XML 33 R46.htm IDEA: XBRL DOCUMENT v2.4.0.8
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2013
Employee Benefit Plans  
Schedule of amounts recognized for all of the entity's pension and postretirement benefit plans

The amounts recognized for all of the Company's pension and postretirement benefit plans are as follows (in thousands):

 
   Pension Benefits   Other Postretirement Benefits  
 
   December 31,
2013		   December 31,
2012		   December 31,
2013		   December 31,
2012		  

Accumulated benefit obligation

   $ 247,874   $ 278,357   $ 600,748   $ 662,464  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Change in projected benefit obligation:

                          

Benefit obligation at beginning of year

   $ 295,944   $ 258,780   $ 662,464   $ 577,918  

Service cost

     7,062     5,991     9,943     8,072  

Interest cost

     12,280     12,517     28,791     29,010  

Actuarial (gain) loss

     (37,873 )   29,933     (74,146 )   71,451  

Benefits paid

     (11,763 )   (11,501 )   (26,304 )   (23,987 )

Plan amendments

     —     224     —     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Benefit obligation at end of year

   $ 265,650   $ 295,944   $ 600,748   $ 662,464  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Change in plan assets:

                          

Fair value of plan assets at beginning of year

   $ 232,960   $ 202,537   $ —   $ —  

Actual return on plan assets

     35,788     28,499     —     —  

Employer contributions

     780     13,425     26,304     23,987  

Benefits paid

     (11,763 )   (11,501 )   (26,304 )   (23,987 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Fair value of plan assets at end of year

   $ 257,765   $ 232,960   $ —   $ —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Unfunded status of the plan

   $ (7,885 ) $ (62,984 ) $ (600,748 ) $ (662,464 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Amounts recognized in the balance sheet, pre-tax:

                          

Other long-term assets

   $ 1,260   $ —   $ —   $ —  

Other current liabilities

     (7,089 )   (5,744 )   —     —  

Accumulated postretirement benefits obligation

                          

Current

     —     —     (30,036 )   (29,200 )

Long-term

     —     —     (570,712 )   (633,264 )

Other long-term liabilities

     (2,056 )   (57,240 )         —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net amount recognized

   $ (7,885 ) $ (62,984 ) $ (600,748 ) $ (662,464 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Amounts recognized in accumulated other comprehensive income, pre-tax

                          

Prior service cost

   $ 994   $ 1,257   $ 7,641   $ 8,871  

Net actuarial loss

     48,331     114,787     238,693     331,775  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net amount recognized

   $ 49,325   $ 116,044   $ 246,334   $ 340,646  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
Components of net periodic benefit cost

The components of net periodic benefit cost are as follows (in thousands):

 
   Pension Benefits   Other Postretirement Benefits  
 
   For the years ended December 31,   For the years ended December 31,  
 
   2013   2012   2011   2013   2012   2011  

Components of net periodic benefit cost:

                                      

Service cost

   $ 7,062   $ 5,991   $ 5,163   $ 9,943   $ 8,072   $ 6,160  

Interest cost

     12,280     12,517     12,576     28,791     29,010     25,140  

Expected return on plan assets

     (16,941 )   (16,125 )   (15,717 )   —     —     —  

Amortization of prior service cost (credit)          

     263     256     272     1,230     1,045     (961 )

Amortization of net actuarial loss

     9,609     9,377     8,252     18,936     14,725     10,046  

Settlement loss

     —     —     1,807     —     —     —  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net periodic benefit cost for continuing operations

   $ 12,273   $ 12,016   $ 12,353   $ 58,900   $ 52,852   $ 40,385  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           
Schedule of estimated portion of net prior service cost and net actuarial loss remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic benefit cost in 2014

The estimated portions of net prior service cost and net actuarial loss remaining in accumulated other comprehensive income that is expected to be recognized as components of net periodic benefit costs in 2014 are as follows (in thousands):

