Item 6. SELECTED FINANCIAL DATA

(In thousands, except per share amounts)

Statement of Income Data

	Years ended April 30,
	2020				2019				2018				2017				2016
Total revenue	$	9,175,296			$	9,352,910			$	8,391,124			$	7,506,587			$	7,122,086
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)	7,030,612				7,398,186				6,621,731				5,825,426				5,508,465
Operating expenses	1,498,043				1,391,279				1,283,046				1,172,328				1,053,805
Depreciation and amortization	251,174				244,387				220,970				197,629				170,937
Interest, net	53,419				55,656				50,940				41,536				40,173
Income before income taxes	342,048				263,402				214,437				269,668				348,706
Federal and state income taxes	78,202				59,516				(103,466		)		92,183				122,724
Net income	$	263,846			$	203,886			$	317,903			$	177,485			$	225,982
Basic earnings per common share	$	7.14			$	5.55			$	8.41			$	4.54			$	5.79
Diluted earnings per common share	$	7.10			$	5.51			$	8.34			$	4.48			$	5.73
Weighted average number of common shares outstanding—basic	36,956				36,710				37,778				39,125				39,016
Weighted average number of common shares outstanding—diluted	37,186				36,975				38,132				39,579				39,422
Dividends declared per common share	$	1.28			$	1.16			$	1.04			$	0.96			$	0.88

Balance Sheet Data

	As of April 30,
	2020				2019				2018				2017				2016
Current assets	387,250				$	410,580			$	396,840			$	350,685			$	325,885
Total assets	$	3,943,892			3,731,376				3,469,927				3,020,102				2,726,148
Current liabilities	1,063,428				590,932				507,850				446,546				387,571
Long-term debt, net of current maturities	714,502				1,283,275				1,291,725				907,356				822,869
Shareholders’ equity	1,643,205				1,408,769				1,271,141				1,190,620				1,083,463

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, 2020, there were a total of 2,207 stores in operation. All but three 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 19% of all stores were opened in communities with populations exceeding 20,000 persons. The Marketing Company operates two distribution centers, through which grocery and other merchandise, and prepared food and fountain items are supplied to our stores. One is adjacent to the Store Support Center facility in Ankeny, Iowa. The other was opened in February 2016 in Terre Haute, Indiana. At April 30, 2020, the Company owned the land at 2,181 store locations and the buildings at 2,189 locations, and leased the land at 26 locations and the buildings at 18 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 guests 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 2020:

	Store Count
Stores at April 30, 2019	2,146
New store construction	60
Acquisitions	18
Acquisitions not opened	(7)
Prior acquisitions opened	3
Closed	(13)
Stores at April 30, 2020	2,207

Long-Term Strategic Plan

The Company announced an updated, long-term strategic plan in January 2020 focused on four strategic objectives: reinvigorate hospitality and the guest experience; be where the guest is; best-in-class efficiencies; and, invest in our people and culture. The Company's plan is based on building on our proud heritage and distinct advantages to become more contemporary through new capabilities, technology, data, and processes. We believe this will best position the Company to address rapidly evolving shifts in consumer habits and other macro retail trends.

COVID-19 and Fourth Quarter Results

During the fourth quarter of fiscal year 2020, the COVID-19 pandemic began to take hold throughout our footprint, as the number of reported infections within the sixteen states in which we operate increased. Starting in mid-March, governmental restrictions, including shelter in place and stay at home orders, a widespread shift to working from home, other efforts to restrict the spread of the outbreak, and our guests’ behavior in response to the pandemic resulted in a sharp, overall decline in store traffic. This resulted in lower demand for our products and a decrease in same-store sales. Because we were considered an “essential service” by public authorities, we continued to operate with minimal (and only temporary) store closings. While our stores remained open, the manner in which we served our guests required changes at many of our locations, including restrictions on self-service food and beverages, reduced prepared food offerings, limiting guest traffic in our stores and social distancing measures. In addition, due to the decrease in demand, and to enhance our cleaning procedures, many of our stores saw a reduction in store hours. Throughout the pandemic, however, we have not experienced any significant disruptions in our supply chain to date, despite the increased restrictions and uncertainty.

