Investments

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion’s rabbi trusts and classified as trading totaled $101 million and $95 million at June 30, 2013 and December 31, 2012, respectively. Cost method investments held in Dominion’s rabbi trusts totaled $12 million and $14 million at June 30, 2013 and December 31, 2012, respectively.

Decommissioning Trust Securities

Dominion holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion’s decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses ⁽¹⁾				Fair Value
(millions)
June 30, 2013
Marketable equity securities:
U.S.:
Large Cap	$	1,163	$	913	$	—			$	2,076
Other	46		17		—				63
Marketable debt securities:
Corporate bonds	360		18		(6		)		372
U.S. Treasury securities and agency debentures	591		10		(12		)		589
State and municipal	263		14		(4		)		273
Other	4		—		—				4
Cost method investments	103		—		—				103
Cash equivalents and other⁽²⁾	71		—		—				71
Total	$	2,601	$	972	$	(22	)	⁽³⁾	$	3,551
December 31, 2012
Marketable equity securities:
U.S.:
Large Cap	$	1,210	$	732	$	—			$	1,942
Other	40		13		—				53
Marketable debt securities:
Corporate bonds	295		30		—				325
U.S. Treasury securities and agency debentures	523		19		(2		)		540
State and municipal	248		26		—				274
Other	6		1		—				7
Cost method investments	117		—		—				117
Cash equivalents and other⁽²⁾	72		—		—				72
Total	$	2,511	$	821	$	(2	)	⁽³⁾	$	3,330


(1)	Included in AOCI and the decommissioning trust regulatory liability.


(2)	Includes pending sales of securities of $1 million and pending purchases of securities of $6 million at June 30, 2013 and December 31, 2012, respectively.


(3)	The fair value of securities in an unrealized loss position was $618 million and $195 million at June 30, 2013 and December 31, 2012, respectively.

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at June 30, 2013 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	122
Due after one year through five years	357
Due after five years through ten years	365
Due after ten years	394
Total	$	1,238

Presented below is selected information regarding Dominion’s marketable equity and debt securities held in nuclear decommissioning trust funds.



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
(millions)
Proceeds from sales	$	308	$	349	$	862	$	764
Realized gains⁽¹⁾	29		28		92		56
Realized losses⁽¹⁾	10		15		16		19


(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Dominion were not material for the three and six months ended June 30, 2013 and 2012.

Blue Racer

In December 2012, Dominion formed Blue Racer to provide midstream services to natural gas producers operating in the Utica Shale region in Ohio and portions of Pennsylvania. Blue Racer is an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital. In March 2013, DTI contributed Line TL-404 to Blue Racer and received approximately $47 million in cash proceeds resulting in an approximately $25 million ($14 million after-tax) gain. Phase 1 of the Natrium natural gas processing and fractionation facility was completed in the second quarter of 2013, and is expected to be contributed to Blue Racer in the third quarter.

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:



	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses⁽¹⁾				Fair Value
(millions)
June 30, 2013
Marketable equity securities:
U.S.:
Large Cap	$	497	$	392	$	—			$	889
Other	22		8		—				30
Marketable debt securities:
Corporate bonds	216		9		(4		)		221
U.S. Treasury securities and agency debentures	223		1		(5		)		219
State and municipal	119		5		(2		)		122
Other	1		—		—				1
Cost method investments	103		—		—				103
Cash equivalents and other⁽²⁾	27		—		—				27
Total	$	1,208	$	415	$	(11	)	⁽³⁾	$	1,612
December 31, 2012
Marketable equity securities:
U.S.:
Large Cap	$	481	$	298	$	—			$	779
Other	20		7		—				27
Marketable debt securities:
Corporate bonds	179		17		—				196
U.S. Treasury securities and agency debentures	231		4		(1		)		234
State and municipal	106		11		—				117
Other	1		—		—				1
Cost method investments	117		—		—				117
Cash equivalents and other⁽²⁾	44		—		—				44
Total	$	1,179	$	337	$	(1	)	⁽³⁾	$	1,515


(1)	Included in AOCI and the decommissioning trust regulatory liability.


(2)	Includes pending purchases of securities of $2 million and pending sales of securities of $6 million at June 30, 2013 and December 31, 2012, respectively.


(3)	The fair value of securities in an unrealized loss position was $311 million and $104 million at June 30, 2013 and December 31, 2012, respectively.

The fair value of Virginia Power’s marketable debt securities at June 30, 2013 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	21
Due after one year through five years	176
Due after five years through ten years	202
Due after ten years	164
Total	$	563

Presented below is selected information regarding Virginia Power’s marketable equity and debt securities.



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
(millions)
Proceeds from sales	$	135	$	162	$	324	$	353
Realized gains⁽¹⁾	10		10		26		21
Realized losses⁽¹⁾	5		5		8		7


(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Virginia Power were not material for the three and six months ended June 30, 2013 and 2012.