SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~July 31, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34700

CASEY’S GENERAL STORES, INC.

(Exact name of registrant as specified in its charter)


Iowa						42-0935283
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

One SE Convenience Blvd., Ankeny, Iowa

(Address of principal executive offices)

50021

(Zip Code)

(515) 965-6100

(Registrant’s telephone number, including area code)

Securities Registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value per share	CASY	The NASDAQ Global Select Market

Securities Registered pursuant to Section 12(g) of the Act

NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at ~~November 30, 2021~~September 1, 2022
Common stock, no par value per share						~~37,108,803~~37,255,085 shares

Table of Contents

CASEY’S GENERAL STORES, INC.

INDEX


			Page
PART I	FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements
		Condensed consolidated balance ~~sheets---October~~sheets---J ul y 31, ~~2021~~2022 and April 30, ~~2021~~202 2 (unaudited)	4
		Condensed consolidated statements of income---three ~~and six~~ months ~~months~~ ended J ~~October~~uly 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	5
		Condensed consolidated statement of shareholders' equity---s i xthree months ended J Ocul ~~tober~~y 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	6
		Condensed consolidated statements of cash flows--- ~~six~~three months ended J ~~October~~ul y 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	7
		Notes to unaudited condensed consolidated financial statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1513
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2219
	Item 4.	Controls and Procedures	2219
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	2219
	Item 1A.	Risk Factors	2319
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	2319
	Item 6.	Exhibits	2421
SIGNATURE			2522

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(DOLLARS IN THOUSANDS)


		October 31, 2021		April 30, 2021			July 31, 2022		April 30, 2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	311,698	$	336,545	Cash and cash equivalents	$	312,364	$	158,878
Receivables	Receivables	90,598		79,698		Receivables	145,887		108,028
Inventories	Inventories	350,182		286,598		Inventories	399,138		396,199
Prepaid expenses	Prepaid expenses	25,312		11,214		Prepaid expenses	24,363		17,859

Income taxes receivable	Income taxes receivable	17,231		9,578		Income taxes receivable	21,102		44,071
Total current assets	Total current assets	795,021		723,633		Total current assets	902,854		725,035
Other assets, net of amortization	Other assets, net of amortization	147,849		82,147		Other assets, net of amortization	184,606		187,219
Goodwill	Goodwill	454,548		161,075		Goodwill	612,934		612,934
Property and equipment, net of accumulated depreciation of $2,308,424 at October 31, 2021 and $2,206,405 at April 30, 2021		3,854,692		3,493,459
Property and equipment, net of accumulated depreciation of $2,497,846 at July 31, 2022 and $2,425,709 at April 30, 2022						Property and equipment, net of accumulated depreciation of $2,497,846 at July 31, 2022 and $2,425,709 at April 30, 2022	3,978,747		3,980,542
Total assets	Total assets	$	5,252,110	$	4,460,314	Total assets	$	5,679,141	$	5,505,730


Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity					Liabilities and Shareholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:

Current maturities of long-term debt and finance lease obligations	Current maturities of long-term debt and finance lease obligations	$	34,134	$	2,354	Current maturities of long-term debt and finance lease obligations	33,562		24,466
Accounts payable	Accounts payable	509,300		355,471		Accounts payable	618,931		588,783
Accrued expenses	Accrued expenses	260,062		254,924		Accrued expenses	284,890		291,429

Total current liabilities	Total current liabilities	803,496		612,749		Total current liabilities	937,383		904,678
Long-term debt and finance lease obligations, net of current maturities	Long-term debt and finance lease obligations, net of current maturities	1,677,391		1,361,395		Long-term debt and finance lease obligations, net of current maturities	1,639,177		1,663,403
Deferred income taxes	Deferred income taxes	496,451		439,721		Deferred income taxes	545,199		520,472
Deferred compensation	Deferred compensation	15,140		15,094		Deferred compensation	12,674		12,746
Insurance accruals, net of current portion	Insurance accruals, net of current portion	25,374		26,239		Insurance accruals, net of current portion	28,475		27,957
Other long-term liabilities	Other long-term liabilities	111,124		72,437		Other long-term liabilities	136,187		135,636
Total liabilities	Total liabilities	3,128,976		2,527,635		Total liabilities	3,299,095		3,264,892
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Preferred stock, no par value	Preferred stock, no par value	—		—		Preferred stock, no par value	—		—
Common stock, no par value	Common stock, no par value	59,214		58,951		Common stock, no par value	80,119		79,412
Retained earnings	Retained earnings	2,063,920		1,873,728		Retained earnings	2,299,927		2,161,426
Total shareholders’ equity	Total shareholders’ equity	2,123,134		1,932,679		Total shareholders’ equity	2,380,046		2,240,838
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	5,252,110	$	4,460,314	Total liabilities and shareholders' equity	$	5,679,141	$	5,505,730

See notes to unaudited condensed consolidated financial statements.

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)


		Three Months Ended October 31,				Six Months Ended October 31,					Three Months Ended July 31,
		2021		2020		2021		2020			2022		2021
Total revenue	Total revenue	$	3,262,942	$	2,215,905	$	6,444,935	$	4,320,926	Total revenue	$	4,454,644	$	3,181,994
Cost of goods sold (exclusive of depreciation and amortization, shown separately below)	Cost of goods sold (exclusive of depreciation and amortization, shown separately below)	2,545,352		1,584,145		5,003,458		3,065,663		Cost of goods sold (exclusive of depreciation and amortization, shown separately below)	3,618,394		2,458,107

Operating expenses	Operating expenses	500,644		410,348		979,572		796,436		Operating expenses	543,271		478,928
Depreciation and amortization	Depreciation and amortization	74,258		64,294		150,146		130,114		Depreciation and amortization	76,295		75,888
Interest, net	Interest, net	13,520		10,634		27,250		24,041		Interest, net	13,816		13,730
Income before income taxes	Income before income taxes	129,168		146,484		284,509		304,672		Income before income taxes	202,868		155,341
Federal and state income taxes	Federal and state income taxes	32,337		34,501		68,519		72,097		Federal and state income taxes	49,936		36,182
Net income	Net income	$	96,831	$	111,983	$	215,990	$	232,575	Net income	$	152,932	$	119,159
Net income per common share	Net income per common share									Net income per common share
Basic	Basic	$	2.61	$	3.02	$	5.81	$	6.29	Basic	$	4.11	$	3.21
Diluted	Diluted	$	2.59	$	3.00	$	5.78	$	6.24	Diluted	$	4.09	$	3.19
Basic weighted average shares outstanding	Basic weighted average shares outstanding	37,162,984		37,030,921		37,144,744		37,002,901		Basic weighted average shares outstanding	37,222,943		37,126,060
Plus effect of stock compensation	Plus effect of stock compensation	205,669		245,962		205,669		245,749		Plus effect of stock compensation	186,762		209,377
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	37,368,653		37,276,883		37,350,413		37,248,650		Diluted weighted average shares outstanding	37,409,705		37,335,437

Dividends declared per share	Dividends declared per share	$	0.35	$	0.32	$	0.69	$	0.64	Dividends declared per share	$	0.38	$	0.34

See notes to unaudited condensed consolidated financial statements.

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER 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 — — 119,159 119,159
Dividends declared (34 cents per share) — — (12,680) (12,680)
Exercise of stock options 3,000 133 — 133
Share-based compensation (net of tax withholding on employee share-based awards) 149,368 (8,626) — (8,626)
Balance at July 31, 2021 37,102,246 50,458 1,980,207 2,030,665
Net income — — 96,831 96,831
Dividends declared (35 cents per share) — — (13,118) (13,118)
Share-based compensation (net of tax withholding on employee share-based awards) 6,557 8,756 — 8,756
Balance at October 31, 2021 37,108,803 $ 59,214 $ 2,063,920 $ 2,123,134


	Shares Outstanding	Common Stock		Retained Earnings		Shareholders' Equity




















Balance at April 30, 2022	37,111,667	$	79,412	$	2,161,426	$	2,240,838
Net income	—	—		152,932		152,932
Dividends declared (38 cents per share)	—	—		(14,431)		(14,431)

Share-based compensation (net of tax withholding on employee share-based awards)	138,132	707		—		707
Balance at July 31, 2022	37,249,799	$	80,119	$	2,299,927	$	2,380,046


		Shares Outstanding	Common Stock		Retained Earnings		Shareholders' Equity			Shares Outstanding	Common Stock		Retained Earnings		Shareholders' Equity

Balance at April 30, 2020		36,806,325	$	33,286	$	1,609,919	$	1,643,205
Balance at April 30, 2021									Balance at April 30, 2021	36,949,878	$	58,951	$	1,873,728	$	1,932,679
Net income	Net income	—	—		120,592		120,592		Net income	—	—		119,159		119,159
Dividends declared (32 cents per share)		—	—		(11,874)		(11,874)
Dividends declared (34 cents per share)									Dividends declared (34 cents per share)	—	—		(12,680)		(12,680)
Exercise of stock options	Exercise of stock options	4,748	211		—		211		Exercise of stock options	3,000	133		—		133
Share-based compensation (net of tax withholding on employee share-based awards)	Share-based compensation (net of tax withholding on employee share-based awards)	95,700	(896)		—		(896)		Share-based compensation (net of tax withholding on employee share-based awards)	149,368	(8,626)		—		(8,626)
Balance at July 31, 2020		36,906,773	32,601		1,718,637		1,751,238
Net income		—	—		111,983		111,983
Dividends declared (32 cents per share)		—	—		(11,883)		(11,883)
Exercise of stock options		23,470	1,042		—		1,042
Share-based compensation (net of tax withholding on employee share-based awards)		5,504	7,471		—		7,471
Balance at October 31, 2020		36,935,747	$	41,114	$	1,818,737	$	1,859,851
Balance at July 31, 2021									Balance at July 31, 2021	37,102,246	$	50,458	$	1,980,207	$	2,030,665

See notes to unaudited condensed consolidated financial statements.

