Exhibit 12.1
Dominion Energy, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)
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| Nine Months |
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| Twelve Months |
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| Years Ended December 31, |
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| 2017(a) |
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| 2017(b) |
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| 2016(c) |
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| 2015(d) |
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| 2014(e) |
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| 2013(f) |
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| 2012(g) |
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Earnings, as defined: |
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Income from continuing operations including noncontrolling interest before income tax expense |
| $ | 2,470 |
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| $ | 3,055 |
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| $ | 2,867 |
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| $ | 2,828 |
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| $ | 1,778 |
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| $ | 2,704 |
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| $ | 2,265 |
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Distributed income from unconsolidated investees, less equity in earnings |
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| (1 | ) |
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| (21 | ) |
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| (32 | ) |
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| 12 |
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| (8 | ) |
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| 17 |
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| (13 | ) | |
Fixed charges included in income |
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| 958 |
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| 1,270 |
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| 1,068 |
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| 953 |
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| 1,237 |
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| 930 |
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| 880 |
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Total earnings, as defined |
| $ | 3,427 |
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| $ | 4,304 |
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| $ | 3,903 |
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| $ | 3,793 |
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| $ | 3,007 |
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| $ | 3,651 |
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| $ | 3,132 |
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Fixed charges, as defined: |
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Interest charges |
| $ | 929 |
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| $ | 1,231 |
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| $ | 1,033 |
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| $ | 920 |
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| $ | 1,208 |
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| $ | 899 |
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| $ | 845 |
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Rental interest factor |
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| 29 |
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| 39 |
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| 35 |
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| 33 |
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| 29 |
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| 31 |
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| 35 |
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Fixed charges included in income |
| $ | 958 |
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| $ | 1,270 |
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| $ | 1,068 |
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| $ | 953 |
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| $ | 1,237 |
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| $ | 930 |
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| $ | 880 |
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Preference security dividend requirement of consolidated subsidiary |
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| 25 |
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| 27 |
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| 2 |
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| 18 |
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| 17 |
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| 25 |
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| 25 |
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Capitalized interest |
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| 118 |
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| 149 |
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| 124 |
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| 67 |
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| 39 |
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| 28 |
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| 24 |
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Interest from discontinued operations |
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| — |
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| — |
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| — |
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| — |
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| — |
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| 85 |
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| 80 |
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Total fixed charges, as defined |
| $ | 1,101 |
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| $ | 1,446 |
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| $ | 1,194 |
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| $ | 1,038 |
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| $ | 1,293 |
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| $ | 1,068 |
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| $ | 1,009 |
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Ratio of Earnings to Fixed Charges |
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| 3.11 |
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| 2.98 |
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| 3.27 |
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| 3.65 |
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| 2.33 |
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| 3.42 |
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| 3.10 |
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| a. | Earnings for the nine months ended September 30, 2017 include $39 million in transition and integration costs associated with the Dominion Energy Questar Combination; and $30 million charge related to other items, partially offset by $41 million of net gain related to our investments in nuclear decommissioning trust funds. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the nine months ended September 30, 2017. |
| b. | Earnings for the twelve months ended September 30, 2017 include $197 million charge associated with ash pond and landfill closure costs; $52 million in transaction, transition, and integration costs associated with the Dominion Energy Questar Combination; $23 million charge related to storm and restoration costs; and $43 million charge related to other items, partially offset by $46 million of net gain related to our investments in nuclear decommissioning trust funds. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended September 30, 2017. |
| c. | Earnings for the twelve months ended December 31, 2016 include $197 million charge associated with ash pond and landfill closure costs; $65 million charge associated with an organizational design initiative; $74 million in transaction and transition costs associated with the Dominion Energy Questar Combination; $23 million charge related to storm and restoration costs; and $45 million charge related to other items, partially offset by $34 million of net gain related to our investments in nuclear decommissioning trust funds. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2016. |
| nuclear decommissioning trust funds. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2015. |
| e. | Earnings for the twelve months ended December 31, 2014 include $374 million charge related to the North Anna nuclear power station and offshore wind facilities; $284 million charge associated with our liability management effort, which is included in fixed charges; $121 million accrued charge associated with ash pond and landfill closure costs; and $93 million charge related to other items, partially offset by $100 million net gain on the sale of our electric retail energy marketing business and $72 million of net gain related to our investments in nuclear decommissioning trust funds. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2014. |
| f. | Earnings for the twelve months ended December 31, 2013 include a $55 million impairment charge related to certain natural gas infrastructure assets; $40 million charge in connection with the Virginia Commission’s final ruling associated with its biennial review of Virginia Power’s base rates for 2011-2012 test years; $28 million charge associated with our operating expense reduction initiative, primarily reflecting severance pay and other employee related costs; $26 million charge related to the expected early shutdown of certain coal-fired generating units; and $29 million charge related to other items, partially offset by $81 million of net gain related to our investments in nuclear decommissioning trust funds; $47 million benefit due to a downward revision in the nuclear decommissioning asset retirement obligations for certain merchant nuclear units that are no longer in service; and $29 million net benefit primarily resulting from the sale of the Elwood power station. Excluding the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2013. |
| g. | Earnings for the twelve months ended December 31, 2012 include $438 million of impairment and other charges related the planned shut-down of the Kewaunee nuclear power station; and $87 million of restoration costs associated with severe storms affecting our Dominion Energy Virginia and Dominion Energy 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 the net effect of these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2012. |