-----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, KBK7hK5qv/3JOmJuI1cCbH5PS3uD+Ammdw5IDU6lXVpKXJxWFn4zWRN6eQy/2a7A oXnQ6I9LBsi5CWl5hx1fVQ== 0000764044-97-000008.txt : 19970815 0000764044-97-000008.hdr.sgml : 19970815 ACCESSION NUMBER: 0000764044-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUESTAR PIPELINE CO CENTRAL INDEX KEY: 0000764044 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [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: 97659915 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: 79 SOUTH STATE 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 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 JUNE 30, 1997 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) 324-2400 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 June 30, 1997 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. PART I FINANCIAL INFORMATION Item 1. Financial Statements QUESTAR PIPELINE COMPANY STATEMENTS OF INCOME (Unaudited)
3 Months Ended 6 Months Ended 12 Months Ended June 30, June 30, June 30, 1997 1996 1997 1996 1997 1996 (In Thousands) REVENUES $25,907 $25,726 $52,628 $51,802 $105,004 $98,892 OPERATING EXPENSES Operating and maintenance 9,637 9,314 18,545 19,575 38,929 36,149 Depreciation 3,614 3,434 7,211 6,812 14,605 13,311 Other taxes 664 902 1,415 1,944 1,990 3,349 TOTAL OPERATING EXPENSES 13,915 13,650 27,171 28,331 55,524 52,809 OPERATING INCOME 11,992 12,076 25,457 23,471 49,480 46,083 INTEREST AND OTHER INCOME 91 260 96 804 1,090 592 INCOME (LOSS) FROM UNCONSOLIDATED AFFILIATES (6) 35 (74) 72 36 1,111 DEBT EXPENSE (3,314) (3,452) (6,665) (6,846) (13,235) (13,551) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 8,763 8,919 18,814 17,501 37,371 34,235 INCOME TAXES 3,303 3,384 7,032 6,715 13,732 12,566 INCOME FROM CONTINUING OPERATIONS 5,460 5,535 11,782 10,786 23,639 21,669 DISCONTINUED OPERATIONS - QUESTAR GAS MANAGEMENT COMPANY 356 1,495 3,175 NET INCOME $5,460 $5,891 $11,782 $12,281 $23,639 $24,844
See notes to financial statements QUESTAR PIPELINE COMPANY CONDENSED BALANCE SHEETS (Unaudited)
June 30, December 31, 1997 1996 1996 (In Thousands) ASSETS Current assets Cash and short-term investments $5,411 $1,254 $2,550 Notes receivable from Questar Gas Management 16,000 Accounts receivable $10,229 4,854 8,229 Inventories 2,363 2,186 2,301 Other current assets 1,754 1,513 1,938 Total current assets 19,757 25,807 15,018 Property, plant and equipment 566,777 552,372 562,711 Less allowances for depreciation 201,269 189,636 194,396 Net property, plant and equipment 365,508 362,736 368,315 Investment in discontinued operations 29,250 Investment in unconsolidated affiliates 14,323 9,155 14,347 Other assets 10,789 10,645 11,070 $410,377 $437,593 $408,750 LIABILITIES AND SHAREHOLDER'S EQUITY Current liabilities Notes payable to Questar Corporation $11,600 $700 $11,800 Accounts payable and accrued expenses 15,869 62,438 14,823 Total current liabilities 27,469 63,138 26,623 Long-term debt 134,554 134,535 134,544 Other liabilities 4,257 4,878 4,322 Deferred income taxes 58,572 53,406 58,768 Common shareholder's equity Common stock 6,551 6,551 6,551 Additional paid-in capital 82,034 82,034 82,034 Retained earnings 96,940 93,051 95,908 Total common shareholder's equity 185,525 181,636 184,493 $410,377 $437,593 $408,750
See notes to financial statements QUESTAR PIPELINE COMPANY CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
6 Months Ended June 30, 1997 1996 (In Thousands) OPERATING ACTIVITIES Net income $11,782 $12,281 Depreciation 7,768 7,670 Deferred income taxes (196) (2,743) Income from discontinued operations (1,495) Loss (income) from unconsolidated affiliates 74 (72) 19,428 15,641 Change in operating assets and liabilities (606) 30,825 NET CASH PROVIDED FROM OPERATING ACTIVITIES 18,822 46,466 INVESTING ACTIVITIES Capital expenditures Purchase of property, plant and equipment (4,227) (5,745) Other investments (50) Total capital expenditures (4,277) (5,745) Costs of disposition of property, plant and equipment (734) (669) NET CASH USED IN INVESTING ACTIVITIES (5,011) (6,414) FINANCING ACTIVITIES Decrease in note receivable from Questar Gas Management 689 Decrease in note payable to Questar Corporation (200) (14,500) Payment of dividends (10,750) (26,000) NET CASH USED IN FINANCING ACTIVITIES (10,950) (39,811) INCREASE IN CASH AND SHORT-TERM INVESTMENTS $2,861 $241
