##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-04065
 Lancaster Colony Corporation
 (Exact name of registrant as specified in its charter)
 Ohio
    
    13-1955943(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)37 West Broad Street
    
    43215Columbus, Ohio
    
    (Zip Code)(Address of principal executive offices)
 614-224-7141  (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, without par value
    
    The NASDAQ Stock Market LLC(NASDAQ Global Select Market)
 Securities registered pursuant to Section 12(g) of the Act:
None
 Yes þ No o
 Yes o No þ
 Yes þ No o
 Yes o No o
 þ
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    6Item 1B. Unresolved Staff Comments
    
    
    11Item 2. Properties
    
    
    12Item 3. Legal Proceedings
    
    
    12Item 4. Removed and Reserved
    
    
    12PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
    
    
    13Item 6. Selected Financial Data
    
    
    15Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    30Item 8. Financial Statements and Supplementary Data
    
    
    30Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    58Item 9A. Controls and Procedures
    
    
    58Item 9B. Other Information
    
    
    60PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    60Item 11. Executive Compensation
    
    
    60Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    60Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    60Item 14. Principal Accounting Fees and Services
    
    
    60PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    61Signatures
    
    
    62Index to Exhibits
    
    
    64Exhibit 4.1Exhibit 21Exhibit 23Exhibit 31.1Exhibit 31.2Exhibit 32
   2




---



##### Table of Contents



PART I
 
 Item 1. Business
 GENERAL
   Available Information
 http://www.lancastercolony.com
 DESCRIPTION OF AND FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS
  Specialty Foods
    3




---



##### Table of Contents



Glassware and Candles
     4




---



##### Table of Contents



NET SALES BY CLASS OF PRODUCTS
  2010
    
    
    2009
    
    
    2008Specialty Foods:Non-frozen
    
    
    52
    %
    
    
    54
    %
    
    
    53
    %Frozen
    
    
    33
    %
    
    
    33
    %
    
    
    29
    %Glassware and Candles:Consumer table and giftware
    
    
    15
    %
    
    
    13
    %
    
    
    15
    %
  RESEARCH AND DEVELOPMENT
  BACKLOG
  ENVIRONMENTAL MATTERS
  EMPLOYEES AND LABOR RELATIONS
  FOREIGN OPERATIONS AND EXPORT SALES
  RAW MATERIALS
    5




---



##### Table of Contents



Item 1A. Risk Factors
   Competitive conditions within our markets could impact our sales volumes and operating margins.
   Wal-Mart is our largest customer and the loss of its business could cause our sales and net
income to decrease.
  Increases in the costs or limitations to the availability of raw materials we use to produce our
products could adversely affect our business by increasing our costs to produce goods.
    6




---



##### Table of Contents



A disruption of production at certain manufacturing facilities could result in an inability to
provide adequate levels of customer service.
  We may be subject to product recalls or product liability claims for mislabeled, adulterated,
contaminated or spoiled food products or defective consumer products.
     Increases in energy-related costs could negatively affect our business by increasing our costs to
produce goods.
  The availability and cost of transportation for our products is vital to our success, and the
loss of availability or increase in the cost of transportation could have an unfavorable impact
on our business and results of operations.
   7




---



##### Table of Contents



Our inability to successfully renegotiate union contracts and any prolonged work stoppages or
other business disruptions could have an adverse effect on our business and results of
operations.
   There is no certainty regarding the amount of future CDSOA distributions.
    Restructuring and impairment charges could have a material adverse effect on our financial
results.
  We may not be able to successfully consummate proposed acquisitions or divestitures or integrate
acquired businesses.
   8




---



##### Table of Contents



Potential indemnification costs relating to business divestitures could have a material adverse
effect on our business and results of operations.
  A future increase in our indebtedness could adversely affect our profitability and operational
flexibility.
  We are subject to Federal, state and local government regulations that could adversely affect our
business and results of operations.
   We rely on the value of our brands, and the costs of maintaining and enhancing the awareness of
our brands are increasing, which could have an adverse impact on our revenues and profitability.
   9




---



##### Table of Contents



We rely on the performance of major retailers, wholesalers, food brokers, distributors,
foodservice customers and mass merchants for the success of our business, and should they perform
poorly or give higher priority to other brands or products, our business could be adversely
affected.
   Inherent risks associated with our idle real property, such as our inability to sell it in a
reasonable time period, could have an adverse effect on our business and results of operations.
    The loss of the services of one or more members of our senior management team could have a
material adverse effect on our business, financial condition and results of operations.
   10




---



##### Table of Contents



Mr. Gerlach, our Chief Executive Officer and Chairman of our board of directors, has a
significant ownership interest in our Company.
   Anti-takeover provisions could make it more difficult for a third party to acquire us.
   
 Item 1B. Unresolved Staff Comments
   11




---



##### Table of Contents



Item 2. Properties
   Approximate
    
    
    Terms ofLocation
    
    Business Segment
    
    Square Feet
    
    
    OccupancyAltoona, IA (2)
    
    Specialty Foods
    
    
    120,000
    
    
    Owned/LeasedBedford Heights, OH (1)
    
    Specialty Foods
    
    
    98,000
    
    
    Owned/LeasedColumbus, OH (2)
    
    Specialty Foods
    
    
    393,000
    
    
    Owned/LeasedGrove City, OH
    
    Specialty Foods
    
    
    195,000
    
    
    OwnedHorse Cave, KY
    
    Specialty Foods
    
    
    333,000
    
    
    OwnedLuverne, AL
    
    Specialty Foods
    
    
    91,000
    
    
    OwnedMilpitas, CA (3)
    
    Specialty Foods
    
    
    130,000
    
    
    Owned/LeasedLeesburg, OH
    
    Glassware and Candles
    
    
    860,000
    
    
    OwnedJackson, OH
    
    Glassware and Candles
    
    
    122,000
    
    
    Owned
 
 (1)
    
    Part leased for term expiring in calendar year 2012(2)
    
    Part leased for term expiring in calendar year 2014(3)
    
    Part leased for term expiring in calendar year 2015  
 Item 3. Legal Proceedings
  
 Item 4. Removed and Reserved
  12




---



##### Table of Contents



PART II
 
 Item 5.Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  DividendsStock Prices
    
    
    PaidHigh
    
    
    Low
    
    
    Per Share2010First quarter
    
    $
    53.41
    
    
    $
    41.52
    
    
    $
    .285Second quarter
    
    $
    51.96
    
    
    $
    47.01
    
    
    
    .300Third quarter
    
    $
    60.07
    
    
    $
    49.30
    
    
    
    .300Fourth quarter
    
    $
    61.60
    
    
    $
    51.77
    
    
    
    .300Year
    
    
    
    
    
    
    
    
    
    $
    1.1852009First quarter
    
    $
    39.24
    
    
    $
    29.57
    
    
    $
    .280Second quarter
    
    $
    38.37
    
    
    $
    26.01
    
    
    
    .285Third quarter
    
    $
    43.46
    
    
    $
    31.90
    
    
    
    .285Fourth quarter
    
    $
    48.92
    
    
    $
    40.42
    
    
    
    .285Year
    
    
    
    
    
    
    
    
    
    $
    1.135
   Issuer Purchases of Equity Securities
  Total NumberTotal
    
    
    Average
    
    
    of Shares
    
    
    Maximum NumberNumber
    
    
    Price
    
    
    Purchased as
    
    
    of Shares That Mayof Shares
    
    
    Paid Per
    
    
    Part of Publicly
    
    
    Yet be PurchasedPeriod
    
    Purchased
    
    
    Share
    
    
    Announced Plans
    
    
    Under the PlansApril 130, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    509,077May 131, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    509,077June 130, 2010
    
    
    80,334
    
    
    $
    54.74
    
    
    
    80,334
    
    
    
    428,743Total
    
    
    80,334
    
    
    $
    54.74
    
    
    
    80,334
    
    
    
    428,743
   13




---



##### Table of Contents



PERFORMANCE GRAPH
 COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
OF LANCASTER COLONY CORPORATION, THE S&P MIDCAP 400 INDEX
AND THE DOW JONES U.S. FOOD PRODUCERS INDEX
  
 Cumulative Total Return (Dollars)
 6/05
    
    
    6/06
    
    
    6/07
    
    
    6/08
    
    
    6/09
    
    
    6/10Lancaster Colony Corporation
    
    
    100.00
    
    
    
    99.13
    
    
    
    107.86
    
    
    
    80.34
    
    
    
    120.51
    
    
    
    149.23S&P Midcap 400
    
    
    100.00
    
    
    
    112.98
    
    
    
    133.89
    
    
    
    124.07
    
    
    
    89.30
    
    
    
    111.56Dow Jones U.S. Food Producers
    
    
    100.00
    
    
    
    108.76
    
    
    
    127.39
    
    
    
    115.79
    
    
    
    97.50
    
    
    
    105.73
   14




---



##### Table of Contents



Item 6. Selected Financial Data
 LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 FIVE YEAR FINANCIAL SUMMARY
 (Thousands Except
    
