Questar Reports Record Net Income of $212 Million for 2012

Questar Corporation (NYSE:STR) reported record net income of $212.0
million, or $1.19 per diluted share for 2012 compared to 2011 net income
of $207.9 million, or $1.16 per diluted share. 2012 earnings include a
$3.0 million ($0.02 per diluted share) after-tax charge for the cost of
a retirement incentive offer. Excluding the charge, Questar earned
$215.0 million, or $1.21 per diluted share. Adjusted earnings before
interest, taxes, depreciation and amortization (Adjusted EBITDA) for
2012 were up 5% to $567.8 million compared to $540.8 million for 2011.
Return on average common equity (ROE) was 20.8% for 2012, excluding the
retirement incentive charge.

'I am very pleased with Questar's performance for 2012 in a challenging
economic environment,' said Ronald W. Jibson, Questar chairman,
president and CEO. 'Even with the cost of the retirement incentive,
Questar posted record net income and an industry-leading return on
equity. Adjusted EBITDA was up 5% to $568 million for the year, allowing
us to fund growth projects and maintain a strong balance sheet while
still returning capital to shareholders via a 5% dividend increase and
the repurchase of 4.6 million company shares at an average price below
$20 per share. Questar Gas and Wexpro grew net income by 2% and 9%
respectively, while Questar Pipeline's income dipped slightly. Questar
delivered full-year EPS at the top end of our 2012 guidance, despite the
many headwinds that we discussed with investors throughout the year.'

The Company also affirmed its preliminary 2013 EPS guidance of $1.12 to
$1.20 per diluted share.

2012 Highlights

Other 2012 highlights include:

• 
  Questar Gas invested $58.4 million in 2012 to replace high-pressure
  feeder-lines, about the same amount as in 2011;
  
• 
  Questar Gas's customer growth rate increased to 1.3%, up from 1.1% in
  2011;
  
• 
  Questar Gas earned its authorized return on equity for the eighth
  straight year (excluding the impact of the retirement incentive);
  
• 
  Questar Gas issued $150 million of private-placement notes in December
  2012 at an average rate of 3.20% to replace $133.5 million of maturing
  debt averaging 6.1%;
  
• 
  Wexpro had a net drilling-success rate of 94%, participating in 98
  gross wells (57.9 net), which resulted in 43.5 net successful gas and
  oil wells, with 10.8 net wells waiting on completion;
  
• 
  Wexpro grew its ending investment base 12% to a record $531 million in
  2012;
  
• 
  The 'Wexpro II' agreement was submitted for expedited hearing and
  review with the public service commissions of Utah and Wyoming;
  
• 
  Questar Pipeline invested $21.7 million on two system expansion
  projects in 2012;
  
• 
  Questar Pipeline initiated a strategic review of certain pipeline
  assets;
  
• 
  Questar spent $92 million to repurchase 4.6 million shares of its
  common stock in 2012, bringing the outstanding share count to the
  target level of 175 million shares.
  

Questar Gas

For 2012, Questar Gas reported net income of $47.1 million, including a
$1.5 million after-tax charge for the retirement incentive. Questar Gas
generated $148.0 million of Adjusted EBITDA for the year. This compares
to net income of $46.1 million and Adjusted EBITDA of $144.0 million for
2011. On a financial basis, in 2012 Questar Gas earned a 10.5% ROE,
excluding the retirement charge. Changes in Questar Gas margin (revenues
less cost of natural gas sold) are summarized in the following table:

As of December 31, 2012, Questar Gas served about 930,800 customers, an
increase of 11,500 customers, or 1.3%, from year-end 2011. Customer
growth was 1.1% during 2011. New customers increased margin by about
$3.1 million in 2012, up from $2.7 million in 2011. Changes in margin
from demand-side-management (DSM) cost-recovery revenues are offset by
equivalent changes in the program's expenses. Combined operating and
maintenance (O&M) and general and administrative (G&A) expenses,
excluding DSM costs, were up 1% to $143 per customer in 2012, compared
to $141 a year earlier, primarily due to higher employee-related costs.

During 2012, Questar Gas spent $58.4 million on its multi-year
infrastructure-upgrade program to replace aging high-pressure,
large-diameter steel pipe. By comparison, 2011 feeder-line replacement
costs totaled $58.6 million. Questar Gas expects to spend about $55
million on the program annually for several more years. In 2010, Utah
regulators approved an infrastructure-cost-tracking mechanism for the
replacement program, thus enabling the timely inclusion of related
expenditures into rate base. Questar Gas recognized $5.9 million of
increased margin under this program in 2012 compared to $4.3 million in
2011.

In December 2012, Questar Gas issued $150 million of private-placement
notes at historically low coupon rates of 2.98% for a $40 million
12-year tranche and 3.28% for a $110 million 15-year tranche, replacing
$133.5 million of debt maturing in 2012 and 2013 that averaged 6.1%.
Maturing notes were initially retired using lower cost short-term debt
until the new long-term debt was issued, reducing interest expense in
2012.

