Item 6. SELECTED FINANCIAL DATA

(In thousands, except per share amounts)

Statement of Income Data

	Years ended April 30,
	2019				2018				2017				2016				2015
Total revenue	$	9,352,910			$	8,391,124			$	7,506,587			$	7,122,086			$	7,767,216
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)	7,398,186				6,621,731				5,825,426				5,508,465				6,327,431
Operating expenses	1,391,279				1,283,046				1,172,328				1,053,805				960,424
Depreciation and amortization	244,387				220,970				197,629				170,937				156,111
Interest, net	55,656				50,940				41,536				40,173				41,225
Income before income taxes	263,402				214,437				269,668				348,706				282,025
Federal and state income taxes	59,516				(103,466		)		92,183				122,724				101,397
Net income	$	203,886			$	317,903			$	177,485			$	225,982			$	180,628
Basic earnings per common share	$	5.55			$	8.41			$	4.54			$	5.79			$	4.66
Diluted earnings per common share	$	5.51			$	8.34			$	4.48			$	5.73			$	4.62
Weighted average number of common shares outstanding—basic	36,710				37,778				39,125				39,016				38,743
Weighted average number of common shares outstanding—diluted	36,975				38,132				39,579				39,422				39,104
Dividends declared per common share	$	1.16			$	1.04			$	0.96			$	0.88			$	0.80

Balance Sheet Data

	As of April 30,
	2019				2018				2017				2016				2015
Current assets	410,580				$	396,840			$	350,685			$	325,885			$	305,260
Total assets	$	3,731,376			3,469,927				3,020,102				2,726,148				2,469,965
Current liabilities	590,932				507,850				446,546				387,571				364,889
Long-term debt, net of current maturities	1,283,275				1,291,725				907,356				822,869				838,245
Shareholders’ equity	1,408,769				1,271,141				1,190,620				1,083,463				875,229

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars and gallons in thousands, except per share amounts)

Please read the following discussion of the Company’s financial condition and results of operations in conjunction with the selected historical consolidated financial data and consolidated financial statements and accompanying notes presented elsewhere in this Form 10-K.

Overview

The Company primarily operates convenience stores under the names "Casey's" and “Casey’s General Store” in 16 Midwestern states, primarily in Iowa, Missouri and Illinois. On April 30, 2019, there were a total of 2,146 stores in operation. All but four Casey's Stores offer fuel for sale on a self-serve basis and all carry a broad selection of food (including freshly prepared foods such as pizza, donuts and sandwiches), beverages, tobacco and nicotine products, health and beauty aids, automotive products and other non-food items. We derive our revenue from the retail sale of fuel and the products offered in our stores.

Approximately 56% of all Casey’s Stores were opened in areas with populations of fewer than 5,000 people, while approximately 18% of all stores were opened in communities with populations exceeding 20,000 persons. The Marketing Company operates two distribution centers, through which grocery and general merchandise, and prepared food items are supplied to our stores. One is adjacent to our Corporate Headquarters facility in Ankeny, Iowa. The other was opened in February 2016 in Terre Haute, Indiana. At April 30, 2019, the Company owned the land at 2,120 store locations and the buildings at 2,125 locations, and leased the land at 26 locations and the buildings at 21 locations. The Company’s business is seasonal, and generally the Company experiences higher sales and profitability during the first and second fiscal quarters (May-October), when customers tend to purchase greater quantities of fuel and certain convenience items such as beer, pop and ice.

The following table represents the roll forward of store growth through the fourth quarter of fiscal 2019:

	Store Count
Stores at 4/30/18	2,073
New Store Construction	56
Acquisitions	24
Acquisitions not opened	(2)
Prior Acquisitions opened	5
Closed	(10)
Stores at 4/30/19	2,146

Quarterly and Year-To-Date Summary Results

During the fourth quarter of fiscal 2019, the Company earned $0.68 in diluted earnings per share compared to $0.51 per share for the same quarter a year ago. Fiscal 2019 diluted earnings per share was $5.51 compared to $3.81 last year, or $8.34 when including the one-time benefit of the adoption of the Tax Cuts and Jobs Act.