    Years Ended June 30Per Share Figures)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006OperationsNet Sales
    
    $
    1,056,608
    
    
    $
    1,051,491
    
    
    $
    980,915
    
    
    $
    945,810
    
    
    $
    924,571Gross Margin
    
    $
    270,332
    
    
    $
    215,492
    
    
    $
    157,341
    
    
    $
    181,740
    
    
    $
    189,074Percent of Sales
    
    
    25.6
    %
    
    
    20.5
    %
    
    
    16.0
    %
    
    
    19.2
    %
    
    
    20.4
    %Interest Expense
    
    $
    
    
    
    $
    (1,217
    )
    
    $
    (3,076
    )
    
    $
    (150
    )
    
    $
    Percent of Sales
    
    
    0.0
    %
    
    
    0.1
    %
    
    
    0.3
    %
    
    
    0.0
    %
    
    
    0.0
    %Other Income  Continued Dumping
and Subsidy Offset Act
    
    $
    893
    
    
    $
    8,696
    
    
    $
    2,533
    
    
    $
    699
    
    
    $
    11,376Income from Continuing Operations
Before Income Taxes
    
    $
    175,138
    
    
    $
    137,006
    
    
    $
    75,668
    
    
    $
    101,260
    
    
    $
    125,734Percent of Sales
    
    
    16.6
    %
    
    
    13.0
    %
    
    
    7.7
    %
    
    
    10.7
    %
    
    
    13.6
    %Taxes Based on Income
    
    $
    60,169
    
    
    $
    47,920
    
    
    $
    27,229
    
    
    $
    36,981
    
    
    $
    44,494Income from Continuing Operations
    
    $
    114,969
    
    
    $
    89,086
    
    
    $
    48,439
    
    
    $
    64,279
    
    
    $
    81,240Percent of Sales
    
    
    10.9
    %
    
    
    8.5
    %
    
    
    4.9
    %
    
    
    6.8
    %
    
    
    8.8
    %Continuing Operations Diluted Income
per Common Share(1)
    
    $
    4.07
    
    
    $
    3.17
    
    
    $
    1.64
    
    
    $
    2.03
    
    
    $
    2.42Cash Dividends per Common Share
    
    $
    1.185
    
    
    $
    1.135
    
    
    $
    1.11
    
    
    $
    1.07
    
    
    $
    3.03Financial PositionCash, Equivalents and
Short-Term Investments
    
    $
    100,890
    
    
    $
    38,484
    
    
    $
    19,417
    
    
    $
    8,316
    
    
    $
    41,815Total Assets
    
    $
    586,453
    
    
    $
    498,481
    
    
    $
    520,178
    
    
    $
    598,497
    
    
    $
    628,021Working Capital
    
    $
    239,446
    
    
    $
    148,233
    
    
    $
    144,925
    
    
    $
    137,121
    
    
    $
    235,283Property, Plant and EquipmentNet
    
    $
    166,097
    
    
    $
    170,900
    
    
    $
    179,573
    
    
    $
    194,589
    
    
    $
    162,107Long-Term Debt
    
    $
    
    
    
    $
    
    
    
    $
    55,000
    
    
    $
    
    
    
    $
    Property Additions
    
    $
    12,833
    
    
    $
    11,336
    
    
    $
    16,832
    
    
    $
    53,589
    
    
    $
    51,860Depreciation and Amortization
    
    $
    20,533
    
    
    $
    21,870
    
    
    $
    24,138
    
    
    $
    24,081
    
    
    $
    24,980Shareholders Equity
    
    $
    484,908
    
    
    $
    402,556
    
    
    $
    359,218
    
    
    $
    444,309
    
    
    $
    494,421Per Common Share
    
    $
    17.21
    
    
    $
    14.32
    
    
    $
    12.63
    
    
    $
    14.45
    
    
    $
    15.33Weighted Average Common Shares
OutstandingDiluted(1)
    
    
    28,174
    
    
    
    28,044
    
    
    
    29,496
    
    
    
    31,603
    
    
    
    33,502
 
 (1)
    
    Certain prior year figures have been restated to reflect the
adoption of the provisions of a Financial Accounting Standards Board (FASB)
Staff Position (FSP) on the FASBs Emerging Issues Task Force (EITF) Issue
No. 03-06-1, Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities. See further discussion in Note 1 to
the consolidated financial statements.  15




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW
 This Managements Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) describes the matters that we consider to be important in understanding the results of our
operations for the three years in the periods ended June 30, 2010, 2009 and 2008 and our liquidity
and capital resources as of June 30, 2010 and 2009. Our fiscal year begins on July 1 and ends on
June 30. Unless otherwise noted, references to year pertain to our fiscal year; for example, 2010
refers to fiscal 2010, which is the period from July 1, 2009 to June 30, 2010. In the discussion
that follows, we analyze the results of our operations for the last three years, including the
trends in our overall business, followed by a discussion of our cash flows and liquidity and
contractual obligations. We then provide a review of the critical accounting policies and estimates
that we believe are most important to an understanding of our MD&A and our consolidated financial
statements. We conclude our MD&A with information on recently issued accounting pronouncements.
 The following discussion should be read in conjunction with the Selected Financial Data and
our consolidated financial statements and the notes thereto, all included elsewhere in this Annual
Report on Form 10-K . The forward-looking statements in this section and other parts of this report
involve risks and uncertainties including statements regarding our plans, objectives, goals,
strategies, and financial performance. Our actual results could differ materially from the results
anticipated in these forward-looking statements as a result of factors set forth under the caption
Forward-Looking Statements.
 EXECUTIVE SUMMARY
 Business Overview
   
    
    June 2008  Sale of the remaining automotive operations, ending the previously
reported Automotive segment;
 
    
    November 2007  Sale of substantially all of the operating assets of our consumer
and floral glass operations; and
 
    
    September 2007  Substantial completion and operational start-up of new frozen
yeast roll facility in Horse Cave, Kentucky.
   16




---



##### Table of Contents




    
    leading retail market positions in several branded products with a high-quality perception;
    
    a broad customer base in both retail and foodservice accounts;
    
    well-regarded culinary expertise among foodservice accounts;
    
    recognized leadership in foodservice product development;
    
    demonstrated experience in integrating complementary business acquisitions; and
    
    historically strong cash flow generation that supports growth opportunities.
  
    
    leveraging the strength of our retail brands to increase current product sales and
introduce new products;
    
    growing our foodservice sales through the strength of our reputation in product
development and quality; and
    
    pursuing acquisitions that meet our strategic criteria.
     Summary of 2010 Results
    17




---



##### Table of Contents



Looking Forward
       18




---



##### Table of Contents



REVIEW OF CONSOLIDATED OPERATIONS
 Segment Sales Mix
  2010
    
    
    2009
    
    
    2008Segment Sales Mix:Specialty Foods
    
    
    85
    %
    
    
    87
    %
    
    
    82
    %Glassware and Candles
    
    
    15
    %
    
    
    13
    %
    
    
    18
    %
 Net Sales and Gross Margin
 Year EndedJune 30
    
    
    Change(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010 vs. 2009
    
    
    2009 vs. 2008Net SalesSpecialty Foods
    
    $
    893,256
    
    
    $
    909,897
    
    
    $
    808,507
    
    
    $
    (16,641
    )
    
    
    (2
    )%
    
    $
    101,390
    
    
    
    13
    %Glassware and Candles
    
    
    163,352
    
    
    
    141,594
    
    
    
    172,408
    
    
    
    21,758
    
    
    
    15
    %
    
    
    (30,814
    )
    
    
    (18
    )%Total
    
    $
    1,056,608
    
    
    $
    1,051,491
    
    
    $
    980,915
    
    
    $
    5,117
    
    
    
    0
    %
    
    $
    70,576
    
    
    
    7
    %Gross Margin
    
    $
    270,332
    
    
    $
    215,492
    
    
    $
    157,341
    
    
    $
    54,840
    
    
    
    25
    %
    
    $
    58,151
    
    
    
    37
    %Gross Margin as a
Percentage of Sales
    
    
    25.6
    %
    
    
    20.5
    %
    
    
    16.0
    %
    19




---



##### Table of Contents



Selling, General and Administrative Expenses
 Year EndedJune 30
    
    
    Change(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010 vs. 2009
    
    
    2009 vs. 2008Selling, General and
Administrative Expenses
    
    $
    93,821
    
    
    $
    84,238
    
    
    $
    80,751
    
    
    $
    9,583
    
    
    
    11
    %
    
    $
    3,487
    
    
    
    4
    %SG&A Expense as a
Percentage of Sales
    
    
    8.9
    %
    
    
    8.0
    %
    
    
    8.2
    %
  Restructuring and Impairment Charges
 Specialty Foods Segment  Fiscal 2010
    Accrual at
    
    
    
    
    
    
    2010
    
    
    Accrual atJune 30,
    
    
    2010
    
    
    Cash
    
    
    June 30,(Dollars in thousands)
    
