POSTRETIREMENT MEDICAL BENEFITS AND PENSION

9 Months Ended

Sep. 30, 2015

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,
	2015		2014		2015		2014
	(In thousands)				(In thousands)
Components of net periodic benefit cost:
Service cost	$	1,054	$	822	$	3,163	$	2,467
Interest cost	2,907		3,203		8,722		9,610
Amortization of deferred items	327		4		981		13
Total net periodic benefit cost	$	4,288	$	4,029	$	12,866	$	12,090

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,
	2015		2014		2015		2014
	(In thousands)				(In thousands)
Former mining operations	$	2,034	$	2,402	$	6,103	$	7,210
Current operations	2,254		1,627		6,763		4,880
Total net periodic benefit cost	$	4,288	$	4,029	$	12,866	$	12,090

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,
	2015			2014			2015			2014
	(In thousands)						(In thousands)
Components of net periodic benefit cost:
Service cost	$	436		$	500		$	1,318		$	1,500
Interest cost	1,831			1,747			5,780			5,240
Expected return on plan assets	(2,435		)	(2,154		)	(7,744		)	(6,461		)
Settlements	(1,529		)	—			(1,874		)	—
Amortization of deferred items	1,059			359			3,301			1,078
Total net periodic pension cost	$	(638	)	$	452		$	781		$	1,357

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

The Company made $3.5 million of contributions to its pension plans in the nine months ended September 30, 2015. The Company expects to make $0.3 million of contributions to its pension plans during the remainder of 2015.