The fourth quarter results reflected an average margin of approximately 18.6 cents per gallon and a 2.8% decrease in same-store fuel gallons sold (compared to an average margin of 16.3 cents per gallon and a 2.0% increase in same-store fuel gallons sold last year). The Company’s fourth quarter fuel margin included the sale of approximately 18.6 million renewable fuel credits for $3.5 million (compared to 14.8 million credits sold last year for $7.9 million). For the year, we sold 73.1 million renewable fuel credits for $15.1 million. In the prior year we sold 65.9 million credits for $47.5 million. Renewable fuel credit values are driven by market conditions, where credits were trading significantly lower throughout fiscal 2019. For the fiscal year, average fuel margin was 20.3 cents per gallon while same-store gallons decreased 1.7%. In the prior year, average fuel margin was 18.5 cents per gallon while same-store gallons increased 2.3%. Historically, our retail fuel strategy has been to price to the competition, where the timing of retail price changes was driven by local competitive conditions. Over the course of fiscal 2019, the Company, as part of its evolving strategy around fuel price optimization, has been more proactive and balanced in driving changes to market prices to grow gross profit dollars, which has contributed to a higher fuel margin and lower same-store fuel gallons sold. In addition, softer demand in the Midwest adversely impacted same-store fuel gallons sold in the quarter. Same store sales of grocery & other merchandise increased 5.7% and prepared foods & fountain increased 2.0% during the fourth quarter of fiscal 2019, as compared to the same period in the prior year.

Company Initiatives

The Company believes that reducing energy consumption where feasible is a sound long-term business strategy that reduces operating expenses. While individually and in aggregate the financial impact of these initiatives may not be material, implementing them throughout our operations is a part of our overall expense management. As an example, all newly constructed stores use 100 percent high efficiency LED lighting. The Company is also in the process of retrofitting all of our legacy stores with LED lighting. The project was expected to be a four or five year project that should be completed by the end of fiscal 2020. Also, when we perform a major remodel of an existing store, the fluorescent lighting is replaced with LED lighting. Furthermore, new canopies over the fuel pumps are installed with time systems and photo eyes to help control the canopy lighting.

For further information concerning the Company’s operating environment and certain conditions that may affect future performance, see the “Forward-looking Statements” at the end of this Item 7.

Fiscal 2019 Compared with Fiscal 2018

Total revenue for fiscal 2019 increased 11.5% ($961,786) to $9,352,910, primarily due to a 8.8% increase in the price of fuel (which generated an additional $454,594) and number of fuel gallons sold (which generated an additional $248,188), and a

$254,047 increase in grocery & other merchandise and prepared food & fountain. Retail fuel sales for the fiscal year were $5,848,770, an increase of 13.7%. Fuel gallons sold increased 4.4% to 2.3 billion gallons. Inside sales increased 8.0% to $3,443,815, primarily due to operating 73 more stores than one year ago.

Total revenue less cost of goods sold (excluding depreciation and amortization) was 20.9% for fiscal 2019 compared with 21.1% for the prior year. Fuel cents per gallon increased to 20.3 cents in fiscal 2019 from 18.5 cents in fiscal 2018 primarily due to the Company's transition to a more balanced approach to fuel pricing and focus on optimizing gross profit dollars. The grocery & other merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was higher at 32.1% in fiscal 2019 compared to 31.8% in fiscal 2018, due mainly to product mix shift and promotion optimization. The prepared food & fountain revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 62.2% from 61.0% during fiscal 2019, due mainly to strategic price increases, favorable commodity prices, and a product mix shift.

Operating expenses increased 8.4% ($108,233) in fiscal 2019 primarily due to operating 73 more stores than one year ago. The majority of all operating expenses are wages and wage-related costs.

Depreciation and amortization expense increased $23,417 (10.6%) to $244,387 in fiscal 2019 from $220,970 in fiscal 2018. The increase was due primarily to capital expenditures made in fiscal 2019 and fiscal 2018.

The effective tax rate increased to 22.6% in fiscal 2019 from (48.3)% in fiscal 2018. The increase in the effective tax rate was primarily due to the one-time benefit of the adoption of the 2017 Tax Cuts and Jobs Act ("Tax Reform Act") in the prior year.

Net income decreased to $203,886 in fiscal 2019 from $317,903 in fiscal 2018. The decrease was mainly due to the adoption of the Tax Reform Act, which amounted to approximately $173,000 of income upon adoption. This was offset by margin increases in each category in fiscal 2019, operating 73 more stores than one year ago, and improved same store sales metrics inside the store.

Fiscal 2018 Compared with Fiscal 2017

Total revenue for fiscal 2018 increased 11.8% ($884,537) to $8,391,124, primarily due to a 9.3% increase in the price of fuel (which generated an additional $411,656) and number of fuel gallons sold (which generated an additional $320,204), and a $148,989 increase in inside sales (grocery & other merchandise and prepared food & fountain). Retail fuel sales for the fiscal year were $5,145,988, an increase of 16.6%. Fuel gallons sold increased 6.6% to 2.2 billion gallons. Inside sales increased 4.9% to $3,189,768, primarily as a result of a $101,953 increase from stores that were built or acquired after April 30, 2016, and a $22,366 increase from the rollout and expansion of our operating programs in our stores (expanded hours at select locations, stores with pizza delivery, and major remodels).

