What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-08-23 compared with 2022-08-25 · 97 added, 122 removed, 937 unchanged (19% of the section changed)

24 unchanged sentences

Indicators of impairment may include, but are not limited to, factors such as adverse changes in the macroeconomic environment, adverse changes in the extent or manner an asset or group of assets are used by management, unfavorable events impacting current and projected operating results and cash flows, or decisions to explore strategic alternatives or exit individual businesses before the end of their expected useful life.

If such indicators are present, the Company determines if the assets are recoverable by comparing the sum of the undiscounted cash flows to the assets’ carrying amounts.

If such indicators are present, the Company determines if the assets are recoverable by comparing the sum of the undiscounted future cash flows to the assets’ carrying amounts.

If the carrying amounts are greater, then the assets are not recoverable.

27 unchanged sentences

Property, Plant and Equipment:

Land, buildings and improvements 321,654 252,174

Machinery and equipment 463,975 424,015

Total cost 785,629 676,189

Property, plant and equipment-gross 853,709 785,629

Less accumulated depreciation 371,503 334,261

55 unchanged sentences

Net Income $ 111,286 $ 89,586 $ 142,332

Other Comprehensive (Loss) Income:

Other Comprehensive Income (Loss):

Defined Benefit Pension and Postretirement Benefit Plans:

Net (loss) gain arising during the period, before tax ( 4,029 ) 4,490 ( 2,662 )

Net gain (loss) arising during the period, before tax 1,859 ( 4,029 ) 4,490

Amortization of loss, before tax 679 401 672

Amortization of prior service credit, before tax ( 181 ) ( 181 ) ( 181 )

Total Other Comprehensive (Loss) Income, Before Tax ( 3,809 ) 4,981 ( 2,298 )

Tax Attributes of Items in Other Comprehensive (Loss) Income:

Net (loss) gain arising during the period, tax 942 ( 1,049 ) 622

Total Other Comprehensive Income (Loss), Before Tax 2,357 ( 3,809 ) 4,981

Tax Attributes of Items in Other Comprehensive Income (Loss):

Net gain (loss) arising during the period, tax ( 434 ) 942 ( 1,049 )

Amortization of loss, tax ( 158 ) ( 94 ) ( 157 )

Amortization of prior service credit, tax 42 42 42

Total Tax Benefit (Expense) 890 ( 1,164 ) 536

Other Comprehensive (Loss) Income, Net of Tax ( 2,919 ) 3,817 ( 1,762 )

Total Tax (Expense) Benefit ( 550 ) 890 ( 1,164 )

Other Comprehensive Income (Loss), Net of Tax 1,807 ( 2,919 ) 3,817

Comprehensive Income $ 113,093 $ 86,667 $ 146,149

30 unchanged sentences

Tax withholdings for stock-based compensation ( 3,026 ) ( 366 ) ( 3,662 )

Other-net ( 2,655 ) ( 2,002 ) ( 610 )

Principal payments for finance leases ( 2,334 ) ( 2,655 ) ( 2,002 )

Net cash used in financing activities ( 106,929 ) ( 97,345 ) ( 95,430 )

15 unchanged sentences

Net income 142,332 142,332

Net pension and postretirement benefit losses, net of $( 536 ) tax effect

( 1,762 ) ( 1,762 )

Net pension and postretirement benefit gains, net of $ 1,164 tax effect

Cash dividends - common stock ($ 2.95 per share)

5 unchanged sentences

Net income 89,586 89,586

Net pension and postretirement benefit gains, net of $ 1,164 tax effect

Net pension and postretirement benefit losses, net of $( 890 ) tax effect

( 2,919 ) ( 2,919 )

Cash dividends - common stock ($ 3.15 per share)

5 unchanged sentences

Net income 111,286 111,286

Net pension and postretirement benefit losses, net of $( 890 ) tax effect

( 2,919 ) ( 2,919 )

Net pension and postretirement benefit gains, net of $ 550 tax effect

Cash dividends - common stock ($ 3.35 per share)

33 unchanged sentences

By policy, we limit the amount of credit exposure to any one institution or issuer.

We maintain our cash and equivalents with high credit-quality financial institutions.

Deposits with these financial institutions may exceed the amounts insured by the Federal Deposit Insurance Corporation.

The majority of our excess cash is invested in AAA-rated money market funds that primarily invest in U.S.

government securities.

