Good day, ladies and gentlemen, and welcome to the Third Quarter 2008 Casey’s General Stores Earnings Conference Call. My name is Lacy, and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s call, Mr. Bill Walljasper, Chief Financial Officer. Please proceed.

Thanks, Lacy. Good morning and thank your for joining us to discuss Casey’s results for the third quarter of fiscal 2008 ended January 31st. I’m Bill Walljasper, Chief Financial Officer. Ron Lamb, Chairman of the Board; and Bob Myers, President and Chief Executive Officer are also here. I hope all have you had an opportunity to see the press release. If you haven’t, please let me know, and I’ll make sure a copy is forwarded to you. Before I begin, I’ll remind that you certain statements may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act from 1995. As discussed in the press release and the 2007 Annual Report, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from future results expressed or implied by those statements. Casey’s disclaims any intention or obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise. I’ll take a few minutes to summarize the quarter and then open for questions. As most of you have seen, the Company had a very solid quarter with earnings per share from continuing operations of $0.26 compared to $0.22 a year ago. Year-to-date earnings from continuing operations were $1.39 compared to $0.90 last year. The primary reason for the earnings increase was due to higher than normal gasoline margins and strong sales inside the store. During the quarter, we experienced a general downward trend in wholesale costs in gasoline combined with a favorable retail price environment. This resulted in a margin of $0.13.5 per gallon, well above the $0.10.5 margin we experience a year ago. This resulted in an increase gross profit of nearly 25% rising to $40.2 million. Year-to-date our gas margin is…

(Operator Instructions) Our first question comes from the line of Karen Holland with Lehman Brothers; please proceed. Karen Holland – Lehman Brothers : Good morning. I was wondering if you could talk a little bit about your new store opening plans. I understand the acquisition environment is somewhat different than what it was when you initially set your guidance, but I would think your store development, as far as the 10 stores you’re going to be opening would have progressed throughout the course of the year.

Excellent question. What happened was this, Karen: Obviously as we started the fiscal year, our store growth goal was certainly weighted towards acquisitions that you might recall. The goal coming into the year was to build 10 stores and to acquire another 50 locations. As we started to see the gasoline environment become what it is right now, it started actually late fourth quarter, we started to see the disconnect becoming increasingly more challenging because of the higher gasoline margins for the acquisition area. So knowing that the store growth was more centered towards the acquisition, we placed more, quite frankly more human resources toward the acquisition environment and less towards the store growth and got behind the curve on the store growth. Now going forward, Karen, when we put out our goal for next year, it will probably be more geared towards a percentage increase in store growth. You’re more than likely to see more new store constructions than we had previously done in prior years. So instead of doing 10 to 15, that may escalate. One of the reasons for that is we do have a new store design that we’ve been working on that will be forthcoming that we believe could benefit us on a go forward basis. We still think there’s quite a few opportunities for new store construction as well as acquisitions. Karen Holland – Lehman Brothers : When you go to build a new store organically, don’t you typically, what sort of I guess lead time do you have as far as buying the land in negotiation? I would have expected, if you had expected to do 10 this year, at the end of last year there would’ve been some that were already underway as far as the negotiations for the properties and such.

That will fluctuate depending on the location because each location has different perimeters from plan and zoning perspective to city council perspective. Some of these meet on a monthly basis, some on a quarterly basis, some even more periodic than that. So if your site plan doesn’t get approved at one meeting, then you’re having to push that out. So intuitively you’re exactly right. The lead time is well over a year once the site is identified. It can be longer and can be extended for some circumstances surrounding easements and things of that nature. So quite frankly, we just got behind the curve on the new store construction and that will change as we head into the next fiscal year. Karen Holland – Lehman Brothers : Then within the Prepared Food, I mean that’s a very impressive margin, an improvement margin, especially given that the Ford cheese buy went away at the end of December. If you look at it on a gross margin, it’s actually sequentially improved as far as over the second quarter. Given that there was the month in there that the Ford cheese buy went away, what was driving that?

