Exhibit 12.1
Dominion Resources, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)
Years Ended December, 31 | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013 (a) | Twelve Months Ended September 30, 2013 (b) | 2012(c)* | 2011(d)* | 2010(e)* | 2009(f)* | 2008(g)* | ||||||||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||||||||||
Income from continuing operations including noncontrolling interest before income tax expense | $ | 2,086 | $ | 2,698 | $ | 2,265 | $ | 2,262 | $ | 5,178 | $ | 1,936 | $ | 2,250 | ||||||||||||||
Distributed income from unconsolidated investees, less equity in earnings | 6 | 11 | (13 | ) | (23 | ) | (30 | ) | (30 | ) | (39 | ) | ||||||||||||||||
Fixed charges included in income | 691 | 906 | 880 | 867 | 835 | 892 | 843 | |||||||||||||||||||||
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Total earnings, as defined | $ | 2,783 | $ | 3,615 | $ | 3,132 | $ | 3,106 | $ | 5,983 | $ | 2,798 | $ | 3,054 | ||||||||||||||
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Fixed charges, as defined: | ||||||||||||||||||||||||||||
Interest charges | $ | 667 | $ | 873 | $ | 845 | $ | 818 | $ | 781 | $ | 838 | $ | 792 | ||||||||||||||
Rental interest factor | 24 | 33 | 35 | 49 | 54 | 54 | 51 | |||||||||||||||||||||
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Fixed charges included in income | 691 | 906 | 880 | 867 | 835 | 892 | 843 | |||||||||||||||||||||
Preference security dividend requirement of consolidated subsidiary | 19 | 25 | 25 | 25 | 28 | 25 | 26 | |||||||||||||||||||||
Capitalized Interest | 20 | 28 | 24 | 11 | 11 | 13 | 43 | |||||||||||||||||||||
Interest from discontinued operations | 85 | 106 | 80 | 99 | 94 | 96 | 84 | |||||||||||||||||||||
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Total fixed charges, as defined | $ | 815 | $ | 1,065 | $ | 1,009 | $ | 1,002 | $ | 968 | $ | 1,026 | $ | 996 | ||||||||||||||
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Ratio of Earnings to Fixed Charges | 3.41 | 3.39 | 3.10 | 3.10 | 6.18 | 2.73 | 3.07 |
* | Recast to reflect Brayton Point and Kincaid power stations as discontinued operations. |
(a) | Earnings for the nine months ended September 30,2013 include a $56 million charge related to our gas infrastructure strategies in response to the changing dynamics and rapid development in the Marcellus and Utica shale regions; $28 million charge associated with our operating expense reduction initiative, primarily reflecting severance pay and other employee related costs; $28 million charge related to other items; partially offset by $66 million of net gain related to our investments in nuclear decommissioning trust funds and a $29 million net benefit primarily resulting from the sale of Elwood. 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, 2013. |
(b) | Earnings for the twelve months ended September 30, 2013 include $443 million of impairment and other charges related the planned shut-down of Kewaunee; $56 million charge related to our gas infrastructure and repositioning strategies in response to the changing dynamics and rapid development in the Marcellus and Utica shale regions; $28 million charge associated with our operating expense reduction initiative, primarily reflecting severance pay and other employee related costs; $37 million net charge related to other items; partially offset by $74 million of net gain related to our investments in nuclear decommissioning trust funds and a $29 million net benefit primarily resulting from the sale of Elwood. 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, 2013. |
(c) | Earnings for the twelve months ended December 31, 2012 include $438 million of impairment and other charges related 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 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. |
(d) | 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; $43 million impairment of excess emission allowances resulting from a new EPA Air Pollution Rule; $31 million net charge in connection with the Virginia State Corporation 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 a $45 million net charge related to other items; partially offset by a $24 million benefit related to litigation with the Department of Energy for spent nuclear fuel-related costs at our Millstone nuclear 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, 2011. |
(e) | Earnings for the twelve months ended December 31, 2010 include a $2.4 billion benefit resulting from the sale of our Appalachian exploration and production (“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 a $326 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 the net effect of these items from the calculation would result in a lower ratio of earnings to fixed charges for the twelve months ended December 31, 2010. |
(f) | Earnings for the twelve months ended December 31, 2009 include a $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; a $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; a $31 million impairment charge related to an equity method investment; and a $10 million net charge related to other items. Earnings for the period also include a $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 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, 2009. |
(g) | 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. assets; a $42 million reduction in the gain recognized in 2007 from the sale of the majority of our U.S. E&P businesses as a result of post-closing adjustments; and a $30 million net charge 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, 2008. |