(L) Pension and Profit Sharing Plans

We offer our employees multiple retirement and profit sharing plans.

Pension Plans

We have several defined benefit and defined contribution retirement plans which together cover substantially all of our employees. Benefits paid under the defined benefit plans covering certain hourly employees are based on years of service and each employee’s qualifying compensation over the last few years of employment. Our funding policy is to generally contribute amounts that are deductible for income tax purposes. The annual measurement date is March 31 for the benefit obligations, fair value of plan assets, and the funded status of the defined benefit plans.

The following table provides a reconciliation of the obligations and fair values of plan assets for all defined benefit plans over the two-year period ended March 31, 2018, and a statement of the funded status as of March 31, 2018 and 2017:

	For the Years Ended March 31,
	2018			2017
	(dollars in thousands)
Reconciliation of Benefit Obligations -
Benefit Obligation at April 1,	$	40,589		$	42,281
Service Cost - Benefits Earned During the Period		710			1,001
Interest Cost on Projected Benefit Obligation		1,466			1,584
Amendments		—			199
Actuarial (Gain) Loss		(4,505	)		(3,531	)
Settlement		(3,857	)		—
Benefits Paid		(1,033	)		(945	)
Benefit Obligation at March 31,	$	33,370		$	40,589
Reconciliation of Fair Value of Plan Assets -
Fair Value of Plan Assets at April 1,	$	26,410		$	21,424
Actual Return on Plan Assets		2,805			2,522
Employer Contributions		9,087			3,409
Settlement		(3,857	)		—
Benefits Paid		(1,033	)		(945	)
Fair Value of Plans at March 31,		33,412			26,410
Funded Status -
Funded (Unfunded) Status at March 31,	$	42		$	(14,179	)
Amounts Recognized in the Balance Sheet Consist of -
Prepaid and Other Assets	$	538		$	—
Accrued Benefit Liability		(496	)		(14,179	)
Accumulated Other Comprehensive Losses:
Net Actuarial Loss		5,198			11,587
Prior Service Cost		80			349
Accumulated Other Comprehensive Losses	$	5,278		$	11,936
Reclassification to Retained Earnings		978			—
Tax impact		(2,244	)		(4,540	)
Accumulated Other Comprehensive Losses, net of tax	$	4,012		$	7,396

The table below summarizes the Company’s Projected Benefit Obligation, Accumulated Benefit Obligation and Fair Value of Plan Assets at March 31, 2018 and 2017:

	March 31,
	2018		2017
	(dollars in thousands)
Projected Benefit Obligation	$	33,370	$	40,589
Accumulated Benefit Obligation	$	33,367	$	40,391
Fair Value of Plan Assets	$	33,412	$	26,410

Net periodic pension cost for the fiscal years ended March 31, 2018, 2017, and 2016, included the following components:

	For the Years Ended March 31,
	2018			2017			2016
	(dollar in thousands)
Service Cost - Benefits Earned During the Period	$	710		$	1,001		$	1,039
Interest Cost of Projected Benefit Obligation		1,466			1,584			1,525
Expected Return on Plan Assets		(2,137	)		(1,606	)		(1,751	)
Recognized Net Actuarial Loss		566			1,712			1,773
Amortization of Prior-Service Cost		269			359			300
Settlement		649			—			—
Net Periodic Pension Cost	$	1,523		$	3,050		$	2,886

During the fourth quarter of fiscal 2018, we offered to pay our deferred vested participants that no longer worked for the Company but were not yet retired. We paid approximately $3.9 million to these participants in March 2018. In connection with this payment, we recognized a settlement cost of approximately $0.6 million.

Expected benefit payments over the next five years, and the following five years under the pension plans are expected to be as follows (dollars in thousands):

Fiscal Years	Total
2019	$	1,350
2020	$	1,416
2021	$	1,520
2022	$	1,604
2023	$	1,657
2024-2028	$	9,412

The following tables set forth the assumptions used in the actuarial calculations of the present value of Net Periodic Benefit Costs and Benefit Obligations:

	March 31,
	2018			2017			2016
Net Periodic Benefit Costs -
Discount Rate		4.03	%		3.83	%		3.70	%
Expected Return on Plan Assets		7.50	%		7.50	%		8.00	%
Rate of Compensation Increase		3.50	%		3.50	%		3.50	%

	March 31,
	2018			2017
Benefit Obligations -
Discount Rate		4.12	%		4.03	%
Rate of Compensation Increase		3.50	%		3.50	%

The expected long-term rate of return on plan assets is an assumption reflecting the anticipated weighted-average rate of earnings on the portfolio over the long-term. To determine this rate, we developed estimates of the key components underlying capital asset returns including: market-based estimates of inflation, real risk-free rates of return, yield curve structure, credit risk premiums, and equity risk premiums. We used these components as appropriate to develop benchmark estimates of the expected long-term management approach employed by us.