Well as I mentioned, we had to take a price increase early in the quarter so really what you’re having is one month of the quarter with increased cheese costs, but you’re having multiple months of benefit from the price increases. So I would look strongly that that will go down sequentially as we unfold 3 months of higher cheese costs. I mean current right now, at least as of the other day, the cheese was about $1.90 a pound compared to the contract that we had was about $1.60 a pound. Karen Holland – Lehman Brothers : In the quarter that, I guess in the month of January, was the gross margin for Prepared Food actually down?

We don’t give out monthly margin information, Karen. Karen Holland – Lehman Brothers : Well thank you for the additional color.

Thanks.

Our next question will come from the line of Anthony Lebiedzinski with Sidoti & Company LLC; please proceed. Anthony Lebiedzinski – Sidoti & Company, LLC: Good morning.

Hi Anthony. Anthony Lebiedzinski – Sidoti & Company, LLC: I know you commented on the gas margins being under a little bit of pressure and returning to more historical norms. I was wondering if you could perhaps give us some color as to what you’re seeing inside the stores, what kind of margins directionally speaking up or down? I know you made a comment about the cheese cost, but any kind of color on that front would help us.

I’ll take the Prepared Food part of that, and you’re right, I did mention a little bit of color. I would anticipate at least sequentially the margin to start to come down in the Prepared Food category as we have a little bit more impact on the cheese costs in the last quarter. So having said that, I move into the Grocery and General Merchandise category: About as best I could give you at this point, Anthony, would be that we are still seeing very strong sales movement in some of the higher margin item categories that I mentioned in the conference call opening comments in the Beverage category. Some of the other impact of the gross profit margin has to do with the carton to pack distribution of cigarettes. As I mentioned, it was 66% pack this year compared to 60% last year, part of that reason behind that was the tax increase in the State of Iowa going up last March. When there’s an increase of that size, people have a tendency to migrate from cartons into buying packs, and it does help the margin. So we are going to cycle against that here in the middle of the March, but there has been a few other state tax increases that may offset some of that. So that’s about as much color as I’m able to give at this point. Anthony Lebiedzinski – Sidoti & Company, LLC: You have taken some price increases, I was wondering if you plan on doing any additional price increases in the near-term.

Right now we’ve don’t have plans, but certainly that is on the front burner, put it that way. Anthony, before I leave your question, I do want to point out also in the fourth quarter last year, when you look at the Grocery and General Merchandise margin, that is inflated by a one-time benefit that we had from the… Anthony Lebiedzinski – Sidoti & Company, LLC: Cigarettes.

Yeah, so I want to make sure everybody’s aware of that. It was to the tune of about $4.8 million. Anthony Lebiedzinski – Sidoti & Company, LLC: Just wanted to clarify on the share count, I think you said the diluted share count in the quarter was 50.921 million.

Yes. Anthony Lebiedzinski – Sidoti & Company, LLC: Right, okay, so it looks like the diluted EPS from continuing operations would’ve been $0.25 if I plugged that into my model.

When you look at the… If you’re asking about end of the quarter if they don’t match up. Anthony Lebiedzinski – Sidoti & Company, LLC: Right, I mean yeah because if I take the net income from continuing operations of 12.898 divided by 50.921, I come up with $0.25 not $0.26. So is that…

That’s absolutely correct. It actually comes to like $0.25.43. You’re absolutely correct. What happens is this: This has occurred for us in the past where the line items because of discounting operation had gain loss on some of the sale doesn’t add up within the third quarter. In taking with our independent auditors, we force those to line up. So what we do is we go down to the bottom, that $13 million and do that calculation, that will be $0.26 and that $135,000 on the gain really round to zero, so then we make it foot going upwards. That’s how we handle that. So you’re absolutely correct but that has happened in prior quarters and that’s the way they would like us to handle that. But that’s a good check. Anthony Lebiedzinski – Sidoti & Company, LLC: Also as far as you mentioned about acquisitions or the lack of so far, the last couple of months, have you seen anything different in terms of expectations from sellers or are they still kind of have the same expectations as they had let’s say 6 or 9 months ago.

It’s been about the same as it has been over the last 9 months or so. Just in the Midwest region, we were seeing unusually high gasoline margins. I mean the margins that we report, it’s not specific to Casey. It’s any retailer in the Midwest. The environment happens to be such that everybody’s just seeing a much greater cash flow. There’s just not a lot of incentive out there. I can tell you that we’re not being outbid for acquisitions. It’s just that we’re not willing to pay such a high multiple and run the risk of having dilutive acquisitions. We think it’s more prudent for us to stick to some due diligence and make sure that we buy right. Anthony Lebiedzinski – Sidoti & Company, LLC: Thank you.

