EX-12.A 4 d431694dex12a.htm EXHIBT 12.A Exhibt 12.a

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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total earnings, as defined

   $ 1,431      $ 3,123      $ 6,081      $ 2,850      $ 3,419   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total fixed charges, as defined

   $ 1,007      $ 1,003      $ 971      $ 1,022      $ 989   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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.