Our top priority throughout this pandemic has been the health and well-being of our team members, our guests, and our communities. As a result, we implemented the following changes across our store footprint:

•	provided additional compensation and operational bonuses for key field and support team members;

•	provided additional paid leave for impacted team members;

•	provided personal protective equipment for team members;

•	installed Plexiglas shields at our cash registers;

•	enhanced cleaning and hygiene practices;

•	implemented health checks in all our distribution centers;

•	designated exclusive shopping times for higher risk guests;

•	established 6-foot markings in our stores to encourage social distancing; and

•	implemented contact-less delivery.

•	provided free meals for all store and distribution center team members;

After a strong start to the fourth quarter, the Company’s results of operations for fiscal 2020 in the last half of the quarter were significantly impacted in all categories by the COVID-19 pandemic as follows:

Same-Store Sales	1st Half		2nd Half		4th quarter total
Fuel Gallons	2.9	%	(32.2	)%	(14.7	)%
Grocery & Other Merchandise	4.9	%	(9.3	)%	(2.0	)%
Prepared Food & Fountain	5.5	%	(30.2	)%	(13.5	)%

Despite these impacts, however, during the fourth quarter, the Company reported $1.67 in diluted earnings per share compared to $0.68 per share for the same quarter a year ago. The increase was driven largely by an unprecedented fuel margin of 40.8 cents per gallon in the fourth quarter of fiscal 2020, compared to 18.6 cents per gallon in the fourth quarter of fiscal 2019, which was primarily due to declining wholesale fuel costs related to macro-economic factors in the oil industry. The fuel margin peaked at the beginning of April, and moderated throughout the remainder of the quarter. Same-store fuel gallons sold during the fourth quarter of fiscal 2020 were down 14.7%, compared to a decrease of 2.8% in the prior year.

Also in the fourth quarter of fiscal 2020, same-store sales of grocery and other merchandise decreased 2.0% with an average margin of 30.4%. In the prior year, same-store sales were up 5.7% with a 31.5% average margin. The average margin was adversely affected by stronger sales of lower margin products in the category. Prepared food and fountain same-store sales in the fourth quarter of fiscal 2020 were down 13.5% with an average margin of 60.0%. In the prior year, same-store sales were up 2.0% with a 62.2% average margin. The average margin was adversely impacted by higher commodity costs and increased promotional activity.

For the fourth quarter of fiscal 2020, operating expenses were up 6.2% to 367.5 million. Fourth quarter results were positively impacted by wage expense reductions related to a reduction in hours at the stores, along with lower credit card fees, offset by higher hourly wage rates and increased costs of cleaning and other pandemic-related supplies. Fourth quarter depreciation expense was consistent with prior year. Fourth quarter effective tax rate was higher than prior year, due primarily to larger prior year tax credits combined with lower pretax income.

As we continue to navigate through this near-term challenge, we made numerous adjustments in our business to maintain flexibility to ensure our continued long-term success, including deferring some discretionary capital spending, temporarily adjusting store hours to meet guest demand to optimize profitability, expanding third-party delivery opportunities, expanding delivery items beyond prepared foods, expanding online assortment available for sale and modifying prepared food production to reduce food waste. In parallel, we continue to move forward in executing on key elements of our long-term strategic plan.

While COVID-19 has resulted in, and will continue to bring, significant challenges and uncertainty, we believe that the strength of our brand and balance sheet position us well to emerge from the COVID-19 pandemic. However, given the uncertainties, we are unable to forecast or estimate the potential impact to our future operating results.

For more information related to the additional risks to the Company related to the COVID-19 pandemic, and certain conditions that may affect future performance, please refer to the “Risk Factors” section above in Item 1A. and “Forward-looking Statements” at the end of Item 7.

Fiscal 2020 Compared with Fiscal 2019

The Company’s results of operations for fiscal 2020 in the last two months of the year were significantly impacted in all categories by the COVID-19 pandemic. Total revenue for fiscal 2020 decreased 1.9% ($177,614) to $9,175,296. Retail fuel sales for the fiscal year were $5,517,412, a decrease of 5.7% primarily due to a 5.5% decrease in the price of fuel, which decreased fuel revenue by $321,444. Fuel gallons sold decreased 0.1% to 2.3 billion gallons, which decreased fuel revenue by an additional $5,835. The decrease in fuel revenue was offset by a $152,358 increase to $3,596,173 (4.4%) in grocery and other merchandise and prepared food and fountain, primarily due to operating 61 more stores than one year ago.