Total revenue less cost of goods sold (excluding depreciation and amortization) was 21.1% for fiscal 2018 compared with 22.4% for the prior year. The fuel cents per gallon was consistent at 18.5 cents in fiscal 2018 compared to 18.4 in fiscal 2017. The grocery & other merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was slightly higher at 31.8% in fiscal 2018 compared to 31.5% in fiscal 2017, due mainly to product mix shift. The prepared food & fountain revenue less related cost of goods sold (exclusive of depreciation and amortization) decreased to 61.0% from 62.3% during fiscal 2018, due mainly to increases in stales and more promotional activity.

Operating expenses increased 9.4% ($110,718) in fiscal 2018 primarily due to an increase from stores built or acquired after April 30, 2016 ($55,443), and the expansion of our operating programs noted above ($14,153). The majority of all operating expenses are wages and related costs.

Depreciation and amortization expense increased $23,341 (11.8%) to $220,970 in fiscal 2018 from $197,629 in fiscal 2017. The increase was due primarily to capital expenditures made in fiscal 2018 and fiscal 2017.

The effective tax rate decreased to (48.3)% in fiscal 2018 from 34.2% in fiscal 2017. The decrease in the effective tax rate was primarily due to the revaluation of net deferred tax liabilities as of the enactment date of the Tax Reform Act along with a reduction in the federal corporate tax rate from 35% to 30.4% (represents a blended rate as four months of our fiscal year are impacted by the new legislation) on our current fiscal year earnings.

Net income increased to $317,903 in fiscal 2018 from $177,485 in fiscal 2017. The increase was due to a combination of the adoption of the Tax Reform Act, an increase in the number of gallons sold, and slight increases in fuel margin and grocery margin. These were offset by a weaker agricultural economy, which has slowed the growth in customer traffic to stores, particularly inside the store combined with decreases in prepared food and fountain margins and unusual weather patterns compared to prior year.

COMPANY TOTAL REVENUE AND REVENUE LESS COST OF GOODS SOLD (EXCLUDING DEPRECIATION AND AMORTIZATION) BY CATEGORY

	Years ended April 30,
	2019				2018				2017
Total revenue by category
Fuel	$	5,848,770			$	5,145,988			$	4,414,128
Grocery & other merchandise	2,369,521				2,184,147				2,087,349
Prepared food & fountain	1,074,294				1,005,621				953,430
Other	60,325				55,368				51,680
	$	9,352,910			$	8,391,124			$	7,506,587
Revenue less cost of goods sold (excluding depreciation and amortization) by category
Fuel	$	466,107			$	406,811			$	378,347
Grocery & other merchandise	759,817				693,576				657,190
Prepared food & fountain	668,598				613,736				594,024
Other	60,202				55,270				51,600
	$	1,954,724			$	1,769,393			$	1,681,161

INDIVIDUAL STORE COMPARISONS (1)

	Years ended April 30,
	2019				2018				2017
Average retail sales	$	4,449			$	4,150			$	3,817
Average retail inside sales	1,649				1,602				1,561
Average revenue less cost of goods sold (excl. depreciation and amortization) on inside items	679				643				633
Average retail sales of fuel	2,800				2,548				2,256
Average revenue less cost of goods sold (excluding depreciation and amortization) on fuel	223				202				194
Average operating income (2)	281				246				233
Average number of gallons sold	1,097				1,087				1,053

(1)	Individual store comparisons include only those stores that had been in operation for at least one full year and remained open on April 30 of the fiscal year indicated.

(2)	Average operating income represents retail sales less cost of goods sold and operating expenses attributable to a particular store; it excludes federal and state income taxes, and Company operating expenses not attributable to a particular store.

SAME STORE SALES GROWTH BY CATEGORY

	Years ended April 30,
	2019			2018			2017
Fuel gallons (1)	(1.7	)%		2.3	%		2.1	%
Grocery & other merchandise (1) (2)	3.6	%		1.9	%		2.9	%
Prepared food & fountain (2)	1.9	%		1.7	%		4.8	%

(1)	The decline in fuel gallons in fiscal 2019 as compared to fiscal 2018 was a combination of declines in miles driven in the Midwest, along with the Company transition to a more balanced pricing approach that focuses on both gallon movement and margins. The increase in same-store Grocery & other merchandise in 2019 is primarily due to refinements in product offerings and promotional strategies.

