Exhibit 12.a
Dominion Resources Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)
Years Ended December, 31 | ||||||||||||||||||||
2012 (a) | 2011 (b) | 2010 (c) | 2009 (d) | 2008 (e) | ||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||
Income from continuing operations including noncontrolling interest before income taxes, extraordinary item and cumulative effect of change in accounting principle | $ | 497 | $ | 2,205 | $ | 5,195 | $ | 1,900 | $ | 2,539 | ||||||||||
Distributed income from unconsolidated investees, less equity in earnings | (13 | ) | (23 | ) | (30 | ) | (30 | ) | (39 | ) | ||||||||||
Fixed charges, as defined | 1,007 | 1,003 | 971 | 1,022 | 989 | |||||||||||||||
Capitalized interest | (37 | ) | (37 | ) | (27 | ) | (18 | ) | (44 | ) | ||||||||||
Preference security dividend requirement of consolidated subsidiary | (23 | ) | (25 | ) | (28 | ) | (24 | ) | (26 | ) | ||||||||||
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Total earnings, as defined | $ | 1,431 | $ | 3,123 | $ | 6,081 | $ | 2,850 | $ | 3,419 | ||||||||||
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Fixed charges, as defined: | ||||||||||||||||||||
Interest charges | $ | 948 | $ | 928 | $ | 886 | $ | 941 | $ | 910 | ||||||||||
Preference security dividend requirement of consolidated subsidiary | 23 | 25 | 28 | 24 | 26 | |||||||||||||||
Rental interest factor | 36 | 50 | 57 | 57 | 53 | |||||||||||||||
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Total fixed charges, as defined | $ | 1,007 | $ | 1,003 | $ | 971 | $ | 1,022 | $ | 989 | ||||||||||
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Ratio of Earnings to Fixed Charges | 1.42 | 3.11 | 6.26 | 2.79 | 3.46 |
(a) | Earnings for the twelve months ended December 31, 2012 include $2.1 billion of impairment and other charges related to management’s decisions to pursue the sale of Brayton Point and Kincaid and the planned shut-down of Kewaunee; $87 million of restoration costs associated with severe storms affecting our Dominion Virginia Power and Dominion North Carolina service territories; partially offset by a $36 million net gain related to our investments in nuclear decommissioning trust funds and $4 million net benefit related to other items. Excluding these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2012. |
(b) | Earnings for the twelve months ended December 31, 2011 include $228 million of impairment charges related to electric utility generation assets; $96 million of restoration costs associated with Hurricane Irene; $57 million impairment of excess emission allowances resulting from a new EPA Air Pollution Rule; $31 million net charge in connection with the Virginia |
Commission’s final ruling associated with its biennial review of Virginia Power’s base rates for 2009 and 2010 test years; $21 million of earthquake related costs, largely related to inspections following the safe shutdown of reactors at our North Anna nuclear power station; and $45 million net charge related to other items; partially offset by $24 million benefit related to litigation with the Department of Energy for spent nuclear fuel-related costs at our Millstone nuclear power station. Excluding these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2011. |
(c) | Earnings for the twelve months ended December 31, 2010 include $2.4 billion benefit resulting from the sale of our Appalachian E&P operations - primarily reflecting the gain on the sale partially offset by certain transaction costs and other related charges. Earnings for the period also include $331 million charge related to the workforce reduction program primarily reflecting severance pay and other benefits to affected employees and $1 million net charge related to other items. Excluding these items from the calculation would result in a lower ratio of earnings to fixed charges for the twelve months ended December 31, 2010. |
(d) | Earnings for the twelve months ended December 31, 2009 include $712 million charge for a partial refund of 2008 earnings and other amounts in connection with the settlement of Virginia Power’s 2009 rate case proceeding; $455 million impairment charge as a result of the quarterly ceiling test performed on our gas and oil properties under the full cost method of accounting; $31 million impairment charge related to an equity method investment; and $10 million net charge related to other items. Earnings for the period also include $103 million reduction in other operation and maintenance expense due to a downward revision in the nuclear decommissioning asset retirement obligation for a power station that is no longer in service. Excluding these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2009. |
(e) | Earnings for the twelve months ended December 31, 2008 include $180 million of impairment charges reflecting other-than-temporary declines in the fair value of securities held in nuclear decommissioning trust funds; $59 million of impairment charges related to Dominion Capital, Inc. (DCI) assets; $42 million reduction in the gain recognized in 2007 from the sale of the majority of our U.S. exploration and production (E&P) businesses as a result of post-closing adjustments; and $30 million net charge related to other items. Excluding these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2008. |