Penn Virginia GP 8-K Fourth Quarter and Full-year 2009 Results

Penn Virginia GP Holdings, L.P.

Three Radnor Corporate Center, Suite 300, 100 Matsonford Road, Radnor, PA 19087

FOR IMMEDIATE RELEASE

Contact: James W. Dean

Vice President, Investor Relations

Ph: (610) 687-8900 Fax: (610) 687-3688

E-Mail: invest@pennvirginia.com

PENN VIRGINIA GP HOLDINGS, L.P. ANNOUNCES

FOURTH QUARTER AND FULL-YEAR 2009 RESULTS

RADNOR, PA (BusinessWire) February 10, 2010 – Penn Virginia GP Holdings, L.P. (NYSE: PVG) today reported financial results for the three months and year ended December 31, 2009.

Distributable cash, a non-GAAP (generally accepted accounting principles) measure, was $14.8 million for the three months ended December 31, 2009, unchanged from the prior year quarter.  Adjusted net income attributable to PVG, a non-GAAP measure that excludes the effects of the non-cash change in derivatives fair value and charges for impairments that affect comparability to prior periods, was $17.5 million, or $0.45 per limited partner unit, as compared to $11.6 million, or $0.30 per limited partner unit, in the prior year quarter.  Net income attributable to PVG was $12.5 million, or $0.32 per limited partner unit, as compared to $9.6 million, or $0.24 per limited partner unit, in the prior year quarter.

For the year ended December 31, 2009, distributable cash was $59.4 million, as compared to $57.0 million in 2008.  Adjusted net income attributable to PVG was $54.6 million, or $1.40 per limited partner unit, as compared to $43.3 million, or $1.11 per limited partner unit, in 2008.  Net income attributable to PVG was $37.8 million, or $0.97 per limited partner unit, as compared to $52.7 million, or $1.35 per limited partner unit, in 2008.

Reconciliations of distributable cash and adjusted net income to GAAP-based measures appear in the financial tables later in this release.

As previously announced, on February 19, 2010, we will pay to unitholders of record as of February 2, 2010 a quarterly cash distribution of $0.38 per limited partner unit, or an annualized rate of $1.52 per unit.  The distribution remains unchanged from the distribution paid in the previous quarter.

We own the general partner, including the incentive distribution rights, and are the largest limited partner unitholder of Penn Virginia Resource Partners, L.P. (NYSE: PVR), and we report our financial results on a consolidated basis with the financial results of PVR.  We currently have no separate operating activities other than those conducted by PVR and derive our cash flow solely from cash distributions received from PVR.

Financial and operational updates, as well as initial full-year 2010 guidance for PVR and its coal and natural resource management and natural gas midstream segments, are discussed in more detail in PVR’s news release dated February 10, 2010 (please visit PVR’s website, www.pvresource.com, under “For Investors” for a copy of the release).

Initial Guidance for 2010

See the Guidance Table included in PVR’s February 10, 2010 release for initial guidance estimates for full-year 2010.

Conference Call

A joint conference call and webcast for PVG and PVR, during which management will discuss fourth quarter 2009 financial and operational results, is scheduled for Thursday, February 11, 2010 at 1:00 p.m. ET.  Prepared remarks by A. James Dearlove, Chairman and Chief Executive Officer, will be followed by a question and answer period.  Investors and analysts may participate via phone by dialing 1-866-630-9986 five to ten minutes before the scheduled start of the conference call, or via webcast by logging on to our website, www.pvgpholdings.com, or PVR’s website, www.pvresource.com, at least 15 minutes prior to the scheduled start of the call to download and install any necessary audio software.  A telephonic replay of the call will be available for two weeks by dialing 1-888-203-1112 (international: 1-719-457-0820) and using the following replay code: 9994822.  An on-demand replay of the conference call will be available for two weeks at our website.

******

Headquartered in Radnor, PA, Penn Virginia GP Holdings, L.P. (NYSE: PVG) is a publicly traded limited partnership which owns the general partner interest, all of the incentive distribution rights and an approximate 37 percent limited partner interest in PVR, a manager of coal and natural resource properties and related assets and the operator of a midstream natural gas gathering and processing business.

For more information about us, please visit our website at www.pvgpholdings.com.  For more information about PVR, please visit its website at www.pvresource.com.

Certain statements contained herein and incorporated herein by reference to the PVR news release dated February 10, 2010 that are not descriptions of historical facts are “forward-looking” statements by PVR within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements.  These risks, uncertainties and contingencies are discussed in more detail in PVR’s news release dated February 10, 2010 and in our press releases and public periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2008.  Many of the factors that will determine PVR’s and, therefore, our future results are beyond the ability of management to control or predict.  Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as the result of new information, future events or otherwise.