The $29,250,000 special dividend declaration of Questar Gas Management shares was a non-cash transaction and excluded from the Statement of Cash Flows. See notes to financial statements QUESTAR PIPELINE COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS June 30, 1997 (Unaudited) Note 1 - Basis of Presentation The interim financial statements 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. The results of operations for the three-and six-month periods ended June 30, 1997, are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. 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, 1996. Note 2 - Discontinued Operations - Gathering Division Spin Down and Transfer Questar Pipeline transferred approximately $55 million of gas-gathering assets to Questar Gas Management Company, a wholly owned subsidiary. The transfer was approved by the Federal Energy Regulatory Commission (FERC) February 28, 1996 and was effective March 1, 1996. Questar Gas Management was subsequently transferred to the nonregulated Market Resources group of Questar on July 1, 1996 and now is a wholly owned subsidiary of Entrada Industries. The transaction was in the form of a stock dividend payable to Questar with no gain or loss recorded. Questar Pipeline's financial statements for prior periods were restated reflecting gas-gathering operations as a discontinued business segment. Questar Pipeline has submitted an application to the FERC to transfer approximately $1.5 million of additional facilities to Questar Gas Management. The facilities consist of several miles of non-mainline laterals, a portion of a mainline pipeline and a compressor station. The application requested that the transfer be effective May 31, 1997. However, the transfer was delayed by a group of producers protesting part of the transfer. The FERC has not yet ruled on the Company's application. Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations QUESTAR PIPELINE COMPANY June 30, 1997 (Unaudited) Operating Results Following is a summary of financial and operating information for the Company:
3 Months Ended 6 Months Ended 12 Months Ended June 30, June 30, June 30, 1997 1996 1997 1996 1997 1996 (Dollars In Thousands) FINANCIAL RESULTS Revenues From unaffiliated customers $8,732 $11,360 $17,863 $19,447 $37,253 $37,700 From affiliates 17,175 14,366 34,765 32,355 67,751 61,192 Total revenues $25,907 $25,726 $52,628 $51,802 $105,004 $98,892 Operating income $11,992 $12,076 $25,457 $23,471 $49,480 $46,083 Income from continuing operations $5,460 $5,535 $11,782 $10,786 $23,639 $21,669 OPERATING STATISTICS Natural gas transportation volumes (in thousands of decatherms) For unaffiliated customers 27,633 36,158 60,936 73,031 119,800 147,427 For Mountain Fuel 26,011 16,426 68,275 53,582 114,854 88,702 For other affiliated customers 10,993 10,271 17,809 14,869 47,267 37,349 Total transportation 64,637 62,855 147,020 141,482 281,921 273,478 Transportation revenue (per decatherm) $0.26 $0.28 $0.23 $0.24 $0.23 $0.24
Revenues were higher in the 6- and 12-month periods of 1997 due primarily to a rate increase, which became effective on February 1, 1996. Operating and maintenance expenses increased 3% in the second quarter of 1997 when compared to the second quarter of 1996 due primarily to charges for electronic field measurement services. Operating and maintenance expenses were lower in the first half of 1997 due to reduced labor and related costs and some operating efficiencies. Operating efficiencies resulted from the consolidation of certain administrative, marketing, financial, technical and related services under Questar Regulated Services Co., which wholly owns Questar Pipeline. These services were previously staffed and performed separately by Questar Pipeline and its affiliated company, Mountain Fuel. Operating and maintenance expenses were 8% higher for the 12-month period ended June 30, 1997 when compared with the same period of 1996, primarily because of some one-time costs associated with the spin-down of certain assets to Questar Gas Management Company and settlement issues in Questar Pipeline's most recent rate proceeding. Depreciation expense was higher in the 1997 periods as a result of increased investment in property, plant and equipment. Other taxes were lower in the 3- and 6-month periods of 1997 when compared with the same periods of 1996 primarily due to reduced payroll taxes because the number of employees has decreased from a year ago. Interest and other income was lower in the 3- and 6-month periods of 1997 because Questar Gas Management repaid a loan to the Company and the proceeds were dividended to Questar. The effective income tax rate for the first half was 37.4% in 1997 compared with 38.4% in 1996. On May 9, 1997, the Federal Energy Regulatory Commission (FERC) issued an "Order Instituting Proceeding" in Docket No. IN97-1, in which it alleges that Questar Pipeline had overcharged its affiliated company, Mountain Fuel, for gathering services provided from November 1988 through September 1992. The FERC order states that Questar Pipeline may have violated the Natural Gas Act by charging Mountain Fuel rates different from those rates specified in the tariff. The FERC is ordering Questar Pipeline to show why the allegations are incorrect and why it should not refund the alleged overcharge of $3.4 million plus interest to Mountain Fuel. Questar Pipeline believes that it