Questar Corp. Reports Operating Results (10-Q)
Questar Corp has a market cap of $3.58 billion; its shares were traded at around $20.18 with a P/E ratio of 17.3 and P/S ratio of 3. The dividend yield of Questar Corp stocks is 3.3%. Questar Corp had an annual average earning growth of 5.6% over the past 10 years.
Highlight of Business Operations:The preparation of financial statements and notes in conformity with GAAP requires that management make estimates and assumptions that affect the amounts of revenues, expenses, assets and liabilities, and disclosure of contingent assets and liabilities. Actual results could differ from estimates. The results of operations for the three, nine and 12 months ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.
There was no ineffectiveness recognized on the fair value hedge for the three, nine and 12 months ended September 30, 2012 and 2011. There was no ineffectiveness recognized on the cash flow hedges for the three and nine months ended September 30, 2012. Ineffectiveness recognized on the cash flow hedges was de minimis in the 12 months ended September 30, 2012 and the three, nine and 12 months ended September 30, 2011. Reclassifications into earnings of amounts reported in AOCI will continue as interest expense is recorded for the hedged interest payments through maturity in 2041. Pre-tax net losses of $0.4 million are expected to be reclassified from AOCI to the Consolidated Statements of Income in the next 12 months. As of September 30, 2012, the Company is not hedging any exposure to variability in future cash flows of forecasted transactions.
Questar Gas margin (revenues minus gas costs) increased $0.1 million in the third quarter of 2012 compared to the third quarter of 2011, increased $5.2 million in the first nine months of 2012 compared to the first nine months of 2011 and increased $11.8
Revenues from oil and NGL sales increased 26% in the third quarter of 2012 over the third quarter of 2011, were up 21% in the first nine months of 2012 over the first nine months of 2011 and were up 22% in the 12 months ended September 30, 2012 over the year-earlier period. The increases were due to higher production volumes. The increase in revenues was partially offset by higher oil-related operating and maintenance expenses. Increased oil and NGL sales caused an increase in the sharing of oil income with Questar Gas customers under the terms of the Wexpro Agreement in the three, nine and 12 months ended September 30, 2012 compared to the three, nine and 12 months ended September 30, 2011.
As of September 30, 2012, Questar Pipeline had net firm-transportation contracts of 4,946 Mdth per day, including 1,020 Mdth per day from Questar Pipeline's 50% ownership of White River Hub, compared with 4,983 Mdth per day as of September 30, 2011. The increase in transportation revenues for the 12 months ended September 30, 2012, was due primarily to expansions of the Overthrust Pipeline system that were completed in March 2011. The decreases in transportation revenues in the third quarter and first nine months of 2012 were due to lower interruptible volumes and the expiration of firm contracts.
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