Questar Reports Record Net Income Of $212 Million For 2012

Questar Corporation (NYSE:STR) reported record net income of $212.0 million, or $1.19 per diluted share for 2012 compared to 2011 net income of $207.9 million, or $1.16 per diluted share. 2012 earnings include a $3.0 million ($0.02 per diluted share) after-tax charge for the cost of a retirement incentive offer. Excluding the charge, Questar earned $215.0 million, or $1.21 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for 2012 were up 5% to $567.8 million compared to $540.8 million for 2011. Return on average common equity (ROE) was 20.8% for 2012, excluding the retirement incentive charge.

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

2012 (a)
  2011   Change    

2012 (a)
  2011   Change
(in millions, except earnings per share)
Questar Gas $ 23.8   $ 20.2   18 % $ 47.1   $ 46.1   2 %
Wexpro 27.4 23.6 16 % 103.9 95.2 9 %
Questar Pipeline 14.9 17.2 (13 %) 64.7 67.9 (5 %)
Corporate and other     (2.3 )   0.6     NM       (3.7 )   (1.3 )   NM  
Total     $ 63.8     $ 61.6     4 %     $ 212.0     $ 207.9     2 %
Earnings per diluted share $ 0.36 $ 0.34 6 % $ 1.19 $ 1.16 3 %
Average diluted shares 175.9 179.0 (2 %) 177.5 178.8 (1 %)
(a) 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. See computations at the end of the attached financial statements.
 
 

ADJUSTED EBITDA BY SUBSIDIARY (a)
       
3 Months Ended December 31, 12 Months Ended December 31,
      2012   2011   Change     2012   2011   Change
(in millions)
Questar Gas $ 56.6   $ 50.2   $ 6.4 $ 148.0   $ 144.0   $ 4.0
Wexpro 60.7 54.8 5.9 236.1 213.9 22.2
Questar Pipeline 44.5 44.9 (0.4 ) 180.8 181.5 (0.7 )
Corporate and other     (0.1 )   0.7     (0.8 )     2.9     1.4     1.5  
Total     $ 161.7     $ 150.6     $ 11.1       $ 567.8     $ 540.8     $ 27.0  
(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.
 
 

"I am very pleased with Questar's performance for 2012 in a challenging economic environment," said Ronald W. Jibson, Questar chairman, president and CEO. "Even with the cost of the retirement incentive, Questar posted record net income and an industry-leading return on equity. Adjusted EBITDA was up 5% to $568 million for the year, allowing us to fund growth projects and maintain a strong balance sheet while still returning capital to shareholders via a 5% dividend increase and the repurchase of 4.6 million company shares at an average price below $20 per share. Questar Gas and Wexpro grew net income by 2% and 9% respectively, while Questar Pipeline's income dipped slightly. Questar delivered full-year EPS at the top end of our 2012 guidance, despite the many headwinds that we discussed with investors throughout the year."

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