UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. ~~For the quarter ended September 30, 2010~~

For the quarterly period ended March 31, 2011

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ___ to ___


Exact name of registrant as specified in its charter	State or other jurisdiction or incorporation of organization	Commission File Number	(I.R.S. Employer Identification No.)
Questar Corporation	Utah	001-08796	87-0407509
Questar Pipeline Company	Utah	000-14147	87-0307414
Questar Gas Company	Utah	333-69210	87-0155877

180 East 100 South Street, P.O. Box 45433 Salt Lake City, Utah 84145-0433

(Address of principal executive offices)

Registrants’ telephone number, including area code (801) 324-~~5699~~5000

Web site http://www.questar.com

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.


Questar Corporation	Yes [X] No [ ]
Questar Pipeline Company	Yes [X] No [ ]
Questar Gas Company	Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Questar Corporation	Yes [X] No [ ]
Questar Pipeline Company	Yes [ ] No [ ]
Questar Gas Company	Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Do not check non-accelerated filer if a smaller reporting company (Check one):


Questar Corporation	Large accelerated filer [X]	Accelerated filer [ ]	Non-accelerated filer [ ]	Smaller reporting company [ ]
Questar Pipeline Company	Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [X]	Smaller reporting company [ ]
Questar Gas Company	Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [X]	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Questar Corporation	Yes [ ] No [X]
Questar Pipeline Company	Yes [ ] No [X]
Questar Gas Company	Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of ~~October~~April 3130, ~~2010~~2011:

Questar Corporation	without par value	~~176~~177,~~055~~482,~~735~~251
Questar Pipeline Company	$1.00 per share par value	6,550,843
Questar Gas Company	$2.50 per share par value	9,189,626

Questar Pipeline Company and Questar Gas Company, as wholly-owned subsidiaries of a reporting company, meet the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format.

Questar Corporation

Questar Pipeline Company

Questar Gas Company

Form 10-Q ~~for the Quarter Ended September 30, 2010~~

For the Quarterly Period Ended March 31, 2011

TABLE OF CONTENTS

Page

PART I.

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS (Unaudited)

Questar Corporation

Consolidated Statements of Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Questar Pipeline Company

Consolidated Statements of Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Questar Gas Company

Statements of Income

Condensed Balance Sheets

Condensed Statements of Cash Flows

Notes Accompanying the ~~Condensed Consolidated~~ Financial Statements

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

2625

ITEM 4.

CONTROLS AND PROCEDURES

2726

PART II.

OTHER INFORMATION

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 6.

EXHIBITS

SIGNATURES

FILING FORMAT

This Quarterly Report on Form 10-Q is a combined report being filed by three separate registrants: Questar Corporation, Questar Pipeline Company and Questar Gas Company. Questar Pipeline Company and Questar Gas Company are wholly-owned subsidiaries of Questar Corporation. Separate financial statements for Wexpro Company have not been included since Wexpro is not a registrant. See Note 8 to the Accompanying Financial Statements for a summary of operations by line of business.

Part I - Financial information in this Quarterly Report on Form 10-Q includes separate financial statements (i.e. balance sheets, statements of income and statements of cash flows) for Questar Corporation, Questar Pipeline Company and Questar Gas Company. The Notes Accompanying the ~~Condensed Consolidated~~ Financial Statements are presented on a combined basis for all three registrants. Management’s Discussion and Analysis of Financial Condition and Results of Operations included under Item 2 is presented by line of business. Only Questar of the three registrants named herein is required to attach XBRL exhibits.

Questar ~~2010~~2011 Form 10-Q

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

QUESTAR CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	3 Months Ended March 31,		12 Months Ended March 31,
	2010	2009 (recast)	2010 (recast)	2009 (recast)	2010 (recast)	2009 (recast)
	2011	2010	2011	2010
	(in millions, except per share amounts)
REVENUES
Questar Gas	$ 89413.89	$82360.37	$~~599~~ 955.10	$~~626~~ 873.59	~~$ 891.5~~	~~$ 955.8~~
Questar Pipeline	4948.3	4347.47	~~145~~197.28	~~128~~179.46	~~190.0~~	~~171.2~~
Wexpro	67.18	56.2	1626.62	1121.06	~~23.4~~	~~13.3~~
Total Revenues	~~145~~470.20	~~130~~414.96	~~760~~1,179.90	~~765~~1,075.91	~~1,104.9~~	~~1,140.3~~
OPERATING EXPENSES
Cost of sales (excluding operating expenses shown separately)	~~(23~~209.2)9	~~(22~~158.1)3	~~153~~332.5	~~213~~273.07	~~271.9~~	~~382.9~~
Operating and maintenance	3651.84	3151.78	~~127~~175.94	~~114~~172.19	~~181.4~~	~~156.4~~
General and administrative	2733.20	2326.72	78115.43	6997.82	~~102.0~~	~~93.3~~
Separation costs	-	-	11.5	-	~~11.5~~	-
Production and other taxes	1113.96	1014.16	3949.76	3244.84	~~49.3~~	~~41.8~~
Depreciation, depletion and amortization	3839.24	3638.29	~~114~~153.59	~~108~~149.34	~~153.3~~	~~143.1~~
Impairment	-	-	-	-	-	3.4
Total Operating Expenses	347.3	289.8	838.2	737.6
Total Operating Expenses	90.9	79.6	525.5	538.0	769.4	820.9
Net gain from asset sales	0.1	-	0.5	0.1
Net gain (loss) from asset sales	0.1	0.1	0.1	0.4	(0.1)	0.4
OPERATING INCOME	122.8	124.8	341.3	337.6
Operating Income	54.4	51.4	235.5	228.3	335.4	319.8
Interest and other income	2.9	2.8	11.8	12.5
Interest and other income	2.9	3.0	8.3	9.2	11.6	15.4
Income from unconsolidated affiliate	0.9	1.0	3.7	3.8
Income from unconsolidated affiliate	0.9	0.9	2.8	2.8	3.8	3.3
Interest expense	(16.0)	(14.3)	(58.8)	(57.8)
Interest expense	(14.1)	(14.4)	(42.4)	(45.2)	(56.8)	(62.0)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	110.6	114.3	298.0	296.1
Income From Continuing Operations Before Income Taxes	44.1	40.9	204.2	195.1	294.0	276.5
Income taxes	(40.7)	(42.1)	(108.0)	(108.7)
Income taxes	(16.4)	(14.1)	(75.6)	(70.0)	(110.0)	(98.2)
INCOME FROM CONTINUING OPERATIONS	69.9	72.2	190.0	187.4
INCOME FROM CONTINUING OPERATIONS	27.7	26.8	128.6	125.1	184.0	178.3
Discontinued operations, net of income taxes	-	78.7	69.5	291.7
Discontinued operations, net of income taxes	-	72.0	148.2	119.9	243.7	190.0
Discontinued operations, noncontrolling interest	-	(0.6)	(0.7)	(2.7)
Discontinued operations, noncontrolling interest	-	(0.6)	(1.3)	(1.7)	(2.2)	(3.8)
Total Discontinued Operations, Net Of Income Taxes	-	78.1	68.8	289.0
Total Discontinued Operations, Net Of Income Taxes	-	71.4	146.9	118.2	241.5	186.2
NET INCOME ATTRIBUTABLE TO QUESTAR	$ 69.9	$150.3	$ 258.8	$ 476.4
NET INCOME ATTRIBUTABLE TO QUESTAR	$27.7	$98.2	$275.5	$243.3	$425.5	$364.5
Earnings Per Common Share Attributable To Questar
Earnings Per Common Share Attributable To Questar
Basic from continuing operations	$ 0.40	$ 0.41	$ 1.08	$ 1.06
Basic from continuing operations	$0.15	$0.16	$0.73	$0.72	$1.04	$1.03
Basic from discontinued operations	-	0.45	0.39	1.67
Basic from discontinued operations	-	0.41	0.84	0.68	1.39	1.07
Basic total	$ 0.40	$ 0.86	$ 1.47	$ 2.73
Basic total	$0.15	$0.57	$1.57	$1.40	$2.43	$2.10
Diluted from continuing operations	$ 0.39	$ 0.41	$ 1.06	$ 1.06
Diluted from continuing operations	$0.15	$0.16	$0.72	$0.71	$1.04	$1.01
Diluted from discontinued operations	-	0.44	0.39	1.64
Diluted from discontinued operations	-	0.40	0.83	0.67	1.36	1.06
Diluted total	$ 0.39	$ 0.85	$ 1.45	$ 2.70
Diluted total	$0.15	$0.56	$1.55	$1.38	$2.40	$2.07
Weighted-average common shares outstanding
Weighted-average common shares outstanding
Used in basic calculation	177.0	174.9	176.2	174.4
Used in basic calculation	175.5	174.3	175.2	174.0	174.9	173.8
Used in diluted calculation	178.5	177.2	178.5	176.6
Used in diluted calculation	178.2	176.3	177.7	176.1	177.3	176.0
Dividends per common share	$0.1525	$ 0.13	$0.5625	$ 0.51
Dividends per common share	$0.14	$0.125	$0.40	$0.375	$0.53	$0.50

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	Sept. 30, 2010	Sept. 30, 2009 (recast)	Dec. 31, 2009 (recast)
	March 31, 2011	March 31, 2010	Dec. 31, 2010
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ -	$ -	$ 1121.58
Federal income taxes receivable	22.7	37.1	3.3
Notes receivable	-	53.0	-
Notes receivable	-	-	39.3
Federal income taxes receivable	-	-	37.1
Accounts receivable, net	56132.3	67127.37	~~119~~122.51
Unbilled-gas accounts receivable	13.9	19.5	86.9
Unbilled gas accounts receivable	62.5	57.6	81.6
Gas stored underground	5311.93	5311.36	4243.97
Materials and supplies	1821.72	2221.74	19.90
Current regulatory assets	8433.64	5138.71	4353.45
Prepaid expenses and other	86.5	106.13	89.60
Deferred income taxes - current	14.3	12.3	14.3
Deferred income taxes – current	14.8	14.3	11.8
Current assets of discontinued operations	-	~~565~~684.6	~~562.4~~-
Total Current Assets	~~272~~282.90	~~839~~1,014.6	~~952~~399.06
Property, Plant and Equipment	4,~~531~~694.94	4,~~261~~379.35	4,~~338~~642.98
Accumulated depreciation, depletion and amortization	(1,~~726~~796.06)	(1,~~603~~657.53)	(1,~~625~~758.32)
Net property, plant and equipment of discontinued operations	-	45,~~812~~222.60	~~5,091.3~~-
Net Property, Plant and Equipment	2,~~805~~897.98	7,~~470~~944.42	72,~~804~~884.96
Investment in unconsolidated affiliate	2827.28	28.73	2827.19
Noncurrent regulatory assets	2220.36	2422.34	2321.57
Other noncurrent assets	3739.83	3935.73	3439.98
Noncurrent assets of discontinued operations	-	~~126~~282.09	~~175.2~~-
TOTAL ASSETS	$3,~~167~~267.15	$89,~~528~~327.7	$93,~~018~~373.6
LIABILITIES AND EQUITY
Current Liabilities
Checks outstanding in excess of cash balances	$ 51.46	$ 60.38	$ -
Short-term debt	~~395~~86.0	38134.5	~~169~~242.0
Notes payable	-	7027.79	~~52.9~~-
Accounts payable and accrued expenses	~~187~~165.01	~~185~~207.74	~~232~~225.21
Current regulatory liabilities	638.05	3710.16	306.70
Current portion of long-term debt	182.0	~~42.0~~-	-182.0
Current liabilities of discontinued operations	-	~~494~~750.34	~~584.2~~-
Total Current Liabilities	~~775~~473.42	~~874~~1,131.6	~~1,069~~655.01
Long-term debt, less current portion	~~649~~898.15	831.2	~~831~~898.25
Deferred income taxes	~~418~~509.90	~~338~~379.83	~~377~~474.7
Asset retirement obligations	5964.42	6357.95	6560.09
Defined benefit pension plan and other postretirement benefits	~~201~~149.43	~~253~~210.26	~~206~~169.95
Other long-term liabilities	88.5	91.2	87.5
Customer contributions-in-aid-of-construction	45.7	50.9	45.5
Noncurrent liabilities of discontinued operations	-	2,679.0	2,824.2
Other long-term liabilities	37.9	37.3	33.3
Noncurrent liabilities of discontinued operations	-	2,749.6	-
EQUITY
Common stock	~~482~~503.27	~~443~~462.35	~~454~~493.80
Retained earnings	~~617~~690.10	23,~~950~~205.32	~~3,077~~647.71
Accumulated other comprehensive loss	(124.9)	(51.9)	(30.3)
Accumulated other comprehensive income (loss)	(104.0)	157.7	(104.0)
TOTAL COMMON SHAREHOLDERS' EQUITY	~~974~~1,089.47	3,~~341~~825.74	31,~~502~~036.21
Noncontrolling interest of discontinued operations	-	5554.13	~~54.9~~-
Total Equity	~~974~~1,089.47	3,~~396~~879.87	31,~~557~~036.1
TOTAL LIABILITIES AND EQUITY	$3,~~167~~267.15	$89,~~528~~327.7	$93,~~018~~373.6

