CASY

• A cyber or data security incident could cause significant operational disruption, reputational damage, and financial loss, with AI adoption potentially making attacks harder to detect.
• Food-safety issues or foodborne illnesses, whether actual or reported, could severely damage the brand and lead to litigation, regulatory action, and reduced sales.
• Fluctuations in commodity costs, especially cheese, and other supply-chain expenses could pressure profitability if the company cannot pass costs to customers.
• Difficulties in recruiting or retaining drivers, distribution center, and store team members amid a tight labor market and rising wages could materially harm operations.
• Extensive government regulations, including those on tobacco/nicotine sales, minimum wage, and taxes, create substantial compliance costs and risk of adverse changes.
• Volatile wholesale petroleum costs and shifts toward fuel efficiency or alternative-fuel vehicles threaten fuel margins and overall guest traffic.

We own the Store Support Center, which was built in 1990. Located on an approximately 57-acre site in Ankeny, Iowa, the Store Support Center includes office space and our first distribution center. The Store Support Center provides approximately 490,000 square feet of available space, including approximately 290,000 square feet related to the distribution center. We also own a building near the Store Support Center where our construction and support services departments operate. In February 2016, we opened our second distribution center, located in Terre Haute, Indiana. This second distribution center has approximately 340,000 square feet of total space. In April 2021, we opened a third distribution center located in Joplin, Missouri (see Note 7 for discussion of ownership structure). The third distribution center provides approximately 300,000 square feet of total space. All three distribution centers have a fleet services maintenance center. As part of the acquisition of Fikes in the prior year we acquired a fuel terminal, located in Waco Texas, and office space, located in Temple, Texas. As of April 30, 2026, we leased a combination of land and/or building at 241 store locations. Most of the leases provide for the payment of a fixed rent plus property taxes, insurance, and maintenance costs. Generally, the leases are for terms of ten to twenty years with options to renew for additional periods or options to purchase the leased premises at the end of the lease period. The Company owns the land and building at all of our other store locations. Additionally, the Company regularly has land held for development, land under construction for new stores, and land held for sale as a result of store closures.

The information required to be set forth under this heading is incorporated by reference from Note 10, Contingencies, to the Consolidated Financial Statements included in Part II, Item 8.

• Total revenue grew 10.2% to $17.6B, with $1.0B from the Fikes acquisition in the first half; same-store sales rose 5.2% in prepared food/dispensed beverage and 3.9% in grocery/general merchandise.
• Inside margin improved: prepared food/dispensed beverage margin expanded 40 bps to 58.6% on better waste, while grocery/general merchandise margin rose 80 bps to 35.8% on favorable mix.
• Fuel revenue less cost of goods sold per gallon jumped to 42.6 cents from 38.7 cents, benefiting from historically high industry margins, especially in Q4, and higher RIN generation ($35.4M vs. $16.7M).
• Operating expenses rose 11.2% to $2.8B, driven by 40 more stores, a full year of Fikes costs, higher variable compensation, and wage rate increases partly offset by lower same-store labor hours.
• Cash from operations increased $286.7M to $1.38B; investing cash outflows fell $971.2M as the prior-year Fikes acquisition ($1.17B) did not repeat, while financing swung to a $425.8M use mainly on lower debt proceeds and higher share repurchases.
• The company ended its three-year strategic plan, adding 504 stores vs. a 350 goal, and will introduce a new plan in June 2026; no specific FY2027 guidance was provided.

• Interest-rate exposure stems from the investment portfolio and floating-rate debt; a 100-bp immediate move would impact annual interest expense by ~$9.4 million based on term-loan balances at April 30, 2026.
• The company uses an interest-rate swap to manage variable-rate debt exposure; the swap is not designated as a hedge for accounting purposes and had an immaterial financial-statement impact in the period.
• Investment risk is mitigated by limiting credit exposure to any single issuer, buying only high-quality liquid securities, and monitoring credit ratings to reduce default and principal-loss risk.
• Fuel-price risk relates to non-store inventoried fuel in pipelines/terminals; futures contracts are used to economically hedge physical inventory until delivery, with no speculative trading.
• Occasional forward purchases of other commodities are not treated as derivatives under the normal-purchase/sale exclusion.

• KPMG audited the consolidated financial statements for the fiscal year ended April 30, 2026, and issued an unqualified opinion, stating they present fairly the company's financial position and results of operations.
• The auditor also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of April 30, 2026.
• The audit report identifies a critical audit matter related to the sufficiency of audit evidence over merchandise inventory quantities at 2,944 store locations, valued at $340.2 million.
• To address this matter, KPMG evaluated the homogeneity of locations, historical count results, and internal controls, and involved IT professionals to test systems tracking inventory.
• The report confirms KPMG has served as the company's auditor since 1987.