Exhibit 12.a
Dominion Resources, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)
Years Ended December 31, | ||||||||||||||||||||
2016(a) | 2015(b) | 2014(c) | 2013(d) | 2012(e) | ||||||||||||||||
Earnings, as defined: | ||||||||||||||||||||
Income from continuing operations including noncontrolling interest before income tax expense | $ | 2,867 | $ | 2,828 | $ | 1,778 | $ | 2,704 | $ | 2,265 | ||||||||||
Distributed income from unconsolidated investees, less equity in earnings | (32 | ) | 12 | (8 | ) | 17 | (13 | ) | ||||||||||||
Fixed charges included in income | 1,068 | 953 | 1,237 | 930 | 880 | |||||||||||||||
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Total earnings, as defined | $ | 3,903 | $ | 3,793 | $ | 3,007 | $ | 3,651 | $ | 3,132 | ||||||||||
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Fixed charges, as defined: | ||||||||||||||||||||
Interest charges | $ | 1,033 | $ | 920 | $ | 1,208 | $ | 899 | $ | 845 | ||||||||||
Rental interest factor | 35 | 33 | 29 | 31 | 35 | |||||||||||||||
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Fixed charges included in income | 1,068 | 953 | 1,237 | 930 | 880 | |||||||||||||||
Preference security dividend requirement of consolidated subsidiary | — | — | 17 | 25 | 25 | |||||||||||||||
Capitalized Interest | 124 | 67 | 39 | 28 | 24 | |||||||||||||||
Interest from discontinued operations | — | — | — | 85 | 80 | |||||||||||||||
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Total fixed charges, as defined | $ | 1,192 | $ | 1,020 | $ | 1,293 | $ | 1,068 | $ | 1,009 | ||||||||||
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Ratio of Earnings to Fixed Charges | 3.27 | 3.72 | 2.33 | 3.42 | 3.10 |
(a) | Earnings for the twelve months ended December 31, 2016 include a $197 million charge associated with future ash pond and landfill closure costs; a $65 million charge associated with an organizational design initiative; $74 million in transaction and transition costs associated with the Dominion Questar combination; a $23 million charge related to storm and restoration costs; a $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 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. |
(b) | Earnings for the twelve months ended December 31, 2015 include a $85 million write-off of prior-period deferred fuel costs associated with Virginia legislation; a $99 million charge associated with ash pond and landfill closure costs and a $78 million charge related to other items; partially offset by $60 million of net gain related to our investments in nuclear decommissioning trust funds. Excluding the 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. |
(c) | Earnings for the twelve months ended December 31, 2014 include a $374 million charge related to North Anna nuclear power station and offshore wind facilities; a $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; $93 million charge related to other items; partially offset by a $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 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. |
(d) | Earnings for the twelve months ended December 31, 2013 include a $55 million impairment charge related to certain natural gas infrastructure assets; a $40 million charge in connection with the Virginia State Corporation Commission’s final ruling associated with its biennial review of Virginia Power’s base rates for 2011-2012 test years; a $28 million charge associated with our operating expense reduction initiative, primarily reflecting severance pay and other employee related costs; a $26 million charge related to the expected early shutdown of certain coal-fired generating units; a $29 million charge related to other items; partially offset by $81 million of net gain related to our investments in nuclear decommissioning trust funds; a $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; a $29 million net benefit primarily resulting from the sale of 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. |
(e) | Earnings for the twelve months ended December 31, 2012 include $438 million of impairment and other charges related the planned shut-down of Kewaunee nuclear power station; $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. |