PENN VIRGINIA GP HOLDINGS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - unaudited

(dollars in thousands, except per unit data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009			2008			2009			2008
Revenues
Natural gas midstream	$	155,907		$	118,875		$	504,789		$	720,002
Coal royalties		29,987			33,923			120,435			122,834
Coal services		1,830			1,837			7,332			7,355
Other		7,177			8,350			24,148			31,389
Total revenues		194,901			162,985			656,704			881,580
Expenses
Cost of midstream gas purchased		121,454			98,752			406,583			612,530
Coal royalties expense		1,388			1,500			5,768			9,534
Operating		6,785			6,624			29,343			23,143
Taxes other than income		1,586			1,241			4,794			4,258
General and administrative		7,146			6,919			32,545			28,976
Impairments		1,511			31,801			1,511			31,801
Depreciation, depletion and amortization		18,264			16,844			70,235			58,166
Total expenses		158,134			163,681			550,779			768,408
Operating income (loss)		36,767			(696	)		105,925			113,172
Other income (expense)
Interest expense		(6,167	)		(7,306	)		(24,653	)		(24,672	)
Interest income and other		333			333			1,353			(2,739	)
Derivatives		(7,709	)		23,261			(19,714	)		16,837
Net income		23,224			15,592			62,911			102,598
Net income attributable to noncontrolling interests		(10,705	)		(6,034	)		(25,032	)		(49,912	)
Net income attributable to Penn Virginia GP Holdings, L.P.	$	12,519		$	9,558		$	37,879		$	52,686
Net income per limited partner unit, basic and diluted	$	0.32		$	0.24		$	0.97		$	1.35
Weighted average number of units outstanding, basic and diluted (in thousands)		39,075			39,075			39,075			39,075
Other data:
Coal and natural resource management segment:
Coal royalty tons (in thousands)		8,456			8,715			34,330			33,690
Average coal royalties ($ per ton)	$	3.55		$	3.89		$	3.51		$	3.65
Average net coal royalties ($ per ton) - (a)	$	3.38		$	3.72		$	3.34		$	3.36
Natural gas midstream segment:
System throughput volumes (MMcf)		27,902			29,768			121,335			98,683
Gross margin (in thousands)	$	34,453		$	20,123		$	98,206		$	107,472

(a) - The average net coal royalties per ton deducts coal royalties expense, which is incurred primarily in Central Appalachia.

PENN VIRGINIA GP HOLDINGS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited

(in thousands)

	December 31,			December 31,
	2009			2008
Assets
Cash and cash equivalents	$	19,314		$	18,338
Accounts receivable		82,321			73,267
Derivative assets		1,331			30,431
Other current assets		4,816			4,263
Total current assets		107,782	��		126,299
Property, plant and equipment, net		900,844			895,119
Other long-term assets		210,437			206,256
Total assets	$	1,219,063		$	1,227,674
Liabilities and partners' capital
Accounts payable and accrued liabilities	$	71,233		$	71,481
Deferred income		3,839			4,842
Derivative liabilities		11,251			13,585
Total current liabilities		86,323			89,908
Derivative liabilities		4,285			6,915
Other long-term liabilities		22,752			24,228
Long-term debt of PVR		620,100			568,100
PVG partners' capital		249,696			269,542
Noncontrolling interests in PVR		235,907			268,981
Total liabilities and partners' capital	$	1,219,063		$	1,227,674

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  - unaudited

(in thousands)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009			2008			2009			2008
Cash flows from operating activities
Net income	$	23,224		$	15,592		$	62,911		$	102,598
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		18,264			16,844			70,235			58,166
Impairments		1,511			31,801			1,511			31,801
Commodity derivative contracts:
Total derivative losses (gains)		8,466			(21,909	)		22,700			(11,357	)
Cash receipts (payments) to settle derivatives for period		(1,135	)		(5,187	)		3,000			(38,466	)
Non-cash interest expense		1,242			1,150			4,391			2,693
Equity earnings, net of distributions		(81	)		1,191			(2,537	)		(224	)
Other		196			289			766			(1,048	)
Changes in operating assets and liabilities		(8,303	)		4,300			(4,763	)		(6,976	)
Net cash provided by operating activities		43,384			44,071			158,214			137,187
Cash flows from investing activities
Acquisitions, net of cash acquired		(70	)		(7,345	)		(29,580	)		(260,376	)
Additions to property, plant and equipment		(7,316	)		(16,750	)		(51,097	)		(71,652	)
Other		275			(658	)		1,147			998
Net cash used in investing activities		(7,111	)		(24,753	)		(79,530	)		(331,030	)
Cash flows from financing activities
Distributions to partners		(30,153	)		(29,987	)		(120,450	)		(108,263	)
Proceeds from (repayments of) borrowings, net		(8,000	)		10,000			52,000			156,000
Proceeds from PVR equity issuance		-			-			-			138,141
Other		-			-			(9,258	)		(4,200	)
Net cash provided by (used in) financing activities		(38,153	)		(19,987	)		(77,708	)		181,678
Net increase (decrease) in cash and cash equivalents		(1,880	)		(669	)		976			(12,165	)
Cash and cash equivalents - beginning of period		21,194			19,007			18,338			30,503
Cash and cash equivalents - end of period	$	19,314		$	18,338		$	19,314		$	18,338

