SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
_____ TO _____
Commission File No. 1-8796
QUESTAR CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF UTAH 87-0407509
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 45433, 180 East First South, Salt Lake City, Utah 84145-0433
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 534-5000
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of July 31, 1994
Common Stock, without par value 40,316,986 shares
QUESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1994 1993 1994 1993 1994 1993
(In Thousands, Except Per Share Amounts)
REVENUES $135,397 $131,656 $358,706 $377,193 $641,943 $639,296
OPERATING EXPENSES
Natural gas purchases 30,453 35,798 124,237 144,923 203,814 215,080
Operating and maintenance 43,703 40,585 85,638 84,692 169,781 160,952
Depreciation and amortization 24,249 20,964 46,124 41,056 91,826 80,729
Other taxes 10,760 8,117 21,000 16,756 36,287 29,113
TOTAL OPERATING EXPENSES 109,165 105,464 276,999 287,427 501,708 485,874
OPERATING INCOME 26,232 26,192 81,707 89,766 140,235 153,422
INTEREST AND OTHER INCOME 1,424 929 3,003 1,698 4,937 4,703
DEBT EXPENSE (9,390) (8,280) (18,360) (16,981) (35,363) (35,662)
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 18,266 18,841 66,350 74,483 109,809 122,463
INCOME TAXES 4,338 2,812 21,329 22,433 32,374 34,117
INCOME FROM CONTINUING OPERATIONS 13,928 16,029 45,021 52,050 77,435 88,346
LOSS FROM DISCONTINUED OPERATIONS (764) (1,662) (1,110) (2,795)
NET INCOME $13,928 $15,265 $45,021 $50,388 $76,325 $85,551
EARNINGS PER COMMON SHARE
Income from continuing operations $0.34 $0.39 $1.11 $1.29 $1.92 $2.20
Loss from discontinued operations (0.02) (0.04) (0.03) (0.07)
Net income $0.34 $0.37 $1.11 $1.25 $1.89 $2.13
Dividends per common share $0.285 $0.275 $0.56 $0.54 $1.11 $1.07
Average common shares outstanding 40,269 39,959 40,232 39,901 40,197 39,790
QUESTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1994 1993 1993
(In Thousands)
ASSETS
Current assets
Cash and short-term investments $6,365
Accounts receivable $115,095 $95,261 138,866
Inventories 23,616 16,934 29,928
Other current assets 10,313 10,813 11,384
Total current assets 149,024 123,008 186,543
Property, plant and equipment 2,169,918 1,926,269 2,024,394
Less allowances for depreciation and
amortization 916,665 836,611 871,734
Net property, plant and equipment 1,253,253 1,089,658 1,152,660
Investment in discontinued operations 30,667 28,408 29,498
Other assets 49,231 38,333 48,986
$1,482,175 $1,279,407 $1,417,687
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Checks outstanding in excess of cash $3,810 $3,658
Short-term loans 119,900 15,000 $78,300
Accounts payable and accrued expense 94,723 77,139 119,064
Purchased-gas adjustments 26,106 43,795 25,727
Total current liabilities 244,539 139,592 223,091
Long-term debt 394,677 365,477 371,713
Other liabilities and deferred credits 48,172 14,258 45,632
Deferred income taxes and investment
tax credits 158,667 164,206 167,784
Redeemable cumulative preferred stock 7,524 8,726 7,525
Common shareholders' equity
Common stock 307,354 298,579 303,503
Retained earnings 382,084 350,440 359,637
Treasury stock, at cost (34,040) (33,452) (34,396)
Note receivable from ESOP (26,802) (28,419) (26,802)
Total common shareholders' equity 628,596 587,148 601,942
$1,482,175 $1,279,407 $1,417,687
QUESTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
6 Months Ended
June 30,
1994 1993
(In Thousands)
OPERATING ACTIVITIES
Net income $45,021 $50,388
Depreciation and amortization 48,259 43,239
Deferred income taxes and
investment tax credits (2,703) (3,038)
Loss from discontinued operations 1,662
90,577 92,251
Change in operating assets and liabilities 6,308 32,882
NET CASH PROVIDED FROM
OPERATING ACTIVITIES 96,885 125,133
INVESTING ACTIVITIES
Capital expenditures
Purchase of property, plant and equipment (161,692) (47,998)
Investment in discontinued operations (1,169) (3,100)
Other investments (459) (163)
