Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Directors

Casey’s General Stores, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Casey's General Stores, Inc. and subsidiaries (the Company) as of April 30, 2024 and 2023, the related consolidated statements of income, shareholders’ equity, and cash flows for each of the years in the three-year period ended April 30, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended April 30, 2024, in conformity with U.S. generally accepted accounting principles.

We also have 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 April 30, 2024, 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 June 24, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over merchandise inventory quantities at store locations

As discussed in Note 1 to the consolidated financial statements, the Company held $306,783 thousand of merchandise inventory as of April 30, 2024, the majority of which was held at 2,658 store locations. The Company’s processes to track and determine store merchandise inventory quantities involves the interaction of information technology (IT) systems. We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of merchandise inventory at store locations as a critical audit matter. Evaluating the sufficiency of audit evidence over quantities of merchandise inventory at store locations required challenging auditor judgment to determine the nature and extent of procedures to be performed over the quantity of merchandise inventory, including determining the number of store locations visited, and also the need to involve IT professionals with specialized skills and knowledge due to the interaction of IT systems that track and record merchandise inventory quantities by store location.

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The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over quantities of merchandise inventory at store locations by evaluating:

• homogeneity of the locations

• historical locations visited and results of prior physical counts

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

We evaluated the design and tested the operating effectiveness of certain internal controls related to the quantity of merchandise inventory held at store locations, including certain controls related to the Company’s merchandise inventory count process. We involved IT professionals with specialized skills and knowledge who assisted in testing certain IT application controls, as well as certain controls related to access to programs and data, program changes, interfaces, and computer operations that support the various IT systems involved in tracking and recording merchandise inventory quantities by store location. We tested the existence and completeness of merchandise inventory by counting inventory quantities on a sample basis through store location visits during the year to evaluate the Company’s inventory records. In addition, we evaluated the overall sufficiency of audit evidence obtained over the quantities of merchandise inventory at store locations.

/s/ KPMG LLP

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

Des Moines, Iowa

June 24, 2024

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Report of Independent Registered Public Accounting Firm

The Shareholders and Board of Directors

Casey’s General Stores, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Casey's General Stores, Inc. and subsidiaries' (the Company) internal control over financial reporting as of April 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of April 30, 2024 and 2023, the related consolidated statements of income, shareholders’ equity, and cash flows for each of the years in the three-year period ended April 30, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated June 24, 2024 expressed an unqualified opinion on those consolidated 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 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 of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included 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/ KPMG LLP

Des Moines, Iowa

June 24, 2024

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In thousands, except share data)

			April 30,
			2024						2023
Assets
Current assets
Cash and cash equivalents			$	206,482					$	378,869
Receivables			151,793						120,547
Inventories			428,722						376,085
Prepaid expenses			25,791						22,107
Income taxes receivable			17,066						23,347
Total current assets			829,854						920,955
Property and equipment, at cost
Land			1,281,408						1,151,812
Buildings and leasehold improvements			3,003,191						2,629,795
Machinery and equipment			3,052,798						2,783,802
Finance lease right-of-use assets			106,837						99,764
Construction in process			109,048						169,796
			7,553,282						6,834,969
Less accumulated depreciation and amortization			2,883,925						2,620,149
Net property and equipment			4,669,357						4,214,820
Other assets, net of amortization			195,559						192,153
Goodwill			652,663						615,342
Total assets			$	6,347,433					$	5,943,270
Liabilities and Shareholders’ Equity
Current liabilities
Current maturities of long-term debt and finance lease obligations			$	53,181					$	52,861
Accounts payable			569,527						560,546
Accrued expenses
Wages and related taxes			95,821						78,791
Property taxes			54,009						51,109
Insurance accruals			27,323						28,856
Other			153,605						154,962
Total current liabilities			953,466						927,125
Long-term debt and finance lease obligations, net of current maturities			1,582,758						1,620,513
Deferred income taxes			596,850						543,598
Insurance accruals, net of current portion			30,046						32,312
Other long-term liabilities			168,932						159,056
Total liabilities			3,332,052						3,282,604
Commitments and contingencies
Shareholders’ equity
Preferred stock, no par value, none issued			—						—
Common stock, no par value, 37,008,488 and 37,263,248 shares issued and outstanding at April 30, 2024 and 2023, respectively			27,453						110,037
Retained earnings			2,987,928						2,550,629
Total shareholders’ equity			3,015,381						2,660,666
Total liabilities and shareholders’ equity			$	6,347,433					$	5,943,270

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

			Years ended April 30,
			2024						2023						2022
Total revenue			$	14,862,913					$	15,094,475					$	12,952,594
Cost of goods sold (excluding depreciation and amortization, shown separately below)			11,515,002						12,022,069						10,189,880
Operating expenses			2,288,513						2,119,942						1,961,473
Depreciation and amortization			349,797						313,131						303,541
Interest, net			53,441						51,815						56,972
Income before income taxes			656,160						587,518						440,728
Federal and state income taxes			154,188						140,827						100,938
Net income			$	501,972					$	446,691					$	339,790
Net income per common share
Basic			$	13.51					$	11.99					$	9.14
Diluted			$	13.43					$	11.91					$	9.10

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except per share and share amounts)

			Shares Outstanding						Common stock						Retained earnings						Shareholders' Equity
Balance at April 30, 2021			36,949,878						$	58,951					$	1,873,728					$	1,932,679
Net income			—						—						339,790						339,790
Dividends declared ($1.39 per share)			—						—						(52,092)						(52,092)
Exercise of stock options			3,000						133						—						133
Share-based compensation (net of tax withholding on employee share-based awards)			158,789						20,328						—						20,328
Balance at April 30, 2022			37,111,667						79,412						2,161,426						2,240,838
Net income			—						—						446,691						446,691
Dividends declared ($1.52 per share)			—						—						(57,488)						(57,488)
Share-based compensation (net of tax withholding on employee share-based awards)			151,581						30,625						—						30,625
Balance at April 30, 2023			37,263,248						110,037						2,550,629						2,660,666
Net income			—						—						501,972						501,972
Dividends declared ($1.72 per share)			—						—						(64,673)						(64,673)
Repurchase of common stock			(392,290)						(105,451)						—						(105,451)
Share-based compensation (net of tax withholding on employee share-based awards)			137,530						22,867						—						22,867
Balance at April 30, 2024			37,008,488						$	27,453					$	2,987,928					$	3,015,381