Our concentration of credit risk with respect to trade accounts receivable is mitigated by our credit evaluation process and our broad Retail and Foodservice customer base.

14 unchanged sentences

For tax purposes, we generally compute depreciation using accelerated methods.

The following table summarizes the components of gross property, plant and equipment at June 30:

Land, buildings and improvements $ 297,611 $ 223,535

Machinery and equipment 513,458 423,135

Construction in progress 42,640 138,959

Property, plant and equipment-gross $ 853,709 $ 785,629

Purchases of property, plant and equipment included in Accounts Payable and excluded from the property additions and the change in accounts payable in the Consolidated Statements of Cash Flows at June 30 were as follows:

5 unchanged sentences

In 2022, we recorded an impairment charge of $ 7.6 million for certain property, plant and equipment related to the Bantam Bagels, LLC (“Bantam”) business.

This charge resulted from our decision to explore strategic alternatives and ultimately exit this business and represents the excess of the carrying value over the fair value.

The fair value was based on agreed-upon selling prices for these assets, which represents a Level 2 measurement within the fair value hierarchy.

The impairment charge is reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature.

This charge resulted from our decision to explore strategic alternatives and ultimately exit this business and represented the excess of the carrying value over the fair value.

The fair value was based on agreed-upon selling prices for these assets, which represented a Level 2 measurement within the fair value hierarchy.

The impairment charge was reflected in Restructuring and Impairment Charges and was not allocated to our two reportable segments due to its unusual nature.

Deferred Software Costs

1 unchanged sentence

Capitalized costs are included in Other Current Assets or Other Noncurrent Assets and are amortized on a straight-line basis over the estimated useful life.

In 2022, 2021 and 2020, we capitalized $ 1.6 million, $ 3.5 million and $ 10.3 million, respectively, of deferred software costs related to cloud computing arrangements.

In 2022 and 2021, we capitalized $ 1.6 million and $ 3.5 million, respectively, of deferred software costs related to cloud computing arrangements.

Long-Lived Assets

11 unchanged sentences

See further discussion regarding goodwill and other intangible assets in Note 6.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

We record right-of-use assets and lease liabilities based on the present value of the lease payments for operating leases and finance leases with an initial term in excess of 12 months.

3 unchanged sentences

• Whether we obtain substantially all of the economic benefits from the use of that underlying asset, and we can direct how and for what purpose the asset is used during the term of the contract.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

In determining how to allocate consideration between lease and non-lease components in a contract that was deemed to contain a lease, we use judgment and consistent application of assumptions to reasonably allocate the consideration.

27 unchanged sentences

As a result, we have used the available practical expedient and, consequently, do not adjust our revenues for the effects of a significant financing component.

Distribution fees billed to customers are included in Net Sales.

All distribution costs associated with outbound freight are accounted for as fulfillment costs and are included in Cost of Sales;

this includes distribution costs incurred after control over a product has transferred to a customer, as we have chosen to use the available practical expedient to account for these costs within our cost of sales.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular amounts in thousands, except per share data)

Distribution fees billed to customers are included in Net Sales.

All distribution costs associated with outbound freight are accounted for as fulfillment costs and are included in Cost of Sales;

Variable Consideration

34 unchanged sentences

See further discussion and disclosure in Note 10.

Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid.

We are subject to income taxes in numerous domestic jurisdictions.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular amounts in thousands, except per share data)

Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid.

We are subject to income taxes in numerous domestic jurisdictions.

Our annual effective tax rate is determined based on our income, statutory tax rates and the permanent tax impacts of items treated differently for tax purposes than for financial reporting purposes.

40 unchanged sentences

Defined Benefit Pension Plan Items:

Net (loss) gain arising during the period ( 4,388 ) 4,340

Net gain (loss) arising during the period 1,527 ( 4,388 )

Amortization of unrecognized net loss (1)

3 unchanged sentences

Amortization of prior service credit ( 181 ) ( 181 )

Total other comprehensive (loss) income, before tax ( 3,809 ) 4,981

Total tax benefit (expense) 890 ( 1,164 )

Other comprehensive (loss) income, net of tax ( 2,919 ) 3,817

Total other comprehensive income (loss), before tax 2,357 ( 3,809 )

Total tax (expense) benefit ( 550 ) 890

Other comprehensive income (loss), net of tax 1,807 ( 2,919 )

Accumulated other comprehensive loss at end of year $ ( 9,365 ) $ ( 11,172 )

11 unchanged sentences

Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

Our financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and equivalents, accounts receivable, accounts payable, contingent consideration payable and defined benefit pension plan assets.

