POSTRETIREMENT MEDICAL BENEFITS AND PENSION

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

POSTRETIREMENT MEDICAL BENEFITS AND PENSION

POSTRETIREMENT MEDICAL BENEFITS AND PENSION

Postretirement Medical Benefits

The Company provides postretirement medical benefits to retired employees and their dependents as mandated by the Coal Industry Retiree Health Benefit Act of 1992 and pursuant to collective bargaining agreements. The Company also provides these benefits to qualified full-time employees pursuant to collective bargaining agreements.

The components of net periodic postretirement medical benefit cost are as follows:

	Three Months Ended March 31,
	2013		2012
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	1,109	$	652
Interest cost	3,035		2,985
Amortization of deferred items	1,001		643
Total net periodic benefit cost	$	5,145	$	4,280

The following table shows the net periodic postretirement medical benefit costs that relate to current and former mining operations:

	Three Months Ended March 31,
	2013		2012
	(In thousands)
Former mining operations	$	3,119	$	2,829
Current operations	2,026		1,451
Total net periodic benefit cost	$	5,145	$	4,280

The costs for the former mining operations are included in Heritage health benefit expenses and costs for current operations are included in Cost of sales and Selling and administrative expenses.

Pension

The Company provides pension benefits to qualified full-time employees pursuant to collective bargaining agreements.

The Company incurred net periodic benefit costs of providing these pension benefits as follows:

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	534		$	440
Interest cost	1,625			1,448
Expected return on plan assets	(2,060		)	(1,905		)
Amortization of deferred items	741			729
Total net periodic pension cost	$	840		$	712

These costs are included in Cost of sales and Selling and administrative expenses.

The Company did not contribute cash to its pension plans in the three months ended March 31, 2013 and expects to make $3.4 million of pension plan contributions during the remainder of 2013.