OPERATING SEGMENTS

Dominion and Virginia Power 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
DVP	Regulated electric distribution	X	X
	Regulated electric transmission	X	X
	Nonregulated retail energy marketing (electric and gas)	X
Dominion Generation	Regulated electric fleet	X	X
	Merchant electric fleet	X
Dominion Energy	Gas transmission and storage	X
	Gas distribution and storage	X
	LNG import and storage	X
	Producer services	X

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

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.

The Corporate and Other Segment of Dominion includes its corporate, service company and other functions (including unallocated debt) and the net impact of the operations that are expected to be or are currently discontinued, which are discussed in Note 3. 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.

DOMINION

In 2012, Dominion reported after-tax net expense of $1.4 billion for specific items in the Corporate and Other segment, with $1.4 billion of these net expenses attributable to its operating segments.

The net expenses for specific items in 2012 primarily related to the impact of the following items:


•	A $1.7 billion ($1.1 billion after-tax) net loss from operations, including an impairment charge, of Brayton Point, Kincaid and Elwood, attributable to Dominion Generation. Dominion announced its intention to pursue the sale of these two merchant power stations and equity method investment in the third quarter of 2012;


•	A $467 million ($303 million after-tax) net loss, including impairment charges, primarily resulting from management's decision to cease operations and begin decommissioning Kewaunee in 2013, attributable to Dominion Generation;


•	An $87 million ($53 million after-tax) charge reflecting restoration costs associated with damage caused by severe storms, attributable to DVP; and


•	A $49 million ($22 million after-tax) loss from discontinued operations of State Line and Salem Harbor which were sold in 2012, attributable to Dominion Generation.

In 2011, Dominion reported after-tax net expense of $311 million for specific items in the Corporate and Other segment, with $340 million of these net expenses attributable to its operating segments.

The net expenses for specific items in 2011 primarily related to the impact of the following items:


•	A $228 million ($139 million after-tax) charge reflecting plant balances that are not expected to be recovered in future periods due to the anticipated retirement of certain utility coal-fired generating units, attributable to Dominion Generation;


•	A $96 million ($59 million after-tax) charge reflecting restoration costs associated with damage caused by Hurricane Irene, primarily attributable to DVP;


•	A $66 million ($39 million after-tax) loss from the operations of Kewaunee, attributable to Dominion Generation;


•	A $57 million ($34 million after-tax) charge related to the impairment of SO₂ emissions allowances not expected to be consumed due to CSAPR, attributable to Dominion Generation; and


•	A $34 million ($25 million after-tax) loss from discontinued operations of State Line and Salem Harbor which were sold in 2012, attributable to Dominion Generation.

In 2010, Dominion reported after-tax net benefits of $865 million for specific items in the Corporate and Other segment, with $1.0 billion of these net benefits attributable to its operating segments.

The net benefits for specific items in 2010 primarily related to the impact of the following items:


•	A $2.5 billion ($1.4 billion after-tax) benefit resulting from the gain on the sale of substantially all of Dominion's Appalachian E&P operations net of charges related to the divestiture, attributable to Dominion Energy; partially offset by


•	A $331 million ($202 million after-tax) charge primarily reflecting severance pay and other benefits related to a workforce reduction program, attributable to:


•	DVP ($67 million after-tax);


•	Dominion Energy ($24 million after-tax); and


•	Dominion Generation ($111 million after-tax);


•	A $158 million ($103 million after-tax) loss from the discontinued operations of State Line and Salem Harbor; and


•	A $134 million ($155 million after-tax) loss from the discontinued operations of Peoples primarily reflecting a net loss on the sale, attributable to the Corporate and Other segment.

