<Page>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001.
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. 0-30321
QUESTAR MARKET RESOURCES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF UTAH 87-0287750
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 45601, 180 East 100 South, Salt Lake City, Utah 84145-0601
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 324- 2600
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 April 30, 2001
- ----------------------------- --------------------------------
Common Stock, $1.00 par value 4,309,427 shares
Registrant meets the conditions set forth in General Instruction H(a)(1) and
(b) of Form 10-Q and is filing this Form 10-Q/A with the reduced disclosure
format.
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Restated)
(Unaudited)
<Table>
<Caption>
3 Months Ended
March 31,
2001 2000
--------- ---------
(In Thousands)
REVENUES $ 258,846 $ 141,761
OPERATING EXPENSES
Cost of natural gas and other
products sold 141,580 63,893
Operating and maintenance 23,719 22,914
Exploration 1,617 3,255
Depreciation, depletion and amortization 20,839 21,213
Other taxes 16,837 7,314
Wexpro settlement agreement - oil
income sharing 1,179 984
--------- ---------
TOTAL OPERATING EXPENSES 205,771 119,573
--------- ---------
OPERATING INCOME 53,075 22,188
INTEREST AND OTHER INCOME 11,951 1,203
MINORITY INTEREST 62
INCOME FROM UNCONSOLIDATED AFFILIATES 49 999
DEBT EXPENSE (4,985) (5,370)
--------- ---------
INCOME BEFORE INCOME TAXES 60,152 19,020
INCOME TAXES 21,808 5,633
--------- ---------
NET INCOME $ 38,344 $ 13,387
========= =========
</Table>
See notes to consolidated financial statements
2
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QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Restated)
<Table>
<Caption>
March 31, December 31,
2001 2000
(Unaudited)
----------- -----------
(In Thousands)
ASSETS
Current assets
Cash and cash equivalents $ 3,980
Notes receivable from Questar Corp. $ 20,300
Accounts receivable, net 121,660 148,433
Qualifying hedging collateral 7,338 48,377
Inventories, at lower of average cost or market -
Gas and oil storage 345 7,618
Materials and supplies 3,725 2,298
Prepaid expenses and other 7,251 4,828
----------- -----------
Total current assets 160,619 215,534
----------- -----------
Property, plant and equipment 1,387,687 1,400,159
Less accumulated depreciation, depletion
and amortization 668,808 662,923
----------- -----------
Net property, plant and equipment 718,879 737,236
----------- -----------
Investment in unconsolidated affiliates 15,255 15,417
Other assets
Cash held in escrow account 26,518 5,387
Other 3,119 4,344
----------- -----------
29,637 9,731
----------- -----------
$ 924,390 $ 977,918
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Checks outstanding in excess of cash balance $ 741
Short-term loans $ 12,500
Notes payable to Questar Corp. 10,500 51,000
Accounts payable and accrued expenses 142,410 164,325
Hedging liability 52,011
----------- -----------
Total current liabilities 205,662 227,825
----------- -----------
Long-term debt 229,414 244,377
Other liabilities 8,758 13,847
Deferred income taxes 56,301 67,875
Minority interest 5,325 5,483
Common shareholder's equity
Common stock 4,309 4,309
Additional paid-in capital 116,027 116,027
Retained earnings 333,440 299,420
Cumulative other comprehensive loss (34,846) (1,245)
----------- -----------
Total common shareholder's equity 418,930 418,511
----------- -----------
$ 924,390 $ 977,918
=========== ===========
</Table>
See notes to consolidated financial statements
3
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QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Restated)
(Unaudited)
<Table>
<Caption>
3 Months Ended
March 31,
2001 2000
--------- ---------
(In Thousands)
OPERATING ACTIVITIES
Net income $ 38,344 $ 13,387
Depreciation, depletion and amortization 21,018 21,384
Deferred income taxes 9,538 (1,379)
(Income) loss from unconsolidated
affiliates, net of cash distributions 162 (924)
Changes in operating assets
and liabilities 45,474 (4,494)
--------- ---------
NET CASH PROVIDED FROM
