EQUITY

Issuance of Common Stock

DOMINION

Dominion maintains Dominion Direct^® and a number of employee savings plans through which contributions may be invested in Dominion's common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans. In January 2014, Dominion began purchasing its common stock on the open market for these plans. In April 2014, Dominion began issuing new common shares for these direct stock purchase plans.

During 2014, Dominion issued approximately 3.8 million shares of common stock through various programs. Dominion received cash proceeds of $205 million from the issuance of 2.9 million of such shares through Dominion Direct and employee savings plans.

In December 2014, Dominion filed an SEC shelf registration for the sale of debt and equity securities including the ability to sell common stock through an at-the-market program. Also in December 2014, Dominion entered into four separate sales agency agreements to effect sales under the program and pursuant to which it may offer from time to time up to $500 million aggregate amount of its common stock. Sales of common stock can be made by means of privately negotiated transactions, as transactions on the NYSE at market prices or in such other transactions as are agreed upon by Dominion and the sales agents and in conformance with applicable securities laws. At December 31, 2014, a total of 7 million shares of Dominion's common stock was reserved for issuance in connection with this program. In 2015, Dominion provided sales instructions to one of the sales agents and has issued 2.7 million shares through at-the-market issuances and received cash proceeds of $207 million, net of fees and commissions paid of $2 million. Following these issuances, Dominion has the ability to issue up to $291 million of stock under the 2014 sales agency agreements.

VIRGINIA POWER

In 2014, 2013 and 2012, Virginia Power did not issue any shares of its common stock to Dominion.

DOMINION GAS

On September 30, 2013, Dominion contributed its wholly-owned subsidiaries DTI, East Ohio and Dominion Iroquois to Dominion Gas in exchange for 100% of its limited liability company membership interests.

Shares Reserved for Issuance

At December 31, 2014, Dominion had approximately 56 million shares reserved and available for issuance for Dominion Direct^®, employee stock awards, employee savings plans, director stock compensation plans, an at-the-market program, and issuance in connection with stock purchase contracts. See Note 17 for more information.

Repurchase of Common Stock

Dominion did not repurchase any shares in 2014 or 2013 and does not plan to repurchase shares during 2015, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock, which do not count against its stock repurchase authorization.

Accumulated Other Comprehensive Income (Loss)

Presented in the table below is a summary of AOCI by component:



At December 31,	2014			2013
(millions)
Dominion
Net deferred losses on derivatives-hedging activities, net of tax of $116 and $196	$	(178	)	$	(288	)
Net unrealized gains on nuclear decommissioning trust funds, net of tax of $(333) and $(307)	548			474
Net unrecognized pension and other postretirement benefit costs, net of tax of $530 and $365	(782		)	(510		)
Other comprehensive loss from equity method investees, net of tax of $3 and $--	(4		)	—
Total AOCI	$	(416	)	$	(324	)
Virginia Power
Net deferred losses on derivatives-hedging activities, net of tax of $4 and $---	$	(7	)	$	—
Net unrealized gains on nuclear decommissioning trust funds, net of tax of $(35) and $(30)	57			48
Total AOCI	$	50		$	48
Dominion Gas
Net deferred gains (losses) on derivatives-hedging activities, net of tax of $11 and $(1)	$	(20	)	$	3
Net unrecognized pension and other postretirement benefit costs, net of tax of $46 and $43	(66		)	(61		)
Total AOCI	$	(86	)	$	(58	)

DOMINION

The following table presents Dominion’s changes in AOCI by component, net of tax:



	Deferred gains and losses on derivatives-hedging activities			Unrealized gains and losses on investment securities			Unrecognized pension and other postretirement benefit costs			Other comprehensive loss from equity method investees			Total
(millions)
Year Ended December 31, 2014
Beginning balance	$	(288	)	$	474		$	(510	)	$	—		$	(324	)
Other comprehensive income before reclassifications: gains (losses)	17			128			(305		)	(4		)	(164		)
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	93			(54		)	33			—			72
Net current period other comprehensive income (loss)	110			74			(272		)	(4		)	(92		)
Ending balance	$	(178	)	$	548		$	(782	)	$	(4	)	$	(416	)
Year Ended December 31, 2013
Beginning balance	$	(122	)	$	326		$	(1,081	)	$	—		$	(877	)
Other comprehensive income before reclassifications: gains (losses)	(243		)	203			516			—			476
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	77			(55		)	55			—			77
Net current period other comprehensive income (loss)	(166		)	148			571			—			553
Ending balance	$	(288	)	$	474		$	(510	)	$	—		$	(324	)

(1) See table below for details about these reclassifications.