Our financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and equivalents, accounts receivable, accounts payable and defined benefit pension plan assets.

The estimated fair value of cash and equivalents, accounts receivable and accounts payable approximates their carrying value.

2 unchanged sentences

See further discussion in Note 1 and Note 6.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Our contingent consideration, which resulted from the earn-out associated with our acquisition of Bantam, was included in Other Noncurrent Liabilities.

The following table summarizes our contingent consideration as of June 30:

Fair Value Measurements at June 30, 2022

Level 1 Level 2 Level 3 Total

Contingent consideration - Bantam $ — $ — $ — $ —

Fair Value Measurements at June 30, 2021

Level 1 Level 2 Level 3 Total

Contingent consideration - Bantam $ — $ — $ 3,470 $ 3,470

Bantam Contingent Consideration

This contingent consideration resulted from the earn-out associated with our October 19, 2018 acquisition of Bantam.

Contingent consideration resulted from the earn-out associated with our October 19, 2018 acquisition of Bantam.

In general, the terms of the acquisition specified the sellers could receive an earn-out based upon a pre-determined multiple of the defined adjusted EBITDA of Bantam for the twelve months ending December 31, 2023.

The initial fair value of the contingent consideration was determined to be $ 8.0 million.

Prior to our May 2022 decision to exit the business, the fair value was measured on a recurring basis using a Monte Carlo simulation that randomly changed revenue growth, forecasted adjusted EBITDA and other uncertain variables to estimate an expected value.

Prior to exiting the Bantam business near the end of fiscal 2022, the fair value was measured on a recurring basis using a Monte Carlo simulation that randomly changed revenue growth, forecasted adjusted EBITDA and other uncertain variables to estimate an expected value.

We recorded the present value of these amounts by applying a discount rate.

As these fair value measurements were based on significant inputs not observable in the market, they represented Level 3 measurements within the fair value hierarchy.

There was no liability recorded for Bantam’s contingent consideration at June 30, 2022.

Our 2022 fair value measurements resulted in a $ 3.5 million reduction in the fair value of Bantam’s contingent consideration based on changes in Bantam’s forecasted adjusted EBITDA for the twelve months ending December 31, 2023, as well as a refinement to the estimated probabilities applied to our forecast scenarios.

The changes in forecasted adjusted EBITDA reflected lower projected sales levels for both the Retail and Foodservice business.

The changes in estimated probabilities reflected a lower likelihood of attaining certain Foodservice business.

We recorded $ 2.6 million of this adjustment in our Foodservice segment and $ 0.9 million in our Retail segment.

Our 2021 fair value measurements resulted in a $ 5.7 million reduction in the fair value of Bantam’s contingent consideration based on changes in Bantam’s forecasted adjusted EBITDA for the twelve months ending December 31, 2023.

The changes in forecasted adjusted EBITDA primarily reflected the impact of a SKU rationalization by a Foodservice customer resulting in the loss of sales to that customer after November 30, 2020.

This adjustment was recorded in our Foodservice segment.

As these fair value measurements were based on significant inputs not observable in the market, they

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

represented Level 3 measurements within the fair value hierarchy.

Based on our fair value measurements, we recorded reductions in the fair value of Bantam’s contingent consideration of $ 3.5 million in 2022, resulting in a zero balance at March 31, 2022.

The following table represents our Level 3 fair value measurements using significant other unobservable inputs for Bantam’s contingent consideration:

5 unchanged sentences

The Facility expires on March 19, 2025 , and all outstanding amounts are then due and payable.

Interest is variable based upon formulas tied to LIBOR or an alternate base rate defined in the Facility.

In the event that LIBOR becomes unavailable or is no longer deemed an appropriate reference rate, the Facility allows for the use of a benchmark replacement rate.

The Facility was amended on December 13, 2022 to reflect a change in the calculation of the variable interest rate from formulas tied to LIBOR to formulas tied to SOFR or an alternate base rate as defined in the Facility.

In the event SOFR becomes unavailable or is no longer deemed an appropriate reference rate, the Facility allows for the use of a benchmark replacement rate.

We must also pay facility fees that are tied to our then-applicable consolidated leverage ratio.

1 unchanged sentence

Due to the nature of its terms, when we have outstanding borrowings under the Facility, they will be classified as long-term debt.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

The Facility contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions.

