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, 1996
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) 324-5000
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, 1996
Common Stock, without par value 40,841,584 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,
1996 1995 1996 1995 1996 1995
(In Thousands, Except Per Share Amounts)
REVENUES $144,514 $138,569 $370,237 $354,501 $665,023 $666,113
OPERATING EXPENSES
Natural gas purchases 38,724 34,559 119,192 120,147 198,464 208,438
Operating and maintenance 48,036 45,861 97,214 92,205 184,734 180,647
Depreciation and amortization 24,474 24,784 50,195 49,233 97,254 96,146
Other taxes 8,111 8,401 17,406 17,600 31,631 32,615
TOTAL OPERATING EXPENSES 119,345 113,605 284,007 279,185 512,083 517,846
OPERATING INCOME 25,169 24,964 86,230 75,316 152,940 148,267
INTEREST AND OTHER INCOME 5,911 4,322 9,947 6,037 21,224 7,991
WRITE-DOWN OF INVESTMENT IN
NEXTEL COMMUNICATIONS (61,743)
DEBT EXPENSE (9,195) (10,825) (20,320) (22,082) (41,053) (43,533)
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 21,885 18,461 75,857 59,271 133,111 50,982
INCOME TAXES 5,817 3,899 25,193 17,636 40,296 4,951
INCOME FROM CONTINUING
OPERATIONS 16,068 14,562 50,664 41,635 92,815 46,031
GAIN FROM SALE OF
DISCONTINUED OPERATIONS 38,126
NET INCOME $16,068 $14,562 $50,664 $41,635 $92,815 $84,157
EARNINGS PER COMMON SHARE
Income from continuing operations $0.39 $0.35 $1.24 $1.02 $2.27 $1.12
Gain from sale of
discontinued operations 0.95
Net income $0.39 $0.35 $1.24 $1.02 $2.27 $2.07
Dividends per common share $0.295 $0.285 $0.59 $0.57 $1.18 $1.14
Average common shares outstanding 40,789 40,529 40,753 40,490 40,690 40,422
QUESTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1996 1995 1995
(In Thousands)
ASSETS
Current assets
Cash and short-term investments $5,122
Accounts receivable $105,072 $94,470 126,528
Inventories 17,825 25,659 28,110
Other current assets 10,219 13,570 10,965
Total current assets 133,116 133,699 170,725
Property, plant and equipment 2,352,497 2,296,778 2,330,900
Less allowances for depreciation
and amortization 1,061,996 1,004,792 1,020,779
Net property, plant and equipment 1,290,501 1,291,986 1,310,121
Securities available for resale,
approximates fair value 59,177 54,748 52,745
Other assets 47,339 45,042 50,962
$1,530,133 $1,525,475 $1,584,553
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Checks outstanding in excess of
cash balances $4,287 $5,134
Short-term loans 10,000 18,000 $77,200
Accounts payable and accrued expenses 100,620 91,500 117,240
Purchased-gas adjustments 1,559 32,372 9,182
Current portion of long-term debt 23,704 19,004
Total current liabilities 140,170 147,006 222,626
Long-term debt, less current portion 404,004 477,692 421,695
Other liabilities and deferred credits 35,197 39,963 34,700
Deferred income taxes and investment
tax credits 195,305 167,939 187,900
Redeemable cumulative preferred stock 4,954 6,218 4,957
Common shareholders' equity
Common stock 286,880 280,003 283,776
Retained earnings 464,897 420,102 438,284
Note receivable from ESOP (20,550) (24,050) (21,238)
Unrealized gain on securities available
for resale, net of income taxes 19,276 10,602 11,853
Total common shareholders' equity 750,503 686,657 712,675
$1,530,133 $1,525,475 $1,584,553
QUESTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
6 Months Ended
June 30,
1996 1995
(In Thousands)
OPERATING ACTIVITIES
Net income $50,664 $41,635
Depreciation and amortization 52,466 51,540
Deferred income taxes and
investment tax credits 2,807 (3,170)
Gain from sales of securities (4,957)
100,980 90,005
Change in operating assets
and liabilities 13,439 46,862
NET CASH PROVIDED FROM
OPERATING ACTIVITIES 114,419 136,867
INVESTING ACTIVITIES