Total revenue less cost of goods sold (excluding depreciation and amortization) was 23.4% for fiscal 2020 compared with 20.9% for the prior year. Fuel cents per gallon increased to 26.8 cents in fiscal 2020 from 20.3 cents in fiscal 2019 due to an unprecedented fourth quarter average fuel margin driven by macro-economic factors, as well as the Company's transition to a more balanced approach to fuel pricing and focus on optimizing gross profit dollars. The grocery and other merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was relatively consistent at 32.0% in fiscal 2020 compared to 32.1% in fiscal 2019. The prepared food and fountain revenue less related cost of goods sold (exclusive of

depreciation and amortization) decreased to 60.9% from 62.2% during fiscal 2020, due mainly to higher commodity costs and increased promotional activity.

Operating expenses increased 7.7% ($106,764) in fiscal 2020 primarily due to operating 61 more stores than one year ago, and incremental expenses associated with the COVID-19 pandemic. The majority of all operating expenses are wages and wage-related costs.

Depreciation and amortization expense increased 2.8% ($6,787) to $251,174 in fiscal 2020 from $244,387 in fiscal 2019. The increase was due primarily to capital expenditures made in fiscal 2020 and fiscal 2019, primarily relating to new stores, offset by an adjustment to the useful lives of underground storage tanks.

The effective tax rate increased to 22.9% in fiscal 2020 from 22.6% in fiscal 2019. The increase in the effective tax rate was due to a one-time benefit in the prior year from adjusting the Company’s deferred tax assets and liabilities for enacted state law changes, offset by a one-time benefit related to net operating loss carrybacks in the current year enacted by the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Net income increased to $263,846 in fiscal 2020 from $203,886 in fiscal 2019. The increase was due to increased fuel margin contribution and operating 61 more stores than one year ago.

Please refer to the Form 10-K related to the fiscal year ended April 30, 2019, filed on June 28, 2019, for comparison of Fiscal 2019 to Fiscal 2018.

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

	Years ended April 30,
	2020				2019				2018
Total revenue by category
Fuel	$	5,517,412			$	5,848,770			$	5,145,988
Grocery and other merchandise	2,498,966				2,369,521				2,184,147
Prepared food and fountain	1,097,207				1,074,294				1,005,621
Other	61,711				60,325				55,368
	$	9,175,296			$	9,352,910			$	8,391,124
Revenue less cost of goods sold (excluding depreciation and amortization) by category
Fuel	$	614,847			$	466,107			$	406,811
Grocery and other merchandise	800,140				759,817				693,576
Prepared food and fountain	668,092				668,598				613,736
Other	61,605				60,202				55,270
	$	2,144,684			$	1,954,724			$	1,769,393

INDIVIDUAL STORE COMPARISONS (1)

	Years ended April 30,
	2020				2019				2018
Average retail sales	$	4,203			$	4,449			$	4,150
Average retail inside sales (3)	1,659				1,649				1,602
Average revenue less cost of goods sold (excluding depreciation and amortization) on inside items	674				679				643
Average retail sales of fuel	2,544				2,800				2,548
Average revenue less cost of goods sold (excluding depreciation and amortization) on fuel	280				223				202
Average operating income (2)	317				281				246
Average number of gallons sold	1,055				1,097				1,087

(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.

(3)	Inside sales is comprised of sales related to the grocery and other merchandise and prepared food and fountain categories

SAME STORE SALES BY CATEGORY (1)

	Years ended April 30,
	2020			2019			2018
Fuel gallons (2)	(5.1	)%		(1.7	)%		2.3	%
Grocery and other merchandise (3)	1.9	%		3.6	%		1.9	%
Prepared food and fountain (3)	(1.5	)%		1.9	%		1.7	%

(1)

Same-store sales is a common metric used in the convenience store industry. We define same-store sales as the total sales increase (or decrease) for stores open during the full time of the periods being 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.

(2)	The decline in fuel gallons in fiscal 2020 as compared to fiscal 2019 was primarily due to shelter in place restrictions diminishing overall demand during the last two months of the fiscal year, as well as transitioning to a more balanced pricing approach that focuses on both gallon movement and margins.

(3)	The decline in same store sales growth for grocery and other merchandise and prepared food and fountain for 2020 as compared to 2019 was primarily due to slowing guest traffic related to the COVID-19 pandemic over the last two months of the fiscal year.

