Operating Segments

The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:



Primary Operating Segment	Description of Operations	Dominion	Virginia Power	Dominion Gas
DVP	Regulated electric distribution	X	X
	Regulated electric transmission	X	X
Dominion Generation	Regulated electric fleet	X	X
	Merchant electric fleet	X
	Nonregulated retail energy marketing	X
Dominion Energy	Gas transmission and storage⁽¹⁾	X		X
	Gas distribution and storage	X		X
	Gas gathering and processing	X		X
	LNG import and storage	X


(1)	Includes remaining producer services activities.

In addition to the operating segments above, the Companies also report a Corporate and Other segment.

Dominion

The Corporate and Other Segment of Dominion includes its corporate, service company and other functions (including unallocated debt) and the net impact of operations that are discontinued or sold. In addition, Corporate and Other includes specific items attributable to Dominion's operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or allocating resources among the segments.

In January 2014, Dominion announced it would exit the electric retail energy marketing business. Dominion completed the sale in March 2014. As a result, the earnings impact from the electric retail energy marketing business has been included in the Corporate and Other Segment of Dominion for 2014 first quarter results of operations.

In the second quarter of 2013, Dominion commenced a repositioning of its producer services business, which aggregates natural gas supply, engages in natural gas trading and marketing activities and natural gas supply management and provides price risk management services to Dominion affiliates. The repositioning was completed in the first quarter of 2014 and resulted in the termination of natural gas trading and certain energy marketing activities. As a result, the earnings impact from natural gas trading and certain energy marketing activities has been included in the Corporate and Other Segment of Dominion for 2014.

In the nine months ended September 30, 2014, Dominion reported an after-tax net expense of $446 million for specific items in the Corporate and Other segment, with $435 million of these net expenses attributable to its operating segments. In the nine months ended September 30, 2013, Dominion reported an after-tax net expense of $148 million for specific items in the Corporate and Other segment, with $144 million of these net expenses attributable to its operating segments.

The net expense for specific items in 2014 primarily related to the impact of the following items:


•	A $330 million ($219 million after-tax) charge associated with Virginia legislation enacted in April 2014 relating to the development of a third nuclear unit located at North Anna and offshore wind facilities, attributable to Dominion Generation;


•	A $319 million ($193 million after-tax) net loss related to the producer services business discussed above, attributable to Dominion Energy;


•	A $47 million ($33 million after-tax) net loss related to the electric retail energy marketing business discussed above, including a $147 million ($90 million after-tax) loss from normal operations, partially offset by a $100 million ($57 million after-tax) gain on sale, net of a $31 million write-off of goodwill, attributable to Dominion Generation; and


•	A $38 million ($23 million after-tax) one-time charge related to the implementation of a depreciation study retroactive to prior periods as ordered by the Virginia Commission, primarily attributable to Dominion Generation; partially offset by


•	A $53 million ($33 million after-tax) net gain on investments held in nuclear decommissioning trust funds, attributable to Dominion Generation.

The net expense for specific items in 2013 primarily related to the impact of the following items:

•

A $135 million ($92 million after-tax) net loss from discontinued operations of Brayton Point and Kincaid, including debt extinguishment of $64 million ($38 million after-tax) related to the sale, impairment charges of $48 million ($28 million after-tax), a $17 million ($18 million after-tax) loss on the sale which includes a $16 million write-off of goodwill, and $6 million ($8 million after-tax) loss from operations, attributable to Dominion Generation;


•	A $130 million ($74 million after-tax) net loss, including a $55 million ($33 million after-tax) impairment charge related to certain natural gas infrastructure assets and a $75 million ($41 million after-tax) loss related to the producer services business discussed above, attributable to Dominion Energy; and


•	A $28 million ($17 million after-tax) charge primarily reflecting severance pay and other benefits related to workforce reductions attributable to all segments; partially offset by


•	A $66 million ($40 million after-tax) net gain on investments held in nuclear decommissioning trust funds, attributable to Dominion Generation; and


•	A $35 million ($25 million after-tax) gain related to the sale of Dominion's equity method investment in Elwood, attributable to Dominion Generation.