(2)	The decline in same store sales growth for grocery & other merchandise and prepared food & fountain for 2018 as compared to 2017 was due primarily to a reduction in customer traffic from a generally weaker agricultural economy, increased competitor promotional activity, and unusual weather patterns as compared to prior year.

The same store sales comparison includes aggregated individual store results for all stores open throughout both periods presented. When comparing quarterly data the store must be open for each entire quarter. When comparing annual data, the store must be open for each entire fiscal year being compared.

Remodeled stores that remained open or were closed for just a very brief period of time (less than a week) during the period being compared remain in the same store sales comparison. If a store is replaced, either at the same location (razed and rebuilt) or relocated to a new location, it is removed from the comparison until the new store has been open for each entire period being compared. Newly constructed and acquired stores do not enter the calculation until they are open for each entire period being compared as well.

Use of Non-GAAP Measures

We define EBITDA as net income before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding the gain or loss on disposal of assets as well as impairment charges. Neither EBITDA nor Adjusted EBITDA are presented in accordance with GAAP.

We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of financial performance and debt service capabilities, and they are regularly used by management for internal purposes including our capital budgeting process, evaluating acquisition targets, and assessing store performance.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as a substitute for net income, cash flows from operating activities or other income or cash flow statement data. These measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

Because non-GAAP financial measures are not standardized, EBITDA and Adjusted EBITDA, as defined by us, may not be comparable to similarly titled measures reported by other companies. It therefore may not be possible to compare our use of these non-GAAP financial measures with those used by other companies.

The following table contains a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months and years ended April 30, 2019 and 2018, respectively:

	Three months ended								Years ended
	April 30, 2019				April 30, 2018				April 30, 2019				April 30, 2018
Net income	25,212				$	19,262			$	203,886			$	317,903
Interest, net	13,749				13,119				55,656				50,940
Depreciation and amortization	62,867				57,402				244,387				220,970
Federal and state income taxes	4,377				(477		)		59,516				(103,466		)
EBITDA	$	106,205			$	89,306			$	563,445			$	486,347
Loss on disposal of assets and impairment charges	225				271				1,384				2,281
Adjusted EBITDA	$	106,430			$	89,577			$	564,829			$	488,628

For the three months ended April 30, 2019, EBITDA and Adjusted EBITDA were up 18.9% and 18.8% respectively, when compared to the same period a year ago. The increase was due primarily to gross profit dollar margin expansion, particularly in the fuel margin, a focus on controlling operating expense growth, and operating 73 more stores than the same period a year ago, offset by decreased fuel gallons sold. For the year ended April 30, 2019, EBITDA and Adjusted EBITDA were up 15.9% and 15.6% respectively. The increase was due primarily to gross profit dollar margin expansion, particularly in the fuel margin, a focus on controlling operating expense growth, and operating 73 more stores than the same period a year ago, offset by decreased fuel gallons sold.

Critical Accounting Policies

Critical accounting policies are those accounting policies that management believes are important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective judgments, often because of the need to estimate the effects of inherently uncertain factors.

Inventory

Inventories, which consist of merchandise and fuel, are stated at the lower of cost or market. For fuel, cost is determined through the use of the first-in, first-out (FIFO) method. For merchandise inventories, cost is determined through the use of the last-in, first-out (LIFO) method.

Long-lived Assets

The Company periodically monitors closed and underperforming stores for an indication that the carrying amount of assets may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recognized to the extent the carrying value of the assets exceeds their estimated fair value. The Company bases the estimated net realizable value of property and equipment on its experience in utilizing and/or disposing of similar assets and on estimates provided by its own and/or third-party real estate experts. Fair value is based on management’s estimate of the future cash flows to be generated and the amount that could be realized from the sale of assets in a current transaction between willing parties, which are considered Level 3 inputs (See Note 3 to the consolidated financial statements). The estimate is derived from offers, actual sale or disposition of assets subsequent to year-end, and other indications of fair value. In determining whether an asset is impaired, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which for the Company is generally on a store-by-store basis. The Company recorded impairment charges of $1,167 in fiscal 2019, $507 in fiscal 2018, and $705 in fiscal 2017, a portion of which was related to replacement store and acquisition activities. Impairment charges are a component of operating expenses.