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, 2020 and 2019, respectively:

	Three months ended								Years ended
	April 30, 2020				April 30, 2019				April 30, 2020				April 30, 2019
Net income	62,091				$	25,212			$	263,846			$	203,886
Interest, net	13,806				13,749				53,419				55,656
Depreciation and amortization	65,193				62,867				251,174				244,387
Federal and state income taxes	16,491				4,377				78,202				59,516
EBITDA	$	157,581			$	106,205			$	646,641			$	563,445
Loss on disposal of assets and impairment charges	1,380				225				3,495				1,384
Adjusted EBITDA	$	158,961			$	106,430			$	650,136			$	564,829

For the three months ended April 30, 2020, EBITDA and Adjusted EBITDA were up 48.4% and 49.4% respectively, when compared to the same period a year ago. The increase was due primarily to gross profit dollar margin expansion from unprecedented average fuel margins driven by macro-economic factors. For the year ended April 30, 2020, EBITDA and Adjusted EBITDA were up 14.8% and 15.1% respectively. The increase was due primarily to gross profit dollar margin expansion in fuel and operating 61 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 $1,177 in fiscal 2020, $1,167 in fiscal 2019, and $507 in fiscal 2018, 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 team member healthcare, workers’ compensation, general liability, and automobile claims. The self-insurance claim liability for workers’ compensation, general liability, and automobile claims is determined actuarially at each year-end based on claims filed and an estimate of claims incurred but not yet reported. 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 $44,959 and $44,334 for the years ended April 30, 2020 and 2019, respectively.

Recent Accounting Pronouncements

Refer to Note 1 of the consolidated financial statements for a description of new accounting pronouncements applicable to the Company.

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, 2020, the Company’s ratio of current assets to current liabilities was 0.36 to 1. The ratio at April 30, 2019 and at April 30, 2018 was 0.69 to 1 and 0.78 to 1, respectively. The decrease in the ratio is primarily attributable to the reclassification of $569,000 5.22% Senior notes to current liabilities as they are due on August 9, 2020. The Company is in the process of refinancing the 5.22% Senior notes.

We believe our current $300,000 unsecured 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 decreased $26,300 (5.0%) for the year ended April 30, 2020, primarily due to a decrease in accounts payable, partially offset by an increase in net income and a decrease in inventories. Cash used in investing activities in the year ended April 30, 2020 increased $8,812 (1.9%) primarily due to an increase in new store construction, offset by a decrease in acquisition activity. Cash flows used in financing activities decreased $40,474, primarily due to reductions in share buyback activity.

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 2020, we expended $471,683 for property and equipment, primarily for construction, acquisition, and remodeling of stores compared with $462,899 in the prior year. In fiscal 2021, we anticipate funding our capital expenditures primarily from existing cash, funds generated by operations, and long-term debt proceeds for our construction and acquisition of stores. Due to the continued uncertainty of COVID-19, guidance around capital expenditures will not be provided at this time. This will be reevaluated as conditions warrant.

In January 2019, the Company entered into a 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 Credit Facility contains an expansion option permitting the Company to request an increase of the Credit Facility from time to time up to an aggregate additional $150 million from the lenders or other financial institutions acceptable to the Company and the Administrative Agent, upon the satisfaction of certain conditions, including the consent of the lenders whose commitments would increase. The 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 had $120,000 and $75,000 outstanding under the Credit Facility at April 30, 2020 and 2019 respectively.

Concurrently with this 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 on the Bank Line at April 30, 2020 and 2019. The line of credit is due upon demand.

As of April 30, 2020, we had long-term debt and finance lease obligations of $714,502 (which is net of current maturities of $570,280) primarily consisting of: $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 $14,502 of finance lease obligations. Current maturities of long-term debt is primarily comprised of $569,000 in principal amount of 5.22% Senior notes.

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 3.67% Senior notes Series A and 3.75% Senior notes 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 revolver, 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, 2020:

Contractual obligations	Payments due by period
	Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
Senior notes	$	1,451,662			$	602,899			$	70,963			$	111,103			$	666,697
Finance lease obligations	23,840				3,118				6,226				3,732				10,764
Operating lease obligations	34,064				1,829				3,531				3,369				25,335
Unrecognized tax benefits	8,907				—				—				—				—
Deferred compensation	15,079				—				—				—				—
Total	$	1,518,488			$	607,846			$	80,720			$	118,204			$	702,796

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 timing of the payment of the balances have not been reflected in the above “Payments due by period” table.

