UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2008
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
QUESTAR GAS COMPANY
(Exact name of registrant as specified in its charter)
| | |
STATE OF UTAH | 333-69210 | 87-0155877 |
(State or other jurisdiction of incorporation or organization) | (Commission File No.) | (I.R.S. Employer Identification No.) |
180 East 100 South Street, P.O. Box 45360 Salt Lake City, Utah 84145-0360
(Address of principal executive offices)
Registrant’s telephone number, including area code(801) 324-5555
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| |
Large accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [X] (Do not check if a smaller reporting company) | Smaller reporting company [ ] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
On October 31, 2008, 9,189,626 shares of the registrant’s common stock, $2.50 par value, were outstanding. All shares are owned by Questar Corporation.
Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is filing this form with the reduced disclosure format.
Questar Gas Company
Form 10-Q for the Quarter Ended September 30, 2008
TABLE OF CONTENTS
Page
PART I.
FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS (Unaudited)
3
Statements of Income for the three, nine and twelve months ended
September 30, 2008 and 2007
3
Condensed Balance Sheets as of September 30, 2008, September 30, 2007
and December 31, 2007
4
Condensed Statements of Cash Flows for the nine months ended
September 30, 2008 and 2007
5
Notes Accompanying the Financial Statements
6
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
6
ITEM 4T.
CONTROLS AND PROCEDURES
9
PART II.
OTHER INFORMATION
ITEM 1A.
RISK FACTORS
9
ITEM 6.
EXHIBITS
10
SIGNATURES
10
Questar Gas 2008 Form 10-Q
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
| | | | | | |
QUESTAR GAS COMPANY | | | | | | |
STATEMENTS OF INCOME | | | | | | |
(Unaudited) | | | | | | |
| 3 Months Ended Sept. 30, | 9 Months Ended Sept. 30, | 12 Months Ended Sept. 30, |
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| (in millions) |
REVENUES | | | | | | |
From unaffiliated customers | $115.2 | $92.7 | $664.9 | $640.9 | $951.6 | $952.2 |
From affiliated companies | 1.8 | 1.2 | 6.1 | 4.4 | 6.6 | 5.4 |
Total Revenues | 117.0 | 93.9 | 671.0 | 645.3 | 958.2 | 957.6 |
| | | | | | |
OPERATING EXPENSES | | | | | | |
Cost of natural gas sold (excluding operating expenses shown separately) | 83.8 | 62.6 | 493.4 | 475.0 | 705.6 | 715.0 |
Operating and maintenance | 20.3 | 18.3 | 61.6 | 55.6 | 79.4 | 73.7 |
General and administrative | 8.4 | 9.5 | 29.4 | 32.1 | 42.8 | 43.5 |
Depreciation and amortization | 10.4 | 9.7 | 30.9 | 28.8 | 40.9 | 38.6 |
Other taxes | 3.8 | 3.5 | 10.9 | 10.7 | 11.7 | 11.5 |
Total Operating Expenses | 126.7 | 103.6 | 626.2 | 602.2 | 880.4 | 882.3 |
Operating Income (Loss) | (9.7) | (9.7) | 44.8 | 43.1 | 77.8 | 75.3 |
Interest and other income | 1.6 | 1.6 | 4.6 | 5.6 | 6.4 | 7.4 |
Interest expense | (6.3) | (5.8) | (18.0) | (17.7) | (24.1) | (23.9) |
Income (Loss) Before Income Taxes | (14.4) | (13.9) | 31.4 | 31.0 | 60.1 | 58.8 |
Income taxes | (5.6) | (5.4) | 11.6 | 11.5 | 22.4 | 21.8 |
Net Income (Loss) | ($ 8.8) | ($ 8.5) | $ 19.8 | $ 19.5 | $ 37.7 | $ 37.0 |
See notes accompanying the financial statements
Questar Gas 2008 Form 10-Q
3
| | | | | |
QUESTAR GAS COMPANY | | |
CONDENSED BALANCE SHEETS | Sept. 30, | Dec. 31, |
| 2008 | 2007 | 2007 |
| (Unaudited) | |
| (in millions) |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | | | $ 4.1 |
Accounts receivable, net | $ 37.1 | $ 32.9 | 76.1 |
Unbilled gas accounts receivable | 17.6 | 10.8 | 78.2 |
Accounts receivable from affiliates | 3.1 | 2.1 | 2.7 |
Gas stored underground | 69.1 | 52.8 | 42.9 |
Materials and supplies | 12.7 | 9.9 | 9.3 |
Regulatory assets | 19.1 | 10.5 | 9.4 |
Prepaid expenses and other | 0.3 | 1.2 | 2.5 |
Purchased-gas adjustment | 3.0 | | |
Deferred income taxes - current | 1.5 | 1.7 | 2.0 |
Total Current Assets | 163.5 | 121.9 | 227.2 |
Property, plant and equipment | 1,626.5 | 1,496.3 | 1,539.2 |
Accumulated depreciation and amortization | (653.0) | (620.4) | (630.3) |
Net Property, Plant and Equipment | 973.5 | 875.9 | 908.9 |
Regulatory assets | 18.6 | 19.2 | 19.1 |
Goodwill | 5.6 | 5.6 | 5.6 |
Other noncurrent assets | 7.8 | 6.2 | 6.9 |
Total Assets | $1,169.0 | $1,028.8 | $1,167.7 |
| | | |
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY | | | |
Current Liabilities | | | |
Checks outstanding in excess of cash balances | $ 4.4 | $ 2.8 | |
Notes payable to Questar | 72.2 | 19.7 | $ 72.9 |
Accounts and other payables | 63.4 | 62.2 | 134.6 |
Accounts payable to affiliates | 48.4 | 28.2 | 32.6 |
Customer-credit balances | 29.7 | 37.0 | 34.1 |
Purchased-gas adjustment | | 46.6 | 58.1 |
Current portion of long-term debt | | 53.0 | 43.0 |
Total Current Liabilities | 218.1 | 249.5 | 375.3 |
Long-term debt, less current portion | 370.0 | 270.0 | 270.0 |
Deferred income taxes | 141.5 | 121.3 | 123.0 |
Other long-term liabilities | 68.4 | 58.7 | 58.7 |
| | | |
COMMON SHAREHOLDER’S EQUITY | | | |
Common stock | 23.0 | 23.0 | 23.0 |
Additional paid-in capital | 147.8 | 116.5 | 116.7 |
Retained earnings | 200.2 | 189.8 | 201.0 |
Total Common Shareholder’s Equity | 371.0 | 329.3 | 340.7 |
Total Liabilities and Common Shareholder’s Equity | $1,169.0 | $1,028.8 | $1,167.7 |
See notes accompanying the financial statements
Questar Gas 2008 Form 10-Q
4
| | |
QUESTAR GAS COMPANY | | |
CONDENSED STATEMENTS OF CASH FLOWS | | |
(Unaudited) | |
| 9 Months Ended Sept. 30, |
| 2008 | 2007 |
| (in millions) |
OPERATING ACTIVITIES | | |
Net income | $ 19.8 | $ 19.5 |
Adjustments to reconcile net income to net | | |
cash provided from operating activities: | | |
Depreciation and amortization | 33.7 | 31.7 |
Deferred income taxes | 19.0 | 2.6 |
Share-based compensation | 1.1 | 0.5 |
Changes in operating assets and liabilities | (28.7) | 46.1 |
Net Cash Provided From Operating Activities | 44.9 | 100.4 |
| | |
INVESTING ACTIVITIES | | |
Capital expenditures | (114.6) | (93.5) |
Cash used in asset dispositions | (3.2) | (0.5) |
Proceeds from asset dispositions | 0.2 | 1.6 |
Affiliated-company property, plant and equipment transfers | 0.1 | (0.6) |
Net Cash Used In Investing Activities | (117.5) | (93.0) |
| | |
FINANCING ACTIVITIES | | |
Checks outstanding in excess of cash balances | 4.4 | 2.8 |
Change in notes payable to Questar | (0.7) | 6.5 |
Long-term debt issued, net of issuance costs | 148.4 | |
Long-term debt repaid | (93.0) | |