See accompanying Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

			Years ended April 30,
			2024						2023						2022
Cash flows from operating activities
Net income			$	501,972					$	446,691					$	339,790
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			349,797						313,131						303,541
Amortization of debt issuance costs			1,111						1,789						2,527
Change in excess replacement cost over LIFO inventory valuation			12,499						24,231						21,573
Share-based compensation			41,379						47,024						37,976
Loss (gain) on disposal of assets and impairment charges			6,414						6,871						(1,201)
Deferred income taxes			53,252						23,126						82,721
Changes in assets and liabilities:
Receivables			(31,246)						(12,519)						(33,025)
Inventories			(51,785)						(141)						(98,303)
Prepaid expenses			(3,684)						(4,248)						(6,376)
Accounts payable			(8,731)						(9,483)						165,893
Accrued expenses			14,387						20,292						23,574
Income taxes			5,112						20,652						(35,716)
Other, net			2,476						4,535						(14,233)
Net cash provided by operating activities			892,953						881,951						788,741
Cash flows from investing activities
Purchase of property and equipment			(522,004)						(476,568)						(326,475)
Payments for acquisitions of businesses, net of cash acquired			(330,032)						(85,569)						(901,638)
Proceeds from sales of property and equipment			26,680						17,103						70,118
Net cash used in investing activities			(825,356)						(545,034)						(1,157,995)
Cash flows from financing activities
Proceeds from long-term debt			—						—						450,000
Payments of long-term debt and finance lease obligations			(53,656)						(40,970)						(188,537)
Payment of debt issuance costs			—						(3,940)						(1,149)
Proceeds from exercise of stock options			—						—						133
Payments of cash dividends			(62,918)						(55,617)						(51,212)
Repurchase of common stock			(104,898)						—						—
Tax withholdings on employee share-based awards			(18,512)						(16,399)						(17,648)
Net cash (used in) provided by financing activities			(239,984)						(116,926)						191,587
Net (decrease) increase in cash and cash equivalents			(172,387)						219,991						(177,667)
Cash and cash equivalents at beginning of year			378,869						158,878						336,545
Cash and cash equivalents at end of year			$	206,482					$	378,869					$	158,878
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid for interest, net of amount capitalized			$	63,449					$	56,799					$	54,499
Cash paid for income taxes, net			105,000						90,398						49,565
Noncash investing and financing activities
Purchased property and equipment in accounts payable			45,617						27,905						46,659

See accompanying Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

1. SIGNIFICANT ACCOUNTING POLICIES

Operations: Casey’s General Stores, Inc. and its subsidiaries (collectively referred to as the "Company") operate 2,658 convenience stores in 17 states, primarily in the Midwest. Many of the stores are located in smaller communities, often with populations of less than 20,000.

Principles of consolidation: The consolidated financial statements include the financial statements of Casey’s General Stores, Inc. and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior year have been reclassified to conform to current year presentation.

Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash equivalents: We consider all highly liquid investments with a maturity at purchase of three months or less to be cash equivalents. Included in cash equivalents are money market funds, treasury bills, and credit card, debit card and electronic benefits transfer transactions that process within three days.

Receivables: Receivables are primarily comprised of balances outstanding from credit card companies which are not processed within three days and balances outstanding from vendor rebates. The Company records credit card receivables at the time of the related sale to the guest. Vendor rebates are recorded based upon the applicable agreements. Uncollectible accounts were immaterial during the periods presented. Below is a summary of the receivable values at April 30, 2024 and 2023:

			Years ended April 30,
			2024						2023
Vendor rebates			$	87,423					$	54,979
Credit cards			35,455						46,851
Other			28,915						18,717
Total receivables			$	151,793					$	120,547

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

The excess of replacement cost over the stated LIFO value was $151,461 and $138,962 at April 30, 2024 and 2023, respectively. There were no material LIFO liquidations during the periods presented. Below is a summary of the inventory values at April 30, 2024 and 2023:

			Years ended April 30,
			2024						2023
Fuel			$	121,939					$	115,095
Merchandise			306,783						260,990
Total inventories			$	428,722					$	376,085

The Company often receives vendor allowances on the basis of quantitative contract terms that vary by product and vendor or directly on the basis of purchases made. Vendor allowances include rebates and other funds received from vendors to promote their products. These amounts are recognized in the period earned based on the applicable rebate agreement. Reimbursements of an operating expense (e.g., advertising) are recorded as reductions of the related expense.

Renewable identification numbers (“RINs”) are assigned to gallons of renewable fuels produced and are used to track compliance with the renewable fuel standard. At times, we purchase fuel components (ethanol, gasoline, biodiesel or diesel) and blend those components into a finished product in a fuel truck. This process enables the Company to take title to the RIN assigned to each gallon of ethanol or biodiesel produced. RINs are recorded as a reduction in cost of goods sold at the contracted sales price, in the period when the Company transfers the RIN. The Company does not record inventories on the balance sheet related to RINs, as they are acquired at no cost to the Company.

The Company includes in cost of goods sold the costs incurred to acquire fuel and merchandise, including excise taxes, less vendor allowances and rebates and RINs. Warehousing costs are recorded within operating expenses on the consolidated statements of income.