The following table presents Dominion’s reclassifications out of AOCI by component:



Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements of Income
(millions)
Year Ended December 31, 2014
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	130		Operating revenue
	13			Purchased gas
	(7		)	Electric fuel and other energy-related purchases
Interest rate contracts	16			Interest and related charges
Total	152
Tax	(59		)	Income tax expense
Total, net of tax	$	93
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(100	)	Other income
Impairment	13			Other income
Total	(87		)
Tax	33			Income tax expense
Total, net of tax	$	(54	)
Unrecognized pension and other postretirement benefit costs:
Prior-service costs (credits)	$	(12	)	Other operations and maintenance
Actuarial losses	69			Other operations and maintenance
Total	57
Tax	(24		)	Income tax expense
Total, net of tax	$	33
Year Ended December 31, 2013
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	58		Operating revenue
	47			Purchased gas
	10			Electric fuel and other energy-related purchases
Interest rate contracts	15			Interest and related charges
Total	130
Tax	(53		)	Income tax expense
Total, net of tax	$	77
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(98	)	Other income
Impairment	8			Other income
Total	(90		)
Tax	35			Income tax expense
Total, net of tax	$	(55	)
Unrecognized pension and other postretirement benefit costs:
Prior-service costs (credits)	$	(8	)	Other operations and maintenance
Actuarial losses	102			Other operations and maintenance
Total	94
Tax	(39		)	Income tax expense
Total, net of tax	$	55

VIRGINIA POWER

The following table presents Virginia Power’s changes in AOCI by component, net of tax:



	Deferred gains and losses on derivatives-hedging activities			Unrealized gains and losses on investment securities			Total
(millions)
Year Ended December 31, 2014
Beginning balance	$	—		$	48		$	48
Other comprehensive income before reclassifications: gains (losses)	(4		)	15			11
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	(3		)	(6		)	(9		)
Net current period other comprehensive income (loss)	(7		)	9			2
Ending balance	$	(7	)	$	57		$	50
Year Ended December 31, 2013
Beginning balance	$	(6	)	$	31		$	25
Other comprehensive income before reclassifications: gains (losses)	6			20			26
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	—			(3		)	(3		)
Net current period other comprehensive income (loss)	6			17			23
Ending balance	$	—		$	48		$	48

(1) See table below for details about these reclassifications.

The following table presents Virginia Power’s reclassifications out of AOCI by component:



Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements of Income
(millions)
Year Ended December 31, 2014
(Gains) losses on cash flow hedges:
Commodity contracts	$	(5	)	Electric fuel and other energy-related purchases
Interest rate contracts	—			Interest and related charges
Total	(5		)
Tax	2			Income tax expense
Total, net of tax	$	(3	)
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(10	)	Other income
Total	(10		)
Tax	4			Income tax expense
Total, net of tax	$	(6	)
Year Ended December 31, 2013
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(6	)	Other income
Impairment	1			Other income
Total	(5		)
Tax	2			Income tax expense
Total, net of tax	$	(3	)

DOMINION GAS

The following table presents Dominion Gas' changes in AOCI by component, net of tax:



	Deferred gains and losses on derivatives-hedging activities			Unrecognized pension and other postretirement benefit costs			Total
(millions)
Year Ended December 31, 2014
Beginning balance	$	3		$	(61	)	$	(58	)
Other comprehensive income before reclassifications: gains (losses)	(31		)	(10		)	(41		)
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	8			5			13
Net current period other comprehensive income (loss)	(23		)	(5		)	(28		)
Ending balance	$	(20	)	$	(66	)	$	(86	)
Year Ended December 31, 2013
Beginning balance	$	(47	)	$	(93	)	$	(140	)
Other comprehensive income before reclassifications: gains (losses)	39			26			65
Amounts reclassified from accumulated other comprehensive income: (gains) losses⁽¹⁾	11			6			17
Net current period other comprehensive income (loss)	50			32			82
Ending balance	$	3		$	(61	)	$	(58	)

(1) See table below for details about these reclassifications.