    2009
    
    
    Charges
    
    
    Outlays
    
    
    2010Restructuring ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    1,643
    
    
    $
    (1,643
    )
    
    $
    Other Costs
    
    
    
    
    
    
    172
    
    
    
    (172
    )
    
    
    Subtotal
    
    $
    
    
    
    
    1,815
    
    
    $
    (1,815
    )
    
    $
    Pension Curtailment Charges
    
    
    
    
    
    
    349Inventory Write-Down
    
    
    
    
    
    
    179Total Restructuring Charges
    
    
    
    
    
    $
    2,343
   20




---



##### Table of Contents



Specialty Foods Segment  Fiscal 2009
  Other
  Held for Sale
  Operating Income (Loss)
 Year EndedJune 30
    
    
    Change(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010 vs. 2009
    
    
    2009 vs. 2008Operating Income (Loss)Specialty Foods
    
    $
    176,194
    
    
    $
    145,848
    
    
    $
    88,975
    
    
    $
    30,346
    
    
    
    21
    %
    
    $
    56,873
    
    
    
    64
    %Glassware and Candles
    
    
    9,445
    
    
    
    (5,671
    )
    
    
    (1,887
    )
    
    
    15,116
    
    
    
    267
    %
    
    
    (3,784
    )
    
    
    (201
    )%Corporate Expenses
    
    
    (11,440
    )
    
    
    (10,529
    )
    
    
    (11,751
    )
    
    
    (911
    )
    
    
    9
    %
    
    
    1,222
    
    
    
    (10
    )%Total
    
    $
    174,199
    
    
    $
    129,648
    
    
    $
    75,337
    
    
    $
    44,551
    
    
    
    34
    %
    
    $
    54,311
    
    
    
    72
    %Operating Income (Loss) as
a Percentage of SalesSpecialty Foods
    
    
    19.7
    %
    
    
    16.0
    %
    
    
    11.0
    %Glassware and Candles
    
    
    5.8
    %
    
    
    (4.0
    )%
    
    
    (1.1
    )%Consolidated
    
    
    16.5
    %
    
    
    12.3
    %
    
    
    7.7
    %
  Interest Expense
  Other Income  Continued Dumping and Subsidy Offset Act
   21




---



##### Table of Contents



Interest Income and Other  Net
  Income from Continuing Operations Before Income Taxes
  Income from Continuing Operations
  Discontinued Operations
  Net Income
  SEGMENT REVIEW  SPECIALTY FOODS
   22




---



##### Table of Contents



SEGMENT REVIEW  GLASSWARE AND CANDLES
    23




---



##### Table of Contents



CORPORATE EXPENSES
  FINANCIAL CONDITION
 Liquidity and Capital Resources
        24




---



##### Table of Contents



Cash Flows from Continuing Operations
 Year EndedJune 30
    
    
    Change(Dollars in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010 vs. 2009
    
    
    2009 vs. 2008Provided by Operating
Activities
    
    $
    107,691
    
    
    $
    133,164
    
    
    $
    70,932
    
    
    $
    (25,473
    )
    
    
    (19
    )%
    
    $
    62,232
    
    
    
    88
    %(Used in) Provided by
Investing Activities
    
    $
    (14,100
    )
    
    $
    (10,974
    )
    
    $
    710
    
    
    $
    (3,126
    )
    
    
    (28
    )%
    
    $
    (11,684
    )
    
    
    N/MUsed in Financing Activities
    
    $
    (31,185
    )
    
    $
    (103,123
    )
    
    $
    (109,372
    )
    
    $
    71,938
    
    
    
    70
    %
    
    $
    6,249
    
    
    
    6
    %
       25




---



##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS AND COMMITMENTS
     Payment Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsOperating Lease Obligations (1)
    
    $
    14,805
    
    
    $
    4,166
    
    
    $
    6,141
    
    
    $
    3,921
    
    
    $
    577Purchase Obligations (2)
    
    
    63,530
    
    
    
    63,148
    
    
    
    366
    
    
    
    16
    
    
    
    Other Long-Term Liabilities (as reflected
on Consolidated Balance Sheet) (3)
    
    
    2,929
    
    
    
    64
    
    
    
    2,865
    
    
    
    
    
    
    
    Total
    
    $
    81,264
    
    
    $
    67,378
    
    
    $
    9,372
    
    
    $
    3,937
    
    
    $
    577
 
 (1)
    
    Operating leases are primarily entered into for warehouse and office facilities and certain
equipment. See Note 12 to the consolidated financial statements for further information.(2)
    
    Purchase obligations represent purchase orders and longer-term purchase arrangements related
to the procurement of raw materials, supplies, and property, plant and equipment.(3)
    
    This amount does not include approximately $16.2 million of other noncurrent liabilities
recorded on the balance sheet, which consist of the underfunded pension liability, other post
employment benefit obligations, tax liabilities and deferred compensation and interest on
deferred compensation. These items are excluded, as it is not certain when these liabilities
will become due. See Notes 6, 9, 10 and 11 to the consolidated financial statements for
further information. IMPACT OF INFLATION
   26




---



##### Table of Contents



CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Revenue Recognition
  Receivables and the Allowance for Doubtful Accounts
  Valuation of Inventory
  Long-Lived Assets
   27




---



##### Table of Contents



Goodwill and Intangible Assets
  Accrued Marketing and Distribution
  Accruals for Self-Insurance
  Accounting for Pension Plans and Other Postretirement Benefit Plans
  RECENTLY ISSUED ACCOUNTING STANDARDS
  RECENTLY ADOPTED ACCOUNTING STANDARDS
   28




---



##### Table of Contents



Forward-Looking Statements
   
    
    the potential for loss of larger programs or key customer relationships;
    
    the effect of consolidation of customers within key market channels;
    
    the continued solvency of key customers;
    
    the success and cost of new product development efforts;
    
    the lack of market acceptance of new products;
    
    the reaction of customers or consumers to the effect of price increases we may implement;
    
    changes in demand for our products, which may result from loss of brand reputation or
customer goodwill;
    
    changes in market trends;
    
    the extent to which future business acquisitions are completed and acceptably integrated;
    
    the possible occurrence of product recalls;
    
    efficiencies in plant operations, including the ability to optimize overhead
utilization in candle operations;
    
    the overall strength of the economy;
    
    changes in financial markets;
    
    slower than anticipated sales growth;
    
    the extent of operational efficiencies achieved;
    
    price and product competition;
    
    the uncertainty regarding the effect or outcome of any decision to explore further
strategic alternatives among our nonfood operations;
  29




---



##### Table of Contents




    
    fluctuations in the cost and availability of raw materials;
    
    adverse changes in energy costs and other factors that may affect costs of producing,
distributing or transporting our products;
    
    the impact of fluctuations in our pension plan asset values on funding levels,
contributions required and benefit costs;
    
    maintenance of competitive position with respect to other manufacturers, including
import sources of production;
    
    dependence on key personnel;
    
    stability of labor relations;
    
    dependence on contract copackers;
    
    effect of governmental regulations, including environmental matters;
    
    legislation and litigation affecting the future administration of the CDSOA;
    
    access to any required financing;
    
    changes in income tax laws;
    
    unexpected costs relating to the holding or disposition of idle real estate;
    
    changes in estimates in critical accounting judgments; and
    
    innumerable other factors.
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  INTEREST RATE RISK
  COMMODITY PRICE RISK
  
 Item 8. Financial Statements and Supplementary Data
  30




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Income Taxes Accounting for Uncertainty in Income Taxes
 Internal ControlIntegrated Framework
 /s/ Deloitte & Touche LLPDeloitte & Touche LLPColumbus, OhioAugust 25, 2010
  31




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 June 30(Amounts in thousands, except share data)
    
    2010
    
    
    2009ASSETSCurrent Assets:Cash and equivalents
    
    $
    100,890
    
    
    $
    38,484Receivables (less allowance for doubtful accounts,
2010$516; 2009$942)
    
    
    67,766
    
    
    
    61,152Inventories:Raw materials
    
    
    36,812
    
    
    
    33,067Finished goods and work in process
    
    
    84,697
    
    
    
    69,456Total inventories
    
    
    121,509
    
    
    
    102,523Deferred income taxes and other current assets
    
    
    27,234
    
    
    
    20,653Total current assets
    
    
    317,399
    
    
    
    222,812Property, Plant and Equipment:Land, buildings and improvements
    
    
    129,747
    
    
    
    130,683Machinery and equipment
    
    
    242,024
    
    
    
    239,380Total cost
    
    
    371,771
    
    
    
    370,063Less accumulated depreciation
    
    
    205,674
    
    
    
    199,163Property, plant and equipmentnet
    
    
    166,097
    
    
    
    170,900Other Assets:Goodwill
    
    
    89,840
    
    
    
    89,840Other intangible assetsnet
    
    
    9,514
    
    
    
    10,678Other noncurrent assets
    
    
    3,603
    
    
    