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Capitalized software implementation costs: The Company capitalizes expenditures related to the implementation of software-as-a-service as incurred. These costs are expensed on a straight-line basis within operating expenses, typically over the contractual life of the related software. The useful lives utilized for capitalized software implementation costs range from 2-13 years. As of April 30, 2024 and 2023, the Company had recognized $37,619 and $42,495 of capitalized software implementation costs, respectively. The outstanding balance is recognized in other assets, net of amortization on the consolidated balance sheets. The Company has recognized amortization of $14,108 in fiscal 2024, $12,302 in fiscal 2023 and $9,449 in fiscal 2022 within operating expenses on the consolidated statements of income.

Goodwill: As of April 30, 2024 and 2023, there was $652,663 and $615,342 of goodwill recognized, respectively. Goodwill is tested for impairment at least annually. The Company used a qualitative approach to assess the recoverability of goodwill at year-end. Management’s analysis of recoverability completed as of the fiscal year-end indicated no evidence of impairment for the years ended April 30, 2024, 2023, and 2022.

Contractual customer relationships: As the result of a prior acquisition, the Company recognized approximately $31,100 of contractual customer relationships. These assets were valued using the multi-period excess earnings method. The contractual customer relationships are amortized on a straight-line basis over a useful life of 15 years and are included within other assets, net of amortization in the consolidated balance sheets as of April 30, 2024. As of April 30, 2024 and 2023, the Company has recognized $24,880 and $26,953 of contractual customer relationships, which was net of accumulated amortization of $6,220 and $4,147, respectively. The Company expects to recognize $2,073 of annual amortization expense related to contractual customer relationships over the next 5 years.

Depreciation and amortization: Depreciation of property and equipment are computed using the straight-line method over the following estimated useful lives:

Buildings			25-40 years
Machinery and equipment			3-40 years
Finance lease right-of-use assets			Lesser of term of lease or life of asset
Leasehold improvements			Lesser of term of lease or life of asset

The Company monitors stores and will accelerate depreciation if the expected life of the asset is reduced due to the expected remaining operation of the store or the Company’s plans. Construction in process is reported at cost and not subject to depreciation until the related asset is placed in service.

Store closings and asset impairment: The Company writes down property and equipment of stores it is closing to estimated net realizable value at the time management commits to a plan to close such stores and begins actively marketing the stores. The Company bases the estimated net realizable value of property and equipment on its experience in utilizing and/or disposing of similar assets, as well as estimates provided by its own and/or third-party real estate experts.

The Company 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 carrying value of the assets exceeds their estimated fair value. Fair value is typically based on management’s estimate of the price that would be received to sell an asset in an orderly transaction between market participants. The estimate is derived from offers, actual sale or disposition of assets subsequent to year-end, and other indications of fair value, which are considered Level 3 inputs (see Note 3). 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 incurred impairment charges of $4,057 in fiscal 2024, $3,500 in fiscal 2023, and $1,056 in fiscal 2022. Impairment charges are recognized as a component of operating expenses.

Income taxes: The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of income in the period that includes the enactment date. The Company calculates its current and deferred tax provision based on estimates and assumptions that could differ from actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified.

Revenue recognition: The Company recognizes retail sales of prepared food and dispensed beverage, grocery and general merchandise, fuel and other revenue at the time of the sale to the guest. Sales taxes collected from guests and remitted to the government are recorded on a net basis in the consolidated statements of income.

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A portion of revenue from sales that include points under our Casey’s Rewards program is deferred. The deferred portion of the sale represents the value of the estimated future redemption of the points. The amounts related to points are deferred until their redemption or expiration. Revenue related to the points issued is expected to be recognized less than one year from the original sale to the guest. As of April 30, 2024 and 2023, the Company recognized a contract liability of $52,934 and $55,561, respectively, related to the outstanding Casey's Rewards program, which is included in other accrued expenses on the consolidated balance sheets. During fiscal 2024, the digital box top program was discontinued and outstanding digital box tops were converted to points.

Gift card related revenue is recognized as the gift cards are used by the guest. Gift card breakage revenue is recognized based on the estimated gift card breakage rate over the pro rata usage of the card. As of April 30, 2024 and 2023, the Company recognized a liability of $17,985 and $17,463, respectively, related to outstanding gift cards, which is included in other accrued expenses on the consolidated balance sheets.

Net income per common share: Basic earnings per share have been computed by dividing net income by the weighted average shares outstanding during each of the years. Unvested shares under equity awards are treated as common shares within the basic earnings per share calculation when a recipient has met certain requirements in the award agreement. For example, if retirement provisions are satisfied which allow a recipient to avoid forfeiture of the award upon a normal retirement from the Company, it is included in the basic earnings per share calculation. The calculation of diluted earnings per share treats unvested restricted stock units with time-based restrictions as potential common shares. The diluted earnings per share calculation does not take into effect any shares that have not met performance or market conditions as of the reporting period.

Asset retirement obligations: The Company recognizes the estimated future cost to remove underground storage tanks over the estimated useful life of the storage tank*.* The Company records a discounted liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of a long-lived asset at the time an underground storage tank is installed. The Company depreciates the amount added to property and equipment on a straight-line basis and recognizes accretion expense in connection with the discounted liability over the remaining life of the tank. The estimates of the anticipated future costs for removal of an underground storage tank are based on our prior experience with removal. Because these estimates are subjective and are currently based on historical costs with adjustments for estimated future changes in the associated costs, we expect the dollar amount of these obligations to change as more information is obtained.

The discounted liability was $39,954 and $36,978 at April 30, 2024 and 2023, respectively, and is recorded in other long-term liabilities on the consolidated balance sheets.

Self-insurance: The Company is 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 using actuarial methods 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 the claim liability include the loss development factors, which includes the development time frame and settlement patterns, and expected loss rates, which includes litigation and adjudication direction, and medical treatment and cost trends. The liability is not discounted. The balance of our self-insurance reserves was $57,369 and $61,168 as of April 30, 2024 and 2023, respectively. See additional discussion in Note 10.