OPERATING ACTIVITIES 114,536 27,974
INVESTING ACTIVITIES
Capital expenditures (23,408) (78,164)
Proceeds from disposition of property,
plant and equipment 15,837 1,238
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (7,571) (76,926)
FINANCING ACTIVITIES
Change in notes receivable from Questar Corp. (20,300) 4,000
Change in notes payable to Questar Corp. (40,500) 25,200
Checks outstanding in excess of cash balance 741 (1,246)
Change in short-term loans (12,500)
Cash in escrow account (21,131) (583)
Long-term debt issued 185,000 33,402
Long-term debt repaid (197,569) (5,000)
Other (159)
Payment of dividends (4,325) (4,325)
--------- ---------
NET CASH PROVIDED FROM (USED IN)
FINANCING ACTIVITIES (110,743) 51,448
Foreign currency translation adjustment (202) (290)
--------- ---------
Change in cash and cash equivalents (3,980) 2,206
Beginning cash and cash equivalents 3,980
--------- ---------
Ending cash and cash equivalents $ -- $ 2,206
========= =========
</Table>
See notes to consolidated financial statements
4
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QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(Restated)
(Unaudited)
Note 1 - Basis of Presentation
The interim financial statements 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 nature of the business, the results of operations for the
three-month period ended March 31, 2001, are not necessarily indicative of
the results that may be expected for the year ending December 31, 2001. For
further information refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K/A for
the year ended December 31, 2000,
Note 2 - Change in Method of Accounting for Gas and Oil Properties
On July 1, 2001, Questar Market Resources (QMR) elected to change its accounting
method for gas and oil properties from the full cost method to the successful
efforts method. The change was prompted by an acquisition of a company that uses
successful efforts. A subsidiary, Wexpro, has always employed the successful
efforts method. Management believes that the successful efforts method is
preferable and will more accurately present the results of operations of the
Company's exploration, development and production activities, minimizes asset
write-downs caused by temporary declines in gas and oil prices and reflects
impairment of the carrying value of the Company's gas and oil properties only
when there has been an other-than-temporary decline in their fair value.
As a result of this change in accounting method, prior year and interim
financial statements have been retroactively restated. The effect of the
change in accounting method on previously reported earnings was an increase
in net income of $4.4 million for the three-month period ended March 31, 2001
and a decrease in net income of $1.7 million in the three-month period ended
March 31, 2000.
Note 3 - Subsequent Event - Acquisition
QMR acquired 100% of the common stock of Shenandoah Energy, Inc. (SEI) on July
31, 2001 for $403 million in cash including assumed debt. SEI was a privately
held Denver-based exploration, production, gathering and drilling company. QMR
obtained an estimated 415 billion cubic feet equivalent of proved oil and gas
reserves, gas processing capacity of 100 MMcf per day, 90 miles of gathering
lines, 114,000 acres of net undeveloped leasehold acreage and four drilling
rigs. SEI operations are located primarily in the Uintah Basin of eastern Utah.
The transaction was accounted for as a purchase business combination in
accordance with accounting principles generally accepted in the United States.
The purchase price in excess of the estimated fair value of the assets was
assigned to goodwill. The acquisition was financed through bank borrowings.
Note 4 - Financing
On March 6, 2001, Market Resources in a public offering issued $150 million
of 7.5% notes due 2011. Market Resources applied the proceeds of the debt
offering to repay a portion of its outstanding floating-rate bank debt. On
January 16, 2002, QMR issued $200 million of 7% notes due 2007 and used the
proceeds to repay existing debt. The notes were issued through a private
placement; however, QMR intends to register the notes.