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	9 Months Ended Sept. 30,
	3 Months Ended March 31,
	2010	2009 (recast)
	2011	2010
	(in millions)
OPERATING ACTIVITIES
Net income	$~~276~~ 69.89	$~~245~~150.09
Discontinued operations, net of income taxes	~~(148.2)~~-	(~~119~~78.97)
Adjustments to reconcile net income to net cash provided by operating activities by continuing operations
Adjustments to reconcile net income to net cash provided by operating activities by continuing operations:
Depreciation, depletion and amortization	~~120~~41.58	~~113~~40.76
Deferred income taxes	4631.13	631.56
Share-based compensation	~~13.~~3.5	72.18
Net (gain) from asset sales	(0.1)	~~(0.4)~~-
(Income) from unconsolidated affiliate	(20.89)	(21.80)
Distributions from unconsolidated affiliate	2.7	1.7
Distribution from unconsolidated affiliate	1.0	0.8
Changes in operating assets and liabilities	~~(24~~82.7)3	3426.05
Net Cash Provided By Operations By Continuing Operations	283.6	341.9
Net Cash Provided By Operating Activities By Continuing Operations	228.8	143.5
--
INVESTING ACTIVITIES
Property, plant and equipment	(~~210~~76.20)	(~~216~~60.69)
Equity investment in QEP Resources, Inc.	(250.0)	-
Cash used in disposition of assets	(0.5)	(0.2)
Cash used in disposition of assets	(1.4)	(1.2)
Change in notes receivable	-	(13.7)
Proceeds from disposition of assets and other	0.6	2.0
Net Cash Used In Investing Activities By Continuing Operations	(76.5)	(74.8)
Change in notes receivable	39.3	89.4
Distribution from QEP Resources, Inc.	15.7	-
Net Cash Used In Investing Activities By Continuing Operations	(406.0)	(126.4)
--
FINANCING ACTIVITIES
Common stock issued	125.16	115.39
Common stock repurchased	(9.2.3)	(65.19)
Long-term debt issued, net of issuance costs	(3.0)	50.8
Change in short-term debt	(156.0)	(34.5)
Long-term note payable	-	(50.0)
Change in notes payable	-	(25.0)
Change in short-term debt	226.0	(192.6)
Checks outstanding in excess of cash balances	1.6	0.8
Change in notes payable	(52.9)	30.0
Dividends paid	(27.0)	(22.8)
Checks outstanding in excess of cash balances	5.4	6.3
Tax benefits from share-based compensation	4.0	1.3
Dividends paid	(70.1)	(65.3)
Net Cash Used In Financing Activities By Continuing Operations	(174.1)	(80.2)
Tax benefits from share-based compensation	2.6	1.3
CASH USED IN CONTINUING OPERATIONS	(21.8)	(11.5)
Net Cash Provided By (Used in) Financing Activities From Continuing Operations	110.9	(214.3)
Cash provided by operating activities of discontinued operations	-	222.0
Cash Provided By (Used In) Continuing Operations	(11.5)	1.2
Cash used in investing activities of discontinued operations	-	(263.4)
Cash provided by operations of discontinued operations	483.9	855.6
Cash provided by financing activities of discontinued operations	-	22.1
Cash used in investing activities of discontinued operations	(598.6)	(766.5)
Effect of change in cash and cash equivalents of discontinued operations	-	19.3
Cash provided by (used in) financing activities of discontinued operations	95.4	(114.2)
Change in cash and cash equivalents	(21.8)	(11.5)
Effect of change in cash and cash equivalents of discontinued operations	19.3	25.1
Beginning cash and cash equivalents	21.8	11.5
Change in cash and cash equivalents	(11.5)	1.2
Beginning cash and cash equivalents	11.5	(1.2)
Ending cash and cash equivalents	$ -	$ -

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR PIPELINE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	3 Months Ended March 31,		12 Months Ended March 31,
	2010	2009	2010	2009	2010	2009
	2011	2010	2011	2010
	(in millions)
REVENUES
From unaffiliated customers (recast)	$49.3	$43.4	$145.2	$128.4	$190.0	$171.2
From unaffiliated customers	$48.3	$47.7	$197.8	$179.6
From affiliated companies (recast)	18.2	17.5	55.5	53.6	74.1	71.2
From affiliated companies	18.6	18.8	73.8	72.5
Total Revenues	6766.59	6066.95	~~200~~271.76	~~182~~252.01	~~264.1~~	~~242.4~~
--
OPERATING EXPENSES
Operating and maintenance	118.26	107.18	2942.32	2739.8	~~41.6~~	~~37.5~~
General and administrative	913.91	910.36	3043.95	2638.61	~~40.4~~	~~36.3~~
Depreciation and amortization	1112.83	1011.98	3547.49	3245.63	~~47.1~~	~~43.4~~
Impairment	-	-	-	-	-	3.4
Other taxes	3.1	2.4	9.7	8.7
Other taxes	2.2	2.2	7.0	6.6	9.0	8.1
Cost of goods sold (excluding operating expenses shown separately)	0.6	0.5	2.5	1.3
Cost of goods sold (excluding operating expenses shown separately)	0.6	0.3	1.6	1.4	1.8	1.7
Total Operating Expenses	37.7	33.1	145.8	133.2
Total Operating Expenses	35.7	32.8	104.2	95.0	139.9	130.4
Net gain from asset sales	0.1	0.1	0.8	0.5
Net gain from asset sales	0.1	0.1	0.2	0.4	0.3	0.6
OPERATING INCOME	29.3	33.5	126.6	119.4
Operating Income	31.9	28.2	96.7	87.4	124.5	112.6
Interest and other income	0.9	0.1	1.2	2.3
Interest and other income	-	0.5	0.3	1.1	1.7	5.1
Income from unconsolidated affiliate	0.9	1.0	3.7	3.8
Income from unconsolidated affiliate	0.9	0.9	2.8	2.8	3.8	3.3
Interest expense	(7.1)	(7.4)	(28.5)	(29.5)
Interest expense	(7.1)	(7.4)	(21.8)	(22.2)	(29.1)	(29.9)
INCOME BEFORE INCOME TAXES	24.0	27.2	103.0	96.0
Income Before Income Taxes	25.7	22.2	78.0	69.1	100.9	91.1
Income taxes	(8.7)	(10.0)	(37.5)	(35.3)
Income taxes	(9.4)	(8.1)	(28.6)	(25.3)	(37.1)	(33.3)
NET INCOME	$15.3	$17.2	$ 65.5	$ 60.7
NET INCOME	$16.3	$14.1	$ 49.4	$43.8	$ 63.8	$57.8

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR PIPELINE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	Sept. 30, 2010	Sept. 30, 2009	Dec. 31, 2009
	March 31, 2011	March 31, 2010	Dec. 31, 2010
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ -0.9	$ ~~0.3~~-	$ 35.83
Notes receivable from Questar	6640.57	~~103~~69.06	4230.73
Accounts receivable, net (recast)	19.6	14.5	19.3
Accounts receivable, net	25.5	18.0	20.2
Accounts receivable from affiliates (recast)	15.0	15.7	15.7
Accounts receivable from affiliates	19.4	15.0	16.2
Gas stored underground	1.4	-	0.4
Materials and supplies	8.1	6.3	7.2
Materials and supplies	5.9	6.3	5.6
Prepaid expenses and other	3.9	3.6	5.2
Prepaid expenses and other	3.8	3.0	4.2
Deferred income taxes – current	1.2	0.7	1.2
Deferred income taxes – current	0.7	0.6	0.7
Total Current Assets	99.7	113.2	85.6
Total Current Assets	112.9	143.4	92.4
Property, Plant and Equipment	1,721.0	1,606.8	1,711.1
Property, Plant and Equipment	1,658.1	1,566.1	1,589.8
Accumulated depreciation and amortization	(557.4)	(514.0)	(545.0)
Accumulated depreciation and amortization	(536.5)	(501.1)	(502.5)
Net Property, Plant and Equipment	1,163.6	1,092.8	1,166.1
Net Property, Plant and Equipment	1,121.6	1,065.0	1,087.3
Investment in unconsolidated affiliate	27.8	28.3	27.9
Investment in unconsolidated affiliate	28.2	28.7	28.1
Goodwill	4.2	4.2	4.2
Regulatory and other noncurrent assets	109.81	1611.90	119.86
TOTAL ASSETS	$1,~~277~~304.74	$1,~~258~~249.25	$1,~~223~~293.84
--
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Liabilities
Checks in excess of cash balances	$ 0.1	$ -	$ -
Accounts payable and accrued expenses	$ 32.4	$ 48.3	$ 45.6
Notes payable to Questar	-	0.2	0.2
Accounts payable to affiliates	4.7	3.8	4.7
Accounts payable and accrued expenses (recast)	51.8	36.7	35.1
Current portion of long-term debt	180.0	-	180.0
Accounts payable to affiliates (recast)	5.9	4.1	2.7
Total Current Liabilities	217.1	52.1	230.3
Current portion of long-term debt	180.0	42.0	-
Long-term debt, less current portion	280.9	461.2	280.9
Total Current Liabilities	237.8	83.0	38.0
Deferred income taxes	196.1	164.0	180.1
Long-term debt, less current portion	281.1	461.2	461.2
Regulatory and other noncurrent liabilities	15.4	14.9	15.3
Deferred income taxes	166.9	153.9	162.4
Other long-term liabilities	15.7	20.4	15.1
--
COMMON SHAREHOLDER’S EQUITY
Common stock	6.6	6.6	6.6
Additional paid-in capital	344.25	~~342~~343.40	~~342~~344.70
Retained earnings	~~225~~243.48	~~190~~207.7	~~197~~236.82
Total Common Shareholder’s Equity	~~576~~594.29	~~539~~557.73	~~547~~586.18
TOTAL LIABILITIES AND COMMON SHAREHOLDER’S EQUITY	$1,~~277~~304.74	$1,~~258~~249.25	$1,~~223~~293.84

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR PIPELINE COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	9 Months Ended Sept. 30,
	3 Months Ended March 31,
	2010	2009
	2011	2010
	(in millions)
OPERATING ACTIVITIES
Net income	$4915.43	$4317.82
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3713.41	3412.64
Deferred income taxes	416.50	171.96
Share-based compensation	0.95	0.83
Net (gain) from asset sales	(0.21)	(0.41)
(Income) from unconsolidated affiliate	(20.89)	(21.80)
Distributions from unconsolidated affiliate	2.7	1.7
Distribution from unconsolidated affiliate	1.0	0.8
Changes in operating assets and liabilities	18(5.85)	616.58
Net Cash Provided By Operating Activities	~~110~~39.74	~~102~~48.10
--
INVESTING ACTIVITIES
Property, plant and equipment	(6825.7)	(7217.93)
Cash used in asset dispositions	(0.3)	(0.1)
Cash used in disposition of assets	-	(0.1)
Proceeds from asset dispositions and other	0.2	1.7
Net Cash Used In Investing Activities	(25.7)	(17.4)
Affiliated-company property, plant and equipment transfer	-	(0.1)
Net Cash Used In Investing Activities	(68.8)	(71.4)
--
FINANCING ACTIVITIES
Long-term debt issued, net of issuance costs	-	50.8
Change in notes receivable from Questar	(10.4)	(26.9)
Change in notes receivable from Questar	(23.8)	(62.4)
Dividends paid	(7.7)	(7.3)
Change in notes payable to Questar	~~(0.2)~~-	-(0.2)
Checks outstanding in excess of cash balances	0.1	-
Net Cash Used In Financing Activities	(18.1)	(34.4)
Dividends paid	(21.8)	(20.6)
Change in cash and cash equivalents	(4.4)	(3.8)
Net Cash Used In Financing Activities	(45.7)	(32.2)
Beginning cash and cash equivalents	5.3	3.8
Change in cash and cash equivalents	(3.8)	(1.5)
Ending cash and cash equivalents	$ 0.9	$ -
Beginning cash and cash equivalents	3.8	1.8
Ending cash and cash equivalents	$ -	$0.3

See notes accompanying the ~~condensed consolidated~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR GAS COMPANY
STATEMENTS OF INCOME
(Unaudited)
	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	3 Months Ended March 31,		12 Months Ended March 31,
	2010	2009	2010	2009	2010	2009
	2011	2010	2011	2010
	(in millions)
REVENUES
From unaffiliated customers	$89413.89	$82360.37	$~~599~~955.10	$~~626~~873.59	~~$891.5~~	~~$955.8~~
From affiliated company	0.28	0.13	01.6	01.63	~~1.0~~	~~0.6~~
Total Revenues	90414.07	82361.40	~~599~~956.76	~~627~~875.12	~~892.5~~	~~956.4~~
--
OPERATING EXPENSES
Cost of natural gas sold (excluding operating expenses shown separately)	52288.67	48237.60	~~386~~643.19	~~431~~570.35	~~581.4~~	~~674.8~~
Operating and maintenance	2037.94	1739.10	84112.48	70114.14	~~120.7~~	~~95.6~~
General and administrative	1214.56	1011.63	3553.32	3144.4	~~46.8~~	~~40.7~~
Depreciation and amortization	10.89	11.01	3343.15	3244.71	~~44.2~~	~~43.3~~
Other taxes	34.53	34.50	1114.4	1113.25	~~13.5~~	~~12.2~~
Total Operating Expenses	~~100~~355.39	90302.84	~~550~~867.38	~~576~~786.79	~~806.6~~	~~866.6~~
Operating Income (Loss)	(10.3)	(8.4)	49.4	50.4	85.9	89.8
OPERATING INCOME	58.8	58.6	88.8	88.3
Interest and other income	1.76	2.1.5	46.98	67.03	~~6.5~~	~~6.6~~
Interest expense	(6.26)	(6.8)	(1926.50)	(2127.75)	~~(26.3)~~	~~(28.9)~~
Income (Loss) Before Income Taxes	(14.8)	(13.1)	34.8	34.7	66.1	67.5
INCOME BEFORE INCOME TAXES	53.8	53.3	69.6	68.1
Income taxes	5(20.74)	5(20.02)	(1325.04)	(1325.02)	~~(24.4)~~	~~(25.4)~~
NET INCOME (LOSS)	($ 9.1)	($8.1)	$ 21.8	$21.7	$ 41.7	$42.1
NET INCOME	$ 33.4	$ 33.1	$ 44.2	$ 42.9