Equity contribution | 30.0 | |
Dividends paid | (20.6) | (20.3) |
Net Cash Provided From (Used In) Financing Activities | 68.5 | (11.0) |
Change in cash and cash equivalents | (4.1) | (3.6) |
Beginning cash and cash equivalents | 4.1 | 3.6 |
Ending Cash and Cash Equivalents | $ - | $ - |
See notes accompanying the financial statements
Questar Gas 2008 Form 10-Q
5
QUESTAR GAS COMPANY
NOTES ACCOMPANYING THE FINANCIAL STATEMENTS
Note 1 – Nature of Business
Questar Gas Company (Questar Gas or Company) is a wholly owned subsidiary of Questar Corporation (Questar). The Company provides retail natural gas distribution in Utah, southwestern Wyoming and a small portion of southeastern Idaho. Questar Gas is regulated by the Public Service Commission of Utah (PSCU) and the Public Service Commission of Wyoming (PSCW). The Public Utility Commission of Idaho has contracted with the PSCU for rate oversight of Questar Gas’s Idaho operations.
Note 2 – Basis of Presentation of Interim Financial Statements
The interim financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions for quarterly reports on Form 10-Q and Regulations S-X and S-K. The interim financial statements reflect all normal, recurring adjustments and accruals that are, in the opinion of management, necessary for a fair presentation of financial position and results of operations for the interim periods presented. Interim financial statements do not include all of the information and notes required by GAAP for audited annual financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. Certain reclassifications were made to prior-period financial statements to conform with the current presentation.
The preparation of the financial statements and notes in conformity with GAAP requires that management make estimates and assumptions that affect the amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities. Actual results could differ from estimates. The results of operations for the three, nine and twelve months ended September 30, 2008, are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.
Note 3 – Financing
In February 2008, Questar Gas filed a shelf registration with the Securities and Exchange Commission to sell up to $150 million of debt securities and to use the net proceeds to repay intercompany demand notes, to repay debt maturing in early 2008 and to finance certain capital expenditures as well as for general corporate purposes, including working capital. In March 2008, Questar Gas sold $50 million of 10-year notes with a 6.3% interest rate and $100 million of 30-year notes with a 7.2% interest rate.
Note 4 – Questar Gas Equity Issue
In the first quarter of 2008, Questar Gas received $30.0 million of common equity from Questar and used the proceeds to repay $30.0 million of notes payable due to Questar.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion updates information as to Questar Gas’s financial condition provided in its previous Form 10-K filing, and analyzes the changes in the results of operations between the three-, nine- and twelve-month periods ended September 30, 2008 and 2007. For definitions of commonly used terms found in this Form 10-Q, please refer to the “Glossary of Commonly Used Terms” provided in the Company’s 2007 Form 10-K.