did not overcharge Mountain Fuel. Questar Pipeline also believes that its actions were fully justified and in full compliance with applicable law and FERC orders, based on its understanding of the issues dealing with jurisdiction over gathering during the period in question. Management does not believe the ultimate outcome of this order will have a material impact on results of operations, financial position or liquidity. Liquidity and Capital Resources Operating Activities: Net cash provided from operating activities of $18,822,000 for the first half of 1997 was lower when compared with $46,466,000 for the same period in 1996 due primarily to changes in operating assets and liabilities. The 1996 period included a $16,000,000 special dividend declaration associated with the loan repayment from Questar Gas Management. Also, the first half of 1996 included the collection of rates subject to refund amounting to $7,400,000. Investing Activities: Capital expenditures were $4,277,000 in the first half of 1997 compared with $5,745,000 in the corresponding 1996 period. Capital expenditures for calendar year 1997 are estimated to be $48,500,000, which includes $18,600,000 earmarked for the Company's share of the second phase of the TransColorado Pipeline. The second phase will cost approximately $200 million and includes 270 miles of 22- and 24-inch pipeline and two compressor plants. The Company will ultimately have a 50% share of the project after completing a purchase of 50% of El Paso Energy Corporation's interest in Phase II and 100% of El Paso's interest in Phase I. Financing Activities: The Company has a short-term line-of-credit arrangement with a bank totaling $200,000. In addition, Questar Corporation loans funds to the Company under a short-term arrangement. As of June 30, amounts borrowed from Questar were $11,600,000 in 1997 and $700,000 in 1996. No amounts were borrowed under the short-term line-of-credit arrangement at June 30, 1997. First half financing activities in 1997 and 1996 included payment of dividends and a partial repayment of the Company's notes payable to Questar. Capital expenditures for 1997 are expected to be financed from net cash flow provided from operations and borrowings from Questar. This 10-Q contains forward-looking statements about the future operations and expectations of Questar Pipeline. According to management, these statements are made in good faith and are reasonable representations of the Company's expected performance at the time. Actual results may vary from management's stated expectations and projections due to a variety of factors. PART II OTHER INFORMATION Item 1. Legal Proceedings. On August 7, 1997, Questar Pipeline Company (Questar Pipeline or the Company) filed a formal Answer and Motion for Hearing in response to an Order Instituting Proceeding issued by the Federal Energy Regulatory Commission (the FERC). This order, which contains allegations that the Company charged gathering rates higher than specified in its tariff to Mountain Fuel Supply Company for the period from November 1, 1988 through September 30, 1992, is described in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997. In its answer, Questar Pipeline emphasized that the issues raised by the FERC were treated in earlier rate settlements involving interested parties and that all parties are bound by these settlements. In addition, the Company denied that it overcharged Mountain Fuel when collecting rates for gathering activities. Questar Pipeline believes that its gathering rates were fully justified and that its activities were in full compliance with applicable law and FERC orders. The Company requested the FERC to dismiss the proceeding or to conduct a full hearing on the issues. Questar Pipeline transferred its gathering assets to Questar Gas Management Company, an affiliated entity, effective March 1, 1996, but is the responsible party for any ultimate outcome. Item 6. Exhibits and Reports on Form 8-K. a. The following exhibit has been filed as part of this report: Exhibit No.Exhibit 3.3. Bylaws (as amended on August 12, 1997). 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) August 13, 1997 /s/ D. N. Rose (Date) D. N. Rose President and Chief Executive Officer August 13, 1997 /s/ S. E. Parks (Date) S. E. Parks Vice President, Treasurer and Chief Financial Officer EX-3.3 2 BYLAWS of QUESTAR PIPELINE COMPANY A Utah Corporation OFFICES SECTION 1. The principal office shall be in the City of Salt Lake, County of Salt Lake, State of Utah. The Corporation may also have offices at such other places as the Board of Directors may from time to time appoint or the business of the Corporation may require. SEAL SECTION 2. The corporate seal shall have inscribed thereon the name of the Corporation, and the words "Corporate Seal," and "Utah." Said seal may be used by causing it, or a facsimile thereof, to be impressed or affixed or reproduced, or otherwise. SHAREHOLDERS' MEETINGS SECTION 3. All meetings of the shareholders shall be held at the Corporation's office in Salt Lake City, Utah, or at such other place as may be specified by the Board of Directors. SECTION 4. The annual meeting of shareholders shall be held on the third Tuesday in May of each year, and if such day is a legal holiday, then on the preceding secular business day, at 1:00 p.m., when they shall elect by majority vote a Board of Directors and transact such other business as may properly be brought before the meeting. SECTION 5. The Board of Directors may direct the calling of special meetings of the shareholders at such time and place as the Board may deem necessary. SECTION 6. Holders of a majority of the shares issued and outstanding, and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the shareholders for the transaction of business, except as otherwise provided by law, by the Articles of Incorporation, or by these Bylaws. If, however, such majority shall not be present or represented at any meeting of the shareholders, the shareholders entitled to vote thereat, present in person or by proxy, shall have power to adjourn the meeting, from time to time, without notice other than announcement at the meeting, until such requisite amount of voting stock shall be present. At such adjourned meeting at which the requisite amount of voting stock shall be represented, business may be transacted which might have been transacted at the meeting as originally notified. SECTION 7. The Secretary shall, but in case of his failure any other officer of the Corporation may, give written or printed notice to the shareholders stating the place, day and hour of each shareholders meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called. Such notice shall be given not less than ten (10) nor more than fifty (50) days before the date of the meeting. SECTION 8. Notice may be given either personally or by mail, and if given by mail, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the stock transfer books of the Corporation, with postage prepaid thereon. SECTION 9. At each meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing, subscribed by such shareholder and bearing a date not more than three months prior to said meeting. Each shareholder shall have one vote for each share of stock registered in such shareholder's name on the books of the Corporation. The vote for directors and, upon the demand of any shareholder, the vote upon any question before any meeting of shareholders shall be by ballot. All elections shall be had and all questions decided by a plurality vote. SECTION 10. A complete list of shareholders entitled to vote at any meeting of shareholders shall be prepared and be available for inspection by any shareholder beginning two business days after notice is given of the meeting for which the list was prepared and continuing throughout the meeting. The list shall be arranged by voting group and by class or series of shares within each voting group and be alphabetical within each voting group or class. The list shall indicate each shareholder's name, address, and number of voting shares. A shareholder, directly or through an agent or attorney, has the right to inspect and copy, at his expense, the list of shareholders prepared for each meeting of shareholders. The shareholder must make a written request to examine the list and must examine it during the Corporation's regular business hours. SECTION 11. Business transacted at all special meetings of the shareholders shall be confined to the objects stated in the call and notice. SECTION 12. Unless otherwise provided in the Articles of Incorporation, any action that may be taken at any annual or special meeting of the shareholders may be taken without a meeting and without prior notice upon the receipt of a unanimous written consent. DIRECTORS SECTION 13. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. The Board shall consist of five directors. A majority shall have the power to transact the business of the corporation in conformity with the powers conferred upon the Board of Directors by the Articles of Incorporation. Directors elected at any annual or special meeting of the shareholders shall hold office until the next annual meeting of the shareholders and until their successors shall be duly elected. One or more directors may be removed with or without cause by a vote of the majority of the shareholders at a meeting of shareholders called for that purpose. SECTION 14. Unless the Articles of Incorporation provide otherwise, any acts required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if all the directors take the action, each director signs a written consent describing the action taken, and the consents are filed with the records of the Corporation. Action taken by consent is effective when the last director signs the consent, unless the consent specifies a different effective date. A signed consent has the effect of a meeting vote and may be described as such in any document. SECTION 15. The directors may hold their meetings and have one or more offices and keep the books of the Corporation at such place as they may from time to time determine. SECTION 16. In addition to the powers and authority by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute of the State of Utah, or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders. COMMITTEE SECTION 17. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more Committees, each Committee to consist of two or more of the Directors of the Corporation and shall have and may exercise the powers conferred upon them by the Board of Directors. All Committees when so appointed shall have such name or names as may be determined from time to time by resolutions adopted by the Board of Directors. SECTION 18. The Committees shall keep regular minutes for their proceedings and report the same to the Board of Directors when required. COMPENSATION OF DIRECTORS SECTION 19. Directors, as such, shall not receive any salary for their services, but the Board of Directors, by resolution, shall fix the fees to be allowed and paid to directors, as such, for their services and provide for the payment of the expenses of the directors incurred by them in performing their duties. Nothing herein contained, however, shall be considered to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore. SECTION 20. Fees to members of special or standing committees and expenses incurred by them in the performance of their duties, as such, shall also be fixed and allowed by resolution of the Board of Directors. MEETINGS OF THE BOARD SECTION 21. The Board of Directors may meet at Salt Lake City, Utah, or at such other place as may be determined by a majority of the members of the Board. SECTION 22. Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. SECTION 23. Special meetings of the Board may be called by the President on at least two days' notice to each director, either personally or by mail or telegram; special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of two directors. SECTION 24. At all meetings of the Board a majority of the Directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum, shall be the act of the Board of Directors. Directors may participate in a meeting and be counted in the quorum by means of conference telephone or similar communication equipment by which all directors participating in the meeting can hear each other. SECTION 25. The officers of the Corporation shall be chosen by the Board of Directors and shall consist of: a Chairman of the Board, a President and Chief Executive Officer, a Vice President, a Secretary, and a Treasurer. The Board may also choose a Vice Chairman, additional Vice Presidents, Assistant Secretaries and Assistant Treasurers. SECTION 26. The Board of Directors at its first meeting after each annual meeting shall choose a Chairman of the Board, a President, one or more Vice Presidents, a Secretary and a Treasurer, and such Assistant Secretaries and Assistant Treasurers as the Board deems necessary or appropriate. None of the officers except the Chairman of the Board, Vice Chairman, and the President need be members of the Board. SECTION 27. The Board may appoint such other officers and agents as it may deem necessary, who hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. SECTION 28. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. SECTION 29. The officers of the Corporation shall hold office until their successors are chosen and qualified in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the whole Board of Directors. If the office of any officer or officers becomes vacant for any reason, the vacancy shall be filled by the affirmative vote of a majority of the whole Board of Directors. CHAIRMAN OF THE BOARD SECTION 30. The Chairman of the Board shall preside at the meetings of the shareholders and directors. In the Chairman's absence, the Vice Chairman (if one has been chosen) shall preside at the meetings of the shareholders and directors. PRESIDENT SECTION 31. The President shall be the Chief Executive Officer of the Corporation; in the absence of the Chairman of the Board and the Vice Chairman of the Board, shall preside at all meetings of the shareholders and directors; shall have general and active management of the Corporation; and shall see that all orders and resolutions of the Board are carried into effect. He shall have the general powers and duties of supervision and management usually vested in the office of president and chief executive officer of a corporation. He shall perform such other functions and duties as shall be prescribed by the Board of Directors. VICE PRESIDENT SECTION 32. The Vice Presidents