INVESTMENTS

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion's rabbi trusts and classified as trading totaled $100 million and $110 million at December 31, 2015 and 2014, respectively.

Decommissioning Trust Securities

Dominion holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion's decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾				Fair Value
(millions)
At December 31, 2015
Marketable equity securities:
U.S. large cap	$	1,295	$	1,213	$	—			$	2,508
REIT	59		4		—				63
Marketable debt securities:
Corporate debt instruments	433		11		(7		)		437
U.S. Treasury securities and agency debentures	654		8		(4		)		658
State and municipal	312		22		—				334
Other	99		—		—				99
Cost method investments	70		—		—				70
Cash equivalents and other⁽²⁾	14		—		—				14
Total	$	2,936	$	1,258	$	(11	)	⁽³⁾	$	4,183
At December 31, 2014
Marketable equity securities:
U.S. large cap	$	1,273	$	1,353	$	—			$	2,626
Marketable debt securities:
Corporate debt instruments	424		19		(2		)		441
U.S. Treasury securities and agency debentures	597		13		(4		)		606
State and municipal	332		23		—				355
Other	66		—		—				66
Cost method investments	86		—		—				86
Cash equivalents and other⁽²⁾	16		—		—				16
Total	$	2,794	$	1,408	$	(6	)	⁽³⁾	$	4,196


(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.


(2)	Includes pending sales of securities of $12 million and $3 million at December 31, 2015 and 2014, respectively.


(3)	The fair value of securities in an unrealized loss position was $592 million and $379 million at December 31, 2015 and 2014, respectively.

The fair value of Dominion's marketable debt securities held in nuclear decommissioning trust funds at December 31, 2015

by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	208
Due after one year through five years	396
Due after five years through ten years	412
Due after ten years	512
Total	$	1,528

Presented below is selected information regarding Dominion's marketable equity and debt securities held in nuclear decommissioning trust funds:



Year Ended December 31,	2015		2014		2013
(millions)
Proceeds from sales	$	1,340	$	1,235	$	1,476
Realized gains⁽¹⁾	219		171		157
Realized losses⁽¹⁾	84		30		33


(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.

Dominion recorded other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds as follows:



Year Ended December 31,	2015			2014			2013
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	66		$	21		$	31
Losses recorded to nuclear decommissioning trust regulatory liability	(26		)	(5		)	(13		)
Losses recognized in other comprehensive income (before taxes)	(9		)	(3		)	(10		)
Net impairment losses recognized in earnings	$	31		$	13		$	8


(1)	Amounts include other-than-temporary impairment losses for debt securities of $9 million, $3 million and $18 million at December 31, 2015, 2014 and 2013, respectively.

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power's decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾				Fair Value
(millions)
At December 31, 2015
Marketable equity securities:
U.S. large cap	$	574	$	525	$	—			$	1,099
REIT	59		4		—				63
Marketable debt securities:
Corporate debt instruments	237		5		(4		)		238
U.S. Treasury securities and agency debentures	260		1		(2		)		259
State and municipal	162		13		(1		)		174
Other	34		—		—				34
Cost method investments	70		—		—				70
Cash equivalents and other⁽²⁾	8		—		—				8
Total	$	1,404	$	548	$	(7	)	⁽³⁾	$	1,945
At December 31, 2014
Marketable equity securities:
U.S. large cap	$	563	$	594	$	—			$	1,157
Marketable debt securities:
Corporate debt instruments	242		9		(1		)		250
U.S. Treasury securities and agency debentures	197		3		(2		)		198
State and municipal	197		13		—				210
Other	23		—		—				23
Cost method investments	86		—		—				86
Cash equivalents and other⁽²⁾	6		—		—				6
Total	$	1,314	$	619	$	(3	)	⁽³⁾	$	1,930


(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.


(2)	Includes pending sales of securities of $8 million and $6 million at December 31, 2015 and 2014, respectively.


(3)	The fair value of securities in an unrealized loss position was $281 million and $170 million at December 31, 2015 and 2014, respectively.

The fair value of Virginia Power's marketable debt securities at December 31, 2015, by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	67
Due after one year through five years	166
Due after five years through ten years	236
Due after ten years	236
Total	$	705

Presented below is selected information regarding Virginia Power's marketable equity and debt securities held in nuclear decommissioning trust funds.



Year Ended December 31,	2015		2014		2013
(millions)
Proceeds from sales	$	639	$	549	$	572
Realized gains⁽¹⁾	110		73		52
Realized losses⁽¹⁾	43		12		14


(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.

Virginia Power recorded other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds as follows:



Year Ended December 31,	2015			2014			2013
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	36		$	8		$	15
Losses recorded to nuclear decommissioning trust regulatory liability	(26		)	(4		)	(13		)
Losses recorded in other comprehensive income (before taxes)	(6		)	(2		)	(1		)
Net impairment losses recognized in earnings	$	4		$	2		$	1


(1)	Amounts include other-than-temporary impairment losses for debt securities of $6 million, $2 million and $9 million at December 31, 2015, 2014 and 2013, respectively.