Capital expenditures
Purchase of property, plant
and equipment (38,758) (38,724)
Other investments (1,223) (657)
Total capital expenditures (39,981) (39,381)
Proceeds from disposition of property,
plant and equipment 6,062 2,998
Proceeds from the sales of securities 10,544
NET CASH USED IN INVESTING
ACTIVITIES (23,375) (36,383)
FINANCING ACTIVITIES
Issuance of common stock 4,108 3,874
Common stock repurchased (1,004) (426)
Redemption of preferred stock (3) (106)
Issuance of long-term debt 12,000 2,000
Repayment of long-term debt (24,991) (18,992)
Decrease in short-term loans (67,200) (76,900)
Checks outstanding in excess
of cash balances 4,287 5,134
Payment of dividends (24,245) (23,339)
Other 882 722
NET CASH USED IN FINANCING
ACTIVITIES (96,166) (108,033)
DECREASE IN CASH AND
SHORT-TERM INVESTMENTS ($5,122) ($7,549)
QUESTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
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, 1996, are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1996. 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, 1995.
QUESTAR CORPORATION AND SUBSIDIARIES
MANAGEMENT'S ANALYSIS
June 30, 1996
Market Resources Operations -
Celsius Energy, Universal Resources, Questar Energy Trading, Questar
Energy Services and Wexpro (Market Resources group) conduct the
Company's exploration, production and energy marketing 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,
1996 1995 1996 1995 1996 1995
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $74,162 $60,843 $145,285 $125,431 $265,118 $241,580
From affiliates 12,555 14,501 30,158 31,081 63,279 70,084
Total revenues $86,717 $75,344 $175,443 $156,512 $328,397 $311,664
Operating income $12,550 $10,737 $25,621 $22,547 $47,399 $50,673
Net income 8,556 8,896 16,673 16,748 31,840 35,518
OPERATING STATISTICS
Production volumes -
Natural gas (in million
cubic feet) 9,188 8,785 18,333 17,709 33,287 37,068
Oil and natural gas liquids
(in thousands of barrels) 567 640 1,139 1,260 2,315 2,552
Production revenues
Natural gas (per thousand
cubic feet) $1.43 $1.26 $1.50 $1.37 $1.40 $1.48
Oil and natural gas liquids
(per barrel) $18.43 $16.52 $17.43 $16.03 $16.65 $15.80
Gas marketing volumes (in thousands
of decatherms) 26,546 24,651 56,221 48,579 117,016 92,722
Revenues were 15% higher for the second quarter of 1996 and 12% higher
for the first half of 1996 when compared with the same periods in 1995
as a result of increased selling prices and natural gas production and
increased gas-marketing volumes.
For the second quarter of 1996 approximately 57% of the gas production
came from Universal Resources, where the average sales price of $1.61
per Mcf was 25% higher than a year earlier. Prices received by Celsius
Energy averaged $1.18 per Mcf. The regional price weakness was
largely the result of abundant, inexpensive hydroelectric power and a
shortage of capacity on interstate gas pipelines between the Rocky
Mountains and Eastern markets. About 80% of Midcontinent equity
production is under hedged or fixed-price contracts. That portion
will drop to about 50% by the end of the third quarter. Between 20
and 30% of Rocky Mountain production is covered under hedged or
fixed-price contracts.
Revenues were 5% higher for the 12 months ended June 30, 1996 when
compared with the prior year period when gas-marketing volumes
replaced gas produced from Company-owned reserves. A portion of gas
production from the Rocky Mountain region was shut in during the
second half of 1995 in response to extremely low gas prices. The
Market Resources group substituted purchased gas for produced gas to
minimize lost revenue from the shut-in production. Most of the
shut-in wells were producing during the first half of 1996.
