Restricted Investments and Bond Collateral

6 Months Ended

Jun. 30, 2011

Restricted Investments and Bond Collateral [Abstract]

RESTRICTED INVESTMENTS AND BOND COLLATERAL

RESTRICTED INVESTMENTS AND BOND COLLATERAL

The Company’s restricted investments and bond collateral consists of the following:


	June 30,			December 31,
	2011			2010
	(In thousands)
Coal Segment:
Westmoreland Mining — debt reserve account	$	14,965		$	7,514
Reclamation bond collateral:
Rosebud Mine		12,264			12,263
Absaloka Mine		11,009			10,956
Beulah Mine		1,270			1,270
Jewett Mine		—			3,001

Power Segment:
Letter of credit account		5,978			5,990
Debt protection account		—			905
Repairs and maintenance account		—			1,067
Ash reserve account		—			602

Corporate Segment:
Workers’ compensation bonds		6,419			6,350
Postretirement medical benefit bonds		6,250			5,466

Total restricted investments and bond collateral		58,155			55,384
Less current portion		(5,000	)		—

Total restricted investments and bond collateral, less current portion	$	53,155		$	55,384

For all of its restricted investments and bond collateral accounts, the Company can select from limited fixed-income investment options for the funds and receive the investment returns on these investments. Funds in the restricted investments and bond collateral accounts are not available to meet the Company’s cash needs, except for $5.0 million of the Westmoreland Mining debt reserve account which was withdrawn in July 2011.

These accounts include held-to-maturity and available-for-sale securities. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts calculated on the effective interest method. Interest income is recognized when earned. Available-for-sale securities are reported at fair value with unrealized gains and losses excluded from earnings and reported in Accumulated other comprehensive loss.

The Company’s carrying value and estimated fair value of its restricted investments and bond collateral at June 30, 2011 are as follows:


	Carrying Value		Fair Value
	(In thousands)
Cash and cash equivalents	$	46,186	$	46,186
Time deposits		7,698		7,698
Held-to-maturity securities		2,486		2,836
Available-for-sale securities		1,785		1,785

	$	58,155	$	58,505

The Company recorded a gain of $0.1 million on the sale of available-for-sale securities held as restricted investments and bond collateral in the six months ended June 30, 2011.

Following the Parent Notes offering in February 2011, discussed in Note 5, ROVA is no longer required to maintain its debt protection accounts, ash reserve account or the repairs and maintenance account.

Held-to-Maturity and Available-for-Sale Restricted Investments and Bond Collateral

The amortized cost, gross unrealized holding gains and fair value of held-to-maturity securities at June 30, 2011, is as follows (in thousands):


Amortized cost	$	2,486
Gross unrealized holding gains		350

Fair value	$	2,836

Maturities of held-to-maturity securities are as follows at June 30, 2011:


	Amortized Cost		Fair Value
	(In thousands)
Due in five years or less	$	667	$	748
Due after five years to ten years		782		893
Due in more than ten years		1,037		1,195

	$	2,486	$	2,836

The cost basis, gross unrealized holding gains and fair value of available-for-sale securities at June 30, 2011, is as follows (in thousands):


Cost basis	$	1,566
Gross unrealized holding gains		219

Fair value	$	1,785