At April 30, 2020, the Company had a total of $8,907 in gross unrecognized tax benefits. Of this amount, $7,059 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 $354 as of April 30, 2020. 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 2016 and 2017. 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 $1,800 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, 2020, was a $13,604 obligation for deferred compensation. Additionally, $1,037 was recognized in current liabilities as of April 30, 2020 related to deferred compensation. As the specific payment dates for a portion of the deferred compensation outstanding are unknown due to the unknown retirement dates of many of the participants, the related timing of the payment of the balances have not been reflected in the above “Payments due by period” table. However, known payments of $7,875 will be due during the next 5 years.

At April 30, 2020, 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 $500 for general liability and auto liability and $350 for workers' compensation. To facilitate this agreement, letters of credit approximating $21,526 were issued and outstanding at April 30, 2020 and 2019, on the insurance company’s behalf. We renew the letters of credit on an annual basis.

Forward-Looking Statements

This Form 10-K, including but not limited to the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. The words “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “continue,” and similar expressions are used to identify forward-looking statements. Forward-looking statements represent the Company’s current expectations or beliefs concerning future events and trends that we believe may affect our financial condition, liquidity and needs, supply chain, results of operations and performance at our stores, business strategy, strategic plans, growth opportunities, short-term and long-term business operations and objectives, and the potential effects of COVID-19 on our business. The Company cautions 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 limitation, the following risk factors described more completely above in Item 1A entitled “Risk Factors”:

Industry. Pandemics or disease outbreaks, such as COVID-19, responsive actions taken by governments and others to mitigate their spread, and guest behavior in response to these events, have and may in the future adversely affect our business operations, supply chain and financial results; our business and our reputation could be adversely affected by a data security incident or the failure to protect sensitive guest, team member or vendor data, or the failure to comply with applicable regulations relating to data security and privacy; the convenience store industry is highly competitive; the volatility of wholesale petroleum costs could adversely affect our operating results; general economic conditions that are largely out of the Company’s control may adversely affect the Company’s financial condition and results of operations; governmental action and campaigns to discourage tobacco and nicotine use and other tobacco products may have a material adverse effect on our revenues and gross profit; consumer or other litigation could adversely affect our financial condition and results of operations; increased credit card expenses could increase operating expenses; developments related to fuel efficiency, fuel conservation practices, climate change, and changing consumer preferences may decrease the demand for motor fuel; and, wholesale cost and tax increases relating to tobacco and nicotine products could affect our operating results.

Our Business: Food-safety issues and food-borne illnesses, whether actual or reported, or the failure to comply with applicable regulations relating to the transportation, storage, preparation or service of food, could adversely affect our business and reputation; any failure to anticipate and respond to changes in consumer preferences, or to introduce and promote innovative technology for guest interaction, could adversely affect our financial results; we rely on our information technology systems, and a number of third-party vendor platforms, to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business; a significant disruption to our distribution network, to the capacity of the distribution centers, or timely receipt of inventory could adversely impact our sales or increase our transaction costs, which could have a material adverse effect on our business; we may experience difficulties implementing and realizing the results of our strategic plan; unfavorable weather conditions can adversely affect our business; because we depend on our management’s and other team members’ experience and knowledge of our industry, we could be adversely affected were we to lose, or experience difficulty in recruiting and retaining, any such members of our team; we may experience increased costs, disruptions or other difficulties with the implementation, operation and functionality of our enterprise resource planning system; control deficiencies could prevent us from accurately and timely reporting our financial results; our operations present hazards and risks which may not be fully covered by insurance, if insured; we may not be able to identify, acquire, and integrate new properties and stores, which could adversely affect our ability to grow our business; covenants in our senior notes and credit facility agreements require us to comply with certain covenants and meet financial maintenance tests - failure to comply with these requirements could have a material impact to us; compliance with and changes in tax laws could adversely affect our performance; we are subject to extensive governmental regulations; and, the dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose to us potentially significant losses, costs or liabilities.

Other: The market price for our common stock has been and may in the future be volatile, which could cause the value of your investment to decline; any issuance of shares of our common stock in the future could have a dilutive effect on your investment; and, Iowa law and provisions in our charter documents may have the effect of preventing or hindering a change in control and adversely affecting the market price of our common stock.

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 we have not identified may in the future prove to be important in affecting our business and results of operations. We ask you not to place undue reliance on any forward-looking statements because they speak only of our views as of the statement dates. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.