Thank you.

Our next question will come from the line of Karen Short with Friedman, Billings, Ramsey & Co; please proceed. Karen Short – Friedman, Billings, Ramsey & Co.: Hey everyone. Just a couple of questions: First on your tax rate, it was a little lower, could you just provide some color on that and give us some directional sense of what we should use going forward.

Well going forward, I would use 37% as the effective tax rate. That’ll bounce around a little bit depending on a number of things -workers opportunities, tax credits coming through in a particular quarter, maybe some contingencies that are falling off in a particular time period. But 37% is a good number to use going forward. Karen Short – Friedman, Billings, Ramsey & Co.: What made it lower this quarter?

Actually, isn’t coming in at 37.2% year-to-date? Karen Short – Friedman, Billings, Ramsey & Co.: Oh, year-to-date, okay.

Workers opportunity tax credits that came through in the third quarter that might be a little bit lower than what you might had in your model. (Inaudible) 37% is the one that I would use. Karen Short – Friedman, Billings, Ramsey & Co.: Okay. I guess maybe just some thoughts on if we assume the acquisition environment continues to remain challenging, any thoughts on what you would consider doing with your cash balance?

Well there’s a number of thoughts on that. We still think that given the fragmented nature of the convenient store industry in our Midwestern marketing area because roughly two-thirds of the c-store operators have 10 stores or less, so it is highly fragmented. I talked about some of the operating expense pressures that we incurred, some of these are same pressures that all of the other operators are incurring. So pressures in the industry coupled with lower gas margin activity going forward, coupled with the fragmented nature of the market area that we operate in, I think there’s going to be some opportunities for acquisitions going forward. We just need to be patient in that regard. We’re not going to go necessarily out and make a deal just to make a deal. If for some reason, however, Karen, that that does not come to fruition in the long-term, there’s certainly other opportunities. One would be one I touched on in a prior question is to accelerate new store construction with the new store design that we have, as well as looking at the remodel process. We remodel a lot of stores, but some of the new aspects of the new store construction we are looking to incorporate into the remodel process that we have here at Casey’s. So basically we touched on it maybe in a couple quarters ago, really what it is it’s a square footage reallocation placing more emphasis on Prepared Food category and adding more cooler space. We think that’s a viable opportunity to use that cash. We have done 2 stock buybacks in the history of the Company. That’s not something that I would do at this point, but certainly we have done that to have demonstrated that we have the desire to that should the circumstances line up correctly. Karen Short – Friedman, Billings, Ramsey & Co.: Then I guess just a last question. Obviously the weather had an impact on the driving patterns as well, do you have any sense… Can you try to quantify the impact of the weather on the comp versus the higher retail prices?

That’s a little bit more challenging to do. I can tell you a good share of the weather-related issues we had in the third quarter were generated in the month of December. The month of December, we happened to what I will call a “major pattern” hit our marking area every weekend in the month of December. That was the first time in a very long time that we saw same-store customer count actually go negative. Now it’s positive in the quarter and it tracked the weather patterns very closely. We saw same-store customer count fall out in a weekend, build up back up in the week and then fall back off as the weather pattern hit the following weekend. So unfortunately I can’t give you what I would call a very accurate indication of what that impact was. Karen Short – Friedman, Billings, Ramsey & Co.: Just to be clear, you said your comps in February, gallon comps are unchanged from January or unchanged from the quarter or trending along the same lines that we…

Same lines as the quarter. Karen Short – Friedman, Billings, Ramsey & Co.: Thanks.

Our next question comes from the line of Chuck Cerankosky with FTN (inaudible); please proceed. Chuck Cerankosky – FTN Midwest Securities: That’s FTN Midwest. Good morning, everyone.

Hi Chuck. Chuck Cerankosky – FTN Midwest Securities: Just want to ask about inflation added among your customers. It seems you’ve been pretty successful in raising prices. It doesn’t look like it’s affecting store traffic, but could you talk about that a little? It looks like in the case of cigarettes, you’re selling fewer cartoons and more packs and that’s the way your customers are reacting in some categories. You can’t do that in every category.

