Pension and OPEB - Periodic Cost

9 Months Ended

Sep. 30, 2013

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS NET PERIODIC BENEFIT COSTS: [Abstract]

Components of Pension and Other Postretirement Benefit Plans:

COMPONENTS OF PENSION AND OTHER POST-EMPLOYMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

Components of net periodic costs (benefits) for the three and nine months ended September 30 are as follows:

	Pension Benefits												Other Post-Employment Benefits
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2013			2012			2013			2012			2013			2012			2013			2012
Service cost	$	4,897		$	5,527		$	16,184		$	15,530		$	4,849		$	4,525		$	14,547		$	14,291
Interest cost	9,497			9,396			27,249			28,190			29,619			33,687			88,856			102,008
Expected return on plan assets	(13,336		)	(11,538		)	(38,191		)	(34,617		)	—			—			—			—
Amortization of prior service credits	(408		)	(408		)	(1,223		)	(1,223		)	(7,804		)	(13,409		)	(23,411		)	(38,418		)
Recognized net actuarial loss	8,042			11,959			30,764			35,876			17,595			20,255			52,784			60,620
Settlement loss	6,296			—			38,498			—			—			—			—			—
Net periodic benefit cost	$	14,988		$	14,936		$	73,281		$	43,756		$	44,259		$	45,058		$	132,776		$	138,501

For the nine months ended September 30, 2013, $55,272 was paid to the pension trust from operating cash flows. Additional contributions to the pension trust are not expected to be significant for the remainder of 2013. CONSOL Energy expects to contribute to the pension trust using prudent funding methods. Net periodic benefit costs are allocated to Costs of Goods Sold and Other Operating Charges and Selling, General and Administrative Expenses in the Consolidated Statements of Income.

According to the Defined Benefit Plans Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification, if the lump sum distributions made for the plan year, which for CONSOL Energy is January 1 to December 31, exceed the total of the projected service cost and interest cost for the plan year, settlement accounting is required. Lump sum payments exceeded this threshold during the three and nine months ended September 30, 2013. Accordingly, CONSOL Energy recognized expense of $6,296 and $38,498 for the three and nine months ended September 30, 2013, respectively, in Costs of Goods Sold and Other Operating Charges in the Consolidated Statements of Income. The settlement charges represented a pro rata portion of the net unrecognized loss based on the percentage reduction in the projected benefit obligation due to the lump sum payments. The settlement charges noted above also resulted in a remeasurement of the pension plan at September 30, June 30, and March 31, 2013. The September 30, 2013 remeasurement resulted in a change to the discount rate to 4.80% from 4.84% at June 30, 2013. The September remeasurement reduced the pension liability by $21,264. The September settlement and corresponding remeasurement of the pension plan resulted in an adjustment of $17,040 in Other Comprehensive Income, net of $10,520 in deferred taxes. It is reasonably possible that CONSOL Energy will incur additional settlement charges in 2013, which would require the pension plan to be remeasured using updated assumptions.

CONSOL Energy does not expect to contribute to the other post-employment benefit plan in 2013. We intend to pay benefit claims as they become due. For the nine months ended September 30, 2013, $124,504 of other post-employment benefits have been paid.