See notes accompanying the ~~condensed~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR GAS COMPANY
CONDENSED BALANCE SHEETS
(Unaudited)
	Sept.30, 2010	Sept.30, 2009	Dec. 31, 2009
	March 31, 2011	March 31, 2010	Dec. 31, 2010
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ -0.4	$ -1.5	$ 74.27
Federal income taxes recoverable	14.4	8.3	-
Accounts receivable, net	95.9	85.9	93.0
Accounts receivable, net	25.2	24.4	77.2
Unbilled gas accounts receivable	62.4	57.5	81.5
Unbilled gas accounts receivable	13.8	19.3	86.6
Accounts receivable from affiliates	4.3	2.9	4.5
Accounts receivable from affiliates	3.3	3.4	3.1
Gas stored underground	10.6	10.7	43.3
Gas stored underground	52.5	53.3	42.5
Materials and supplies	9.0	11.9	7.9
Materials and supplies	8.2	14.2	12.1
Current regulatory assets	32.9	37.9	52.7
Current regulatory assets	83.5	51.7	43.3
Prepaid expenses and other	1.9	1.7	2.9
Prepaid expenses and other	3.6	2.9	3.4
Deferred income taxes – current	4.3	3.6	1.3
Deferred income taxes – current	3.6	2.7	3.6
Total Current Assets	221.7	213.6	291.8
Total Current Assets	208.1	180.2	279.0
Property, Plant and Equipment	1,833.5	1,734.9	1,817.6
Property, Plant and Equipment	1,786.3	1,690.7	1,721.9
Accumulated depreciation and amortization	(731.9)	(695.6)	(721.3)
Accumulated depreciation and amortization	(713.3)	(683.3)	(690.4)
Net Property, Plant and Equipment	1,101.6	1,039.3	1,096.3
Net Property, Plant and Equipment	1,073.0	1,007.4	1,031.5
Noncurrent regulatory assets	14.4	15.4	15.0
Noncurrent regulatory assets	15.1	16.3	16.0
Goodwill	5.6	5.6	5.6
Other noncurrent assets	62.85	76.79	72.06
TOTAL ASSETS	$1,~~308~~345.68	$1,~~217~~280.28	$1,~~339~~411.13
--
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Liabilities
Checks outstanding in excess of cash balances	$ 2.2	$ 3.1	$ -
Notes payable to Questar	$ 64.1	$ 63.4	$ 153.6
Notes payable to Questar	97.0	33.4	87.0
Accounts payable and accrued expenses	98.9	109.6	108.3
Accounts payable and accrued expenses	71.0	65.4	130.7
Accounts payable to affiliates	37.4	52.9	53.6
Accounts payable to affiliates	54.6	43.4	47.2
Customer advances	8.0	9.4	26.2
Customer advances	25.9	37.3	30.3
Current regulatory liabilities	35.3	6.2	2.8
Current regulatory liabilities	2.0	37.1	27.2
Current portion of long-term debt	2.0	-	2.0
Current portion of long-term debt	2.0	-	-
Total Current Liabilities	245.7	241.5	346.5
Total Current Liabilities	254.7	219.7	322.4
Long-term debt, less current portion	368.0	370.0	368.0
Long-term debt	368.0	370.0	370.0
Deferred income taxes	239.3	186.8	230.3
Deferred income taxes	227.9	182.3	189.0
Customer contributions-in-aid-of-construction	45.7	50.9	45.5
Other long-term liabilities	57.3	59.1	58.7
Regulatory and other noncurrent liabilities	5.5	6.3	5.5
--
COMMON SHAREHOLDER’S EQUITY
Common stock	23.0	23.0	23.0
Additional paid-in capital	150.46	~~148~~149.73	~~148~~150.93
Retained earnings	~~227~~268.30	~~214~~253.40	~~227~~242.12
Total Common Shareholder’s Equity	~~400~~441.76	~~386~~425.13	~~399~~415.05
TOTAL LIABILITIES AND COMMON SHAREHOLDER’S EQUITY	$1,~~308~~345.68	$1,~~217~~280.28	$1,~~339~~411.13

See notes accompanying the ~~condensed~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
	9 Months Ended Sept. 30,
	3 Months Ended March 31,
	2010	2009
	2011	2010
	(in millions)
OPERATING ACTIVITIES
Net income	$21 33.84	$21 33.71
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3612.30	3512.71
Deferred income taxes	386.90	28(2.32)
Share-based compensation	10.13	0.84
Changes in operating assets and liabilities	~~(15~~67.3)5	~~39.~~7.9
Net Cash Provided By Operating Activities	82119.82	~~126~~51.23
--
INVESTING ACTIVITIES
Property, plant and equipment	(7925.9)	(5326.81)
Cash used in asset dispositions	(1.1)	(1.1)
Cash used in disposition of assets	(0.5)	(0.1)
Proceeds from asset dispositions	0.4	0.2
Net Cash Used In Investing Activities	(26.4)	(26.2)
Affiliated-company property, plant and equipment transfers	-	0.1
Net Cash Used In Investing Activities	(80.6)	(54.6)
--
FINANCING ACTIVITIES
Change in notes payable to Questar	10(89.05)	(5423.96)
Checks outstanding in excess of cash balances	2.2	3.1
Dividends paid	(7.6)	(7.2)
Dividends paid	(21.6)	(21.0)
Net Cash Used In Financing Activities	(97.1)	(30.8)
Net Cash Used In Financing Activities	(9.4)	(72.8)
Change in cash and cash equivalents	(4.3)	(5.7)
Change in cash and cash equivalents	(7.2)	(1.2)
Beginning cash and cash equivalents	4.7	7.2
Beginning cash and cash equivalents	7.2	1.2
Ending cash and cash equivalents	$ 0.4	$ 1.5
Ending cash and cash equivalents	$ -	$ -

See notes accompanying the ~~condensed~~ financial statements

Questar ~~2010~~2011 Form 10-Q

QUESTAR CORPORATION

QUESTAR PIPELINE COMPANY

QUESTAR GAS COMPANY

NOTES ACCOMPANYING THE ~~CONDENSED CONSOLIDATED~~ FINANCIAL STATEMENTS

Note 1 - Nature of Business

Questar Corporation (Questar or the Company) is a Rockies-based integrated natural gas ~~holding~~ company with three ~~subsidiaries~~complementary and ~~complementary~~wholly owned lines of business:

- Wexpro Company (Wexpro) develops and produces natural gas onfrom ~~behalf~~ cost-of-service reserves for Questar Gas ~~Company;~~.

- Questar Pipeline Company (Questar Pipeline) operates interstate natural gas pipelines and storage facilities in the western

U.United ~~S.;~~States and, provides other energy services.

- Questar Gas Company (Questar Gas) provides retail natural gas distribution in Utah, Wyoming and Idaho.

Questar ~~and~~is ~~its subsidiaries are~~ headquartered in Salt Lake City, Utah. Shares of Questar common stock trade on the New York Stock Exchange (NYSE:STR).

Note 2 - Basis of Presentation of Interim ~~Consolidated~~ Financial Statements

The interim ~~condensed consolidated~~ financial statements contain the accounts of Questar and its majority-owned or controlled subsidiaries. The ~~condensed consolidated~~ financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions for Quarterly Reports on Form 10-Q and Regulations S-X and S-K. All significant intercompany accounts and transactions have been eliminated in consolidation.

The ~~condensed consolidated~~ financial statements reflect all normal, recurring adjustments and accruals that are, in the opinion of management, necessary for a fair presentation of financial position and results of operations for the interim periods presented. Interim ~~condensed consolidated~~ financial statements do not include all of the information and notes required by GAAP for audited annual ~~consolidated~~ financial statements. These ~~condensed consolidated~~ financial statements should be read in conjunction with the ~~consolidated~~ financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2009 as recast in Item 9.01 exhibit 99.1 of the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 30,~~ 2010.

The preparation of the ~~condensed consolidated~~ financial statements and notes in conformity with GAAP requires that management make estimates and assumptions that affect the amounts of revenues, expenses, assets and liabilities, and disclosure of contingent assets and liabilities. Actual results could differ from estimates. The results of operations for the three, ~~nine~~ and 12 months ended ~~September~~March 3031, ~~2010~~2011, are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2010~~2011.

Questar uses the equity method to account for its investment in an unconsolidated affiliate where it does not have control, but has significant influence. White River Hub, LLC is a limited liability ~~corporation~~company and FERC-regulated transporter of natural gas. Questar Pipeline owns 50% of White River Hub, LLC and is the operator. Generally, the investment in White River Hub, LLC on the Company’s ~~consolidated~~ balance sheets equals the Company’s proportionate share of equity reported by White River Hub, LLC. ~~Investment~~The investment is assessed for possible impairment when events indicate that the fair value of the investment may be below the Company’s carrying value. When such a condition is deemed to be other than temporary, the carrying value of the investment is written down to its fair value, and the amount of the write-down is included in the determination of net income.

~~Effective~~The ~~May 18,~~ 2010, ~~Questar~~financial ~~Market~~information ~~Resources,~~in ~~Inc.,~~this aQuarterly ~~wholly-owned~~Report ~~subsidiary~~on ofForm ~~Questar,~~10-Q ~~merged~~has ~~with~~been ~~and~~recast ~~into~~due ~~its~~to ~~newly-formed,~~the ~~wholly-owned~~Spinoff ~~subsidiary,~~of QEP Resources, ~~Inc.~~ (QEP), aso ~~Delaware~~that ~~corporation~~the inbasis ~~order~~of topresentation ~~reincorporate~~is inconsistent with that of the ~~State~~first quarter 2011 financial information. This recast reflects the financial condition and results of ~~Delaware~~operations ~~(Reincorporation~~of ~~Merger)~~QEP as discontinued operations for all periods presented. For a summary of discontinued operations see Note 10.

OnNote ~~June~~3 ~~30,~~– ~~2010~~Comprehensive (Distribution Date), Questar distributed all of the shares of QEP common stock held by Questar to Questar shareholders as a tax-free, pro rata dividend (the Spinoff). This noncash dividend totaled $2,929.7 million. Each Questar shareholder received one share of QEP common stock for each share of Questar common stock held at the close of business on the record date, including fractional shares. In connection therewith and prior to the Spinoff, QEP distributed Wexpro, a wholly-owned subsidiary of QEP, by means of a dividend to Questar. In addition, Questar made a capital contribution of $250.0 million to QEP prior to the Spinoff. Income

~~The~~Comprehensive ~~first-half~~income ~~2010~~(loss) ~~and~~attributable ~~all~~to ~~2009~~Questar ~~financial~~is ~~information~~the sum of net income attributable to Questar as reported in ~~this~~the ~~Quarterly~~Consolidated ~~Report~~Statements onof ~~Form~~Income 10and net other comprehensive income (loss). Net other comprehensive income (loss) includes recognition of the under-Qfunded ~~has~~position ~~been~~of ~~recast~~the sodefined ~~that~~benefit pension plan and other postretirement benefits (employee benefits), changes in the ~~basis~~market value of ~~presentation~~long-term isinvestment ~~consistent~~and ~~with~~commodity-based ~~that~~derivative instruments and income taxes. These transactions are not the culmination of the ~~third~~earnings ~~quarter~~process ~~2010~~but ~~financial~~result ~~information~~from periodically adjusting historical balances to fair value. ~~This~~Income ~~recast~~or ~~reflects~~loss is recognized when the ~~financial~~pension ~~condition~~or ~~and~~other ~~results~~postretirement ofbenefit ~~operations~~costs ofare ~~QEP~~accrued asand ~~discontinued~~the ~~operations~~long-term ~~for~~investment ~~all~~is ~~periods~~sold ~~presented~~or otherwise realized. ~~For~~Comprehensive aincome ~~summary~~(loss) ofattributable ~~discontinued~~to ~~operations~~Questar ~~see~~is shown below:

~~Note~~Questar 3.2011 Form 10-Q

Questar 2010 Form 10-Q

Note 3 – Discontinued Operations


	3 Months Ended March 31,		12 Months Ended March 31,
	2011	2010	2011	2010
	(in millions)
Net income	$69.9	$150.9	$259.5	$479.1
Other comprehensive income (loss)
Employee benefits	-	-	21.5	47.8
Long-term investment	-	0.1	-	0.1
Discontinued operations
Change in unrealized fair value of derivatives held by QEP	-	299.2	(437.9)	(195.5)
Income taxes	-	(111.3)	154.7	54.4
Net other comprehensive income (loss)	-	188.0	(261.7)	(93.2)
Comprehensive income (loss)	69.9	338.9	(2.2)	385.9
Discontinued operations, noncontrolling interest	-	(0.6)	(0.7)	(2.7)
Comprehensive income (loss) attributable to Questar	$69.9	$338.3	($2.9)	$383.2

~~QEP~~The ~~operations~~components ~~are~~of ~~reflected~~Accumulated asOther ~~discontinued~~Comprehensive ~~operations~~Income in(Loss), ~~this~~net ~~Quarterly~~of ~~Report~~income taxes, shown on ~~Form~~the ~~10-Q~~Condensed ~~and~~Consolidated Balance Sheets are ~~summarized~~as ~~below~~follows:

		3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	Mar. 31, 2011	Mar. 31, 2010	Dec. 31, 2010
		2010	2009	2010	2009	2010	2009
	(in millions)
		(in millions, except per share amounts)
Employee benefits	($104.1)	($117.4)	($104.1)
	Revenues	$ -	$487.9	$1,109.8	$1,412.7	$1,669.6	$1,928.6
Long-term investment	0.1	0.1	0.1
	Separation costs	-	-	14.0	-	14.0	-
Discontinued operations, unrealized fair value of derivatives	-	275.0	-
	Operating income	-	147.4	270.5	421.1	434.9	601.4
Accumulated Other Comprehensive Income (Loss)	($104.0)	$157.7	($104.0)
	--
	Discontinued operations, net of income taxes	$ -	$ 72.0	$ 148.2	$ 119.9	$ 243.7	$ 190.0
	Discontinued operations, noncontrolling interest	-	(0.6)	(1.3)	(1.7)	(2.2)	(3.8)
	Total discontinued operations, net of income taxes	$ -	$ 71.4	$ 146.9	$ 118.2	$ 241.5	$ 186.2
Earnings Per Common Share Attributable To Questar
Basic from discontinued operations		$ -	$0.41	$0.84	$0.68	$1.39	$1.07
Diluted from discontinued operations		-	0.40	0.83	0.67	1.36	1.06

Note 4 –- ~~Comprehensive~~Earnings ~~Income~~Per Share

~~Comprehensive~~Basic ~~income~~earnings per share (EPS) is ~~the~~computed ~~sum~~by ofdividing net income attributable to Questar asby ~~reported in~~ the ~~Consolidated~~weighted-average ~~Statements~~number of ~~Income~~common ~~and~~shares ~~other~~outstanding ~~comprehensive~~during ~~income~~the ~~(loss)~~reporting period. ~~Other~~Diluted ~~comprehensive~~EPS ~~income~~includes ~~(loss)~~the ~~includes~~potential ~~changes~~increase in the ~~market~~number ~~value~~ of ~~commodity-based~~outstanding ~~derivative~~shares ~~instruments~~that ~~and~~could ~~recognition~~result offrom the ~~under-funded~~exercise ~~position~~ of in-the-money ~~defined~~stock ~~benefit~~options ~~pension~~that ~~plan and other postretirement benefits (employee benefits). These transactions~~ are ~~not~~part ~~the culmination~~ of the ~~earnings~~Company’s ~~process~~Long-Term ~~but~~Stock ~~result~~Incentive ~~from~~Plan ~~periodically adjusting historical balances to fair value~~(LTSIP). ~~Income~~A orreconciliation ~~loss~~of ~~is recognized when~~ the ~~pension~~components orof ~~other~~basic ~~postretirement~~and ~~benefit~~diluted ~~costs~~shares ~~are~~used ~~accrued.~~in ~~Comprehensive~~the ~~income~~EPS ~~(loss)~~calculation ~~attributable to Questar is shown below~~follows:

