Operating Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Operating Segments

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 Dominion includes its corporate, service company and other functions (including unallocated debt) and the net impact of operations that are expected to be or are currently discontinued. 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 the second quarter of 2013, Dominion commenced a restructuring 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 restructuring will result 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.

In the nine months ended September 30, 2013, Dominion reported 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. In the nine months ended September 30, 2012, Dominion reported after-tax net expense of $413 million for specific items in the Corporate and Other segment, with $422 million of these net expenses attributable to its operating segments.

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 a $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 net expense for specific items in 2012 primarily related to the impact of the following items:

• A $458 million ($297 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;

• A $98 million ($72 million after-tax) net loss from discontinued operations of Brayton Point and Kincaid, attributable to Dominion Generation, including $25 million of additional tax expense for the potential loss or recapture of state tax credits. Dominion announced its intention to pursue the sale of these two merchant power stations in the third quarter of 2012;

• A $69 million ($42 million after-tax) charge reflecting restoration costs associated with damage caused by late June 2012 summer 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.

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, 2013 and 2012, Virginia Power reported after-tax net expense of $5 million and $41 million, respectively, 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 2012 primarily related to the impact of a $69 million ($42 million after-tax) charge reflecting restoration costs associated with damage caused by late June 2012 summer storms, attributable to DVP.

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

	DVP		Dominion Generation(1)		Dominion Energy		Corporate and Other(1)			Adjustments/Eliminations			Consolidated Total
(millions)
Three Months Ended September 30,
2013
Total revenue from external customers	$	829	$	1,882	$	361	$	(10	)	$	370		$	3,432
Intersegment revenue	8		110		281		158			(557		)	—
Total operating revenue	837		1,992		642		148			(187		)	3,432
Loss from discontinued operations	—		—		—		(23		)	—			(23		)
Net income (loss) attributable to Dominion	124		338		169		(62		)	—			569
2012
Total revenue from external customers	$	836	$	1,824	$	291	$	37		$	344		$	3,332
Intersegment revenue	6		110		281		164			(561		)	—
Total operating revenue	842		1,934		572		201			(217		)	3,332
Loss from discontinued operations	—		—		—		(52		)	—			(52		)
Net income (loss) attributable to Dominion	119		363		104		(377		)	—			209
Nine Months Ended September 30,
2013
Total revenue from external customers	$	2,508	$	5,034	$	1,326	$	54		$	1,013		$	9,935
Intersegment revenue	56		237		821		464			(1,578		)	—
Total operating revenue	2,564		5,271		2,147		518			(565		)	9,935
Loss from discontinued operations	—		—		—		(92		)	—			(92		)
Net income (loss) attributable to Dominion	398		730		472		(334		)	—			1,266
2012
Total revenue from external customers	$	2,573	$	4,960	$	1,278	$	109		$	814		$	9,734
Intersegment revenue	81		275		701		459			(1,516		)	—
Total operating revenue	2,654		5,235		1,979		568			(702		)	9,734
Loss from discontinued operations	—		—		—		(94		)	—			(94		)
Net income (loss) attributable to Dominion	428		762		362		(591		)	—			961

(1) 2012 amounts have been recast to reflect Brayton Point and Kincaid as discontinued operations, as discussed in Note 3.

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

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,
2013
Operating revenue	$	470	$	1,589	$	—		$	2,059
Net income	123		262		2			387
2012
Operating revenue	$	505	$	1,581	$	—		$	2,086
Net income	128		283		4			415
Nine Months Ended September 30,
2013
Operating revenue	$	1,366	$	4,184	$	—		$	5,550
Net income (loss)	355		587		(3		)	939
2012
Operating revenue	$	1,413	$	4,183	$	—		$	5,596
Net income (loss)	335		534		(39		)	830