Total capital expenditures (163,320) (51,261)
Proceeds from disposition of property,
plant and equipment 10,064 2,649
CASH USED IN INVESTING ACTIVITIES (153,256) (48,612)
FINANCING ACTIVITIES
Issuance of common stock 4,420 5,415
Purchase of treasury stock (213) (827)
Redemption of preferred stock (1)
Issuance of long-term debt 40,000 114,000
Repayment of long-term debt (17,036) (129,117)
Increase (decrease) in short-term loans 41,600 (55,000)
Checks outstanding in excess of cash balances 3,810 3,658
Payment of dividends (22,838) (21,915)
Other 264 277
CASH PROVIDED FROM (USED IN)
FINANCING ACTIVITIES 50,006 (83,509)
DECREASE IN CASH AND SHORT-TERM INVESTMENTS ($6,365) ($6,988)
QUESTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1994
Note A - Basis of Presentation
The interim financial statements furnished reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of
the results for the interim periods presented. All such adjustments are
of a normal recurring nature. Due to the seasonal nature of the
business, the results of operations for the three- and six-month periods
ended June 30, 1994, are not necessarily indicative of the results that
may be expected for the year ended December 31, 1994. For further
information refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1993.
Note B - Discontinued Operations
In October 1993, Questar reached an agreement with Nextel Communications
to sell Questar's entire interest in Questar Telecom for approximately
3.9 million shares of Nextel common stock. This sale was completed
August 4, 1994, subject to adjustments, and resulted in a pretax gain of
about $61.9 million ($37.2 million after-tax ). The closing price of
Nextel's common stock on August 4, 1994 was $25.625 per share. Since
Telecom represented all of Questar's specialized mobile radio operations,
these operations have been disclosed as discontinued on Questar's
financial statements. Prior financial statements have been reclassified
to present the discontinued operations as a single line on both the
income statement and balance sheet. Losses subsequent to September 1993
have been deferred until the sale is recorded since the Company expected
to report a gain from the sale.
Note C - Acquisitions of Oil and Gas Properties
The Company completed two acquisitions of oil and natural gas reserves
for $96,528,000 in the first quarter of 1994, which added a net 113.5
Bcfe of oil and natural gas reserves. These acquisitions were primarily
funded by Questar with a $50,000,000 bank loan and short-term debt.
These borrowings were repaid in August 1994, using proceeds from an
expansion of the existing production-based credit facility. The credit
facility was expanded to $135,000,000.
Note D - Accounting for Postemployment Benefits
Effective January 1, 1994, the Company recorded a liability for
postemployment disability and health care benefits in compliance with the
Statement of Financial Accounting Standards No. 112. The effect on net
income was not significant since the majority of the $3,268,000 liability
was offset with a regulatory asset because both Questar Pipeline and
Mountain Fuel expect to include these costs in future rates.
Note E - Financing
During the second quarter of 1994, Mountain Fuel issued $17,000,000 of
30-year notes at an 8.12% interest rate. Mountain Fuel used proceeds from
these notes for capital expenditures and operations. In August 1994 the
Company expanded its production-based credit facility from $65,000,000 to
$135,000,000. The proceeds of this revolving loan were used to repay a
bridge loan used to finance the E & P group's first-quarter 1994 property
acquisitions and also will provide financing for future capital
expenditures.
QUESTAR CORPORATION AND SUBSIDIARIES
MANAGEMENT'S ANALYSIS
June 30, 1994
Exploration and Production Operations --
Celsius Energy, Universal Resources and Wexpro (E&P group) conduct the
Company's exploration and production operations. Following is a summary
of financial results and operating information.
