EX-12.1 3 d-ex121_676.htm EX-12.1

Exhibit 12.1

Dominion Energy, Inc. and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

(millions of dollars)

|  |  |  |  |  |  |  |  |  | Years Ended December 31, |
|  | Six Months Ended June 30, 2017(a) |  |  | Twelve Months Ended June 30, 2017(b) |  |  | 2016(c) |  |  | 2015(d) |  |  | 2014(e) |  |  | 2013f) |  |  | 2012(g) |
Earnings, as defined: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations including noncontrolling interest before income tax expense |  | $ | 1,502 |  |  | $ | 3,045 |  |  | $ | 2,867 |  |  | $ | 2,828 |  |  | $ | 1,778 |  |  | $ | 2,704 |  |  | $ | 2,265 |
Distributed income from unconsolidated investees, less equity in earnings |  |  | (3 | ) |  |  | (32 | ) |  |  | (32 | ) |  |  | 12 |  |  |  | (8 | ) |  |  | 17 |  |  |  | (13 | )
Fixed charges included in income |  |  | 635 |  |  |  | 1,212 |  |  |  | 1,068 |  |  |  | 953 |  |  |  | 1,237 |  |  |  | 930 |  |  |  | 880 |
Total earnings, as defined |  | $ | 2,134 |  |  | $ | 4,225 |  |  | $ | 3,903 |  |  | $ | 3,793 |  |  | $ | 3,007 |  |  | $ | 3,651 |  |  | $ | 3,132 |
Fixed charges, as defined: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest charges |  | $ | 616 |  |  | $ | 1,175 |  |  | $ | 1,033 |  |  | $ | 920 |  |  | $ | 1,208 |  |  | $ | 899 |  |  | $ | 845 |
Rental interest factor |  |  | 19 |  |  |  | 37 |  |  |  | 35 |  |  |  | 33 |  |  |  | 29 |  |  |  | 31 |  |  |  | 35 |
Fixed charges included in income |  | $ | 635 |  |  | $ | 1,212 |  |  | $ | 1,068 |  |  | $ | 953 |  |  | $ | 1,237 |  |  | $ | 930 |  |  | $ | 880 |
Preference security dividend requirement of consolidated subsidiary |  |  | 16 |  |  |  | 18 |  |  |  | 2 |  |  |  | 18 |  |  |  | 17 |  |  |  | 25 |  |  |  | 25 |
Capitalized interest |  |  | 75 |  |  |  | 140 |  |  |  | 124 |  |  |  | 67 |  |  |  | 39 |  |  |  | 28 |  |  |  | 24 |
Interest from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 85 |  |  |  | 80 |
Total fixed charges, as defined |  | $ | 726 |  |  | $ | 1,370 |  |  | $ | 1,194 |  |  | $ | 1,038 |  |  | $ | 1,293 |  |  | $ | 1,068 |  |  | $ | 1,009 |
Ratio of Earnings to Fixed Charges |  |  | 2.94 |  |  |  | 3.08 |  |  |  | 3.27 |  |  |  | 3.65 |  |  |  | 2.33 |  |  |  | 3.42 |  |  |  | 3.10 |

| a. | Earnings for the six months ended June 30, 2017 include $23 million in transition and integration costs associated with the Dominion Energy Questar Combination; and $30 million charge related to other items partially offset by $37 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 six months ended June 30, 2017.

| b. | Earnings for the twelve months ended June 30, 2017 include $197 million charge associated with ash pond and landfill closure costs; $90 million in transaction, transition, and integration costs associated with the Dominion Energy Questar Combination; $23 million charge related to storm and restoration costs; $69 million charge related to other items; partially offset by $59 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 June 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; $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.

| d. | Earnings for the twelve months ended December 31, 2015 include $85 million write-off of prior-period deferred fuel costs associated with Virginia legislation; $99 million charge associated with ash pond and landfill closure costs and $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 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 North Anna 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 cost s; $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 ne t 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.

| 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; $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; $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 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 Kewaunee; $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.