The following discussion and analysis of the financial condition and results of operations of Penn Virginia Resource Partners, L.P. and its subsidiaries (the "Partnership," "we," "us" or "our") should be read in conjunction with our condensed consolidated financial statements and the accompanying notes in Item 1, "Financial Statements."

Overview of Business

We are a publicly traded Delaware limited partnership formed by Penn Virginia Corporation in 2001, and we are principally engaged in the management of coal and natural resource properties and the gathering and processing of natural gas in the United States.

Selected Financial Data - Consolidated

Summary operating results for the three and six months ended June 30, 2009 and
2008 were as follows (in thousands):



                                     Three Months Ended                            Six Months Ended
                                          June 30,                                     June 30,
                                    2009           2008         % Change         2009           2008         % Change
Revenues                          $ 149,419      $ 276,505           (46 %)    $ 306,178      $ 433,319           (29 %)
Expenses                            128,026        232,176           (45 %)      262,858        357,756           (27 %)

Operating income                     21,393         44,329           (52 %)       43,320         75,563           (43 %)
Other income (expense)               (8,071 )      (34,858 )         (77 %)      (20,530 )      (31,552 )         (35 %)

Net income                        $  13,322      $   9,471            41 %     $  22,790      $  44,011           (48 %)

We currently conduct operations in two business segments: (i) coal and natural resource management and (ii) natural gas midstream.

• Coal and Natural Resource Management-management and leasing of coal properties and subsequent collection of royalties; other land management activities such as selling standing timber; leasing of fee-based coal-related infrastructure facilities to certain lessees and end-user industrial plants; collection of oil and gas royalties; and coal transportation, or wheelage, fees. Both in our current limited partnership form and in our previous corporate form, we have managed coal properties since 1882.

• Natural Gas Midstream-natural gas processing, gathering and other related services. We entered this business segment in 2005.

The following table presents a summary of certain financial information relating to our segments: