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 $104 million and $107 million at March 31, 2014 and December 31, 2013, respectively. Cost method investments held in Dominion’s rabbi trusts totaled $9 million and $10 million at March 31, 2014 and December 31, 2013, 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)
March 31, 2014
Marketable equity securities:
U.S. Large Cap	$	1,214	$	1,219	$	—			$	2,433
Marketable debt securities:
Corporate bonds	375		17		(1		)		391
U.S. Treasury securities and agency debentures	612		8		(6		)		614
State and municipal	305		16		(1		)		320
Other	7		—		—				7
Cost method investments	99		—		—				99
Cash equivalents and other⁽²⁾	105		—		—				105
Total	$	2,717	$	1,260	$	(8	)	⁽³⁾	$	3,969
December 31, 2013
Marketable equity securities:
U.S.:
Large Cap	$	1,183	$	1,194	$	—			$	2,377
Other	49		23		—				72
Marketable debt securities:
Corporate bonds	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


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


(2)	Includes pending purchases of securities of $13 million and pending sales of securities of $11 million at March 31, 2014 and December 31, 2013, respectively.


(3)	The fair value of securities in an unrealized loss position was $475 million and $604 million at March 31, 2014 and December 31, 2013, respectively.

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at March 31, 2014 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	134
Due after one year through five years	379
Due after five years through ten years	403
Due after ten years	416
Total	$	1,332

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



	Three Months Ended March 31,
	2014		2013
(millions)
Proceeds from sales	$	442	$	554
Realized gains⁽¹⁾	38		63
Realized losses⁽¹⁾	6		6


(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 months ended March 31, 2014 and 2013.

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, Dominion sold Line TL-404 to Blue Racer and received approximately $47 million in cash proceeds. The sale resulted in a gain of approximately $25 million ($14 million after-tax) which is included in other operations and maintenance expense in Dominion's Consolidated Statement of Income. 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, including $6 million of goodwill. In March 2014, Dominion sold the Northern System to Blue Racer and received approximately $84 million in cash proceeds. The sale resulted in a gain of approximately $59 million ($34 million after-tax) net of a $3 million write-off of goodwill, and is included in other operations and maintenance expense in Dominion's Consolidated Statement of Income.

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)
March 31, 2014
Marketable equity securities:
U.S. Large Cap	$	522	$	523	$	—			$	1,045
Marketable debt securities:
Corporate bonds	211		9		(1		)		219
U.S. Treasury securities and agency debentures	217		2		(2		)		217
State and municipal	175		7		(1		)		181
Other	1		—		—				1
Cost method investments	99		—		—				99
Cash equivalents and other⁽²⁾	34		—		—				34
Total	$	1,259	$	541	$	(4	)	⁽³⁾	$	1,796
December 31, 2013
Marketable equity securities:
U.S.:
Large Cap	$	506	$	514	$	—			$	1,020
Other	25		11		—				36
Marketable debt securities:
Corporate bonds	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


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


(2)	Includes pending purchases of securities of $15 million and pending sales of securities of $6 million at March 31, 2014 and December 31, 2013, respectively.


(3)	The fair value of securities in an unrealized loss position was $211 million and $299 million at March 31, 2014 and December 31, 2013, respectively.

The fair value of Virginia Power’s marketable debt securities at March 31, 2014 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	41
Due after one year through five years	161
Due after five years through ten years	232
Due after ten years	184
Total	$	618

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



	Three Months Ended March 31,
	2014		2013
(millions)
Proceeds from sales	$	204	$	189
Realized gains⁽¹⁾	19		16
Realized losses⁽¹⁾	3		3


(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 months ended March 31, 2014 and 2013.