PENN VIRGINIA GP HOLDINGS, L.P.

CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited

(in thousands, except per unit data)

The following tables present the calculation of distributable cash to PVG and reconciliation of net income attributable to PVG with respect to the three months and years ended December 31, 2009 and 2008:

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009 (a)			2008			2009 (a)			2008
Calculation of Non-GAAP "Distributable cash"
Distributable cash:
Cash distributions received from PVR associated with:
2% general partner interest	$	497		$	497		$	1,987		$	1,902
General partner incentive distribution rights		6,035			6,035			24,140			22,066
PVR common units		9,206			9,206			36,824			36,238
Total cash received from PVR		15,738			15,738			62,951			60,206
Deduct: Net expenses of PVG on a stand-alone basis (b)		(377	)		(345	)		(2,304	)		(1,902	)
Cash reserve for working capital		(513	)		(545	)		(1,255	)		(1,256	)
Distributable cash (c)	$	14,848		$	14,848		$	59,392		$	57,048
Cash distributions paid to partners of PVG
To Penn Virginia Corporation	$	7,629		$	11,429		$	41,916		$	44,595
To public unitholders		7,219			3,419			17,476			12,453
Total cash distributions paid	$	14,848		$	14,848		$	59,392		$	57,048
Distribution per limited partner unit (paid in subsequent period)	$	0.38		$	0.38		$	1.52		$	1.46
Weighted-average units outstanding, basic and diluted		39,075			39,075			39,075			39,075

	Three Months Ended						Year Ended
	December 31,						December 31,
	2009			2008			2009			2008
Reconciliation of GAAP "Net income" to Non-GAAP "Net income as adjusted"
Net income attributable to PVG	$	12,519		$	9,558		$	37,879		$	52,686
Adjustments for derivatives:
Derivative losses included in operating income		-			1,352			-			5,480
Derivative losses (gains) included in other income		8,466			(23,261	)		22,700			(16,837	)
Cash receipts (payments) to settle derivatives for period		(1,135	)		(5,187	)		3,000			(38,466	)
Adjustments for impairments		1,511			31,801			1,511			31,801
Impact of adjustments on noncontrolling interests (d)		(3,814	)		(2,652	)		(10,445	)		8,608
Net income attributable to PVG, as adjusted (e)	$	17,547		$	11,611		$	54,645		$	43,272
Net income attributable to PVG, as adjusted, per limited partner unit, basic and diluted	$	0.45		$	0.30		$	1.40		$	1.11

(a) The three months and years ended December 31, 2009 columns represent cash distributions expected to be received from PVR and cash distributions expected to be paid to unitholders of PVG in February 2010.

(b) Estimated net expenses of PVG, which represent general and administrative expenses, partially offset by interest income.

(c)  Distributable cash represents cash distributions received from PVR, minus net expenses of PVG, minus cash reserve for working capital. Distributable cash is presented because we believe it is a useful adjunct to net income under GAAP. Distributable cash is a significant liquidity metric which is an indicator of our ability to pay quarterly cash distributions to our limited partners. Distributable cash is also the quantitative standard used throughout the investment community with respect to publicly traded partnerships. Distributable cash is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities, as an indicator of cash flows, as a measure of liquidity or as an alternative to net income.

(d) Noncontrolling interests in net income adjusts for the effects of incentive distribution rights and reflects the noncontrolling interests percentage of net income. The ratio of net income and net income attributable to noncontrolling interests calculated on a GAAP basis was used to estimate the impact of adjustments on noncontrolling interests. A pro forma calculation of net income attributable to noncontrolling interests was not performed.

(e) Net income as adjusted represents net income adjusted to exclude the effects of non-cash changes in the fair value of derivatives, the effects of the 2009 intangible asset impairment and 2008 goodwill impairment, and adjustments for an estimate of the related noncontrolling interests. We believe this presentation is widely used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the natural gas midstream industry. We use this information for comparative purposes within the industry. Net income as adjusted is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income.

PENN VIRGINIA GP HOLDINGS, L.P.

