted average discount rate used to determine operating lease liability balances as of September 30, 2023 was 5.5 %, and was 6.0 % for finance lease liability balances. 6. Supplementary Balance Sheet Information Accrued Expenses and Current Portion of Other Long-Term Liabilities - Accrued expenses and current portion of other long-term liabilities are summarized as follows: 2023 2022 Property, payroll, and other taxes payable $ 25,203,091 $ 23,306,546 Salaries, wages, and bonuses payable 50,836,143 49,619,593 Self-insurance liabilities: Employee group insurance 4,536,309 4,969,709 Workers’ compensation insurance 4,711,748 4,607,267 General liability insurance 4,726,301 3,543,885 Interest 5,111,666 4,590,254 Other 5,610,526 4,332,648 Total accrued expenses and current portion of other long-term liabilities $ 100,735,784 $ 94,969,902 Employee insurance expense, including workers’ compensation and medical care benefits, net of employee contributions, totaled $ 35.2 million, $ 37.0 million and $ 35.5 million for fiscal years 2023, 2022 and 2021, respectively. Other Long-Term Liabilities - Other long-term liabilities are summarized as follows: 2023 2022 Advance payments on purchases contracts $ 2,992,494 $ 1,994,459 Nonqualified investment plan liability 21,768,079 18,445,157 Self-insurance liabilities: Workers’ compensation insurance 13,297,179 13,287,189 General liability insurance 5,628,963 4,552,162 Other 4,804,238 3,942,604 Other long-term liabilities 48,490,953 42,221,571 Less current portion 1,046,077 742,351 Total other long-term liabilities $ 47,444,876 $ 41,479,220 The Company’s fuel operations contain underground tanks for the storage of gasoline and diesel fuel. The Company reviewed FASB Topic ASC 410 and determined that we have a legal obligation to remove tanks at a point in the future and accordingly determined we have met the requirements for an asset retirement obligation. The Company followed the FASB ASC 410 model for determining the asset retirement cost and asset retirement obligation. The amounts recorded are immaterial for each fuel center as well as in the aggregate at September 30, 2023 and September 24, 2022. Advance Payments on Purchases Contracts - The Company has entered into agreements with suppliers whereby payment is received in advance and earned based on purchases of product from these suppliers in the future. The unearned portion, included in other long-term liabilities, will be recognized in the results of operations in accordance with the terms of the contract. 39 7. Long-Term Debt Long-term debt and short-term loans are as follows: 2023 2022 Bonds payable: Senior notes, interest rate of 4.00 %, maturing 2031 $ 350,000,000 $ 350,000,000 Recovery Zone Facility Bonds, maturing 2036 54,440,000 58,970,000 Notes payable due to banks, weighted average interest rate of 6.29 % for 2023 and 2.31 % for 2022 151,069,954 169,021,513 Less unamortized prepaid loan costs ( 5,351,705 ) ( 6,083,304 ) Total long-term debt 550,158,249 571,908,209 Less current portion 17,526,289 17,620,789 Long-term debt, net of current portion $ 532,631,960 $ 554,287,420 The U.S. Dollar LIBOR panel ceased following June 30, 2023, and the Company’s debt agreements and interest rate swaps that utilized LIBOR discontinued the use of LIBOR and adopted SOFR, which did not materially impact our consolidated audited financial statements. In June 2021, the Company issued at par $ 350.0 million aggregate principal amount of 4.00 % senior notes due 2031 (the “Notes”). The Company may redeem all or a portion of the Notes at any time at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the 12-month periods beginning June 15 of the years indicated below: Year 2026 102.000 % 2027 101.333 % 2028 100.667 % 2029 and thereafter 100.000 % Additionally, the Company may also redeem all or part of the Notes at any time prior to June 15, 2026 at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed plus the Applicable Premium (as defined in the indenture governing the Notes), as of, and accrued and unpaid interest to, the redemption date. Additionally, the Company may redeem up to 40 % of the aggregate principal amount of the Notes prior to June 15, 2024 with the net cash proceeds of certain sales of its capital stock at a redemption price equal to 104.0 % of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the date of redemption; provided, that, after such redemption, at least 60 % of the aggregate principal amount of the 2031 Notes originally issued remains outstanding. The Company has a $ 150.0 million line of credit (the “Line”) that matures in June 2026. The Line provides the Company with various interest rate options based on the prime rate, the Federal Funds Rate or SOFR. The Line allows the Company to issue up to $ 10.0 million in letters of credit, of which none were issued at September 30, 2023. The Company is not required to maintain compensating balances in connection with the Line. At September 30, 2023, the Company had no borrowings outstanding under the Line. In