Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Note 4 - Fair Value Measurements

Questar complies with the provisions of the accounting standards for fair value measurements and disclosures. These standards define fair value in applying GAAP, establish a framework for measuring fair value and expand disclosures about fair value measurements. The standards do not change existing guidance as to whether or not an instrument is carried at fair value. The standards establish a fair value hierarchy. Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

Questar primarily applies the market approach for recurring fair value measurements and maximizes its use of observable inputs and minimizes its use of unobservable inputs. Questar considers bid and ask prices for valuing the majority of its assets and liabilities measured and reported at fair value. In addition to using market data, Questar makes assumptions in valuing its assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

On January 1, 2009, Questar adopted, without material impact on the Consolidated Financial Statements, fair value accounting standards related to nonfinancial assets and nonfinancial liabilities that are not required or permitted to be measured at fair value on a recurring basis. Questar did not have any assets or liabilities measured at fair value on a non-recurring basis at December 31, 2011 and 2010.

Questar

The following table discloses the carrying amount and estimated fair value of certain financial instruments not disclosed in other notes to Questar's Financial Statements in this Annual Report on Form 10-K:



	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	December 31, 2011				December 31, 2010
	(in millions)
Financial assets
Cash and cash equivalents	$	11.6	$	11.6	$	21.8	$	21.8
Long-term investment	14.4		14.4		13.1		13.1
Financial liabilities
Short-term debt	219.0		219.0		242.0		242.0
Long-term debt, including current portion	1,084.5		1,223.4		1,080.5		1,173.8

The carrying amounts of cash and cash equivalents and short-term debt approximate fair value. The long-term investment is recorded at fair value and consists of money market and short-term bond index mutual funds representing funds held in Wexpro's trust (see Note 3). The fair value of the long-term investment is based on quoted prices for the underlying funds, and is considered a Level 1 fair value measurement. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using the Company's current credit-risk-adjusted borrowing rates.

The fair value of the Company's derivative instrument is the same as its carrying amount, and is disclosed in Note 5. The fair value of the derivative instrument, which is an interest rate swap, is estimated using a standard discounted cash flow model using observable market-based forward interest rates obtained from a third-party financial institution, and is considered a Level 2 fair value measurement.

Questar Pipeline

The following table discloses the carrying amount and estimated fair value of certain financial instruments not disclosed in other notes to Questar Pipeline's Financial Statements in this Annual Report on Form 10-K:



	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	December 31, 2011				December 31, 2010
	(in millions)
Financial assets
Cash and cash equivalents	$	3.4	$	3.4	$	5.3	$	5.3
Notes receivable from Questar	8.8		8.8		30.3		30.3
Financial liabilities
Long-term debt, including current portion	459.0		519.4		460.9		501.9

The carrying amounts of cash and cash equivalents and notes receivable from Questar approximate fair value. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using Questar Pipeline's current credit-risk-adjusted borrowing rates.

Questar Gas

The following table discloses the carrying amount and estimated fair value of certain financial instruments not disclosed in other notes to Questar Gas's Financial Statements in this Annual Report on Form 10-K:



	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
	December 31, 2011				December 31, 2010
	(in millions)
Financial assets
Cash and cash equivalents	$	5.0	$	5.0	$	4.7	$	4.7
Financial liabilities
Notes payable to Questar	142.7		142.7		153.6		153.6
Long-term debt, including current portion	368.0		445.4		370.0		425.3

The carrying amounts of cash and cash equivalents and notes payable to Questar approximate fair value. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using Questar Gas's current credit-risk-adjusted borrowing rates.

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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