18 unchanged sentences

As of June 30, 2023 and 2022, the weighted-average discount rate of our finance leases was 1.7 % and 1.8 %, respectively.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

The components of lease expense in each of the years ended June 30 have been provided as follows:

7 unchanged sentences

Total net lease cost $ 16,389 $ 16,451 $ 12,679

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Supplemental balance sheet information related to leases at June 30 is as follows:

16 unchanged sentences

Supplemental noncash information on operating lease liabilities arising from obtaining right-of-use assets $ 5,698 $ 16,617 $ 7,005

Supplemental noncash information on operating lease liabilities removed due to purchase of leased asset $ — $ — $ 5,765

Supplemental noncash information on finance lease liabilities arising from obtaining right-of-use assets $ — $ 334 $ 9,035

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

As of June 30, 2023, the maturities of lease liabilities were as follows:

3 unchanged sentences

2026 6,154 306

2026 4,995 306

Thereafter 240 —

4 unchanged sentences

As of June 30, 2023 and 2022, the weighted-average remaining term of our finance leases was 2.1 years and 3.0 years, respectively.

We have additional operating lease commitments totaling $ 1.9 million for equipment that had not been delivered as of June 30, 2022.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Note 5 – Commitments and Contingencies

In addition to the items discussed below, at June 30, 2022, we were a party to various claims and litigation matters arising in the ordinary course of business.

At June 30, 2023, we were a party to various claims and litigation matters arising in the ordinary course of business.

Such matters did not have a material effect on the current-year results of operations and, in our opinion, their ultimate disposition is not expected to have a material effect on our consolidated financial statements.

We have a significant remaining commitment of approximately $ 30 million related to a capacity expansion project at our dressing and sauce facility in Horse Cave, Kentucky.

23 % of our employees are represented under various collective bargaining contracts.

The labor contract for our Vineland, New Jersey plant facility, which produces frozen bread products, will expire on December 31, 2022.

The labor contract for our Bedford Heights, Ohio plant facility, which produces frozen bread products, will expire on April 30, 2024.

6 % of our employees are represented under this collective bargaining contract.

15 unchanged sentences

Net carrying value $ 824 $ 2,128

Non-compete Agreements ( 5 -year life)

Gross carrying value $ 191 $ 191

Accumulated amortization ( 191 ) ( 177 )

Net carrying value $ — $ 14

Total net carrying value $ 4,840 $ 32,323

In 2023, we recorded impairment charges of $ 25.0 million related to the intangible assets of Flatout, Inc.

(“Flatout”) due to our lowered expectations for the projected sales and profitability of the Flatout business.

The tradename, customer relationships and technology / know-how intangible assets were written down to their fair values.

These impairment charges were reflected in Restructuring and Impairment Charges and were recorded in our Retail segment.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

In 2022, we recorded impairment charges of $ 13.2 million to write off the net carrying value of Bantam’s tradename, customer relationships and technology / know-how intangible assets.

5 unchanged sentences

This impairment charge was reflected in Restructuring and Impairment Charges and was recorded in our Retail segment.

In 2021, we recorded impairment charges of $ 1.2 million related to certain tradename and technology / know-how intangible assets for Bantam, which reflected the impact of a SKU rationalization by a Foodservice customer resulting in the loss of sales to that customer after November 30, 2020.

The impairment charges were reflected in Restructuring and Impairment Charges and were recorded in our Foodservice segment.

We also reduced the remaining useful life for Bantam’s Foodservice customer relationship and recorded accelerated amortization expense.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

The impairment charges discussed above represent the excess of the carrying value over the fair value of estimated discounted cash flows specific to the remaining useful lives of the related intangible assets.

As the fair value measurements were based on significant inputs not observable in the market, they represent Level 3 measurements within the fair value hierarchy.

As the fair value measurements were based on significant inputs not observable in the market, they represented Level 3 measurements within the fair value hierarchy.

Amortization expense for our other intangible assets, which is reflected in Selling, General and Administrative Expenses, was as follows in each of the years ended June 30:

5 unchanged sentences

Compensation and employee benefits $ 26,339 $ 16,300

Distribution 11,862 8,803

Operating leases 8,821 8,874

Distribution 7,515 11,862

Royalties 5,484 4,705

Finance leases 2,542 2,517

Other taxes 1,984 1,592

Finance leases 1,944 2,542

Other 4,907 4,738

4 unchanged sentences

Finance leases 2,255 4,320

Pension benefit liability 1,813 1,675

Gross tax contingency reserve 858 925

Postretirement benefit liability 604 867

Contingent consideration — 3,470

Pension benefit liability 462 1,813

Other 1,078 595

22 unchanged sentences

Our net deferred tax liability for all periods presented has been classified as noncurrent.

