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 six months ended June 30, 2014, Dominion reported an after-tax net expense of $430 million for specific items in the Corporate and Other segment, with $402 million of these net expenses attributable to its operating segments. In the six months ended June 30, 2013, Dominion reported an after-tax net expense of $134 million for specific items in the Corporate and Other segment, with $131 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 $319 million ($193 million after-tax) net loss related to the producer services business discussed above, attributable to Dominion Energy;


•	A $287 million ($191 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 $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.

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


•	A $118 million ($69 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 pending sale, impairment charges of $48 million ($28 million after-tax), and a $6 million ($3 million after-tax) loss from operations, attributable to Dominion Generation;


•	A $107 million ($57 million after-tax) net loss, including a $55 million ($33 million after-tax) impairment charge related to certain natural gas infrastructure assets and a $52 million ($24 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 $51 million ($31 million after-tax) net gain on investments held in nuclear decommissioning trust funds, 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 June 30, 2014
Total revenue from external customers	$	445	$	1,694	$	429	$	4		$	241		$	2,813
Intersegment revenue	5		10		252		139			(406		)	—
Total operating revenue	450		1,704		681		143			(165		)	2,813
Net income (loss) attributable to Dominion	116		159		130		(246		)	—			159
Three Months Ended June 30, 2013
Total revenue from external customers	$	432	$	1,898	$	354	$	17		$	279		$	2,980
Intersegment revenue	3		3		275		164			(445		)	—
Total operating revenue	435		1,901		629		181			(166		)	2,980
Loss from discontinued operations	—		—		—		(70		)	—			(70		)
Net income (loss) attributable to Dominion	112		185		124		(219		)	—			202
Six Months Ended June 30, 2014
Total revenue from external customers	$	945	$	3,951	$	791	$	7		$	749		$	6,443
Intersegment revenue	9		37		741		281			(1,068		)	—
Total operating revenue	954		3,988		1,532		288			(319		)	6,443
Net income (loss) attributable to Dominion	247		468		338		(515		)	—			538
Six Months Ended June 30, 2013
Total revenue from external customers	$	896	$	4,028	$	966	$	63		$	550		$	6,503
Intersegment revenue	5		44		539		307			(895		)	—
Total operating revenue	901		4,072		1,505		370			(345		)	6,503
Loss from discontinued operations	—		—		—		(69		)	—			(69		)
Net income (loss) attributable to Dominion	228		439		303		(273		)	—			697


(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 six months ended June 30, 2014, Virginia Power reported an after-tax net expense of $181 million for specific items in the Corporate and Other segment, with $189 million of these net expenses attributable to its operating segments. In the six months ended June 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 item:


•	A $287 million ($191 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.

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



	DVP		Dominion Generation		Corporate and Other			Consolidated Total
(millions)
Three Months Ended June 30, 2014
Operating revenue	$	448	$	1,281	$	—		$	1,729
Net income (loss)	117		133		(181		)	69
Three Months Ended June 30, 2013
Operating revenue	$	431	$	1,279	$	—		$	1,710
Net income (loss)	114		157		(6		)	265
Six Months Ended June 30, 2014
Operating revenue	$	950	$	2,762	$	—		$	3,712
Net income (loss)	251		322		(180		)	393
Six Months Ended June 30, 2013
Operating revenue	$	896	$	2,595	$	—		$	3,491
Net income (loss)	232		325		(5		)	552

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 six months ended June 30, 2014, Dominion Gas reported no amounts for specific items in the Corporate and Other segment. In the six months ended June 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 June 30, 2014
Operating revenue	$	428	$	—		$	428
Net income (loss)	96		(3		)	93
Three Months Ended June 30, 2013
Operating revenue	$	430	$	—		$	430
Net income (loss)	97		(44		)	53
Six Months Ended June 30, 2014
Operating revenue	$	997	$	—		$	997
Net income (loss)	262		(5		)	257
Six Months Ended June 30, 2013
Operating revenue	$	1,016	$	—		$	1,016
Net income (loss)	237		(46		)	191