December 2010, the Company completed the funding of $ 99.7 million of Recovery Zone Facility Bonds (the “Bonds”) for construction of new warehouse and distribution space adjacent to its existing space in Buncombe County, North Carolina (the “Project”). The final maturity date of the Bonds is January 1, 2036 . Under a Continuing Covenant and Collateral Agency Agreement (the “Covenant Agreement”) between certain financial institutions and the Company, such financial institutions hold the Bonds until December 2029, subject to certain events. Mandatory redemption of the Bonds by the Company in the annual amount of $ 4.5 million began on January 1, 2014. The Company may redeem the Bonds without penalty or premium at any time prior to December 17, 2029. Interest earned by bondholders on the Bonds is exempt from Federal and North Carolina income taxation. The interest rate on the Bonds is equal to SOFR plus a credit spread, adjusted to reflect the income tax exemption. The Company’s obligation to repay the Bonds is collateralized by the Project. The Covenant Agreement incorporates substantially all financial covenants included in the Line. The Notes, the Bonds and the Line contain provisions that under certain circumstances would permit the acceleration of the indebtedness under such instruments or would otherwise permit lending institutions to terminate or withdraw their respective extensions of credit to the Company. Included among the triggering factors permitting the termination or withdrawal of the Line are certain events of default, including both monetary and non-monetary defaults, the initiation of bankruptcy or insolvency proceedings, and the failure of the Company to meet certain financial covenants designated in its loan documents. The Company was in compliance with all financial covenants related to the Notes, the Bonds and Line at September 30, 2023. 40 In September 2017, the Company refinanced approximately $ 60 million of secured borrowing obligations with a SOFR-based amortizing floating rate loan secured by real estate, which matures in October 2027. The Company has an interest rate swap agreement for a current notional amount of $ 24.5 million at a fixed rate of 3.962 %. Under this agreement, the Company pays monthly the fixed rate of 3.962 % and receives the one-month SOFR plus 1.75 %. The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $ 0.5 million and mature October 1, 2027 . In December 2019, the Company closed a $ 155 million SOFR-based amortizing floating rate loan secured by real estate, which matures in January 2030. The Company has an interest rate swap agreement for a current notional amount of $ 124.6 million at a fixed rate of 2.998 %. Under this agreement, the Company pays monthly the fixed rate of 2.998 % and receives the one-month SOFR plus 1.60 %. The interest rate swap effectively hedges floating rate debt in the same amount as the current notional amount of the interest swap. Both the floating rate debt and the interest rate swap have monthly principal amortization of $ 0.65 million and mature in fiscal year 2030. The Company recognizes differences between the variable rate interest payments and the fixed interest rate settlements with the swap counterparties as an adjustment to interest expense each period over the life of the swaps. The Company has designated the swaps as cash flow hedges and records the changes in the estimated fair value of the swaps to other comprehensive income each period. For the fiscal year ended September 30, 2023, the Company recorded $ 0.8 million of other comprehensive income, net of income taxes, in its Consolidated Statements of Comprehensive Income. Unrealized gains of $ 17.5 million are recorded as an asset at fair value in the line “Other Assets” on the Consolidated Balance Sheet as of September 30, 2023. For the fiscal year ended September 24, 2022, the Company recorded $ 15.8 million of other comprehensive income, net of income taxes, in its Consolidated Statements of Comprehensive Income. Unrealized gains of $ 16.4 million are recorded as an asset at fair value in the line “Other Assets” on the Consolidated Balance Sheet as of September 24, 2022. Failure of the swap counterparty to make payments would result in the loss of any potential benefit to the Company under the swap agreement. In this case, the Company would still be obligated to pay the variable interest payments underlying the debt agreements. Additionally, failure of the swap counterparty would not eliminate the Company’s obligation to continue to make payments under the existing swap agreement if it continues to be in a net pay position. At September 30, 2023, property and equipment with an undepreciated cost of approximately $ 257.2 million was pledged as collateral for long-term debt. Long-term debt and Line agreements contain various restrictive covenants requiring, among other things, minimum levels of net worth and maintenance of certain financial ratios. While there are no current restrictions on net income or retained