File No. 69-292
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
____________________________
Form U-3A-2 for 1999
Statement by Holding Company Claiming Exemption
Under Rule U-2 From the Provisions of the Public
Utility Holding Company Act of 1935
To Be Filed Annually Prior to March 1
QUESTAR CORPORATION
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to
Rule 2, its statement claiming exemption as a holding company from the
provisions of the Public Utility Holding Company Act of 1935, and
submits the following information:
1. Name, state of organization, location and nature of business
of claimant and every subsidiary thereof, other than any exempt
wholesale generator (EWG) or foreign utility company in which claimant
directly or indirectly holds an interest.
Questar Corporation ("Questar" or the "Company") is a Utah
corporation with its principal executive office and principal place of
business at 180 East 100 South Street, P.O. Box 45433, Salt Lake City,
Utah 84145-0433. On October 2, 1984, the Company filed an initial
Form U-3A-2 with the Securities and Exchange Commission following a
holding company reorganization in which Questar Gas Company ("Questar
Gas") became a subsidiary of Questar. Questar subsequently filed a
Form U-3A-2 on March 1, 1985, and on or before each subsequent March 1
to the present time.
As a parent company, Questar provides certain administrative
services, e.g., personnel, public relations, communications, tax,
financial, and audit, to companies within the consolidated group.
Questar has three direct subsidiaries: Questar Regulated Services
Company, a Utah corporation ("Regulated Services"); Questar Market
Resources, Inc., a Utah corporation ("Market Resources"); and Questar
InfoComm, Inc., a Utah corporation ("Questar InfoComm"). The Company
owns 100 percent of the common stock issued by each of these directly
held subsidiaries.
Regulated Services has three subsidiaries: Questar Gas, a Utah
corporation; Questar Pipeline Company, a Utah corporation ("Questar
Pipeline"); and Questar Energy Services, Inc. ("QES"). Questar Gas is
engaged in the retail distribution of natural gas in the states of
Utah, Wyoming, and Idaho. Questar Gas also transports natural gas for
industrial users in Utah and Wyoming. Questar Gas's activities in
Utah and Wyoming are subject to regulation by the respective Public
Service Commissions in those states. Questar Gas has a contract to
sell and transport natural gas to one customer in Colorado. This
isolated activity is not subject to the jurisdiction of the Colorado
Public Utilities Commission. Questar Gas's customers in Idaho are
served under the provisions of its Utah tariff. Pursuant to a special
contract with the Idaho Public Utilities Commission, Questar Gas's
Idaho natural gas service is regulated by the Public Service
Commission of Utah. Questar Pipeline currently transports and stores
natural gas in interstate commerce in the Rocky Mountain states of
Utah, Wyoming, and Colorado. QES performs energy management,
appliance financing, and other activities.
Questar InfoComm owns data processing, communications, and
electronic gas measurement equipment systems, and performs data
processing, communications, and gas measurement services for other
members of the consolidated group and third parties.
Market Resources engages in various businesses not subject to
state utility regulation through several subsidiaries: Wexpro Company
("Wexpro"), which conducts oil and gas development and production
activities on certain producing properties for the benefit of Questar
Gas in the Rocky Mountain region; Questar Exploration and Production
Company ("QEP"), which engages in oil and gas exploration and related
development and production activities throughout the western and
Midcontinent portions of the United States and Canada (Canadian
operations are conducted by Celsius Energy Resources Ltd. and Canor
Energy Ltd.); Questar Energy Trading Company ("Questar Energy
Trading"), which conducts energy marketing activities; and Questar Gas
Management Company ("Questar Gas Management"), which is engaged in
gathering and field processing activities. Neither Market Resources
nor any of its subsidiaries is a "public utility company," as such
term is defined in the Act. All companies owned by Market Resources
have their principal offices at 180 East 100 South, Salt Lake City,
Utah.
With the exception of Questar Gas, none of the companies directly
or indirectly owned by Questar is a "public utility company" as that
term is defined in the Public Utility Holding Company Act of 1935, as
amended (the "Act"). Questar's directly held subsidiaries have their
principal executive offices at 180 East 100 South, Salt Lake City,
Utah. Questar does not have any interest, direct or indirect, in any
exempt wholesale generator or foreign utility company.
2. A brief description of the properties of claimant and each of
its subsidiary public utility companies used for the generation,
transmission, and distribution of electric energy for sale, or for the
production, transmission, and distribution of natural or manufactured
gas, indicating the location of principal generating plants,
transmission lines, producing fields, gas manufacturing plants, and
electric and gas distribution facilities, including all such
properties which are outside the state in which claimant and its
subsidiaries are organized and all transmission or pipelines which
deliver or receive electric energy or gas at the borders of such
state.
Questar Gas, which is a "gas utility company" for purposes of the
Act, was distributing natural gas to 686,317 sales and transportation
customers (defined as active meters) in Utah, southwestern Wyoming,
southeastern Idaho, and western Colorado as of year-end 1999. Of
these customers, 662,897 were located in Utah, 21,904 were located in
southwestern Wyoming, 1,515 were located in southeastern Idaho, and
one was located in western Colorado. Questar Gas owns and operates
approximately 20,696 miles of street mains, service lines and
interconnecting pipelines in its distribution system, including
approximately 19,753 miles in its Utah distribution system.
Under the terms of a settlement agreement among Questar Gas,
Wexpro and various state parties ending several years of litigation,
Questar Gas owns the natural gas produced from gas reservoirs that
were productive as of August 1, 1981. Most of these productive
reservoirs are located in southwestern Wyoming and northwestern
Colorado; most of the gas produced from such reservoirs is distributed
to Questar Gas's retail natural gas customers. Gas owned by Questar
Gas but produced from reservoirs outside the location of pipelines
owned by Questar Pipeline is generally sold to or exchanged with other
companies. Gas owned by Questar Gas (including related royalty gas)
constituted 49 percent of Questar Gas's total gas supply in 1999 and
is reflected in Questar Gas's rates at "cost-of-service" prices.
Questar Gas is directly responsible for all gas acquisition
activities. Questar Pipeline transports the gas volumes purchased
directly by Questar Gas and transports cost-of-service gas owned by
Questar Gas and produced by Wexpro. Questar Gas takes delivery of gas
from Questar Pipeline and an unaffiliated interstate pipeline at
various points in Utah, Wyoming, and Colorado. Questar Gas does not
currently own any interstate transmission lines or gas manufacturing
plants. Questar Energy Trading markets natural gas and electricity,
but does not own any distribution facilities in connection with such
activities.
3. The following information for the last calendar year with
respect to claimant and each of its subsidiary public utility
companies:
(a) Number of kwh of electric energy sold (at retail or
wholesale) and Mcf of natural or manufactured gas distributed at
retail.
During the 1999 calendar year, Questar Gas sold 92,024,000
decatherms ("Dth") of natural gas, including 82,201,000 Dth at retail
(defined as residential and commercial customers), and transported
51,643,000 Dth of natural gas. (Questar Gas generally reports volumes
in Dth; a Dth is equal to ten therms or one million Btu's. In Questar
Gas's gas system, each Mcf of natural gas contains approximately 1.045
Dth.) For purposes of this report, Questar Gas's "retail" customers
are general service or residential and commercial customers. The
9,823,000 Dth difference between the total sales number and the retail
sales number includes sales to industrial customers that are not
involved in resale transactions and sales of natural gas to refueling
stations that are resold for natural gas vehicles. Questar Gas's
total revenues for 1999 were $449,937,000, of which $413,067,000 were
attributable to its operations in Utah, $18,274,000 were attributable
to its operations in Wyoming, $121,000 were attributable to its
operations in Colorado, and $952,000 were attributable to its
operations in Idaho. (Questar Gas's total 1999 revenues included
$17,523,000 in addition to revenues from gas deliveries.) Questar Gas
did not distribute any manufactured gas during such calendar year.
Questar Gas is the only public utility company among the Company's
subsidiaries. Questar itself did not make any sales of natural or
manufactured gas during 1999.
(b) Number of kwh of electric energy and Mcf of natural or
manufactured gas distributed at retail outside the state in which
each such company is organized.
During the 1999 calendar year, Questar Gas distributed at retail
3,205,000 Dth of natural gas outside the state of Utah, it's state of
incorporation.
(c) Number of kwh of electric energy and Mcf of natural or
manufactured gas sold at wholesale outside the state in which
each such company is organized, or at the state line.
During 1999, Questar Gas sold 447,000 Dth of natural gas outside
the state of Utah, or at the state line of such state, to industrial
customers and to natural gas refueling stations. Questar Gas, during
1999, also transported 382,000 Dth of natural gas to customers outside
Utah. Questar Gas did not sell at wholesale any manufactured gas
during 1999. Questar itself did not sell at wholesale any natural gas
or manufactured gas during 1999.
