Asset Retirement Obligations, Contractual Third-Party Reclamation Receivables, and Reclamation Deposits

12 Months Ended

Dec. 31, 2011

Asset Retirement Obligations, Contractual Third-Party Reclamation Receivables, and Reclamation Deposits [Abstract]

ASSET RETIREMENT OBLIGATIONS, CONTRACTUAL THIRD-PARTY RECLAMATION RECEIVABLES, AND RECLAMATION DEPOSITS

8. ASSET RETIREMENT OBLIGATIONS, CONTRACTUAL THIRD-PARTY RECLAMATION RECEIVABLE, AND RECLAMATION DEPOSITS

The asset retirement obligation, contractual third-party reclamation receivable, and reclamation deposits for each of the Company’s mines and ROVA at December 31, 2011 are summarized below:

		September 30,		September 30,		September 30,
	Asset Retirement Obligation		Contractual Third-Party Reclamation Receivable		Reclamation Deposits
	(In thousands)
Rosebud	$	113,817	$	15,780	$	71,939
Jewett		82,928		82,928		—
Absaloka		24,756		225		—
Beulah		20,441		—		—
Savage		4,766		—		—
ROVA		770		—		—
Total	$	247,478	$	98,933	$	71,939

Asset Retirement Obligations

Changes in the Company’s asset retirement obligations were as follows:

		September 30,			September 30,
	Years Ended December 31,
	2011			2010
	(In thousands)
Asset retirement obligations, beginning of year (including current portion)	$	241,643		$	244,615
Accretion		20,156			19,773
Liabilities settled		(14,646	)		(15,351	)
Changes due to amount and timing of reclamation		325			(7,394	)
Asset retirement obligations, end of year		247,478			241,643
Less current portion		(19,765	)		(14,514	)
Asset retirement obligations, less current portion	$	227,713		$	227,129

As permittee, the Company or its subsidiaries are responsible for the total amount of final reclamation costs for its mines and ROVA. The financial responsibility for a portion of final reclamation of the mines when they are closed has been transferred by contract to certain customers, while other customers have provided guarantees or funded escrow accounts to cover final reclamation costs. Costs of reclamation of mining pits prior to mine closure are recovered in the price of coal shipped.

As of December 31, 2011, the Company had $214.6 million in surety bonds outstanding to secure reclamation obligations.

Contractual Third-Party Reclamation Receivables

The Company has recognized as an asset $98.9 million as contractual third-party reclamation receivables, representing the present value of customer obligations to reimburse the Company for reclamation expenditures at the Company’s Rosebud, Jewett and Absaloka Mines.

Reclamation Deposits

The Company’s reclamation deposits will be used to fund final reclamation activities. The Company’s carrying value and estimated fair value of its reclamation deposits at December 31, 2011 are as follows:

		September 30,		September 30,
	Carrying Value		Fair Value
	(In thousands)
Cash and cash equivalents	$	36,627	$	36,627
Held-to-maturity securities		19,990		21,385
Time deposits		14,218		14,218
Available-for-sale securities		1,104		1,104
	$	71,939	$	73,334

In 2011 and 2010, the Company recorded a gain of $0.1 million $0.6 million, respectively, on the sale of available-for-sale securities held as reclamation deposits. In 2009, an impairment of $0.3 million was recorded as a result of other-than-temporary declines in the value of marketable securities included in reclamation deposits.

Held-to-Maturity and Available-for-Sale Reclamation Deposits

The amortized cost, gross unrealized holding gains and losses and fair value of held-to-maturity securities are as follows:

		September 30,			September 30,
	Years Ended December 31,
	2011			2010
	(In thousands)
Amortized cost	$	19,990		$	15,633
Gross unrealized holding gains		1,401			1,453
Gross unrealized holding losses		(6	)		(42	)
Fair value	$	21,385		$	17,044

Maturities of held-to-maturity securities are as follows at December 31, 2011:

		September 30,		September 30,
	Amortized Cost		Fair Value
	(In thousands)
Due in five years or less	$	8,792	$	8,916
Due after five years to ten years		5,703		6,227
Due in more than ten years		5,495		6,242
	$	19,990	$	21,385

The cost basis, gross unrealized holding gains and fair value of available-for-sale securities are as follows:

		September 30,		September 30,
	December 31,
	2011		2010
	(In thousands)
Cost basis	$	1,000	$	2,000
Gross unrealized holding gains		104		204
Fair value	$	1,104	$	2,204