earnings available for the payment of dividends, certain loan agreements contain provisions outlining minimum tangible net worth requirements that restrict the ability of the Company to pay cash dividends in excess of the current annual per share dividends paid on the Company’s Class A and Class B Common Stock. Components of interest costs were as follows: 2023 2022 2021 Total interest costs $ 23,056,378 $ 21,848,860 $ 25,463,076 Interest capitalized ( 988,088 ) ( 340,725 ) ( 1,130,933 ) Interest expense $ 22,068,290 $ 21,508,135 $ 24,332,143 Maturities of long-term debt at September 30, 2023 were as follows: Fiscal Year 2024 $ 18,280,000 2025 18,280,000 2026 18,280,000 2027 18,280,000 2028 12,766,620 Thereafter 469,623,334 Less unamortized prepaid loan costs ( 5,351,705 ) Total $ 550,158,249 8. Stockholders’ Equity The Company has two classes of Common Stock: Class A and Class B. Class A Common Stock is traded on The NASDAQ Global Select Market under the symbol IMKTA. There is no public market for the Company’s Class B Common Stock. However, each share of Class B Common Stock is convertible at any time, at the option of the holder, into one share of Class A Common Stock. Upon any transfers of Class B Common Stock (other than to immediate family members, other eligible holders, and participants in the Investment/Profit Sharing Plan), such stock is automatically converted into Class A Common Stock. The holders of the Class A Common Stock and Class B Common Stock are entitled to dividends and other distributions when declared out of assets legally available therefore, subject to the dividend rights of any preferred stock that may be issued in the future. Each 41 share of Class A Common Stock is entitled to receive a cash dividend and liquidation payment in an amount equal to 110 % of any cash dividend or liquidation payment on Class B Common Stock. Any stock dividend must be paid in shares of Class A Common Stock with respect to Class A Common Stock and in shares of Class B Common Stock with respect to Class B Common Stock. The voting powers, preferences and relative rights of Class A Common Stock and Class B Common Stock are identical in all respects, except that the holders of Class A Common Stock have one vote per share and the holders of Class B Common Stock have ten votes per share. In addition, holders of Class A Common Stock, as a separate class, are entitled to elect 25 % of all directors constituting the Board of Directors (rounded to the nearest whole number). As long as the Class B Common Stock represents at least 12.5 % of the total outstanding Common Stock of both classes, holders of Class B Common Stock, as a separate class, are entitled to elect the remaining directors. The Company’s Articles of Incorporation and Bylaws provide that the Board of Directors can set the number of directors between five and eleven . 9. Earnings Per Common Share The Company calculates earnings per share using the two-class method in accordance with FASB ASC Topic 260. The two-class method of computing basic earnings per share for each period reflects the cash dividends paid per share for each class of stock, plus the amount of allocated undistributed earnings per share computed using the participation percentage which reflects the dividend rights of each class of stock. Diluted earnings per share is calculated assuming the conversion of all shares of Class B Common Stock to shares of Class A Common Stock on a share-for-share basis. The tables below reconcile the numerators and denominators of basic and diluted earnings per share for current and prior periods. Year Ended September 30, 2023 Class A Class B Numerator: Allocated net income Net income allocated, basic $ 163,599,005 $ 47,212,954 Conversion of Class B to Class A shares 47,212,954 — Net income allocated, diluted $ 210,811,959 $ 47,212,954 Denominator: Weighted average shares outstanding Weighted average shares outstanding, basic 14,417,916 4,576,460 Conversion of Class B to Class A shares 4,576,460 — Weighted average shares outstanding, diluted 18,994,376 4,576,460 Earnings per share Basic $ 11.35 $ 10.32 Diluted $ 11.10 $ 10.32 Year Ended Year Ended September 24, 2022 September 25, 2021 Class A Class B Class A Class B Numerator: Allocated net income Net income allocated, basic $ 210,480,738 $ 62,278,190 $ 185,964,771 $ 63,766,687 Conversion of Class B to Class A shares 62,278,190 — 63,766,687 — Net income allocated, diluted $ 272,758,928 $ 62,278,190 $ 249,731,458 $ 63,766,687 Denominator: Weighted average ‎ shares outstanding Weighted average shares outstanding, basic 14,330,809 4,663,567 14,242,276 5,370,894 Conversion of Class B to Class A shares 4,663,567 — 5,370,894 — Weighted average shares outstanding, diluted 18,994,376 4,663,567 19,613,170 5,370,894 Earnings per share Basic $ 14.69 $ 13.35 $ 13.06 $ 11.87 Diluted $ 14.36 $ 13.35 $ 12.73 $ 11.87 42 10. Employee Benefit Plans Investment/Profit Sharing Plan – The purpose of the qualified investment/profit sharing plan is to provide retirement benefits