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(DOLLARS IN THOUSANDS)


		Six months ended October 31,					Three months ended July 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	215,990	$	232,575	Net income	$	152,932	$	119,159
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	150,146		130,114		Depreciation and amortization	76,295		75,888
Amortization of debt issuance costs	Amortization of debt issuance costs	717		—		Amortization of debt issuance costs	345		359
Share-based compensation	Share-based compensation	17,500		14,492		Share-based compensation	16,185		8,623
(Gain) loss on disposal of assets and impairment charges		(1,707)		2,159
Loss (gain) on disposal of assets and impairment charges						Loss (gain) on disposal of assets and impairment charges	230		(1,770)
Deferred income taxes	Deferred income taxes	58,073		15,607		Deferred income taxes	24,727		33,460

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Receivables	Receivables	(8,087)		(7,609)		Receivables	(37,859)		(18,511)
Inventories	Inventories	(39,531)		(13,835)		Inventories	(2,899)		(26,624)
Prepaid expenses	Prepaid expenses	(13,698)		(8,381)		Prepaid expenses	(6,504)		(5,264)
Accounts payable	Accounts payable	87,831		125,719		Accounts payable	34,799		65,727
Accrued expenses	Accrued expenses	(6,134)		39,177		Accrued expenses	(7,865)		(12,035)
Income taxes	Income taxes	(6,898)		22,924		Income taxes	23,953		1,531
Other, net	Other, net	1,175		(985)		Other, net	1,867		1,016
Net cash provided by operating activities	Net cash provided by operating activities	455,377		551,957		Net cash provided by operating activities	276,206		241,559
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of property and equipment	Purchase of property and equipment	(123,518)		(158,815)		Purchase of property and equipment	(82,070)		(45,045)
Payments for acquisition of businesses, net of cash acquired	Payments for acquisition of businesses, net of cash acquired	(626,126)		—		Payments for acquisition of businesses, net of cash acquired	(1,065)		(617,291)
Proceeds from sales of assets	Proceeds from sales of assets	21,890		2,667		Proceeds from sales of assets	5,019		18,001
Net cash used in investing activities	Net cash used in investing activities	(727,754)		(156,148)		Net cash used in investing activities	(78,116)		(644,335)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from long-term debt	Proceeds from long-term debt	300,000		650,000		Proceeds from long-term debt	—		300,000
Payments of long-term debt	Payments of long-term debt	(9,750)		(570,738)		Payments of long-term debt	(15,998)		(4,867)
Payments of debt issuance costs	Payments of debt issuance costs	(249)		—		Payments of debt issuance costs	—		(249)
Net payments of short-term debt		—		(120,000)

Proceeds from exercise of stock options	Proceeds from exercise of stock options	133		1,253		Proceeds from exercise of stock options	—		133
Proceeds from capital grant		—		1,594

Payments of cash dividends	Payments of cash dividends	(25,234)		(23,591)		Payments of cash dividends	(13,128)		(12,609)
Tax withholdings on employee share-based awards	Tax withholdings on employee share-based awards	(17,370)		(7,917)		Tax withholdings on employee share-based awards	(15,478)		(17,249)
Net cash provided by (used in) financing activities		247,530		(69,399)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(44,604)		265,159


Net (decrease) increase in cash and cash equivalents		(24,847)		326,410
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	153,486		(137,617)
Cash and cash equivalents at beginning of the period	Cash and cash equivalents at beginning of the period	336,545		78,275		Cash and cash equivalents at beginning of the period	158,878		336,545
Cash and cash equivalents at end of the period	Cash and cash equivalents at end of the period	$	311,698	$	404,685	Cash and cash equivalents at end of the period	$	312,364	$	198,928

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Continued)

(DOLLARS IN THOUSANDS)

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION


		Six months ended October 31,					Three months ended July 31,
		2021		2020			2022		2021
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest, net of amount capitalized	Interest, net of amount capitalized	$	25,076	$	26,535	Interest, net of amount capitalized	$	8,689	$	7,914
Income taxes, net	Income taxes, net	14,937		31,956		Income taxes, net	—		—

Noncash investing and financing activities:	Noncash investing and financing activities:					Noncash investing and financing activities:
Purchased property and equipment in accounts payable	Purchased property and equipment in accounts payable	50,713		18,471		Purchased property and equipment in accounts payable	42,008		22,007
Right-of-use assets obtained in exchange for new finance lease liabilities	Right-of-use assets obtained in exchange for new finance lease liabilities	47,775		—		Right-of-use assets obtained in exchange for new finance lease liabilities	736		47,775
Right-of-use assets obtained in exchange for new operating lease liabilities	Right-of-use assets obtained in exchange for new operating lease liabilities	40,944		1,109		Right-of-use assets obtained in exchange for new operating lease liabilities	—		39,021

See notes to unaudited condensed consolidated financial statements.

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CASEY’S GENERAL STORES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(Dollars in Thousands, Except Share and Per Share Amounts)

1. Presentation of Financial Statements

Casey’s General Stores, Inc. and its subsidiaries (hereinafter referred to as the "Company" or "Casey’s") operate ~~2,380~~2,454 convenience stores in 1716 states, primarily in the Midwest. Many of the stores are located in smaller communities, often with populations of less than 5,000.

The accompanying condensed consolidated financial statements include the accounts and transactions of Casey's General Stores, Inc. and its direct and indirect wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

2. Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations.

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

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position as of ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021,~~2022, the results of operations for the three ~~and six~~ months ended ~~October~~July 31, ~~2021~~2022 and ~~2020,~~2021, and shareholders' equity and cash flows for the ~~six~~three months ended ~~October~~July 31, ~~2021~~2022 and ~~2020.~~2021. Although management believes that the disclosures are adequate to make the information presented not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto. See the Form 10-K for the year ended April 30, ~~2021~~2022 for our consideration of new accounting pronouncements.

3. Revenue and Cost of Goods Sold

The Company recognizes retail sales of fuel, grocery and general merchandise, ~~(previously referred to as “grocery and other merchandise”),~~ prepared food and dispensed beverage ~~(previously referred to as “prepared food and fountain”)~~ 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 condensed consolidated financial statements.

A portion of revenue from sales that include a redeemable digital box top coupon or points under our Casey’s Rewards program is deferred. The deferred portion of the sale represents the value of the estimated future redemption of the digital box top coupon or points. The amounts related to digital box top coupons and points are deferred until their redemption or expiration. Revenue related to the digital box top coupons and points issued is expected to be recognized less than one year from the original sale to the guest. As of ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021,~~2022, the Company recognized a contract liability of ~~$36,379~~$45,317 and ~~$30,719,~~$41,577, respectively, related to the outstanding digital box top coupons and Casey's Rewards points, which is included in accrued expenses on the condensed consolidated balance sheets.

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 July 31, 2022 and April 30, 2022, the Company recognized a liability of $15,982 and $15,509, respectively, related to outstanding gift cards, which is included in accrued expenses on the condensed consolidated balance sheets.

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 treated as a reduction in cost of goods sold in the period the Company commits to a price and agrees to sell the RIN.

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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 condensed consolidated statements of income. ~~Reimbursements of an operating expense (e.g., advertising) are recorded as reductions of the related expense.~~

The Company often receives vendor allowances on the basis of quantitative contract terms that vary by product and vendor or on the basis of purchases made. Vendor allowances include rebates and other funds received from vendors to promote their products. Vendor rebates, including billbacks, are treated as a reduction in cost of goods sold and are

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recognized primarily based on the purchase of product or shipment of product from the warehouse to the store, or sale of product to our guests. These are recognized in the period earned based on the applicable rebate agreement.

4. Long-Term Debt and Finance Lease Obligations, Lines of Credit and Fair Value Disclosure

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. The fair value of the Company’s long-term debt was approximately ~~$1,683,000~~$1,509,000 and ~~$1,391,000~~$1,508,000 at ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021,~~2022, respectively. The fair value calculated excludes finance lease obligations of ~~$71,480~~$73,890 and ~~$14,085~~$74,234 outstanding at ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021,~~2022, respectively, which are grouped with long-term debt on the condensed consolidated balance sheets.

