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 $100 million and $95 million at September 30, 2013 and December 31, 2012, respectively. Cost method investments held in Dominion’s rabbi trusts totaled $10 million and $14 million at September 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)
September 30, 2013
Marketable equity securities:
U.S.:
Large Cap	$	1,176	$	999	$	—			$	2,175
Other	48		20		—				68
Marketable debt securities:
Corporate bonds	339		17		(4		)		352
U.S. Treasury securities and agency debentures	571		10		(7		)		574
State and municipal	299		13		(4		)		308
Other	4		—		—				4
Cost method investments	103		—		—				103
Cash equivalents and other⁽²⁾	89		—		—				89
Total	$	2,629	$	1,059	$	(15	)	⁽³⁾	$	3,673
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 $6 million and pending purchases of securities of $6 million at September 30, 2013 and December 31, 2012, respectively.


(3)	The fair value of securities in an unrealized loss position was $487 million and $195 million at September 30, 2013 and December 31, 2012, respectively.

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



	Amount
(millions)
Due in one year or less	$	138
Due after one year through five years	341
Due after five years through ten years	358
Due after ten years	401
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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
(millions)
Proceeds from sales	$	398	$	276	$	1,260	$	1,040
Realized gains⁽¹⁾	29		15		121		71
Realized losses⁽¹⁾	13		6		29		25


(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 nine months ended September 30, 2013 and 2012.

Blue Racer

In December 2012, Dominion formed Blue Racer with Caiman 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 sold 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 was contributed to Blue Racer in the third quarter of 2013, resulting in an increased equity method investment in Blue Racer of $473 million. Also in the third quarter of 2013, East Ohio sold Line TPL-2A and DTI sold Line TL-388 to Blue Racer and received approximately $83 million in cash proceeds resulting in an approximately $75 million ($42 million after-tax) gain.

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)
September 30, 2013
Marketable equity securities:
U.S.:
Large Cap	$	505	$	433	$	—			$	938
Other	23		10		—				33
Marketable debt securities:
Corporate bonds	191		9		(3		)		197
U.S. Treasury securities and agency debentures	209		2		(2		)		209
State and municipal	157		6		(3		)		160
Cost method investments	103		—		—				103
Cash equivalents and other⁽²⁾	28		—		—				28
Total	$	1,216	$	460	$	(8	)	⁽³⁾	$	1,668
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 sales of securities of $4 million and $6 million at September 30, 2013 and December 31, 2012, respectively.


(3)	The fair value of securities in an unrealized loss position was $247 million and $104 million at September 30, 2013 and December 31, 2012, respectively.

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



	Amount
(millions)
Due in one year or less	$	30
Due after one year through five years	158
Due after five years through ten years	199
Due after ten years	179
Total	$	566

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
(millions)
Proceeds from sales	$	140	$	128	$	464	$	481
Realized gains⁽¹⁾	8		6		34		27
Realized losses⁽¹⁾	5		2		13		9


(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 nine months ended September 30, 2013 and 2012.