RESULTS OF OPERATIONS
Questar Gas, which provides retail natural gas distribution services in Utah, Wyoming and Idaho, reported a net loss of $8.8 million in the third quarter of 2008 compared with a loss of $8.5 million in the third quarter of 2007. Net income was $19.8 million in the first nine months of 2008 compared with $19.5 million in the first nine months of 2007. Net income for the 12 months ended September 30, 2008, was $37.7 million compared with $37.0 million in the 12 months ended September 30, 2007. Operating loss was the same in the third quarter of 2008 as the third quarter of 2007. Operating income for the first nine months of 2008 increased $1.7 million due primarily to higher revenues from new-customer growth. Operating income for the 12 months ended September 30, 2008, was $77.8 million compared with $75.3 million for the 12 months ended September 30, 2007. Following is a summary of Questar Gas’s financial and operating results:
Questar Gas 2008 Form 10-Q
6
| | | | | | | | | |
| 3 Months Ended Sept. 30, | 9 Months Ended Sept. 30, | 12 Months Ended Sept. 30, |
| 2008 | 2007 | Change | 2008 | 2007 | Change | 2008 | 2007 | Change |
| |
Operating Income | | | | | | | | | |
REVENUES | | | | | | | | | |
Residential and commercial sales | $ 94.7 | $80.4 | $ 14.3 | $612.7 | $600.8 | $11.9 | $888.6 | $898.8 | ($10.2) |
Industrial sales | 2.9 | 2.1 | 0.8 | 8.9 | 7.2 | 1.7 | 11.6 | 10.1 | 1.5 |
Transportation for industrial customers | 2.3 | 2.4 | (0.1) | 6.7 | 7.0 | (0.3) | 9.7 | 9.1 | 0.6 |
Service | 1.2 | 1.3 | (0.1) | 4.4 | 4.7 | (0.3) | 5.6 | 6.1 | (0.5) |
Other | 15.9 | 7.7 | 8.2 | 38.3 | 25.6 | 12.7 | 42.7 | 33.5 | 9.2 |
Total Revenues | 117.0 | 93.9 | 23.1 | 671.0 | 645.3 | 25.7 | 958.2 | 957.6 | 0.6 |
Cost of natural gas sold | 83.8 | 62.6 | 21.2 | 493.4 | 475.0 | 18.4 | 705.6 | 715.0 | (9.4) |
Margin | 33.2 | 31.3 | 1.9 | 177.6 | 170.3 | 7.3 | 252.6 | 242.6 | 10.0 |
OTHER OPERATING EXPENSES | | | | | | | | | |
Operating and maintenance | 20.3 | 18.3 | 2.0 | 61.6 | 55.6 | 6.0 | 79.4 | 73.7 | 5.7 |
General and administrative | 8.4 | 9.5 | (1.1) | 29.4 | 32.1 | (2.7) | 42.8 | 43.5 | (0.7) |
Depreciation and amortization | 10.4 | 9.7 | 0.7 | 30.9 | 28.8 | 2.1 | 40.9 | 38.6 | 2.3 |
Other taxes | 3.8 | 3.5 | 0.3 | 10.9 | 10.7 | 0.2 | 11.7 | 11.5 | 0.2 |
Total Other Operating Expenses | 42.9 | 41.0 | 1.9 | 132.8 | 127.2 | 5.6 | 174.8 | 167.3 | 7.5 |
Operating Income (Loss) | ($ 9.7) | ($ 9.7) | $ - | $ 44.8 | $ 43.1 | $ 1.7 | $ 77.8 | $75.3 | $ 2.5 |
Operating Statistics | | | | | | | | | |
Natural gas volumes (MMdth) | | | | | | | | | |
Residential and commercial sales | 9.3 | 9.1 | 0.2 | 78.4 | 70.1 | 8.3 | 114.4 | 104.6 | 9.8 |
Industrial sales | 0.4 | 0.3 | 0.1 | 1.3 | 1.1 | 0.2 | 1.8 | 1.5 | 0.3 |
Transportation for industrial customers | 16.4 | 14.0 | 2.4 | 45.8 | 34.9 | 10.9 | 64.7 | 45.0 | 19.7 |
Total Industrial | 16.8 | 14.3 | 2.5 | 47.1 | 36.0 | 11.1 | 66.5 | 46.5 | 20.0 |
Total Deliveries | 26.1 | 23.4 | 2.7 | 125.5 | 106.1 | 19.4 | 180.9 | 151.1 | 29.8 |
Natural gas revenue (per dth) | | | | | | | | | |
Residential and commercial sales | $10.18 | $8.83 | $1.35 | $7.82 | $8.57 | ($0.75) | $7.76 | $8.60 | ($0.84) |
Industrial sales | 7.59 | 6.03 | 1.56 | 7.01 | 6.28 | 0.73 | 6.72 | 6.37 | 0.35 |
Transportation for industrial customers | $0.14 | $0.17 | ($0.03) | $0.15 | $0.20 | ($0.05) | $0.15 | $0.20 | ($0.05) |
Colder (warmer) than normal temperatures | (49%) | 6% | (55%) | 14% | - | 14% | 10% | 1% | 9% |
Temperature-adjusted usage per customer (dth) | 8.3 | 7.8 | 0.5 | 73.9 | 73.2 | 0.7 | 111.4 | 110.4 | 1.0 |
Customers at Sept. 30 (thousands) | 880.1 | 861.0 | 19.1 | | | | | | |
Margin Analysis