Environmental remediation liabilities: The Company accrues for environmental remediation liabilities when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. At April 30, 2024 and 2023 we had an accrued liability of $299 and $268, respectively, which is recorded in other accrued expenses on the consolidated balance sheets.

Derivative instruments: There were no options or futures contracts as of or during the years ended April 30, 2024, 2023, or 2022. From time to time, we participate in a forward buy of certain commodities. These are not accounted for as derivatives under the normal purchases and sale exclusions within the applicable accounting guidance.

Share-based compensation: Share-based compensation is recorded based upon the fair value of the award on the grant date. The cost of the award is recognized ratably in the consolidated statements of income over the vesting period of the award, adjusted for certain retirement provisions. Forfeitures are recognized as they occur. Additionally, certain awards include performance and market conditions. Performance-based awards are based on either the achievement of a three-year average return on invested capital (ROIC) or three-year cumulative earnings before interest, income taxes, depreciation, and amortization (EBITDA). For these awards, share-based compensation expense is estimated based on the probable outcome of shares to be awarded adjusted as necessary at each reporting period. Additionally, if the Company's relative total shareholder return over the performance period is in the bottom or top quartile of the companies comprising the S&P 500, the performance-based shares included will be adjusted downward by 25%, or upward by 25%, respectively (the "TSR Modifier"). The fair value of these awards is determined using a Monte Carlo simulation as of the date of the grant. For the market-based portion of these awards, the share-based compensation expense will not be adjusted should the target awards vary from actual awards.

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Segment reporting: As of April 30, 2024, we operated 2,658 stores in 17 states. Our convenience stores offer a broad selection of merchandise, fuel and other products and services designed to appeal to the convenience needs of our guests. We manage the business on the basis of one operating segment and therefore, have only one reportable segment. Our stores sell similar products and services, use similar processes to sell those products and services, and sell their products and services to similar classes of guests. We make specific disclosures concerning the three broad categories of prepared food and dispensed beverage, grocery and general merchandise, and fuel because it allows us to more effectively discuss trends and operational initiatives within our business and industry. Although we can separate revenue and cost of goods sold within these categories (and further sub-categories), the operating expenses associated with operating a store that sells these products are not separable by these three categories.

Recent accounting pronouncements:

In September 2022, the FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50). The standard included guidance related to supplier finance programs and requires the buyer in a supplier finance program to disclose qualitative and quantitative information about the program. The new standard was effective for the Company beginning May 1, 2023. The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The standard is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss. The new standard is effective for the Company's annual periods beginning May 1, 2024, and interim periods beginning May 1, 2025, with early adoption permitted. The Company is currently evaluating ASU 2023-07 to determine its impact on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The standard includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The new standard is effective for the Company's annual periods beginning May 1, 2025, with early adoption permitted. The Company is currently evaluating ASU 2023-09 to determine its impact on our disclosures.

2. ACQUISITIONS

Current Period Acquisitions

During the year ended April 30, 2024, the Company acquired 112 stores through a variety of transactions, pursuant to the terms and conditions of the individual asset purchase agreements. The majority of these acquisitions meet the criteria to be considered business combinations. The purchase price for each transaction was paid in cash upon closing using available cash on hand.

The acquisitions were recorded in the financial statements by allocating the purchase price to the assets acquired, including intangible assets, and liabilities assumed, based on their estimated fair values at the acquisition date as determined by third party appraisals or internal estimates. Fair values were determined using Level 3 inputs, which are unobservable inputs that are not corroborated by market data. The excess of the cost of the acquisition over the net amounts assigned to the fair value of the assets acquired and the liabilities assumed is recorded as goodwill if the acquisition is considered to be a business combination. Goodwill of $37,321 was recognized as the result of the current period acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies. Almost all of the goodwill associated with these transactions will be deductible for income tax purposes over 15 years.

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

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. We utilized a third-party valuation specialist to assist in valuing the majority of other assets, leases and property and equipment acquired.

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Assets acquired:
Inventories			$	13,351
Property and equipment			279,396
Finance lease right-of-use assets			3,194
Operating lease right-of-use assets			7,201
Other assets			2,137
Goodwill			37,321
Total assets			$	342,600
Liabilities assumed:
Accrued expenses and other long-term liabilities			$	982
Finance lease liabilities			5,004
Operating lease liabilities			7,041
Total liabilities			13,027
Net assets acquired and total consideration paid			$	329,573

Payments for acquisition of businesses, net of cash acquired, on the consolidated statements of cash flows includes payments made for acquisitions that are closing shortly after the year-end. Such payments are not included in the total consideration paid in the table above, as those acquisitions have not yet closed as of the end of the year.

The Company recognized approximately $237,529 of revenue related to the acquired locations in the consolidated statements of income for the year ended April 30, 2024. The amount of net income related to the acquired locations was not material for the year ended April 30, 2024.

Pro Forma Information

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

			For the year ended April 30,
			2024						2023
Total revenue			$	15,228,497					$	15,799,468
Net income			$	521,630					$	457,671
Net income per common share
Basic			$	14.04					$	12.28
Diluted			$	13.96					$	12.20

Prior Period Acquisitions

During the year ended April 30, 2023, the Company acquired 47 stores, of which 26 stores were acquired from Minit Mart LLC pursuant to the terms and conditions of an asset purchase agreement. The majority of these acquisitions meet the criteria to be considered business combinations. Goodwill of $2,408 was recognized as the result of the current year acquisitions and is primarily attributable to the location of the stores in relation to our footprint and expected synergies. All of the goodwill associated with these transactions will be deductible for income tax purposes over 15 years.

