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 $107 million and $95 million at December 31, 2013 and 2012, respectively. Cost-method investments held in Dominion's rabbi trusts totaled $10 million and $14 million at December 31, 2013 and 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)
2013
Marketable equity securities:
U.S.:
Large Cap	$	1,183	$	1,194	$	—			$	2,377
Other	49		23		—				72
Marketable debt securities:
Corporate debt instruments	332		16		(3		)		345
U.S. Treasury securities and agency debentures	589		8		(10		)		587
State and municipal	297		11		(5		)		303
Other	3		—		—				3
Cost method investments	106		—		—				106
Cash equivalents and other⁽²⁾	110		—		—				110
Total	$	2,669	$	1,252	$	(18	)	⁽³⁾	$	3,903
2012
Marketable equity securities:
U.S.:
Large Cap	$	1,210	$	732	$	—			$	1,942
Other	40		13		—				53
Marketable debt securities:
Corporate debt instruments	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 as discussed in Note 2.


(2)	Includes pending sales of securities of $11 million and pending purchases of securities of $6 million at December 31, 2013 and 2012, respectively.


(3)	The fair value of securities in an unrealized loss position was $604 million and $195 million at December 31, 2013 and 2012, respectively.

The fair value of Dominion's marketable debt securities held in nuclear decommissioning trust funds at December 31, 2013 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	128
Due after one year through five years	357
Due after five years through ten years	362
Due after ten years	391
Total	$	1,238

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



Year Ended December 31,	2013		2012		2011
(millions)
Proceeds from sales	$	1,476	$	1,356	$	1,757
Realized gains⁽¹⁾	157		98		79
Realized losses⁽¹⁾	33		33		92


(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability as discussed in Note 2.

Dominion recorded other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds as follows:



Year Ended December 31,	2013			2012			2011
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	31		$	26		$	75
Losses recorded to decommissioning trust regulatory liability	(13		)	(10		)	(24		)
Losses recognized in other comprehensive income (before taxes)	(10		)	(2		)	(3		)
Net impairment losses recognized in earnings	$	8		$	14		$	48


(1)	Amounts include other-than-temporary impairment losses for debt securities of $18 million, $4 million and $6 million at December 31, 2013, 2012 and 2011, respectively.

Equity Method Investments

Investments that Dominion accounts for under the equity method of accounting are as follows:



Company	Ownership%		Investment Balance				Description
As of December 31,			2013		2012
(millions)
Blue Racer Midstream LLC	50	%	$	510	$	39	Midstream gas and related services
Fowler I Holdings LLC	50	%	149		158		Wind-powered merchant generation facility
NedPower Mount Storm LLC	50	%	131		137		Wind-powered merchant generation facility
Iroquois Gas Transmission System, LP	24.72	%	105		102		Gas transmission system
Elwood Energy LLC⁽¹⁾	—	%	—		117		Natural gas-fired merchant generation peaking facility
Other⁽²⁾	various		21		5
Total			$	916	$	558

(1) Following the 2013 sale of Elwood, at December 31, 2013, Dominion retained a 0.5% cost method investment. At December 31, 2012, Dominion owned 50% and Elwood was therefore considered an equity method investment.

(2) Dominion has a $50 million commitment to invest in clean power and technology businesses through 2018.

Dominion's equity earnings on these investments totaled $14 million, $25 million and $35 million in 2013, 2012 and 2011, respectively. Dominion received distributions from these investments of $33 million, $58 million and $55 million in 2013, 2012, and 2011, respectively. As of December 31, 2013 and 2012, the carrying amount of Dominion's investments exceeded Dominion's share of underlying equity in net assets by approximately $36 million and $30 million, respectively. $28 million of the differences relate to Dominion's investments in wind projects and primarily reflect its capitalized interest during construction and the excess of its cash contributions over the book value of development assets contributed by Dominion's partners for these projects, which are being amortized over the useful lives of the underlying assets. The remaining $8 million of differences reflect equity method goodwill and are not being amortized.

BLUE RACER

In December 2012, Dominion formed a joint venture with Caiman to provide midstream services to natural gas producers operating in the Utica Shale region in Ohio and portions of Pennsylvania. The joint venture, Blue Racer, is an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital. In return for its December 2012 contribution of assets to the joint venture, Dominion received a 50% interest in Blue Racer and received $115 million in cash proceeds, resulting in a gain of $72 million ($43 million after-tax), net of transaction fees of $9 million, which is recorded in other operations and maintenance expense in Dominion's Consolidated Statement of Income.

In March 2013, Dominion 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, Dominion sold Line TPL-2A and 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. In the fourth quarter of 2013, Dominion sold the Western System to Blue Racer for $30 million in cash proceeds resulting in an approximately $4 million ($2 million after-tax) gain. Dominion NGL Pipelines, LLC was contributed in January 2014 to Blue Racer prior to commencement of service, resulting in an increased equity method investment of $155 million.

The joint venture is leveraging Dominion's existing presence in the Utica region with significant additional new capacity designed to meet producer needs as the Utica Shale acreage is developed. Midstream services offered include gathering, processing, fractionation, and NGL transportation and marketing. In addition to the assets already sold or contributed, Dominion expects to sell additional East Ohio gathering assets to Blue Racer.

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)
2013
Marketable equity securities:
U.S.:
Large Cap	$	506	$	514	$	—			$	1,020
Other	25		11		—				36
Marketable debt securities:
Corporate debt instruments	185		8		(2		)		191
U.S. Treasury securities and agency debentures	214		1		(3		)		212
State and municipal	163		4		(4		)		163
Cost method investments	106		—		—				106
Cash equivalents and other⁽²⁾	37		—		—				37
Total	$	1,236	$	538	$	(9	)	⁽³⁾	$	1,765
2012
Marketable equity securities:
U.S.:
Large Cap	$	481	$	298	$	—			$	779
Other	20		7		—				27
Marketable debt securities:
Corporate debt instruments	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 as discussed in Note 2.


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


(3)	The fair value of securities in an unrealized loss position was $299 million and $104 million at December 31, 2013 and 2012, respectively.

The fair value of Virginia Power's debt securities at December 31, 2013, by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	31
Due after one year through five years	163
Due after five years through ten years	196
Due after ten years	176
Total	$	566

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



Year Ended December 31,	2013		2012		2011
(millions)
Proceeds from sales	$	572	$	626	$	1,030
Realized gains⁽¹⁾	52		42		34
Realized losses⁽¹⁾	14		11		34


(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability as discussed in Note 2.

Virginia Power recorded other-than-temporary impairment losses on investments as follows:



Year Ended December 31,	2013			2012			2011
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	15		$	11		$	29
Losses recorded to decommissioning trust regulatory liability	(13		)	(10		)	(24		)
Losses recorded in other comprehensive income (before taxes)	(1		)	—			(1		)
Net impairment losses recognized in earnings	$	1		$	1		$	4


(1)	Amounts include other-than-temporary impairment losses for debt securities of $9 million, $2 million and $4 million at December 31, 2013, 2012 and 2011, respectively.

OTHER INVESTMENTS

Dominion and Virginia Power hold restricted cash and cash equivalent balances that primarily consist of money market fund investments held in trust for the purpose of funding certain qualifying construction projects. At December 31, 2013 and 2012, Dominion had $11 million and $37 million, respectively, and Virginia Power had $8 million and $10 million, respectively, of restricted cash and cash equivalents. These balances are presented in Other Current Assets and Other Investments in the Consolidated Balance Sheets.