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Questar Reports 2013 Earnings

Questar Corporation (NYSE:STR) reported net income of $161.2 million for 2013, or $0.92 per diluted share. This included a noncash impairment charge for the eastern segment of Southern Trails Pipeline of $52.4 million after-tax, or $0.29 per diluted share. Excluding the impairment charge, 2013 adjusted earnings were $213.6 million, or $1.21 per diluted share, compared to 2012 net income of $212.0 million, or $1.19 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the year rose 5% to $595.0 million compared to $567.8 million for 2012. The return on average common equity (ROE) was 14.4% for 2013. Excluding the impairment charge, Questar’s 2013 adjusted ROE was 18.7%.

NET INCOME (LOSS) BY SUBSIDIARY
     
3 Months Ended December 31, 12 Months Ended December 31,
    2013  

2012 (b)
  Change     2013  

2012 (b)
  Change
(in millions, except earnings per share)
Questar Gas $ 26.0   $ 23.8   9 % $ 52.8   $ 47.1   12 %
Wexpro 28.4 27.4 4 % 110.6 103.9 6 %
Questar Pipeline 15.8 14.9 6 % 60.6 64.7 (6 %)
Corporate and other   (2.1 )   (2.3 )     (9 %)     (10.4 )   (3.7 )     NM  
Adjusted earnings $ 68.1 $ 63.8 7 % $ 213.6 $ 212.0 1 %

Asset impairment (a)
                (52.4 )       NM  
Net income   $ 68.1     $ 63.8     7 %     $ 161.2     $ 212.0     (24 %)
Adjusted earnings per diluted share $ 0.39 $ 0.36 8 % $ 1.21 $ 1.19 2 %
Asset impairment (a)                 (0.29 )       NM  
Earnings per diluted share   $ 0.39     $ 0.36     8 %     $ 0.92     $ 1.19     (23 %)
Weighted-average diluted shares 175.9 175.9 % 176.0 177.5 (1 %)
 

(a) Impairment of the eastern segment of Questar Pipeline's Southern Trails Pipeline. See computations at the end of the attached financial statements.

 

(b) Includes $3.0 million ($0.02 per diluted share) after-tax impact of the retirement incentive costs in the fourth quarter of 2012. Subsidiaries and corporate each bore a proportionate share of the charge: Questar Gas, $1.5 million; Questar Pipeline, $0.6 million; Wexpro, $0.1 million; and corporate, $0.8 million.
 

ADJUSTED EBITDA BY SUBSIDIARY (a)
     
3 Months Ended December 31, 12 Months Ended December 31,
    2013   2012   Change     2013   2012   Change
(in millions)
Questar Gas $ 60.7   $ 56.6   $ 4.1 $ 156.7   $ 148.0   $ 8.7
Wexpro 71.1 60.7 10.4 258.7 236.1 22.6
Questar Pipeline 44.6 44.5 0.1 177.1 180.8 (3.7 )
Corporate and other   (0.5 )   (0.1 )   (0.4 )     2.5     2.9     (0.4 )
Total   $ 175.9     $ 161.7     $ 14.2       $ 595.0     $ 567.8     $ 27.2  
 

(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 at the end of the attached financial statements.
 

“All Questar businesses executed well in the fourth quarter and for all of 2013. On a consolidated basis, a strong fourth quarter at all business units enabled Questar to reach adjusted 2013 earnings of $1.21 per diluted share, exceeding our tightened 2013 earnings guidance range of $1.16 to $1.20 per share,” said Ronald W. Jibson, Questar chairman, president and CEO. “Questar Gas posted strong 12% earnings growth for the year, reflecting customer growth, infrastructure upgrades and ongoing cost-containment efforts. Wexpro's net income rose 6% while Questar Pipeline's income, before the impairment charge, was down 6% compared to 2012. Adjusted EBITDA in the fourth quarter grew 9% to $175.9 million and for all of 2013 grew 5% to $595 million.”

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