5
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Note 5 - Operations By Line of Business
<Table>
<Caption>
3 Months Ended
March 31,
2001 2000
-------- --------
(In Thousands)
REVENUES FROM UNAFFILIATED CUSTOMERS
Exploration and production $ 78,320 $ 49,509
Cost of service 5,066 3,844
Gathering, processing and marketing 147,479 66,118
-------- --------
$230,865 $119,471
======== ========
REVENUES FROM AFFILIATED COMPANIES
Exploration and production $ 4 $ --
Cost of service 23,375 17,130
Gathering, processing and marketing 4,602 5,160
-------- --------
$ 27,981 $ 22,290
======== ========
DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE (Restated)
Exploration and production $ 15,700 $ 16,312
Cost of service 3,768 3,537
Gathering, processing and marketing 1,371 1,364
-------- --------
$ 20,839 $ 21,213
======== ========
OPERATING INCOME (Restated)
Exploration and production $ 37,804 $ 12,318
Cost of service 10,489 9,031
Gathering, processing and marketing 4,782 839
-------- --------
$ 53,075 $ 22,188
======== ========
NET INCOME (Restated)
Exploration and production $ 28,098 $ 6,734
Cost of service 6,584 5,787
Gathering, processing and marketing 3,662 866
-------- --------
$ 38,344 $ 13,387
======== ========
FIXED ASSETS - NET, at end of period
(Restated)
Exploration and production $485,635 $492,948
Cost of service 155,619 134,968
Gathering, processing and marketing 77,625 71,024
-------- --------
$718,879 $698,940
======== ========
GEOGRAPHIC INFORMATION
REVENUES
United States $245,500 $134,788
Canada 13,346 6,973
-------- --------
$258,846 $141,761
======== ========
FIXED ASSETS - NET, at end of
period (Restated)
United States $635,023 $603,670
Canada 83,856 95,270
-------- --------
$718,879 $698,940
======== ========
</Table>
6
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Note 6 - Comprehensive Income (Restated)
Comprehensive income is the sum of net income as reported in the Consolidated
Statement of Income and other comprehensive income transactions reported in
Shareholder's Equity. Other comprehensive income transactions that currently
apply to QMR result from changes in the market value of energy-hedging contracts
and changes in holding value resulting from foreign currency translation
adjustments. These transactions are not the culmination of the earnings process,
but result from periodically adjusting historical balances to market value.
Income or loss is realized when the gas or oil underlying the hedging contracts
is sold. In 2000, other comprehensive income included mark-to-market adjustments
of securities available for sale. QMR sold the balance of these securities late
in 2000.
<Table>
<Caption>
3 Months Ended
March 31,
2001 2000
-------- --------
(In Thousands)
Comprehensive Income:
Net income $ 38,344 $ 13,387
Other comprehensive income (loss)
Unrealized loss on hedging transaction (52,100)
Unrealized gain on securities available for sale 2,120
Foreign currency translation adjustments (2,269) (557)
-------- --------
Other comprehensive income (loss)
before income taxes (54,369) 1,563
Income taxes on other
comprehensive income (loss) (20,765) 554
-------- --------
Net other comprehensive income (loss) (33,604) 1,009
-------- --------
Total comprehensive income $ 4,740 $ 14,396
======== ========
</Table>
Note 7 - New Accounting Standard - "Accounting for Derivative Instruments and
Hedging Activities"
The Company adopted the accounting provisions of SFAS 133, as amended,
"Accounting for Derivative Instruments and Hedging Activities" beginning in
January 2001. SFAS 133 addresses the accounting for derivative instruments,
including certain derivative instruments embedded in other contracts. Under the
standard, entities are required to carry all derivative instruments in the
balance sheet at fair value. The accounting for changes in fair value, which
result in gains or losses, of a derivative instrument depends on whether such
instrument has been designated and qualifies as part of a hedging relationship
and, if so, depends on the reason for holding it. If certain conditions are met,
entities may elect to designate a derivative instrument as a hedge of exposure
to changes in fair value, cash flows or foreign currencies. If the hedged
exposure is a fair-value exposure, the gain or loss on the derivative instrument
is recognized in earnings in the period of the change together with the
offsetting loss or gain on the hedged item attributable to the risk being
hedged. If the hedged exposure is a cash-flow exposure, the effective portion of
the gain or loss on the derivative instrument is reported initially as a
component of other comprehensive income in the shareholders' equity section of
the balance sheet and subsequently reclassified into earnings when the
forecasted transaction affects earnings. Any amounts excluded from the
assessment of hedge effectiveness, as well as the ineffective portion of the
gain or loss, is reported in earnings immediately.
