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
Dominion Energy	Gas transmission and storage	X⁽¹⁾		X
	Gas distribution and storage	X		X
	Gas gathering and processing	X		X
	LNG import and storage	X
	Nonregulated retail energy marketing	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). 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 March 2014, Dominion exited the electric retail energy marketing business. 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 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, which was completed in the first quarter of 2014, 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 2016, Dominion reported after-tax net expenses of $484 million in the Corporate and Other segment, with $180 million of these net expenses attributable to specific items related to its operating segments.

The net expenses for specific items in 2016 primarily related to the impact of the following items:


•	A $197 million ($122 million after-tax) charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Dominion Generation; and


•	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).

In 2015, Dominion reported after-tax net expenses of $391 million in the Corporate and Other segment, with $136 million of these net expenses attributable to specific items related to its operating segments.

The net expenses for specific items in 2015 primarily related to the impact of the following items:


•	A $99 million ($60 million after-tax) charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Dominion Generation; and


•	An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015, attributable to Dominion Generation.

In 2014, Dominion reported after-tax net expenses of $970 million in the Corporate and Other segment, with $544 million of these net expenses attributable to specific items related to its operating segments.

The net expenses for specific items in 2014 primarily related to the impact of the following items:


•	$374 million ($248 million after-tax) in charges 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;


•	A $319 million ($193 million after-tax) net loss related to the producer services business discussed above, attributable to Dominion Energy; and


•	A $121 million ($74 million after-tax) charge related to a settlement offer to incur future ash pond closure costs at certain utility generation facilities, attributable to Dominion Generation.

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



Year Ended December 31,	DVP		Dominion Generation			Dominion Energy		Corporate and Other			Adjustments & Eliminations			Consolidated Total
(millions)
2016
Total revenue from external customers	$	2,210	$	6,747		$	2,069	$	(7	)	$	718		$	11,737
Intersegment revenue	23		10			697		609			(1,339		)	—
Total operating revenue	2,233		6,757			2,766		602			(621		)	11,737
Depreciation, depletion and amortization	537		662			330		30			—			1,559
Equity in earnings of equity method investees	—		(16		)	105		22			—			111
Interest income	—		74			34		36			(78		)	66
Interest and related charges	244		290			38		516			(78		)	1,010
Income taxes	308		279			431		(363		)	—			655
Net income (loss) attributable to Dominion	484		1,397			726		(484		)	—			2,123
Investment in equity method investees	—		228			1,289		44			—			1,561
Capital expenditures	1,320		2,440			2,322		43			—			6,125
Total assets (billions)	15.6		27.1			26.0		10.2			(7.3		)	71.6
2015
Total revenue from external customers	$	2,091	$	7,001		$	1,877	$	(27	)	$	741		$	11,683
Intersegment revenue	20		15			695		554			(1,284		)	—
Total operating revenue	2,111		7,016			2,572		527			(543		)	11,683
Depreciation, depletion and amortization	498		591			262		44			—			1,395
Equity in earnings of equity method investees	—		(15		)	60		11			—			56
Interest income	—		64			25		13			(44		)	58
Interest and related charges	230		262			27		429			(44		)	904
Income taxes	307		465			423		(290		)	—			905
Net income (loss) attributable to Dominion	490		1,120			680		(391		)	—			1,899
Investment in equity method investees	—		245			1,042		33			—			1,320
Capital expenditures	1,607		2,190			2,153		43			—			5,993
Total assets (billions)	14.7		25.6			15.2		8.9			(5.8		)	58.6
2014
Total revenue from external customers	$	1,918	$	7,135		$	2,446	$	(12	)	$	949		$	12,436
Intersegment revenue	18		34			880		572			(1,504		)	—
Total operating revenue	1,936		7,169			3,326		560			(555		)	12,436
Depreciation, depletion and amortization	462		514			243		73			—			1,292
Equity in earnings of equity method investees	—		(18		)	54		10			—			46
Interest income	—		58			23		20			(33		)	68
Interest and related charges	205		240			11		770			(33		)	1,193
Income taxes	317		365			463		(693		)	—			452
Net income (loss) attributable to Dominion	502		1,061			717		(970		)	—			1,310
Capital expenditures	1,652		2,466			1,329		104			—			5,551

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 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.