Self-insurance

We are primarily self-insured for employee healthcare, workers’ compensation, general liability, and automobile claims. The self-insurance claim liability for workers’ compensation, general liability, and automobile claims is determined actuarially at each year-end based on claims filed and an estimate of claims incurred but not yet reported. Actuarial projections of the losses are employed due to the potential of variability in the liability estimates. Some factors affecting the uncertainty of claims include the development time frame, settlement patterns, litigation and adjudication direction, and medical treatment and cost trends. The liability is not discounted. The balances of our self-insurance reserves were $44,334 and $39,777 for the years ended April 30, 2019 and 2018, respectively.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). We adopted the standard on May 1, 2018 using the modified retrospective approach. The Company adopted two changes that affect the timing of recognition of revenues related to gift card breakage income and the redemption of coupon box tops attached to our pizza boxes. The impact related to gift cards was $879, net of $321 of deferred taxes and was an increase to shareholders' equity with a reduction in deferred income. The impact related to box tops was $5,019, net of$1,816 of deferred taxes and was a reduction in shareholders' equity, with an increase in deferred income.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update seeks to increase the transparency and comparability among entities by requiring public entities to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. To satisfy the standard’s objective, a lessee will recognize a right-of-use asset representing its right to use the underlying asset for the lease term and a lease liability for the obligation to make lease payments. Both the right-of-use asset and lease liability will initially be measured at the present value of the lease payments, with subsequent measurement dependent on the classification of the lease as either a finance or an operating lease. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.

In July 2018, the FASB issued ASU 2018-10, Leases (Topic 842) - Codification Improvements, which contains several FASB Codification improvements for ASC Topic 842, including several implementation issues and ASU 2018-11, "Leases (Topic 842) - Targeted Improvements" which provides entities with an additional transition method for implementing ASC Topic 842. Entities have the option to apply the new standard at the adoption date, recognizing a cumulative-effect adjustment to the opening balance of retained earnings along with the modified retrospective approach previously identified, both of which include a number of practical expedients that companies may elect to apply. Under the cumulative-effect adjustment comparative periods would not

be restated. Under the modified retrospective approach leases are recognized and measured under the noted guidance at the beginning of the earliest period presented. The new standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. We will adopt this guidance as of May 1, 2019 using the modified retrospective approach and elect the cumulative-effect adjustment practical expedient. As a result of the transition method selected, the Company will not restate previously reported comparable periods. The effect of the adoption will not be material to our financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other than Inventory. We adopted the standard in the quarter ended July 31, 2018. There was no material impact to the Company for the adoption of this standard.

In January 2017, the FASB issued ASU 2017-01, Business Combinations, Clarifying the Definition of a Business. The standard clarifies the definition of a business and adds guidance to assist entities in the determination of whether an acquisition (or disposal) represents assets or a business. The guidance requires the Company to utilize various criteria to evaluate whether or not an acquisition is a business. First, if substantially all of the fair value of the assets acquired is concentrated in a single asset or a group of similar identifiable assets, the acquired assets do not represent a business. If that is not the case, the update provides further guidance to evaluate if the acquisition represents a business focused on the nature and substance of the inputs and process acquired. The standard is generally expected to reduce the number of business combinations, which may impact the allocation of purchase consideration in future acquisitions. Where it is determined that an acquisition is not a business combination, there would be no resulting goodwill recorded. The Company prospectively adopted this guidance for all future acquisitions in the first quarter of fiscal 2019.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The amendments in the update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The Company early adopted this guidance retrospectively, in the first quarter of fiscal 2019. The adoption did not have a material impact on our consolidated financial statements.

Liquidity and Capital Resources

Due to the nature of our business, cash provided by operations is our primary source of liquidity. We finance our inventory purchases primarily from normal trade credit aided by relatively rapid inventory turnover. This turnover allows us to conduct operations without large amounts of cash and working capital. As of April 30, 2019, the Company’s ratio of current

assets to current liabilities was 0.69 to 1. The ratio at April 30, 2018 and at April 30, 2017 was 0.78 to 1 and 0.82 to 1, respectively. We believe our current $300,000 secured revolver, our $25,000 unsecured bank line of credit, current cash and cash equivalents, and the future cash flow from operations will be sufficient to satisfy the working capital needs of our business.

Net cash provided by operating activities increased $110,817 (26.4%) in the year ended April 30, 2019, primarily due to higher net income (excluding impact of adoption of tax reform), increases in accrued expenses and reduction in income taxes receivable, partially offset by increases in inventory. Cash used in investing activities in the year ended April 30, 2019 decreased $151,505 (24.9%) primarily due to the decreased level of acquisitions and new store construction. Cash flows used in financing activities increased $229,667, primarily due to proceeds from issuance of long-term debt in fiscal 2018, offset by repurchases of common stock that same year.

