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Questar Reports Third-Quarter 2013 Earnings

Questar Corporation (NYSE:STR) reported a net loss in the third quarter of 2013 of $19.2 million, or $0.11 per diluted share, including a noncash impairment charge for the eastern segment of Southern Trails Pipeline of $52.4 million after-tax, or $0.30 per diluted share. Excluding the impairment charge, third-quarter 2013 adjusted earnings were $33.2 million, or $0.19 per diluted share, compared to third-quarter 2012 net income of $33.8 million, or $0.19 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the quarter improved 3% to $112.6 million compared to $109.7 million in the year-ago period. The return on average common equity (ROE) was 14.9% for the 12 months ended September 30, 2013. Excluding the asset impairment charge, the 12-month trailing ROE was 19.4%, the same as a year ago.

 

NET INCOME (LOSS) BY SUBSIDIARY

       

3 Months Ended September 30,

 

   

2013

   

2012

   

Change

(in millions, except earnings per share)
Questar Gas

$

(9.0 ) $ (9.3 ) $ 0.3 3 %
Wexpro

 

27.5

 

26.4

 

1.1

4 %
Questar Pipeline

 

14.5

 

17.1

 

(2.6

) (15 %)
Corporate and other  

 

0.2

   

 

(0.4

)  

 

0.6

    NM  
Adjusted earnings

 

33.2

 

33.8

 

(0.6

) (2 %)
Asset impairment (a)  

 

(52.4

)  

 

   

 

(52.4

)   NM  
Net income (loss)  

$

(19.2 )   $ 33.8     $ (53.0 )   NM  
 
Adjusted earnings per diluted share $ 0.19 $ 0.19 $

%
Asset impairment  

 

(0.30

)  

 

   

 

(0.30

)   NM  
Earnings (loss) per diluted share   $ (0.11 )   $ 0.19     $ (0.30 )   NM  
Weighted-average diluted shares

 

175.5

 

176.5

 

(1.0

) (1 %)
 
(a) Impairment of the eastern segment of Questar Pipeline's Southern Trails Pipeline.
 
 

ADJUSTED EBITDA BY SUBSIDIARY (a)

 

 

3 Months Ended September 30,

   

2013

   

2012

   

Change

(in millions)

Questar Gas

 

$

2.5

$

2.1

$

0.4

19

%

Wexpro

62.2

61.3

0.9

1

%

Questar Pipeline

43.5

44.7

(1.2

)

 

(3

%)

Corporate and other

   

4.4

     

1.6

     

2.8

   

175

%

Total Adjusted EBITDA

 

$

112.6

   

$

109.7

   

$

2.9

   

3

%

(a) Management defines Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation, depletion and amortization, gains and losses from asset sales, abandonments and impairments, and other special items. See computations on the last page of the attached financial statements.

“I am pleased to report that Questar's adjusted quarterly and year-to-date earnings continue to be in line with our 2013 earnings guidance,” said Ronald W. Jibson, Questar chairman, president and CEO. “As is typical for the period, Questar Gas posted a seasonal quarterly net loss, though it was a 3% improvement over one year ago. Wexpro's net income rose 4% while Questar Pipeline's income, before the impairment charge, was down 15% compared to the third quarter of 2012. Adjusted EBITDA in the third quarter of 2013 grew 3% to nearly $113 million.”

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