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	3 Months Ended March 31,		12 Months Ended March 31,
	2010	2009	2010	2009	2010	2009
	2011	2010	2011	2010
		(recast)	(recast)	(recast)	(recast)	(recast)
	(in millions)
	(in millions)
Weighted-average basic common shares outstanding	177.0	174.9	176.2	174.4
Net income	$ 27.7	$ 98.8	$276.8	$245.0	$427.7	$368.3
Potential number of shares issuable under the Company’s LTSIP	1.5	2.3	2.3	2.2
Other comprehensive income (loss)
Weighted average diluted common shares outstanding	178.5	177.2	178.5	176.6
Employee benefits
Transferred to QEP	-	-	38.7	-	38.7	-
Re-measured pension and other obligations	(38.0)	-	(51.2)	-	(3.4)	(146.7)
Long-term investment	-	-	0.1	-	0.1	-
Discontinued operations
Unrealized fair value of derivatives transferred to QEP	-	-	(372.9)	-	(372.9)	-
Change in unrealized fair value of derivatives held by QEP	-	(252.5)	234.2	(392.5)	221.6	(110.4)
Income taxes	14.5	93.9	56.5	145.9	42.9	98.8
Net other comprehensive (loss)	(23.5)	(158.6)	(94.6)	(246.6)	(73.0)	(158.3)
Comprehensive income (loss)	4.2	(59.8)	182.2	(1.6)	354.7	210.0
Discontinued operations, noncontrolling interest	-	(0.6)	(1.3)	(1.7)	(2.2)	(3.8)
Comprehensive income (loss) attributable to Questar	$ 4.2	($ 60.4)	$180.9	($ 3.3)	$352.5	$206.2

~~The~~Note ~~components~~5 of- ~~Accumulated~~Asset ~~Other~~Retirement ~~Comprehensive~~Obligations ~~Income (Loss) (AOCI), net of income taxes, shown on the Condensed Consolidated Balance Sheets are as follows:~~

Questar ~~2010~~records ~~Form~~asset 10retirement obligations (ARO) when there are legal obligations associated with the retirement of tangible long-Qlived assets. At Questar, ARO apply primarily to abandonment costs associated with gas and oil wells, production facilities and certain other properties. The Company has not capitalized future abandonment costs on a majority of its long-lived transportation and distribution assets because the Company does not have a legal obligation to restore the area surrounding abandoned assets. The fair value of retirement costs are estimated by Company personnel based on abandonment costs of similar properties available to field operations and depreciated over the life of the related assets. Revisions to ARO estimates result from changes in expected cash flows or material changes in estimated retirement costs. Income or expense resulting from the settlement of ARO liabilities is included in net gain (loss) from asset sales on the Consolidated Statements of Income. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. Changes in Questar’s ARO from the Consolidated Balance Sheets for the three months ended March 31 were as follows:

Questar 2011 Form 10-Q

	Sept. 30, 2010	Sept. 30, 2009	Dec. 31, 2009
	2011	2010
	(in millions)
Employee benefits	($125.0)	($146.9)	($117.4)
ARO liability at December 31	$60.9	$65.0
Long-term investment	0.1	-	-
Accretion	0.7	0.7
Discontinued operations, unrealized fair value of derivatives	-	95.0	87.1
Liabilities incurred	0.2	0.2
Accumulated Other Comprehensive (Loss)	($124.9)	($ 51.9)	($ 30.3)
Revisions	2.5	(8.3)
Liabilities settled	(0.1)	(0.1)
ARO liability at March 31	$64.2	$57.5

~~Note~~Wexpro 5collects -from ~~Earnings~~Questar ~~Per~~Gas ~~Share~~and deposits in trust certain funds related to estimated ARO costs. The funds amounted to $13.4 million at March 31, 2011, and $12.2 million at March 31, 2010. The funds are recorded in other noncurrent assets on the Condensed Consolidated Balance Sheets and used to satisfy retirement obligations as the properties are abandoned. The accounting treatment of reclamation activities associated with ARO for properties administered under the longstanding Wexpro Agreement is defined in a guideline letter between Wexpro and the Utah Division of Public Utilities and the staff of the Public Service Commission of Wyoming (PSCW).

~~Basic~~Note ~~earnings~~6 ~~per share (EPS) is computed by dividing net income attributable to Questar by the weighted~~-~~average~~ ~~number~~Fair ofValue common shares outstanding during the reporting period. Diluted EPS includes the potential increase in the number of outstanding shares that could result from the exercise of in-the-money stock options. A reconciliation of the components of basic and diluted shares used in the EPS calculation follows:Measurements

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	2010	2009	2010	2009	2010	2009
	(in millions)
Weighted-average basic common shares outstanding	175.5	174.3	175.2	174.0	174.9	173.8
Potential number of shares issuable under the Long- Term Stock Incentive Plan	2.7	2.0	2.5	2.1	2.4	2.2
Average diluted common shares outstanding	178.2	176.3	177.7	176.1	177.3	176.0

Questar measures and discloses fair values in accordance with the provisions of the accounting standards for Fair Value Measurements and Disclosures. 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.

~~Note~~The 6following -table ~~Asset~~discloses ~~Retirement~~the ~~Obligations~~carrying amount and related fair value of certain financial instruments not disclosed in other notes to the financial statements in this Quarterly Report on Form 10-Q:

Questar records asset retirement obligations (ARO) when there are legal obligations associated with the retirement of tangible long-lived assets. The fair values of retirement costs are estimated based on abandonment costs of similar properties available to field operations and depreciated over the life of the related assets. Revisions to ARO estimates result from changes in expected cash flows or material changes in estimated retirement costs. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. Income or expense resulting from the settlement of ARO liabilities is included in net gain or (loss) from asset sales on the Consolidated Statements of Income. Changes in ARO were as follows:

	2010	2009
	(recast)	(recast)
	(in millions)
ARO liability at December 31	$65.0	$58.9
Accretion	2.1	2.5
Liabilities incurred	0.7	0.4
Revisions	(8.2)	2.4
Liabilities settled	(0.2)	(0.3)
ARO liability at September 30	$59.4	$63.9

Wexpro collects from Questar Gas and deposits in trust certain funds related to estimated ARO costs. The funds are recorded in other noncurrent assets on the Condensed Consolidated Balance Sheets and used to satisfy retirement obligations as the properties are abandoned. The accounting treatment of reclamation activities associated with ARO for properties administered under the longstanding Wexpro Agreement is defined in a guideline letter between Wexpro and the Utah Division of Public Utilities and the staff of the Public Service Commission of Wyoming (PSCW).

Note 7 - Fair Value Measurements

Questar measures and discloses fair values in accordance with the provisions of ASC 820 "Fair Value Measurements and Disclosures." ASC 820 establishes a fair-value hierarchy of Levels 1, 2 and 3 based on inputs with Level 1 measures calculated from the most visible inputs. 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

Questar 2010 Form 10-Q

that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

The following table discloses the fair value and related carrying amount of certain financial instruments not disclosed in other notes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q:

Questar

	Carrying	Estimated	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value	Amount	Fair Value
	Sept. 30, 2010		Sept. 30, 2009		Dec. 31, 2009
	March 31, 2011		March 31, 2010		December 31, 2010
			(recast)		(recast)
	(in millions)
Financial assets
Cash and cash equivalents	$ -	$ -	$ -	$ -	$ 1121.58	$ 1121.58
Notes receivable	-	-	-53.0	-53.0	~~39.3~~-	~~39.3~~-
Long-term investment	1213.94	1213.94	1112.2	1112.2	1113.71	1113.71
Financial liabilities
Checks outstanding in excess of cash balances	51.46	51.46	60.38	60.38	-	-
Short-term debt	~~395~~86.0	~~395~~86.0	38134.5	38134.5	~~169~~242.0	~~169~~242.0
Notes payable	-	-	7027.79	7027.79	~~52.9~~-	~~52.9~~-
Long-term debt, including current portion	$~~831.~~1,080.5	$~~956~~1,159.72	$~~873~~831.2	$~~953~~913.91	$~~831~~1,080.25	$~~895~~1,173.08

The carrying amounts of cash and cash equivalents, notes receivable, checks outstanding in excess of cash balances, short-term debt and notes payable approximate fair value. 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. Notes receivable and notes payable represent borrowing transactions between Questar and pre-Spinoff affiliated companies. The long-term investment is recorded at fair value and consists of money market and short-term bond index mutual funds, ~~and represents funds~~ held in Wexpro's trust (see Note 65). The fair value of the long-term investment is based on quoted prices for the underlying ~~mutual~~ funds, and is considered a Level 1 fair value.

The following table discloses the ~~fair~~carrying ~~value~~amount and related ~~carrying~~fair ~~amount~~value of certain financial instruments not disclosed in other notes to Questar Pipeline's condensed consolidated financial statements in this Quarterly Report on Form 10-Q:

Questar 2011 Form 10-Q

Questar Pipeline

	Carrying	Estimated	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value	Amount	Fair Value
	Sept. 30, 2010		Sept. 30, 2009		Dec. 31, 2009
	March 31, 2011		March 31, 2010		December 31, 2010
	(in millions)
Financial assets
Cash and cash equivalents	$ -0.9	$ -0.9	$ ~~0.3~~-	$ ~~0.3~~-	$ 35.83	$ 35.83
Notes receivable from Questar	6640.57	6640.57	~~103~~69.06	~~103~~69.06	4230.73	4230.73
Financial liabilities
Checks outstanding in excess of cash balances	0.1	0.1	-	-	-	-
Long-term debt, including current portion	$460.9	$496.8	$461.2	$497.9	$460.9	$501.9
Notes payable to Questar	-	-	0.2	0.2	0.2	0.2
Long-term debt, including current portion	$461.1	$516.4	$503.2	$544.0	$461.2	$490.9

The carrying amounts of cash and cash equivalents, and notes receivable from Questar, ~~checks outstanding in excess of cash balances 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 Pipeline's current credit-risk adjusted borrowing rates.

The following table discloses the ~~fair~~carrying ~~value~~amount and related ~~carrying~~fair ~~amount~~value of certain financial instruments not disclosed in other notes to Questar Gas's condensed financial statements in this Quarterly Report on Form 10-Q:

Questar 2010 Form 10-Q

Questar Gas

	Carrying	Estimated	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value	Amount	Fair Value
	Sept. 30, 2010		Sept. 30, 2009		Dec. 31, 2009
	March 31, 2011		March 31, 2010		December 31, 2010
	(in millions)
Financial assets
Cash and cash equivalents	$ -0.4	$ -0.4	$ -1.5	$ -1.5	$ 74.27	$ 74.27
Financial liabilities
Checks outstanding in excess of cash balances	2.2	2.2	3.1	3.1	-	-
Notes payable to Questar	64.1	64.1	63.4	63.4	153.6	153.6
Notes payable to Questar	97.0	97.0	33.4	33.4	87.0	87.0
Long-term debt, including current portion	$370.0	$417.0	$370.0	$415.2	$370.0	$425.3
Long-term debt, including current portion	$370.0	$440.3	$370.0	$409.9	$370.0	$404.1

The carrying amounts of cash and cash equivalents, ~~checks outstanding in excess of cash balances~~ 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.

Note 87 - Share-Based Compensation

Questar issues stock options, restricted shares, ~~and~~ restricted stock units and performance shares to certain officers, employees and non-employee directors under its Long-~~Term~~term Stock Incentive Plan (LTSIP). ToQuestar ~~generally~~recognizes ~~preserve~~expense ~~the~~over ~~potential~~time ~~benefits~~as ~~under~~ the ~~LTSIP~~stock ~~prior~~options, torestricted ~~the Spinoff~~shares, restricted stock ~~options~~units and ~~restricted~~performance shares vest. Total share-based ~~awards~~compensation ~~outstanding~~expense asamounted to $3.5 million in the first quarter of 2011 compared to $2.8 million in the ~~Distribution~~first ~~Date~~quarter ~~were~~of ~~adjusted~~2010. ~~and~~Deferred ~~bifurcated~~share-based ~~into~~compensation, ~~stock~~representing ~~options~~the ~~and~~unvested value of restricted share awards, ~~for~~amounted ~~both~~to ~~Questar~~$9.3 ~~and~~million ~~QEP~~at March 31, ~~respectively~~2011. ~~The~~Deferred ~~exercise~~share-based ~~price~~compensation ofis ~~options~~included ~~and~~in ~~the~~common ~~grant-day~~stock ~~prices~~on ofthe ~~restricted~~Condensed ~~shares~~Consolidated ~~were~~Balance ~~modified~~Sheets. ~~using~~First ~~the~~quarter ~~ratio~~cash offlow ~~the~~from ~~June~~income ~~30,~~tax ~~2010,~~benefits ~~closing~~in ~~prices~~excess of ~~Questar,~~recognized compensation expense amounted to $144.660 ormillion ~~32.23%,~~in ~~and~~2011 ~~QEP,~~compared to $301.833 ormillion 67in 2010.~~77%.~~ There were 7,546,987 shares available for future grants at March 31, 2011.

~~Questar~~The ~~recognizes~~Company ~~expense~~uses ~~over time as~~ the ~~stock~~Black-Scholes-Merton ~~options~~mathematical ormodel ~~restricted~~in ~~shares~~estimating ~~vest. For~~ the ~~first~~fair ~~nine~~value ~~months~~of ~~share-based~~stock ~~compensation~~options ~~expense~~for ~~amounted~~accounting ~~to $13~~purposes.3 ~~million~~Fair-value incalculations ~~2010~~rely ~~compared~~upon tosubjective ~~$7.1~~assumptions ~~million~~used in ~~2009.~~the ~~Deferred~~mathematical ~~share-based~~model ~~compensation,~~and ~~representing~~may ~~the~~not ~~unvested~~be ~~value~~representative of ~~restricted~~future ~~share awards, amounted to $8~~results.8 ~~million~~The ~~at September 30, 2010. Deferred share~~Black-~~based~~Scholes-Merton ~~compensation~~model iswas ~~included~~intended infor ~~common~~measuring ~~stock on~~ the ~~Condensed~~value ~~Consolidated Balance Sheets. For the first nine months cash flow from income tax benefits in excess~~ of ~~recognized~~options ~~compensation~~traded ~~expense~~on ~~amounted~~an ~~to $2~~exchange.6 ~~million~~Questar indid ~~2010~~not ~~compared~~grant toany ~~$1.3~~stock ~~million~~options in ~~2009.~~the ~~There~~first ~~were~~quarter ~~8,347,021~~of ~~shares available for future grants at September 30, 2010~~2011.