Revenues from sales of oil and natural gas liquids were flat in the
3-month period ended June 30, 1996 as higher selling prices offset
lower production volumes. Revenues were lower in the 6- and 12-month
periods ended June 30, 1996 due to a decline in production.
Revenues for cost-of-service operation of Mountain Fuel's gas wells
were lower for the 1996 periods presented as a result of lower
operating expenses and a declining investment base.
Customers' buy-out of gas-sales contracts added $1.3 million to 1995
after-tax earnings of the Market Resources group.
Regulated Services Operations -
Mountain Fuel and Questar Pipeline conduct the Company's regulated
services of natural gas distribution, transmission and storage.
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,
1996 1995 1996 1995 1996 1995
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $57,064 $65,984 $201,631 $205,807 $354,582 $378,347
From affiliates 863 1,312 1,199 2,304 2,906 4,124
Total revenues $57,927 $67,296 $202,830 $208,111 $357,488 $382,471
Operating income (loss) ($537) $814 $33,260 $25,291 $51,691 $41,831
Net income (loss) (617) 152 18,234 13,213 28,689 25,316
OPERATING STATISTICS
Natural gas volumes (in thousands of
decatherms)
Residential and commercial
sales 11,991 13,935 46,408 43,513 76,845 77,840
Industrial sales 1,858 2,068 4,352 5,253 8,309 10,226
Transportation for industrial
customers 11,046 13,952 24,775 31,561 52,783 59,652
Total deliveries 24,895 29,955 75,535 80,327 137,937 147,718
Natural gas revenue (per decatherm)
Residential and commercial $3.93 $3.97 $3.93 $4.20 $4.10 $4.25
Industrial sales 2.14 2.49 2.14 2.55 2.21 2.56
Transportation for industrial
customers 0.13 0.10 0.12 0.10 0.11 0.10
Heating degree days
Actual 617 895 3,213 3,112 5,148 5,572
Normal 741 741 3,484 3,484 5,801 5,801
Colder (warmer) than normal (17%) 21% (8%) (11%) (11%) (4%)
Number of customers at end of
period 597,143 575,450
Revenues, net of gas costs, decreased $583,000 or 2% in the second
quarter as a result of lower sales volumes caused by warmer weather
that more than offset the affects of a rate case settlement.
Temperatures, as measured in degree days, were 17% warmer than normal
for the second quarter of 1996 compared with 21% colder than normal
for the same quarter in 1995. Revenues, net of gas costs, were
$9,385,000 or 10% higher for the first half of 1996 when compared with
the first half of 1995 due to colder temperatures in the first quarter
of 1996, the benefits of a rate case settlement and a 3.8% annual rate
of growth in the number of customers. Temperatures in the first
quarter of 1996 were 5% warmer than normal compared with 19% warmer
than normal reported in the first quarter of 1995.
The effect of the warmer-than-normal weather in 1996 was partially
offset by the provisions of the 1995 rate settlement that provides for
a weather-normalization adjustment, new-premises fee and sharing of
capacity release revenues. About 40 to 50% of Mountain Fuel's
residential and commercial sales volumes were subjected to
temperature-adjusted rates. Under the provisions of the Utah rate
settlement, the weather-normalization adjustment will be extended to
all residential and commercial volumes beginning October 1 unless
customers inform Mountain Fuel that they desire to be treated
otherwise. The terms of the Utah rate case are expected to add about
$3.7 million in annual revenues from a new-premises fee and the
sharing of capacity-release credits. In addition to the other rate
case items, Mountain Fuel's allowed return on rate base increased from
10.08% to between 10.22% and 10.34%. Mountain Fuel also received
approval from the Public Service Commission of Wyoming to implement a
weather-normalization adjustment for all residential and commercial
customers beginning September 1.