~~Term Loan Facility~~

In order to fund the acquisition of Buchanan Energy (see note 6) the Company drew on the senior unsecured term loan facility in the aggregate principal amount of $300 million (the “Term Loan Facility”) during the first quarter of fiscal 2022. Amounts borrowed under the Term Loan Facility bear interest at variable rates based upon, at the Company’s option, either: (i) the Adjusted LIBO Rate, plus a margin ranging from 1.55% to 2.60%; or (ii) the ABR Rate, plus a margin ranging from 0.20% to 1.60%. The Company initially elected the Adjusted LIBO Rate, and there is an option to elect either rate in subsequent interest periods. The Term Loan Facility also carries a facility fee of 0.20% to 0.40% per annum. The applicable margins and facility fee are dependent upon the Company's Consolidated Leverage Ratio, as defined in the Credit Agreement establishing the Term Loan Facility as calculated quarterly. The outstanding principal balance 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 due on January 6, 2026. The Company had an outstanding principal balance of $292,500 on the Term Loan Facility at October 31, 2021.

Revolving Facility

The Company has a committed unsecured revolving credit facility in the aggregate principal amount of $450,000 (the "Revolving Facility"). The maturity date for the ~~revolving facility~~Revolving Facility is January 11, 2024. Amounts borrowed under the Revolving Facility bear interest at variable rates based upon, at the Company’s option, either: (a) the LIBO Rate adjusted for statutory reserve requirements (but no less than ~~0.75%~~0.50%), plus a margin ranging from 1.05% to 1.85%; or (b) an alternate base rate, which is the higher of (i) the prime rate announced by the Administrative Agent, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) the one-month LIBO Rate plus 1.00%, plus a margin ranging from 0.05% to 0.85%. The Revolving Facility also carries a facility fee of 0.20% to 0.40% per annum. The applicable margins and facility fee are dependent upon the Company’s Consolidated Leverage Ratio, as ~~noted above.~~calculated as set forth in the Revolving Facility's underlying credit agreement. The Company had $0 outstanding under the Revolving Facility at ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021.~~2022.

Bank Line

The Company has an additional unsecured bank line of credit (the "Bank Line") with availability up to $25,000. The $25,000 availability under the Bank Line is encumbered by letters of credits totaling $5,924. 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”). There was $0 outstanding under the Bank Line at ~~October~~July 31, ~~2021~~2022 and April 30, ~~2021.~~2022. The Bank Line is due upon demand.

5. Compensation Related Costs and Share Based Payments

The 2018 Stock Incentive Plan (the “2018 Plan”), was approved by the Company's shareholders on September 5, 2018 ("the "2018 Plan Effective Date").

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 1one share against the maximum limit under the 2018 Plan, and each share issued pursuant to an award of restricted stock or restricted stock units is counted as 2two 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 ~~October~~July 31, ~~2021,~~2022, there were ~~1,975,756~~1,630,928 shares available for grant under the 2018 Plan.

We account for share-based compensation by estimating the fair value of time-based and performance-based restricted stock unit awards using the closing price of a share of our common stock on the date of grant. For market-based awards we use a ~~"Monte Carlo"~~Monte Carlo approach to estimate the value of the awards, which simulates the prices of the Company’s and each member of the performance peer groups' common stock price at the end of the relevant performance period, taking into account volatility and the specifics surrounding each total shareholder return metric under the relevant plan. We

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recognize these amounts as an operating expense in our condensed 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 ~~performance based~~performance-based awards. All awards have been granted at no cost to the grantee and/or non-employee member of the Board.

Information concerning the unvested restricted stock units under the 2018 Plan is presented in the following table:

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Unvested at April 30, ~~2021~~2022			~~646,920~~526,394
Granted			~~146,355~~151,840
Vested			~~(239,232)~~(215,988)
Forfeited			~~(23,857)~~(2,072)
Performance Award Adjustments			~~(41,791)~~62,028
Unvested at ~~October~~July 31, ~~2021~~2022			~~488,395~~522,202

The above awards reflect (a) long-term incentive compensation program grants for ~~2018~~fiscal 2021 through ~~2021,~~2023, which include a mix of time-based restricted stock units and performance-based restricted stock units (subject to three-year cumulative net income before net interest expense, income taxes, depreciation and amortization ("EBITDA")~~, three-year relative total shareholder return ("TSR")~~ and three-year average return on invested capital ("ROIC"), with further potential adjustments for three-year relative total shareholder return ("TSR"),) (b) certain “make-whole” and sign-on grants, which include a mix of time-based restricted stock units and performance-based restricted stock units subject to ~~TSR,~~ EBITDA and ROIC, with further potential adjustments for TSR (c) a special strategic grant which, upon grant, included performance-based restricted stock units subject to the performance of the Company’s e-commerce and loyalty platforms (which performance period has been completed, and are now subject to time-based vesting), (d) special performance grants which include time-based restricted stock units, and (e) non-employee director equity awards, which include time-based restricted stock units.

Total compensation costs recorded for employees and non-employee directors for the ~~six~~three months ended ~~October~~July 31, ~~2021~~2022 and ~~2020,~~2021, respectively, were ~~$17,500~~$16,185 and ~~$14,492,~~$8,623, related entirely to restricted stock unit awards. As of ~~October~~July 31, ~~2021,~~2022, there was ~~$43,139~~$61,052 of unrecognized compensation costs related to restricted stock units which are expected to be recognized through fiscal ~~2025.~~2026. No stock option awards have been granted under the 2018 Plan.

6. ~~Acquisitions~~

Many of our acquisitions meet the criteria to be considered business combinations. The Company accounts for business combinations using the acquisition method of accounting. Under this method of accounting, acquired assets and assumed liabilities are included within the acquirer's accounts as of the date of acquisition, with any excess of purchase price over the fair value of the net assets acquired recognized as goodwill. Acquisition-related transaction costs are recognized as period costs as incurred. We accounted for the Buchanan Energy and Circle K acquisitions as business combinations.

~~Buchanan Energy~~

On May 13, 2021, the Company closed on the acquisition of 100% of the equity interest in Buchanan Energy (and certain of its related subsidiaries and affiliated entities), owner of Bucky’s Convenience Stores. The transaction included 92 retail locations (consisting of 24 stores in Nebraska, 56 in Illinois, 5 in Iowa, 3 in Missouri, and 4 in Texas), a dealer network of 81 stores where Casey’s will manage fuel wholesale supply agreements to these stores, as well as several parcels of real estate which may be used for new store construction. NaN of the retail locations were divested shortly after closing as part of a consent order with the Federal Trade Commission. As a result of this acquisition, we increased our total store count to over 2,300 stores and have added a fuel wholesale business. The Company expects to achieve certain synergies over time, in part, through the reduction of duplicate processes, improvements in purchasing power, installing our kitchens, and expanding merchandise offerings.

~~The aggregate purchase price for the acquisition totaled $572,532, which is net of a provisional working capital adjustment of $4,710. Upon closing, $577,242 was paid in cash~~using available cash on hand and proceeds from the Term Loan Facility and a draw on the Revolving Facility, as discussed above in Note 4. The draw on the Revolving Facility has been repaid at October 31, 2021.

The table below summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. We utilized a third-party valuation specialist to assist in valuing the contractual customer relationships, leases, and property and equipment acquired. The accounting related to certain property and equipment, intangible assets, goodwill, contingent liabilities, deferred taxes, and the working capital adjustment is considered provisional and is subject to change.

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~~Assets acquired:~~
~~Cash and cash equivalents~~	$	~~5,517~~
~~Receivables~~	~~3,023~~
~~Inventories~~	~~18,516~~
~~Prepaid expenses~~	~~400~~
~~Property and equipment~~	~~293,176~~
~~Contractual customer relationships~~	~~31,100~~
~~Deferred income taxes~~	~~1,343~~
~~Finance lease right-of-use assets~~	~~10,689~~
~~Operating lease right-of-use assets~~	~~11,816~~
~~Other assets~~	24
~~Goodwill~~	~~261,811~~
~~Total assets~~	~~637,415~~
~~Liabilities assumed:~~
~~Accounts payable~~	~~24,736~~
~~Accrued expenses~~	~~8,395~~
~~Finance lease liabilities~~	~~12,369~~
~~Operating lease liabilities~~	~~15,666~~
~~Other long-term liabilities~~	~~3,717~~
~~Total liabilities~~	~~64,883~~
~~Net assets acquired and total purchase price~~	$	~~572,532~~

Acquired operating lease right-of-use assets are included within other assets, net of amortization and acquired operating lease liabilities are included within accrued expenses and other long-term liabilities in the condensed consolidated balance sheets as of October 31, 2021.

The $31,100 of contractual customer relationships will be amortized over a useful life of 15 years and are included within other assets, net of amortization in the condensed consolidated balance sheets as of October 31, 2021. These assets were valued using the multi-period excess earnings method.

The goodwill acquired was assigned to the retail reporting unit in the amount of $253,814 and the fuel wholesale reporting unit in the amount of $7,997. The goodwill recognized is primarily attributable to the location of the seller’s stores in relation to our footprint and expected synergies due to expanded inside store offerings and improved purchasing power. Almost all of the goodwill acquired as the result of this transaction will be deductible for income tax purposes over 15 years. The value assigned to goodwill is considered provisional.

The Company incurred total acquisition-related transaction costs of approximately $8.6 million. This includes approximately $6.7 million incurred during the six months ended October 31, 2021, which are included in the condensed consolidated statements of income within operating expenses.