(d) Number of kwh of electric energy and Mcf of natural or
manufactured gas purchased outside the state in which each such
company is organized or at the state line.
During the 1999 calendar year, Questar Gas purchased 31,072,000
Dth of natural gas or approximately 33 percent of its total gas supply
outside the state of Utah or at the state line. Questar itself did
not purchase any gas volumes.
4. The following information for the reporting period with
respect to claimant and each interest it holds directly or indirectly
in an EWG or a foreign utility company, stating monetary amounts in
United States dollars:
(a) Name, location, business address and description of the
facilities used by the EWG or foreign utility company for the
generation, transmission and distribution of electric energy for
sale or for the distribution at retail of natural or manufactured
gas.
None. Neither Questar nor any of its affiliates has any
interest, direct or indirect, in any exempt wholesale generator or
foreign utility company.
(b) Name of each system company that holds an interest in
such EWG or foreign utility company; and description of the
interest held.
None. Questar and its affiliates do not have any interest,
direct or indirect, in any exempt wholesale generator or foreign
utility company.
(c) Type and amount of capital invested, directly or
indirectly, by the holding company claiming exemption; any direct
or indirect guarantee of the security of the EWG or foreign
utility company by the holding company claiming exemption; and
any debt or other financial obligation for which there is
recourse, directly or indirectly, to the holding company claiming
exemption or another system company, other than the EWG or
foreign utility company.
None. Questar does not have any interest, direct or indirect, in
any exempt wholesale generator or foreign utility company.
(d) Capitalization and earnings of the EWG or foreign
utility company during the reporting period.
None. Questar does not have any interest, direct or indirect, in
any exempt wholesale generator or foreign utility company.
(e) Identify any service, sales or construction contract(s)
between the EWG or foreign utility company and a system company,
and describe the services to be rendered or goods sold and fees
or revenues under such agreements(s).
None. Questar does not have any interest, direct or indirect, in
any exempt wholesale generator or foreign utility company.
UNDERTAKING
Questar hereby undertakes that it will not issue any shares of
its authorized preferred stock unless, on a pro forma basis giving
effect to such issuance, (1) consolidated earnings of Questar and its
subsidiaries available for interest and dividends for a period of 12
consecutive calendar months within the 15 calendar months immediately
preceding the issuance of such stock, determined in accordance with
generally accepted accounting principles, would be at least one and
one-half times the sum of the annual interest requirements on
consolidated long-term debt of Questar (including current maturities
and excluding interest charges on indebtedness to be retired by the
application of proceeds from the issuance of such shares or in
connection with the transaction in which such shares are issued) and
the annual dividend requirements on shares of preferred stock of
Questar and its subsidiaries; (2) the aggregate outstanding long-term
debt (including current maturities) of Questar and its subsidiaries on
a consolidated basis is less than or equal to 60 percent of the
capitalization of Questar and its subsidiaries on a consolidated
basis; and (3) Questar's common stock represents at least 35 percent
of the capitalization of Questar and its subsidiaries on a
consolidated basis. For purposes of the foregoing, consolidated
earnings of Questar and its subsidiaries available for interest and
dividends shall be determined on an after-tax basis and shall be the
sum of income before extraordinary items and interest expense; pro
forma income available for interest and dividends and pro forma
interest charges shall include income and interest charges of
businesses acquired, or proposed to be acquired, in conjunction with
the issuance of Questar preferred stock, for the pro forma periods,
regardless of whether the company acquired shall be accounted for on a
pooling-of-interests basis or otherwise, provided that such earnings
available for interest and dividends is determinable for the acquired
business in accordance with generally accepted accounting principles;
and consolidated capitalization shall include long-term debt
(including current maturities), preferred stock and any premium
thereon, and the sum of the common equity accounts of the company, all
as prepared in accordance with generally accepted accounting
principles.
Questar has not issued any shares of its authorized preferred
stock and has no current plans to do so.
EXHIBIT A
A consolidating statement of income and surplus of the claimant
and its subsidiary companies as of the close of such calendar year,
together with a consolidating balance sheet of claimant and its
subsidiary companies as of the close of such calendar year.
