Casey’s revising financial statements

Casey's General Stores is revising its financial statements for the past three years because of an error in calculating ethanol excise tax.

The Ankeny-based convenience store chain said the mistake was uncovered during a routine Internal Revenue Service examination. The company has voluntarily reported the error to the IRS and also has repaid $31.5 million in taxes and interest related to the mistake.

'We deeply regret the errors that led to this revision, and we are taking swift and decisive action to enhance our excise tax reporting process and systems to resolve this issue,” said Robert Myers, Casey's chairman and CEO.

The stock market reacted sharply to the disclosure. Shares of Casey's stock ended trading Tuesday at $80.8, down 8 percent, or $7.04 per share.

Before Jan. 1, 2012, Casey's received a credit from the federal government for the blending of ethanol and gasoline commonly known as 'splash” blending. Up to this time, ethanol gallons were being correctly accounted for on the excise tax return and the applicable tax owed was offset against the credit.

After the credit expired on Dec. 31, 2011, Casey's continued the practice of blending ethanol and gasoline, obligating the company to pay the excise tax of $0.184 per gallon, without the offsetting benefit of the corresponding credit.

After Jan. 1, 2012, Casey's continued to file the quarterly IRS Form 720, but the ethanol gallons blended and related tax for the ethanol activity were inadvertently left off the form. That resulted in Casey's failing to record the correct federal excise taxes for blended ethanol gallons from Jan. 1, 2012, through July 31, 2014.

The total impact of the unrecorded excise taxes for the period, including accrued interest, is approximately $31.5 million. Over that period, the impact to Casey's fully diluted earnings per share is approximately 4.5 cents in each of the affected quarters.

Myers said the issue will not affect the company's future expansion plans. Casey's plans to buy or build 72 to 108 stores and replace 25 this fiscal year.