The Company recognized approximately $246,947 and $470,591 of revenue related to Buchanan Energy in the condensed consolidated statements of income for the three and six months ended October 31, 2021, respectively. The amount of net income related to Buchanan Energy was not material for the three and six months ended October 31, 2021.

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~~Circle K~~

Throughout June 2021, the Company closed on the acquisition of 48 stores located in Oklahoma from Circle K pursuant to the terms and conditions of an asset purchase agreement. The aggregate purchase price for the acquisition totaled $41,416, which was paid in cash upon closing using available cash on hand.


~~Assets acquired:~~
~~Inventories~~	$	~~5,299~~
~~Property and equipment~~	~~6,150~~
~~Finance lease right-of-use assets~~	~~37,086~~
~~Operating lease right-of-use assets~~	~~24,164~~
~~Goodwill~~	~~31,662~~
~~Total assets~~	~~104,361~~
~~Liabilities assumed:~~
~~Accrued expenses~~	~~545~~
~~Finance lease liabilities~~	~~46,576~~
~~Operating lease liabilities~~	~~15,824~~
~~Total liabilities~~	~~62,945~~
~~Net assets acquired and total consideration paid~~	$	~~41,416~~

The goodwill recognized from this transaction is primarily attributable to the location of the seller's stores in relation to our footprint and expected synergies due, in part, to expanded inside store and fuel offerings. All of the goodwill acquired as a result of this transaction will be deductible for income tax purposes over 15 years.

The Company recognized approximately $47,647 and $71,391 of revenue related to the acquired Circle K locations in the condensed consolidated statements of income for the three and six months ended October 31, 2021, respectively. The amount of net income related to the acquired Circle K locations was not material for the three and six months ended October 31, 2021.

~~Pro Forma Information~~

The following unaudited pro forma information presents a summary of our condensed consolidated statements of income as if the Buchanan Energy and Circle K transactions referenced above occurred on May 1, 2020 (amounts in thousands, except per share data):

Three Months Ended
October 31, Six Months Ended
October 31,
2021 2020 2021 2020
Total revenue 3,262,942 2,456,322 6,502,640 4,788,888
Net income 98,378 114,439 225,741 234,694
Net income per common share
Basic 2.65 3.09 6.08 6.34
Diluted 2.63 3.07 6.04 6.30

~~Pilot~~

On September 27, 2021, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with Pilot Corporation to acquire all of the assets of 40 stores located in Tennessee and Kentucky for a purchase price of $220 million, subject to customary post-closing adjustments.

The closing of the acquisition is conditioned upon the satisfaction of customary closing conditions, including, among others: (a) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which occurred on or around November 4, 2021; (b) the accuracy of the representations and warranties of each party to the Purchase Agreement as of the closing; (c) the performance in all material respects by the parties of their respective covenants under the Purchase Agreement, including receipt of certain

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~~consents; and (d) in the case of Pilot Corporation, the absence of any material adverse effect since the date of the Purchase Agreement.~~

~~The Company intends to finance the pending transaction with a combination of cash on hand and incremental financing.~~

7. Commitments and Contingencies

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 or other general business disputes; employment, personnel, or accessibility matters; personal injury and property damage claims; claims by federal, state, and local regulatory authorities relating to the sale of products pursuant to licenses and permits issued by those authorities; and, other claims or proceedings. 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 adverse effect 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 2,001 current and/or former Store Managers (representing less than 1/3 of those eligible) have opted to participate in the lawsuit. The Company believes that adequate provisions have been made for probable losses related to this matter, and that those, and the reasonably possible losses in excess of amounts accrued, where such range of loss can be estimated, are not material to the Company’s financial position, results of operations or cash flows. The Company believes that its Store Managers are properly classified as exempt employees under the FLSA and it intends to continue to vigorously defend the matter.

We have entered into various purchase agreements related to our fuel supply, which include varying volume commitments. Prices included in the purchase agreements are indexed to market prices. While volume commitments are included in the contracts, we do not have a history of incurring material penalties related to these provisions. These c~~ontracts~~contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.

We have entered into forward contracts for cheese in order to fix the price per pound for a portion of our expected supply. ~~As of October 31, 2021, the forward contracts run through November 2021. The commitment under these contracts is approximately $2,600.~~ These contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.

8.7. Unrecognized Tax Benefits

The total amount of gross unrecognized tax benefits was ~~$9,316~~$10,259 at April 30, ~~2021.~~2022. At ~~October~~July 31, ~~2021,~~2022, gross unrecognized tax benefits were ~~$11,357.~~$11,309. If this unrecognized tax benefit were ultimately recognized, ~~$8,972~~$8,934 is the

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amount that would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was ~~$488~~$424 at ~~October~~July 31, ~~2021,~~2022, and ~~$370~~$371 at April 30, ~~2021.~~2022. Net interest and penalties included in income tax expense for the ~~six~~three months ended ~~October~~July 31, ~~2021,~~2022, was a net expense of ~~$118~~$53 and a net expense of ~~$106~~$51 for the same period in ~~2020.~~2021.

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~~$2,100 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 ~~2015~~2018 and forward. Tax years ~~2012~~2013 and forward are subject to audit by state tax authorities depending on open statute of limitations waivers and the tax code of each state.

9.8. Segment Reporting

As of ~~October~~July 31, ~~2021,~~2022, we operated ~~2,380~~2,454 stores in 1716 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 1one operating segment. Our stores sell similar products and services, and use similar processes to sell those products and services directly to the general public. We make specific disclosures concerning the 3three broad merchandise categories of fuel, grocery and general merchandise, ~~(previously referred to as "grocery and other merchandise"),~~ and prepared food and dispensed beverage ~~(previously referred to as “prepared food and fountain”)~~ because it allows us to more effectively discuss trends and operational programs within our business and industry. Although we can separate revenues and cost of goods sold within these categories (and further sub-categories), the operating expenses associated with operating a store that sells these products are not separable by these categories.

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Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in Thousands).

Overview

Casey’s and its direct and indirect wholly-owned subsidiaries operate convenience stores primarily under the names "Casey’s" and “Casey’s General Store” (collectively, with the stores below referenced as "GoodStop" or "Bucky's", as the "Company" or “Stores”) throughout 1716 states, over half of which are located in Iowa, Missouri and Illinois. As of July 31, 2022, there were a total of 2,454 stores in operation.

All convenience stores 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 nonfood items. In addition, all but ~~three~~four offer fuel for sale on a self-service basis. The Company derives its revenue primarily from the retail sale of fuel and the products offered in its stores. As of ~~October~~July 31, ~~2021, there were a total of 2,380 stores in operation.~~

2022, 203 store locations offered car washes.

During the prior fiscal year, the Company introduced certain stores branded or rebranded as "GoodStop (by Casey’s)". Similar to most of our store footprint, the "GoodStop" locations offer fuel for sale on a self-serve basis, and a broad selection of snacks, drinks, tobacco products, and other essentials. However, such locations typically do not have a kitchen and have limited prepared food offerings. As of ~~October~~July 31, ~~2021, 17~~2022, 46 stores operate under the "GoodStop" brand.

Additionally, the Company is temporarily operating certain locations acquired from Buchanan Energy in the prior year under the name, "Bucky's." The Company ~~plans to eventually transition~~is in the process of transitioning all "Bucky's" locations to either the "Casey's" or "GoodStop" brand. The Company also operates two stores selling primarily tobacco products, one grocery store, and one liquor store.

The Company acquired a dealer network from Buchanan Energy during the 2022 fiscal year. As of July 31, 2022, there were 75 dealer locations where Casey’s manages fuel wholesale supply agreements to these stores. These locations are not operated by Casey's. Approximately ~~52%~~2% of total revenue for the three-months ended July 31, 2022 relates to this dealer network.

Approximately 51% of our stores were opened in areas with populations of fewer than 5,000 persons, while approximately ~~23%~~25% of all stores were opened in communities with populations exceeding 20,000 persons. ~~Three~~The Company operates three distribution centers ~~are currently in operation~~ (in Ankeny, Iowa adjacent to our corporate headquarters, ~~[which~~which we refer to as our Store Support ~~Center],~~Center, in Terre Haute, Indiana, and in Joplin, Missouri) from which certain grocery and general merchandise and prepared food and dispensed beverage items are supplied to our stores. As of ~~October~~July 31, ~~2021,~~2022, the Company leased a combination of land and/or building at 86114 locations.

The Company’s business is seasonal, and generally 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, sports drinks, water, soft drinks and ice.

The Company reported diluted earnings per common share of ~~$2.59~~$4.09 for the ~~second~~first quarter of fiscal ~~2022.~~2023. For the same quarter a year-ago, diluted earnings per common share was ~~$3.00.~~$3.19.