Wexpro

Wexpro grew 2012 net income 9% to $103.9 million and generated $236.1
million of Adjusted EBITDA, up 10% over 2011. This growth was driven by
a higher average investment base which grew by 13% to $514.3 million for
2012. It earned a 19.9% after-tax return on average investment base in
2012. Wexpro recovers its costs and earns an unlevered after-tax return
of approximately 20% on its average investment base under the terms of
the Wexpro Agreement, a long-standing agreement with the states of Utah
and Wyoming. Currently, Wexpro's natural gas production supplies more
than half of the utility's annual gas-supply requirements. Wexpro's
efficient drilling program resulted in finding costs below $1.00 per
Mcfe in the Vermillion Basin and an 8% reduction in cost-of-service
prices per unit delivered in 2012. Wexpro increased natural gas liquids
(NGL) and oil revenues by 18% in 2012 compared to 2011. NGL and oil
revenues are shared with Questar Gas customers, thereby benefitting both
customers and shareholders. A summary of changes in Wexpro's investment
base is provided below:

Questar Pipeline

In 2012, Questar Pipeline reported net income of $64.7 million,
including a $0.6 million after-tax charge for the retirement incentive.
Questar Pipeline generated $180.8 million of Adjusted EBITDA for the
year. This compares to net income of $67.9 million and Adjusted EBITDA
of $181.5 million for 2011. Excluding the retirement charge, Questar
Pipeline earned a 10.8% ROE. The drop in net income was primarily due to
lower revenues from transportation and NGLs as well as higher
depreciation, interest and G&A costs. The modest decrease in
transportation revenues was primarily from lower interruptible volumes
and reduced rates on some contract renewals. NGL revenues were down 10%
for all of 2012 compared to 2011, reflecting lower NGL prices that more
than offset higher NGL sales volumes. Lower NGL revenues were partially
offset by gas received from Clay Basin storage customers. This gas is
part of an agreement that allows Questar Pipeline to recover any
shortfall between the NGL revenues and the cost of service for
conditioning gas at Clay Basin to meet pipeline gas-quality
specifications. The value of this gas received, and subsequently sold,
represents most of Questar Pipeline's overall revenue increase for 2012.
During 2012, Questar Pipeline's combined O&M and G&A costs were up 4%
compared to 2011 levels. However, 14% higher transportation volumes in
2012 enabled O&M and G&A expenses to remain at $0.10 per decatherm
transported, the same as in 2011. At December 31, 2012, Questar Pipeline
held net firm-transportation contracts totaling 5,039 thousand
decatherms (Mdth) per day, up 1% from 4,973 Mdth per day at December 31,
2011.

Questar Pipeline strategic review

In the fourth quarter of 2012, Questar Pipeline announced that it was
initiating a strategic review of certain pipeline assets, namely
Southern Trails and Overthrust pipelines. Initially, the primary focus
of this review is on the Southern Trails Pipeline, which appears to
offer compelling economics if converted back to its original purpose as
a crude oil pipeline to move production from two southwestern U.S.
producing regions to refineries in Southern California. Questar Pipeline
is in the very early stages of this process. During the first half of
2013, Questar Pipeline will review all preliminary proposals received
and determine the appropriate path to provide shareholders with the
greatest value.

Wexpro II hearings held

On January 30, 2013, a hearing was held before the Public Service
Commission of Utah to formally review Questar Gas Company's application
and proposed agreement to enable Wexpro to acquire additional oil and
gas properties for future development. The goal is to perpetuate the
current program of providing cost-of-service production for Questar Gas
customers in Utah and Wyoming. This agreement, referred to as 'Wexpro
II,' is patterned after the terms of the original 1981 Wexpro Agreement.
This successful model has resulted in stable natural gas prices and
savings of about $1.3 billion to Questar Gas customers over the past
three decades while providing stable returns to shareholders. Questar
Gas filed for expedited review and expects a ruling in the first half of
2013.

Questar Fueling to build CNG-fueling facilities

Questar Fueling announced that it had signed an agreement to build, own
and operate a CNG-fueling facility in Houston, Texas, that will serve up
to 200 natural gas-powered trucks operated by Swift Transportation and
Central Freight Lines. These trucks are projected to use about 5 million
gallon-equivalents of natural gas per year. Part of this facility will
also offer public refueling to other CNG-powered vehicles. Additionally,
Questar Fueling is in the final stages of contract negotiations to build
dedicated CNG-fueling facilities for other parties. While not expected
to make meaningful earnings or cash flow contributions in the early
years, Questar sees long-term growth potential for the use of natural
gas for transportation.