The following table presents segment information pertaining to Dominion’s operations:



	DVP⁽¹⁾		Dominion Generation⁽¹⁾		Dominion Energy		Corporate and Other			Adjustments/Eliminations⁽¹⁾			Consolidated Total
(millions)
Three Months Ended September 30, 2014
Total revenue from external customers	$	480	$	1,985	$	380	$	4		$	201		$	3,050
Intersegment revenue	4		11		223		140			(378		)	—
Total operating revenue	484		1,996		603		144			(177		)	3,050
Net income (loss) attributable to Dominion	119		326		144		(60		)	—			529
Three Months Ended September 30, 2013
Total revenue from external customers	$	469	$	2,337	$	361	$	(10	)	$	275		$	3,432
Intersegment revenue	2		6		281		158			(447		)	—
Total operating revenue	471		2,343		642		148			(172		)	3,432
Loss from discontinued operations	—		—		—		(23		)	—			(23		)
Net income (loss) attributable to Dominion	121		340		169		(61		)	—			569
Nine Months Ended September 30, 2014
Total revenue from external customers	$	1,425	$	5,936	$	1,171	$	10		$	951		$	9,493
Intersegment revenue	13		48		964		422			(1,447		)	—
Total operating revenue	1,438		5,984		2,135		432			(496		)	9,493
Net income (loss) attributable to Dominion	366		794		482		(575		)	—			1,067
Nine Months Ended September 30, 2013
Total revenue from external customers	$	1,366	$	6,365	$	1,326	$	54		$	824		$	9,935
Intersegment revenue	6		50		821		464			(1,341		)	—
Total operating revenue	1,372		6,415		2,147		518			(517		)	9,935
Loss from discontinued operations	—		—		—		(92		)	—			(92		)
Net income (loss) attributable to Dominion	349		779		472		(334		)	—			1,266


(1)	2013 amounts have been recast to reflect nonregulated retail energy marketing operations in the Dominion Generation segment.

Intersegment sales and transfers for Dominion are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation.

Virginia Power

The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or allocating resources among the segments.

In the nine months ended September 30, 2014, Virginia Power reported an after-tax net expense of $235 million for specific items in the Corporate and Other segment, with $239 million of these net expenses attributable to its operating segments. In the nine months ended September 30, 2013, Virginia Power reported an after-tax net expense of $5 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segments.

The net expense for specific items in 2014 primarily related to the impact of the following items:


•	A $330 million ($219 million after-tax) charge associated with Virginia legislation enacted in April 2014 relating to the development of a third nuclear unit located at North Anna and offshore wind facilities, attributable to Dominion Generation; and


•	A $38 million ($23 million after-tax) one-time charge related to the implementation of a depreciation study retroactive to prior periods as ordered by the Virginia Commission, primarily attributable to Dominion Generation.

The following table presents segment information pertaining to Virginia Power’s operations:



	DVP		Dominion Generation		Corporate and Other			Consolidated Total
(millions)
Three Months Ended September 30, 2014
Operating revenue	$	483	$	1,570	$	—		$	2,053
Net income (loss)	120		248		(54		)	314
Three Months Ended September 30, 2013
Operating revenue	$	470	$	1,589	$	—		$	2,059
Net income	123		262		2			387
Nine Months Ended September 30, 2014
Operating revenue	$	1,433	$	4,332	$	—		$	5,765
Net income (loss)	371		570		(234		)	707
Nine Months Ended September 30, 2013
Operating revenue	$	1,366	$	4,184	$	—		$	5,550
Net income (loss)	355		587		(3		)	939

Dominion Gas

The Corporate and Other Segment of Dominion Gas primarily includes specific items attributable to Dominion Gas' operating segment that are not included in profit measures evaluated by executive management in assessing the segment's performance and the effect of certain items recorded at Dominion Gas as a result of Dominion's basis in the net assets contributed.

In the nine months ended September 30, 2014, Dominion Gas reported no amounts for specific items in the Corporate and Other segment. In the nine months ended September 30, 2013, Dominion Gas reported an after-tax net expense of $41 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segment.

The net expenses for specific items in 2013 primarily related to the impact of the following items:


•	A $55 million ($33 million after-tax) impairment charge related to certain natural gas infrastructure assets; and


•	A $14 million ($8 million after-tax) charge primarily reflecting severance pay and other benefits related to workforce reductions.

The following table presents segment information pertaining to Dominion Gas' operations:



	Dominion Energy		Corporate and Other			Consolidated Total
(millions)
Three Months Ended September 30, 2014
Operating revenue	$	391	$	—		$	391
Net income (loss)	108		(1		)	107
Three Months Ended September 30, 2013
Operating revenue	$	388	$	—		$	388
Net income (loss)	131		(1		)	130
Nine Months Ended September 30, 2014
Operating revenue	$	1,388	$	—		$	1,388
Net income (loss)	370		(6		)	364
Nine Months Ended September 30, 2013
Operating revenue	$	1,404	$	—		$	1,404
Net income (loss)	368		(47		)	321