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

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

Assets acquired:
Inventories			$	3,976
Property and equipment			79,556
Goodwill			2,408
Total assets			85,940
Total liabilities			371
Net assets acquired and total purchase price			$	85,569

3. FAIR VALUE OF FINANCIAL INSTRUMENTS AND LONG-TERM DEBT

U.S. GAAP requires that each financial asset and liability carried at fair value be classified into one of the following of the fair value hierarchy levels, which is based upon the quality of the inputs used in the valuation. Level 1 inputs are quoted market prices in active markets for identical assets and liabilities. Level 2 inputs are observable market-based inputs or unobservable inputs that are corroborated by market data (excluding those included within Level 1). Level 3 inputs are unobservable inputs that are not corroborated by market data. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period. A summary of the fair value of the Company’s financial instruments follows.

Cash and cash equivalents, receivables, and accounts payable: The carrying amount approximates fair value due to the short maturity of these instruments or the recent purchase of the instruments at current rates of interest.

Long-term debt: The fair value of the Company’s long-term debt (including current maturities) is estimated based on the current rates offered to the Company for debt of the same or similar issuances which are considered Level 2 inputs. The fair value of the Company’s long-term debt was approximately $1,375,000 and $1,437,000 at April 30, 2024 and 2023, respectively. The fair value calculated excludes finance lease obligations of $101,818 and $95,072 outstanding at April 30, 2024 and 2023, respectively, which are grouped with long-term debt on the consolidated balance sheets.

Credit Agreement

In the prior fiscal year, the Company entered into a credit agreement for (a) a $250 million unsecured term loan (the “Term Loan Facility”) and (b) an $850 million unsecured revolving credit facility (the “Revolving Facility” and together with the Term Loan Facility, the “Credit Facilities”). The Term Loan Facility was used to refinance the Company's previous term loan under a prior credit agreement, and to pay fees and expenses in connection therewith. The Revolving Facility is available for working capital and other general corporate purposes of the Company and its subsidiaries.

Amounts borrowed under the Credit Facilities bear interest at variable rates based upon, at the Company’s option, either: (a) either Term SOFR or Daily Simple SOFR, in each case plus 0.10% (with a floor of 0.00%) for the interest period in effect, plus an applicable margin ranging from 1.10% to 1.70% or (b) an alternate base rate, which generally equals the highest of (i) the prime commercial lending rate announced by the Administrative Agent as its “prime rate”, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) Adjusted Daily Simple SOFR plus 1.00%, each plus an applicable margin ranging from 0.10% to 0.70% and each with a floor of 1.00%. The Revolving Facility carries a facility fee of 0.15% to 0.30% per annum. The applicable margins and facility fee, in each case, are dependent upon the Company’s quarterly Consolidated Leverage Ratio, as defined in the credit agreement.

The outstanding principal balance on the Term Loan Facility is required to be repaid in equal quarterly installments in an amount equal to 1.25% of the original principal amount, on the last day of each March, June, September, and December, with the balance of the Credit Facilities due on April 21, 2028. The credit agreement contains an expansion option permitting the Company to request an increase of either of the Credit Facilities from time to time not to exceed the greater of (a) $900 million and (b) 100% of Consolidated EBITDA (as defined in the credit agreement) of the Company for the four most recently completed fiscal quarters, from the lenders or other financial institutions acceptable to the Company and the administrative agent, upon the satisfaction of certain conditions, including the consent of the lenders whose commitments would increase.

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

Bank Line

The Company has an additional unsecured bank line of credit (the "Bank Line") with availability of up to $50,000. As of April 30, 2024, the availability under the Bank Line is encumbered by letters of credits totaling $308. The Bank Line bears

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interest at a variable rate subject to change from time to time based on changes in an independent index referred to in the Bank Line as the Federal Funds Offered Rate. There was $0 outstanding under the Bank Line at April 30, 2024 and 2023. The Bank Line is due upon demand.

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

			As of April 30,
			2024						2023
Finance lease liabilities (Note 7)			$	101,818					$	95,072
3.67% Senior Notes (Series A) due in 7 installments beginning June 17, 2022, and ending June 15, 2028			111,000						135,000
3.75% Senior Notes (Series B) due in 7 installments beginning December 17, 2022 and ending December 18, 2028			37,000						45,000
3.65% Senior Notes (Series C) due in 7 installments beginning May 2, 2025 and ending May 2, 2031			50,000						50,000
3.72% Senior Notes (Series D) due in 7 installments beginning October 28, 2025 and ending October 28, 2031			50,000						50,000
3.51% Senior Notes (Series E) due June 13, 2025			150,000						150,000
3.77% Senior Notes (Series F) due August 22, 2028			250,000						250,000
2.85% Senior Notes (Series G) due August 7, 2030			325,000						325,000
2.96% Senior Notes (Series H) due August 6, 2032			325,000						325,000
Variable rate term loan facility, requiring quarterly installments ending April 21, 2028			237,500						250,000
Debt issuance costs			(1,379)						(1,698)
			$	1,635,939					$	1,673,374
Less current maturities			53,181						52,861
			$	1,582,758					$	1,620,513

Interest, net on the consolidated statements of income is net of interest income of $11,736, $7,823, and $48 for the years ended April 30, 2024, 2023, and 2022, respectively. Interest, net is also net of interest capitalized of $3,363, $3,631, and $2,031 during the years ended April 30, 2024, 2023, and 2022, respectively.

The agreements relating to the above long-term debt contain certain operating and financial covenants. At April 30, 2024, the Company was in compliance with all such operating and financial covenants.

Listed below are the aggregate maturities of long-term debt, excluding finance lease obligations (refer to Note 7 for future minimum payments under finance leases), for the 5 years commencing May 1, 2024 and thereafter:

Years ended April 30,
2025						$	44,500
2026						204,500
2027						60,500
2028						248,000
2029						286,000
Thereafter						692,000
						$	1,535,500

4. PREFERRED AND COMMON STOCK

Preferred stock: The Company has 1,000,000 authorized shares of preferred stock, of which 250,000 shares have been designated as Series A Serial Preferred Stock. No shares of preferred stock have been issued.

Common stock: The Company currently has 120,000,000 authorized shares of common stock.