As of January 1, 2001, the Company structured a majority of its energy
derivative instruments as cash flow hedges. As a result of adopting SFAS 133 in
January 2001, the Company recorded a $121 million hedging liability for
derivative instruments. The hedging liability fell to $52 million as of March
31, 2001. Settlement of contracts accounted for $47.3 million of the decrease,
while a decrease in prices of gas and oil on futures resulted in a $21.7 million
decline. The offset to the hedging liability, net of income taxes, was a $32.4
million unrealized loss on hedging activities recorded in other comprehensive
income in the shareholder's equity section of the balance sheet. The ineffective
portion of hedging transaction recognized in earnings was not significant. The
fair-value calculation does not consider changes in fair value of the
corresponding scheduled equity physical transactions.
7
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The contracts at March 31, 2001 had terms extending through December 2003. About
86% of those contracts, representing approximately $49 million, settle and will
be reclassified from other comprehensive loss in the next 12 months.
Note 8 - Reclassifications
Certain reclassifications were made to the 2000 financial statements to conform
with the 2001 presentation.
8
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
QUESTAR MARKET RESOURCES, INC. AND SUBSIDIARIES
March 31, 2001
(Unaudited)
Operating Results
Questar Exploration and Production, Wexpro, Questar Gas Management and Questar
Energy Trading, collectively Questar Market Resources (QMR or the Company),
conduct exploration and production, gas gathering and processing, and energy
marketing operations. Following is a summary of QMR's financial results and
operating information.
<Table>
<Caption>
3 Months Ended
March 31,
2001 2000
-------- --------
FINANCIAL RESULTS - (dollars in thousands)
Revenues
From unaffiliated customers $230,865 $119,471
From affiliates 27,981 22,290
-------- --------
Total revenues $258,846 $141,761
======== ========
Operating income (Restated) $ 53,075 $ 22,188
Net income (Restated) $ 38,344 $ 13,387
OPERATING STATISTICS
Production volumes
Natural gas (in million cubic feet) 15,787 16,950
Oil and natural gas liquids (in thousands of barrels)
Questar Exploration & Production 495 554
Wexpro 125 128
Production revenue
Natural gas (per thousand cubic feet) $ 4.17 $ 2.17
Oil and natural gas liquids (per barrel)
Questar Exploration & Production $ 21.48 $ 21.64
Wexpro $ 27.92 $ 25.07
Wexpro investment base at March 31, net of
deferred income taxes (in millions) $ 122.2 $ 109.7
Marketing volumes in energy equivalent decatherms
(in thousands of decatherms) 24,028 27,025
Natural gas gathering volumes (in
thousands of decatherms)
For unaffiliated customers 22,085 21,778
For Questar Gas 10,211 9,853
For other affiliated customers 6,799 5,164
-------- --------
Total gathering 39,095 36,795
======== ========
Gathering revenue (per decatherm) $ 0.13 $ 0.14
</Table>
9
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Revenues
Strong commodity prices more than offset lower production leading to an 83%
increase in revenues in the first quarter of 2001 compared with the first
quarter of 2000. Questar E & P reported that its average realized natural gas
price rose 92% to $4.17 per thousand cubic feet (Mcf), while gas production was
7% lower and oil and natural gas liquids (NGL) production was 11% lower in the
first quarter of 2001. Production volumes decreased in 2001 as a result of sales
of reserves, weather-related operational delays and a natural decline in older
fields.
Approximately 63% of gas volumes in the first quarter of 2001 were hedged with
floors and ceilings averaging $3.28 per Mcf and $3.51 per Mcf, respectively, net
to the well. The remainder of gas production realized prices averaging about
$6.80 per Mcf, driven by cold winter temperatures and an energy shortage in the
western United States. Approximately 52% of gas production for the remaining
nine months of 2001 is hedged with floors and ceilings averaging $2.75 per Mcf
and $3 per Mcf, respectively. Hedging activities reduced revenues from gas sales
by $41.9 million in the first quarter of 2001.
For Questar E & P, the average selling price of oil and NGL was 1% lower in the
first quarter of 2001 compared with the same period in 2000. Approximately 58%
of 2001 oil production in the quarter was hedged at an average price of $17.20
per barrel, net to the well. The remainder of oil production realized prices
averaging about $28 per barrel. Demand in 2001 for NGL caused prices to increase
79% over the same period in 2000. QMR does not hedge the selling price of NGL.