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 2016, Virginia Power reported after-tax net expenses of $173 million for specific items attributable to its operating segments in the Corporate and Other segment.

The net expenses for specific items in 2016 primarily related to the impact of the following item:


•	A $197 million ($121 million after-tax) charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Dominion Generation.

In 2015, 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 2015 primarily related to the impact of the following items:


•	A $99 million ($60 million after-tax) charge related to future ash pond and landfill closure costs at certain utility generation facilities, attributable to Dominion Generation; and


•	An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015, attributable to Dominion Generation.

In 2014, Virginia Power reported after-tax net expenses of $342 million for specific items attributable to its operating segments in the Corporate and Other segment.

The net expenses for specific items in 2014 primarily related to the impact of the following items:


•	$374 million ($248 million after-tax) in charges 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 $121 million ($74 million after-tax) charge related to a settlement offer to incur future ash pond closure costs at certain utility generation facilities, attributable to Dominion Generation.

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)
2016
Operating revenue	$	2,217	$	5,390	$	(19	)	$	—		$	7,588
Depreciation and amortization	537		488		—			—			1,025
Interest income	—		—		—			—			—
Interest and related charges	244		219		—			(2		)	461
Income taxes	307		524		(104		)				727
Net income (loss)	482		909		(173		)	—			1,218
Capital expenditures	1,313		1,336		—			—			2,649
Total assets (billions)	15.6		17.8		—			(0.1		)	33.3
2015
Operating revenue	$	2,099	$	5,566	$	(43	)	$	—		$	7,622
Depreciation and amortization	498		453		2			—			953
Interest income	—		7		—			—			7
Interest and related charges	230		210		4			(1		)	443
Income taxes	308		437		(86		)				659
Net income (loss)	490		750		(153		)	—			1,087
Capital expenditures	1,569		1,120		—			—			2,689
Total assets (billions)	14.7		17.0		—			(0.1		)	31.6
2014
Operating revenue	$	1,928	$	5,651	$	—		$	—		$	7,579
Depreciation and amortization	462		416		37			—			915
Interest income	—		8		—			—			8
Interest and related charges	205		203		3			—			411
Income taxes	317		416		(185		)	—			548
Net income (loss)	509		691		(342		)	—			858
Capital expenditures	1,651		1,456		—			—			3,107

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 2016, Dominion Gas reported after-tax net expenses of $3 million in its Corporate and Other segment, with $7 million of these net expenses attributable to its operating segment.

The net expense for specific items in 2016 primarily related to the impact of the following item:


•	An $8 million ($5 million after-tax) charge related to an organizational design initiative.

In 2015, Dominion Gas reported after-tax net expenses of $21 million in its Corporate and Other segment, with $13 million of these net expenses attributable to specific items related to its operating segment.

The net expenses for specific items in 2015 primarily related to the impact of the following item:


•	$16 million ($10 million after-tax) ceiling test impairment charge.

In 2014, Dominion Gas reported after-tax net expenses of $9 million in its Corporate and Other segment, with none of these net expenses attributable to specific items related to its operating segment.

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



Year Ended December 31,	Dominion Energy		Corporate and Other			Consolidated Total
(millions)
2016
Operating revenue	$	1,638	$	—		$	1,638
Depreciation and amortization	214		(10		)	204
Equity in earnings of equity method investees	21		—			21
Interest income	1		—			1
Interest and related charges	92		2			94
Income taxes	237		(22		)	215
Net income (loss)	395		(3		)	392
Investment in equity method investees	98		—			98
Capital expenditures	854		—			854
Total assets (billions)	10.5		0.6			11.1
2015
Operating revenue	$	1,716	$	—		$	1,716
Depreciation and amortization	213		4			217
Equity in earnings of equity method investees	23		—			23
Interest income	1		—			1
Interest and related charges	72		1			73
Income taxes	296		(13		)	283
Net income (loss)	478		(21		)	457
Investment in equity method investees	102		—			102
Capital expenditures	795		—			795
Total assets (billions)	9.7		0.6			10.3
2014
Operating revenue	$	1,898	$	—		$	1,898
Depreciation and amortization	197		—			197
Equity in earnings of equity method investees	21		—			21
Interest income	1		—			1
Interest and related charges	27		—			27
Income taxes	340		(6		)	334
Net income (loss)	521		(9		)	512
Capital expenditures	719		—			719