Stock incentive plans: The 2018 Stock Incentive Plan (the “2018 Plan”) was approved by the Company's shareholders on September 5, 2018. Awards under the 2018 Plan may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other equity-based and equity-related awards. Each share issued pursuant to a stock option and each share with respect to which a stock-settled stock appreciation right is exercised (regardless of the number of shares actually delivered) is counted as one share against the maximum limit under the 2018 Plan, and each share issued pursuant to an award

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of restricted stock or restricted stock units is counted as two shares against the maximum limit. Restricted stock is transferred immediately upon grant (and may be subject to a holding period), whereas restricted stock units have a vesting period that must expire, and in some cases performance or market conditions that must be satisfied before the stock is transferred. At April 30, 2024, there were 1,135,976 shares available for grant under the 2018 Plan.

We account for share-based compensation by estimating the grant date fair value of time-based and performance-based restricted stock unit awards using the closing price of our common stock on the applicable grant date, or the date on which performance goals for performance-based units are established, if after the grant date. The time-based awards most commonly vest ratably over a three-year period commencing on the first anniversary of the grant date. The performance-based awards represent a “target” amount; the final amount earned is based on the satisfaction of certain performance measures over a three-year performance period and will range from 0% to 200% of “target." The performance-based awards are also subject to the TSR Modifier (see Note 1 for additional information). The fair value of these awards is determined using a Monte Carlo simulation as of the date of the grant. For market-based awards, the share-based compensation expense will not be adjusted should the target awards vary from actual awards.

We recognize these amounts as an operating expense in our consolidated statements of income ratably over the requisite service period using the straight-line method, as adjusted for certain retirement provisions, and updated estimates of shares to be issued under performance-based awards. All awards have been granted at no cost to the grantee.

The following table presents a summary of our RSU activity during the three-year period ended April 30, 2024. At April 30, 2024, there were no stock options outstanding.

									Weighted-Average
									Grant Date Fair
			Shares						Value per Share
Unvested at April 30, 2021			646,920
Granted			154,278						$	219
Vested			(242,955)
Forfeited			(30,055)
Performance Award Adjustments			(1,794)
Unvested at April 30, 2022			526,394
Granted			165,024						218
Vested			(233,533)
Forfeited			(40,773)
Performance Award Adjustments			133,728
Unvested at April 30, 2023			550,840						212
Granted			142,865						238
Vested			(219,752)						195
Forfeited			(17,534)						224
Performance Award Adjustments			35,443						246
Unvested at April 30, 2024			491,862						$	229

Total share-based compensation costs recorded for employees and non-employee board members for the restricted stock unit awards for the years ended April 30, 2024, 2023 and 2022 were $41,379, $47,024, and $37,976, respectively. As of April 30, 2024, there was $38,910 of total unrecognized compensation costs related to the 2018 Plan for costs related to restricted stock units which are expected to be recognized ratably through fiscal 2027, with a weighted average remaining term of 1.0 year. The fair value of restricted stock unit awards vested for the years ended April 30, 2024, 2023 and 2022 were $49,631, $46,943, and, $51,046, respectively, as of the applicable vest date.

On, and effective as of, March 3, 2022, the Board authorized a share repurchase program, whereby the Company was authorized to repurchase its outstanding common stock from time-to-time, for an aggregate amount of up to $400 million, exclusive of fees, commissions or other costs (the "Repurchase Program"). The Repurchase Program has no set expiration date. The timing and number of repurchase transactions depends on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements. The Repurchase Program can be suspended or discontinued at any time. During fiscal 2024, the Company repurchased and retired 392,290 shares of our common stock under our share repurchase program for a total of $104.9 million, excluding fees, commissions and other costs. As of April 30, 2024, $295.1 million remained available for future purchases under this share repurchase program.

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5. NET INCOME PER COMMON SHARE

Computations for basic and diluted earnings per common share are presented below:

			Years ended April 30,
			2024						2023						2022
Basic
Net income			$	501,972					$	446,691					$	339,790
Weighted average shares outstanding-basic			37,164,022						37,266,851						37,158,898
Basic earnings per common share			$	13.51					$	11.99					$	9.14
Diluted
Net income			$	501,972					$	446,691					$	339,790
Weighted-average shares outstanding-basic			37,164,022						37,266,851						37,158,898
Plus effect of stock options and restricted stock units			206,284						252,844						197,800
Weighted-average shares outstanding-diluted			37,370,306						37,519,695						37,356,698
Diluted earnings per common share			$	13.43					$	11.91					$	9.10

6. INCOME TAXES

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

			Years ended April 30,
			2024						2023						2022
Current tax expense:
Federal			$	78,542					$	95,336					$	4,382
State			22,394						22,365						13,835
			100,936						117,701						18,217
Deferred tax expense			53,252						23,126						82,721
Total income tax expense			$	154,188					$	140,827					$	100,938

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The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:

			As of April 30,
			2024						2023
Deferred tax assets:
Accrued liabilities and reserves			$	9,075					$	7,031
Deferred revenue			15,222						15,565
Accrued bonus compensation			10,272						9,361
Workers compensation			11,281						11,500
Operating and finance lease obligations			55,739						52,464
Asset retirement obligations			10,036						9,404
Deferred compensation			2,909						3,242
Equity compensation			8,018						8,305
State net operating losses and tax credits			2,568						1,807
Other			4,523						3,551
Total gross deferred tax assets			129,643						122,230
Less valuation allowance			550						250
Total net deferred tax assets			129,093						121,980
Deferred tax liabilities:
Property and equipment depreciation			(667,680)						(617,154)
Goodwill			(52,900)						(43,900)
Other			(5,363)						(4,524)
Total gross deferred tax liabilities			(725,943)						(665,578)
Net deferred tax liability			$	(596,850)					$	(543,598)

At April 30, 2024, the Company had net operating loss carryforwards for state income tax purposes of $126,681, which are available to offset future state taxable income. The state net operating loss carryforwards begin to expire in 2031. In addition, the Company had state tax credit carryforwards of $2,319, which begin to expire in 2027.