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30 were comprised of:

Deferred tax assets:

1 unchanged sentence

Operating lease liabilities 5,613 6,553

Receivables 2,756 2,175

Section 174 research and development capitalization 4,281 —

Inventories 4,143 1,668

Receivables 3,042 2,756

Intangible assets 1,426 —

Other accrued liabilities 1,600 1,443

8 unchanged sentences

Net deferred tax liability $ ( 47,325 ) $ ( 38,889 )

Prepaid federal income taxes of $ 5.1 million were included in Other Current Assets at June 30, 2021.

Prepaid state and local income taxes of $ 1.9 million and $ 1.1 million were included in Other Current Assets at June 30, 2022 and 2021, respectively.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular amounts in thousands, except per share data)

Prepaid federal income taxes of $ 3.3 million were included in Other Current Assets at June 30, 2023.

Prepaid state and local income taxes of $ 0.8 million and $ 1.9 million were included in Other Current Assets at June 30, 2023 and 2022, respectively.

Net cash payments for income taxes for each of the years ended June 30 were as follows:

19 unchanged sentences

For each of the years ended June 30, we recognized the change in the accrual for net tax-related interest and penalties as follows:

(Benefit) expense recognized for net tax-related interest and penalties $ ( 22 ) $ 48

Benefit recognized for net tax-related interest and penalties $ ( 13 ) $ ( 22 )

We had accrued interest and penalties at June 30 as follows:

9 unchanged sentences

We evaluate our segments based on net sales and operating income.

In 2021, our Chief Operating Decision Maker (“CODM”), in order to drive enhanced accountability and transparency throughout our organization, initiated a review of functional costs that had historically been part of the indirect costs allocated to our two reportable segments.

This review was completed as part of our preparation for our enterprise resource planning system implementation.

As a result of this review, our CODM identified certain support functions that were more appropriately presented within corporate expenses to facilitate the management of the business, including assessing segment performance and allocating resources.

These changes were effective in 2021, and all historical information was retroactively conformed to the current presentation.

These changes had no effect on previously reported consolidated net sales, gross profit, operating income, net income or earnings per share.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Retail - The vast majority of the products we sell in the Retail segment are sold through sales personnel, food brokers and distributors in the United States.

2 unchanged sentences

Within the frozen food section of the grocery store, we sell yeast rolls and garlic breads.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Foodservice - The vast majority of the products we sell in the Foodservice segment are sold through sales personnel, food brokers and distributors in the United States.

5 unchanged sentences

As many of our products are similar between our two segments, our procurement, manufacturing, warehousing and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity.

Consequently, we do not prepare, and our CODM does not review, separate balance sheets for the reportable segments.

Consequently, we do not prepare, and our Chief Operating Decision Maker does not review, separate balance sheets for the reportable segments.

As such, our external reporting does not include the presentation of identifiable assets, payments for property additions or depreciation and amortization by reportable segment.

50 unchanged sentences

(2) All intercompany transactions have been eliminated.

(3) As discussed above, certain prior-year amounts were reclassified in 2021 to conform to the current presentation.

These changes had no effect on previously reported consolidated totals.

(4) Reflects restructuring and impairment charges related to the Bantam business and a facility closure in 2022 and a plant closure in 2020, which were not allocated to our two reportable segments due to their unusual nature.

(3) Reflects restructuring and impairment charges related to the Bantam business and a facility closure in 2022, which were not allocated to our two reportable segments due to their unusual nature.

(4) Our Corporate Expenses include various expenses of a general corporate nature, expenditures for Project Ascent and costs related to certain divested or closed nonfood operations.

1 unchanged sentence

(5) Retail and Foodservice identifiable assets include those assets used in our operations and other intangible assets allocated to purchased businesses.

The decrease in Retail and Foodservice identifiable assets from June 30, 2022 to June 30, 2023 reflected a decline in intangible assets due to impairment charges and lower receivables balances due to the impact of advance customer orders in the prior year ahead of our ERP go-live, as partially offset by property additions due to a capacity expansion project.

