Pension and Postretirement Medical Benefits

6 Months Ended

Jun. 30, 2011

Pension and Postretirement Medical Benefits [Abstract]

PENSION AND POSTRETIREMENT MEDICAL BENEFITS

6. PENSION AND POSTRETIREMENT MEDICAL BENEFITS

Pension

The Company provides pension benefits to qualified full-time employees pursuant to collective bargaining agreements. The Company froze its pension plan for non-union employees in 2009.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	237		$	115		$	390		$	311
Interest cost		1,250			731			2,369			2,337
Expected return on plan assets		(1,465	)		(886	)		(2,570	)		(2,185	)
Amortization of deferred items		385			436			770			664
Total net periodic benefit cost	$	407		$	396		$	959		$	1,127

The Company is required by a WML loan covenant to ensure that by 8.5 months after the end of the plan year, the value of its pension assets are at least 90% of the plan’s year end actuarially determined pension liability.

The Company contributed $1.5 million in cash and $0.5 million in company stock to its pension plans in the six months ended June 30, 2011. The Company expects to make approximately $5.4 million of pension plan contributions during the remainder of 2011 and expects a significant portion of these contributions to be made in Company stock.

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 Company incurred net periodic benefit costs of providing postretirement medical benefits during the three and six months ended June 30, 2011 and 2010, as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	123		$	129		$	246		$	270
Interest cost		2,627			2,497			5,254			5,249
Amortization of deferred items		(72	)		(70	)		(144	)		(138	)
Total net periodic benefit cost	$	2,678		$	2,556		$	5,356		$	5,381

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In thousands)
Former mining operations	$	2,315	$	2,106	$	4,629	$	4,624
Current operations		363		450		727		757
Total net periodic benefit cost	$	2,678	$	2,556	$	5,356	$	5,381

The costs for the former mining operations are included in Heritage health benefit expenses and the costs for current operations are included as operating expenses.

The Company expects to pay approximately $7.3 million for postretirement medical benefits during the remainder of 2011, net of Medicare Part D reimbursements. A total of $6.3 million was paid in the six months ended June 30, 2011 net of Medicare Part D reimbursements.