Postretirement Medical and Life Insurance Benefit Plans

We and certain of our operating subsidiaries provide multiple postretirement medical and life insurance benefit plans. We recognize the cost of benefits as the employees render service. Postretirement benefits are funded as incurred. At the end of the year, we discount our plan liabilities using an assumed discount rate. In estimating this rate, we, along with our third-party actuaries, review bond indices, consider yield curve analysis results and the past history of discount rates.

The actuarial present value of benefit obligations summarized below was based on the following assumption:


	2012	2011
Weighted-average assumption as of June 30
Discount rate.................................................................................................	3.78%	5.29%

The net periodic benefit costs were determined utilizing the following beginning-of-the-year assumptions:


	2012	2011	2010
Discount rate.........................................................................	5.29%	5.21%	6.34%
Health care cost trend rate.................................................	10.00%	10.00%	10.00%

Relevant information with respect to our postretirement medical and life insurance benefits as of June 30 can be summarized as follows:


	2012	2011
Change in benefit obligation
Benefit obligation at beginning of year....................................................	$ 2,881	$ 2,707
Service cost....................................................................................................	25	24
Interest cost...................................................................................................	147	137
Actuarial loss.................................................................................................	70	220
Benefits paid.................................................................................................	(69)	(207)
Benefit obligation at end of year..........................................................	$ 3,054	$ 2,881


	2012	2011
Change in plan assets
Employer contributions...............................................................................	$ 69	$ 207
Benefits paid.................................................................................................	(69)	(207)
Fair value of plan assets at end of year...............................................	$ –	$ –


	2012	2011
Reconciliation of funded status
Accrued benefit cost................................................................................	$ (3,054)	$ (2,881)


	2012	2011
Amounts recognized in the consolidated balance sheets consist of
Current accrued benefit liability................................................................	$ (191)	$ (203)
Noncurrent accrued benefit liability..........................................................	$ (2,863)	$ (2,678)


	2012	2011
Accumulated benefit obligation..............................................................	$ (3,054)	$ (2,881)

Amounts recognized in accumulated other comprehensive loss at June 30 were as follows:


	2012	2011
Net actuarial gain.........................................................................................	$ (644)	$ (745)
Prior service benefit......................................................................................	(23)	(28)
Income taxes.................................................................................................	247	286
Total...........................................................................................................	$ (420)	$ (487)

Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows:


			2013
	Prior service asset amortization...............................................................................................		$ (5)
	Unrecognized gain amortization.............................................................................................		(22)
	Total........................................................................................................................................		$ (27)

The following table summarizes the components of net periodic benefit cost at June 30:


	2012	2011	2010
Components of net periodic benefit cost
Service cost..............................................................................	$ 25	$ 24	$ 17
Interest cost..............................................................................	147	137	193
Amortization of unrecognized net gain..............................	(31)	(46)	(14)
Amortization of prior service asset......................................	(5)	(5)	(5)
Net periodic benefit cost...................................................	$ 136	$ 110	$ 191

We expect to contribute approximately $0.2 million to our postretirement benefit plans in 2013.

Benefit payments estimated for future years are as follows:


	2013.............................................................................................................................................		$ 191
	2014.............................................................................................................................................		$ 186
	2015.............................................................................................................................................		$ 184
	2016.............................................................................................................................................		$ 191
	2017.............................................................................................................................................		$ 183
	2018 – 2022................................................................................................................................		$ 921

For other postretirement benefit measurement purposes, annual increases in medical costs for 2012 for pre-medicare eligible claims were assumed to total approximately 10% per year and gradually decline to 5% by approximately the year 2017 and remain level thereafter. However, for medicare eligible claims, the annual increases in medical costs for 2012 were assumed to total approximately 7% per year and gradually decline to 5% by approximately the year 2016 and remain level thereafter. Annual increases in medical costs for 2011 were assumed to total approximately 10% per year and gradually decline to 5% by approximately the year 2016 and remain level thereafter.

Assumed health care cost rates can have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effect:


	1-Percentage-Point Increase	1-Percentage-Point Decrease
Effect on total of service and interest cost components..............	$ 8	$ (7)
Effect on postretirement benefit obligation as of June 30, 2012	$ 221	$ (193)