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Questar Reports 17% Increase In First-Quarter 2014 Earnings

Questar Corporation (NYSE:STR) reported first-quarter 2014 net income of $85.1 million, or $0.48 per diluted share, up 17% compared to first-quarter 2013 net income of $72.9 million, or $0.41 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the quarter were up 12% to $206.3 million compared to $183.8 million in the year-ago period. Return on average common equity (ROE) was 18.9% for the 12 months ended March 31, 2014, excluding a $52.4 million after-tax impairment charge taken in the third quarter of 2013. Including the impairment charge, Questar’s ROE was 14.8%.

NET INCOME (LOSS) BY SUBSIDIARY

     
3 Months Ended March 31,
        2014     2013     Change
(in millions, except earnings per share)
Questar Gas $ 39.6     $ 37.0     $ 2.6   7 %
Wexpro 31.8 26.3 5.5 21 %
Questar Pipeline 15.7 15.8 (0.1 ) (1 %)
Corporate and other       (2.0 )     (6.2 )     4.2     68 %
Total net income       $ 85.1       $ 72.9       $ 12.2     17 %
Earnings per diluted share $ 0.48 $ 0.41 $ 0.07 17 %
Average diluted shares 176.1 176.1 %
 
 
     

ADJUSTED EBITDA BY SUBSIDIARY (a)

 
3 Months Ended March 31,
        2014     2013     Change
(in millions)
Questar Gas $

84.3

    $ 77.6     $ 6.7   9 %
Wexpro 76.1 62.4 13.7 22 %
Questar Pipeline 44.9 45.5 (0.6 ) (1 %)
Corporate and other         1.0       (1.7 )     2.7     159 %
Total Adjusted EBITDA       $ 206.3       $ 183.8       $ 22.5     12 %

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

“We are very pleased with Questar’s strong performance in the first quarter,” said Ronald W. Jibson, Questar chairman, president and CEO. “Wexpro and Questar Gas grew net income by 21% and 7%, respectively, while Questar Pipeline's income was flat compared to last year’s first quarter. Adjusted EBITDA in the first quarter of 2014 was over $206 million, up 12% from the same quarter in 2013. Wexpro's recent Trail acquisition was approved under the Wexpro II Agreement and is now producing cost-of-service gas for Questar Gas customers. We are also pleased to report that Utah regulators recently issued a rate case order that allows Questar Gas to earn a competitive ROE and increase its spending under the infrastructure-replacement program’s tracker. Although there are a number of uncertainties that could still impact 2014, we remain comfortable with our initial 2014 earnings guidance range of $1.18 to $1.28 per diluted share, which we will update each quarter.”

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