 
   Pension Benefits   Other
Postretirement
Benefits		  

Prior service cost

   $ 246   $ 1,227  

Net actuarial loss

     2,566     15,570  
           
​ ​ ​ ​ ​ ​ ​ ​

Net amount to be recognized

   $ 2,812   $ 16,797  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           
Schedule of changes in plan assets and benefit obligations recognized in other comprehensive income (loss)

Changes in plan assets and benefit obligations recognized in other comprehensive income (loss) in 2013 are as follows (in thousands):

 
   Pension Benefits   Other
Postretirement
Benefits		   Total  

Current year net actuarial gain

   $ 56,721   $ 74,146   $ 130,867  

Current year prior service cost

     —     —     —  

Amortization of actuarial loss

     9,609     18,936     28,545  

Amortization of prior service cost

     263     1,230     1,493  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

     66,593     94,312     160,905  

Deferred income taxes

     (24,986 )   (35,027 )   (60,013 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total recognized in other comprehensive income (loss), net of taxes

   $ 41,607   $ 59,285   $ 100,892  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
Summary of key assumptions used

 

 
   Pension Benefits   Other Postretirement
Benefits		  
 
   December 31,   December 31,  
 
   2013   2012   2011   2013   2012   2011  

Weighted average assumptions used to determine benefit obligations:

                                      

Discount rate

     5.24 %   4.29 %   5.02 %   5.28 %   4.44 %   5.14 %

Rate of compensation increase

     3.70 %   3.70 %   3.70 %   —     —     —  

Weighted average assumptions used to determine net periodic cost:

                                      

Discount rate

     4.29 %   5.02 %   5.30 %   4.44 %   5.14 %   5.35 %

Expected return on plan assets

     7.50 %   7.75 %   7.75 %   —     —     —  

Rate of compensation increase

     3.70 %   3.70 %   3.70 %   —     —     —  
Summary of assumed health care cost trend rates


 

 
   December 31,  
 
   2013   2012   2011  
 
   Pre-65   Post-65   Pre-65   Post-65   Pre-65   Post-65  

Assumed health care cost trend rates at December 31:

                                      

Health care cost trend rate assumed for next year

     7.00 %   7.00 %   7.50 %   7.50 %   8.00 %   8.00 %

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

     4.50 %   4.50 %   5.00 %   5.00 %   5.00 %   5.00 %

Year that the rate reaches the ultimate trend rate

     2027     2027     2019     2019     2018     2018  
Schedule of pension trust's strategic asset allocation targets

 

 
    
    
   Actual
Allocation		  
 
   Strategic
Allocation		   Tactical
Range		  
 
   2013   2012  

Equity investments:

                          

U.S. large-cap funds

     38.5 %   30-47 %   39.0 %   37.3 %

International fund

     13.0 %   10-16 %   14.3 %   13.3 %

U.S. mid-cap fund

     8.5 %   6-11 %   9.7 %   9.6 %
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total equity investments

     60.0 %   50-70 %   63.0 %   60.2 %

Fixed income investments

     40.0 %   30-50 %   36.5 %   39.2 %

Cash

     0.0 %   0-5 %   0.5 %   0.6 %
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

     100.0 %         100.0 %   100.0 %
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                     
Schedule of the fair values of pension trust's assets by asset category

The fair values of the Pension Trust's assets, all of which are valued based on quoted market prices in active markets for identified assets (Level 1), were as follows (in thousands):

 
   December 31,  
Asset Class:
  2013   2012  

Cash and cash equivalents

   $ 1,224   $ 1,397  

Equity investments(a):

              

U.S. large cap funds

     100,384     86,892  

International fund

     36,812     31,038  

U.S. mid-cap fund

     25,143     22,368  

Fixed income investments:

              

Intermediate-term bond(b)

     34,091     85,814  

Long-term bond(c)

     60,111     5,451  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 257,765   $ 232,960  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           
(a)
Equity investments include investments in domestic and international mutual funds investing in large- and mid-capitalization companies. Investments in mutual funds are valued at the net asset value per share multiplied by the number of shares held as of the measurement date and are traded on listed exchanges.