shall perform the duties prescribed by the President or the Board of Directors. SECRETARY AND ASSISTANT SECRETARIES SECTION 33. (a) The Secretary: shall attend the meetings of the Board and the meetings of the shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for the Committees appointed by the Board when required; give or cause to be given notice of the meetings of the shareholders and of the Board of Directors; and perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision the Secretary shall keep in safe custody the seal of the Corporation and affix the same to any instrument requiring it. (b) The Assistant Secretary, senior in time of service, in the absence or disability of the Secretary, shall perform the duties and exercise the powers of the Secretary and shall perform such other duties as shall be prescribed by the President or the Board of Directors. TREASURER AND ASSISTANT TREASURERS SECTION 34. The Treasurer and Assistant Treasurers shall perform such duties as shall be prescribed by the President or the Board. VACANCIES SECTION 35. If the office of any director or directors becomes vacant by reason of the death, resignation, disqualification, removal from office, or otherwise, the remaining directors, not less than a quorum, shall choose a person or persons to fill the vacancy or vacancies who shall hold office until the successor or successors shall have been duly appointed or elected. CERTIFICATES OF STOCK SECTION 36. The certificates of stock of the Corporation shall be numbered and shall be entered in the books of the Corporation as they are issued. FISCAL YEAR SECTION 37. The fiscal year shall begin the first day of January in each year. RECORDS AND INSPECTION RIGHTS Section 38. The Corporation shall maintain permanent records of the minutes of all meetings of its shareholders and Board of Directors; all actions taken by the shareholders or Board of Directors without a meeting; and all actions taken by a Committee of the Board of Directors on behalf of the Corporation. The Corporation shall also maintain appropriate accounting records. The Corporation shall keep such records at its office in salt Lake City, and at any other location designated by the Board of Directors. A shareholder of the Corporation, directly or through an agent or attorney, shall have the limited rights to inspect and copy the Corporation's records as provided under applicable state law and by complying with the procedures specified under such law. BANK ACCOUNTS SECTION 39. All checks, demands for money, or other transactions involving the Corporation's bank accounts shall be signed by such officers or other responsible employees as the Board of Directors may designate. No third party is allowed access to the Corporation's bank accounts without express written authorization by the Board of Directors. AMENDMENTS SECTION 40. The Corporation's Board of Directors may amend or repeat the Corporation's Bylaws unless the Corporation's Articles of Incorporation or Utah's Revised Business Corporation Act reserve this power exclusively to the shareholders in whole or part; unless the shareholders, in adopting, amending, or repealing a particular Bylaw, provide expressly that the Board of Directors may not amend or repeal that Bylaw; or unless the Bylaw either establishes, amends or deletes a supermajority shareholder quorum or voting requirement. The Corporation's shareholders may amend or repeal the Corporation's Bylaws even though the Bylaws may also be amended or repealed by the Board of Directors. INDEMNIFICATION AND LIABILITY INSURANCE SECTION 41. (a) Voluntary Indemnification. Unless otherwise provided in the Articles of Incorporation, the Corporation shall indemnify any individual made a party to a proceeding because he is or was a director of the Corporation, against liability incurred in the proceeding, but only if the Corporation has authorized the payment in accordance with the applicable statutory provisions [Sections 16-10a-902 and 16-10a-904 of Utah's Revised Business Corporation Act] and a determination has been made in accordance with the procedures set forth in such provision that the director conducted himself in good faith; that he reasonably believed that his conduct, if in his official capacity with the Corporation, was in its best interests and that his conduct, in all other cases, was at least not opposed to the Corporation's best interests; and that he had no reasonable cause to believe his conduct was unlawful in the case of any criminal proceeding. (b) The Corporation may not voluntarily indemnify a director in connection with a proceeding by or in the right of the Corporation in which the director was adjudged liable to the Corporation or in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. (c) Indemnification permitted under Paragraph (a) in connection with a proceeding by or in the right of the Corporation