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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)				(In thousands)
Components of net periodic benefit cost:
Service cost	$	822	$	1,109	$	1,645	$	2,218
Interest cost	3,203		3,035		6,407		6,069
Amortization of deferred items	4		1,001		9		2,003
Total net periodic benefit cost	$	4,029	$	5,145	$	8,061	$	10,290

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)				(In thousands)
Former mining operations	$	2,402	$	3,119	$	4,807	$	6,237
Current operations	1,627		2,026		3,254		4,053
Total net periodic benefit cost	$	4,029	$	5,145	$	8,061	$	10,290

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 June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)						(In thousands)
Components of net periodic benefit cost:
Service cost	$	500		$	638		$	1,000		$	1,173
Interest cost	1,638			1,555			3,384			3,180
Expected return on plan assets	(2,154		)	(2,325		)	(4,307		)	(4,385		)
Amortization of deferred items	359			1,004			719			1,745
Total net periodic pension cost	$	343		$	872		$	796		$	1,713

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

The Company contributed $1.1 million of cash contributions to its pension plans in the six months ended June 30, 2014 and expects to make $3.2 million of pension plan contributions during the remainder of 2014.