QUARTERLY SEGMENT INFORMATION - unaudited

(in thousands)

	Coal and Natural Resource Management		Natural Gas Midstream		Other			Consolidated
Three months ended December 31, 2009
Revenues
Natural gas midstream	$	-	$	155,907	$	-		$	155,907
Coal royalties		29,987		-		-			29,987
Coal services		1,830		-		-			1,830
Timber		1,371		-		-			1,371
Oil and gas royalties		688		-		-			688
Other		2,149		2,969		-			5,118
Total revenues		36,025		158,876		-			194,901
Expenses
Cost of midstream gas purchased		-		121,454		-			121,454
Coal royalties expense		1,388		-		-			1,388
Other operating		692		6,093		-			6,785
Taxes other than income		558		1,028		-			1,586
General and administrative		3,107		3,640		399			7,146
Impairments		1,511							1,511
Depreciation, depletion and amortization		7,773		10,491		-			18,264
Total expenses		15,029		142,706		399			158,134
Operating income (loss)	$	20,996	$	16,170	$	(399	)	$	36,767
Additions to property, plant and equipment and acquisitions	$	206	$	7,180	$	-		$	7,386

	Coal and Natural Resource Management		Natural Gas Midstream			Other			Consolidated
Three months ended December 31, 2008
Revenues
Natural gas midstream	$	-	$	118,875		$	-		$	118,875
Coal royalties		33,923		-			-			33,923
Coal services		1,837		-			-			1,837
Timber		1,615		-			-			1,615
Oil and gas royalties		1,259		-			-			1,259
Other		3,683		1,793			-			5,476
Total revenues		42,317		120,668			-			162,985
Expenses
Cost of midstream gas purchased		-		98,752			-			98,752
Coal royalties expense		1,500		-			-			1,500
Other operating		918		5,706			-			6,624
Taxes other than income		565		676			-			1,241
General and administrative		2,826		3,741			352			6,919
Impairments		-		31,801			-			31,801
Depreciation, depletion and amortization		8,072		8,772			-			16,844
Total expenses		13,881		149,448			352			163,681
Operating income (loss)	$	28,436	$	(28,780	)	$	(352	)	$	(696	)
Additions to property, plant and equipment and acquisitions	$	2,084	$	22,011		$	-		$	24,095

PENN VIRGINIA GP HOLDINGS, L.P.

YEAR-TO-DATE SEGMENT INFORMATION - unaudited

(in thousands)

	Coal and Natural Resource Management		Natural Gas Midstream		Other			Consolidated
Year ended December 31, 2009
Revenues
Natural gas midstream	$	-	$	504,789	$	-		$	504,789
Coal royalties		120,435		-		-			120,435
Coal services		7,332		-		-			7,332
Timber		5,726		-		-			5,726
Oil and gas royalties		2,471		-		-			2,471
Other		8,636		7,315		-			15,951
Total revenues		144,600		512,104		-			656,704
Expenses
Cost of midstream gas purchased		-		406,583		-			406,583
Coal royalties expense		5,768		-		-			5,768
Other operating		2,892		26,451		-			29,343
Taxes other than income		1,704		3,090		-			4,794
General and administrative		13,867		16,301		2,377			32,545
Impairments		1,511		-		-			1,511
Depreciation, depletion and amortization		31,330		38,905		-			70,235
Total expenses		57,072		491,330		2,377			550,779
Operating income (loss)	$	87,528	$	20,774	$	(2,377	)	$	105,925
Additions to property, plant and equipment and acquisitions	$	2,252	$	78,425	$	-		$	80,677

	Coal and Natural Resource Management		Natural Gas Midstream		Other			Consolidated
Year ended December 31, 2008
Revenues
Natural gas midstream	$	-	$	720,002	$	-		$	720,002
Coal royalties		122,834		-		-			122,834
Coal services		7,355		-		-			7,355
Timber		6,943		-		-			6,943
Oil and gas royalties		5,989		-		-			5,989
Other		10,206		8,251		-			18,457
Total revenues		153,327		728,253		-			881,580
Expenses
Cost of midstream gas purchased		-		612,530		-			612,530
Coal royalties expense		9,534		-		-			9,534
Other operating		2,406		20,737		-			23,143
Taxes other than income		1,680		2,578		-			4,258
General and administrative		12,606		14,300		2,070			28,976
Impairments		-		31,801		-			31,801
Depreciation, depletion and amortization		30,805		27,361		-			58,166
Total expenses		57,031		709,307		2,070			768,408
Operating income (loss)	$	96,296	$	18,946	$	(2,070	)	$	113,172
Additions to property, plant and equipment and acquisitions	$	27,270	$	304,758	$	-		$	332,028