~~The~~Questar ~~Company~~2011 ~~uses~~Form ~~the Black~~10-Scholes-Merton mathematical model in estimating the fair value of stock options for accounting purposes. Fair-value calculations rely upon subjective assumptions used in the mathematical model and may not be representative of future results. The Black-Scholes-Merton model was intended for measuring the value of options traded on an exchange. The calculated fair value of options granted and major assumptions used in the model at February 9, 2010, the date of grant, are listed below:Q

	Stock Option Variables 9 Months Ended Sept. 30, 2010
Fair value of options at grant date (recast)	$13.10
Risk-free interest rate	2.30%
Expected price volatility	30.3%
Expected dividend yield	1.18%
Expected life in years	5.2

Unvested stock options decreased by ~~520~~115,~~137~~068 shares to ~~274~~117,~~195~~794 shares in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011. Stock ~~options of certain employees were immediately vested as a result of the Spinoff. Stock~~-option transactions under the terms of the LTSIP ~~recast for the effect of the Spinoff~~ are summarized below:

Questar 2010 Form 10-Q


	Options Outstanding	Price Range	Weighted- average Price
Balance at December 31, 2010	2,560,059	$3.70 - $17.35	$ 7.30
Exercised	(322,184)	3.70 - 13.10	5.49
Balance at March 31, 2011	2,237,875	$3.70 - $17.35	$7.56


Options Outstanding				Options Exercisable		Unvested Options
Range of exercise prices	Number outstanding at March 31, 2011	Weighted-average remaining term in years	Weighted-average exercise price	Number exercisable at March 31, 2011	Weighted-average exercise price	Number unvested at March 31, 2011	Weighted- average exercise price
$3.70 - $4.37	1,255,501	1.5	$4.11	1,255,501	$4.11	-	$-
7.84 - 12.43	649,174	3.7	11.17	590,177	11.15	58,997	11.40
$13.10 - $17.35	333,200	5.3	13.52	274,403	13.60	58,797	13.10
	2,237,875	2.7	$ 7.56	2,120,081	$ 7.30	117,794	$12.25

Restricted share grants typically vest in equal installments over a three- or four-year period from the grant date. Several grants vest in a single installment after a specified period. The weighted-average vesting period of unvested restricted shares at March 31, 2011, was 23 months. Transactions involving restricted shares under the terms of the LTSIP are summarized below:


	Restricted Shares Outstanding	Price Range	Weighted-average Price
Balance at December 31, 2010	568,707	$11.40 - $20.31	$14.66
Granted	348,127	17.50 - 17.97	17.96
Distributed	(126,406)	11.40 - 17.35	13.97
Balance at March 31, 2011	790,428	$11.40 - $20.31	$16.22

Restricted stock unit grants typically vest in equal installments over a three year period from the grant date. At March 31, 2011, Questar’s outstanding restricted stock units totaled 67,353 with a weighted-average price of $15.27 per share and a weighted-average vesting period of 15 months.

In the first quarter of 2011, Questar granted to certain Company executive officers a total of 128,021 performance shares under the terms of the LTSIP. The awards motivate and reward these executives for long-term Company performance and provide an incentive for them to remain with the Company. The target number of performance shares for each executive officer is subject to adjustment upward or downward based on the Company’s performance over the three-year performance period ending December 31, 2013 with respect to specified performance criteria relative to a specified peer group of companies. The actual performance shares awarded, if any, will be distributed in the first quarter of 2014 so long as such executive officer was employed by the Company or its affiliates as of December 31, 2013. Half of any award will be distributed in shares of Company common stock and half in cash. The Monte Carlo simulation method was used to estimate the grant-date fair value of the performance share awards at $18.23 per share. The liability awards to be settled in cash will be marked-to-market at least annually using the Monte Carlo simulation method. Equity and liability-based performance share compensation expense amounted to $0.2 million in the first quarter of 2011.

Note 8 - Operations by Line of Business

Questar's three complementary lines of business include Wexpro, which develops and produces natural gas from cost-of-service reserves for Questar Gas; Questar Pipeline, which operates interstate natural gas pipelines and storage facilities; and Questar Gas, which provides retail natural gas distribution in Utah, Wyoming and Idaho. Line-of-business information is presented according to senior management's basis for evaluating performance and considering differences in the nature of products, services and regulation among other factors. Separation costs, comprised primarily of advisory fees, legal fees and employee severance expenses, were reported at the corporate level. Following is a summary of operations by line of business:

Questar 2011 Form 10-Q

	Options Outstanding	Price Range	Weighted- average Price
	3 Months Ended March 31,		12 Months Ended March 31
Balance at Dec. 31, 2009 (recast)	3,001,999	$2.42 - $17.35	$ 6.42
	2011	2010	2011	2010
Granted	266,000	13.10	13.10
	(in millions)
Questar employees transferred to QEP	(143,800)	10.91 - 13.10	11.47
Revenues from Unaffiliated Customers
Exercised	(194,330)	2.42 - 11.40	4.00
Wexpro	$ 7.8	$ 6.2	$ 26.2	$ 21.6
Balance at Sept. 30, 2010	2,929,869	$3.70 - $17.35	$6.94
Questar Pipeline	48.3	47.7	197.8	179.6
Questar Gas	413.9	360.7	955.0	873.9
Total	$470.0	$414.6	$1,179.0	$1,075.1
--
Revenues from Affiliated Companies
Wexpro	$ 60.9	$ 60.5	$ 240.6	$ 226.1
Questar Pipeline	18.6	18.8	73.8	72.5
Questar Gas	0.8	0.3	1.6	1.3
Total	$ 80.3	$ 79.6	$ 316.0	$ 299.9
--
Operating Income (Loss)
Wexpro	$ 34.5	$ 32.8	$ 135.4	$ 128.5
Questar Pipeline	29.3	33.5	126.6	119.4
Questar Gas	58.8	58.6	88.8	88.3
Corporate	0.2	(0.1)	(9.5)	1.4
Total	$122.8	$124.8	$ 341.3	$ 337.6
--
Income (Loss) From Continuing Operations
Wexpro	$ 22.3	$ 21.2	$ 89.2	$ 83.1
Questar Pipeline	15.3	17.2	65.5	60.7
Questar Gas	33.4	33.1	44.2	42.9
Corporate	(1.1)	0.7	(8.9)	0.7
Total	$ 69.9	$ 72.2	$ 190.0	$ 187.4

Options Outstanding				Options Exercisable		Unvested Options
Range of exercise prices	Number outstanding at Sept. 30, 2010	Weighted-average remaining term in years	Weighted-average exercise price	Number exercisable at Sept. 30, 2010	Weighted-average exercise price	Number unvested at Sept. 30, 2010	Weighted- average exercise price
$ 3.70	508,932	1.3	$ 3.70	508,932	$ 3.70	-	$ -
4.37 - 4.79	1,380,563	1.6	4.42	1,380,563	4.42	-	-
7.84 - 12.43	699,174	4.3	11.09	531,179	11.07	167,995	11.12
13.10 - 17.35	341,200	5.8	13.51	235,000	13.69	106,200	13.10
	2,929,869	2.7	$ 6.94	2,655,674	$ 6.43	274,195	$11.89

Restricted share grants typically vest in equal installments over a three- or four-year period from the grant date. Several grants vest in a single installment after a specified period. The weighted-average vesting period of unvested restricted shares at September 30, 2010, was 25 months. Restricted share transactions under the terms of the LTSIP recast for the effect of the Spinoff are summarized below:

	Unvested Restricted Shares	Price Range	Weighted-average Price
Balance at Dec. 31, 2009 (recast)	331,475	$10.01 - $17.57	$13.43
Granted	540,277	13.10 - 15.98	14.57
Questar employees transferred to QEP	(26,252)	10.91 - 20.31	7.44
Distributed	(262,229)	10.01 - 17.57	13.73
Balance at September 30, 2010	583,271	$11.40 - $20.31	$14.62

In the third quarter of 2010, Questar issued 66,235 restricted stock units with a weighted-average price of $15.24 per share and a weighted-average vesting period of 21 months.

As result of the Spinoff and bifurcation of share-based awards, restricted QEP shares and QEP stock options were granted to certain officers, employees and non-employee directors of Questar. The awards include 256,591 unvested restricted shares with a weighted-average price of $29.20 per QEP share and 274,195 unvested stock options with a weighted-average price of $25.01 per QEP share. Questar will recognize expense in future periods for these unvested share-based awards. In addition, certain QEP officers, employees and non-employee directors hold 1,725,913 Questar stock options with a weighted-average exercise price of $9.55 and a weighted-average remaining life of 4.1 years and 613,657 Questar unvested restricted shares with a weighted-average price of $13.73.

Note 9 - Employee Benefits

Questar has defined-benefit pension and life insurance plans covering a majority of its employees. On July 1, 2010, Questar closed its defined-benefit pension plan to new hires or rehires. The Company previously closed its postretirement medical coverage and life insurance plan to employees hired or rehired after January 1, 1997, and established maximum amounts paid by the Company.

~~As a part of the Spinoff,~~ Questar ~~transferred~~is ~~benefit~~subject ~~obligations~~ to ~~QEP~~and ~~for~~complies ~~active~~with ~~QEP employees eligible for defined~~minimum-~~benefit~~required ~~pension, postretirement medical~~ and ~~life~~maximum-allowed ~~insurance~~annual ~~plans~~contribution ~~while~~levels ~~Questar retained obligations~~ for ~~retired~~its ~~employees.~~qualified ~~The~~pension ~~transfer~~plan ofas adetermined ~~portion~~by of the ~~benefit~~Employee ~~obligations~~Retirement toIncome ~~QEP~~Security ~~triggered~~Act ~~re-measurements~~and ~~resulting~~Internal inRevenue ~~increased expenses year-over-year~~Code. ~~Expenses~~The ~~increased~~2011 ~~because~~estimated ~~the~~qualified ~~liability~~pension ~~discount~~expense ~~rate~~is ~~decreased from 6~~$22.5%8 ~~to 5~~million.~~75% and returns on plan assets were lower than expected.~~

~~Questar~~The ~~2010~~Company ~~Form~~also 10has a nonqualified pension plan for eligible employees who participate in the qualified pension plan, which provides a "make-Qup" benefit due to the limits on compensation that can be taken into account in determining benefits under the qualified pension plan. The nonqualified pension plan is unfunded. Claims are paid from the Company general funds. The 2011 nonqualified pension plan expense is estimated to be $0.8 million. Components of the qualified and nonqualified pension expense included in the determination of net income are listed below and 2010 amounts are not recast for the Spinoff.

Questar 2011 Form 10-Q

Questar is subject to and complies with minimum-required and maximum-allowed annual contribution levels for its qualified pension plan as determined by the Employee Retirement Income Security Act and Internal Revenue Code. Subject to these limitations, Questar generally plans to fund the qualified pension plan in amounts approximately equal to the yearly expense. However, Questar contributed $30.0 million to its qualified pension plan through September 30, 2010. The 2010 estimated qualified pension expense is $20.8 million.


	3 Months Ended March 31,		12 Months Ended March 31,
	2011	2010	2011	2010
	(in millions)
Service cost	$2.2	$2.4	$9.1	$9.8
Interest cost	7.1	7.9	27.9	30.3
Expected return on plan assets	(6.3)	(6.4)	(24.3)	(25.3)
Prior service and other costs	0.3	0.3	1.1	1.2
Recognized net-actuarial loss	2.6	1.8	9.0	6.9
Curtailment charges	-	0.2	2.2	(0.1)
Special-termination benefits	-	-	-	2.0
Pension expense	$5.9	$6.2	$25.0	$24.8

The Company ~~also~~currently ~~has~~estimates a ~~nonqualified~~$4.8 ~~pension~~million ~~plan~~expense for ~~eligible~~postretirement ~~employees~~benefits ~~who~~other ~~participate~~than inpensions ~~the qualified pension plan, which provides a "make-up" benefit due to the limits on compensation that can be taken into account~~ in ~~determining~~2011 ~~benefits~~before ~~under the qualified pension plan~~$0.8 ~~The~~million ~~nonqualified~~for ~~pension~~accretion ~~plan~~of isa ~~unfunded.~~regulatory ~~Claims are paid from the Company general funds~~liability. ~~The~~Postretirement ~~2010~~benefit ~~nonqualified pension plan~~ expense iscomponents ~~estimated~~are tolisted bebelow ~~$3.9 million. Components of the qualified~~ and ~~nonqualified~~2010 ~~pension~~amounts ~~expense~~are ~~included~~not inrecast for the ~~determination of net income are listed below~~Spinoff:

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	3 Months Ended March 31,		12 Months Ended March 31,
	2010	2009	2010	2009	2010	2009
	2011	2010	2011	2010
	(in millions)
Service cost	$ 20.32	$ 20.52	$ 70.26	$ 70.57	~~$ 9.6~~	~~$ 9.8~~
Interest cost	61.51	71.72	224.3	224.06	~~29.9~~	~~29.9~~
Expected return on plan assets	(50.67)	(60.35)	(182.46)	(192.02)	~~(24.7)~~	~~(25.5)~~
Prior service and other costs	0.3	0.3	0.9	0.9	1.2	1.2
Amortization of transition obligation	0.5	0.5	1.9	1.9
Recognized net-actuarial loss	2.8	2.1	6.3	5.0	7.9	6.9
Amortization of losses	0.1	0.2	0.5	0.8
Settlement costs	1.1	0.7	1.4	1.3	2.1	1.6
Curtailment charges	-	-	0.3	-
Pension expense	$ 7.4	$ 7.0	$19.7	$17.7	$26.0	$23.9
Accretion of regulatory liability	0.2	0.2	0.8	0.8
Postretirement benefits expense	$1.4	$1.8	$5.8	$6.6

~~The~~Note ~~Company~~10 ~~currently~~– ~~estimates~~Discontinued a $5.0 million expense for postretirement benefits other than pensions in 2010 before $0.8 million for accretion of a regulatory liability. Postretirement benefits include an estimate of the effect of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Questar's prescription drug benefit is actuarially equivalent to Part D of Medicare and therefore qualifies for a federal subsidy available on benefits provided to plan participants. In 2004, the Medicare Part D benefit reduced the accumulated postretirement benefit obligation by $2.0 million. By year-end 2009, the Medicare Part D subsidy grew to $4.0 million. Yearly amortization of this benefit amounting to $0.3 million reduces expense through a decrease in the amortization of the unrecognized net loss. The Medicare Part D subsidy is no longer tax exempt as a result of the Health Care and Education Reconciliation Act of 2010. Receipts of Medicare Part D subsidies reduce Company contributions to the employee plan. Expense components are listed below:Operations

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	2010	2009	2010	2009	2010	2009
	(in millions)
Service cost	$ 0.2	$ 0.2	$ 0.5	$ 0.6	$ 0.6	$ 0.7
Interest cost	1.0	1.1	3.4	3.5	4.5	4.6
Expected return on plan assets	(0.7)	(0.6)	(1.8)	(1.7)	(2.3)	(2.6)
Amortization of transition obligation	0.5	0.5	1.4	1.4	1.9	1.9
Amortization of losses	0.1	0.2	0.5	0.7	0.7	0.7
Accretion of regulatory liability	0.2	0.2	0.6	0.6	0.8	0.8
Postretirement benefits expense	$ 1.3	$ 1.6	$ 4.6	$ 5.1	$ 6.2	$ 6.1

QEP operations are reflected as discontinued operations in this Quarterly Report on Form 10-Q and are summarized below:

