Employer Sponsored Benefit Plans

As of June 30, 2018, the Company maintains a defined benefit pension plan that covers certain domestic Lydall employees (“domestic pension plan”) that is closed to new employees and benefits are no longer accruing. The domestic pension plan is noncontributory and benefits are based on either years of service or eligible compensation paid while a participant is in the plan. The Company’s funding policy is to fund not less than the ERISA minimum funding standard and not more than the maximum amount that can be deducted for federal income tax purposes.

As of January 1, 2018 the Company adopted ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost". This ASU required the other components of net benefit cost, which includes interest costs, expected return on plan assets, and amortization of actuarial loss be presented in the income statement outside a subtotal of income from operations for the quarter and six months ended June 30, 2018. The retrospective adoption of this ASU resulted in the reclassification of net benefit costs of $0.1 million from cost of sales and $0.1 million from the selling, product development and administrative expenses to the other expense, net line in the Consolidated Statement of Operations for the quarter ended June 30, 2017. Net benefit costs of $0.2 million from cost of sales and $0.2 million from the selling, product development and administrative expenses were reclassified to the other expense, net line in the Consolidated Statement of Operations for the six months ended June 30, 2017.

The Company expects to contribute approximately $7.0 million in cash to the domestic pension plan in 2018 to further fund the plan. Contributions of $3.0 million and $4.2 million were made during the quarter and six months ended June 30, 2018, respectively. Contributions of $1.2 million and $2.4 million were made during the quarter and six months ended June 30, 2017, respectively.

The following is a summary of the components of net periodic benefit cost, which is recorded in other expense, net, for the domestic pension plan for the quarters and six months ended June 30, 2018 and 2017:



	Quarter Ended June 30,						Six Months Ended June 30,
In thousands	2018			2017			2018			2017
Components of net periodic benefit cost
Interest cost	$	470		$	514		$	940		$	1,029
Expected return on assets	(650		)	(594		)	(1,300		)	(1,188		)
Amortization of actuarial loss	256			273			512			546
Net periodic benefit cost	$	76		$	193		$	152		$	387