The following table presents Dominion Gas' reclassifications out of AOCI by component:



Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements of Income
(millions)
Year Ended December 31, 2014
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(2	)	Operating revenue
	14			Purchased gas
	1			Interest and related charges
Total	13
Tax	(5		)	Income tax expense
Total, net of tax	$	8
Unrecognized pension and other postretirement benefit costs:
Prior service costs	$	1		Other operations and maintenance
Actuarial losses	7			Other operations and maintenance
Total	8
Tax	(3		)	Income tax expense
Total, net of tax	$	5
Year Ended December 31, 2013
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	2		Operating revenue
	14			Purchased gas
Total	16
Tax	(5		)	Income tax expense
Total, net of tax	$	11
Unrecognized pension and other postretirement benefit costs:
Prior service costs	$	1		Other operations and maintenance
Actuarial losses	9			Other operations and maintenance
Total	10
Tax	(4		)	Income tax expense
Total, net of tax	$	6

Stock-Based Awards

The 2005 and 2014 Incentive Compensation Plans permit stock-based awards that include restricted stock, performance grants, goal-based stock, stock options, and stock appreciation rights. The Non-Employee Directors Compensation Plan permits grants of restricted stock and stock options. Under provisions of these plans, employees and non-employee directors may be granted options to purchase common stock at a price not less than its fair market value at the date of grant with a maximum term of eight years. Option terms are set at the discretion of the CGN Committee of the Board of Directors or the Board of Directors itself, as provided under each plan. At December 31, 2014, approximately 31 million shares were available for future grants under these plans.

Dominion measures and recognizes compensation expense relating to share-based payment transactions over the vesting period based on the fair value of the equity or liability instruments issued. Dominion's results for the years ended December 31, 2014, 2013 and 2012 include $39 million, $31 million, and $25 million, respectively, of compensation costs and $14 million, $11 million, and $8 million, respectively of income tax benefits related to Dominion's stock-based compensation arrangements. Stock-based compensation cost is reported in other operations and maintenance expense in Dominion's Consolidated Statements of Income. Excess tax benefits are classified as a financing cash flow. During the years ended December 31, 2014, 2013, and 2012, Dominion realized less than $1 million, less than $1 million and $10 million, respectively, of excess tax benefits from the vesting of restricted stock awards and exercise of stock options.

Restricted Stock

Restricted stock grants are made to officers under Dominion's LTIP and may also be granted to certain key non-officer employees from time to time. The fair value of Dominion's restricted stock awards is equal to the closing price of Dominion's stock on the date of grant. New shares are issued for restricted stock awards on the date of grant and generally vest over a three-year service period. The following table provides a summary of restricted stock activity for the years ended December 31, 2014, 2013 and 2012:



	Shares		Weighted - average Grant Date Fair Value
	(thousands)
Nonvested at December 31, 2011	1,301		$	37.37
Granted	390		51.14
Vested	(596	)	33.31
Cancelled and forfeited	(10	)	42.99
Nonvested at December 31, 2012	1,085		$	44.46
Granted	312		54.70
Vested	(356	)	39.00
Cancelled and forfeited	(34	)	51.11
Nonvested at December 31, 2013	1,007		$	49.35
Granted	354		67.98
Vested	(278	)	44.50
Cancelled and forfeited	(18	)	53.61
Nonvested at December 31, 2014	1,065		$	56.74

As of December 31, 2014, unrecognized compensation cost related to nonvested restricted stock awards totaled $27 million and is expected to be recognized over a weighted-average period of 1.8 years. The fair value of restricted stock awards that vested was $19 million, $20 million, and $30 million in 2014, 2013 and 2012, respectively. Employees may elect to have shares of restricted stock withheld upon vesting to satisfy tax withholding obligations. The number of shares withheld will vary for each employee depending on the vesting date fair market value of Dominion stock and the applicable federal, state and local tax withholding rates.