The pension plans’ approximate weighted-average asset allocation at March 31, 2018 and 2017 and the range of target allocation are as follows:

		Percentage of Plan Assets at March 31,
	Range of Target Allocation	2018			2017
Asset Category -
Equity Securities	40 – 60%		50	%		70	%
Debt Securities	35 – 60%		47	%		27	%
Other	0 – 5%		3	%		3	%
Total			100	%		100	%

Our pension investment strategies have been developed as part of a comprehensive management process that considers the interaction between the assets and liabilities within each plan. These strategies consider not only the expected risk and returns on plan assets, but also the detailed actuarial projections of liabilities as well as plan-level objectives such as projected contributions, expense, and funded status.

The principal pension investment strategies include asset allocation and active asset management. The range of target asset allocations has been determined after giving consideration to the expected returns of each asset class, the expected variability or volatility of the asset class returns over time, and the complementary nature or correlation of the asset classes within the portfolio. Each asset class is actively managed by one or more external money managers with the objective of generating returns, net of management fees, that exceed market-based benchmarks. None of the plans hold any EXP stock.

During March 2018, we changed the asset allocation to reduce our holdings in equity securities and increase our holdings in debt securities. This was done in response to the pension plan being close to fully funded at March 31, 2018. Due to this reallocation, we anticipate our Expected Return on Plan Assets to be approximately 6% for fiscal 2019.

Based on our current actuarial estimates, we anticipate making contributions ranging from approximately $2.5 million to $3.0 million to our defined benefit plans for fiscal year 2018.

The fair values of our defined benefit plans’ consolidated assets by category as of March 31, 2018 and 2017 were as follows:

	March 31,
	2018		2017
	(dollars in thousands)
Equity Securities	$	16,533	$	18,375
Fixed Income Securities		15,799		7,166
Real Estate Funds		163		147
Commodity Linked Funds		213		464
Cash Equivalents		704		258
Total	$	33,412	$	26,410

The fair values of our defined benefit plans’ consolidated assets were determined using the fair value hierarchy of inputs described in Footnote (A) to the Consolidated Financial Statements.

The fair values by category of inputs as of March 31, 2018 were as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Asset Categories	(dollars in thousands)
Equity Securities	$	—	$	16,533	$	—	$	16,533
Fixed Income Securities		—		15,799		—		15,799
Real Estate Funds		—		163		—		163
Commodity Linked Funds		—		213		—		213
Cash Equivalents		704		—		—		704
	$	704	$	32,708	$	—	$	33,412

The fair values by category of inputs as of March 31, 2017 were as follows:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Asset Categories	(dollars in thousands)
Equity Securities	$	—	$	18,375	$	—	$	18,375
Fixed Income Securities		—		7,166		—		7,166
Real Estate Funds		—		147		—		147
Commodity Linked Funds		—		464		—		464
Cash Equivalents		258		—		—		258
	$	258	$	26,152	$	—	$	26,410

Equity securities consist of funds that are not actively traded. These funds are maintained by an investment manager and are primarily invested in indexes. The remaining funds, excluding cash, primarily consist of investments in institutional funds.

Profit Sharing Plans

We also provide profit sharing plans, which cover substantially all salaried and certain hourly employees. The profit sharing plans are defined contribution plans funded by employer discretionary contributions; employees may also contribute a certain percentage of their base annual salary. Employees are fully vested in their own contributions and become fully vested in any Company contributions over a six-year period for salaried employees and a three-year period for hourly employees. Costs relating to the employer discretionary contributions for our contribution plan totaled $8.4 million, $6.4 million, and $6.2 million in fiscal years 2018, 2017, and 2016, respectively.

Individuals who became our employees as a result of a previous transaction are provided benefits substantially comparable to those provided under the seller’s benefit plans. These plans included the seller’s 401(k) plan which allows for employer matching percentages of hourly employees. As a result, we made matching contributions to the hourly profit sharing plan totaling $0.6 million, $0.3 million, and $0.3 million for these employees during fiscal years 2018, 2017, and 2016, respectively.

Approximately sixty of our employees belong to three different multi-employer plans. The collective bargaining agreements for the employees who participate in the multi-employer plans expire in March 2020. Our expense related to these plans was approximately $1.6 million, $1.6 million, and $1.3 million during fiscal years 2018, 2017, and 2016, respectively. We anticipate the total expense in fiscal 2019 related to these plans will be approximately $1.8 million.