Exhibit 12
Dominion Resources Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)
Years Ended | ||||||||||||||||
2003 (a) | 2002 | 2001 (b) | 2000 (c) | 1999 | ||||||||||||
Earnings, as defined: | ||||||||||||||||
Earnings before income taxes and minority interests in consolidated subsidiaries | $ | 1,547 | $ | 2,043 | $ | 914 | $ | 600 | $ | 829 | ||||||
Distributed income from unconsolidated investees, less equity in earnings | (5 | ) | 24 | 33 | 6 | |||||||||||
Fixed charges included in the determination of net income | 1,010 | 975 | 1,026 | 1,042 | 583 | |||||||||||
Total earnings, as defined | $ | 2,552 | $ | 3,042 | $ | 1,973 | $ | 1,648 | $ | 1,412 | ||||||
Fixed charges, as defined: | ||||||||||||||||
Interest charges | $ | 1,084 | $ | 1,051 | $ | 1,063 | $ | 1,039 | $ | 592 | ||||||
Rental interest factor | 31 | 27 | 19 | 18 | 8 | |||||||||||
Total fixed charges, as defined | $ | 1,115 | $ | 1,078 | $ | 1,082 | $ | 1,057 | $ | 600 | ||||||
Ratio of Earnings to Fixed Charges | 2.29 | 2.82 | 1.82 | 1.56 | 2.35 |
(a) Earnings for the twelve months ended December 31, 2003 include a $134 million impairment of Dominion Capital, Inc. assets, $28 million for severance costs related to workforce reductions, a $84 million impairment of certain assets held for sale, $197 million for restoration expenses related to Hurricane Isabel, $105 million related to the termination of a power purchase contract, $64 million for the restructuring and termination of certain electric sales contracts, and $144 million related to our investment in Dominion Telecom including impairments, the cost of refinancings, and reallocation of equity losses. Excluding these items from the calculation would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2003.
(b) Earnings for the twelve months ended December 31, 2001 include $220 million related to the cost of the buyout of power purchase contracts and non-utility generating plants previously serving the company under long-term contracts, a $40 million loss associated with the divestiture of Saxon Capital Inc., a $281 million write-down of Dominion Capital, Inc. assets, $151 million charge associated with Dominion’s estimated Enron-related exposure, and $105 million associated with a senior management restructuring initiative and related costs. Excluding these items from the calculation above would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2001.
(c) Earnings for the twelve months ended December 31, 2000 include $579 million in restructuring and other acquisition-related costs resulting from the CNG acquisition and a write-down at Dominion Capital, Inc. Excluding these items from the calculation above would result in a higher ratio of earnings to fixed charges for the twelve months ended December 31, 2000.