Operating Segments

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Operating Segments

Operating Segments

The Companies are organized primarily on the basis of products and services sold in the United States. 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
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
	Nonregulated retail energy marketing(2)	X

(1) Includes remaining producer services activities for Dominion.

(2) As a result of Dominion's decision to realign its business units effective for 2015 year-end reporting, nonregulated retail energy marketing operations were moved from the Dominion Generation segment to the Dominion Energy segment.

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 in allocating resources.

In the six months ended June 30, 2016, Dominion reported an after-tax net expense of $37 million for specific items in the Corporate and Other segment, with $26 million of these net expenses attributable to its operating segments. In the six months ended June 30, 2015, Dominion reported an after-tax net expense of $64 million for specific items in the Corporate and Other segment, with $62 million of these net expenses attributable to its operating segments.

The net expense for specific items attributable to Dominion's operating segments in 2016 primarily related to the impact of the following item:

• A $59 million ($36 million after-tax) charge related to an organizational design initiative, attributable to:

• DVP ($5 million after-tax);

• Dominion Energy ($12 million after-tax); and

• Dominion Generation ($19 million after-tax).

The net expense for specific items in 2015 primarily related to the impact of the following items, all of which were attributable to Dominion Generation:

• An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015;

• A $45 million ($28 million after-tax) charge related to incremental future ash pond and landfill closure costs at certain utility generation facilities due to the enactment of the final CCR rule in April 2015; and

• A $17 million ($10 million after-tax) billing adjustment related to PJM; partially offset by

• A $45 million ($28 million after-tax) net gain on investments held in nuclear decommissioning trust funds.

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

	DVP		Dominion Generation(1)		Dominion Energy(1)		Corporate and Other			Adjustments/Eliminations(1)			Consolidated Total
(millions)
Three Months Ended June 30, 2016
Total revenue from external customers	$	512	$	1,564	$	391	$	3		$	128		$	2,598
Intersegment revenue	6		2		124		133			(265		)	—
Total operating revenue	518		1,566		515		136			(137		)	2,598
Net income attributable to Dominion	104		171		162		15			—			452
Three Months Ended June 30, 2015
Total revenue from external customers	$	500	$	1,652	$	463	$	4		$	128		$	2,747
Intersegment revenue	5		6		115		144			(270		)	—
Total operating revenue	505		1,658		578		148			(142		)	2,747
Net income (loss) attributable to Dominion	117		250		129		(83		)	—			413
Six Months Ended June 30, 2016
Total revenue from external customers	$	1,068	$	3,257	$	876	$	6		$	312		$	5,519
Intersegment revenue	11		5		302		325			(643		)	—
Total operating revenue	1,079		3,262		1,178		331			(331		)	5,519
Net income (loss) attributable to Dominion	224		416		348		(12		)	—			976
Six Months Ended June 30, 2015
Total revenue from external customers	$	1,064	$	3,641	$	999	$	(9	)	$	461		$	6,156
Intersegment revenue	10		9		425		286			(730		)	—
Total operating revenue	1,074		3,650		1,424		277			(269		)	6,156
Net income (loss) attributable to Dominion	257		512		356		(176		)	—			949

(1) 2015 amounts have been recast to reflect nonregulated retail energy marketing operations in the Dominion Energy 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 in allocating resources.

In the six months ended June 30, 2016, Virginia Power reported an after-tax net expense of $19 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segments. In the six months ended June 30, 2015, Virginia Power reported an after-tax net expense of $87 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 attributable to Virginia Power's operating segments in 2016 primarily related to the impact of the following item:

• A $33 million ($20 million after-tax) charge related to an organizational design initiative, attributable to:

• DVP ($5 million after-tax); and

• Dominion Generation ($15 million after-tax).

The net expense for specific items in 2015 primarily related to the impact of the following items, all of which were attributable to Dominion Generation:

• An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015;

• A $45 million ($28 million after-tax) charge related to incremental future ash pond and landfill closure costs at certain utility generation facilities due to the enactment of the final CCR rule in April 2015; and

• A $15 million ($9 million after-tax) billing adjustment related to PJM.

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, 2016
Operating revenue	$	512	$	1,264	$	—		$	1,776
Net income	104		174		2			280
Three Months Ended June 30, 2015
Operating revenue	$	502	$	1,311	$	—		$	1,813
Net income (loss)	117		155		(26		)	246
Six Months Ended June 30, 2016
Operating revenue	$	1,069	$	2,597	$	—		$	3,666
Net income (loss)	222		340		(19		)	543
Six Months Ended June 30, 2015
Operating revenue	$	1,069	$	2,896	$	(15	)	$	3,950
Net income (loss)	257		345		(87		)	515

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 or in allocating resources 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, 2016, Dominion Gas reported an after-tax net expense of $2 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segment. In the six months ended June 30, 2015, Dominion Gas reported no amounts for specific items in the Corporate and Other segment.

The net expense for specific items in 2016 primarily related to an $8 million ($5 million after-tax) charge related to an organizational design initiative.

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

	Dominion Energy		Corporate and Other			Consolidated Total
(millions)
Three Months Ended June 30, 2016
Operating revenue	$	368	$	—		$	368
Net income (loss)	108		(3		)	105
Three Months Ended June 30, 2015
Operating revenue	$	395	$	—		$	395
Net income (loss)	87		(2		)	85
Six Months Ended June 30, 2016
Operating revenue	$	799	$	—		$	799
Net income (loss)	211		(8		)	203
Six Months Ended June 30, 2015
Operating revenue	$	926	$	—		$	926
Net income (loss)	251		(5		)	246