3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1994 1993 1994 1993 1994 1993
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $72,354 $51,421 $138,415 $109,091 $246,993 $203,462
From affiliates 18,502 11,567 38,346 25,914 71,210 54,869
Total revenues $90,856 $62,988 $176,761 $135,005 $318,203 $258,331
Operating income $16,087 $12,202 $31,168 $23,648 $56,907 $49,625
Net income 10,969 8,989 21,446 17,270 40,501 34,045
OPERATING STATISTICS
Production volumes -
Natural gas (in million
cubic feet) 10,442 8,001 18,300 15,582 35,017 30,470
Oil and natural gas liquids
(in thousands of barrels) 638 503 1,150 932 2,193 2,024
Production revenue
Natural gas (per thousand
cubic feet) $1.91 $1.85 $1.99 $1.86 $1.92 $1.77
Oil and natural gas liquids
(per barrel) 14.63 18.30 13.84 18.18 14.55 18.70
Gas marketing volumes (in thousands
of decatherms) 23,059 13,695 44,798 32,241 77,700 59,189
Increased natural gas reserves along with colder weather in the eastern
United States led to higher natural gas production in the 3-, 6-, and
12-month periods ended June 30, 1994 compared with the corresponding 1993
periods. The Company completed the $96,528,000 acquisition of 113.5 Bcfe
of natural gas and oil reserves during the first quarter of 1994 and
produced approximately 3.1 Bcf of gas from these properties in the first
half of 1994. The colder weather in the eastern United States resulted
in increased demand from the mid-continent producing area.
The E&P group received revenue of $1.99 per Mcf of gas production in the
first half of 1994 compared with $1.86 in the first half of 1993. The
price of natural gas increased because of strong demand for gas
throughout the eastern United States and our ability to pre-sell part of
our production at prices above current market levels. About 85% of Rocky
Mountain gas production is under contract until October 1994 at an
average price of $1.95 per Mcf.
Oil and natural gas liquids production was higher in the 1994 periods
presented due primarily to the previously mentioned reserve acquisitions
and the completion of several natural gas liquid processing plants that
were not on line in the first quarter of 1993. Of the 218,000 bbl
increase in first half production, about 171,000 bbl were produced from
the newly acquired properties. The increased production was largely
offset by reduced oil and natural gas liquid prices. Prices were down by
at least 20% in the 1994 periods compared with the same periods in the
prior year.
Gas marketing volumes increased 39% in the first six months of 1994 over
the first six months of 1993 as a result of increased national demand for
natural gas.
The E & P group recognized $2,761,000 of tight sands income tax credits
in the first half of 1994, up from $2,525,000 for the same period of
1993.
The Company enters into swaps, futures contracts or option agreements to
hedge its exposure to price fluctuations in connection with marketing of
its own production of natural gas and oil, and to secure a known margin
for the purchase and resale of gas in the Company's marketing activities.
The Company feels that there is a high degree of correlation of such
contracts because timing of production and the hedge contract are
closely matched, and hedge prices are established in the areas of the
Company's operations. Recognized gains and losses on hedge transactions
are matched and reported during the same time period as the related
physical transactions. The Company's hedging transactions do not have a
material effect on its operating results or financial position.
Natural Gas Transmission Operations --
Questar Pipeline conducts the Company's natural gas transmission,
gathering and storage operations. Following is a summary of financial
results and operating information.
3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1994 1993 1994 1993 1994 1993
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $9,614 $9,813 $18,201 $19,846 $39,709 $43,430
From affiliates 19,805 25,236 38,968 93,354 75,888 168,876
Total revenues $29,419 $35,049 $57,169 $113,200 $115,597 $212,306
Operating income $13,884 $10,378 $25,547 $25,116 $49,682 $49,767
Net income 6,869 4,778 12,377 12,160 23,492 23,932
OPERATING STATISTICS
Natural gas volumes (in thousands of
decatherms)
Transportation
For Mountain Fuel 15,204 9,778 52,064 23,037 94,088 40,179
For other customers 38,729 41,536 69,932 80,407 138,713 172,550
Total transportation 53,933 51,314 121,996 103,444 232,801 212,729
Sales for resale to Mountain Fuel 3,298 24,337 42,044
Total system throughput 53,933 54,612 121,996 127,781 232,801 254,773
Gathering
For Mountain Fuel 8,637 6,281 20,702 27,270 37,864 46,519
For other customers 12,624 11,809 24,407 19,399 53,344 37,865
Total gathering 21,261 18,090 45,109 46,669 91,208 84,384
Natural gas revenues (per decatherm)
Transportation $0.28 $0.23 $0.25 $0.23 $0.25 $0.22
Sales for resale 5.00 2.99 3.19
Gathering 0.34 0.22 0.28 0.22 0.25 0.23
Questar Pipeline began operating under Federal Energy Regulatory
Commission (FERC) Order 636 effective September 1, 1993. At that time
Questar Pipeline unbundled its transportation, gathering and storage
services and eliminated its sales-for-resale function. Under the Order
636 operating environment, firm transportation volumes do not have a
significant impact on current operating results since 96% of the cost of
service is recovered in the demand component of rates using the straight
fixed-variable rate design. Since this demand component is collected
equally each month of the year, revenues collected using the straight
fixed-variable rate design in the high-volume first and fourth quarters
are less than those collected under the rate design in effect during the
comparable periods of 1993. The straight fixed-variable rate design
resulted in increased revenues during the second quarter of 1994, when
compared to the same quarter of 1993.