The following exhibits are attached to and made a part of this
filing:
Exhibit A-1 Consolidating Statement of Income of Questar
Corporation and Subsidiaries as of December 31,
1999.
Exhibit A-2 Consolidated Statement of Common Shareholders'
Equity, Questar Corporation and Subsidiaries as of
December 31, 1999.
Exhibit A-3 Consolidating Balance Sheet, Questar Corporation and
Subsidiaries as of December 31, 1999.
EXHIBIT B
If, at the time a report on this form is filed, the registrant is
required to submit this report and any amendments thereto
electronically, the registrant shall furnish a Financial Data
Schedule.
The requested Financial Data Schedule information has been
submitted.
EXHIBIT C
An organization chart showing the relationship of each EWG or
foreign utility company to associate companies in the holding-company
system.
Not applicable. The Company does not have an interest in any
exempt wholesale generator or foreign utility company.
The above-named Claimant has caused this statement to be duly
executed on its behalf by its authorized officer on this 25th day of
February, 2000.
[corporate seal] QUESTAR CORPORATION
Attest:
/s/Connie C. Holbrook By /s/S. E. Parks
Connie C. Holbrook S. E. Parks
Secretary Vice President, Treasurer and
Chief Financial Officer
Name, title and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Connie C. Holbrook
Vice President, General Counsel & Secretary
Questar Corporation
180 East 100 South, P.O. Box 45433
Salt Lake City, Utah 84145-0433
EXHIBIT A-1
QUESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Questar Questar Regulated Services
Market Questar Corporate Questar
Resources Questar Pipeline Other and Other Intercompany Corporation
Consolidated Gas Consolidated Operations Transactions Consolidated
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
From unaffiliated customers $418,603 $447,606 $36,922 $2,260 $18,828 $924,219
From affiliated companies 79,708 2,331 75,238 196 38,851 $(196,324)
TOTAL REVENUES 498,311 449,937 112,160 2,456 57,679 (196,324) 924,219
Operating expenses
Natural gas and other product purchases 239,201 257,265 (154,337) 342,129
Operating and maintenance 79,916 103,308 38,534 2,474 47,167 (39,695) 231,704
Depreciation and amortization 78,608 36,426 16,743 14 5,953 137,744
Other expenses 23,808 7,625 2,488 24 1,071 (2,292) 32,724
Total operating expenses 421,533 404,624 57,765 2,512 54,191 (196,324) 744,301
Operating income (loss) 76,778 45,313 54,395 (56) 3,488 179,918
Interest and other income 4,272 2,980 4,229 1,014 73,406 (11,201) 74,700
Income (loss) from
unconsolidated affiliates 763 (5,109) (10) (4,356)
Write-down of investment in partnership (49,700) (49,700)
Debt expense (17,363) (20,062) (17,466) (605) (9,649) 11,201 (53,944)
Income tax (expense) credit (18,584) (9,012) 5,260 (102) (25,350) (47,788)
Net income (loss) $45,866 $19,219 ($8,391) $251 $41,885 $98,830
EXHIBIT A-2
QUESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Note Other Compre-
Common Stock Retained Receivable Comprehensive hensive
Shares Amount Earnings from ESOP Income Income
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1997 82,049,774 $292,613 $487,799 ($15,556) $7,229
Issuance of common stock 745,212 11,328
Purchase of common stock (652,902) (12,619)
1997 net income 104,795 $104,795
Payment of dividends
Preferred stock (192)
Common stock of $.62 per share (50,943)
Premium paid on retired preferred stock (48)
Income tax benefit of dividends paid to ESOP 252
Collection of note receivable from ESOP 5,383
Other comprehensive income
Unrealized gain on securities available for
sale, net of income taxes of $9,642 15,564 15,564
Foreign currency translation adjustment,
net of income taxes of $98 173 173
Balances at December 31, 1997 82,142,084 291,322 541,663 (10,173) 22,966 $120,532
Issuance of common stock 521,879 8,243
Purchase of common stock (31,885) (677)
1998 net income 76,899 $76,899
Payment of common stock dividends