Goal-Based Stock

Goal-based stock awards are granted under Dominion's LTIP to officers who have not achieved a certain targeted level of share ownership, in lieu of cash-based performance grants. Goal-based stock awards may also be made to certain key non-officer employees from time to time. Current outstanding goal-based shares include awards granted to officers in February 2013 and February 2014.

The issuance of awards is based on the achievement of two performance metrics during a two-year period: TSR relative to that of companies listed as members of the Philadelphia Utility Index as of the end of the performance period and ROIC. The actual number of shares issued will vary between zero and 200% of targeted shares depending on the level of performance metrics achieved. The fair value of goal-based stock is equal to the closing price of Dominion's stock on the date of grant. Goal-based stock awards granted to key non-officer employees convert to restricted stock at the end of the two-year performance period and generally vest three years from the original grant date. Awards to officers vest at the end of the two-year performance period. All goal-based stock awards are settled by issuing new shares.

The following table provides a summary of goal-based stock activity for the years ended December 31, 2014, 2013 and 2012:



	Targeted Number of Shares		Weighted - average Grant Date Fair Value
	(thousands)
Nonvested at December 31, 2011	12		$	39.19
Granted	1		52.48
Vested	(9	)	37.46
Nonvested at December 31, 2012	4		$	45.60
Granted	4		54.17
Vested	(2	)	43.54
Cancelled and forfeited	(1	)	43.54
Nonvested at December 31, 2013	5		$	53.85
Granted	13		68.83
Vested	(1	)	52.48
Nonvested at December 31, 2014	17		$	65.15

At December 31, 2014, the targeted number of shares expected to be issued under the February 2013 and February 2014 awards was approximately 17 thousand. In January 2015, the CGN Committee determined the actual performance against metrics established for the February 2013 awards with a performance period that ended December 31, 2014. Based on that determination, the total number of shares to be issued under the February 2013 goal-based stock awards was approximately 7 thousand.

As of December 31, 2014, unrecognized compensation cost related to nonvested goal-based stock awards was not material.

Cash-Based Performance Grants

Cash-based performance grants are made to Dominion's officers under Dominion's LTIP. The actual payout of cash-based performance grants will vary between zero and 200% of the targeted amount based on the level of performance metrics achieved.

In February 2011, a cash-based performance grant was made to officers. A portion of the grant, representing $6 million was paid in December 2012, based on the achievement of two performance metrics during 2011 and 2012: ROIC and TSR relative to that of a peer group of companies. The total amount of the award under the grant was $8 million and the remaining $2 million of the grant was paid in February 2013.

In February 2012, a cash-based performance grant was made to officers. A portion of the grant, representing the initial payout of $8 million was paid in December 2013, based on the achievement of two performance metrics during 2012 and 2013: TSR relative to that of companies listed as members of the Philadelphia Utility Index as of the end of the performance period and ROIC. The total amount of the award under the grant was $12 million and the remaining portion of the grant was paid in January 2014.

In February 2013, a cash-based performance grant was made to officers. A portion of the grant, representing the initial payout of $14 million was paid in December 2014, based on the achievement of two performance metrics during 2013 and 2014: TSR relative to that of companies listed as members of the Philadelphia Utility Index as of the end of the performance period and ROIC. The total expected award under the grant is $21 million and the remaining portion of the grant is expected to be paid by March 15, 2015. At December 31, 2014, a liability of $7 million had been accrued for the remaining portion of the award.

In February 2014, a cash-based performance grant was made to officers. Payout of the performance grant is expected to occur by March 15, 2016 based on the achievement of two performance metrics during 2014 and 2015: TSR relative to that of companies listed as members of the Philadelphia Utility Index as of the end of the performance period and ROIC. At December 31, 2014, the targeted amount of the grant was $13 million and a liability of $3 million had been accrued for this award.