Deliveries to Mountain Fuel were higher in the 3-, 6- and 12-month
periods ended June 30, 1994. Transportation for other customers was lower
in the 1994 periods because of lower firm transportation contract demand.
In April 1994, the FERC approved a gathering agreement between Questar
Pipeline and Mountain Fuel retroactive to September 1, 1993, which
allocates 60% of gathering costs to the demand component of rates and 40%
to the commodity component. Gathering revenues were increased
$1,335,000 in the second quarter of 1994, to retroactively reflect the
FERC approved gathering agreement. Mountain Fuel accounted for 46% of
the volumes of gas gathered in the first half of 1994.
Questar Pipeline expanded firm storage service at Clay Basin from 31 to
41.8 Bcf working gas capacity in mid-May 1994. With additional cushion
gas, storage capacity will be increased to 46.3 Bcf by the 1995-96
heating season.
Natural Gas Distribution --
Mountain Fuel conducts the Company's natural gas distribution operations.
Following is a summary of financial results and operating information.
3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1994 1993 1994 1993 1994 1993
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $53,382 $70,236 $201,700 $247,758 $354,167 $391,519
From affiliates 1,503 841 2,200 1,302 3,064 3,957
Total revenues $54,885 $71,077 $203,900 $249,060 $357,231 $395,476
Operating income (loss) ($4,995) $2,440 $22,781 $39,174 $30,116 $50,934
Net income (loss) (3,849) 2,150 11,249 22,615 13,703 30,683
OPERATING STATISTICS
Natural gas volumes (in thousands of
decatherms)
Residential and commercial sales 9,768 14,002 39,906 50,435 68,840 76,976
Industrial sales 1,692 1,364 3,909 3,102 7,321 5,730
Transportation for industrial
customers 10,020 11,824 23,291 28,838 47,558 54,085
Total deliveries 21,480 27,190 67,106 82,375 123,719 136,791
Natural gas revenue (per decatherm)
Residential and commercial $4.55 $4.42 $4.54 $4.52 $4.55 $4.60
Industrial sales 2.65 3.08 2.98 3.64 3.01 3.54
Transportation for industrial
customers 0.12 0.12 0.12 0.11 0.11 0.11
Heating degree days
Actual 523 950 2,830 4,117 4,786 6,047
Normal 741 1,040 3,484 4,003 5,282 5,803
Number of customers at end of
period 553,350 532,402
Natural gas volumes sold to residential and commercial customers
decreased in the 3-, 6- and 12-month periods of 1994 as a result of
unseasonably warm weather and a change in the method of recording
revenues from the retail sale of natural gas. These two factors were
also largely responsible for the significantly lower earnings reported in
the second quarter and first half of 1994. Temperatures in the first
half of 1994 were 19% warmer than normal compared with 3% colder than
normal weather in the first half of 1993. The effects of warmer weather
and the change in recording revenues was partially offset by a 3.9%
increase in the number of customers.