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



Year Ended December 31,	DVP		Dominion Generation⁽¹⁾		Dominion Energy		Corporate and Other⁽¹⁾			Adjustments & Eliminations			Consolidated Total
(millions)
2012
Total revenue from external customers	$	3,385	$	6,517	$	1,813	$	307		$	1,071		$	13,093
Intersegment revenue	112		333		930		608			(1,983		)	—
Total operating revenue	3,497		6,850		2,743		915			(912		)	13,093
Depreciation, depletion and amortization	402		500		216		68			—			1,186
Equity in earnings of equity method investees	—		3		23		(1		)	—			25
Interest income	9		57		30		71			(106		)	61
Interest and related charges	187		208		47		546			(106		)	882
Income taxes	351		479		352		(1,036		)	—			146
Loss from discontinued operations, net of tax	—		—		—		(22		)	—			(22		)
Net income (loss) attributable to Dominion	559		874		551		(1,682		)	—			302
Investment in equity method investees	1		414		141		2			—			558
Capital expenditures	1,158		1,615		1,350		22			—			4,145
Total assets (billions)	12.1		21.2		11.2		12.6			(10.3		)	46.8
2011
Total revenue from external customers	$	3,663	$	7,080	$	2,044	$	55		$	1,303		$	14,145
Intersegment revenue	173		355		1,077		596			(2,201		)	—
Total operating revenue	3,836		7,435		3,121		651			(898		)	14,145
Depreciation, depletion and amortization	374		457		207		28			—			1,066
Equity in earnings of equity method investees	—		3		23		9			—			35
Interest income	22		54		27		70			(106		)	67
Interest and related charges	185		217		57		514			(106		)	867
Income taxes	318		583		323		(470		)	—			754
Loss from discontinued operations, net of tax	—		—		—		(25		)	—			(25		)
Net income (loss) attributable to Dominion	501		968		521		(582		)	—			1,408
Investment in equity method investees	8		415		104		26			—			553
Capital expenditures	1,091		1,593		907		61			—			3,652
Total assets (billions)	11.5		22.1		10.6		11.4			(10.0		)	45.6
2010
Total revenue from external customers	$	3,613	$	7,735	$	2,335	$	19		$	1,225		$	14,927
Intersegment revenue	207		413		1,166		750			(2,536		)	—
Total operating revenue	3,820		8,148		3,501		769			(1,311		)	14,927
Depreciation, depletion and amortization	353		443		210		29			—			1,035
Equity in earnings of equity method investees	—		11		21		10			—			42
Interest income	12		45		12		92			(90		)	71
Interest and related charges	158		179		85		494			(90		)	826
Income taxes	277		756		302		777			—			2,112
Loss from discontinued operations, net of tax	—		—		—		(258		)	—			(258		)
Net income attributable to Dominion	448		1,263		475		622			—			2,808
Capital expenditures	1,038		1,742		613		29			—			3,422

(1) Segment information has been recast to reflect Salem Harbor and State Line as discontinued operations, as discussed in Note 3.

At December 31, 2012, 2011, and 2010, none of Dominion's long-lived assets and no significant percentage of its operating revenues were associated with international operations.

VIRGINIA POWER

The majority of Virginia Power's revenue is provided through tariff rates. Generally, such revenue is allocated for management reporting based on an unbundled rate methodology among Virginia Power's DVP and Dominion Generation segments.

In 2012, Virginia Power reported after-tax net expenses of $51 million for specific items attributable to its operating segments in the Corporate and Other segment.

The net expenses for specific items in 2012 primarily related to the impact of the following:

•An $87 million ($53 million after-tax) charge reflecting restoration costs associated with damage caused by severe storms, attributable to DVP.

In 2011, Virginia Power reported after-tax net expenses of $268 million for specific items attributable to its operating segments in the Corporate and Other segment.

The net expenses for specific items in 2011 primarily related to the impact of the following:


•	A $228 million ($139 million after-tax) charge reflecting plant balances that are not expected to be recovered in future periods due to the anticipated retirement of certain coal-fired generating units, attributable to Dominion Generation;


•	A $96 million ($59 million after-tax) charge reflecting restoration costs associated with damage caused by Hurricane Irene, primarily attributable to DVP; and


•	A $43 million ($26 million after-tax) charge related to the impairment of SO₂ emissions allowances not expected to be consumed due to CSAPR, attributable to Dominion Generation.

In 2010, Virginia Power reported after-tax net expenses of $153 million for specific items attributable to its operating segments in the Corporate and Other segment.

The net expenses for specific items in 2010 primarily related to the impact of the following:


•	A $202 million ($123 million after-tax) charge primarily reflecting severance pay and other benefits related to a workforce reduction program, attributable to:


•	DVP ($63 million after-tax); and


•	Dominion Generation ($60 million after-tax).

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



Year Ended December 31,	DVP		Dominion Generation		Corporate and Other			Adjustments & Eliminations			Consolidated Total
(millions)
2012
Operating revenue	$	1,847	$	5,379	$	—		$	—		$	7,226
Depreciation and amortization	392		390		—			—			782
Interest income	1		7		—			—			8
Interest and related charges	186		199		—			—			385
Income taxes	277		403		(27		)	—			653
Net income (loss)	448		653		(51		)	—			1,050
Capital expenditures	1,142		1,146		—			—			2,288
Total assets (billions)	11.4		14.8		—			(1.4		)	24.8
2011
Operating revenue	$	1,793	$	5,546	$	(93	)	$	—		$	7,246
Depreciation and amortization	368		350		—			—			718
Interest income	10		8		—			—			18
Interest and related charges	182		199		(50		)	—			331
Income taxes	265		447		(172		)	—			540
Net income (loss)	426		664		(268		)	—			822
Capital expenditures	1,081		1,009		—			—			2,090
Total assets (billions)	10.7		14.3		—			(1.5		)	23.5
2010
Operating revenue	$	1,680	$	5,546	$	(7	)	$	—		$	7,219
Depreciation and amortization	344		327		—			—			671
Interest income	11		4		—			—			15
Interest and related charges	158		189		—			—			347
Income taxes	228		385		(71		)	—			542
Net income (loss)	377		630		(155		)	—			852
Capital expenditures	1,035		1,199		—			—			2,234