Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

19. Discontinued Operations

Prior to June 2010, we indirectly owned partner interests in Penn Virginia Resource Partners, L.P. (“PVR”), a publicly traded limited partnership formed by us in 2001. Our ownership interests in PVR were held principally through our general and limited partner interests in PVG. During June 2010, we disposed of our remaining ownership interests in PVG and, indirectly, our interests in PVR.

Income from discontinued operations represents the results of operations of PVG, which include the results of operations of PVR. Previously, the results of operations of PVG and PVR were presented as our coal and natural resource management and natural gas midstream segments.

The disclosures for the 2010 period provided in the table below reflect the results of operations of PVG through the date of the disposition of our entire remaining interest in PVG on June 7, 2010.

	Year Ended December 31,
	2011		2010			2009
Revenues	$	-	$	303,206		$	579,931
Income from discontinued operations before taxes	$	-	$	36,832		$	64,130
Income tax expense 1		-		(3,384	)		(10,642	)
Income from discontinued operations, net of taxes	$	-	$	33,448		$	53,488

¹ Determined by applying the effective tax rate attributable to discontinued operations to the income from discontinued operations less noncontrolling interests that are fully attributable to PVG's operations.

The following table summarizes the determination of the gain recognized in 2010 upon the disposition of PVG:

Cash proceeds, net of offering costs (8,827,429 units x $15.76 per unit)	$	139,120
Carrying value of noncontrolling interests in PVG at date of disposition		382,324
		521,444
Less: Carrying value of PVG's assets and liabilities at date of disposition		(434,782	)
		86,662
Income tax expense		(35,116	)
Gain on sale of discontinued operations, net of tax	$	51,546

During 2011, we terminated certain agreements under which PVR provided marketing and gas gathering and processing services to us. We continue to sell gas to PVR for resale at PVR’s Crossroads plant in East Texas. In connection with the disposition in 2010, we and PVG entered into transition service agreements attributable primarily to corporate and information technology functions. We billed PVG for transition services in the amount of $0.7 million, net of amounts charged to us by PVG, for the year ended December 31, 2010. This amount is included in the General and administrative caption on our Consolidated Statements of Operations as a reduction to expenses.