The valuation allowance for state net operating loss and state tax credit deferred tax assets as of April 30, 2024 and 2023 was $550 and $250, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected taxable income, and tax planning strategies in making this assessment.

Total reported tax expense applicable to the Company’s continuing operations varies from the tax that would have resulted from applying the statutory U.S. federal income tax rates to income before income taxes.

			Years ended April 30,
			2024						2023						2022
Income taxes at the statutory rates			21.0		%				21.0		%				21.0		%
Federal tax credits			(1.0)		%				(1.3)		%				(1.8)		%
State income taxes, net of federal tax benefit			3.7		%				4.0		%				3.8		%
Impact of phased-in state law changes, net of federal benefit			(1.0)		%				(0.4)		%				(0.8)		%
ASU 2016-09 benefit (share-based compensation)			(0.1)		%				(0.3)		%				(1.0)		%
Nondeductible executive compensation			0.9		%				1.1		%				1.2		%
Other			—		%				(0.1)		%				0.5		%
			23.5		%				24.0		%				22.9		%

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company had a total of $10,747 and $10,957 in gross unrecognized tax benefits at April 30, 2024 and 2023, respectively, which is recorded in other long-term liabilities in the consolidated balance sheets. Of this amount, $8,490 represents the amount of unrecognized tax

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benefits that, if recognized, would impact our effective tax rate. Unrecognized tax benefits decreased $210 during the twelve months ended April 30, 2024, due primarily to the expiration of certain statute of limitation exceeding the increase associated with income tax filing positions for the current year. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

			2024						2023
Beginning balance			$	10,957					$	10,259
Additions based on tax positions related to current year			2,570						2,867
Reductions due to lapse of applicable statute of limitations			(2,780)						(2,169)
Ending balance			$	10,747					$	10,957

The total net amount of accrued interest and penalties for such unrecognized tax benefits was $350 and $386 at April 30, 2024 and 2023, respectively, and is included in other long-term liabilities. Net interest and penalties included in income tax expense for the twelve month periods ended April 30, 2024 and 2023 was an decrease in tax expense of $36 and an increase in tax expense of $15, respectively.

A number of years may elapse before an uncertain tax position is audited and ultimately settled. 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 Company has no ongoing federal or state income tax examinations.

At this time, the Company’s best estimate of the reasonably possible change in the amount of the gross unrecognized tax benefits is a decrease of $2,000 during the next twelve months mainly due to the expiration of certain statute of limitations. The federal statute of limitations remains open for the tax years 2020 and forward. Tax years 2019 and forward are subject to audit by state tax authorities depending on open statute of limitations waivers and the tax code of each state.

7. LEASES

The Company is a lessee in situations where we lease property and equipment, most commonly land, building or store equipment, from a lessor. The Company is a lessor in situations where the Company owns land or building and leases a portion or all of the property or equipment to a tenant. In both situations, leases are reported in accordance with ASC 842 - Leases. As a lessee, the Company recognizes 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 are initially 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, we have elected to not recognize lease assets and lease liabilities and will recognize lease expense on a straight-line basis over the lease term. The Company records operating lease liabilities in other accrued expenses and other long-term liabilities and records finance lease liabilities within current maturities of long-term debt and finance lease obligations and long-term debt and finance lease obligations on the consolidated balance sheets. All lessor related activity is considered immaterial to the consolidated financial statements.

New leases are recognized at the present value of the lease payments using the implicit rate in the lease agreement when it is readily determinable. In the case the implicit rate is not readily determinable, the Company uses our incremental borrowing rate of debt based on the term of the lease. The Company commonly has options to renew or extend the current lease arrangement on many of our leases. In these situations, if it is reasonably certain the lease would be extended, we have included those extensions within the remaining lease payments at the time of measurement.

When acquiring leases in a business combination, we retain the lease classification utilized by the seller if it was determined using acceptable methods under ASC 842. As part of the allocation of the purchase price in a business combination, lease terms are compared to market terms utilizing an income approach to determine if leases are favorable or unfavorable. Any favorable or unfavorable leasehold interests identified increase (favorable) or reduce (unfavorable) the right-of-use lease asset and are recognized over the life of the related right-of-use asset.

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

									Years ended April 30,
			Classification						2024						2023
Finance lease right-of-use assets			Net property and equipment						$	83,714					$	79,344
Operating lease right-of-use assets			Other assets, net of amortization						115,819						107,994

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

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						Years ended April 30,
						2024						2023						2022
Operating lease cost						$	10,174					$	9,346					$	6,721
Finance lease cost:
Amortization of right-of-use assets						$	10,417					$	5,882					$	4,489
Interest on lease liabilities						4,491						2,966						2,337

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

						Years ended April 30,
						2024						2023						2022
Operating cash flows required by operating leases						$	8,693					$	7,725					$	5,468
Operating cash flows required by finance leases						4,491						2,966						2,337
Financing cash flows required by finance leases						9,156						5,345						4,162
Right-of-use assets obtained in exchange for new finance lease liabilities						$	17,626					$	25,166					$	52,525
Right-of-use assets obtained in exchange for new operating lease liabilities						14,646						14,642						87,723

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

			April 30,
			2024						2023
Weighted-average remaining lease-term - finance lease			15.4						15.1
Weighted-average remaining lease-term - operating lease			19.1						19.8
Weighted-average discount rate - finance lease			4.77		%				4.40		%
Weighted-average discount rate - operating lease			4.91		%				4.33		%

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

Years ended April 30,			Finance leases						Operating leases
2025			$	12,942					$	9,297
2026			12,964						9,194
2027			12,970						9,147
2028			11,601						9,127
2029			6,199						9,049
Thereafter			87,707						134,729
Total minimum lease payments			$	144,383					$	180,543
Less amount representing interest			42,565						65,374
Present value of net minimum lease payments			$	101,818					$	115,169