Share repurchase program completed

During 2012, Questar repurchased a total of 4.6 million shares of its
common stock for about $92 million, at an average price of $19.95 per
share. The program was authorized to repurchase up to $100 million of
common stock through the end of 2012, with the goal to bring the
outstanding share count to its current level of about 175 million
shares. Going forward, the Board of Directors authorized additional
repurchases of up to 1 million shares per year in order to maintain the
share count at the current level.

2013 EPS guidance and outlook

For 2013, Questar affirmed that EPS may range from $1.12 to $1.20 per
diluted share. 'Despite continuing challenges with commodity prices,
government policies, pension and property tax expenses, we are holding
to our guidance range,' Jibson said. 'In 2012, we made significant
progress on three key initiatives that have the potential to drive
significant shareholder value in 2013 and beyond. We filed the Wexpro II
agreement with Utah and Wyoming regulators and expect a decision in the
coming months. With the formation of Questar Fueling and the signing of
an initial benchmark contract, Questar is well-positioned to be a major
player in natural gas refueling infrastructure across the nation.? In
addition, Questar Pipeline has identified a potentially attractive
project to convert its Southern Trails pipeline back into crude oil
transport service. And last, but not least, strong cash flow generation
from Wexpro and Questar Pipeline will support continued reinvestment in
our businesses and future dividend growth,' Jibson added.

Fourth-Quarter 2012 earnings teleconference

Questar management will discuss fourth-quarter 2012 results and the
outlook for 2013 in a conference call with investors Thursday, February
21, beginning at 9:30 a.m. ET. The call can be accessed on the company
website at www.questar.com.

About Questar Corporation

Questar is a Rockies-based integrated natural gas company with an
enterprise value of about $5.5 billion, operating through three
principal subsidiaries:

• Questar Gas provides retail natural gas distribution in Utah,
  Wyoming and Idaho;
  
• Wexpro develops and produces natural gas from cost-of-service
  reserves for Questar Gas customers; and
  
• Questar Pipeline operates interstate natural gas pipelines and
  storage facilities in the western U.S. and provides other energy
  services.
  

Forward-Looking Statements

This document may contain or incorporate by reference information that
includes or is based upon 'forward-looking statements' within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements give expectations or forecasts of future
events. You can identify these statements by the fact that they do not
relate strictly to historical or current facts. They use words such as
'anticipate,' 'estimate,' 'expect,' 'project,' 'intend,' 'plan,'
'believe,' and other words and terms of similar meaning in connection
with a discussion of future operating or financial performance. Any or
all forward-looking statements may turn out to be wrong. These
statements are based on current expectations and the current economic
environment. They involve a number of risks and uncertainties that are
difficult to predict. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Factors that
could cause actual results to differ materially include, but are not
limited to the following:

• 
  general economic conditions, including the performance of financial
  markets and interest rates;
  
• 
  changes in industry trends;
  
• 
  changes in laws or regulations; and
  
• 
  other factors, most of which are beyond Questar's control.
  

Questar undertakes no obligation to publicly correct or update the
forward-looking statements in this document, in other documents, or on
the website to reflect future events or circumstances. All such
statements are expressly qualified by this cautionary statement.

For more information, visit Questar's website at www.questar.com

QUESTAR CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

In addition to financial measures calculated in accordance with
generally accepted accounting principles (GAAP), this press release
contains non-GAAP financial measures. The Company believes that these
non-GAAP financial measures are useful to investors because they provide
alternative methods for assessing the Company's ongoing operating
results and cash flows. The Company's management uses these non-GAAP
financial measures for the same purposes, and for planning and
forecasting purposes. The presentation of non-GAAP financial measures is
not meant to be a substitute for financial measures calculated in
accordance with GAAP.

1. Management believes that net income, diluted earnings per common
share and ROE before the 2012 retirement incentive charge are useful
measures to assess ongoing results of operations because this charge was
unusual and is not expected to recur.

The following table reconciles GAAP net income and diluted earnings per
common share to non-GAAP net income and diluted earnings per common
share before the 2012 retirement incentive charge for the three months
ended December ?31, 2012:

The following table reconciles GAAP net income, diluted earnings per
common share and ROE to non-GAAP net income, diluted earnings per common
share and ROE before the 2012 retirement incentive charge for the twelve
months ended December ?31, 2012:

2. Management defines Adjusted EBITDA as net income (loss) before the
following items: interest expense, income taxes, depreciation, depletion
and amortization, net gain or loss from asset sales, abandonments and
impairments, and other special items. Management believes Adjusted
EBITDA is an important measure of the Company's cash flow and liquidity,
and a key measure for comparing the Company's financial performance to
other companies.

The following table reconciles Questar's net income (loss) to Adjusted
EBITDA for the three months ended December ?31, 2012:

The following table reconciles Questar's net income to Adjusted EBITDA
for the three months ended December ?31, 2011:

The following table reconciles Questar's net income (loss) to Adjusted
EBITDA for the twelve months ended December ?31, 2012: