-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E4ijfNbgEj0p0ZNY7/ryKQLbFdqPyZriZj0K3immemXPfFyWU4HgmHU45jsAKy5R 9xsEbrHZNSFPnY4YANwMMg== /in/edgar/work/20000628/0000751652-00-000020/0000751652-00-000020.txt : 20000920 0000751652-00-000020.hdr.sgml : 20000920 ACCESSION NUMBER: 0000751652-00-000020 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUESTAR CORP CENTRAL INDEX KEY: 0000751652 STANDARD INDUSTRIAL CLASSIFICATION: [4923 ] IRS NUMBER: 870407509 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08796 FILM NUMBER: 663659 BUSINESS ADDRESS: STREET 1: 180 E FIRST SOUTH ST STREET 2: PO BOX 45433 CITY: SALT LAKE CITY STATE: UT ZIP: 84145 BUSINESS PHONE: 8015345000 MAIL ADDRESS: STREET 1: 180 E FIRST SOUTH ST STREET 2: P O BOX 45433 CITY: SALT LAKE CITY STATE: UT ZIP: 84145 11-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____. Commission File No. 1-8796 QUESTAR CORPORATION EMPLOYEE INVESTMENT PLAN Questar Corporation 180 East 100 South P.O. Box 45433 Salt Lake City, Utah 84145-0433 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999. Commission File Number 1-8796. A. The full title of the plan is the Questar Corporation Employee Investment Plan. The address of the plan is the same as that of the issuer named below. B. The name of the issuer of the securities held pursuant to the plan and the address of its principal executive office are: Questar Corporation, 180 East 100 South, P.O. Box 45433, Salt Lake City, Utah 84145-0433. C. Financial statements and schedules prepared in accordance with the Employee Retirement Income Security Act of 1974 for the fiscal year ended December 31, 1999, are attached as an exhibit to this Form 11-K. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Questar Corporation Employee Benefits Committee have duly caused this annual report to be signed by its duly authorized chairman. QUESTAR CORPORATION EMPLOYEE INVESTMENT PLAN Date: June 28, 2000 By: /s/R. D. Cash R. D. Cash Chairman, Employee Benefits Committee Financial Statements and Schedules Questar Corporation Employee Investment Plan Years ended December 31, 1999 and 1998 with Report of Independent Auditors Questar Corporation Employee Investment Plan Financial Statements and Schedules Years ended December 31, 1999 and 1998 Contents Report of Independent Auditors Audited Financial Statements Statements of Net Assets Available for Plan Benefits Statements of Changes in Net Assets Available for Plan Benefits Notes to Financial Statements Schedules Schedule of Assets Held for Investment Purposes at End of Year Schedule of Reportable Transactions Report of Independent Auditors Participants in Questar Corporation Employee Investment Plan We have audited the accompanying statements of net assets available for plan benefits of Questar Corporation Employee Investment Plan as of December 31, 1999 and 1998, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1999 and 1998, and the changes in its net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1999, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1999 financial statements taken as a whole. 16-Jun-00 /s/Ernst & Young LLP Questar Corporation Employee Investment Plan Statements of Net Assets Available for Plan Benefits
December 31 1999 1998 Assets Investments - at current value : Questar Corporation common stock : Allocated 85,662,540 126,795,730 Unallocated 5,869,895 Mutual funds 27,029,382 24,412,047 Merrill Lynch Retirement Preservation Trust 1,948,575 2,158,833 Loans receivable from employees 3,363,507 118,004,004 159,236,505 Cash and short-term investments 749,934 96,780 Contribution receivable from Questar Corporation 417,800 398,000 Interest receivable 12,513 12,224 119,184,251 159,743,509 Liabilities Unallocated contributions and dividends 749,914 71,687 Security acquisition loans 3,955,225 749,914 4,026,912 Net assets available for plan benefits 118,434,337 155,716,597
See accompanying notes. Statements of Changes in Net Assets Available for Plan Benefits
Year ended December 31 1999 1998 Additions Dividend and interest income 5,631,900 6,298,664 Contributions : Employees 7,958,654 7,256,970 Employer 3,657,895 4,975,420 Interest income from employee loans 187,772 11,804,321 12,232,390 Total additions 17,436,221 18,531,054 Deductions Withdrawals - at current value 29,547,817 25,358,000 Distribution of dividends to participants 328,001 Trustee fees and commissions 34,232 16,847 Interest expense 163,746 622,900 Total deductions 29,745,795 26,325,748 Net realized and unrealized depreciation of the current value of investments (24,972,686)(19,324,694) Net deductions (37,282,260)(27,119,388) Net assets available for plan benefits at beginning of year 155,716,597 182,835,985 Net assets available for plan benefits at end of year 118,434,337 155,716,597
See accompanying notes. Notes To Financial Statements December 31, 1999 1. Description of the Plan The Questar Corporation Employee Investment Plan (Plan) is a defined contribution plan for employees of Questar Corporation and certain of its subsidiaries (Questar). As of August 1, 1999, the Plan is no longer an employee stock ownership plan (ESOP) as defined in the Internal Revenue Code (Code) Section 4975(e)(7). In addition to Questar common stock, employees are able to direct the investment of their contributions into the following funds: the 1) Merrill Lynch Retirement Preservation Trust, which invests primarily in a broadly diversified portfolio of Guaranteed Investment Contracts (GICs) and in obligations of U.S. government and government-agency securities; 2) Fidelity Magellan Fund, which invests primarily in common stocks; 3) Fidelity Puritan Fund, which invests primarily in common stocks and bonds; 4) Fidelity Intermediate Bond Fund, which invests primarily in high and upper-medium grade fixed-income obligations; 5) Vanguard 500 Portfolio Index Fund, which invests primarily in common stocks as it seeks to replicate the Standard & Poor's 500 Composite Price Index; 6) Vanguard Total International Portfolio Fund, which invests in a combination of the European, Pacific, and Emerging Markets Vanguard International Equity Index Funds; and 7) Vanguard Index Trust-Small Capitalization Stock Portfolio Fund, which invests in a diversified group of small-sized companies as it attempts to track the performance of the Russell 2000 Index. Employees are required to have any plan change request forms submitted to the Personnel Services Department by the 25th day of the prior month or the preceding business day if the 25th falls on a weekend. Participants are able to transfer all or part of their 401(k) account balance between any of the Plan investment funds, including their Questar stock. The Plan, however, does not permit the transfer of any portion of a participant's account balance attributable to employer contributions. Participants who contributed to the stock fund or any of the other investment funds received employer matching contributions in the form of Questar shares released from an ESOP suspense account (Note 3) or purchased on the open market, on up to 6% of their eligible compensation contributed, at the following percentages: 100% on the first 3% and 60% on the next 3% of eligible contributions. Employees are eligible to participate in the Plan immediately upon hire if they are scheduled to work 20 hours per week. In 1999, all participants were allowed to contribute from 1% to 16% of annual compensation on a pre-tax basis pursuant to salary reduction rrangements that qualify under section 401(k) of the Code, subject to limits imposed by Federal tax laws and to discrimination testing. Beginning in the year 2000, the contribution maximum was increased to 19% of monthly compensation on a pre-tax basis, subject to the same limits. The ability to have after-tax payroll deductions made to the Plan was terminated as of January 1, 1999. The Plan provides an additional $200 annual employer contribution at the end of the Plan year in the form of shares of Questar stock to each employee working 20 hours per week with at least one year of service at the beginning of the Plan year and employed on the last day of the Plan year. This contribution is made irrespective of whether the eligible employee otherwise participates in the Plan. Beginning in 1999, employees have the opportunity to borrow up to 50% of the value of their Plan account balance, not to exceed $50,000. The interest rate is fixed and is equal to prime plus one percent, set at the time the loan is made. The participant can elect loan repayment terms up to a maximum of five years (ten years if the loan is to purchase or build a primary residence) and repayment is by payroll deductions. Upon termination of employment, the participant can either elect to repay the loan or treat the loan as a taxable distribution from their account. The Plan provides for the direct rollover of taxable amounts withdrawn from the Plan to the trustee of the participant's Individual Retirement Account (IRA) or other qualified plan, if the participant so elects. The rules for in-service withdrawals of Questar shares and investment funds allocated to participants' accounts and for distributions of such amounts upon termination of employment, disability or death are set forth in the Summary Plan Description of the Plan. In 1999, participants were fully vested in all shares and funds allocated to their individual accounts. Beginning in 2000, employees hired or who became eligible after January 1, 2000 must have one year of service before any employer contributions and earnings thereon are vested. Should the Plan terminate at some future time, all amounts vested and allocated to the participants' accounts would be distributed to them. 2. Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates. Investments Investment in Questar common stock is stated at current value based on the closing market price on the last business day of the year on the New York Stock Exchange. The nationally listed mutual funds are stated at current value. The Merrill Lynch Retirement Preservation Trust is valued at cost plus interest earned, which approximates market. Short-term investments consist primarily of investments in a separate money market portfolio fund and in unallocated mutual funds and are stated at current value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Dividends Questar has a Dividend Reinvestment and Stock Purchase Plan (DRP) whereby participants may reinvest dividends to purchase additional shares of Questar common stock at market value. Beginning in 1999, dividends on all shares of Questar stock held in the Plan are reinvested through the DRP. Dividends paid on leveraged shares were applied to the principal and interest payments on the promissory note payable to Questar until the note was repaid in 1999. Withdrawals Withdrawals are recorded based on current prices at the date withdrawn. The differences between cost and current value at the time of withdrawal are included in the financial statements as realized gains or losses. Administrative Expenses Legal, accounting, and other administrative expenses except commissions and a portion of the trustee fees have been paid by Questar. 3. Security Acquisition Loans In 1989 the Plan issued two promissory notes payable to Questar totaling $35,000,000 and used the proceeds to purchase 3,985,768 shares (leveraged shares) of Questar common stock at $8.7813 per share. The leveraged shares were held in a separate suspense account established under the Trust and were released and allocated to eligible participants as the notes were repaid over a ten-year period. Payments on the notes were made with contributions from Questar and from dividends and earnings received on the remaining allocated and unallocated leveraged shares. The notes were collateralized by the unreleased leveraged shares. Under the terms of the notes, the Plan was obligated to make principal payments annually, which, in aggregate, had to meet or exceed cumulative minimum principal payments as of each payment date. The 1998 end of year balance of $3,955,225 was repaid July 1, 1999, and all remaining shares were allocated to employees throughout the year. Income Taxes The Plan has received a determination letter from the Internal Revenue Service dated January 19, 2000, stating that the plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the plan is qualified and the related trust is tax exempt. 5. Non-Participant Directed Investments First Security Bank, N.A., is the Plan Trustee. Investments in common stock of Questar are non-participant directed *. Activity for the two years ended December 31, 1999 and 1998, was as follows:
Allocated Unallocated Shares Cost Shares Cost Balances at January 1, 1998 6,839,022 87,624,866 805,900 7,076,809 Purchases 331,419 6,555,742 Allocation of shares 502,941 9,857,179 (502,941) (4,416,362) Withdrawals (1,129,086)(14,310,440) Balances at December 31, 1998 6,544,296 89,727,347 302,959 2,660,447 Purchases 353,584 6,310,234 Allocation of shares 302,959 5,462,203 (302,959) (2,660,447) Loan Distributions/Payments (132,407) (2,362,574) Transfers In/Out (139,750) (1,697,496) Withdrawals (1,217,846)(16,986,068) Balances at December 31, 1999 5,710,836 80,453,646 0 0
Average cost per share of allocated stock was $14.09 and $13.71 as of December 31, 1999 and 1998, respectively. The current price per share of stock, both allocated and unallocated, was $15.00 and $19.38 as of December 31, 1999 and 1998, respectively. The cost of allocated shares is based on the average market purchase price for shares for each month, whereas the cost of unallocated shares is shown as the original purchase price of the shares which was $8.78 per share. Statement amounts that were attributable to allocated and unallocated shares during 1999 and 1998, were as follows:
Allocated Unallocated 1999 1998 1999 1998 Changes in net realized and unrealized depreciation (24,288,662)(15,541,516) (3,209,452) (7,695,375) Security acquisition loans 3,955,225 Dividends 3,854,876 4,437,272 99,496 374,357
Interest expense was entirely attributable to shares that were unreleased during 1999 and 1998. Employer contributions receivable, employer contributions, and distributions were entirely attributable to allocated shares. * The participant directed shares are included with the non-participant directed share balances. 6. Investments Investments that represent 5% or more of the current value of the Plan's net assets are as follows:
December 31 1999 1998 Questar Corporation Common Stock * 85,662,540 132,665,625 Fidelity Magellan Fund 11,551,672 11,807,522 Vanguard 500 Portfolio Index Fund 8,708,341 5,640,040
*Non-participant directed EIN 87-0407509 PLAN #002 Questar Corporation Employee Investment Plan Schedule H, Line 4i-Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999
Identity of Issue, Borrower, Lessor or Similar Party Description of Investments Cost Current Value Questar Corporation Common Stock - 5,710,836 shares 80,453,646 85,662,540 Fidelity Magellan Fund - 84,547 units 9,593,599 11,551,672 Fidelity Puritan Fund - 252,711 units 5,454,902 4,809,089 Fidelity Intermediate Bond Fund 46,396 units 682,466 450,336 Vanguard 500 Portfolio Index Fund 64,348 units 6,586,392 8,708,341 Vanguard Total International Portfolio Fund - 63,508 units 734,536 908,810 Vanguard Index Trust Small Capitalization Stock Portfolio Fund - 25,472 units 561,623 601,134 Merrill Lynch Retirement Preservation Trust 1,948,575 units 1,948,575 1,948,575 Employees Loans receivable from employees at interest rates from 8.75% to 9.50%, maturing through 2000 3,363,507 106,015,739 118,004,004
Schedule H, Line 4j-Schedule of Reportable Transactions Year ended December 31, 1999
Current Value Identity of Description Purchase Selling Cost of of Asset on Net Gain Party Involved of Assets Price Price Asset Transaction or Loss Date Category (i) - Single Transaction in Excess of 5% of Plan Assets None Category (ii) - Series of Transactions (Other than Securities Transactions) with the Same Person Aggregating 5% of Plan Assets None Category (iii) - A Series of Transactions in Excess of 5% of Plan Assets Questar Corporation Common Stock 11,772,437 11,772,437 11,772,437 Questar Corporation Common Stock 20,936,203 16,986,069 20,936,203 3,950,134 Category (iv) - Transactions in Securities with a Person if Any Single Transaction with that Person was in Excess of 5% of Plan Assets None
EXHIBIT INDEX Exhibit Number Exhibit 23. Consent of Independent Auditors. EX-23 2 0002.txt Exhibit 23 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8, No. 33-4436 and No. 33-48169) pertaining to the Questar Corporation Employee Investment Plan (formerly the Questar Corporation Employee Stock Purchase Plan) of our report dated June 16. 2000, with respect to the financial statements and schedules of the Questar Corporation Investment Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1999. /s/ Ernst & Young LLP Salt Lake City, Utah June 26, 2000 -----END PRIVACY-ENHANCED MESSAGE-----