of $.6525 per share (53,747)
Income tax benefit of dividends paid to ESOP 143
Collection of note receivable from ESOP 6,218
Other comprehensive income
Unrealized loss on securities available for
sale, net of income tax benefit of $3,086 (4,992) (4,992)
Foreign currency translation adjustment,
net of income taxes of $53 93 93
Balances at December 31, 1998 82,632,078 $298,888 $564,958 ($3,955) $18,067 $72,000
Issuance of common stock 488,302 8,124
Purchase of common stock (1,701,527) (28,575)
1999 net income 98,830 $98,830
Payment of common stock dividends
of $.67 per share (55,328)
Income tax benefit of dividends paid to ESOP 38
Collection of note receivable from ESOP 3,955
Other comprehensive income
Unrealized gain on securities available for
sale, net of income tax benefit of $13,193 21,303 21,303
Foreign currency translation adjustment,
net of income tax benefit of $284 (460) (460)
Balances at December 31, 1999 81,418,853 $278,437 $608,498 $38,910 $119,673
EXHIBIT A-3
QUESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Questar Regulated Services Questar
Questar Corporate Questar Market
Corporation Intercompany and Other Questar Pipeline Other Resources
Consolidated Transactions Operations Gas Consolidated Consolidated
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and short-term investments $8,291 $5,423 $1,708 $2,387 $19 ($1,246)
Notes receivable from affiliates ($232,600) 225,500 1,100 2,000 4,000
Accounts and notes receivable 181,274 (34,188) 19,656 83,098 21,704 15,181 75,823
Inventories 37,614 2,157 21,680 2,443 81 11,253
Prepaid expenses and deposits 11,249 2,213 3,168 1,782 (366) 4,452
Purchased gas adjustment 432 432
TOTAL CURRENT ASSETS 238,860 (266,788) 254,949 110,086 29,416 16,915 94,282
PROPERTY, PLANT AND EQUIPMENT 3,258,773 (98) 72,867 1,013,599 698,236 4,493 1,469,676
Less allowances for depreciation 1,471,859 40,727 421,111 228,784 2,542 778,695
NET PROPERTY, PLANT AND EQUIPMENT 1,786,914 (98) 32,140 592,488 469,452 1,951 690,981
INVESTMENT IN UNCONSOLIDATED AFFILIATES 25,269 (1,284,922) 856,238 11,724 428,928 13,301
SECURITIES AVAILABLE FOR SALE,
approximates fair value 94,945 84,543 10,402
CASH HELD IN ESCROW 36,727 36,727
OTHER ASSETS 55,282 20,400 20,978 12,435 517 952
$2,237,997 ($1,551,808)$1,248,270 $723,552 $523,027 $448,311 $846,645
CURRENT LIABILITIES
Short-term loans $144,115 $144,115
Notes payable to affiliates ($226,600) 69,400 $79,300 $42,500 $10,900 $24,500
Accounts payable and accrued expenses 132,466 (34,188) 19,303 56,765 10,554 9,695 70,337
Interest payable 7,518 (22) 4,476 1,621 1,443
Federal income taxes payable 17,374 6,570 2,966 1,560 46 6,232
Other taxes payable 22,315 1,632 4,915 1,471 31 14,266
Current portion of long-term debt 7 7
TOTAL CURRENT LIABILITIES 323,795 (260,788) 241,005 148,422 57,706 20,672 116,778
LONG-TERM DEBT, less current portion 735,043 (6,000) 6,148 225,000 245,001 264,894
OTHER LIABILITIES 36,554 (98) 14,798 1,394 3,118 139 17,203
DEFERRED INVESTMENT TAX CREDITS 5,648 5,630 18
DEFERRED INCOME TAXES 211,112 23,033 79,713 49,873 (1,443) 59,936
COMMON SHAREHOLDERS' EQUITY
Common stock 278,437 (34,349) 278,952 22,974 6,551 4,309
Additional paid-in capital (733,602) 12,930 81,875 82,034 440,736 116,027
Retained earnings 608,498 (511,550) 624,183 158,544 78,726 (11,793) 270,388
Other comprehensive income 38,910 (5,421) 47,221 (2,890)
TOTAL COMMON SHAREHOLDERS' EQUITY 925,845 (1,284,922) 963,286 263,393 167,311 428,943 387,834
$2,237,997 ($1,551,808)$1,248,270 $723,552 $523,027 $448,311 $846,645
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
The following schedule contains summarized financial information extracted
from the Questar Corporation Consolidated Statements of Income and Balance
Sheet for the period ended December 31, 1999, and is qualified in its entirety
by reference to such unaudited financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 2,237,997
<TOTAL-OPERATING-REVENUES> 924,219
<NET-INCOME> 98,830
</TABLE>
