-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dXCU64qkxhIrz2m/d33atq3WorBWwQ9QMdptMLK1hRnuhlHTkPEea7Aj9cYRIZQ5 3IL9JrAvCQ29Iyo8RKcTYQ== 0000764044-94-000002.txt : 19940516 0000764044-94-000002.hdr.sgml : 19940516 ACCESSION NUMBER: 0000764044-94-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUESTAR PIPELINE CO CENTRAL INDEX KEY: 0000764044 STANDARD INDUSTRIAL CLASSIFICATION: 4924 IRS NUMBER: 870307414 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14147 FILM NUMBER: 94527726 BUSINESS ADDRESS: STREET 1: 79 S STATE ST STREET 2: P O BOX 11450 CITY: SALT LAKE CITY STATE: UT ZIP: 84147 BUSINESS PHONE: 8015302400 MAIL ADDRESS: STREET 1: 190 EAST FIRST SOUTH STREET STREET 2: P O BOX 11150 CITY: SALT LAKE CITY STATE: UT ZIP: 84147 FORMER COMPANY: FORMER CONFORMED NAME: MOUNTAIN FUEL RESOURCES INC DATE OF NAME CHANGE: 19880331 10-Q 1 QUESTAR PIPELINE 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission File No. 0-14147 QUESTAR PIPELINE COMPANY (Exact name of registrant as specified in its charter) STATE OF UTAH 87-0307414 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 11450, 79 South State Street, Salt Lake City, Utah 84147 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (801) 530-2400 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of April 30, 1994 Common Stock, $1.00 par value 6,550,843 shares Registrant meets the conditions set forth in General Instruction H(a)(1) and (b) of Form 10-Q and is filing this Form 10-Q with the reduced disclosure format. QUESTAR PIPELINE COMPANY STATEMENTS OF INCOME (Unaudited)
3 Months Ended 12 Months Ended March 31, March 31, 1994 1993 1994 1993 (In Thousands of Dollars) REVENUES $27,750 $78,151 $121,227 $210,893 OPERATING EXPENSES Natural gas purchases 45,169 10,853 96,796 Operating and maintenance 11,279 13,745 45,890 48,447 Depreciation 3,674 3,456 14,302 13,705 Other taxes 1,134 1,043 4,006 3,832 TOTAL OPERATING EXPENSES 16,087 63,413 75,051 162,780 OPERATING INCOME 11,663 14,738 46,176 48,113 INTEREST AND OTHER INCOME 226 85 2 912 INCOME FROM UNCONSOLIDATED AFFILIATES 69 18 179 34 DEBT EXPENSE (3,203) (3,314) (13,003) (13,779) INCOME BEFORE INCOME TAXES 8,755 11,527 33,354 35,280 INCOME TAXES 3,247 4,145 11,953 12,431 NET INCOME $5,508 $7,382 $21,401 $22,849
QUESTAR PIPELINE COMPANY CONDENSED BALANCE SHEETS (Unaudited)
March 31, December 31, 1994 1993 1993 (In Thousands) ASSETS Current assets Cash and short-term investments $2,004 $1,341 Notes receivable from parent company $16,300 Accounts receivable 11,221 41,365 11,191 Inventories 2,730 9,517 2,394 Other current assets 1,989 2,164 2,268 Total current assets 17,944 69,346 17,194 Property, plant and equipment 566,191 513,885 561,108 Less allowances for depreciation 193,365 178,898 189,279 Net property, plant and equipment 372,826 334,987 371,829 Investment in unconsolidated affiliates 7,214 6,824 7,145 Other assets 10,127 6,867 9,726 $408,111 $418,024 $405,894 LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities Checks outstanding in excess of cash balances $3,031 Notes payable to affiliates $300 $3,000 Accounts payable and accrued expenses 17,224 19,462 12,668 Purchased gas adjustments 12,390 Total current liabilities 17,524 34,883 15,668 Long-term debt 134,492 134,473 134,487 Deferred credits 1,485 782 2,276 Deferred income taxes 67,474 65,651 67,335 Common shareholder's equity Common stock 6,551 6,551 6,551 Additional paid-in capital 57,034 57,034 57,034 Retained earnings 123,551 118,650 122,543 Total common shareholder's equity 187,136 182,235 186,128 $408,111 $418,024 $405,894
QUESTAR PIPELINE COMPANY CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
3 Months Ended March 31, 1994 1993 (In Thousands) OPERATING ACTIVITIES Net income $5,508 $7,382 Depreciation 4,091 3,912 Deferred income taxes 139 2,045 Income from unconsolidated affiliates (69) (18) 9,669 13,321 Change in operating assets and liabilities 3,282 12,909 NET CASH PROVIDED FROM OPERATING ACTIVITIES 12,951 26,230 INVESTING ACTIVITIES Capital expenditures Purchase of property, plant and equipment (5,089) (2,290) Other investments (153) Total capital expenditures (5,089) (2,443) Proceeds (uses) from disposition of property, plant and equipment 1 (73) CASH USED IN INVESTING ACTIVITIES (5,088) (2,516) FINANCING ACTIVITIES Decrease in notes payable to parent company (2,700) (7,500) Increase in notes receivable from parent company (16,300) Payment of dividends (4,500) (4,000) CASH USED IN FINANCING ACTIVITIES (7,200) (27,800) CHANGE IN CASH AND SHORT-TERM INVESTMENTS, AND CHECKS OUTSTANDING IN EXCESS OF CASH BALANCES $663 ($4,086)
QUESTAR PIPELINE COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS March 31, 1994 (Unaudited) Note A - Basis of Presentation The interim financial statements furnished reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Due to the seasonal nature of the business, the results of operations for the three-month period ended March 31, 1994, are not necessarily indicative of the results that may be expected for the year ending December 31, 1994. For further information refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1993. Note B - Accounting for Postemployment Benefits Effective January 1, 1994, the Company recorded a liability for postemployment disability and health care benefits in compliance with the Statement of Financial Accounting Standards No. 112. This did not have an effect on net income since the $1,256,000 liability was offset with a regulatory asset because the Company expects to include these costs in future rates. QUESTAR PIPELINE COMPANY MANAGEMENT'S ANALYSIS March 31, 1994 Operating Results -- Following is a summary of operating information for the Company:
3 Months Ended 12 Months Ended March 31, March 31, 1994 1993 1994 1993 Natural gas volumes (in thousands of decatherms) Transportation For Mountain Fuel 36,860 13,259 88,662 35,432 For other customers 31,203 38,871 141,520 168,153 Total transportation 68,063 52,130 230,182 203,585 Sales for resale to Mountain Fuel 21,039 3,298 42,285 Total system throughput 68,063 73,169 233,480 245,870 Gathering For Mountain Fuel 12,065 20,989 35,508 44,252 For other customers 11,783 7,590 52,529 31,020 Total gathering 23,848 28,579 88,037 75,272 Natural gas revenues (per decatherm) Transportation $0.23 $0.23 $0.24 $0.22 Sales for resale 2.70 7.57 3.22 Gathering 0.23 0.22 0.22 0.24
Questar Pipeline began operating under Federal Energy Regulatory Commission (FERC) Order 636 effective September 1, 1993. At that time Questar Pipeline unbundled its transportation, gathering and storage services and eliminated its sales-for-resale function. Under the Order 636 operating environment, firm transportation and gathering volumes do not have a significant impact on current operating results since 94% of the cost of service is recovered in the demand component of rates using the straight fixed-variable rate design. Since this demand component is collected equally each month of the year, revenues collected using the straight fixed-variable rate design in the high-volume first quarter are less than those collected under the rate design in effect during the first quarter of 1993. The straight fixed-variable rate design should result in increased revenues during the second and third quarters of 1994, compared to the same quarters of 1993. Deliveries to Mountain Fuel (including transportation and sales for resale) were higher in the periods ended March 31, 1994, due to gas transported to storage reservoirs. Transportation for other customers was lower in the 1994 periods because Order 636 rate design changes reduced volumes for interruptible customers. Gathering volumes for Mountain Fuel decreased in the first quarter of 1994; however, gathering for other customers increased. In April 1994, the FERC approved a gathering agreement between Questar Pipeline and Mountain Fuel, which will allocate 60% of the gathering cost of service to the demand component of rates and 40% to the commodity component. Gathering revenues will be increased in the second quarter of 1994, retroactive to September 1, 1993. Operating and maintenance expenses were lower in the periods ended March 31, 1994, because of the transfer of activities to Mountain Fuel associated with the gas-purchase function and lower variable costs from the reduced system throughput. Depreciation expense was higher in the periods ended March 31, 1994, because of capital spending, primarily for storage and gathering activities. The effective income tax rate of 37.1% in the first quarter of 1994 was higher than the 36.0% in the first quarter of 1993 because of an increase in the federal income tax rate to 35%. Effective January 1, 1994, the Company recorded a liability for postemployment disability and health care benefits in compliance with the Statement of Financial Accounting Standards No. 112. This did not have an effect on net income since the $1,256,000 liability was offset with a regulatory asset because the Company expects to include these costs in future rates. Liquidity and Capital Resources -- Net cash provided from operating activities was $12,951,000 for the first quarter of 1994 compared with $26,230,000 for the same period of 1993. The decrease was due to lower net income, and reduced sources from deferred taxes and working capital. In the Order 636 operating environment, Questar Pipeline does not have the same seasonal changes in working capital as it did in the first quarter of 1993. Capital expenditures were $5,089,000 in the first quarter of 1994, compared with $2,443,000 in the corresponding 1993 period. Capital expenditures for the calendar year 1994 are estimated at $70,900,000. These capital expenditures will be financed with funds from operations and borrowings from banks or the parent corporation. The Company had a short-term line-of-credit arrangement with a bank totaling $200,000. As of March 31, 1994, Questar Pipeline had borrowed $300,000 from Questar Corporation. PART II OTHER INFORMATION Questar Pipeline Company has nothing to disclose in this section of the report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. QUESTAR PIPELINE COMPANY (Registrant) May 11, 1994 /s/ A. J. Marushack A. J. Marushack President and Chief Executive Officer May 11, 1994 /s/ W. F. Edwards W. F. Edwards Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----