Hedging activities reduced revenues from oil sales by $3.2 million in the first
quarter of 2001.
Revenues from energy marketing increased $82.3 million in the first quarter
comparison as a result of higher commodity prices. The margin from energy
marketing was $4.5 million in 2001 compared with breakeven in the 2000 period.
Expenses (Restated)
Operating and maintenance expenses increased 4% in the first quarter of 2001
compared with the corresponding 2000 period primarily because of the increase
in the number of producing properties including the acquisition of a Canadian
gas and oil company in January 2000. In addition, higher gas prices increased
the cost of replacing gas in extraction plant operations. Exploration expense
declined $1.6 million from the 2000 period as a result of reduced exploration
activity.
Depreciation, depletion and amortization (DD&A) was lower in the first
quarter of 2001compared with the first quarter of 2000 as a result of
decreased production more than offsetting a higher DD&A rate. The combined
U.S. and Canadian DD&A rate for the first quarter of 2001 was $.83 per
thousand cubic feet equivalent (Mcfe) of production compared with $.80 for
the corresponding quarter a year ago.
Other taxes increased because of higher gas prices and the effect on
production-related taxes. Debt expense was lower in the 2001 period because of
decreased borrowing.
The effective income tax rate for the first quarter of 2001 was 36.3% up from
the 29.6% for the same period of 2000. The effective income tax rate increased
because of a higher portion of earnings derived from Canada, where income tax
rates are higher. The Company recognized $1,217,000 of non-conventional fuel tax
credits in the 2001 period and $1,137,000 in the 2000 period.
Other income (Restated)
Other income was substantially higher in the first quarter of 2001 as a
result of a $10.5 million pretax gain from selling non-strategic oil and gas
and gathering properties. QMR placed the $27 million of proceeds into an
escrow account pending a search for suitable properties in a like kind
exchange for income tax purposes.
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Net income (Restated)
QMR's first quarter net income increased $25 million, representing a 186%
improvement over the first quarter of 2000. The increase resulted from higher
commodity prices, increased earnings for Wexpro and gains from selling
non-strategic gathering properties.
Wexpro's net income increased $800,000 in the first quarter of 2001. Wexpro
increased its investment in development-drilling projects. Wexpro develops gas
reserves on behalf of affiliated company, Questar Gas, which is a rate-regulated
distributor of natural gas. In addition, higher oil and NGL prices contributed
to Wexpro's improved earnings.
Liquidity and Capital Resources
Operating Activities (Restated)
Net cash provided from operating activities in the first quarter of 2001 of
$114.5 million was $86.6 million more than was generated in the first quarter
of 2000. The increase in cash flow from operating activities resulted from
higher net income and the release of cash deposited as collateral for hedging
contracts.
Investing Activities (Restated)
Capital expenditures were $23.4 million in 2001. Forecasted capital expenditures
for calendar year 2001 are $194.1 million.
Financing Activities
Net cash provided from operating activities enabled QMR to repay short-term
debt, finance capital expenditures and loan the remaining cash to Questar. On
March 6, 2001, Market Resources in a public offering issued $150 million of 7.5%
notes due 2011. Market Resources applied the proceeds of the debt offering to
repay a portion of its outstanding floating-rate debt. QMR expects to finance
2001 capital expenditures with the proceeds of net cash provided from operating
activities, borrowing on its bank credit and borrowing from Questar.
Quantitative and Qualitative Disclosures about Market Risk
QMR's primary market-risk exposures arise from commodity-price changes for
natural gas, oil and other hydrocarbons and changes in long-term interest rates.
The Company has an investment in a foreign operation that may subject it to
exchange-rate risk. QMR also has reserved pipeline capacity for which it is
obligated to pay $3 million annually for the next six years, regardless of
whether it is able to market the capacity to others.