Volumes delivered to industrial customers were 19% less in the second
quarter of 1996 and 21% less in the first half of 1996 when compared
with the same periods of 1995 due to a continued abundance of
inexpensive hydroelectric power. Margins from gas delivered to
industrial customers are substantially lower than from gas sold to
residential and commercial customers.
Natural Gas Transmission Operations --
Questar Pipeline conducts the Company's natural gas transmission,
storage and gathering 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,
1996 1995 1996 1995 1996 1995
(Dollars in Thousands)
FINANCIAL RESULTS
Revenues
From unaffiliated customers $12,859 $11,285 $22,532 $22,144 $43,704 $44,355
From affiliates 17,481 18,550 39,576 37,256 76,359 73,484
Total revenues $30,340 $29,835 $62,108 $59,400 $120,063 $117,839
Operating income $12,755 $12,883 $25,826 $25,736 $52,027 $53,067
Net income 5,891 5,811 12,281 12,085 24,844 25,537
OPERATING STATISTICS
Natural gas volumes (in thousands of
decatherms)
Transportation
For unaffiliated customers 36,158 38,978 73,031 77,547 147,427 149,129
For Mountain Fuel 16,426 15,553 53,582 44,752 88,702 77,481
For other affiliated customer 10,271 10,133 14,869 16,359 37,349 40,336
Total transportation 62,855 64,664 141,482 138,658 273,478 266,946
Gathering
For unaffiliated customers 9,725 10,126 20,559 19,747 39,840 39,461
For Mountain Fuel 4,555 7,470 14,373 16,860 29,204 30,756
For other affiliated customer 2,485 1,815 4,401 3,095 7,255 8,359
Total gathering 16,765 19,411 39,333 39,702 76,299 78,576
Natural gas revenues (per decatherm)
Transportation $0.28 $0.25 $0.24 $0.23 $0.24 $0.24
Gathering 0.29 0.28 0.26 0.28 0.27 0.28
Revenues were higher in the 1996 periods presented partially as a
result of a rate increase for transportation and storage activities.
Questar Pipeline filed for a rate increase with the Federal Energy
Regulatory Commission (FERC) on July 31, 1995. Questar Pipeline began
collecting revenues under the new rate structure, subject to refund,
February 1, 1996. The FERC approved a rate settlement July 1, 1996.
The settlement included a stated return on equity of 11.75% and is
expected to add approximately $5.9 million to annual revenues or $3
million in after-tax income. Questar Pipeline had fully reserved for
the differences between the filed rates and the settlement rates and
as a result there was no significant impact on net income. In
addition to the rate increase, Questar Pipeline reported higher
revenues from its expanded firm gas-storage activities.
Revenues for gas-gathering activities were lower for the 1996 periods
presented as a result of decreased volumes gathered and a decrease in
the rate charged on gas volumes gathered for Mountain Fuel.
Reservation charges on Mountain Fuel's firm-gathering contract were
reduced beginning in the Fall of 1995.
Questar Pipeline transferred approximately $55 million of
gas-gathering assets to Questar Gas Management Company, a wholly owned
subsidiary. The transfer was approved by the FERC February 28, 1996
and was effective March 1, 1996. Questar Corporation, in its
continuing efforts to realign its operations into the two primary
activities of Regulated Services and nonregulated Market Resources,
transferred Questar Gas Management Company to its Market Resources
group on July 1, 1996.
Questar Pipeline and Mountain Fuel have consolidated various
financial, technical, administrative and other support functions in an
ongoing effort to improve efficiency and coordination.
Consolidated Results of Operations --
Consolidated revenues increased in the 3- and 6-month periods ended
June 30, 1996 when compared with the same periods of 1995 due to
increases in gas-marketing volumes sold, increases in gas production,
higher gas selling prices and rate increases for gas distribution,
transmission and storage activities.