    4,251Total
    
    $
    586,453
    
    
    $
    498,481LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    41,904
    
    
    $
    41,180Accrued liabilities
    
    
    36,049
    
    
    
    33,399Total current liabilities
    
    
    77,953
    
    
    
    74,579Other Noncurrent Liabilities
    
    
    19,138
    
    
    
    16,719Deferred Income Taxes
    
    
    4,454
    
    
    
    4,627Shareholders Equity:Preferred stockauthorized 3,050,000 shares; 
outstandingnoneCommon stockauthorized 75,000,000 shares; 
outstanding, 201028,167,549 shares; 200928,101,885 shares
    
    
    94,885
    
    
    
    88,962Retained earnings
    
    
    1,080,015
    
    
    
    998,476Accumulated other comprehensive loss
    
    
    (9,797
    )
    
    
    (9,085
    )Common stock in treasury, at cost
    
    
    (680,195
    )
    
    
    (675,797
    )Total shareholders equity
    
    
    484,908
    
    
    
    402,556Total
    
    $
    586,453
    
    
    $
    498,481
   32




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 Years Ended June 30(Amounts in thousands, except per share data)
    
    
    2010
    
    
    2009
    
    
    2008Net Sales
    
    $
    1,056,608
    
    
    $
    1,051,491
    
    
    $
    980,915Cost of Sales
    
    
    786,276
    
    
    
    835,999
    
    
    
    823,574Gross Margin
    
    
    270,332
    
    
    
    215,492
    
    
    
    157,341Selling, General and Administrative Expenses
    
    
    93,821
    
    
    
    84,238
    
    
    
    80,751Restructuring and Impairment Charges
    
    
    2,312
    
    
    
    1,606
    
    
    
    1,253Operating Income
    
    
    174,199
    
    
    
    129,648
    
    
    
    75,337Other (Expense) Income:Interest expense
    
    
    
    
    
    
    (1,217
    )
    
    
    (3,076
    )Other incomeContinued Dumping and Subsidy
Offset Act
    
    
    893
    
    
    
    8,696
    
    
    
    2,533Interest income and othernet
    
    
    46
    
    
    
    (121
    )
    
    
    874Income from Continuing Operations
Before Income Taxes
    
    
    175,138
    
    
    
    137,006
    
    
    
    75,668Taxes Based on Income
    
    
    60,169
    
    
    
    47,920
    
    
    
    27,229Income from Continuing Operations
    
    
    114,969
    
    
    
    89,086
    
    
    
    48,439Discontinued Operations, Net of Tax:Income from Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    2,633Loss on Sale of Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (13,452
    )Total Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    (10,819
    )Net Income
    
    $
    114,969
    
    
    $
    89,086
    
    
    $
    37,620Income Per Common Share from
Continuing Operations:Basic
    
    $
    4.08
    
    
    $
    3.17
    
    
    $
    1.64Diluted
    
    $
    4.07
    
    
    $
    3.17
    
    
    $
    1.64Loss Per
Common Share from Discontinued Operations:Basic and Diluted
    
    $
    
    
    
    $
    
    
    
    $
    (.37
    )Net Income Per Common Share:Basic
    
    $
    4.08
    
    
    $
    3.17
    
    
    $
    1.27Diluted
    
    $
    4.07
    
    
    $
    3.17
    
    
    $
    1.27Weighted Average Common Shares Outstanding:Basic
    
    
    28,144
    
    
    
    28,033
    
    
    
    29,494Diluted
    
    
    28,174
    
    
    
    28,044
    
    
    
    29,496
   33




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended June 30(Amounts in thousands)
    
    2010
    
    
    2009
    
    
    2008Cash Flows From Operating Activities:Net income
    
    $
    114,969
    
    
    $
    89,086
    
    
    $
    37,620Adjustments to reconcile net income
to net cash provided by operating activities:Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    10,819Depreciation and amortization
    
    
    20,533
    
    
    
    21,870
    
    
    
    24,138Deferred income taxes and other noncash changes
    
    
    3,415
    
    
    
    3,767
    
    
    
    4,593Restructuring and impairment charges
    
    
    677
    
    
    
    (1,221
    )
    
    
    774Gain on sale of property
    
    
    (40
    )
    
    
    (861
    )
    
    
    (603
    )Loss on divestitures
    
    
    
    
    
    
    
    
    
    
    6,414Pension plan activity
    
    
    (289
    )
    
    
    (2,316
    )
    
    
    2,035Changes in operating assets and liabilities:Receivables
    
    
    (7,421
    )
    
    
    (2,287
    )
    
    
    (5,851
    )Inventories
    
    
    (19,166
    )
    
    
    17,780
    
    
    
    (7,487
    )Other current assets
    
    
    (6,755
    )
    
    
    13,868
    
    
    
    (8,277
    )Accounts payable and accrued liabilities
    
    
    1,768
    
    
    
    (6,522
    )
    
    
    6,757Net cash provided by operating activities
from continuing operations
    
    
    107,691
    
    
    
    133,164
    
    
    
    70,932Cash Flows From Investing Activities:Cash paid for acquisitions
    
    
    
    
    
    
    
    
    
    
    (250
    )Payments on property additions
    
    
    (12,833
    )
    
    
    (11,336
    )
    
    
    (16,832
    )Proceeds from sale of property
    
    
    69
    
    
    
    2,000
    
    
    
    935Net proceeds from divestitures
    
    
    
    
    
    
    
    
    
    
    19,108Othernet
    
    
    (1,336
    )
    
    
    (1,638
    )
    
    
    (2,251
    )Net cash (used in) provided by investing activities
from continuing operations
    
    
    (14,100
    )
    
    
    (10,974
    )
    
    
    710Cash Flows From Financing Activities:Net repayment of $100 million credit facility
    
    
    
    
    
    
    
    
    
    
    (42,500
    )Proceeds from debt
    
    
    
    
    
    
    25,000
    
    
    
    146,104Payments on debt
    
    
    
    
    
    
    (80,000
    )
    
    
    (91,104
    )Purchase of treasury stock
    
    
    (4,398
    )
    
    
    (16,894
    )
    
    
    (89,338
    )Payment of dividends
    
    
    (33,430
    )
    
    
    (31,854
    )
    
    
    (32,578
    )Proceeds from the exercise of stock awards
    
    
    4,643
    
    
    
    5,407
    
    
    
    648Increase (decrease) in cash overdraft balance
    
    
    2,000
    
    
    
    (4,782
    )
    
    
    (604
    )Net cash used in financing activities
from continuing operations
    
    
    (31,185
    )
    
    
    (103,123
    )
    
    
    (109,372
    )Cash Flows From Discontinued Operations:Net cash provided by operating activities
from discontinued operations
    
    
    
    
    
    
    
    
    
    
    22,385Net cash provided by investing activities
from discontinued operations
    
    
    
    
    
    
    
    
    
    
    26,444Net cash provided by discontinued operations
    
    
    
    
    
    
    
    
    
    
    48,829Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    2Net change in cash and equivalents
    
    
    62,406
    
    
    
    19,067
    
    
    
    11,101Cash and equivalents at beginning of year
    
    
    38,484
    
    
    
    19,417
    
    
    
    8,316Cash and equivalents at end of year
    
    $
    100,890
    
    
    $
    38,484
    
    
    $
    19,417
   34




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 AccumulatedCommon Stock
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total(Amounts in thousands,
    
    Outstanding
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Shareholdersexcept per share data)
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance, June 30, 2007
    
    
    30,748
    
    
    $
    81,665
    
    
    $
    937,376
    
    
    $
    (5,167
    )
    
    $
    (569,565
    )
    
    $
    444,309Net income
    
    
    
    
    
    
    
    
    
    
    37,620
    
    
    
    
    
    
    
    
    
    
    
    37,620Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (131
    )
    
    
    
    
    
    
    (131
    )Net pension and postretirement
benefit losses, net of $339
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (477
    )
    
    
    
    
    
    
    (477
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,012Cash dividends  common
stock ($1.11 per share)
    
    
    
    
    
    
    
    
    
    
    (32,578
    )
    
    
    
    
    
    
    
    
    
    
    (32,578
    )Purchase of treasury stock
    
    
    (2,340
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (89,338
    )
    
    
    (89,338
    )Stock-based plans
    
    
    44
    
    
    
    648
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    648Stock-based compensation expense
    
    
    
    
    
    
    339
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    339Cumulative effect of
FIN 48 adoption
    
    
    
    
    
    
    
    
    
    
    (1,174
    )
    
    
    
    
    
    
    
    
    
    
    (1,174
    )Balance, June 30, 2008
    
    
    28,452
    
    
    
    82,652
    
    
    
    941,244
    
    
    
    (5,775
    )
    
    
    (658,903
    )
    
    
    359,218Net income
    
    
    
    
    
    
    
    
    
    
    89,086
    
    
    
    
    
    
    
    
    
    
    
    89,086Net pension and postretirement
benefit losses, net of $1,897
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,310
    )
    
    
    
    
    