No, you’re right on point, Chuck. As far as to answer your question, kind of dissect that, as far as inflationary pressures and how the customer’s reacting to that, the only place we are seeing any elasticity in demand is in the gas galloon movement. Typically what people are doing in that, and their buying habits are such that if you’re a $30 type person, meaning that you’re going to put $30 in your tank and obviously with the higher retail, you’re going to get less gallons. That’s the kind of buying habit that we’re seeing. We’re not seeing a pullback inside of our stores and I think that’s indicated by a couple things. One would be the very solid same-store sales that we’ve been able to put up over the last three quarters, but also in addition, we have been seeing same-store customer count to be very solid over the 9-month period. I think that’s an indication that the price increases that we have taken since July of last year really have not been an impact as far as customers pulling back on those products. Now there was a question earlier in the call her about potential price increases going forward and certainly we look at that on a go forward basis kind of identified several areas that we have, that we believe a potential if the cost pressures continue. But keep in mind, we certainly need to be cognizant of our demographics. We’re a small town rural Midwestern company and you certainly do not want to offend the customer with a multitude of price increases because then you may have a situation like you have indicated that might happen and maybe they might pull back. So we’re cognizant of that and we approach that very diligently. Chuck Cerankosky – FTN Midwest Securities: Bill, what is the same-store customer count?

For the quarter or for the year-to-date? We haven’t given that out year-to-date. Chuck Cerankosky – FTN Midwest Securities: I’ll take both if possible.

I can tell you for the quarter, it’s just slightly below 1% and same-store customer count year-to-date is about 2.5%. Chuck Cerankosky – FTN Midwest Securities: Now looking at that fall off in trend for the quarter, what do you attribute that to?

That goes back to the weather-related issue that we talked about. The month of December, we were negative, quite substantially negative relative to other months, so that was the pullback. It’s not uncommon when you have severe weather patterns to see a customer count decline. Chuck Cerankosky – FTN Midwest Securities: Gotcha.

Just so happened in this, Chuck, last year in the third quarter was an extremely third quarter compared to this year and the weather patterns, you just didn’t see them last year. Chuck Cerankosky – FTN Midwest Securities: Now interested in this new store design you’re talking about as well as the remodel that could perhaps parallel it. How detailed can you be on the space allocation? Are we going to see 30% more footage given to Prepared Foods and how does the coffee program work into that?

Well I kind of an overview to the extent that I can. From a 20,000 foot overview, our average store currently is about 27/2800 squire foot. The new store design is going to add about 1,000 square foot going forward. Most of that is space, that 1,000 extra square foot is going to be allocated to the Prepared Food area as well as the cooler space. Most of our stores have a 9 cooler door set and you’re going to take that 9 cooler door set and take it to a 14, roughly a 14 cooler door set to make room for what I call “the increasing popularity” and continued popularity of the Beverage category ranging from energy drinks to vitamin waters to juices and so forth and then the rest of it is going into the Prepared Food category. You touched on one of the aspects right there, Chuck, is to expand the coffee program. We saw a great success in expanding our fountain area several years ago, and that actually continues to be very, very solid for us. We think that we can take that same thought process and expand the fountain area to offer a wider variety of flavor profiles, creamers, things of that nature, multiple head cappuccino machines and play upon that popularity in that particular category in an effort to drive same-store sales in addition to gross profit dollars. So that’s the intent. Those same concepts, Chuck, we intend to take in and fold into the remodel program that we have here. So basically the remodel program would consist of a wide variety depending on what size you’re looking at and real estate constraints, things of that nature. But certainly going to look to expand cooler doors and the kitchen in the remodel process. Chuck Cerankosky – FTN Midwest Securities: What will add that to the cost of a new store?

About $200,000. Chuck Cerankosky – FTN Midwest Securities: All in building and equipment?

Yeah, that’s an all in. Chuck Cerankosky – FTN Midwest Securities: Thank you very much.

Thanks, Chuck.

Our next question comes from the line of Fred Speece with Speece Thorson Capital Group; please proceed.

Hi Fred. Fred, are you there? Fred Speece – Speece Thorson Capital Group: Are you there?

