Retirement benefits

6 Months Ended

Jun. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Retirement benefits

Note 3 – Retirement benefits

Pension plans

We have various defined-benefit pension plans covering eligible current and former employees. Benefits under most plans are based on salary and years of service.

The components of net periodic pension cost (credit) for our pension plans were as follows:

		U.S. plans		Non-U.S. plans		Total
(In millions)		2012	2011	2012	2011	2012	2011
Three months ended June 30,
Service cost	$	-	-	2.8	2.5	2.8	2.5
Interest cost on projected benefit obligation		11.0	11.6	4.8	4.3	15.8	15.9
Return on assets – expected		(14.9)	(16.2)	(3.1)	(3.0)	(18.0)	(19.2)
Amortization of losses		9.7	7.0	1.0	0.7	10.7	7.7
Amortization of prior service cost		-	-	0.4	0.4	0.4	0.4
Settlement loss		-	-	0.3	1.0	0.3	1.0
Net periodic pension cost	$	5.8	2.4	6.2	5.9	12.0	8.3
Six months ended June 30,
Service cost	$	-	-	5.4	5.3	5.4	5.3
Interest cost on projected benefit obligation		22.0	23.1	8.9	8.6	30.9	31.7
Return on assets – expected		(30.0)	(32.5)	(6.1)	(6.1)	(36.1)	(38.6)
Amortization of losses		19.7	14.0	2.1	1.5	21.8	15.5
Amortization of prior service cost		-	-	0.8	0.8	0.8	0.8
Settlement loss		4.0	-	1.1	1.0	5.1	1.0
Net periodic pension cost	$	15.7	4.6	12.2	11.1	27.9	15.7

We made a $9 million stock contribution to our primary U.S. pension plan in the first three months of 2012 and another $7 million cash contribution to the plan in July 2012. Based on the law in effect at June 30, 2012, we are required to contribute an additional $15.5 million to the primary U.S. pension plan during the remainder of 2012. New legislation titled Moving Ahead for Progress in the 21st Century was passed in July 2012 that has the effect of spreading the expected funding requirements for our primary U.S. pension plan over a longer period of time. We have not yet estimated the effect of the new law on our projected contributions to our primary U.S. pension plan, but the remaining 2012 funding requirement is expected to be lower.

We recognized a $4.0 million settlement loss in the first six months of 2012 related to the payment of U.S. pension benefits.

Retirement benefits other than pensions

We provide retirement healthcare benefits for eligible current and former U.S. and Canadian employees, including former employees of our former U.S. coal operation. Retirement benefits related to our former coal operation include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for United Mine Workers of America Represented Employees (the “UMWA plans”) as well as costs related to black lung obligations.

The components of net periodic postretirement cost related to retirement benefits other than pensions were as follows:

		UMWA plans		Black lung and other plans		Total
(In millions)		2012	2011	2012	2011	2012	2011
Three months ended June 30,
Service cost	$	-	-	0.1	-	0.1	-
Interest cost on accumulated postretirement benefit obligations		5.6	5.9	0.7	0.7	6.3	6.6
Return on assets – expected		(5.3)	(6.4)	-	-	(5.3)	(6.4)
Amortization of losses		5.1	3.8	0.4	0.1	5.5	3.9
Amortization of prior service cost		-	-	0.5	0.5	0.5	0.5
Net periodic pension cost	$	5.4	3.3	1.7	1.3	7.1	4.6
Six months ended June 30,
Service cost	$	-	-	0.1	-	0.1	-
Interest cost on accumulated postretirement benefit obligations		11.2	12.0	1.5	1.4	12.7	13.4
Return on assets – expected		(10.6)	(12.8)	-	-	(10.6)	(12.8)
Amortization of losses		10.5	7.5	0.6	0.2	11.1	7.7
Amortization of prior service cost		-	-	1.0	1.0	1.0	1.0
Net periodic pension cost	$	11.1	6.7	3.2	2.6	14.3	9.3