NEWS RELEASE

For Immediate Release

Casey’s Reports Strong Inside Sales in a Challenging Gasoline Market

Ankeny, Iowa, December 6, 2006—Casey’s General Stores, Inc. (Nasdaq symbol CASY) today reported $0.34 in earnings per share from continuing operations for the second quarter of fiscal 2007 ended October 31, 2006. For the same quarter a year ago, earnings were $0.44 per share. This fiscal year to date, earnings came to $0.68 per share versus $0.89 for the first half of fiscal 2006. President and CEO Robert J. Myers gave this assessment: “Second-quarter total and same-store sales were up in all three of our business categories, but earnings were affected by tighter gasoline margins.”

Gasoline—The Company’s fiscal 2007 goal is to increase same-store gasoline gallons sold 2% with an average margin of 10.8 cents per gallon. Same-store gallons sold were up 2.7% in the second quarter. Total gallons sold were up 9.4% for the second quarter and up 5.6% for the year to date. “We benefited from increased demand as the retail price of gas came down,” said Myers, “but we couldn’t keep pace with the post-Katrina margin we reported a year ago.” The quarter’s average margin was 9.4 cents compared with a record 14.1 cents in the previous second quarter. Gasoline gross profit was down 26.8% to $28.6 million for the quarter and down 21.6% to $57.1 million at midyear.

Grocery & Other Merchandise—The annual goal is to increase same-store sales 3.9% with an average margin of 32.2%. Same-store sales were up 3.5% for the second quarter and up 2.7% for the year to date. “This is the eleventh straight quarter of positive same-store sales,” Myers stated. “We are encouraged by the steady progress we continue to make in this category.” Total sales for the quarter were up 9.4% with an average margin of 32.6% and up 8% at midyear with an average margin of 32.4%. The second-quarter gross profit was $70.9 million; for the year to date, it was $143.7 million.

Prepared Food & Fountain—The goal is to increase same-store sales 7.9% with an average margin of 63.4%. Same-store sales were up 13.7% for the quarter with an average margin of 61.6%. For the six months, same-store sales were up 11.6% with an average margin of 62.2%. Total sales rose 19.4% for the quarter and 16.9% year to date. “Despite difficult quarter-to-quarter comparisons, all areas of this category are performing exceptionally well,” Myers explained. Gross profit was up 13.8% to $42.6 million for the quarter and up 13.2% to $84 million for the year to date. Management expects continued benefits from an expanded fountain program, strategic price increases, and a favorable cheese price that is now locked in through the end of the next calendar year.

Operating Expenses—It is an ongoing corporate goal to hold the percentage increase in operating expenses to less than the percentage increase in gross profit. For the quarter, operating expenses increased 8.5% while gross profit increased 0.7%. Year to date, operating expenses rose 10.5% as gross profit increased 2.3%. “Being off target was primarily due to the margin shortfall in a gasoline market over which we had little control,” Myers stated. “We did a good job of building inside sales to drive gross profit.” Inside sales in the second quarter were up 11.9% while gross profit including commissions rose 10%. For the year to date, inside sales rose 10.3% and gross profit increased 9.9%.

Expansion—The Company’s goal is to acquire 50 stores and build 10 new stores in fiscal year 2007. In early October, Casey’s closed on the HandiMart acquisition, adding 33 stores. “These sites already are performing very well for us,” said Myers. By midyear, Casey’s had acquired 8 other stores and completed 6 new constructions. “The acquisition environment continues to be favorable,” Myers added, “and we have 7 written agreements, giving me confidence we will meet the annual goal.”

Dividend—At its November meeting, the Board of Directors declared a quarterly dividend of $0.05 per share. The dividend is payable February 15, 2007 to shareholders of record on February 1, 2007.

Certain statements in the news release, including any discussion of management expectations for future periods, constitute "forward-looking statements" within the meaning of Private Securities Litigation Reform Act of 1995. 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.