Effective during the third quarter of fiscal year 2020, Casey’s Marketing Company, and the City of Joplin, Missouri (“Joplin”) entered into an agreement in which Joplin agreed to issue up to $51,400 of taxable industrial development revenue bonds for the purpose of acquiring, constructing, improving, purchasing, equipping and installing a warehouse and distribution facility, which has been completed and is currently being used by the Company. As the title of the development was transferred to Joplin and the Company is subsequently leasing the related asset from Joplin, we have accounted for the transaction under the sale-and-leaseback guidance included in ASC 842-40. We have a purchase option included in the lease agreement for below the fair value of the asset, which prevents the transfer of the assets to Joplin from being recognized as a sale. Accordingly, we have not recognized any gain or loss related to the transfer. Furthermore, we have not derecognized the transferred assets and continue to recognize them in property and equipment on the consolidated balance sheets. The Company has the right and intends to set-off any obligations to make payments under the lease, with proceeds due from the industrial revenue bonds. As of April 30, 2024, we have recognized the full amount of bonds available as property and equipment on the consolidated balance sheets related to this agreement.

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8. BENEFIT PLAN

The Company provides Team Members with a defined contribution 401(k) Plan. The 401(k) Plan is available to all Team Members who meet minimum age and service requirements. The Company contributions consist of matching amounts in Company stock and are allocated based on Team Member contributions. Contributions to the 401(k) Plan were $14,262, $11,765, and $10,983 for the years ended April 30, 2024, 2023, and 2022, respectively.

On April 30, 2024 and 2023, 715,328 and 751,339 shares of common stock, respectively, were held by the trustee of the 401(k) Plan in trust for distribution to eligible participants upon death, disability, retirement, or termination of employment. Shares held by the 401(k) Plan are treated as outstanding in the computation of net income per common share.

9. COMMITMENTS

The Company has entered into employment agreements with its Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, each of which require minimum annual compensation. The Company also has entered into change of control agreements with its Chief Executive Officer and 32 other officers, providing for certain payments in the event of termination in connection with a change of control of the Company, as defined therein.

10. CONTINGENCIES

Environmental compliance: The United States Environmental Protection Agency and several states have adopted laws and regulations relating to underground storage tanks used for petroleum products. The majority of the states in which the Company does business have trust fund programs with provisions for sharing or reimbursing corrective action or remediation costs.

Management currently believes that substantially all capital expenditures for electronic monitoring, cathodic protection, and overfill/spill protection to comply with existing regulations have been completed. The Company has an accrued liability at April 30, 2024 and 2023 of approximately $299 and $268, respectively, for estimated expenses related to anticipated corrective actions or remediation efforts, including relevant legal and consulting costs. Management believes the Company has no material joint and several environmental liability with other parties. Additional regulations or amendments to the existing regulations could result in future revisions to such estimated expenditures.

Legal matters: From time to time we may be involved in legal or administrative proceedings or investigations arising from the conduct of our business operations, including, but not limited to, contractual disputes; employment, personnel, or accessibility matters; personal injury and property damage claims; and claims by federal, state, and local regulatory authorities relating to the sale of products pursuant to licenses and permits issued by those authorities. Claims for damages in those actions may be substantial. While the outcome of such litigation, proceedings, investigations, or claims is never certain, it is our opinion, after taking into consideration legal counsel’s assessment and the availability of insurance proceeds and other collateral sources to cover potential losses, that the ultimate disposition of such matters currently pending or threatened, individually or cumulatively, will not have a material impact on our consolidated financial position and results of operations.

The Company is named as a defendant in a lawsuit filed in the United States District Court for the Northern District of Indiana, titled McColley v. Casey’s General Stores, Inc., in which the plaintiff alleges that the Company misclassified its Store Managers as exempt employees under the Fair Labor Standards Act (FLSA). The complaint seeks unpaid wages, liquidated damages and attorneys’ fees for the plaintiff and all similarly situated Store Managers who worked at the Company from February 16, 2015, to the present. On March 31, 2021, the Court granted conditional certification, and to-date, approximately 1,400 current and/or former Store Managers remain opted-in to participate in the McColley lawsuit. The Company is also named in a related lawsuit filed in the Southern District of Illinois, titled Kessler v. Casey’s Marketing Company, et al., with substantially the same allegations and seeking the same relief, but instead for the plaintiff and all similarly situated Store Managers located in the state of Illinois from December 19, 2019, to the present. On October 13, 2023, the Court approved conditional certification, and to-date, approximately 550 current and/or former Store Managers remain opted-in to participate in the Kessler lawsuit. Discovery in both cases is currently underway. The Company believes that adequate provisions have been made for probable losses related to these matters, and that those, and the reasonably possible losses in excess of amounts accrued, where such range of loss can be estimated, are not material to the Company’s financial position, results of operations or cash flows. The Company believes that its Store Managers are properly classified as exempt employees under the FLSA and it intends to continue to vigorously defend these matters.

In 2023, the Company received a $15,297 one-time payment from the resolution of a legal matter. These proceeds were recognized as a reduction to operating expenses in the consolidated statements of income.

At April 30, 2024, the Company was primarily self-insured for workers’ compensation claims in all but two states of its operating territory. In North Dakota and Ohio, the Company is required to participate in an exclusive, state managed fund for

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all workers compensation claims. The Company was also partially self-insured for general liability and auto liability under an agreement that provides for annual stop-loss limits equal to or exceeding $2,000 for auto liability and $1,000 for general liability and workers' compensation. Additionally, the Company is self-insured for its portion of Team Member medical expenses. At April 30, 2024 and 2023, the Company had $57,369 and $61,168, respectively, accrued for estimated claims relating to self-insurance, the majority of which has been actuarially determined.

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