    
    (3,310
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,776Cash dividends  common
stock ($1.135 per share)
    
    
    
    
    
    
    
    
    
    
    (31,854
    )
    
    
    
    
    
    
    
    
    
    
    (31,854
    )Purchase of treasury stock
    
    
    (496
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,894
    )
    
    
    (16,894
    )Stock-based plans
    
    
    146
    
    
    
    5,347
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,347Stock-based compensation expense
    
    
    
    
    
    
    963
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    963Balance, June 30, 2009
    
    
    28,102
    
    
    
    88,962
    
    
    
    998,476
    
    
    
    (9,085
    )
    
    
    (675,797
    )
    
    
    402,556Net income
    
    
    
    
    
    
    
    
    
    
    114,969
    
    
    
    
    
    
    
    
    
    
    
    114,969Net pension and postretirement
benefit losses, net of $430
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (712
    )
    
    
    
    
    
    
    (712
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,257Cash dividends  common
stock ($1.185 per share)
    
    
    
    
    
    
    
    
    
    
    (33,430
    )
    
    
    
    
    
    
    
    
    
    
    (33,430
    )Purchase of treasury stock
    
    
    (80
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,398
    )
    
    
    (4,398
    )Stock-based plans
    
    
    146
    
    
    
    4,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,274Stock-based compensation expense
    
    
    
    
    
    
    1,649
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,649Balance, June 30, 2010
    
    
    28,168
    
    
    $
    94,885
    
    
    $
    1,080,015
    
    
    $
    (9,797
    )
    
    $
    (680,195
    )
    
    $
    484,908
   35




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Note 1  Summary of Significant Accounting Policies
 Principles of Consolidation
  Subsequent Events
  Use of Estimates
  Cash and Equivalents
  Receivables and the Allowance for Doubtful Accounts
  Credit Risk
  Inventories
   36




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
  Property, Plant and Equipment
  Long-Lived Assets
  Goodwill and Intangible Assets
  Accrued Marketing and Distribution
  Accruals for Self-Insurance
  Revenue Recognition
   37




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Advertising Expense
  Shipping and Handling
  Stock-Based Employee Compensation Plans
  Other Income
  Per Share Information
    38




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
  2010
    
    
    2009
    
    
    2008Net income
    
    $
    114,969
    
    
    $
    89,086
    
    
    $
    37,620Net income allocated to participating securities
    
    
    (198
    )
    
    
    (87
    )
    
    
    (17
    )Net income allocated to common shareholders
    
    $
    114,771
    
    
    $
    88,999
    
    
    $
    37,603Weighted average common shares outstanding:Basic
    
    
    28,144
    
    
    
    28,033
    
    
    
    29,494Incremental share effect from:Stock options
    
    
    3
    
    
    
    3
    
    
    
    Restricted stock
    
    
    6
    
    
    
    6
    
    
    
    2Stock-settled stock appreciation rights
    
    
    21
    
    
    
    2
    
    
    
    Diluted
    
    
    28,174
    
    
    
    28,044
    
    
    
    29,496Net income per common share:Basic
    
    $
    4.08
    
    
    $
    3.17
    
    
    $
    1.27Diluted
    
    $
    4.07
    
    
    $
    3.17
    
    
    $
    1.27
 Comprehensive Income and Accumulated Other Comprehensive Loss
  Recently Issued Accounting Standards
  Note 2  Acquisitions, Discontinued Operations and Divestitures
 Acquisitions
  Discontinued Operations
    39




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Divestitures
  Note 3  Goodwill and Other Intangible Assets
   2010
    
    
    2009Trademarks (40-year life)Gross carrying value
    
    $
    370
    
    
    $
    370Accumulated amortization
    
    
    (177
    )
    
    
    (167
    )Net Carrying Value
    
    $
    193
    
    
    $
    203Customer Relationships (12 to 15-year life)Gross carrying value
    
    $
    13,020
    
    
    $
    13,020Accumulated amortization
    
    
    (4,054
    )
    
    
    (3,118
    )Net Carrying Value
    
    $
    8,966
    
    
    $
    9,902Non-compete Agreements (5 to 8-year life)Gross carrying value
    
    $
    1,540
    
    
    $
    1,540Accumulated amortization
    
    
    (1,185
    )
    
    
    (967
    )Net Carrying Value
    
    $
    355
    
    
    $
    573Total Net Carrying Value
    
    $
    9,514
    
    
    $
    10,678
  Note 4  Accrued Liabilities
  2010
    
    
    2009Accrued compensation and employee benefits
    
    $
    24,671
    
    
    $
    22,863Accrued marketing and distribution
    
    
    6,471
    
    
    
    5,768Income and other taxes
    
    
    1,269
    
    
    
    1,307Book cash overdrafts
    
    
    2,000
    
    
    
    Other
    
    
    1,638
    
    
    
    3,461Total accrued liabilities
    
    $
    36,049
    
    
    $
    33,399
  40




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Note 5  Long-Term Debt
    Note 6  Income Taxes
  2010
    
    
    2009
    
    
    2008Currently payable:Federal
    
    $
    55,422
    
    
    $
    40,019
    
    
    $
    23,221State and local
    
    
    3,933
    
    
    
    3,858
    
    
    
    3,130Total current provision
    
    
    59,355
    
    
    
    43,877
    
    
    
    26,351Deferred Federal, state and local provision
    
    
    814
    
    
    
    4,043
    
    
    
    878Total taxes based on income
    
    $
    60,169
    
    
    $
    47,920
    
    
    $
    27,229
  2010
    
    
    2009
    
    
    2008Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State and local income taxes
    
    
    1.5
    %
    
    
    2.1
    %
    
    
    3.2
    %ESOP dividend deduction
    
    
    (0.1
    )%
    
    
    (0.2
    )%
    
    
    (0.4
    )%Domestic manufacturing deduction
    
    
    (1.9
    )%
    
    
    (1.8
    )%
    
    
    (1.3
    )%Other
    
    
    (0.1
    )%
    
    
    (0.1
    )%
    
    
    (0.5
    )%Effective rate
    
    
    34.4
    %
    
    
    35.0
    %
    
    
    36.0
    %
  41




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
  2010
    
    
    2009Deferred tax assets:Inventories
    
    $
    3,499
    
    
    $
    2,929Employee medical and other benefits
    
    
    10,892
    
    
    
    9,214Receivable and other allowances
    
    
    4,625
    
    
    
    5,100Other accrued liabilities
    
    
    3,591
    
    
    
    3,817Total deferred tax assets
    
    
    22,607
    
    
    
    21,060Total deferred tax liabilitiesproperty and other
    
    
    (12,380
    )
    
    
    (10,448
    )Net deferred tax asset
    
    $
    10,227
    
    
    $
    10,612
    2010
    
    
    2009Balance, beginning of year
    
    $
    2,932
    
    
    $
    2,673Tax positions related to current year:Additions
    
    
    15
    
    
    
    336Reductions
    
    
    
    
    
    
    Tax positions related to prior years:Additions
    
    
    640
    
    
    
    243Reductions
    
    
    (32
    )
    
    
    (220
    )Decreases due to settlements with taxing authorities
    
    
    (1,634
    )
    
    
    (100
    )Balance, end of year
    
    $
    1,921
    
    
    $
    2,932
     42




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
    Note 7  Shareholders Equity
   Note 8  Stock-Based Compensation
   Stock Options
     43




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
   WeightedWeighted
    
    
    AverageNumber
    
    
    Average
    
    
    Remaining
    
    
    Aggregateof
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life in Years
    
    
    ValueOutstanding at June 30, 2007
    
    
    361
    
    
    $
    40.42Exercised
    
    
    (17
    )
    
    
    37.23Forfeited
    
    
    (33
    )
    
    
    41.11Expired
    
    
    (72
    )
    
    
    37.23Outstanding at June 30, 2008
    
    
    239
    
    
    $
    41.52
    
    
    
    1.67
    
    
    $
    Exercised
    
    
    (125
    )
    
    
    41.52Forfeited
    
    
    (18
    )
    
    
    41.52Outstanding at June 30, 2009
    
    
    96
    
    
    $
    41.52
    
    
    
    .67
    
    
    $
    246Exercised
    
    
    (95
    )
    
    
    41.52Expired
    
    
    (1
    )
    
    
    41.52Outstanding at June 30, 2010
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Exercisable and vested at June 30, 2008
    
    
    237
    
    
    $
    41.52
    
    
    
    1.67
    
    
    $
    Vested and expected to vest at June 30, 2008
    
    
    239
    
    
    $
    41.52
    
    
    
    1.67
    
    
    $
    Exercisable and vested at June 30, 2009
    
    
    96
    
    
    $
    41.52
    
    
    
    .67
    
    
    $
    246Vested and expected to vest at June 30, 2009
    
    
    96
    
    
    $
    41.52
    
    
    