Capital expenditures represent the single largest use of Company funds. We believe that by reinvesting in stores, we will be better able to respond to competitive challenges and increase operating efficiencies. During fiscal 2019, we expended $462,899 for property and equipment, primarily for construction, acquisition, and remodeling of stores compared with $614,581 in the prior year. In fiscal 2020, we anticipate expending $516,000, primarily from existing cash, funds generated by operations, and long-term debt proceeds for our construction and acquisition of stores.

In January 2019, the Company entered into a new credit agreement that provides for a $300 million unsecured revolving credit facility which includes a $30 million sublimit for letters of credit and a $30 million sublimit for swingline loans (the "Credit Facility"). The maturity date is January 11, 2024. Amounts borrowed under the Credit Facility bear interest at variable rates based upon, at the Company's option, either (a) LIBOR plus an applicable margin or (b) an alternate base rate. The Credit Facility also carries a facility fee between 0.2% and 0.4% per annum based on the Company's consolidated leverage ratio as defined in the credit agreement. The Company has $75,000 outstanding under the new Credit Facility at April 30, 2019.

Concurrently with this new credit agreement, the Company also reduced its existing unsecured revolving line of credit from $150,000 to $25,000 (the "Bank Line"). The Bank Line bears interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate (the “Index”). The interest rate to be applied to the unpaid principal balance of the Bank Line was at a rate of 1.0% over the Index. There was $0 outstanding at April 30, 2019 and $39,600 outstanding at April 30, 2018. The line of credit is due upon demand.

As of April 30, 2019, we had long-term debt, net of current maturities, of $1,283,275 consisting of $569,000 in principal amount of 5.22% Senior notes; $0 in principal amount of 5.72% Senior notes ($15,000 in current maturities), Series A and B; $150,000 in principal amount of 3.67% Senior Notes, Series A; $50,000 in principal amount of 3.75% Senior Notes, Series B; $50,000 in principal amount of 3.65% Senior Notes, Series C; $50,000 in principal amount of 3.72% Senior Notes, Series D; $150,000 in principal amount of 3.51% Senior Notes, Series E; $250,000 in principal amount of 3.77% Senior Notes, Series F; and $14,275 of capital lease obligations.

Interest on the 5.22% Senior notes is payable on the 9th day of each February and August. Principal on the 5.22% Senior notes is payable in full on August 9, 2020. We may prepay the 5.22% notes in whole or in part at any time in an amount of not less than $2,000 at a redemption price calculated in accordance with the Note Agreement dated August 9, 2010 between the Company and the purchasers of the 5.22% Senior notes.

Interest on the 5.72% Senior notes Series A and Series B is payable on the 30th day of each March and September. Principal on the Senior notes Series A and Series B is payable in various installments beginning September 30, 2012 and continuing through March 2020. We may prepay the 5.72% Senior notes Series A and Series B in whole or in part at any time in an amount of not less than $2,000 at a redemption price calculated in accordance with the Note Agreement dated September 29, 2006 between the Company and the purchasers of the 5.72% Senior notes Series A and Series B.

Interest on the 3.67% Senior notes Series A and 3.75% Series B is payable on the 17th day of each June and December. Principal on the Senior notes Series A and Series B is payable in various installments beginning June 17, 2022 (Series A) and December 17, 2022 (Series B) through December 2028. We may prepay the 3.67% and 3.75% Senior notes in whole or in part at any time in an amount of not less than $2,000 at a redemption price calculated in accordance with the Note Agreement dated June 17, 2013, between the Company and the purchasers of the Senior notes Series A and Series B.

Interest on the 3.65% Senior notes Series C is payable on the 2nd day of each May and November, while the interest on the 3.72% Senior notes Series D is payable on the 28th day of each April and October. Principal on the Senior notes Series C and Series D is payable in various installments beginning May 2, 2025 (Series C) and October 28, 2025 (Series D) through October 2031. We may prepay the 3.65% and 3.72% Senior notes in whole or in part at any time in an amount of not less than

$2,000 at a redemption price calculated in accordance with the Note Agreement dated May 2, 2016, between the Company and the purchasers of the Senior notes Series C and Series D.

Interest on the 3.51% Senior notes Series E is payable on the 13th day of each June and December, while the interest on the 3.77% Senior notes Series F is payable on the 22nd day of each February and August. Principal on the Senior notes Series E and Series F is payable in full on June 13, 2025 (Series E) and August 22, 2028 (Series F), respectively. We may prepay the 3.51% and 3.77% Senior notes in whole or in part at any time in an amount of not less than $2,000 at a redemption price calculated in accordance with the Note Agreement dated June 13, 2017, between the Company and the purchasers of the Senior notes Series E and Series F.