Equity Method Investments

Dominion and Dominion Gas

Investments that Dominion and Dominion Gas account for under the equity method of accounting are as follows:



Company	Ownership%			Investment Balance				Description
As of December 31,				2015		2014
(millions)
Dominion
Blue Racer	50	%		$	661	$	671	Midstream gas and related services
Iroquois	50.65	%	⁽¹⁾	324		107		Gas transmission system
Fowler Ridge	50	%		125		134		Wind-powered merchant generation facility
NedPower	50	%		119		128		Wind-powered merchant generation facility
Atlantic Coast Pipeline	45	%		59		19		Gas transmission system
Other⁽²⁾	various			32		22
Total				$	1,320	$	1,081
Dominion Gas
Iroquois	24.72	%		$	102	$	107	Gas transmission system
Total				$	102	$	107


(1)	Comprised of Dominion Midstream's interest of 25.93% and Dominion Gas' interest of 24.72%. See Note 15 for more information.


(2)	Dominion has a $50 million commitment to invest in clean power and technology businesses through 2018.

Dominion's equity earnings on its investments totaled $56 million, $46 million and $14 million in 2015, 2014 and 2013, respectively. Dominion received distributions from these investments of $83 million, $60 million and $33 million in 2015, 2014, and 2013, respectively. As of December 31, 2015 and 2014, the carrying amount of Dominion's investments exceeded its share of underlying equity in net assets by $234 million and $126 million, respectively. These differences are comprised at December 31, 2015 and 2014, of $72 million and $87 million, respectively, related to basis differences from Dominion's investments in Blue Racer and wind projects, which are being amortized over the useful lives of the underlying assets, and $162 million and $39 million, respectively, reflecting equity method goodwill that is not being amortized.

Dominion Gas' equity earnings on its investment totaled $23 million, $21 million and $22 million in 2015, 2014 and 2013, respectively. Dominion Gas received distributions from its investment of $28 million, $20 million and $19 million in 2015, 2014, and 2013, respectively. As of December 31, 2015 and 2014, the carrying amount of Dominion Gas' investment exceeded its share of underlying equity in net assets by $8 million. The difference reflects equity method goodwill and is not being amortized.

Equity earnings are recorded in other income in Dominion's and Dominion Gas' Consolidated Statements of Income.

Blue Racer

In December 2012, Dominion formed a joint venture with Caiman to provide midstream services to natural gas producers operating in the Utica Shale region in Ohio and portions of Pennsylvania. Blue Racer is an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital.

In March 2013, Dominion Gas sold Line TL-404 to an affiliate, that subsequently sold line TL-404 to Blue Racer for cash proceeds of $47 million. The sale resulted in a gain of $25 million ($14 million after-tax) net of a $2 million write-off of goodwill, and is included in other operations and maintenance expense in both Dominion Gas' and Dominion's Consolidated Statement of Income.

Phase 1 of Natrium was completed in the second quarter of 2013 and was contributed by Dominion to Blue Racer in the third quarter of 2013, resulting in an increased equity method investment in Blue Racer of $473 million. Also in the third quarter of 2013, Dominion Gas sold Line TPL-2A to an affiliate, that subsequently sold Line TPL-2A to Blue Racer, and sold Line TL-388 to Blue Racer and received $78 million in cash proceeds. The sales resulted in a $74 million ($41 million after-tax) gain which is included in other operations and maintenance expense in both Dominion Gas' and Dominion’s Consolidated Statements of Income.

In the fourth quarter of 2013, Dominion Gas sold the Western System to an affiliate, that subsequently sold the Western System to Blue Racer for cash proceeds of $30 million. The sale resulted in a gain of $3 million ($2 million after-tax) for Dominion Gas and $4 million ($2 million after-tax) for Dominion and is included in other operations and maintenance expense in both Dominion Gas' and Dominion's Consolidated Statement of Income.

Dominion NGL Pipelines, LLC was contributed in January 2014 by Dominion to Blue Racer, prior to commencement of service, resulting in an increased equity method investment of $155 million, including $6 million of goodwill allocated from Dominion's goodwill balance to its equity method investment in Blue Racer.

In March 2014, Dominion Gas sold the Northern System to an affiliate, that subsequently sold the Northern System to Blue Racer for consideration of $84 million. Dominion Gas' consideration consisted of $17 million in cash proceeds and the extinguishment of affiliated current borrowings of $67 million and Dominion's consideration consisted of cash proceeds of $84 million. The sale resulted in a gain of $59 million ($35 million after-tax for Dominion Gas and $34 million after-tax for Dominion) net of a $3 million write-off of goodwill, and is included in other operations and maintenance expense in both Dominion Gas' and Dominion's Consolidated Statements of Income.

Dominion

Atlantic Coast Pipeline

In September 2014, Dominion, along with Duke Energy, Piedmont and AGL, announced the formation of Atlantic Coast Pipeline. The members, which are subsidiaries of the above-referenced parent companies, hold the following membership interests: Dominion, 45%; Duke Energy, 40%; Piedmont, 10%; and AGL, 5%. In October 2015, Duke Energy entered into a merger agreement with Piedmont. The Atlantic Coast Pipeline partnership agreement includes provisions to allow Dominion an option to purchase additional ownership interest in Atlantic Coast Pipeline to maintain a leading ownership percentage. Atlantic Coast Pipeline is focused on constructing an approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina. Subsidiaries and affiliates of all four members plan to be customers of the pipeline under 20-year contracts. Public Service Company of North Carolina, Inc. also plans to be a customer of the pipeline under a 20-year contract. Atlantic Coast Pipeline is considered an equity method investment as Dominion has the ability to exercise significant influence, but not control, over the investee. See Note 15 for more information.