Note 10 - Operations by Line of Business


		3 Months Ended March 31,		12 Months Ended March 31,
		2011	2010	2011	2010
		(in millions, except per share amounts)
	Revenues	$-	$580.1	$529.7	$2,070.5
	Separation costs	-	-	14.0	-
	Operating income	-	142.9	127.6	573.3
	--
	Discontinued operations, net of income taxes	$-	$ 78.7	$ 69.5	$ 291.7
	Discontinued operations, noncontrolling interest	-	(0.6)	(0.7)	(2.7)
	Total discontinued operations, net of income taxes	$-	$ 78.1	$ 68.8	$ 289.0
Earnings Per Common Share Attributable To Questar
Basic from discontinued operations		$-	$ 0.45	$ 0.39	$ 1.67
Diluted from discontinued operations		-	0.44	0.39	1.64

Questar's ~~three~~2011 ~~complementary~~Form lines of business include Wexpro, which develops and produces natural gas on behalf of Questar Gas; Questar Pipeline, which operates interstate natural gas pipelines and storage facilities; and Questar Gas, which provides retail natural gas distribution in Utah, Wyoming and Idaho. Line10-of-business information is presented according to senior management's basis for evaluating performance and considering differences in the nature of products, services and regulation among other factors. Separation costs, comprised primarily of advisory fees, legal fees and employee severance expenses, were reported at the corporate level. Following is a summary of operations by line of business:Q

Questar 2010 Form 10-Q

	3 Months Ended Sept. 30,		9 Months Ended Sept. 30,		12 Months Ended Sept. 30,
	2010	2009	2010	2009	2010	2009
		(recast)	(recast)	(recast)	(recast)	(recast)
	(in millions)
Revenues from Unaffiliated Customers
Wexpro	$ 6.1	$ 5.2	$ 16.6	$ 11.0	$ 23.4	$ 13.3
Questar Pipeline	49.3	43.4	145.2	128.4	190.0	171.2
Questar Gas	89.8	82.3	599.1	626.5	891.5	955.8
Total	$145.2	$130.9	$760.9	$765.9	$1,104.9	$1,140.3
--
Revenues from Affiliated Companies
Wexpro	$ 58.4	$ 53.8	$179.1	$166.6	$ 237.6	$ 223.1
Questar Pipeline	18.2	17.5	55.5	53.6	74.1	71.2
Questar Gas	0.2	0.1	0.6	0.6	1.0	0.6
Total	$ 76.8	$ 71.4	$235.2	$220.8	$ 312.7	$ 294.9
--
Operating Income (Loss)
Wexpro	$ 32.8	$ 31.6	$ 98.9	$ 90.4	$ 133.1	$ 118.4
Questar Pipeline	31.9	28.2	96.7	87.4	124.5	112.6
Questar Gas	(10.3)	(8.4)	49.4	50.4	85.9	89.8
Corporate	-	-	(9.5)	0.1	(8.1)	(1.0)
Total	$ 54.4	$ 51.4	$235.5	$228.3	$ 335.4	$ 319.8
--
Income (Loss) From Continuing Operations
Wexpro	$ 22.2	$ 20.6	$ 65.4	$ 59.2	$ 86.9	$ 77.7
Questar Pipeline	16.3	14.1	49.4	43.8	63.8	57.8
Questar Gas	(9.1)	(8.1)	21.8	21.7	41.7	42.1
Corporate	(1.7)	0.2	(8.0)	0.4	(8.4)	0.7
Total	$ 27.7	$ 26.8	$128.6	$125.1	$ 184.0	$ 178.3

Note 11 – Subsequent Event – Interest Rate Swap Transaction

In April of 2011, Questar executed a fixed-to-floating interest rate swap transaction with JPMorgan Chase Bank, N.A. and converted $125.0 million of its 2.75% fixed rate long-term debt to floating rate debt. The 2.75% fixed rate was swapped for a LIBOR-based floating rate that is determined at the beginning of August and February each year until the maturity of the notes on February 1, 2016. This transaction will be reflected beginning in the second quarter of 2011.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following information updates the discussion of Questar's financial condition provided in its ~~2009~~2010 Form 10-K ~~filing as recast in Item 9.01 exhibit 99.1 of the Company's Current Report on Form 8-K filed with the Securities~~ and ~~Exchange Commission on September 30, 2010, and~~ analyzes the changes in the results of operations between the three, ~~nine~~ and 12 months ended ~~September~~March 3031, ~~2010~~2011, and ~~September~~March 3031, ~~2009. Financial information was recast to show the effect of the Spinoff of QEP as discontinued operations. The first half~~ 2010 ~~and all 2009 financial information in this Quarterly Report on Form 10-Q has been recast so that the basis of presentation is consistent with that of the third quarter of 2010~~. For definitions of commonly used ~~gas and oil~~ terms found in this Quarterly Report on Form 10-Q, please refer to the "Glossary of Commonly Used Terms" provided in Questar's ~~2009~~2010 Form 10-K.

RESULTS OF OPERATIONS

Following are comparisons of income (loss) from continuing operations by line of business:

	3 Months Ended Sept. 30,			9 Months Ended Sept. 30,			12 Months Ended Sept. 30,
	3 Months Ended March 31,			12 Months Ended March 31,
	2010	2009 (recast)	Change	2010 (recast)	2009 (recast)	Change	2010 (recast)	2009 (recast)	Change
	2011	2010	Change	2011	2010	Change
	(in millions, except per share amounts)
Wexpro	$22.23	$2021.62	$1.61	$65 89.42	$59 83.21	$ 6.21	~~$86.9~~	~~$77.7~~	~~$9.2~~
Questar Pipeline	1615.3	1417.12	2(1.29)	4965.45	4360.87	54.68	~~63.8~~	~~57.8~~	~~6.0~~
Questar Gas	(933.1)4	(833.1)	~~(1.~~0).3	2144.82	2142.79	0.1.3	~~41.7~~	~~42.1~~	~~(0.4)~~
Corporate	(1.71)	0.27	(1.98)	(8.09)	0.47	(89.46)	~~(8.4)~~	~~0.7~~	~~(9.1)~~
Income from continuing operations	$69.9	$72.2	($2.3)	$190.0	$187.4	$ 2.6
Earnings from continuing operations per diluted share	$0.39	$0.41	($0.02)	$ 1.06	$ 1.06	$ -
Average diluted shares	178.5	177.2	1.3	178.5	176.6	1.9

Questar 2010 Form 10-Q

Income from continuing operations	$27.7	$26.8	$0.9	$128.6	$125.1	$3.5	$184.0	$178.3	$5.7
Earnings per diluted share	$0.15	$0.16	($0.01)	$0.72	$0.71	$0.01	$1.04	$1.01	$0.03
Average diluted shares	178.2	176.3	1.9	177.7	176.1	1.6	177.3	176.0	1.3

WEXPRO

Wexpro reported income of $22.23 million in the ~~third~~first quarter of ~~2010~~2011 compared to $2021.62 million in the ~~third~~first quarter of ~~2009~~2010, ana 85% increase. ~~Wexpro earnings for the nine months of 2010 were $65.4 million compared to $59.2 million in the nine months of 2009.~~ For the 12 months ended ~~September~~March 3031, ~~2010~~2011, Wexpro earned $8689.92 million compared to $7783.71 million for the year-earlier period. Following is a summary of Wexpro financial and operating results:

	3 Months Ended Sept. 30,			9 Months Ended Sept. 30,				12 Months Ended Sept. 30,
	3 Months Ended March 31,			12 Months Ended March 31,
	2010	2009	Change	2010	2009	Change		2010	2009	Change
	2011	2010	Change	2011	2010	Change
	(in millions)
Operating Income
Revenues
Operator service fee	$5861.61	$5360.65	$5.0.6	$~~177~~240.61	$~~165~~225.87	$1114.84	~~$236.7~~		~~$221.4~~	~~$15.3~~
Oil and NGL sales	57.86	56.2	01.64	1826.05	1121.52	6.5.3	~~23.9~~		~~15.5~~	~~8.4~~
Other	~~0.1~~-	~~0.2~~-	~~(0.1)~~-	0.12	0.38	(0.26)	~~0.4~~		~~(0.5)~~	~~0.9~~
Total Revenues	6468.57	5966.07	52.50	~~195~~266.78	~~177~~247.67	1819.1	~~261.0~~		~~236.4~~	~~24.6~~
Operating expenses
Operating and maintenance	45.84	4.5.0	0.34	1420.36	1618.38	(21.0)8	~~19.2~~		~~23.5~~	~~(4.3)~~
General and administrative	56.2	4.38	01.94	1521.29	1217.85	24.4	~~19.4~~		~~16.4~~	~~3.0~~
Depreciation, depletion and amortization	1516.51	1415.39	10.2	4562.83	4259.97	2.96	~~61.7~~		~~56.3~~	~~5.4~~
Production and other taxes	65.07	47.28	1(2.81)	2024.87	1421.65	63.2	~~26.2~~		~~21.0~~	~~5.2~~
Oil income sharing	0.28	0.13	0.15	01.6	01.63	-0.3	~~1.0~~		~~0.6~~	~~0.4~~
Total Operating Expenses	3134.72	2733.48	40.34	96131.71	87118.28	912.53	~~127.5~~		~~117.8~~	~~9.7~~
Net (loss) from asset sales	-	-(0.1)	-0.1	(0.13)	-(0.4)	(0.1)	~~(0.4)~~		~~(0.2)~~	~~(0.2)~~
Operating Income	$3234.85	$3132.68	$1.27	$98135.94	$90128.45	$8 6.59	~~$133.1~~		~~$118.4~~	~~$14.7~~
Operating Statistics
Production volumes
Natural gas (Bcf)	12.4	11.4	1.0	37.5	36.2	1.3	49.5		48.2	1.3
Oil and NGL (MMbbl)	0.1	0.1	-	0.3	0.3	-	0.4		0.4	-
Oil and NGL average sales price (per bbl)	$62.01	$53.90	$8.11	$63.53	$41.88	$21.65	$62.70		$41.44	$21.26
Investment base at Sept. 30 (in millions)	$445.6	$419.5	$26.1

Questar 2011 Form 10-Q


*Operating Statistics*
Production volumes
Natural gas (Bcf)	12.7	13.0	(0.3)	49.9	48.0	1.9
Oil and NGL (MMbbl)	0.1	0.1	-	0.4	0.4	-
Oil and NGL average sales price (per bbl)	$81.34	$64.46	$16.88	$69.69	$56.57	$13.12
Investment base at March 31 (in millions)	$445.3	$427.8	$17.5

Revenues

Wexpro earned a 20.13% after-tax return on its average investment base for the 12 months ended ~~September~~March 3031, ~~2010~~2011. Wexpro ~~2010~~2011 operating results benefited from a higher average investment base compared to the prior-year period. Pursuant to the terms of a longstanding agreement referred to as the Wexpro Agreement, Wexpro recovers its costs and receives an after-tax return on its investment base. Wexpro’s investment base includes its costs of commercial wells and related facilities adjusted for working capital and reduced for deferred income taxes and accumulated depreciation. The investment base grew in ~~2010~~the 12 months ended March 31, 2011, but atthe aincrease ~~lower~~due ~~rate~~to ~~compared~~investment ~~with~~in ~~2009,~~commercial ~~reflecting~~wells ~~reduced~~was ~~capital~~partially ~~expenditures~~offset by increased deferred taxes due to bonus depreciation allowed for income tax purposes. Following is a summary of changes in the Wexpro investment base:

	12 Months Ended Sept. 30,
	12 Months Ended March 31,
	2010	2009
	2011	2010
	(in millions)
Beginning investment base	$~~419~~427.58	$~~374~~400.91
Successful development wells	~~105~~97.53	~~124~~106.95
Depreciation, depletion and amortization	(6158.12)	(5655.60)
Deferred income taxes	(1821.36)	(23.78)
Ending investment base	$445.63	$~~419~~427.58

Wexpro produced 12.7 Bcf of cost-of-service natural gas for Questar Gas during the first quarter of 2011, down 2% from the first quarter of 2010. ~~Form~~The ~~10-Q~~decrease in the quarter was due to delays in the completion of wells. Wexpro produced 49.9 Bcf of cost of service gas in the 12 months ended March 31, 2011, compared to 48.0 Bcf for the 12 months ended March 31, 2010. On an annual basis, Wexpro natural gas production provides about half of Questar Gas's supply requirements.

20Revenues from oil and NGL sales increased 23% in the first quarter of 2011 over the first quarter of 2010 and were up 25% in the 12 months ended March 31, 2011 over the year-earlier period. The increases were due to higher sales prices. The increase in revenues was largely offset by higher oil-related expenses and production taxes.

Wexpro produced 37.5 bcf of cost-of-service natural gas for Questar Gas during the first nine months of 2010, up 4% from the first nine months of 2009. On an annual basis, Wexpro natural gas production provides about half of Questar Gas's supply requirements.

Revenues from oil and NGL sales increased 57% in the first nine months of 2010 over the first nine months of 2009 due to a 52% increase in the average sales price. The increase in revenues was largely offset by higher oil-related expenses and production taxes.

Expenses

Operating and maintenance expenses were up ~~slightly~~8% in the ~~third~~first quarter of ~~2010~~2011 ~~but~~and ~~lower~~up 10% in ~~the nine- and~~ 12-month ~~periods~~period ended ~~September~~March 3031, ~~2010.~~2011 ~~Wexpro~~compared ~~reduced~~to prior year periods due to increased spending on repairs and ~~well~~maintenance. ~~workovers~~Lease operating expense per Mcfe was $0.40 in the first ~~nine~~quarter ~~months~~of ~~and~~2011 ~~trailing~~compared 12to ~~months~~$0.37 in the first quarter of 2010. General and administrative expenses were higher in the three-, ~~nine-~~ and 12-month periods ended ~~September~~March 3031, ~~2010~~2011, compared to prior year periods. These increases are due to higher employee and share-based compensation expenses and higher allocation of corporate costs following the Spinoff of QEP Resources. Production and other taxes were ~~higher~~lower in the ~~2010~~first ~~periods~~quarter ~~due~~of 2011 compared to ~~increased~~the ~~production~~first quarter of 2010 and higher in the 12 months ended March 31, 2011 compared to the 2010 period due to changes in the value of natural gas, oil and NGL production.

Depreciation, depletion and amortization expense increased 71% in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 over the first ~~nine~~quarter of 2010 and increased 4% in the 12 months ofended ~~2009~~March 31, 2011, over the 12 months ended March 31, 2010, due to increased investment in natural gas wells and facilities ~~and higher production volumes~~.

