EX-12.1 7 d512216dex121.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, |
|  | 2017(a) |  |  | 2016(b) |  |  | 2015(c) |  |  | 2014(d) |  |  | 2013(e) |
Earnings, as defined: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations including noncontrolling interest before income tax expense (benefit) |  | $ | 3,090 |  |  | $ | 2,867 |  |  | $ | 2,828 |  |  | $ | 1,778 |  |  | $ | 2,704 |
Distributed income from unconsolidated investees, less equity in earnings |  |  | 177 |  |  |  | (32 | ) |  |  | 12 |  |  |  | (8 | ) |  |  | 17 |
Fixed charges included in income |  |  | 1,276 |  |  |  | 1,068 |  |  |  | 953 |  |  |  | 1,237 |  |  |  | 930 |
Total earnings, as defined |  | $ | 4,543 |  |  | $ | 3,903 |  |  | $ | 3,793 |  |  | $ | 3,007 |  |  | $ | 3,651 |
Fixed charges, as defined: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest charges |  | $ | 1,238 |  |  | $ | 1,033 |  |  | $ | 920 |  |  | $ | 1,208 |  |  | $ | 899 |
Rental interest factor |  |  | 38 |  |  |  | 35 |  |  |  | 33 |  |  |  | 29 |  |  |  | 31 |
Fixed charges included in income |  | $ | 1,276 |  |  | $ | 1,068 |  |  | $ | 953 |  |  | $ | 1,237 |  |  | $ | 930 |
Preference security dividend requirement of consolidated subsidiary |  |  | 23 |  |  |  | 2 |  |  |  | — |  |  |  | 17 |  |  |  | 25 |
Capitalized interest |  |  | 164 |  |  |  | 124 |  |  |  | 67 |  |  |  | 39 |  |  |  | 28 |
Interest from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 85 |
Total fixed charges, as defined |  | $ | 1,463 |  |  | $ | 1,194 |  |  | $ | 1,020 |  |  | $ | 1,293 |  |  | $ | 1,068 |
Ratio of Earnings to Fixed Charges |  |  | 3.11 |  |  |  | 3.27 |  |  |  | 3.72 |  |  |  | 2.33 |  |  |  | 3.42 |

(a) | Earnings for the twelve months ended December 31, 2017 include $158 million of charges associated with our equity method investments in wind-powered generation facilities; $72 million in transition and integration costs primarily associated with Dominion Energy’s acquisition of Dominion Energy Questar; and a $51 million charge related to other items, partially offset by $46 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, 2017.

(b) | Earnings for the twelve months ended December 31, 2016 include a $197 million charge associated with ash pond and landfill closure costs; a $65 million charge associated with an organizational design initiative; a $74 million in transaction and transition costs associated with Dominion Energy’s acquisition of Dominion Energy Questar; a $23 million charge related to storm and restoration costs; and 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 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.

(c) | Earnings for the twelve months ended December 31, 2015 include an $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.

(d) | 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; a $121 million accrued charge associated with ash pond and landfill closure costs; and a $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.

(e) | 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 Electric and Power Company’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; and 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; and a $29 million net benefit primarily resulting from the sale of the 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.