is limited to reasonable expenses incurred in connection with the proceeding. (d) If a determination is made, using the procedures set forth in the applicable statutory provision, that the director has satisfied the requirements listed herein and if an authorization of payment is made, using the procedures and standards set forth in the applicable statutory provision, then, unless otherwise provided in the Corporation's Articles of Incorporation, the Corporation shall pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of the final disposition of the proceeding if the director furnishes the Corporation a written affirmation of his good faith belief that he has satisfied the standard of conduct described in this Section, furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct (which undertaking must be an unlimited general obligation of the director, but need not be secured and may be accepted without reference to financial ability to make repayment); and if a determination is made that the facts then known of those making the determination would not preclude indemnification under this Section. (e) Mandatory Indemnification. Unless otherwise provided in the Corporation's Articles of Incorporation, the Corporation shall indemnify a director or officer of the Corporation who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director or officer of the Corporation against reasonable expenses incurred by him in connection with the proceeding. (f) Court-Ordered Indemnification. Unless otherwise provided in the Corporation's Articles of Incorporation, a director or officer of the Corporation who is or was a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. The court may order indemnification if it determines that the director or officer is entitled to mandatory indemnification as provided in this Section and applicable law, in which case the court shall also order the Corporation to pay the reasonable expenses incurred by the director or officer to obtain court-ordered indemnification. The court may also order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director or officer met the applicable standard of conduct set forth in this Section and applicable law. Any indemnification with respect to any proceeding in which liability has been adjudged in the circumstances described in Paragraph (b) above is limited to reasonable expenses. (g) Indemnification of Others. Unless otherwise provided in the Corporation's Articles of Incorporation, an officer, employee, or agent of the Corporation shall have the same indemnification rights provided to a director by this Section. The Board of Directors may also indemnify and advance expenses to any officer, employee, or agent of the Corporation, to any extent consistent with public policy as determined by the general or specific purpose of the Board of Directors. (h) Insurance. The Corporation may purchase and maintain liability insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent or the Corporation, or who, while serving as a director, officer, employee, fiduciary, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, fiduciary or agent of another foreign or domestic corporation, other person, of an employee benefit plan, or incurred by him in that capacity or arising from his status as a director, officer, employee, fiduciary, or agent, whether or not the Corporation has the power to indemnify him against the same liability under applicable law. LIMITATION ON LIABILITY SECTION 41. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any action taken or any failure to take any action, as a director, except liability for (a) the amount of a financial benefit received by a director to which he is not entitled; (b) an intentional infliction of harm on the Corporation or the shareholders; (c) any action that would result in liability of the director under the applicable statutory provision concerning unlawful distributions [Section 16-10-842 of Utah's Revised Business Corporation Act]; or (d) an intentional violation of criminal law. This provision shall not limit the liability of a director for any act or omission occurring prior to August 11, 1992. Any repeal or modification of this provision by the stockholders shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation for acts or omissions occurring prior to the effective date of such repeal or modification. EX-27 3
5 The following schedule contains summarized financial information extracted from the Questar Pipeline Co. Statements of Income and Balance Sheet for the period ended June 30, 1997, and is qualified in its entirety to such unaudited financial statements. 1,000 6-MOS DEC-31-1997 JUN-30-1997 5,411 0 10,229 0 2,363 19,757 566,777 201,269 410,377 27,469 134,554 0 0 6,551 178,974 410,377 0 52,628 0 18,545 8,626 0 6,665 18,814 7,032 11,782 0 0 0 11,782 0 0
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