To date, we have funded capital expenditures primarily through funds generated from operations, the proceeds of the sale of common stock, issuance of debt, and existing cash. Future capital required to finance operations, improvements, and the anticipated growth in the number of stores is expected to come from cash generated by operations, the bank line of credit, and additional long-term debt or other securities as circumstances may dictate. We do not expect such capital needs to adversely affect liquidity.

The table below presents our significant contractual obligations, including interest, at April 30, 2019:

Contractual obligations	Payments due by period
	Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
Senior notes	$	1,490,037			$	68,468			$	628,654			$	101,350			$	691,565
Capital lease obligations	24,169				3,103				6,205				5,646				9,215
Operating lease obligations	17,336				1,703				2,901				2,294				10,438
Unrecognized tax benefits	7,287				—				—				—				—
Deferred compensation	16,471				—				—				—				—
Total	$	1,555,300			$	73,274			$	637,760			$	109,290			$	711,218

Unrecognized tax benefits relate to uncertain tax positions and since we are not able to reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not been reflected in the above “Payments due by period” table.

At April 30, 2019, the Company had a total of $7,287 in gross unrecognized tax benefits. Of this amount, $5,780 represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was $242 as of April 30, 2019. Interest and penalties related to income taxes are classified as income tax expense in our consolidated financial statements. The federal statute of limitations remains open for the tax years 2012 and forward. Tax years 2012 and forward are subject to audit by state tax authorities depending on open statute of limitations waivers and the tax code of each state.

A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the expiration of the statute of limitations, examinations or other unforeseen circumstances. The IRS is currently examining tax year 2012. The Company has no other ongoing federal or state income tax examinations. At this time, management believes it is reasonably possible the aggregate amount of unrecognized tax benefits will decrease by $1,100 within the next 12 months. This expected decrease is due to the expiration of statute of limitations related to certain federal and state income tax filing positions.

Included in long-term liabilities on our consolidated balance sheet at April 30, 2019, was a $15,881 obligation for deferred compensation. As the specific payment dates for the deferred compensation are unknown due to the unknown retirement dates of many of the participants, the related balances have not been reflected in the above “Payments due by period” table. However, known payments of $4,901 will be due during the next 5 years.

At April 30, 2019, we were partially self-insured for workers’ compensation claims in all 16 states of our marketing territory; we also were partially self-insured for general liability and auto liability under an agreement that provides for annual stop-loss limits equal to or exceeding approximately $1,000. To facilitate this agreement, letters of credit approximating

$21,526 and $21,118, respectively, were issued and outstanding at April 30, 2019 and 2018, on the insurance company’s behalf. We renew the letters of credit on an annual basis.

Forward-looking Statements

This Form 10-K contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements represent our expectations or beliefs concerning future events, including (i) any statements regarding future sales and gross profit percentages, (ii) any statements regarding the continuation of historical trends, and (iii) any statements regarding the sufficiency of the Company’s cash balances and cash generated from operations and financing activities for the Company’s future liquidity and capital resource needs. The words believe, expect, anticipate, intend, estimate, project and similar expressions are intended to identify forward-looking statements. We caution you that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including without limitations the factors described in this Form 10-K.

We ask you not to place undue reliance on such forward-looking statements because they speak only of our views as of the statement dates. Although we have attempted to list the important factors that presently affect the Company’s business and operating results, we further caution you that other factors may in the future prove to be important in affecting the Company’s results of operations. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following:

Competition

Our business is highly competitive and marked by ease of entry and constant change in terms of the numbers and types of retailers offering the products and services found in stores. Many of the food (including prepared foods) and nonfood items similar or identical to those we sell are generally available from a variety of competitors in the communities served by our stores, and we compete with other convenience store chains, gasoline stations, supermarkets, drug stores, discount stores, club stores, mass merchants, and quick serve restaurants (with respect to the sale of prepared foods). Sales of nonfuel items (particularly prepared food items) have contributed substantially to our gross profit on retail sales in recent years. Fuel sales are also intensely competitive. We compete for fuel sales with both independent and national brand gasoline stations, other convenience store chains, and several nontraditional fuel retailers such as supermarkets in specific markets. Some of these other fuel retailers may have access to more favorable arrangements for fuel supply than we do or the firms that supply our stores. Some of our competitors have greater financial, marketing, and other resources than we have and therefore may be able to respond better to changes in the economy and new opportunities within the industry.

