POSTRETIREMENT MEDICAL BENEFITS AND PENSION

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands)				(In thousands)
Components of net periodic benefit cost:
Service cost	$	1,109	$	1,061	$	3,327	$	2,602
Interest cost	3,035		3,057		9,104		9,226
Amortization of deferred items	1,001		643		3,004		1,929
Total net periodic benefit cost	$	5,145	$	4,761	$	15,435	$	13,757

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands)				(In thousands)
Former mining operations	$	3,119	$	2,828	$	9,356	$	8,485
Current operations	2,026		1,933		6,079		5,272
Total net periodic benefit cost	$	5,145	$	4,761	$	15,435	$	13,757

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 September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(In thousands)						(In thousands)
Components of net periodic benefit cost:
Service cost	$	587		$	576		$	1,760		$	1,606
Interest cost	1,590			1,669			4,771			4,816
Expected return on plan assets	(2,192		)	(2,164		)	(6,577		)	(6,243		)
Amortization of deferred items	872			729			2,617			2,187
Total net periodic pension cost	$	857		$	810		$	2,571		$	2,366

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 nine months ended September 30, 2013 and expects to make $0.6 million of pension plan contributions during the remainder of 2013.