    .67
    
    
    $
    246
 Stock-Settled Stock Appreciation Rights
     44




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
   WeightedWeighted
    
    
    AverageNumber
    
    
    Average
    
    
    Remaining
    
    
    Aggregateof
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicRights
    
    
    Price
    
    
    Life in Years
    
    
    ValueOutstanding at June 30, 2007
    
    
    
    
    
    $
    Granted
    
    
    153
    
    
    
    38.31Outstanding at June 30, 2008
    
    
    153
    
    
    $
    38.31
    
    
    
    4.67
    
    
    $
    Exercised
    
    
    (8
    )
    
    
    38.31Granted
    
    
    78
    
    
    
    39.86Forfeited
    
    
    (1
    )
    
    
    38.31Outstanding at June 30, 2009
    
    
    222
    
    
    $
    38.85
    
    
    
    4.02
    
    
    $
    1,160Exercised
    
    
    (76
    )
    
    
    38.65Granted
    
    
    168
    
    
    
    58.79Forfeited
    
    
    (5
    )
    
    
    50.20Outstanding at June 30, 2010
    
    
    309
    
    
    $
    49.55
    
    
    
    3.93
    
    
    $
    2,075Exercisable and vested at June 30, 2008
    
    
    
    
    
    
    Vested and expected to vest at June 30, 2008
    
    
    147
    
    
    $
    38.31
    
    
    
    4.67
    
    
    $
    Exercisable and vested at June 30, 2009
    
    
    43
    
    
    $
    38.31
    
    
    
    3.67
    
    
    $
    248Vested and expected to vest at June 30, 2009
    
    
    214
    
    
    $
    38.85
    
    
    
    4.02
    
    
    $
    1,117Exercisable and vested at June 30, 2010
    
    
    43
    
    
    $
    38.64
    
    
    
    2.88
    
    
    $
    631Vested and expected to vest at June 30, 2010
    
    
    299
    
    
    $
    49.64
    
    
    
    3.93
    
    
    $
    1,988
  Outstanding
    
    
    ExercisableWeighted AverageRemainingGrant
    
    Exercise
    
    
    Number
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    Weighted AverageYears
    
    Price
    
    
    Outstanding
    
    
    Life in Years
    
    
    Price
    
    
    Exercisable
    
    
    Exercise Price2010
    
    $
    58.79
    
    
    
    165
    
    
    
    4.66
    
    
    $
    58.79
    
    
    
    
    
    
    
    2009
    
    $
    39.86
    
    
    
    61
    
    
    
    3.66
    
    
    $
    39.86
    
    
    
    9
    
    
    $
    39.862008
    
    $
    38.31
    
    
    
    83
    
    
    
    2.67
    
    
    $
    38.31
    
    
    
    34
    
    
    $
    38.31
  45




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
  WeightedNumber
    
    
    Averageof
    
    
    Grant DateRights
    
    
    Fair ValueUnvested at beginning of period
    
    
    179
    
    
    $
    6.39Granted
    
    
    168
    
    
    
    11.81Vested
    
    
    (76
    )
    
    
    6.30Forfeited
    
    
    (5
    )
    
    
    9.54Unvested at end of period
    
    
    266
    
    
    $
    9.77
  Restricted Stock
     WeightedNumber
    
    
    Averageof
    
    
    Grant DateShares
    
    
    Fair ValueUnvested restricted stock at beginning of period
    
    
    43
    
    
    $
    35.61Granted
    
    
    33
    
    
    
    56.79Vested
    
    
    (14
    )
    
    
    29.57Forfeited
    
    
    (1
    )
    
    
    47.41Unvested restricted stock at end of period
    
    
    61
    
    
    $
    48.43Expected to vest restricted stock at end of period
    
    
    60
    
    
    $
    48.39
   46




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
   Note 9  Pension Benefits
 Defined Benefit Pension Plans
    2010
    
    
    2009Weighted-average assumption as of June 30Discount rate
    
    
    5.21
    %
    
    
    6.34
    %
  2010
    
    
    2009
    
    
    2008Discount rate
    
    
    6.34
    %
    
    
    6.65
    %
    
    
    6.35
    %Expected long-term return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %
   Target Percentage
    
    Actual Percentageof Plan Assets
    
    of Plan Assetsat June 30
    
    at June 30Asset Category
    
    2010
    
    2010
    
    
    2009Cash
    
    010%
    
    
    2
    %
    
    
    2
    %Equity securities
    
    3070%
    
    
    54
    %
    
    
    58
    %Fixed income
    
    3070%
    
    
    44
    %
    
    
    40
    %Total
    
    
    
    
    100
    %
    
    
    100
    %
  47




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
        Asset Category
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalCash and equivalents
    
    $
    523
    
    
    $
    
    
    
    $
    
    
    
    $
    523Money market funds
    
    
    174
    
    
    
    
    
    
    
    
    
    
    
    174U.S. government obligations
    
    
    
    
    
    
    3,836
    
    
    
    
    
    
    
    3,836Corporate obligations
    
    
    
    
    
    
    1,812
    
    
    
    
    
    
    
    1,812Mortgage obligations
    
    
    
    
    
    
    2,262
    
    
    
    
    
    
    
    2,262Mutual funds fixed income
    
    
    5,048
    
    
    
    
    
    
    
    
    
    
    
    5,048Mutual funds equity
    
    
    16,388
    
    
    
    
    
    
    
    
    
    
    
    16,388Total
    
    $
    22,133
    
    
    $
    7,910
    
    
    $
    
    
    
    $
    30,043
    2010
    
    
    2009Change in benefit obligationBenefit obligation at beginning of year
    
    $
    34,484
    
    
    $
    33,599Service cost
    
    
    45
    
    
    
    117Interest cost
    
    
    2,118
    
    
    
    2,170Actuarial loss
    
    
    4,192
    
    
    
    986Benefits paid
    
    
    (2,375
    )
    
    
    (2,388
    )Benefit obligation at end of year
    
    $
    38,464
    
    
    $
    34,484
  48




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 2010
    
    
    2009Change in plan assetsFair value of plan assets at beginning of year
    
    $
    27,738
    
    
    $
    29,672Actual return on plan assets
    
    
    3,878
    
    
    
    (2,621
    )Employer contributions
    
    
    802
    
    
    
    3,075Benefits paid
    
    
    (2,375
    )
    
    
    (2,388
    )Fair value of plan assets at end of year
    
    $
    30,043
    
    
    $
    27,738Reconciliation of funded statusNet accrued benefit cost
    
    $
    (8,421
    )
    
    $
    (6,746
    )Amounts recognized in the consolidated balance sheets consist ofAccrued benefit liability (noncurrent liabilities)
    
    $
    (8,421
    )
    
    $
    (6,746
    )Net amount recognized
    
    $
    (8,421
    )
    
    $
    (6,746
    )Accumulated benefit obligation
    
    $
    38,464
    
    
    $
    34,484
   2010
    
    
    2009Net actuarial loss
    
    $
    16,747
    
    
    $
    14,780Prior service cost
    
    
    
    
    
    
    354Net transition asset
    
    
    (3
    )
    
    
    (3
    )Income taxes
    
    
    (6,296
    )
    
    
    (5,689
    )Total
    
    $
    10,448
    
    
    $
    9,442
  2011Net actuarial loss
    
    $
    546Net transition asset
    
    
    (1
    )Total
    
    $
    545
  2010
    
    
    2009
    
    
    2008Components of net periodic benefit costService cost
    
    $
    45
    
    
    $
    117
    
    
    $
    155Interest cost
    
    
    2,118
    
    
    
    2,170
    
    
    
    2,381Expected return on plan assets
    
    
    (2,150
    )
    
    
    (2,263
    )
    
    
    (2,904
    )Curtailment/settlement charges
    
    
    349
    
    
    
    331
    
    
    
    3,011Amortization of unrecognized net loss
    
    
    496
    
    
    
    327
    
    
    
    145Amortization of prior service cost
    
    
    5
    
    
    
    75
    
    
    
    102Amortization of unrecognized net (asset)
obligation existing at transition
    
    
    (1
    )
    
    
    2
    
    
    
    3Net periodic benefit cost
    
    $
    862
    
    
    $
    759
    
    
    $
    2,893
   49




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
     2011
    
    $
    2,1712012
    
    $
    2,1582013
    
    $
    2,1612014
    
    $
    2,1502015
    
    $
    2,1492016  2020
    
    $
    11,977
 Note 10   Postretirement Benefits
 Postretirement Medical and Life Insurance Benefit Plans
   2010
    
    
    2009Weighted-average assumption as of June 30Discount rate
    
    
    5.21
    %
    
    
    6.34
    %
  2010
    
    
    2009
    
    
    2008Discount rate
    
    
    6.34
    %
    
    
    6.65
    %
    
    
    6.35
    %Health care cost trend rate
    
    
    10.00
    %
    
    
    10.00
    %
    
    
    10.00
    %
  2010
    
    
    2009Change in benefit obligationBenefit obligation at beginning of year
    
    $
    3,153
    
    
    $
    3,102Service cost
    
    
    17
    
    
    
    17Interest cost
    
    
    193
    
    
    
