Restricted Investments and Bond Collateral

9 Months Ended

Sep. 30, 2011

Restricted Investments and Bond Collateral [Abstract]

RESTRICTED INVESTMENTS AND BOND COLLATERAL

4. RESTRICTED INVESTMENTS AND BOND COLLATERAL

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

	September 30,		December 31,
	2011		2010
	(In thousands)
Coal Segment:
Westmoreland Mining — debt reserve account	$	10,764	$	7,514
Reclamation bond collateral:
Absaloka Mine		13,555		10,956
Rosebud Mine		12,264		12,263
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:
Postretirement medical benefit bonds		6,645		5,466
Workers’ compensation bonds		6,457		6,350
Total restricted investments and bond collateral	$	56,933	$	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.

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 September 30, 2011 are as follows:

	Carrying Value		Fair Value
	(In thousands)
Cash and cash equivalents	$	42,525	$	42,525
Time deposits		7,698		7,698
Held-to-maturity securities		4,923		5,297
Available-for-sale securities		1,787		1,787
	$	56,933	$	57,307

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 nine months ended September 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 losses and fair value of held-to-maturity securities at September 30, 2011 is as follows (in thousands):

Amortized cost	$	4,923
Gross unrealized holding gains		414
Gross unrealized holding losses		(40	)
Fair value	$	5,297

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

	Amortized Cost		Fair Value
	(In thousands)
Within one year	$	123	$	120
Due in five years or less		3,067		3,116
Due after five years to ten years		792		967
Due in more than ten years		941		1,094
	$	4,923	$	5,297

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

Cost basis	$	1,566
Gross unrealized holding gains		221
Fair value	$	1,787