HEDGING POLICY
The Company has established policies and procedures for managing market risks
through the use of commodity-based derivative arrangements. A primary objective
of these hedging transactions is to protect the Company's commodity sales from
adverse changes in energy prices. The volume of production hedged and the mix of
derivative instruments employed are regularly evaluated and adjusted by
management in response to changing market conditions and reviewed periodically
by the Board of Directors. Additionally, under the terms of the Market
Resources' revolving credit facility, not more than 75% of Market Resources'
production quantities can be committed to hedging arrangements. The Company does
not enter into derivative arrangements for speculative purposes.
ENERGY-PRICE RISK MANAGEMENT
Energy-price risk is a function of changes in commodity prices as supply and
demand fluctuate. Market Resources bears a majority of the risk associated with
changes in commodity prices. The Company uses hedge arrangements in the normal
course of business to limit the risk of adverse price movements; however, these
same arrangements usually
11
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limit future gains from favorable price movements.
QMR held hedge contracts covering the price exposure for about 42.6 million dth
of gas and 735,000 barrels of oil at March 31, 2001. A year earlier the
contracts covered 58.6 million dth of natural gas and 2.1 million barrels of
oil. The hedging contracts exist for a significant share of QMR-owned gas and
oil production and for a portion of energy-marketing transactions. The contracts
at March 31, 2001 had terms extending through December 2003. About 86% of those
contracts, representing approximately $49 million, settle and will be
reclassified from other comprehensive loss in the next 12 months.
The undiscounted mark-to-market adjustment of financial gas and oil
price-hedging contracts at March 31, 2001 was a negative $48.4 million. A 10%
decline in gas and oil prices would decrease the mark-to-market adjustment by $9
million; while a 10% increase in prices would increase the mark-to-market
adjustment by $8.9 million. The mark-to-market adjustment of gas and oil
price-hedging contracts at March 31, 2000 was a negative $31.5 million. A 10%
decline in gas and oil prices at that time would have caused a positive
mark-to-market adjustment of $18 million. Conversely, a 10% increase in prices
would have resulted in a $18.6 million negative mark-to-market adjustment at
that date. The calculations used energy prices posted on the NYMEX, various
"into the pipe" postings and fixed prices for the indicated measurement dates.
These sensitivity calculations do not consider changes in the fair value of the
corresponding scheduled physical transactions (i.e., the correlation between the
index price and the price to be realized for the physical delivery of gas or oil
production), which should largely offset the change in value of the hedge
contracts.
INTEREST-RATE RISK MANAGEMENT
As of March 31, 2001, QMR owed $79.4 million of floating-rate long-term debt.
The book value of floating-rate debt approximates fair value.
FOREIGN CURRENCY RISK MANAGEMENT
The Company does not hedge the foreign currency exposure of its foreign
operation's net assets and long-term debt. Long-term debt held by the foreign
operation, amounting to $44.4 million (U.S.), and is expected to be repaid from
future operations of the foreign company.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of Section
27(a) of the Securities Act of 1933, as amended, and Section 21(e) of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included or incorporated by reference in this
report, including, without limitation, statements regarding the Company's future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "will", "could", "expect",
"intend", "project", "estimate", "anticipate", "believe", "forecast", or
"continue" or the negative thereof or variations thereon or similar terminology.
Although these statements are made in good faith and are reasonable
representations of the Company's expected performance at the time, actual
results may vary from management's stated expectations and projections due to a
variety of factors.
Important assumptions and other significant factors that could cause actual
results to differ materially from those expressed or implied in forward-looking
statements include changes in general economic conditions, gas and oil prices
and supplies, competition, rate-regulatory issues, regulation of the Wexpro
settlement agreement, availability of gas and oil properties for sale or for
exploration and other factors beyond the control of the Company. These other
factors include the rate of inflation, quoted prices of securities available for
sale, the weather and other natural phenomena, the effect of accounting policies
issued periodically by accounting standard-setting bodies, and adverse changes
in the business or financial condition of the Company.
12
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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 MARKET RESOURCES, INC.
(Registrant)
February 14, 2002 /s/ G. L. Nordloh
- ----------------- ----------------------------------------
(Date) G. L. Nordloh
President and Chief Executive Officer
February 14, 2002 /s/ S. E. Parks
- ----------------- ----------------------------------------
(Date) S. E. Parks
Vice President, Treasurer and
Chief Financial Officer