The increase in Retail and Foodservice identifiable assets from June 30, 2021 to June 30, 2022 reflected property additions due to several capacity expansion projects, higher receivables balances due to increased sales, and higher inventory levels due to increased input costs.

The increase in Retail and Foodservice identifiable assets from June 30, 2020 to June 30, 2021 reflected property additions due to several capacity expansion projects and higher inventory levels due to increased commodity costs.

Corporate assets consist principally of cash and equivalents.

The increase in Corporate assets from June 30, 2022 to June 30, 2023 reflected the increase in cash and equivalents as well as prepaid income taxes.

The decrease in Corporate assets from June 30, 2021 to June 30, 2022 reflected the decline in cash and equivalents.

26 unchanged sentences

Our policy is to issue shares upon SSSARs exercise from new shares that had been previously authorized.

In 2021 and 2020, we granted SSSARs to various employees under the terms of the plan.

In 2021, we granted SSSARs to various employees under the terms of the plan.

The following table summarizes information relating to these grants:

45 unchanged sentences

1 0.66 $ 154.48 1 $ 154.48

2018 $ 121.09 -$ 124.29

35 0.65 $ 121.18 35 $ 121.18

At June 30, 2023, there was $ 0.8 million of unrecognized compensation expense related to SSSARs that we will recognize over a weighted-average period of 1 year.

40 unchanged sentences

Performance Units

We made an initial grant of performance units in August 2021 as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value.

Beginning in 2022, we use periodic grants of performance units as a vehicle for rewarding certain employees with long-term incentives for their efforts in helping to create long-term shareholder value.

These performance units are based on two performance metrics, with equal weightings, as follows:

4 unchanged sentences

Dividend equivalents earned during the vesting period will be paid at the time the awards vest.

In 2022, we granted performance units to various employees under the terms of the plan.

In 2023 and 2022, we granted performance units to various employees under the terms of the plan.

The following table summarizes information relating to these grants:

11 unchanged sentences

Volatility factor of the expected market price of our common stock 32.20 % 31.30 %

The following table summarizes our performance units compensation expense and tax benefits recorded for the year ended June 30:

The following table summarizes our performance units compensation expense and tax benefits recorded for each of the years ended June 30:

Compensation expense $ 2,678 $ 1,055

81 unchanged sentences

Fair value of plan assets at end of year $ 28,776 $ 29,611

Funded status - net (accrued) prepaid benefit cost $ ( 1,432 ) $ 1,980

Funded status - net prepaid (accrued) benefit cost $ 824 $ ( 1,432 )

Amounts recognized in the Consolidated Balance Sheets consist of

10 unchanged sentences

Total $ 10,610 $ 12,336

The following table summarizes the components of net periodic benefit income for our pension plans at June 30:

The following table summarizes the components of net periodic benefit cost (income) for our pension plans at June 30:

2023 2022 2021

Components of net periodic benefit income

Components of net periodic benefit cost (income)

Interest cost $ 1,344 $ 935 $ 965

1 unchanged sentence

Amortization of unrecognized net loss 725 428 692

Net periodic benefit income $ ( 548 ) $ ( 122 ) $ ( 484 )

Net periodic benefit cost (income) $ 653 $ ( 548 ) $ ( 122 )

We have not yet finalized our anticipated funding level for 2024, but based on initial estimates, we do not expect our 2024 contributions to our pension plans to be material.

Benefit payments estimated for future years are as follows:

2029 - 2033 $ 10,393

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular amounts in thousands, except per share data)

Benefit payments estimated for future years are as follows:

2028 - 2032 $ 11,208

Note 12 – Defined Contribution and Other Employee Plans

1 unchanged sentence

We sponsor four defined contribution plans established pursuant to Section 401(k) of the Internal Revenue Code.

Contributions are determined under various formulas, and we contributed to each of these plans in 2022.

Contributions are determined under various formulas, and we contributed to three of these plans in 2023.

Costs related to such plans for each of the years ended June 30 were as follows:

21 unchanged sentences

$ 250 $ 296 $ 327 No

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

Under this multiemployer plan and one additional multiemployer plan, we also contribute amounts for health and welfare benefits that are defined by each plan.

10 unchanged sentences

Participants are paid out upon retirement or termination in accordance with their annual election.

LANCASTER COLONY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in thousands, except per share data)

The following table summarizes our liability for total deferred compensation and accrued interest at June 30:

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data