The following table represents the roll forward of store growth through the ~~second~~first quarter of fiscal ~~2022:~~2023:


			Store Count
Total stores at April 30, ~~2021~~2022			~~2,243~~2,452
New store construction			72
Acquisitions			~~144~~1
Acquisitions not opened			~~(6)~~(1)
Prior acquisitions opened			41
Closed			~~(12)~~(1)
Total stores at ~~October~~July 31, ~~2021~~2022			~~2,380~~2,454

Acquisitions in the table above include, in part, 89 stores which were acquired from Buchanan Energy on May 13, 2021. The table excludes three sites that were included in the transaction, but were divested by the Company shortly after closing as part of a consent order with the Federal Trade Commission. Additionally, it includes 48 stores from the Circle K transaction that closed in June. For additional discussion, refer to Note 6 in the condensed consolidated financial statements.

COVID-19 and Related Impacts

Throughout the ~~first six months of fiscal 2022,~~last two years, the Company has ~~generally seen an increase in guest traffic and sales of certain products compared~~continued to adapt to the ~~same period a year ago as schools, businesses~~challenges caused or contributed to by COVID-19 and ~~the economy in general have gone through various stages of reopening from COVID-19.~~its new and unpredictable variants. The Company has, however, also seen a recent increase in the number of COVID-19 cases reported amongst its team members and in certain areas of its operating territory, which in some instances has led to temporary store closures (which often times only last for a matter of hours) for COVID-19 cleaning protocols, laborongoing challenges ~~and the return of various locally imposed governmental restrictions, including~~include, but are not limited to, ~~mask~~a stressed labor market, as it became increasingly challenging to find, hire and ~~social distancing mandates.~~retain store Team Members. In response, the Company held two large-scale hiring events during the prior fiscal year, each of which led to the onboarding of a significant number of Team Members to support our stores. In addition, ~~on November 4, 2021, the Occupational Safety and Health Administration (OSHA) announced a requirement that employers with 100 or more employees, which includes~~ the Company ~~ensure their employees are fully vaccinated for~~saw increasing wage pressure, as wages across the convenience store, restaurant and retail industries in general continued to rise, which has directly contributed to increased operating expenses. The Company expects to see these labor challenges continue throughout the 2023 fiscal year. COVID-19 or undergo regular testing. The original implementation date for the requirements was January 4, 2022; however, they have been temporarily enjoined by a federal appeals court and OSHA has temporarily suspended enforcement. Should these requirements eventually be put in place, they may have a material impact on the Company duealso continues to the costs and logistics of testing, the cost and impact of employees electing to leave the Company’s workforce permanently, or the impact of and cost to attract prospective employees that may seek employment elsewhere, instead of being subject to the requirements. As such, the continued unpredictable nature of the COVID-19 pandemic, including case trends, severity of newpressure

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~~variants, including Omicron, the efficacy of vaccines~~our supply chain, and the ~~willingness~~supply chains of ~~individuals~~our suppliers. While the Company has been successful in hiring and retaining drivers, some supplier networks have been challenged by a lack of drivers, which in some cases has led to ~~be vaccinated, further governmental restrictions~~delays in deliveries to our distribution centers and stores. Other supply chain challenges have included the unavailability of certain products from our suppliers, which has led to these products being out of stock or ~~protections, and its effect on~~not available at all. The Company also expects these issues to continue throughout the ~~Company’s workforce and~~2023 fiscal year.

The initial onset of COVID-19 in early 2020 caused a significant decrease in store traffic across our entire footprint. While store traffic has markedly increased as the economy ashas reopened over the past two or so years, the Company has not seen a ~~whole, could again lead or contribute~~full return to ~~additional disruptions, labor shortages~~store traffic levels experienced prior to the pandemic. The Company believes this is largely contributed to the increased prevalence and ~~increased operating expenses for~~acceptance across all industries of working from home, a trend which the Company expects to continue into the foreseeable future. While COVID-19 ~~continues to result in, and~~ will continue to bring ~~significant~~ challenges and uncertainty to our operating environment, we believe that our resilient business model and the strength of our brand and balance sheet position us well to navigate the pandemic and ~~eventually~~its impacts.

Fuel Volatility

Since the beginning of the COVID-19 pandemic, the price of crude oil, and in turn the wholesale cost of fuel, has been volatile. Initially, at the outset of the pandemic, oil and fuel prices fell dramatically; however, as the economy in general began to emerge from the ~~pandemic.~~COVID-19 pandemic, prices began to modestly increase over time. More recently, during the end of the Company’s 2022 fiscal year, oil and fuel prices saw a quick and dramatic increase, in part, as a result of the conflict in Ukraine, as well as other macroeconomic conditions, which also directly impacts the retail price of fuel that we sell at our stores. The increased oil and fuel prices continued into the first quarter of fiscal 2023. Beginning in the middle of June and continuing through the end of the quarter, oil and fuel prices have begun to decrease, but still remain elevated compared to historical levels. In part as a result of the increases in the retail price of fuel, we saw an overall reduction in same-store fuel gallons sold during the quarter, compared to the prior year.

In addition, since the beginning of the COVID-19 pandemic, the Company, and the fuel industry as a whole, has experienced historically high average revenue less cost of goods sold per gallon (excluding depreciation and amortization and credit card fees). Although this has remained relatively consistent since that time, on a longer-term basis, this metric can fluctuate significantly, and sometimes unpredictably, in the short-term. While the Company believes that its average revenue less cost of goods sold per gallon (excluding depreciation and amortization and credit card fees) will remain elevated from pre-COVID-19 pandemic levels for the foreseeable future, it is possible that increased oil and fuel prices, rising interest rates, macroeconomic conditions and/or continuing conflicts or disruptions involving oil producing countries may materially impact the performance of this metric.

Electric Vehicles and Renewable Fuels

Casey's is in the early stages of developing a more robust electric vehicle ("EV") strategy and our management team remains committed to understanding if and how the increase demand for, and usage of, EVs impacts consumer behavior across our store footprint and beyond. The Company has installed 126 charging stations at 27 stores, across 10 states. Our current implementation strategy is designed to selectively install charging stations in locations within our footprint where we see higher levels of consumer EV usage. To date, consumer EV demand within our Midwest footprint has been comparatively lower than the levels along the coasts. As EV demand from our guests increases, we are prepared to integrate charging station options at our nearby stores.

The Company also remains committed to offering renewable fuel options at our stores. Currently, 100% of our stores offer fuel with at least 10% of blended ethanol and 44% of our stores offer biodiesel. Every new store has the capability to sell higher blended ethanol, and we aim to continue growing sales of renewable fuels throughout our footprint.

Same-Store Sales

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 both periods being presented. ~~We exclude from~~When comparing data, the ~~calculation any acquired stores and any~~store must be open for each entire fiscal period being compared. Remodeled stores that ~~have been replaced with~~remained open or were closed for just a ~~new store, until such stores have been open~~very brief period of time (i.e., less than a week) during the ~~full time of both periods~~period being ~~presented. Stores that have undergone a major remodel, had adjustments in hours of operation, added pizza delivery, or had other revisions to their operating format~~compared remain in the ~~calculation.~~same-store sales comparison. If a store is replaced, either at the same location (i.e., 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.

The ~~second~~first quarter results reflected a ~~2.5% increase~~2.3% decrease in same-store fuel gallons sold, with an average fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) of ~~34.7~~44.7 cents per gallon, compared to ~~35.3~~35.1 cents per gallon in the same quarter a year ago. Same-store gallons sold were ~~positively~~negatively impacted by higher ~~guest traffic.~~fuel prices. The Company sold ~~4.2~~10.7 million renewable fuel credits for ~~$6.2~~$17.7 million during the quarter, compared to the sale of ~~6.1~~11.3 million renewable fuel credits in the ~~second~~first quarter of the prior year, which generated ~~$3.8~~$18.7 million.

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Same-store sales of grocery and general merchandise increased ~~6.8%~~5.5% and prepared food and dispensed beverage increased ~~4.1%~~8.4% during the ~~second~~ quarter. Note that we have changed the names of the "grocery and other merchandise" category to "grocery and general merchandise" and the "prepared food and fountain" category to "prepared food and dispensed beverage" to better reflect the composition of the category. There have been no changes to the makeup of the categories, and they remain directly comparable to prior periods.The increase in grocery and general merchandise same-store sales was primarily due to stronger sales of packaged beverages and grocery items, such as salty snacks and ~~meat snacks.~~candy. The increase in prepared food and dispensed beverage same-store sales was ~~primarily~~ attributable to ~~continued momentum~~improved sales in pizza slices, ~~driven in part~~as well as breakfast sandwiches and burritos. Both categories were also impacted favorably by increased guest traffic inside the store. Prepared food and dispensed beverage same-store sales were adversely impacted by supply chain challenges in the quarter, notably in bakery and dispensed beverages. The Company also implemented selectivestrategic retail price ~~increases to offset inflationary pressures throughout the business.~~adjustments.