Mountain Fuel's allowed return on equity for Utah operations was reduced
from 12.1% to 11% effective January 1, 1994, by the Public Service
Commission of Utah (PSCU) in a general rate case order. Also as a
result of actions taken by the PSCU, the Company changed the way that
revenues for residential and commercial customers are recorded from an
"as-billed" to an "as-delivered" basis. This had the effect of shifting
approximately $5 million of net income from the first half of 1994 to the
second half, primarily the fourth quarter.
Volumes delivered to industrial customers decreased 15% in the first half
of 1994 compared with the same period of 1993. Natural gas demand for
electric generation and for use by several major metal and chemical
customers was lower during the first half of 1994.
The net income comparison for the first half of 1994 with the same period
in 1993 was also negatively affected by lower tight sands income tax
credits. Tight sands income tax credits amounted to $2,049,000 in 1994,
down from $3,299,000 in 1993.
Discontinued Operations -
In October 1993, Questar reached an agreement with Nextel Communications
to sell Questar's entire interest in Questar Telecom for approximately
3.9 million shares of Nextel common stock. This sale was completed
August 4, 1994, subject to adjustments, and resulted in a pretax gain of
about $61.9 million ($37.2 million after-tax ). The closing price of
Nextel's common stock on August 4, 1994 was $25.625 per share. Since
Telecom represented all of Questar's specialized mobile radio operations,
these operations have been disclosed as discontinued on Questar's
financial statements. Prior financial statements have been reclassified
to present the discontinued operations as a single line on both the
income statement and balance sheet. Losses subsequent to September 1993
have been deferred until the sale is recorded since the Company expected
to report a gain from the sale.
Consolidated Results of Operations --
Consolidated revenues were higher in the second quarter of 1994 compared
with the second quarter of 1993 due to increased exploration and
production revenues from natural gas production and marketing. However,
first half revenues were lower in 1994 because these positive factors
were more than offset by reduced natural gas deliveries by the natural
gas distribution and natural gas transmission business segments of
Questar. Consolidated revenues increased in the 12 months ended June 30,
1994, compared with the prior year period primarily because of increased
natural gas production and prices by the E & P group.
Natural gas purchases were lower in the 3-, 6- and 12- month periods of
1994 compared with the same periods of 1993 because of reduced deliveries
by Mountain Fuel.
Operating and maintenance expenses were higher in the 3-, 6- and 12-month
periods primarily due to increased production volumes and costs from the
additional oil and gas properties being operated as a result of the
property acquisitions. Another cause for higher expenses was the
above-average growth in the number of distribution customers. Partially
offsetting the increase was a credit received by the E & P group from the
recovery of injected gas in the Powell field and lower variable costs due
to lower natural gas transmission throughput.
Depreciation and amortization increased in the periods ended June 30,
1994, because of increased natural gas and oil production and increased
investment in property, plant and equipment by all lines of business.
Other taxes were higher in the periods ended June 30, 1994, because of
the increased production volumes.
Interest and other income was higher in the 1994 periods largely due to a
working-gas carrying charge earned by Mountain Fuel as allowed by the
PSCU in the last general rate case. Debt expense increased in the 1994
periods because of higher debt balances.
The effective income tax rate for the six months was 32.1% in 1994 and
30.1% in 1993. The Company recognized $4,810,000 of tight-sands gas
production tax credits in the 1994 period and $5,824,000 in the 1993
period. The Company expects to recognize about $10,000,000 of tax
credits in 1994 compared with $11,026,000 in 1993.
Effective January 1, 1994, the Company recorded a liability for
postemployment disability and health care benefits in compliance with the
Statement of Financial Accounting Standards No. 112. The effect on net
income was not significant since the majority of the $3,268,000 liability
was offset with a regulatory asset because both Questar Pipeline and
Mountain Fuel expect to include these costs in future rates.
In the first half of 1994, the Company, through an affililate, converted
$6,758,000 of loans receivable from FuelMaker to common equity resulting
in an increase in ownership to 40% from 33%.
Liquidity and Capital Resources --
Operating Activities:
Net cash provided from operating activities was $96,885,000 for the first
six months of 1994 compared with $125,133,000 for the same period of
1993. The decrease was primarily due to lower net income and lower
sources of cash from changes in gas stored underground, and the purchased
gas cost balancing account.