    198Actuarial (gain) loss
    
    
    (491
    )
    
    
    48Benefits paid
    
    
    (165
    )
    
    
    (212
    )Benefit obligation at end of year
    
    $
    2,707
    
    
    $
    3,153
  50




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 2010
    
    
    2009Change in plan assetsEmployer contributions
    
    $
    165
    
    
    $
    212Benefits paid
    
    
    (165
    )
    
    
    (212
    )Fair value of plan assets at end of year
    
    $
    
    
    
    $
    Reconciliation of funded statusAccrued benefit cost
    
    $
    (2,707
    )
    
    $
    (3,153
    )Amounts recognized in the consolidated balance sheets consist ofCurrent accrued benefit liability
    
    $
    (169
    )
    
    $
    (225
    )Noncurrent accrued benefit liability
    
    $
    (2,538
    )
    
    $
    (2,928
    )Accumulated benefit obligation
    
    $
    (2,707
    )
    
    $
    (3,153
    )
  2010
    
    
    2009Net actuarial gain
    
    $
    (1,011
    )
    
    $
    (534
    )Prior service benefit
    
    
    (33
    )
    
    
    (38
    )Income taxes
    
    
    393
    
    
    
    215Total
    
    $
    (651
    )
    
    $
    (357
    )
  2011Prior service cost amortization
    
    $
    (5
    )Unrecognized gain amortization
    
    
    (47
    )Total
    
    $
    (52
    )
  2010
    
    
    2009
    
    
    2008Components of net periodic benefit costService cost
    
    $
    17
    
    
    $
    17
    
    
    $
    26Interest cost
    
    
    193
    
    
    
    198
    
    
    
    231Amortization of unrecognized net gain
    
    
    (14
    )
    
    
    (17
    )
    
    
    Amortization of prior service asset
    
    
    (5
    )
    
    
    (5
    )
    
    
    (5
    )Curtailment benefit
    
    
    
    
    
    
    
    
    
    
    (27
    )Net periodic benefit cost
    
    $
    191
    
    
    $
    193
    
    
    $
    225
   51




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
   2011
    
    $
    1692012
    
    $
    1812013
    
    $
    1852014
    
    $
    1832015
    
    $
    1872016  2020
    
    $
    951
   1-Percentage-Point
    
    
    1-Percentage-PointIncrease
    
    
    DecreaseEffect on total of service and interest cost components
    
    $
    9
    
    
    $
    (8
    )Effect on postretirement benefit obligation as of June 30, 2010
    
    $
    165
    
    
    $
    (144
    )
 Note 11   Defined Contribution and Other Employee Plans
    Note 12  Commitments
   52




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
  2010
    
    
    2009
    
    
    2008Operating leases:Minimum rentals
    
    $
    4,336
    
    
    $
    4,388
    
    
    $
    4,431Contingent rentals
    
    
    456
    
    
    
    355
    
    
    
    401Short-term cancelable leases
    
    
    1,253
    
    
    
    1,458
    
    
    
    1,609Total
    
    $
    6,045
    
    
    $
    6,201
    
    
    $
    6,441
  Note 13   Contingencies
      Note 14  Restructuring and Impairment Charges
 Specialty Foods Segment  Fiscal 2010
   53




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
    Accrual at
    
    
    
    
    
    
    2010
    
    
    Accrual atJune 30,
    
    
    2010
    
    
    Cash
    
    
    June 30,2009
    
    
    Charges
    
    
    Outlays
    
    
    2010Restructuring ChargesEmployee Separation Costs
    
    $
    
    
    
    $
    1,643
    
    
    $
    (1,643
    )
    
    $
    Other Costs
    
    
    
    
    
    
    172
    
    
    
    (172
    )
    
    
    Subtotal
    
    $
    
    
    
    
    1,815
    
    
    $
    (1,815
    )
    
    $
    Pension Curtailment Charges
    
    
    
    
    
    
    349Inventory Write-Down
    
    
    
    
    
    
    179Total Restructuring Charges
    
    
    
    
    
    $
    2,343
  Specialty Foods Segment  Fiscal 2009
  Other
  Held for Sale
   54




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Note 15  Business Segments Information
  Specialty Foods
 Glassware and Candles
  2010
    
    
    2009
    
    
    2008Specialty FoodsNon-frozen
    
    $
    547,704
    
    
    $
    569,053
    
    
    $
    526,142Frozen
    
    
    345,552
    
    
    
    340,844
    
    
    
    282,365Total Specialty Foods
    
    $
    893,256
    
    
    $
    909,897
    
    
    $
    808,507Glassware and CandlesConsumer table and giftware
    
    $
    158,327
    
    
    $
    134,991
    
    
    $
    146,434Nonconsumer ware and other
    
    
    5,025
    
    
    
    6,603
    
    
    
    25,974Total Glassware and Candles
    
    $
    163,352
    
    
    $
    141,594
    
    
    $
    172,408Total
    
    $
    1,056,608
    
    
    $
    1,051,491
    
    
    $
    980,915
 Corporate Expenses
  2010
    
    
    2009
    
    
    2008Net Sales(1)Specialty Foods
    
    $
    893,256
    
    
    $
    909,897
    
    
    $
    808,507Glassware and Candles
    
    
    163,352
    
    
    
    141,594
    
    
    
    172,408Total
    
    $
    1,056,608
    
    
    $
    1,051,491
    
    
    $
    980,915Operating Income (Loss)(2)Specialty Foods
    
    $
    176,194
    
    
    $
    145,848
    
    
    $
    88,975Glassware and Candles
    
    
    9,445
    
    
    
    (5,671
    )
    
    
    (1,887
    )Corporate Expenses
    
    
    (11,440
    )
    
    
    (10,529
    )
    
    
    (11,751
    )Total
    
    $
    174,199
    
    
    $
    129,648
    
    
    $
    75,337
  55




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 2010
    
    
    2009
    
    
    2008Identifiable Assets(1)(3)Specialty Foods
    
    $
    362,844
    
    
    $
    349,401
    
    
    $
    364,402Glassware and Candles
    
    
    105,537
    
    
    
    93,813
    
    
    
    108,394Corporate
    
    
    118,072
    
    
    
    55,267
    
    
    
    47,382Total
    
    $
    586,453
    
    
    $
    498,481
    
    
    $
    520,178Capital ExpendituresSpecialty Foods
    
    $
    11,321
    
    
    $
    10,680
    
    
    $
    15,400Glassware and Candles
    
    
    1,340
    
    
    
    492
    
    
    
    1,389Corporate
    
    
    172
    
    
    
    164
    
    
    
    43Total
    
    $
    12,833
    
    
    $
    11,336
    
    
    $
    16,832Depreciation and AmortizationSpecialty Foods
    
    $
    15,832
    
    
    $
    15,409
    
    
    $
    15,307Glassware and Candles
    
    
    4,601
    
    
    
    6,303
    
    
    
    8,580Corporate
    
    
    100
    
    
    
    158
    
    
    
    251Total
    
    $
    20,533
    
    
    $
    21,870
    
    
    $
    24,138
 
 (1)
    
    Net sales and long-lived assets are predominantly domestic.(2)
    
    Operating income represents net sales less operating expenses related to the business
segments. All intercompany transactions have been eliminated, and intersegment revenues are
not significant.(3)
    
    Identifiable assets for each segment include those assets used in its operations and
intangible assets allocated to purchased businesses. Corporate assets consist principally of
cash and equivalents, deferred income taxes and certain real property that is held for sale.    56




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share data)
 Note 16  Selected Quarterly Financial Data

(Unaudited)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    FiscalQuarter(1)
    
    
    Quarter(2)
    
    
    Quarter
    
    
    Quarter
    
    
    Year(3)2010Net Sales
    
    $
    254,160
    
    
    $
    304,115
    
    
    $
    250,328
    
    
    $
    248,005
    
    
    $
    1,056,608Gross Margin
    
    $
    63,707
    
    
    $
    84,777
    
    
    $
    61,923
    
    
    $
    59,925
    
    
    $
    270,332Net Income
    
    $
    28,405
    
    
    $
    39,527
    
    
    $
    24,222
    
    
    $
    22,815
    
    
    $
    114,969Diluted Net Income per Share
    
    $
    1.01
    
    
    $
    1.40
    
    
    $
    .86
    
    
    $
    .81
    
    
    $
    4.07
 First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    FiscalQuarter(4)
    
    
    Quarter(5)
    
    
    Quarter
    
    
    Quarter
    
    
    Year(3)2009Net Sales
    
    $
    263,837
    
    
    $
    288,242
    
    
    $
    246,027
    
    
    $
    253,385
    
    
    $
    1,051,491Gross Margin
    
    $
    39,669
    
    
    $
    58,163
    
    
    $
    52,642
    
    
    $
    65,018
    
    
    $
    215,492Net Income
    
    $
    11,020
    
    
    $
    28,452
    
    
    $
    21,213
    
    
    $
    28,401
    
    
    $
    89,086Diluted Net Income per Share
    
    $
    .39
    
    
    $
    1.02
    
    
    $
    .76
    
    
    $
    1.01
    
    
    $
    3.17
 
 (1)
    