QUESTAR PIPELINE

Questar Pipeline reported ~~third~~first quarter ~~2010~~2011 income of $1615.3 million compared with $1417.12 million in ~~2009~~2010, aan 1611% ~~increase~~decrease. ~~Income for the first nine months of 2010 was $49.4 million compared with $43.8 million for the first nine months of 2009.~~ Questar Pipeline earned $6365.85 million in the 12 months ended ~~September~~March 3031, ~~2010~~2011, compared to $5760.87 million in the 12 months ended ~~September~~March 3031, ~~2009~~2010. Following is a summary of Questar Pipeline financial and operating results:

	3 Months Ended Sept. 30,			9 Months Ended Sept. 30,				12 Months Ended Sept. 30,
	2010	2009	Change	2010	2009	Change		2010	2009	Change
	(in millions)
Operating Income
Revenues
Transportation	$47.1	$43.4	$3.7	$141.5	$129.4	$12.1	$185.3		$172.4	$12.9
Storage	9.3	9.6	(0.3)	28.2	29.5	(1.3)	38.1		39.9	(1.8)
NGL sales - transportation	4.4	2.2	2.2	8.8	6.0	2.8	9.8		7.7	2.1
NGL sales - field services	2.2	1.2	1.0	8.4	1.4	7.0	11.2		1.4	9.8
Energy services	3.4	3.1	0.3	10.5	10.3	0.2	13.9		13.9	-
Other	1.1	1.4	(0.3)	3.3	5.4	(2.1)	5.8		7.1	(1.3)
Total Revenues	67.5	60.9	6.6	200.7	182.0	18.7	264.1		242.4	21.7
Operating expenses
Operating and maintenance	11.2	10.1	1.1	29.3	27.8	1.5	41.6		37.5	4.1
General and administrative	9.9	9.3	0.6	30.9	26.6	4.3	40.4		36.3	4.1
Depreciation and amortization	11.8	10.9	0.9	35.4	32.6	2.8	47.1		43.4	3.7
Impairment	-	-	-	-	-	-	-		3.4	(3.4)
Other taxes	2.2	2.2	-	7.0	6.6	0.4	9.0		8.1	0.9
Cost of sales	0.6	0.3	0.3	1.6	1.4	0.2	1.8		1.7	0.1
Total Operating Expenses	35.7	32.8	2.9	104.2	95.0	9.2	139.9		130.4	9.5
Net gain from asset sales	0.1	0.1	-	0.2	0.4	(0.2)	0.3		0.6	(0.3)
Operating Income	$31.9	$28.2	$3.7	$ 96.7	$87.4	$9.3	$124.5		$112.6	$11.9
Operating Statistics
Natural gas-transportation volumes (MMdth)
For unaffiliated customers (recast)	172.1	163.1	9.0	490.5	481.4	9.1	633.2		638.6	($5.4)
For Questar Gas	15.8	14.0	1.8	89.4	85.1	4.3	117.2		117.6	(0.4)
Total Transportation	187.9	177.1	10.8	579.9	566.5	13.4	750.4		756.2	(5.8)

Questar 2011 Form 10-Q

~~Questar 2010 Form 10-Q~~20


	3 Months Ended March 31,			12 Months Ended March 31,
	2011	2010	Change	2011	2010	Change
	(in millions)
*Operating Income*
Revenues
Transportation	$47.7	$47.0	$0.7	$189.4	$177.5	$11.9
Storage	9.7	9.6	0.1	37.7	38.9	(1.2)
NGL sales - transportation	2.6	2.0	0.6	12.9	7.3	5.6
NGL sales - field services	2.0	3.1	(1.1)	10.5	7.2	3.3
Energy services	3.9	3.4	0.5	14.5	13.1	1.4
Other	1.0	1.4	(0.4)	6.6	8.1	(1.5)
Total Revenues	66.9	66.5	0.4	271.6	252.1	19.5
Operating expenses
Operating and maintenance	8.6	7.8	0.8	42.2	39.8	2.4
General and administrative	13.1	10.6	2.5	43.5	38.1	5.4
Depreciation and amortization	12.3	11.8	0.5	47.9	45.3	2.6
Other taxes	3.1	2.4	0.7	9.7	8.7	1.0
Cost of sales	0.6	0.5	0.1	2.5	1.3	1.2
Total Operating Expenses	37.7	33.1	4.6	145.8	133.2	12.6
Net gain from asset sales	0.1	0.1	-	0.8	0.5	0.3
Operating Income	$29.3	$33.5	($4.2)	$126.6	$119.4	$7.2
*Operating Statistics*
Natural gas-transportation volumes (MMdth)
For unaffiliated customers	162.5	155.7	6.8	649.2	624.7	24.5
For Questar Gas	43.1	44.0	(0.9)	111.1	112.5	(1.4)
Total Transportation	205.6	199.7	5.9	760.3	737.2	23.1
Transportation revenue (per dth)	$0.23	$0.24	($0.01)	$0.25	$0.24	$0.01
Net firm-daily transportation demand at March 31 (in Mdth)	4,954	4,683	271	-	-	-
Natural gas processing
NGL sales (MMgal)	2.8	3.4	(0.6)	17.3	12.5	4.8
NGL sales price (per gal)	$1.66	$1.49	$0.17	$1.36	$1.16	$0.20

Transportation revenue (per dth)	$0.25	$0.24	$0.01	$0.24	$0.23	$0.01	$0.25	$0.23	$0.02
Net firm-daily transportation demand at Sept. 30 (in Mdth)	4,666	4,208	458
Natural gas processing
NGL sales (MMgal)	5.8	3.2	2.6	13.5	8.9	4.6	16.7	11.0	5.7
NGL sales price (per gal)	$1.17	$1.05	$0.12	$1.28	$0.83	$0.45	$1.27	$0.83	$0.44

Revenues

As of ~~September~~March 3031, ~~2010~~2011, Questar Pipeline had net firm-transportation contracts of 4,~~666~~954 Mdth per day, including 1,020 Mdth per day from Questar Pipeline’s 50% ownership of White River Hub, compared with 4,~~208~~683 Mdth per day as of ~~September~~March 3031, ~~2009~~2010. Questar Pipeline has expanded its transportation system in response to growing regional natural gas production and transportation demand. The increase in transportation revenues in the ~~2010~~first ~~periods~~quarter ~~compared~~of to2011 ~~the 2009 periods~~ was due primarily to aexpansions ~~compression expansion~~ of the Overthrust Pipeline system that ~~was~~were completed in March 2011. The expansions of Overthrust Pipeline include the ~~fourth~~increase ~~quarter~~in compression completed in February 2010 and the 43-mile, 36-inch diameter loop placed in service in March 2011. The compression expansion added 160 Mdth per day of ~~2009~~firm-transportation contracts in February 2010 and the loop expansion added 50 Mdth per day in December 2010 and 275 Mdth per day in March 2011. The company has long-term firm-transportation contracts of ~~460~~325 Mdth per day associated with this expansion.

Questar Gas is Questar Pipeline’s largest transportation customer with contracts for 901 Mdth per day. The majority of the Questar Gas transportation contracts extend through mid 2017.

Questar Pipeline owns and operates the Clay Basin underground storage complex in eastern Utah. This facility is 100% subscribed under long-term contracts. In addition to Clay Basin, Questar Pipeline also owns and operates three smaller aquifer gas storage facilities. Questar Gas has contracted for 26% of firm-storage capacity at Clay Basin for terms extending from three to nine years and 100% of the firm-storage capacity at the aquifer facilities for terms extending for eight years.

Questar 2011 Form 10-Q

Questar Pipeline charges FERC-approved transportation and storage rates that are based on straight-fixed-variable rate design. Under this rate design, all fixed costs of providing service including depreciation and return on investment are recovered through the demand charge. About 95% of Questar Pipeline costs are fixed and recovered through these demand charges. Questar Pipeline’s earnings are driven primarily by demand revenues from firm shippers. Since only about 5% of operating costs are recovered through volumetric charges, changes in transportation volumes do not have a significant impact on earnings.

NGL ~~revenues~~volumes ~~grew~~decreased 18% in the ~~three,~~first ~~nine~~quarter ~~and 12 months~~ of ~~2010~~2011 compared to the ~~same~~first ~~periods~~quarter of ~~2009~~2010 due to ~~increased~~a ~~volumes~~new ~~and~~third-party ~~higher~~processing ~~prices~~plant upstream of the company’s Price, Utah processing facilities. NGL ~~sales~~volumes ~~more~~were ~~than~~38% ~~doubled~~higher in the ~~first~~12 ~~nine~~ months ofended ~~2010~~March ~~over~~31, ~~the~~2011, ~~first~~compared ~~nine~~to ~~months~~the ofyear-earlier ~~2009~~period due to ahigher ~~54%~~liquids ~~increase~~content inof the gas stream. NGL prices ~~and~~were ~~a 52~~11% ~~increase~~higher in ~~sales~~the ~~volume.~~first ~~Volumes~~quarter ~~increased~~of ~~due~~2011 toand ~~the~~17% ~~third-quarter~~higher ~~2009~~in ~~completion~~the of12 amonths ~~processing~~ended ~~plant~~March ~~near~~31, ~~Price~~2011, ~~Utah~~compared to year-earlier periods.

Expenses

Operating and maintenance expenses increased by 1110% in the ~~third~~first quarter of ~~2010~~2011, ~~5% in the first nine months of 2010~~ and 116% in the 12 months ended ~~September~~March 3031, ~~2010~~2011, compared to corresponding ~~2009~~2010 periods. The increased costs are due primarily to higher compressor maintenance costs and the operation of system expansions. General and administrative expenses increased by 624% in the ~~third~~first quarter of ~~2010~~2011, ~~16% in the first nine months of 2010~~ and 1114% in the 12 months ended ~~September~~March 3031, ~~2010~~2011, compared to corresponding ~~2009~~2010 periods. These increases are due to higher employee and share-~~base~~based compensation expenses and higher allocation of corporate costs following the Spinoff of QEP Resources. Operating, maintenance, general and administrative expenses per dth transported were $0.1011 in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 ~~and~~compared ~~2009~~to $0.09 ~~Operating,~~in ~~maintenance,~~the ~~general~~first ~~and~~quarter ~~administrative~~of ~~expenses include processing and storage costs~~2010.

~~Depreciation~~Other ~~expense~~taxes ~~was~~increased ~~up 9~~29% in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 ~~compared~~and to11% in the ~~first~~12 ~~nine~~ months ofended ~~2009~~March ~~because~~31, of2011, acompared ~~compression~~to ~~expansion~~year-earlier ~~and~~periods aprimarily ~~processing~~due ~~plant~~to ~~placed~~higher inproperty ~~service~~taxes indriven ~~late~~by ~~2009.~~increased investment and tax rates.

Depreciation expense was up 4% in the first quarter of 2011 compared to the first quarter of 2010 because of system expansions placed into service.

QUESTAR GAS

Questar Gas reported anet ~~seasonal~~income ~~loss~~ of $933.14 million in the ~~third~~first quarter of ~~2010~~2011 compared to ~~a loss of~~ $833.1 million in the ~~third~~first quarter of ~~2009. Income was $21.8 million in the first nine months of~~ 2010~~, compared to $21~~.7 ~~million~~Net inincome ~~the first nine months of 2009. Income~~ was $4144.72 million in the 12 months ended ~~September~~March 3031, ~~2010~~2011, compared to $42.19 million in the year-earlier period. Questar Gas, because of the seasonal nature of its business, typically reports income in the first and fourth quarters of the year and losses in the second and third quarters of the year. Following is a summary of Questar Gas financial and operating results:

	3 Months Ended Sept. 30,			9 Months Ended Sept. 30,			12 Months Ended Sept. 30,
	3 Months Ended March 31,			12 Months Ended March 31,
	2010	2009	Change	2010	2009	Change	2010	2009	Change
	2011	2010	Change	2011	2010	Change
	(in millions)
Operating Income
Revenues
Residential and commercial sales	$396.8	$342.0	$54.8	$887.8	$824.0	$63.8
Industrial sales	7.4	6.6	0.8	27.5	12.6	14.9
Transportation for industrial customers	2.7	2.9	(0.2)	9.5	11.6	(2.1)
Service	1.6	1.7	(0.1)	4.7	5.4	(0.7)
Other	6.2	7.8	(1.6)	27.1	21.6	5.5
Total revenues	414.7	361.0	53.7	956.6	875.2	81.4
Cost of natural gas sold	288.7	237.0	51.7	643.9	570.5	73.4
Margin	126.0	124.0	2.0	312.7	304.7	8.0
Other operating expenses
Operating and maintenance	37.4	39.0	(1.6)	112.8	114.4	(1.6)
General and administrative	14.6	11.3	3.3	53.2	44.4	8.8
Depreciation and amortization	10.9	11.1	(0.2)	43.5	44.1	(0.6)
Other taxes	4.3	4.0	0.3	14.4	13.5	0.9
Total other operating expenses	67.2	65.4	1.8	223.9	216.4	7.5
Operating income	$ 58.8	$ 58.6	$ 0.2	$ 88.8	$ 88.3	$ 0.5