Questar Gas margin (revenues less gas costs) increased $1.9 million in the third quarter of 2008 compared to the third quarter of 2007, $7.3 million in the first nine months of 2008 compared to the first nine months of 2007 and $10.0 million in the 12 months ended September 30, 2008 compared to the 12 months ended September 30, 2007. Following is a summary of major changes in Questar Gas margin:
Questar Gas 2008 Form 10-Q
7
| | | |
| Change in margin |
| 3 Months Ended Sept. 30, | 9 Months Ended Sept. 30, | 12 Months Ended Sept. 30, |
| 2008 to 2007 | 2008 to 2007 | 2008 to 2007 |
| | (in millions) | |
New customers | $0.6 | $3.4 | $4.9 |
Conservation-enabling tariff | (0.8) | (3.1) | (4.5) |
Change in usage per customer | 1.1 | 3.8 | 5.8 |
Demand-side management cost recovery | 0.7 | 2.3 | 2.9 |
Change in rates | 0.7 | 0.7 | 0.7 |
Other | (0.4) | 0.2 | 0.2 |
Increase | $1.9 | $7.3 | $10.0 |
At September 30, 2008, Questar Gas served 880,059 customers, up from 861,036 at September 30, 2007. New-customer growth increased margin by $3.4 million in the first nine months of 2008 and $4.9 million for the 12 months ended September 30, 2008.
Temperature-adjusted usage per customer increased 6% in the third quarter of 2008, increased 1% in the first nine months of 2008 and increased 1% in the 12 months ended September 30, 2008 compared to the same periods of 2007. The impact on the company margin from changes in usage per customer has been mitigated by a pilot conservation-enabling tariff (CET) that was approved by the PSCU beginning 2006. The CET resulted in margin decreases of $3.1 million in the first nine months of 2008 and $4.5 million in the 12 months ended September 30, 2008, partially offsetting an increase in margin resulting from usage per customer of $3.8 million for the nine months ended September 30, 2008, and $5.8 million for the 12 months ended September 30, 2008.
Weather, as measured in degree days, was 49% warmer than normal in the third quarter of 2008, 14% colder than normal in the first nine months of 2008 and 10% colder than normal in the 12 months ended September 30, 2008. A weather-normalization adjustment on customer bills generally offsets financial impacts of moderate temperature variations.
In December 2007, Questar Gas filed a general rate case in Utah requesting an increase in rates of $27.0 million, including an authorized return on equity of 11.25%. The company subsequently reduced its request to $22.2 million to reflect a change in test year ordered by the PSCU and the impact of tax law changes on rate base. In the second quarter of 2008, Questar Gas received an order from the PSCU increasing rates by $12.0 million. The PSCU reduced Questar Gas’s allowed return on equity from 11.2% to 10%. The new rates went into effect in mid-August 2008 and increased the margin by $0.7 million in the third quarter of 2008.
Expenses
Cost of natural gas sold increased 34% in the third quarter of 2008 compared with the third quarter of 2007 due to increased sales volumes. Cost of natural gas sold increased 4% in the first nine months of 2008 and declined 1% in the 12 months ended September 30, 2008 compared to the same period in 2007. Lower gas cost per dth offset a 12% increase in volumes sold in the first nine months of 2008 and a 10% increase in volumes sold in the 12 months ended September 30, 2008. Questar Gas accounts for purchased-gas costs in accordance with procedures authorized by the PSCU and the PSCW. Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes. As of September 30, 2008, Questar Gas had a $3.0 million under-collected balance in the purchased-gas adjustment account representing costs incurred that exceeded costs recovered from customers.