Three Months Ended ~~October~~July 31, ~~2021~~2022 Compared to

Three Months Ended ~~October~~July 31, ~~2020~~2021

(Dollars and Amounts in Thousands)


Three Months Ended October 31, 2021		Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Three Months Ended July 31, 2022																	Three Months Ended July 31, 2022	Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Revenue	Revenue	$	2,048,831		$	829,484		$	309,504		$	75,123		$	3,262,942		Revenue	$	3,096,342		$	923,064		$	343,553		$	91,685		$	4,454,644
Revenue less cost of goods sold (excluding depreciation and amortization)	Revenue less cost of goods sold (excluding depreciation and amortization)	$	231,883		$	275,940		$	187,498		$	22,269		$	717,590		Revenue less cost of goods sold (excluding depreciation and amortization)	$	308,188		$	313,307		$	190,953		$	23,802		$	836,250
		11.3		%	33.3		%	60.6		%	29.6		%	22.0		%		10.0		%	33.9		%	55.6		%	26.0		%	18.8		%
Fuel gallons	Fuel gallons	668,757															Fuel gallons	689,467

Three Months Ended October 31, 2020		Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Three Months Ended July 31, 2021																	Three Months Ended July 31, 2021	Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Revenue	Revenue	$	1,193,491		$	718,226		$	288,822		$	15,366		$	2,215,905		Revenue	$	1,967,155		$	835,485		$	308,440		$	70,914		$	3,181,994
Revenue less cost of goods sold (excluding depreciation and amortization)	Revenue less cost of goods sold (excluding depreciation and amortization)	$	204,154		$	238,992		$	173,661		$	14,953		$	631,760		Revenue less cost of goods sold (excluding depreciation and amortization)	$	234,474		$	275,408		$	188,106		$	25,899		$	723,887
		17.1		%	33.3		%	60.1		%	97.3		%	28.5		%		11.9		%	33.0		%	61.0		%	36.5		%	22.7		%
Fuel gallons	Fuel gallons	577,581															Fuel gallons	667,534

Total revenue for the ~~second~~first quarter of fiscal ~~2022~~2023 increased by ~~$1,047,037 (47.3%~~$1,272,650 (40.0%) over the comparable period in fiscal ~~2021.~~2022. Total revenues were impacted favorably by operating 74 more stores than a year ago, elevated retail fuel prices, and strategic retail price adjustments. Retail fuel sales increased by ~~$855,340 (71.7%~~$1,129,187 (57.4%) as the average retail price per gallon increased ~~48.3%~~52.4%, and the number of gallons sold increased by ~~91,176 (15.8%~~21,933 (3.3%). During this same period, retail sales of grocery and general merchandise increased by ~~$111,258 (15.5%~~$87,579 (10.5%), due to ~~operating 161 more stores than a year ago~~ ~~and~~ strong sales of packaged beverages, salty snacks, and

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~~meat snacks.~~ candy. Prepared food and dispensed beverage sales increased by ~~$20,682 (7.2%~~$35,113 (11.4%), due to ~~operating 161 more stores than a year ago~~ increased sales of pizza slices, as well as breakfast sandwiches and ~~continued momentum in pizza slices.~~

burritos.

The other revenue category historically has primarily consisted of lottery, which is presented net of applicable costs, and car wash. As a result of the Buchanan Energy acquisition in the prior year, we acquired a dealer network ~~of 81 stores~~ where Casey’s ~~will manage~~manages fuel wholesale supply agreements to these stores. The activity related to this dealer network is included in the other category and is presented gross of applicable costs. Other revenues increased ~~$59,757 (388.9%~~$20,771 (29.3%) for the ~~second~~first quarter of fiscal ~~2022~~2023 compared to the prior year, ~~driven~~ primarily ~~by activity related~~attributable to the dealer network. The increase in dealer network revenue was due to the higher wholesale price of fuel.

Revenue less cost of goods sold (excluding depreciation and amortization) was ~~22.0%~~18.8% of revenue for the ~~second~~first quarter of fiscal ~~2022,~~2023, compared to ~~28.5%~~22.7% for the comparable period in the prior year. Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was ~~11.3%~~10.0% of fuel revenue during the ~~second~~first quarter of fiscal ~~2022,~~2023, compared to ~~17.1%~~11.9% in the ~~second~~first quarter of the prior year, largely attributable to higher average retail price of fuel per gallon. Revenue per gallon less cost of goods sold ~~per gallon~~ (exclusive of depreciation and amortization) ~~was 34.7~~per gallon increased to 44.7 cents in the ~~second~~first quarter of fiscal ~~2022,~~2023, compared to ~~35.3~~35.1 cents for the comparable period in the prior ~~year.~~year, given the favorable environment due to falling wholesale costs in the second half of the quarter.

Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) ~~was consistent at~~ ~~33.3%~~increased to 33.9% of revenue, from 33.0% of revenue for the ~~current year and~~comparable period in the prior ~~year periods.~~year. The current year percentage was positively impacted by ~~the private label program~~joint strategic business planning with vendor partners and ~~procurement initiatives, offset by inflationary pressures~~.strategic retail price adjustments. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) ~~increased~~decreased to ~~60.6%~~55.6% of revenue, compared to ~~60.1%~~61.0% of revenue for the comparable period in the prior year, primarily due to ~~a resurgence in pizza slices and procurement initiatives,~~higher ingredient costs, notably cheese, which was partially offset by ~~inflationary pressures.~~retail price adjustments.

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Operating expenses increased ~~$90,296 (22.0%~~$64,343 (13.4%) in the ~~second~~first quarter of fiscal ~~2022~~2023 from the comparable period in the prior ~~year, primarily~~year. Approximately 4% of the increase is due to operating ~~161~~74 more stores ~~compared~~than prior year. Approximately 3% of the change is due to ~~the same period a year ago, higher wage rates, and a 35%~~an increase in same-store credit card fees from higher retail fuel ~~pricing along with~~prices and 2% is due to higher ~~sales volume.~~long-term incentive compensation. Same-store operating expense excluding credit card fees was up 3%, impacted favorably by a 2% reduction in same-store labor hours.

Depreciation and amortization expense increased by ~~15.5%~~0.5% to ~~$74,258~~$76,295 in the ~~second~~first quarter of fiscal ~~2022~~2023 from ~~$64,294 for the comparable period in the prior year.~~$75,888. The increase was primarily due to operating ~~161~~74 more stores than a year ago and capital expenditures during the previous twelve ~~months.~~months, offset by a decrease in accelerated depreciation, which was recorded in the prior year on equipment replaced in remodels.

~~Interest expense increased by $2,886 (27.1%),~~ ~~primarily attributable~~ ~~to a $300,000 draw on the Term Loan Facility to fund the acquisition of Buchanan Energy during the first quarter.~~

TheThe effective tax rate increased to ~~25.0%~~24.6% in the ~~second~~first quarter of fiscal ~~2022~~2023 compared to ~~23.6%~~23.3% in the same period of fiscal ~~2021.~~ ~~The increase in the effective tax rate was primarily due to a decrease in favorable permanent differences.~~

Net income decreased by $15,152 (13.5%) to $96,831 from $111,983 in the comparable period in the prior year. The decrease in net income was primarily attributable to increased fuel and merchandise contribution from improved guest traffic, offset by higher operating expenses and depreciation driven primarily from operating 161 more stores than a year ago and higher wage rates.

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~~Six Months Ended October 31, 2021 Compared to~~

~~Six Months Ended October 31, 2020~~

~~(Dollars and Amounts in Thousands)~~

Six Months Ended October 31, 2021 Fuel Grocery &
General Merchandise Prepared
Food &
Dispensed Beverage Other Total
Revenue $ 4,015,986 1,664,969 617,944 146,036 6,444,935
Revenue less cost of goods sold (excluding depreciation and amortization) 466,358 551,348 375,604 48,167 1,441,477
11.6 % 33.1 % 60.8 % 33.0 % 22.4 %
Fuel gallons 1,336,291
Six Months Ended October 31, 2020 Fuel Grocery &
General Merchandise Prepared
Food &
Dispensed Beverage Other Total
Revenue $ 2,279,472 $ 1,450,087 $ 559,588 $ 31,779 $ 4,320,926
Revenue less cost of goods sold (excluding depreciation and amortization) $ 414,184 $ 474,591 $ 335,309 $ 31,179 $ 1,255,263
18.2 % 32.7 % 59.9 % 98.1 % 29.1 %
Fuel gallons 1,127,089

Total revenue for the first six months of fiscal 2022 increased by $2,124,009 (49.2%) over the comparable period in fiscal 2021. Retail fuel sales increased by $1,736,514 (76.2%) as the average retail price per gallon increased 48.6%, and the number of gallons sold increased 209,202 (18.6%). During this same period, retail sales of grocery and general merchandise increased by $214,882 (14.8%) due to operating 161 more stores than a year ago and ~~strong sales of packaged beverages, salty snacks, and meat snacks. Prepared food and dispensed beverage sales increased by $58,356 (10.4%), due~~ ~~to operating 161 more stores than a year ago~~ ~~and a resurgence in pizza slices.~~

The other revenue category historically has primarily consisted of lottery, which is presented net of applicable costs, and car wash. As a result of the Buchanan Energy acquisition, we acquired a dealer network of 81 stores where Casey’s will manage fuel wholesale supply agreements to these stores. The activity related to this dealer network is included in the other category and is presented gross of applicable costs. ~~These revenues increased $114,257 (359.5%) through the second quarter of fiscal 2022 compared to the prior year,~~ ~~driven primarily by activity related to the dealer network.~~

Revenue less cost of goods sold (excluding depreciation and amortization) was 22.4% of revenue for the first six months of fiscal 2022, compared to 29.1% for the comparable period in the prior year. Fuel revenue less related cost of goods sold (exclusive of depreciation and amortization) was 11.6% of fuel revenue for the first six months of fiscal 2022 compared to 18.2% for the first six months of the prior year. Revenue per gallon less cost of goods sold per gallon (exclusive of depreciation and amortization) was 34.9 cents for the first six months of fiscal 2022 compared to 36.7 cents in the prior year.

