Workers Compensation Expense

The Company is liable under the Federal Mine Safety and Health Act of 1969, as subsequently amended, to provide for pneumoconiosis (occupational disease) benefits to eligible employees, former employees and dependents. The Company currently provides for federal claims principally through a self-insurance program. The Company is also liable under various state workers’ compensation statutes for occupational disease benefits. The occupational disease benefit obligation represents the present value of the of the actuarially computed present and future liabilities for such benefits over the employees’ applicable years of service.

In addition, the Company is liable for workers’ compensation benefits for traumatic injuries which are calculated using actuarially-based loss rates, loss development factors and discounted based on a risk free rate. Traumatic workers’ compensation claims are insured with varying retentions/deductibles, or through state-sponsored workers’ compensation programs.

Workers’ compensation expense consists of the following components:



	Successor			Predecessor		Successor			Predecessor
	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016		Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
(In thousands)
Self-insured occupational disease benefits:
Service cost	$	1,558		$	1,051	$	4,675		$	3,466
Interest cost	1,169			1,098		3,506			3,184
Net amortization	—			2,178		—			4,325
Curtailments	$	(4,660	)	$	—	$	(4,660	)	$	4,156
Total occupational disease	$	(1,933	)	$	4,327	$	3,521		$	15,131
Traumatic injury claims and assessments	3,077			2,415		8,487			6,628
Total workers’ compensation expense	$	1,144		$	6,742	$	12,008		$	21,759

The curtailment reflected in three and nine months ended September 30, 2017 was related to the divestiture during the quarter and therefore was included in the line item, “Gain on sale of Lone Mountain Processing, Inc.,” within the Condensed Consolidated Statement of Operations. For additional information on the sale, please see Note 4, “Divestitures,” to the Condensed Consolidated Financial Statements.

Additionally, due to the curtailment discussed above, the Company revalued the occupational disease liability which increased the liability by approximately $10.0 million with the offset to accumulated other comprehensive income. The discount rate used for the revaluation was 3.86%.