    Included in the first quarter earnings is expense of approximately $0.6 million, net of
taxes, or approximately $.02 per share, related to the closing of our dressings and sauces
manufacturing operation located in Wilson, New York.(2)
    
    Included in the second quarter earnings are (A) expense of approximately $0.8 million, net of
taxes, or approximately $.03 per share, related to the closing of our dressings and sauces
manufacturing operation located in Wilson, New York and (B) income of approximately $0.6
million, net of taxes, or approximately $.02 per share, related to funds received under CDSOA.(3)
    
    Diluted earnings per share are calculated independently for each of the quarters presented.
Accordingly, the sum of the quarterly earnings per share amounts may not agree with the fiscal
year. Prior year diluted net income per share has been restated to reflect the adoption of new
accounting guidance on participating securities. See Note 1 for further discussion.(4)
    
    Included in the first quarter earnings are (A) expense of approximately $0.5 million, net of
taxes, or approximately $.02 per share, related to the closing of our industrial glass
operation in Lancaster, Ohio and (B) expense of approximately $0.5 million, net of taxes, or
approximately $.02 per share, related to the consolidation of our Atlanta, Georgia dressing
operation into other existing facilities.(5)
    
    Included in the second quarter earnings is income of approximately $5.6 million, net of
taxes, or approximately $.20 per share, related to funds received under CDSOA.  57




---



##### Table of Contents



Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
   REPORT OF MANAGEMENT
  1.
    
    Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of our assets;2.
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with
authorizations of management and our directors; and3.
    
    Provide reasonable assurance regarding prevention or timely detection of an
unauthorized acquisition, use or disposition of our assets that could have a material
effect on the financial statements.
  Internal
Control  Integrated Framework
   58




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal
Control  Integrated Framework
    Internal Control
 Integrated Framework
  /s/ Deloitte & Touche LLP

Deloitte & Touche LLP
 
  59




---



##### Table of Contents



Item 9B. Other Information
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
     
 Item 11. Executive Compensation
   
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accounting Fees and Services
   60




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 Financial Statements
       Financial Statement Schedules.
   Exhibits Required by Item 601 of Regulation S-K and Item 15(b
  61




---



##### Table of Contents



SIGNATURES
  Lancaster Colony Corporation(Registrant)By:
    /s/John B. Gerlach, Jr.John B. Gerlach, Jr.Chairman, Chief Executive Officer,
President and DirectorDate: August 25, 2010  Signatures
    
    Title
    
    Date/s/ John B. Gerlach, Jr.

John B. Gerlach, Jr.
    
    Chairman, Chief
Executive Officer,
President and Director
(Principal Executive Officer)
    
    August 25, 2010/s/ John L. Boylan

John L. Boylan
    
    Treasurer, Vice President, Assistant
Secretary,
Chief Financial Officer
and Director
(Principal Financial and
Accounting Officer)
    
    August 25, 2010/s/ James B. Bachmann

James B. Bachmann
    
    Director
    
    August 16, 2010/s/ Neeli Bendapudi

Neeli Bendapudi
    
    Director
    
    August 17, 2010/s/ Robert L. Fox

Robert L. Fox
    
    Director
    
    August 17, 2010/s/Alan F. Harris

Alan F. Harris
    
    Director
    
    August 17, 2010/s/ Edward H. Jennings

Edward H. Jennings
    
    Director
    
    August 17, 2010/s/ Henry M. ONeill, Jr.

Henry M. ONeill, Jr.
    
    Director
    
    August 18, 2010/s/ Zuheir Sofia

Zuheir Sofia
    
    Director
    
    August 17, 2010
  62




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
 SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
For each of the three years in the period ended June 30, 2010
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D

    
    
    Column EAdditionsBalance at
    
    
    Charged to
    
    
    
    
    
    
    BalanceBeginning
    
    
    Costs and
    
    
    
    
    
    at EndDescription
    
    of Year
    
    
    Expenses(B)
    
    
    Deductions(A)(B)
    
    
    of YearReserves deducted from asset to which they
apply  Allowance for doubtful accounts
(amounts in thousands):Year ended June 30, 2008
    
    $
    581
    
    
    $
    1,049
    
    
    $
    561
    
    
    $
    1,069Year ended June 30, 2009
    
    $
    1,069
    
    
    $
    (218
    )
    
    $
    (91
    )
    
    $
    942Year ended June 30, 2010
    
    $
    942
    
    
    $
    (51
    )
    
    $
    375
    
    
    $
    516
 Notes:
 (A)
    
    Represents uncollectible accounts written-off net of recoveries.(B)
    
    Includes recovery of previously written-off bad debt related to the 2002 bankruptcy of Kmart
Corporation of approximately $0.7 million for 2009.  63




---



##### Table of Contents



LANCASTER COLONY CORPORATION AND SUBSIDIARIES
FORM 10-K
JUNE 30, 2010
 
 INDEX TO EXHIBITS
 ExhibitNumber
    
    Description2.1
    
    
    Asset Purchase Agreement, dated as of June 10, 2008, by and among MBR, Inc., RBM, L.L.C., Dee
Zee, Inc. and Lancaster Colony Corporation (incorporated herein by reference to Exhibit 2.1 to
the Current Report on Form 8-K (000-04065), filed June 17, 2008).3.1
    
    
    Amended and Restated Articles of Incorporation of Lancaster Colony Corporation (incorporated
by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q (000-04065), filed February
9, 2009).3.2
    
    
    Amended and Restated Regulations of Lancaster Colony Corporation (incorporated by reference
to Exhibit 3.2 to the Quarterly Report on Form 10-Q (000-04065), filed February 9, 2009).4.1
    
    
    Specimen Certificate of Common Stock.4.2
    
    
    Credit Agreement, dated as of October 5, 2007, by and among Lancaster Colony Corporation, the
Lenders (as defined therein) and JPMorgan Chase Bank, NA (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K (000-04065), filed October 11, 2007).10.1
    *
    
    Lancaster Colony Corporation Executive Employee Deferred Compensation Plan (incorporated by
reference to Exhibit 10.9 to the Annual Report on Form 10-K (000-04065), filed September 26,
2000).10.2
    *
    
    2004 Amendment to Lancaster Colony Corporation Executive Employee Deferred Compensation Plan
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (000-04065),
filed January 3, 2005).10.3
    *
    
    Lancaster Colony Corporation 2005 Executive Employee Deferred Compensation Plan
(incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K (000-04065),
filed February 25, 2005).10.4
    *
    
    Lancaster Colony Corporation 2005 Stock Plan (incorporated by reference to Appendix C to the
Definitive Proxy Statement on Schedule 14A (000-04065), filed October 17, 2005).10.5
    *
    
    Form of Restricted Stock Award Agreement for Directors under the Lancaster Colony
Corporation 2005 Stock Plan (incorporated by reference to Exhibit 10.10 to the Annual Report
on Form 10-K (000-04065), filed August 28, 2007).10.6
    *
    
    Form of Stock Appreciation Rights Award Agreement for employees and consultants under the
Lancaster Colony Corporation 2005 Stock Plan (incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q/A (000-04065), filed August 28, 2008).10.7
    *
    
    Form of Restricted Stock Award Agreement for employees and consultants under the Lancaster
Colony Corporation 2005 Stock Plan (incorporated by reference to Exhibit 10.1 to the Quarterly
Report on Form 10-Q/A (000-04065), filed August 28, 2008).10.8
    
    
    Agreement, dated as of October 9, 2007, by and among Lancaster Colony Corporation, Barington
Companies Equity Partners, L.P. and the other parties thereto (incorporated by reference to
Exhibit 99.2 to the Current Report on Form 8-K (000-04065), filed October 11, 2007).10.9
    *
    
    Amended and Restated Key Employee Severance Agreement, dated December 3, 2008, between
Lancaster Colony Corporation and John L. Boylan (incorporated by reference to Exhibit 10.1 to
the Quarterly Report on Form 10-Q (000-04065), filed February 9, 2009).10.10
    *
    
    Amended and Restated Key Employee Severance Agreement, dated December 3, 2008, between
Lancaster Colony Corporation and Bruce L. Rosa (incorporated by reference to Exhibit 10.2 to
the Quarterly Report on Form 10-Q (000-04065), filed February 9, 2009).10.11
    *
    
    Description of Executive Bonus Arrangements (incorporated by reference to Exhibit 10.9 to
the Annual Report on Form 10-K (000-04065), filed September 10, 2004).21
    
    
    Subsidiaries of Registrant.
  64




---



##### Table of Contents



ExhibitNumber
    
    Description23
    
    
    Consent of Deloitte & Touche LLP.31.1
    
    
    Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31.2
    
    
    Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32
    
    
    Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Indicates a management contract or compensatory plan, contract or arrangement in which any
Director or any Executive Officer participates.  65