~~Grocery and general merchandise revenue less related cost of goods sol~~d (exclusive of depreciation and amortization) increased to 33.1% of grocery and general merchandise revenue, compared to 32.7% in the prior year. Grocery and general merchandise revenue less related cost of goods sold (exclusive of depreciation and amortization) was positively impacted by mix shift, including gaining market share on the private label program, and procurement initiatives~~, offset by inflationary pressures. Prepared food and dispensed beverage revenue less related cost of goods sold (exclusive of depreciation and amortization) increased to 60.8% of revenue, compared to 59.9% in the prior year,~~ ~~primarily due to a resurgence in pizza slices and procurement initiatives, offset by inflationary pressures.~~

Operating expenses increased by $183,136 (23.0%) in the first six months of fiscal 2022 from the comparable period in the prior year, primarily due to restoring store operation hours to pre-COVID levels, operating 161 more stores compared to the same period a year ago, higher wage rates, a 37% increase in credit card fees from higher retail fuel pricing along with higher sales volume, and one-time deal and integration costs associated with the Buchanan Energy and Circle K acquisitions.

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Depreciation and amortization expense increased 15.4% to $150,146 for the first six months of fiscal 2022 from $130,114 for the comparable period in the prior year. The increase was primarily due to operating 161 more stores than a year ago and capital expenditures during the previous twelve months.

~~Interest expense increased by $3,209 (13.3%),~~ ~~primarily attributable~~ ~~to a $300,000 draw on the Term Loan Facility to fund the acquisition of Buchanan Energy during the first quarter~~.

~~The effective tax rate increased to 24.1% in the first six months of fiscal year 2022 compared to 23.7% in the same period of fiscal year 2021.~~2022. The increase in the effective tax rate was driven by a decrease in excess tax benefits recognized on share-based awards (200 basis points) and a one-time benefit in the prior year from adjusting the Company’s deferred tax assets and liabilities for state law changes enacted during the quarter (100 basis points). The effect of these unfavorable items was partially offset by a one-time expense in the prior year to update the state deferred tax rate following the Buchanan Energy and Circle K transactions ~~offset by an increase in excess tax benefits recognized on share-based awards.~~(200 basis points).

Net income ~~decreased~~increased by ~~$16,585 (7.1%~~$33,773 (28.3%) to ~~$215,990~~$152,932 from ~~$232,575~~$119,159 in the comparable period in the prior year. The ~~decrease~~increase in net income was primarily attributable to increased fuel and merchandise contribution, ~~from improved guest traffic,~~ offset by higher operating expenses ~~and depreciation~~ driven primarily from operating ~~161~~74 more stores than a year ago and an increase in ~~store hours and higher wage rates.~~credit card fees primarily due to the record high retail price of fuel.

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 considered GAAP measures, 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.

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, assessing performance, and awarding incentive compensation.

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 ~~and six~~ months ended ~~October~~July 31, ~~2021~~2022 and ~~2020:~~2021:


		Three months ended				Six months ended					Three months ended
		October 31, 2021		October 31, 2020		October 31, 2021		October 31, 2020			July 31, 2022		July 31, 2021
Net income	Net income	$	96,831	$	111,983	$	215,990	$	232,575	Net income	$	152,932	$	119,159
Interest, net	Interest, net	13,520		10,634		27,250		24,041		Interest, net	13,816		13,730
Federal and state income taxes	Federal and state income taxes	32,337		34,501		68,519		72,097		Federal and state income taxes	49,936		36,182
Depreciation and amortization	Depreciation and amortization	74,258		64,294		150,146		130,114		Depreciation and amortization	76,295		75,888
EBITDA	EBITDA	$	216,946	$	221,412	$	461,905	$	458,827	EBITDA	$	292,979	$	244,959
Loss (gain) on disposal of assets and impairment charges	Loss (gain) on disposal of assets and impairment charges	63		1,819		(1,707)		2,159		Loss (gain) on disposal of assets and impairment charges	230		(1,770)
Adjusted EBITDA	Adjusted EBITDA	$	217,009	$	223,231	$	460,198	$	460,986	Adjusted EBITDA	$	293,209	$	243,189

For the three months ended ~~October~~July 31, ~~2021,~~2022, EBITDA and Adjusted EBITDA ~~decreased 2.0%~~increased 19.6% and ~~2.8%~~20.6%, respectively, when compared to the same period a year ago. ~~For the six months ended October 31, 2021,~~The increases in EBITDA ~~increased 0.7%~~ and ~~Adjusted EBITDA decreased 0.2%, compared to the same period a year ago. The decreases in~~ Adjusted EBITDA are primarily attributable to increased fuel and merchandise contribution, ~~from improved guest traffic,~~ offset by higher operating expenses driven primarily from operating ~~161~~74 more stores than a year ago and ~~higher wage rates.~~an increase in credit card fees primarily due to the record high retail price of fuel.

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Critical Accounting Policies

Critical accounting policies are those accounting policies that management believes are important to the portrayal of the Company’s financial condition and results of operations. The Company's critical accounting policies are described in the Form 10-K for the year ended April 30, ~~2021,~~2022, and such discussion is incorporated herein by reference. There have been no changes to these policies in the ~~six~~three months ended ~~October~~July 31, ~~2021.~~2022.

Liquidity and Capital Resources

Due to the nature of the Company’s business, cash provided by operations is the Company’s primary source of liquidity. The Company finances its inventory purchases primarily from normal trade credit aided by the relatively rapid turnover of inventory. This turnover allows the Company to conduct its operations without large amounts of cash and working capital. As of ~~October~~July 31, ~~2021,~~2022, the Company’s ratio of current assets to current liabilities was ~~0.99~~0.96 to 1. The ratio at ~~October~~July 31, ~~2020~~2021 and April 30, ~~2021~~2022 was ~~1.30~~0.91 to 1 and ~~1.18~~0.80 to 1, respectively. The ~~decrease~~increase in the ratio from the prior year is ~~partially~~primarily attributable to ~~a decrease~~an increase in cash and cash equivalents ~~associated with payments for the acquisitions of Buchanan Energy and 48 stores from Circle K~~, ~~offset by an increase in inventory due~~ ~~to operating 161 more stores than a year ago~~ ~~and higher fuel pricing.~~ ~~Additionally, current liabilities have increased primarily related to accounts payable,~~ due to ~~increasing store count, higher fuel pricing, as well as an effort to better utilize available payment terms.~~strong free cash flows.

Management believes that the availability under the Bank Line of ~~$25,000~~approximately $19,000 and the Revolving Facility of $450,000, combined with the 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 operations ~~decreased $96,580 (17.5%~~increased $34,647 (14.3%) in the ~~six~~three months ended ~~October~~July 31, ~~2021~~2022 from the comparable period in the prior year, primarily due to ~~changes~~an increase in ~~inventories, accounts payable, and accrued expenses.~~net income. Cash used in investing in the ~~six~~three months ended ~~October~~July 31, ~~2021 increased $571,606~~2022 decreased $566,219 over prior year, due primarily to cash paid for the acquisition of Buchanan Energy for $571,725, and 48 Circle K stores for $41,416 ~~net of cash acquired.~~ ~~For additional discussion, refer to Note 6~~ in the ~~condensed consolidated financial statements.~~ prior year. Cash ~~provided by~~used in financing ~~increased $316,929 (456.7%),~~decreased $309,763, primarily due to athe $300,000 draw on the Term Loan ~~Facility, also discussed~~Facilities in ~~Note 4 and Note 6.~~the prior year.

Purchases of property and equipment and payments for acquisitions of businesses typically represent the largest use of Company funds. Management believes that by acquiring, building, and reinvesting in stores, the Company will be better able to respond to competitive challenges and increase operating efficiencies. During the first ~~six~~three months of fiscal ~~2022,~~2023, the Company expended ~~$749,644,~~$83,135, compared to ~~$158,815~~$662,336 for the comparable period in the prior year related to these activities. The ~~increase~~decrease from the prior year is due to the Buchanan Energy and Circle K ~~acquisitions.~~acquisitions, occurring in the prior year.