Yeah, I’m here, Fred. Can you hear me? Fred Speece – Speece Thorson Capital Group: Yeah, sorry. Question: Part of the big gas margin is ethanol. Is that reversing? Is that part of your reason for forecasting it coming back to the average?

Not so much. Now the ethanol pricing has increased in the last quarter versus the first few quarters, there’s no question about that. But really what’s happening is this, Fred: We’re seeing the wholesale cost, at least in February, rise and retail certainly are sticking. As you know, your one who follows the stock, you know that’s an environment typically where our margins get under pressure, and that’s what’s happening. I think maybe perhaps you’re seeing some different pricing potentially. It’s only one month and that change very quickly however. But on the ethanol side, we’re still seeing a significant spread on retail price between E10 and the clear product which basically leads people to buy more E10. Here in the State of Iowa, we do get a tax credit on that, and that has been higher than normal over the prior period. Fred Speece – Speece Thorson Capital Group: Then just a comment just to put a balanced tone out there: I’m real happy that you are resisting paying up for acquisitions and you’re being patient and disciplined and stay that course. We give up the short-term growth and don’t let the pressure to have you grow just to grow, don’t change that pattern.

I appreciate that comment and that’s our philosophy. We’ve seen many of our peers in past years become under a little bit of pressure because of that, so we don’t want to certainly fall into that. Fred Speece – Speece Thorson Capital Group: Be well.

Thank you, Fred. Take care.

(Operator Instructions) Our next question will come from the line of Ben Brownlow with Morgan Keegan; please proceed. Ben Brownlow – Morgan, Keegan & Co, Inc.: Hey, good morning, guys. Just to kind of touch back on the ethanol, is there any progress or update on your thoughts on splash blending there to get the federal tax credit?

Well the federal tax code, we’re actually already receiving that. I mean it’s very common here in the Midwest that the terminals have those products and do that blending at the terminals. You might have a different environment in different parts of the country where it takes, it is a little more challenging to get the ethanol first of all to those parts of the country and secondly the terminals may not be quite inline or in the same type of program here in the Midwest. I’ve been with the Company 18 years, Ben, and we’ve had E10 ever since I’ve been here, and we were on of the leaders in E10 coming forward. So it’s a very common product here and it may not be as common in terminals out in other parts of the United States. In a sense, we do receive that via a reduction in the cost and we see that right off the invoice. Ben Brownlow – Morgan, Keegan & Co, Inc.: What’s the current spread, price spread?

A retail price spread, it’s about $0.12/$0.13. Ben Brownlow – Morgan, Keegan & Co, Inc.: Can you give us an update kind of on what you’re seeing on the credit card management that you brought in-house and the savings there?

I’m glad you brought that up, man. That’s been an extremely positive endeavor for us. We brought the clearing of the credit cards in house as of the beginning of the fiscal year, and it’s going to be about $2 million savings for us. So if we had not done that, that operating expense number that I reported on earlier would’ve been even higher than what it was. So it’s proving to be very successful. Ben Brownlow – Morgan, Keegan & Co, Inc.: Then what’s your outlook on the margin for the other revenue category?

Well, we don’t give margin guidance necessarily, but just to kind of reiterate some earlier comments, the Prepared Food category margin, we’re under some pressure with some different costs, the big cost being cheese. We’re also seeing pressure from wheat as well. So I would anticipate (inaudible) any other price increases that we may take, that the margin should come under pressure in relationship to where it is currently. Now I would report certainly if we take some price increase, I’ll report those on to everyone so you can factor that in your forward-looking models. But also on the Grocery/General Merchandise we’re still seeing some very strong sales on higher margin items, specifically in the Beverage category, and I still think we’ll see some benefit on the pack to carton contribution. I think the outlook there certainly is positive. Ben Brownlow – Morgan, Keegan & Co, Inc.: Great. Thank you very much.

Thanks, Ben.

At this time, we have no questions in queue. I would like to turn the call back over to Mr. Bill Walljasper, Chief Financial Officer, for closing remarks.

Thank you, Lacey. I want to thank everybody for being on the call today. Just as a reminder, same-store sales for the month of February will be released March 13th. Thank you and have a good day.

Thank you for your participation in today’s conference. This concludes your presentation; you may now disconnect. Good day.