Natural gas purchase expenses increased for the second quarter ended
June 30, 1996 when compared with the second quarter of 1995 due
primarily to an increase in the volumes of gas purchased for
gas-marketing activities. Natural gas purchase expenses were lower in
the 6- and 12-month periods of 1996 when compared with the same
periods of 1995 primarily because of lower natural gas purchase
prices. The gas cost allowed in distribution rates has decreased from
$1.43 per dth filed in February 1995 to $1.03 per dth beginning
February 1996.
Operating and maintenance expenses were higher for the 1996 periods
when compared with the same periods in the prior year. The increases
resulted from not repeating the recognition of production credits
which amounted to $1.5 million in the first half of 1995, some
one-time expenses from gas transmission operations related to the
gathering division spin down and rate case, and an increase in the
number of distribution customers. The combined benefits of an early
retirement program and consolidation of gas distribution operations
beginning in mid-1995 partially offset these increases.
Depreciation expenses were slightly lower for the second quarter of
1996 when compared to the second quarter of 1995 because the effects
of revising ownership interests in a jointly owned property and a
lower full cost amortization rate more than offset increases in
property, plant and equipment. The full cost amortization rate was
$.78 per equivalent Mcf for the first half of 1996, down from $.81 per
Mcfe in the prior year period. Depreciation and amortization expenses
were higher in the 6- and 12-month periods ended June 30, 1996,
primarily due to increased investment in property, plant and
equipment.
Interest and other income was higher in the first half of 1996 because
of a $4,957,000 pretax gain from the sales of Nextel related
securities, a $1,644,000 pretax gain from selling real estate, which
includes selling two former gas-distribution service centers, and a
$700,000 pretax gain from the sales of FCC licenses and related
equipment. The Company's Market Resources group reported a $2,100,000
pretax gain from customers' buy-out of gas-sales agreements in the
second quarter of 1995.
In the third quarter of 1994, Questar Corporation sold Questar Telecom
to Nextel Communications in exchange for 3.9 million shares of Nextel
common stock and reported a $38,126,000 after-tax gain from the sale.
At year end 1994, the Company wrote down its investment in Nextel
Communications by $61,743,000. This amounted to $38,126,000, or $.95
per share, after income taxes. These transactions are included in
operating results for the 12 months ended June 30, 1995.
The effective income tax rate for the first half was 33.2 % in 1996
and 29.8% in 1995. The Company recognized $4,483,000 of tight-sands
gas production tax credits in the 1996 period and $4,759,000 in the
1995 period.
Liquidity and Capital Resources --
Operating Activities:
Net cash provided from operating activities was $114,419,000 for the
first half of 1996, compared with $136,867,000 for the same period of
1995. A refund of gas costs to gas distribution customers in the
first quarter of 1996, lower gas purchase costs collected in rates
from gas distribution customers and margin calls on gas price swap
agreements resulted in lower net cash flow provided from operating
activities for 1996.
Investing Activities:
Capital expenditures were $39,981,000 for the first six months of
1996, compared with $39,381,000 for the same period a year ago.
Proceeds from the sales of Nextel related securities amounted to
$10,544,000. A comparison of capital expenditures by line of business
for the first half of 1996 and 1995 plus an estimate for calendar year
1996 are as follows:
Estimate
Actual 12 Months
Six Months Ended Ended
June 30, Dec. 31,
1996 1995 1996
(In Thousands)
Market Resources $8,245 $10,911 $83,300
Regulated Services
Natural gas distribution 15,969 16,952 55,000
Natural gas transmission 7,381 9,535 37,100
Total Regulated Services 23,350 26,487 92,100
Other operations 8,386 1,983 59,400
$39,981 $39,381 $234,800
Financing Activities:
Net cash flow from operating activities plus the proceeds from selling
Nextel securities provided funds for repayment of short-term and
long-term debt, payment of dividends and funding capital expenditures
for the first six months of 1996. The Company plans to finance 1996
capital expenditures through net cash provided from operating
activities, bank borrowings, and proceeds from its dividend
reinvestment plan. In addition, the Company may sell up to one third
of its investment in Nextel common stock, depending upon market
conditions, to fund capital expenditures.