to eligible associates. Assets of the plan, including the Company’s Class B Common Stock, are held in trust for associates and distributed upon retirement, death, disability or termination of employment. Company contributions are discretionary and are determined quarterly by the Board of Directors. The plan includes a 401(k) feature. Company contributions to the plan, included in operating and administrative expenses, were approximately $ 5.7 million, $ 5.0 million and $ 5.1 million for fiscal years 2023, 2022 and 2021, respectively. Nonqualified Investment Plan – The purpose of the Executive Nonqualified Excess Plan is to provide benefits similar to the Company’s Investment/Profit Sharing Plan to certain of the Company’s management associates who are otherwise subject to limited participation in the 401(k) feature of the Company’s Investment/Profit Sharing Plan. Company contributions to the plan, included in operating and administrative expenses, were approximately $ 509,000 , $ 440,000 and $ 375,000 for fiscal years 2023, 2022 and 2021, respectively. Cash Bonuses – The Company pays monthly bonuses to various managerial personnel based on the performance of the operating units managed by these personnel. The Company pays discretionary annual bonuses to certain associates who do not receive monthly performance bonuses. The Company pays discretionary bonuses to certain executive officers based on Company performance. Operating and administrative expenses include bonuses of approximately $ 34.4 million, $ 32.3 million and $ 27.2 million for fiscal years 2023, 2022 and 2021, respectively. The accrued liability for cash bonuses totaled $ 23.6 million at September 30, 2023 and $ 26.0 million at September 24, 2022. These amounts are included in the caption “Accrued expenses and current portion of other long-term liabilities” in the Consolidated Balance Sheets. Medical Care Plan - Medical and dental benefits are provided to qualified associates under a self-insured plan. Expenses under the plan include claims paid, administrative expenses and an estimated liability for claims incurred but not yet paid. 11. Segment Information The Company operates one primary business segment, retail grocery sales (representing the aggregation of individual retail stores). “Other” includes the Company’s remaining operations -- fluid dairy and shopping center rentals. Information about the Company’s operations by lines of business (amounts in thousands) is as follows: 2023 2022 2021 Revenues from unaffiliated customers: Grocery $ 2,062,416 $ 1,940,414 $ 1,762,872 Non-foods 1,326,907 1,204,443 1,136,250 Perishables 1,482,089 1,445,042 1,349,081 Gasoline 792,524 885,801 583,749 Total retail 5,663,936 5,475,700 4,831,952 Other 228,846 203,135 155,968 Total revenues from unaffiliated customers $ 5,892,782 $ 5,678,835 $ 4,987,920 Income before income taxes: Retail $ 263,220 $ 353,006 $ 327,563 Other 29,084 23,927 22,495 Total income from operations 292,304 376,933 350,058 Other income, net 8,269 5,845 2,971 Interest expense 22,068 21,508 24,332 Loss on early extinguishment of debt — — 1,083 Income before income taxes $ 278,505 $ 361,270 $ 327,614 Assets: Retail $ 2,159,883 $ 2,042,730 $ 1,794,160 Other 317,479 255,880 226,762 Elimination of intercompany receivable ( 3,516 ) ( 3,099 ) ( 2,578 ) Total assets $ 2,473,846 $ 2,295,511 $ 2,018,344 Capital expenditures: Retail $ 168,154 $ 106,508 $ 138,005 Other 5,437 13,101 2,592 Total capital expenditures $ 173,591 $ 119,609 $ 140,597 Depreciation and amortization: Retail $ 106,225 $ 109,642 $ 108,745 Other 9,754 8,160 8,359 Total depreciation and amortization $ 115,979 $ 117,802 $ 117,104 43 The “Grocery” category includes grocery, dairy, and frozen foods. The “Non-foods” category includes alcoholic beverages, tobacco, pharmacy, and health/beauty/cosmetic products. The “Perishable” category includes meat, produce, deli and bakery. 12. Commitments and Contingencies Various legal proceedings and claims arising in the ordinary course of business are pending against the Company. In the opinion of management, the ultimate liability, if any, from all pending legal proceedings and claims is not expected to materially affect the Company’s financial position, the results of its operations or its cash flows. Construction commitments at September 30, 2023 totaled $ 3.0 million. The Company expects these commitments to be fulfilled during fiscal year 2024. The Company has entered into supply contracts to provide approximately 85 % of the fuel sold in its fuel centers. Pricing is based on certain market indices at the time of purchase. The suppliers can modify or terminate the contracts if the Company does not meet certain minimum monthly purchase requirements. There have been no other material changes in contractual obligations and commercial commitments subsequent to September 30, 2023 other than as described elsewhere in this Annual Report on Form 10-K. 13. Fair Values of Financial Instruments The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: Cash and cash equivalents: The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents approximate their fair values. Short term investments: The carrying amounts reported in the Consolidated Balance Sheets for short term investments approximate their fair values. Receivables: The carrying amounts reported in the Consolidated Balance Sheets for receivables approximate their fair values. The fair value of the Company’s debt is estimated using valuation techniques under the accounting guidance related to fair value measurements based on observable and unobservable inputs. Observable inputs reflect readily available data from independent sources, while unobservable inputs reflect the Company’s market assumptions. These inputs are classified into the following hierarchy: Level 1 Inputs - Quoted prices for identical assets or liabilities in active markets. Level 2 Inputs - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Inputs - Pricing inputs are unobservable for the assets or liabilities and include situations where there is little, if any, market activity for the assets or liabilities. The inputs into the determination of fair value require significant management judgment or estimation. The carrying amount and fair value of the Company’s debt, interest rate swaps, and non-qualified plan assets at September 30, 2023 is was follows (in thousands): Carrying Amount Fair Value Fair Value Measurements Senior Notes $ 350,000 $ 287,875 Level 2 Facility Bonds 54,440 54,440 Level 2 Secured notes payable and other 145,718 145,718 Level 2 Interest rate swaps derivative contract asset 17,515 17,515 Level 2 Non-qualified retirement plan assets 20,074 20,074 Level 2 The fair values for Level 2 measurements were determined primarily using market yields and taking into consideration the underlying terms of the debt. 44 14. Cash Flow Information Supplemental disclosure of cash flow information is as follows: 2023 2022 2021 Cash paid during the year for: Interest (net of amounts capitalized) $ 21,546,878 $ 21,398,985 $ 26,537,234 Income taxes 78,406,107 87,187,808 77,515,577 Non cash items: Property and equipment additions included in accounts payable 5,067,861 8,724,576 6,920,759 15. Related Party Transactions The Company will from time to time make short-term non-interest bearing loans to the Company’s Investment/Profit Sharing Plan to allow the plan to meet distribution obligations during a time when the plan was prohibited from selling shares of the Company’s Class A Common Stock. At September 30, 2023 there was an aggregate of $ 330,000 of outstanding loans, and there were no such loans outstanding at September 24, 2022. During the twelve months ended September 30, 2023, a limited liability company having Robert P. Ingle II, the Company’s Chairman of the Board, as one of its principals, purchased a shopping center from an unrelated party at which the Company has a long-term lease in place. The Company’s lease was in place prior to such purchase, and the terms of the lease have not changed since it was originally negotiated. During the twelve months ended September 30, 2023, the Company purchased two properties, which join property owned by the Company, for a combined $ 5.8 million from a limited liability company having Mr. Ingle II as one of its principals. In accordance with the Company’s Related Party Transaction policy, independent fair market value appraisals were obtained to determine the purchase price, and the Company’s Audit Committee reviewed and approved the transaction. During the twelve months ended September 30, 2023, the Company and a limited liability company having Mr. Ingle II, as one of its principals swapped adjoining properties in an even exchange. In accordance with the Company’s Related Party Transaction policy, independent fair market value appraisals were obtained, and the Company’s Audit Committee reviewed and approved the transaction ‎ 45 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INGLES MARKETS, INCORPORATED By: /s/ James W. Lanning James W. Lanning President, Chief Executive Officer and Chief Operating Officer (principal executive officer) Date: November 29, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: /s/ Robert P. Ingle, II November 29, 2023 Robert P. Ingle, II, Chairman and Director /s/ James W. Lanning November 29, 2023 James W. Lanning, President, Chief Executive Officer, Chief Operating Officer and Director (principal executive officer) /s/ Patricia E. Jackson November 29, 2023 Patricia E. Jackson, CPA, Vice President-Finance, Chief Financial Officer, and Director (principal financial and accounting officer) /s/ Catherine L. Phillips November 29, 2023 Catherine L. Phillips, CPA, Secretary and Controller /s/ John R. Lowden November 29, 2023 John R. Lowden, Director /s/ Fred D. Ayers November 29, 2023 Fred D. Ayers, Director /s/ Laura Sharp November 29, 2023 Laura Sharp, Director /s/ Brenda S. Tudor November 29, 2023 Brenda S. Tudor, Director /s/ Ernest E. Ferguson November 29, 2023 Ernest E. Ferguson, Director 46