Fuel Operations

Fuel sales are an important part of our revenue and earnings, and retail fuel profit margins have a substantial impact on our net income. Profit margins on fuel sales can be adversely affected by factors beyond our control, including the supply of fuel available in the retail fuel market, uncertainty or volatility in the wholesale fuel market, increases in wholesale fuel costs generally during a period, and price competition from other fuel marketers. The market for crude oil and domestic wholesale petroleum products is marked by significant volatility and is affected by general political conditions and instability in oil producing regions such as the Middle East and South America. The volatility of the wholesale fuel market makes it extremely difficult to predict the impact of future wholesale cost fluctuation on our operating results and financial conditions. These factors could materially affect our fuel gallon volume, fuel gross profit, and overall customer traffic levels at stores. Any substantial decrease in profit margins on fuel sales or in the number of gallons sold by stores could have a material adverse effect on our earnings.

Fuel is purchased from a variety of independent national and regional petroleum distributors at current daily prices at the rack in which the fuel is loaded onto tanker trucks. While annual purchase agreements exist with a few distributors, those agreements primarily specify purchasing volumes that must be maintained to be eligible for certain discounts. We typically sell the fuel before the vendor is paid as a result of our short fuel inventory turnover rate. Any substantial change in the payment terms required by fuel vendors could impact the amount of cash and working capital we would need to conduct operations.

Although in recent years suppliers have not experienced any difficulties in obtaining sufficient amounts of fuel to meet our needs, unanticipated national and international events could result in a reduction of fuel supplies available for distribution. Any substantial curtailment in our fuel supply could reduce fuel sales. Further, we believe a significant amount of our business results from the patronage of customers primarily desiring to purchase fuel; accordingly, reduced fuel supplies could adversely affect the sale of nonfuel items. Such factors could have a material adverse effect on our earnings and operations.

Tobacco and Nicotine Products

Sales of tobacco and nicotine products represent a significant portion of our revenues. Significant increases in wholesale cigarette costs and tax increases on tobacco and nicotine products as well as national and local campaigns to further regulate and discourage smoking in the United States have had and are expected to continue having an adverse effect on the demand for tobacco and nicotine products sold in our stores. We attempt to pass price increases on to our customers, but competitive pressures in specific markets may prevent us from doing so. These factors could materially impact the retail price of tobacco and nicotine products, the gross profit obtained from the tobacco category, the volume of cigarettes and other tobacco and nicotine products sold by stores, and overall customer traffic, and have a material adverse effect on the Company’s earnings and profits.

Environmental Compliance Costs

The United States Environmental Protection Agency and several of the states in which we do business have adopted laws and regulations relating to underground storage tanks used for petroleum products. In the past, we have incurred substantial costs to comply with such regulations, and additional substantial costs may be necessary in the future. Several states in which we do business have trust fund programs with provisions for sharing or reimbursing corrective action or remediation costs. Any reimbursements received in respect to such costs typically are subject to statutory provisions requiring repayment of the reimbursed funds for any future noncompliance with upgrade provisions or other applicable laws. Although we regularly accrue expenses for the estimated costs related to future corrective action or remediation efforts, there can be no assurance that the accrued amounts will be sufficient to pay such costs or that we have identified all environmental liabilities at all of our current store locations. In addition, there can be no assurance that we will not incur substantial expenditures in the future for remediation of contamination or related claims that have not been discovered or asserted, with respect to existing store locations or locations that we may acquire in the future, that we will not be subject to any claims for reimbursement of funds disbursed to us under the various state programs, and/or that additional regulations or amendments to existing regulations will not require additional expenditures beyond those presently anticipated.

Seasonality of Sales

Company sales generally are strongest during its first two fiscal quarters (May–October) relative to the third and fourth fiscal quarters (November–April). In the warmer months, customers tend to purchase greater quantities of fuel and certain convenience items such as beer, pop, and ice. Difficult weather conditions (such as flooding, prolonged rain or periods of unseasonably cold weather, or snowstorms) in any quarter, however, may adversely reduce sales at affected stores and may have an adverse impact on our earnings for that period.

Other Factors

Other factors and risks that may cause actual results to differ materially from those in the forward-looking statements include the risk that our cash balances and cash generated from operations and financing activities will not be sufficient for our future liquidity and capital resource needs, tax increases, potential liabilities and expenditures related to compliance with environmental and other laws and regulations, the seasonality of demand patterns, and weather conditions; the increased indebtedness that the Company has incurred to purchase shares of our common stock in our self-tender offer; and the other risks and uncertainties included from time to time in our filings with the SEC. We further caution you that other factors we have not identified may in the future prove to be important in affecting our business and results of operations.

Please see Item 1A of this Form 10-K, entitled “Risk Factors,” for further information on these and other factors that may affect our business and financial results.