Investing Activities:
Capital expenditures of $163,320,000 in the first half of 1994, were
$112,059,000 higher than for the same period a year ago due largely to E
& P property acquisitions. A comparison of capital expenditures for the
first six months of 1994 and 1993 plus an estimate for the calendar year
1994 are as follows:
Estimated
Actual 12 months
Six months Ended Ended
June 30, Dec. 31,
1994 1993 1994
(In Thousands)
Exploration and production $113,641 $19,787 $160,000
Natural gas transmission 27,356 12,827 64,500
Natural gas distribution 19,075 14,551 51,400
Other operations 3,248 4,096 21,100
$163,320 $51,261 $297,000
Capital expenditures in 1994 included purchases of oil and gas reserves
and related properties by Universal Resources as follows:
(In Thousands)
Purchase of properties from Petroleum Inc. $22,200
Purchase of Amax Oil and Gas Northern Division
properties from Union Pacific Resources Corporation 88,128
Exercise of option to purchase Amax's Colorado properties
by the Southern Ute Indian Tribe (13,800)
$96,528
Financing Activities:
Questar borrowed $50,000,000 under a bridge-loan agreement with a bank to
finance a portion of the oil and gas reserve acquisitions. This loan was
repaid in August, 1994, with proceeds from the existing production-based
credit facility, which was expanded to $135,000,000. Mountain Fuel also
borrowed $17,000,000 of 30-year notes with an interest rate of 8.12%.
Questar plans to finance the remaining 1994 capital expenditures with
cash flow from operations, short-term debt and borrowings under the
expanded production-based credit facility. In addition, Questar may
issue common stock, or sell or monetize a portion of its investment in
Nextel common stock to fund capital expenditures.
Short-term borrowings at June 30, consisted of the following:
1994 1993
(In Thousands)
Commercial paper $69,900 $15,000
Bridge loan to finance reserve acquisitions 50,000
$119,900 $15,000
The Company had the capacity at June 30, 1994, to borrow an additional
$45,800,000 under short-term credit lines with banks. Total short-term
credit lines capacity was subsequently reduced to $135,700,000 following
the termination of the $50,000,000 bridge loan in August, 1994.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders.
Questar Corporation (Questar or the Company) held its annual
meeting of stockholders on May 17, 1994. Four incumbent
directors - U. Edwin Garrison, W. Whitley Hawkins, Robert E.
Kadlec, and Harris H. Simmons - were elected to serve three-year
terms. The following chart lists the name of each director
nominated and elected, the number of votes cast in favor of his
election, and the number of votes withheld from his election.
Director In Favor Withheld
U. Edwin Garrison 33,890,943 165,432
W. Whitley Hawkins 33,897,915 158,460
Robert E. Kadlec 33,905,770 150,605
Harris H. Simmons 33,805,710 250,665
Since brokers are permitted to vote for the election of
directors in an uncontested election, there were no broker
nonvotes. Shareholders are not given an option to abstain with
respect to the election of directors.
Item 5. Other Matters.
On August 4, 1994, Questar received 3,875,950 shares of
Class A common stock issued by Nextel Communications, Inc.
(Nextel) in a nontaxable share exchange for 100 percent of the
outstanding shares of Questar Telecom, Inc. The agreement was
negotiated with Nextel in October of 1993. The closing was
delayed when the parties to the transaction received requests
from the Department of Justice relating to the effect of the
transaction on competition within the specialized mobile radio
market and by unexpected problems in securing necessary
regulatory approvals.
The Company has no current plans to dispose of its shares of
Nextel stock, but anticipates that it may sell or otherwise
monetize up to 50 percent of its investment in Nextel within the
next year.
Item 6. Exhibits and Reports on Form 8-K.
The following exhibit is filed as part of this report.
Exhibit No. Exhibit
10.14. Agreement and Plan of Reorganization, dated
April 29, 1994, by and between Nextel
Communications, Inc., Questar Corporation,
Advanced MobilComm, Inc., Robert C. Mearns
and Francis G. Fuson.
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 CORPORATION
(Registrant)
August 12, 1994 /s/W. F. Edwards
(Date) W. F. Edwards
Senior Vice President and Chief
Financial Officer (Duly authorized
officer and principal financial
officer)