(b)
This fund seeks maximum total return through a diversified portfolio of fixed income instruments of varying maturities, which may be represented by forward or derivatives such as options, futures, contracts, or swap agreements. Fixed income instruments include bonds, debt securities and other similar instruments issued by various U.S. and non-U.S. public or private-sector entities. This fund also invests in high yield securities, mortgage-related securities and securities denominated in foreign currencies. This fund is valued at the net asset value per share multiplied by the number of shares held as of the measurement date and is traded on a listed exchange.

(c)
This fund invests in diversified portfolio consisting primarily of high-quality bonds and other fixed income securities, including U.S. government obligations, mortgage-and asset-backed securities, corporate and municipal bonds, and collateralized mortgage obligations of varying maturities. This fund is valued at the net asset value per share multiplied by the number of shares held as of the measurement date and is traded on a listed exchange.
Schedule of one-percentage point change in the trend rate

A one-percentage-point change in the rate for each of these assumptions would have had the following effects as of and for the year ended December 31, 2013 (in thousands):

 
   Increase (Decrease)  
 
   1-Percentage
Point Increase		   1-Percentage
Point Decrease		  

Healthcare cost trend:

              

Effect on total of service and interest cost components

   $ 7,468   $ (5,790 )

Effect on postretirement benefit obligation

   $ 78,720   $ (65,091 )

Discount rate:

              

Effect on postretirement service and interest cost components

   $ (297 ) $ 293  

Effect on postretirement benefit obligation

   $ (67,637 ) $ 83,447  

Effect on current year postretirement expense

   $ (6,140 ) $ 7,638  

Effect on pension service and interest cost components

   $ 159   $ (272 )

Effect on pension benefit obligation

   $ (27,881 ) $ 33,879  

Effect on current year pension expense

   $ (2,978 ) $ 3,547  

Expected return on plan assets:

              

Effect on current year pension expense

   $ (2,259 ) $ 2,259  

Rate of compensation increase:

              

Effect on pension service and interest cost components

   $ 631   $ (557 )

Effect on pension benefit obligation

   $ 4,929   $ (4,463 )

Effect on current year pension expense

   $ 1,058   $ (948 )
Schedule of estimated benefit payments from the plans that are expected to be paid

The following estimated benefit payments from the plans, which reflect expected future service as appropriate, are expected to be paid as follows (in thousands):

 
   Pension
Benefits		   Other
Postretirement
Benefits Before
Medicare
Subsidy		   Medicare
Part D
Subsidy		  

2014

   $ 20,326   $ 32,158   $ 2,121  

2015

   $ 14,820   $ 34,127   $ 2,391  

2016

   $ 14,772   $ 36,056   $ 2,650  

2017

   $ 15,814   $ 37,921   $ 2,921  

2018

   $ 16,516   $ 39,824   $ 3,222  

Years 2019-2023

   $ 92,643   $ 217,871   $ 20,982  
Schedule of additional information regarding the 1974 Pension Plan

The following table provides additional information regarding the 1974 Pension Plan as of December 31, 2013 (in thousands):

 
    
   Pension
Protection Act
Zone Status		    
   Contributions of Walter
Energy		    
    
  
 
   EIN/Pension
Plan Number		   FIP/RP Status
Pending/Implemented		   Surcharge
Imposed		   Expiration Date of
Collective-Bargaining
Agreement		  
Pension Fund
  2013   2012   2013   2012   2011  

United Mine Workers of America 1974 Pension Plan(1)

     52-1050282/002   Yellow   Yellow   Yes   $ 19,670   $ 20,948   $ 19,520   No     12/31/2016  
(1)
The enrolled actuary for the 1974 Pension Plan certified to the U.S. Department of the Treasury and the plan sponsor that the plan is in "Seriously Endangered Status" for the plan year beginning July 1, 2013 and ending June 30, 2014. The plan adopted a funding improvement plan on May 25, 2012.