Operating and maintenance expenses increased 11% in both the third quarter of 2008 and the first nine months of 2008 and 8% in the 12 months ended September 30, 2008, compared to the same periods of 2007. Higher operating and maintenance expense was due primarily to higher bad-debt costs and labor costs. General and administrative expenses decreased 12% in the third quarter of 2008, 8% in the first nine months of 2008 and 2% in the 12 months ended September 30, 2008, due to lower labor and legal costs. Operating, maintenance, general and administrative expenses per customer were $103 in the first nine months of 2008 compared to $102 in the year earlier period.
Questar Gas 2008 Form 10-Q
8
Depreciation expense increased 7% in both the third quarter of 2008 and the first nine months of 2008 and 6% in the 12 months ended September 30, 2008 compared to the 2007 periods. The increase in depreciation expense was primarily the result of plant additions from customer growth and system expansion.
Forward-Looking Statements
This quarterly report may contain or incorporate by reference information that includes or is based upon “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, exploration efforts, expenses, the outcome of contin gencies such as legal proceedings, trends in operations and financial results.
Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to the following:
·
the risk factors discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007;
·
general economic conditions, including the performance of financial markets and interest rates;
·
changes in industry trends;
·
changes in laws or regulations; and
·
other factors, most of which are beyond the Company’s control.
Questar Gas undertakes no obligation to publicly correct or update the forward-looking statements in this quarterly report, in other documents, or on the Web site to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.
ITEM 4T. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures.
The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of September 30, 2008. Based on such evaluation, such officers have concluded that, as of September 30, 2008, the Company’s disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company’s reports filed or submitted under the Exchange Act. The Company’s Chief Executive Officer and Chief Financial Officer also concluded that the controls and procedures were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management including its principal executive and financial officers or persons performing similar f unctions as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls.
There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended September 30, 2008, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS.
Recent disruptions in the financial markets could affect the ability of Questar and Questar Gas to obtain financing or refinance existing indebtedness on reasonable terms and may have other adverse effects.Widely-documented commercial-credit market disruptions have resulted in a tightening of credit markets in the United States. Liquidity in the global-credit markets has been severely contracted by these market disruptions making terms for certain financings less attractive, and in
Questar Gas 2008 Form 10-Q
9
certain cases, have resulted in the unavailability of certain types of financing. As a result of ongoing credit-market turmoil, Questar or its subsidiaries may not be able to obtain debt financing, or refinance existing indebtedness on favorable terms, which could affect operations and financial performance.
ITEM 6. EXHIBITS.
The following exhibits are filed as part of this report:
Exhibit No.
Exhibits
31.1.
Certification signed by Ronald W. Jibson, Questar Gas Company’s President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2.
Certification signed by S. E. Parks, Questar Gas Company’s Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.
Certification signed by Ronald W. Jibson and S. E. Parks, Questar Gas Company’s President and Chief Executive Officer and Vice President and Chief Financial Officer, respectively, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
QUESTAR GAS COMPANY
(Registrant)
November 7, 2008
/s/Ronald W. Jibson
Ronald W. Jibson
President and Chief Executive Officer
November 7, 2008
/s/S/ E. Parks
S. E. Parks
Vice President and Chief Financial Officer
Exhibits List
Exhibit No.
Exhibits
31.1.
Certification signed by Ronald W. Jibson, Questar Gas Company’s President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2.
Certification signed by S. E. Parks, Questar Gas Company’s Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.
Certification signed by Ronald W. Jibson and S. E. Parks, Questar Gas Company’s President and Chief Executive Officer and Vice President and Chief Financial Officer, respectively, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Questar Gas 2008 Form 10-Q
10