As of ~~October~~July 31, ~~2021,~~2022, the Company had long-term debt consisting of:


Finance lease liabilities	~~71,480~~$	73,980
3.67% Senior notes (Series A) due in 7 installments beginning June 17, 2022, and ending June 15, 2028	~~150,000~~135,000
3.75% Senior notes (Series B) due in 7 installments beginning December 17, 2022 and ending December 18, 2028	50,000
3.65% Senior notes (Series C) due in 7 installments beginning May 2, 2025 and ending May 2, 2031	50,000
3.72% Senior notes (Series D) due in 7 installments beginning October 28, 2025 and ending October 28, 2031	50,000
3.51% Senior notes (Series E) due June 13, 2025	150,000
3.77% Senior notes (Series F) due August 22, 2028	250,000
2.85% Senior notes (Series G) due August 7, 2030	325,000
2.96% Senior notes (Series H) due August 6, 2032	325,000
Variable rate ~~term loan facility,~~Term Loan Facilities, requiring quarterly installments ending ~~June~~January 6, 2026	~~292,500~~265,625
Less debt issuance costs	~~(2,455)~~(1,866)
	~~1,711,525~~1,672,739
Less current maturities	~~(34,134)~~(33,562)
	~~1,677,391~~$	1,639,177

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The Company has funded purchases of property and equipment and payments for acquisitions of businesses primarily from the issuance of debt, existing cash, and funds generated from operations. Future capital needs required to finance operations, improvements and the anticipated growth in the number of stores are expected to be met from cash generated by operations, the Revolving Facility, the Bank Line, and additional long-term debt or other securities as circumstances may dictate, and are not expected to adversely affect liquidity.

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Cautionary Statements

This Form 10-Q, including the foregoing 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,” "should," “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 related sources and needs, supply chain, results of operations and performance at our stores, business strategy, strategic plans, growth opportunities, integration of acquisitions, acquisition synergies, short-term and long-term business operations and objectives including our long-term strategic plan, wholesale fuel, inventory and ingredient costs and the potential effects of the conflict in Ukraine and 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 in the Company’s Form 10-K for the fiscal year ended April 30, ~~2021:~~

2022:

Business ~~Operations:~~Operations 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; Our business and our reputation could be adversely affected by a cyber or data security incident or the failure to protect sensitive guest, Team Member or supplier data, or the failure to comply with applicable regulations relating to data security and privacy; 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; 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; 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 could be adversely affected if we experience difficulties in, or are unable to recruit, hire or retain, members of our leadership team and other distribution, field and store Team Members; 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 software providers, to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business; increased credit card expenses could lead to higher operating expenses and other costs for the Company; our operations present hazards and risks which may not be fully covered by insurance, if insured; 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; consumer or other litigation could adversely affect our financial condition and results of operations; and, covenants in our senior notes and credit facility agreements require us to comply with certain covenants and meet financial maintenance tests and the failure to comply with these requirements could have a material impact to us.

Governmental Actions, Regulations, and ~~Oversight:~~Oversight: Compliance with and changes in tax laws could adversely affect our performance; we are subject to extensive governmental regulations; 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; and, wholesale cost and tax increases relating to tobacco and nicotine products could affect our operating results.

~~Industry:~~Industry: General economic and political conditions that are largely out of the Company’s control may adversely affect the Company’s financial condition and results of operations; developments related to fuel efficiency, fuel conservation practices, climate change, and changing consumer preferences may decrease the demand for motor fuel; unfavorable weather conditions can adversely affect our business; the volatility of wholesale petroleum costs could adversely affect our operating results; and, the convenience store industry is highly competitive.

Growth ~~Strategies:~~Strategies: We may experience difficulties implementing and realizing the results of our long-term strategic plan; ~~we may experience increased costs, disruptions or other difficulties with the integration of the Buchanan Energy acquisition;~~ and, we may not be able to identify, acquire, and integrate new properties and stores, which could adversely affect our ability to grow our ~~business.~~business

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Common ~~Stock:~~Stock: 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.

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.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Company’s exposure to market risk for changes in interest rates relates primarily to our investment portfolio and ~~certain~~floating rate long-term debt obligations. We place our investments with high-quality credit issuers and, by policy, limit the amount of credit exposure to any one issuer. Our first priority is to attempt to reduce the risk of principal loss. Consequently, we seek to preserve our invested funds by limiting default risk, market risk, and reinvestment risk. We attempt to mitigate default risk by investing in only high-quality credit securities that we believe to be low risk and by positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity. ~~We believe~~Based upon the outstanding balance of the Company's term loan facilities as of July 31, 2022, an immediate 100-basis-point move in interest rates ~~affecting our floating and fixed rate financial instruments as of October 31, 2021~~ would have ~~not have a material effect~~an approximate annualized impact of $2.7 million on ~~pretax earnings.~~interest expense.

We do from time to time, participate in a forward buy of certain commodities. These contracts are not accounted for as derivatives as they meet the normal purchases exclusion under derivative accounting.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 240.13a-15(e)). Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

We acquired Buchanan Energy, owner of Bucky’s Convenience Stores on May 13, 2021 and its total assets and revenues constituted approximately 12% and 7%, respectively, of the Company's consolidated total assets and revenues as shown on our condensed consolidated financial statements as of and for the six months ended October 31, 2021. We will exclude Buchanan Energy's control over financial reporting from the scope of management’s annual assessment of the effectiveness of the Company's controls and procedures. This exclusion is in accordance with the general guidance issued by the Staff of the SEC that an assessment of a recent business combination may be omitted from management's report on internal control over financial reporting in the first year of consolidation.

Changes in Internal Controls Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~October~~July 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is set forth in Note 6 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q and is incorporated herein by this reference.

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Item 1A. Risk Factors

There have been no material changes in our “risk factors” from those previously disclosed in our ~~2021~~2022 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to the Company's repurchases of common stock during the quarter ended ~~October~~July 31, ~~2021:~~2022:

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Period

Total Number of Shares Purchased

Average Price Paid Per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs

~~Second~~First Quarter

~~August~~May 1 - ~~August~~May 31, ~~2021~~2022

—

~~300,000,000~~400,000,000

~~September~~June 1 - ~~September~~June 30, ~~2021~~2022

—

~~300,000,000~~400,000,000

~~October~~July 1 - ~~October~~July 31, ~~2021~~2022

—

~~300,000,000~~400,000,000

Total

—

~~300,000,000~~400,000,000

On, and effective as of, March ~~7, 2018,~~3, 2022, the ~~Company announced~~Board authorized a share repurchase program, whereby the Company iswas authorized to repurchase its outstanding common stock from time-to-time, for an aggregate amount of up to ~~an aggregate~~$400 million, exclusive of ~~$300 million of the Company’s outstanding common stock. On March 6, 2020, the authorization was extended through the end of the Company’s 2022 fiscal year.~~fees, commissions or other expenses (the "Repurchase Program"). The Repurchase Program has no set expiration date. The timing and number of repurchase transactions under the ~~program~~Repurchase Program depends on a variety of factors including, but not limited to, market conditions, corporate considerations, business opportunities, debt agreements, and regulatory requirements. The ~~program~~Repurchase Program can be suspended or discontinued at any time. ~~No stock was repurchased in the current quarter.~~

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Item 6. Exhibits.


Exhibit No.			Description






~~2.1~~			~~Asset Purchase Agreement by and among CGS Stores, LLC and Pilot Corporation dated September 27, 2021 (incorporated by reference to Exhibit 2.1 to Form 8-K filed September 28, 2021)~~
3.1			Second Restatement of the Restated and Amended Articles of Incorporation, as amended September 5, 2018, June 28, 2019 and September 4, 2019 (incorporated by reference to Exhibit 3.1 to Form 10-Q filed September 9, 2019)
3.2a			Sixth-Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2(a) to Form 8-K filed December 7, 2020)
10.1*10.1			~~Retirement~~Amended and Restated Employment Agreement, ~~and General Release of Claims~~ dated ~~November 8, 2021,~~July 25, 2022, between the Company and ~~Julia L. Jackowski~~Darren M. Rebelez (incorporated by reference to Exhibit 10.1 to Form 8 K filed July 29 , 2022)
31.1*			Certification of Darren M. Rebelez under Section 302 of the Sarbanes Oxley Act of 2002
31.2*			Certification of Stephen P. Bramlage Jr. under Section 302 of the Sarbanes Oxley Act of 2002
32.1*			Certification of Darren M. Rebelez under Section 906 of Sarbanes-Oxley Act of 2002
32.2*			Certification of Stephen P. Bramlage Jr. under Section 906 of Sarbanes-Oxley Act of 2002
101.INS			XBRL Instance Document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB			XBRL Taxonomy Extension Label Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
101. DEF			XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		CASEY’S GENERAL STORES, INC.

Date: ~~December~~September 7, ~~2021~~2022	By:	/s/ Stephen P. Bramlage Jr.
		Stephen P. Bramlage Jr.
	Its:	Chief Financial Officer
		(Authorized Officer and Principal Financial and Accounting Officer)

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Six Months Ended October 31, 2021	Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Revenue	$	4,015,986		1,664,969			617,944			146,036			6,444,935
Revenue less cost of goods sold (excluding depreciation and amortization)	466,358			551,348			375,604			48,167			1,441,477
	11.6		%	33.1		%	60.8		%	33.0		%	22.4		%
Fuel gallons	1,336,291

Six Months Ended October 31, 2020	Fuel			Grocery & General Merchandise			Prepared Food & Dispensed Beverage			Other			Total
Revenue	$	2,279,472		$	1,450,087		$	559,588		$	31,779		$	4,320,926
Revenue less cost of goods sold (excluding depreciation and amortization)	$	414,184		$	474,591		$	335,309		$	31,179		$	1,255,263
	18.2		%	32.7		%	59.9		%	98.1		%	29.1		%
Fuel gallons	1,127,089