Short-term bank borrowings were $10,000,000 at June 30, 1996 and
$18,000,000 at June 30, 1995. Short-term bank lines of credit serve
as backup to the credit received through the commercial paper program.
No amounts were borrowed under commercial paper agreements at either
June 30, 1996 or June 30, 1995. The Company's lines of credit
borrowing capacity was $100,000,000 at June 30, 1996. Borrowing
capacity increases to $135,000,000 from October 1 to March 31
anticipating seasonal credit demands. The Company repaid a
$19,000,000, 8.25% ESOP note as scheduled on July 1, 1996.
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 21, 1996. Four incumbent
directors, Patrick J. Early, Dixie L. Leavitt, Mary Mead, and D. N.
Rose, 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/her election, and the number of votes withheld from
his/her election:
Name Votes Cast in Favor Votes Withheld
Patrick J. Early 30,231,919 1,929,621
Dixie L. Leavitt 30,195,403 1,966,137
Mary Mead 30,260,795 1,900,745
D. N. Rose 30,221,278 1,940,262
Each of the nominees received more than 93.8 percent of the total votes
cast and more than 74 percent of the outstanding shares.
The Company's Board of Directors recommended three proposals for
consideration by the Company's shareholders. The first proposal
involved amendments to the Company's Long-Term Stock Incentive Plan that
would permit such plan to qualify as a performance-based plan under
applicable tax regulations, enlarge the number of eligible participants,
and extend the exercise term after a participant's retirement.
Amendments to the Company's Stock Option Plan for Directors constituted
the second proposal under consideration. The proposed amendments
enlarged the number of shares reserved and extended the term of this
plan. The third proposal involved a new Directors' Stock Plan that
would permit directors to be paid their fees with shares of the
Company's common stock. All three proposals were approved by the
Company's shareholders as is shown in the following chart:
FOR AGAINST ABSTAIN
Proposal No. One: 29,834,316 1,996,908 314,766
Proposal No. Two: 29,140,224 2,617,355 388,411
Proposal No. Three: 30,233,968 1,525,652 386,370
Each of the proposals received more than 90 percent of the votes cast
and more than 71 percent of the outstanding shares.
The United Food and Commercial Workers Union, Local 99R (the UFCW),
a record shareholder of 100 shares, indicated that it intended to
present two proposals for consideration by the Company's shareholders
and filed proxy solicitation materials with the Securities and Exchange
Commission. The Company's Board of Directors opposed both proposals,
but included the proposals in the definitive proxy materials. The
UFCW's proposals involved confidential voting and possible severance
payments under the Company's Executive Severance Compensation Plan. The
proposals were not approved by the Company's shareholders as is shown on
the following chart:
FOR AGAINST ABSTAIN
UFCW Proposal No. One: 10,435,570 17,101,912 1,632,341
UFCW Proposal No. Two: 6,148,664 21,820,853 1,200,306
Item 5. Other Information.
On June 21, 1996, Mary Mead, a director of the Company, was killed
in a horseback riding accident. Mrs. Mead, who turned 61 on the date of
her death, had served as a director of the Company since February of
1990. She was a rancher in Jackson, Wyoming, and had recently been
elected to another three-year term. The Company's Board of Directors
has not replaced her.
Item 6. Exhibits and Reports on Form 8-K.
The following exhibits are filed as part of this report.
Exhibit No. Exhibit
10.5. Questar Corporation Long-Term Stock Incentive
Plan, as amended and restated May 21, 1996.
10.10. Questar Corporation Stock Option Plan for
Directors, as amended and restated May 21, 1996.
10.15. Questar Corporation Directors' Stock Plan as
approved May 21, 1996.
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 13, 1996 /s/ R. D. Cash
(Date) R. D. Cash
Chairman of the Board,
President and Chief
Executive Officer
August 13, 1996 /s/ S. E. Parks
(Date) S. E. Parks
Vice President, Treasurer and
Chief Financial Officer