Questar ~~2010~~2011 Form 10-Q

Residential and commercial sales	$72.7	$72.2	$0.5	$546.0	$593.9	($47.9)	$826.1	$907.9	($81.8)
Operating Statistics
Industrial sales	6.6	2.0	4.6	19.0	6.1	12.9	21.2	9.2	12.0
Natural gas volumes (MMdth)
Transportation for industrial customers	2.8	2.6	0.2	8.2	7.7	0.5	11.7	10.9	0.8
Residential and commercial sales	48.9	44.6	4.3	110.1	109.5	0.6
Service	1.1	1.1	-	4.2	4.3	(0.1)	5.3	5.5	(0.2)
Industrial sales	1.2	1.1	0.1	4.6	2.1	2.5
Other	6.8	4.5	2.3	22.3	15.1	7.2	28.2	22.9	5.3
Transportation for industrial customers	14.2	16.5	(2.3)	57.0	58.0	(1.0)
Total revenues	90.0	82.4	7.6	599.7	627.1	(27.4)	892.5	956.4	(63.9)
Total industrial	15.4	17.6	(2.2)	61.6	60.1	1.5
Cost of natural gas sold	52.6	48.6	4.0	386.1	431.3	(45.2)	581.4	674.8	(93.4)
Total deliveries	64.3	62.2	2.1	171.7	169.6	2.1
Margin	37.4	33.8	3.6	213.6	195.8	17.8	311.1	281.6	29.5
Natural gas revenue (per dth)
Other operating expenses
Residential and commercial sales	$ 8.11	$ 7.66	$ 0.45	$ 8.07	$ 7.52	$0.55
Operating and maintenance	20.9	17.1	3.8	84.4	70.1	14.3	120.7	95.6	25.1
Industrial sales	6.11	6.01	0.10	5.92	6.08	(0.16)
General and administrative	12.5	10.6	1.9	35.3	31.4	3.9	46.8	40.7	6.1
Transportation for industrial customers	0.19	0.18	0.01	0.17	0.20	(0.03)
Depreciation and amortization	10.8	11.0	(0.2)	33.1	32.7	0.4	44.2	43.3	0.9
Colder than normal temperatures	4%	-		3%	5%
Other taxes	3.5	3.5	-	11.4	11.2	0.2	13.5	12.2	1.3
Temperature-adjusted usage per customer (dth)	50.0	46.6	3.4	110.3	108.2	2.1
Total other operating expenses	47.7	42.2	5.5	164.2	145.4	18.8	225.2	191.8	33.4
Customers at March 31 (thousands)	914.1	904.0	10.1
Operating income (loss)	($10.3)	($8.4)	($1.9)	$49.4	$50.4	($1.0)	$85.9	$89.8	($3.9)
Operating Statistics
Natural gas volumes (MMdth)
Residential and commercial sales	8.0	8.7	(0.7)	71.1	71.0	0.1	109.5	104.9	4.6
Industrial sales	1.1	0.4	0.7	3.4	1.0	2.4	3.7	1.4	2.3
Transportation for industrial customers	14.9	13.1	1.8	44.4	43.2	1.2	59.2	59.6	(0.4)
Total industrial	16.0	13.5	2.5	47.8	44.2	3.6	62.9	61.0	1.9
Total deliveries	24.0	22.2	1.8	118.9	115.2	3.7	172.4	165.9	6.5
Natural gas revenue (per dth)
Residential and commercial sales	$9.04	$8.30	$0.74	$7.67	$8.36	($0.69)	$7.54	$8.65	($1.11)
Industrial sales	5.88	5.86	0.02	5.67	6.56	(0.89)	5.74	6.69	(0.95)
Transportation for industrial customers	$0.18	$0.20	($0.02)	$0.18	$0.18	$ -	$0.20	$0.18	$0.02
Colder (warmer) than normal temperatures	(64%)	(58%)	(6%)	5%	(2%)	7%	9%	(2%)	11%
Temperature-adjusted usage per customer (dth)	7.7	8.7	(1.0)	70.8	73.2	(2.4)	106.6	109.2	(2.6)
Customers at Sept. 30 (thousands)	902.3	888.3	14.0

Margin Analysis

Questar Gas margin (revenues minus gas costs) increased $32.60 million in the ~~third~~first quarter of ~~2010~~2011 compared to the ~~third~~first quarter of ~~2009, increased $17.8 million in the first nine months of~~ 2010 ~~compared to the first nine months of 2009~~ and increased $298.50 million in the 12 months ended ~~September~~March 3031, ~~2010~~2011 compared to the 12 months ended ~~September~~March 3031, ~~2009~~2010. Following is a summary of major changes in Questar Gas margin:

		Change
	3 Months	12 Months
	3 Month	9 Month	12 Month
	2010 to 2011	2010 to 2011
	2009 to 2010	2009 to 2010	2009 to 2010
	(in millions)
	(in millions)
Customer growth	$1.1	$2.7
Customer growth	$0.4	$2.6	$3.7
General rate increase	0.9	4.7
General rate increase	0.2	0.2	0.2
Feeder line cost recovery	1.4	1.4
Demand-side management cost recovery	(1.46)	15(0.48)	~~26.6~~
Recovery of gas-cost portion of bad-debt costs	~~0.9~~-	(0.5)8	~~(1.4)~~
Other	0.72	(0.18)	~~0.4~~
Increase	$32.60	$~~17.~~8.0	~~$29.5~~

AtOn ~~September~~March 3031, ~~2010~~2011, Questar Gas served ~~902~~914,~~283~~054 customers, up 1.61% from ~~888~~904,~~332~~040 at ~~September~~March 3031, ~~2009~~2010. Customer growth increased the margin by $01.41 million in the ~~third~~first quarter of ~~2010,~~2011 ~~$2.6 million in the first nine months of 2010~~ and $32.7 million in the 12 months ended ~~September~~March 3031, ~~2010~~2011.

Questar ~~2010~~Gas ~~Form~~benefited 10from a conservation-Qenabling (revenue decoupling) tariff since 2006. Under this tariff, Questar Gas is allowed to earn a margin for each general-service customer. Differences between the margin and the amount billed to customers are recovered from customers or refunded to customers through future rate changes. Because of this tariff, changes in usage per customer do not impact the company’s margin. In addition, a weather-normalization adjustment of customer bills offsets the revenue impact of temperature variations.

On April 8, 2010, the Public Service Commission of Utah (PSCU) approved a settlement in Questar Gas’s Utah general rate case to increase the utility’s allowed return on equity from 10% to 10.35% and to indefinitely extend the existing conservation-enabling (revenue decoupling) tariff. The stipulation agreement increased customer rates by $5.0 million annually effective August 1, 2010. Increased revenues from the case resulted in higher gross margin of $0.9 million in the first quarter of 2011 and $4.7 million in the 12 months ended March 31, 2011.

The stipulation further approves an infrastructure cost-tracking mechanism that allows the company to place into rate base and earn on capital expenditures associated with a multiyear high-pressure natural gas feeder-line replacement program, and do it immediately upon the completion of each project. Questar Gas recognized $1.4 million of increased margin due to the infrastructure tracking mechanism in the first quarter of 2011.

Questar 2011 Form 10-Q

~~Questar~~As ~~Gas has had~~ a ~~conservation-enabling~~partial ~~(revenue~~offset ~~decoupling)~~to ~~tariff~~other ~~since~~margin ~~2006. Under this tariff~~changes, Questar Gas ismargin ~~allowed~~decreased aduring ~~margin~~the ~~for~~three- ~~each~~and ~~general~~12-~~service~~month ~~customer.~~periods ~~Differences~~ended ~~between~~March ~~the~~31, ~~margin~~2011, ~~and~~due ~~the amount billed~~ to ~~customers~~lower ~~are~~recovery ~~recovered~~of ~~from~~demand-side ~~customers~~management orcosts ~~refunded~~used to ~~customers~~promote ~~through~~energy ~~future~~conservation ~~rate~~by ~~changes~~customers. ~~Because~~Changes ~~of this tariff, changes~~ in ~~usage per customer do not impact~~ the ~~company’s~~ margin. Incontribution ~~addition,~~from ~~a weather~~demand-~~normalization~~side ~~adjustment~~management ofrecovery ~~customer~~revenues ~~bills~~are offset ~~the~~by ~~revenue~~equivalent ~~impact~~changes ofin ~~temperature~~program ~~variations~~expenses.

Questar Gas margin increased during the three-, nine- and 12-month periods ended September 30, 2010, due to recovery of demand-side management costs used to promote energy conservation by customers. Changes in the margin contribution from demand-side management recovery revenues are offset by equivalent changes in program expenses.

On April 8, 2010, the Public Service Commission of Utah (PSCU) approved a settlement in Questar Gas’s Utah general rate case. The stipulation, effective August 1, 2010, authorized an increase in the utility’s allowed return on equity from 10% to 10.35% and indefinitely extended the existing conservation-enabling (revenue decoupling) tariff. The stipulation further approves an infrastructure cost-tracking mechanism that allows the company to place into rate base and earn on capital expenditures associated with a multiyear high-pressure natural gas feeder-line replacement program, and do it immediately upon the completion of each project. The stipulation agreement increased customer rates by $5.0 million annually with the changes in rates effective August 1, 2010.

Expenses

Cost of natural gas sold rose 822% in the ~~third~~first quarter of ~~2010,~~2011 ~~fell~~and 1013% in the ~~first~~12 ~~nine~~ months ended March 31, 2011, compared to the same periods of 2010 due to higher volumes and ~~fell~~higher ~~14%~~rates. inQuestar Gas received authorization from the 12PSCU ~~months~~to ~~ended~~increase ~~September~~rates 30by an annualized $48.0 million effective August 1, 2010, ~~compared~~ to ~~the~~recover ~~prior-year~~higher ~~periods~~gas costs. Questar Gas accounts for purchased-gas costs in accordance with procedures authorized by the PSCU and the PSCW. Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes. As of ~~September~~March 3031, ~~2010~~2011, Questar Gas had a $3729.7 million ~~under~~over-collected balance in the purchased-gas adjustment account representing costs ~~incurred in excess of costs~~ recovered from customers. ~~Questar~~in ~~Gas~~excess ~~received~~of ~~authorization from the PSCU to increase rates by an annualized $48 million effective August 1, 2010, to recover these~~ costs ~~and higher projected future gas costs~~incurred.

Operating and maintenance expenses ~~increased~~decreased $31.86 million in the ~~third~~first quarter of ~~2010,~~2011 ~~increased $14.3 million in the first nine months of 2010~~ and ~~increased~~decreased $~~25.~~1.6 million in the 12 months ended ~~September~~March 3031, ~~2010~~2011, compared to the same periods of ~~2009~~2010. These ~~increases~~decreases included ~~higher~~lower demand-side management costs of $1.46 million, ~~$15.4 million~~ and $260.68 million for the three-, ~~nine-~~ and 12-month periods respectively. The demand-side management costs are for the company’s energy efficiency program and are recovered from customers through periodic rate changes. ~~Bad~~General ~~debt~~and ~~expense~~administrative ~~was~~expenses atincreased ~~a nearer-to-normal level in the third quarter of 2010 compared to a lower-than-usual level in the third quarter of 2009. Bad debt expense was~~ $03.73 million ~~lower~~ in the 2011 first ~~nine~~quarter ~~months~~ and $18.78 million ~~lower~~ in the 12 months ended ~~September~~March 3031, ~~2010,~~2011. ~~compared~~These ~~with~~increases ~~the~~are ~~same~~due ~~periods~~to inhigher ~~2009.~~employee ~~General~~ and ~~administrative~~share-based compensation expenses ~~increased~~and ~~$1.9~~higher ~~million~~allocation inof ~~the~~corporate ~~2010~~costs ~~third~~following ~~quarter, $3.9 million in~~ the ~~2010~~Spinoff ~~first~~of ~~nine~~QEP ~~months and $6~~Resources.1 ~~million in the 12 months ended September 30, 2010, due to higher employee and share-based compensation expenses.~~ Operating, maintenance, general and administrative expenses per customer, exclusive of demand-side management costs, were $~~103~~141 in the ~~first~~12 ~~nine~~ months ofended ~~2010~~March 31, 2011, compared to $~~101~~133 in the ~~first~~12 ~~nine~~ months ofended ~~2009~~March 31, 2010.

Depreciation expense ~~increased~~decreased 12% in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 compared to the first ~~nine~~quarter ~~months~~ of ~~2009~~2010. ~~primarily~~A asreduction ~~a result~~ of ~~plant~~depreciation ~~additions~~rates ~~from~~was ~~customer~~ordered ~~growth~~by ~~and~~the ~~replacement~~PSCU ofeffective ~~feeder~~August ~~lines~~1, 2010, which ~~was partially~~ offset ~~with~~increased ~~a reduction of~~ depreciation ~~rates~~from asplant ~~ordered~~additions driven by ~~the~~customer ~~PSCU~~growth ~~effective~~and ~~August~~replacement 1,of ~~2010~~feeder lines.

Other Consolidated Results

Consolidated cost of sales

Questar Gas’s cost of natural gas sold includes amounts paid to Wexpro for cost-of-service gas supplies and amounts paid to Questar Pipeline for transportation and storage services. These intercompany transactions are eliminated in the consolidated Questar financial statements. Questar Gas records injection of natural gas into underground storage as a reduction of cost of natural gas sold. During the third quarters of both 2010 and 2009, the Questar consolidated income statements show credit balances for cost of sales because of low sales volumes offset by the elimination of intercompany revenues and expenses and the injection of natural gas into storage.

Separation costs

Questar's share of separation costs associated with the June 30, 2010, Spinoff of QEP Resources amounted to $11.5 million. Separation costs were primarily for advisory fees, legal fees and employee severance costs. Separation costs were reported at Corporate and resulted in ~~losses~~a loss from continuing operations, totaling $~~1.7 million in the third quarter of 2010, $~~8.09 million ~~in the first nine months of 2010, and $8.4 million~~ for the 12 months ended ~~September~~March 3031, ~~2010~~2011.

Interest expense

Interest expense ~~decreased~~increased in the ~~third~~first quarter, ~~first nine months~~ and 12 months ended ~~September~~March 3031, ~~2010~~2011, compared with the corresponding ~~2009~~2010 periods because of ~~lower~~higher ~~borrowing~~long-term ~~rates~~debt ~~on commercial paper~~balances. In June 2010, Questar entered into a new $250.0 million 364-day revolving credit loan agreement and a new $350.0 million multi-year revolving credit agreement to support commercial paper borrowing, which resulted in an increase in commitment fee expense. Questar borrowed $250.0 million in commercial paper and contributed the proceeds to QEP Resources prior to the Spinoff. In December 2010, Questar issued $250.0 million of 2.75% Senior Notes due 2016 to repay the commercial paper.

Questar 2010 Form 10-Q

commercial paper borrowing, which resulted in an increase in commitment fee expense. Questar borrowed $250.0 million and contributed the proceeds to QEP prior to the Spinoff.

Income taxes

Questar's effective combined federal and state income tax rate was 3736.08% in both the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 ~~compared~~and ~~with 35.9 % in~~ the ~~2009~~first ~~period.~~quarter ~~The increase in the effective income tax rate in 2010 resulted primarily from changes in estimates~~ of ~~the deductibility of certain separation costs~~2010.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash provided by operating activities ofby continuing operations ~~decreased~~increased 1259% in the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 compared to the first ~~nine~~quarter ~~months~~ of ~~2009~~2010 due primarily to changes in deferred income taxes and operating assets and liabilities. Deferred income taxes increased due to bonus tax depreciation rules, which allow the Company to deduct the cost of certain capital expenditures for income tax purposes. Cash sources from operating assets and liabilities were ~~lower~~higher in ~~2010~~2011 due to ~~normal~~a ~~repayment~~liability tofor ~~gas distribution customers through rate adjustments of~~ over-collected gas purchase costs. Net cash provided by operating activities ofby continuing operations is presented below:

	9 Months Ended Sept. 30,
	3 Months Ended March 31,
	2010	2009	Change
	2011	2010	Change
	(in millions)
Income from continuing operations	$~~128~~ 69.69	$~~125~~ 72.12	($ 32.53)
Noncash adjustments to net income	~~179~~76.76	~~182~~44.8	(331.1)8
Changes in operating assets and liabilities	~~(24~~82.7)3	3426.05	~~(58~~55.7)8
Net cash provided by operating activities by continuing operations	$~~283~~228.68	$~~341~~143.95	($5885.3)

Questar 2011 Form 10-Q

Investing Activities

A comparison of capital expenditures of continuing operations for the first ~~nine~~quarter ~~months~~ of ~~2010~~2011 and ~~2009~~2010 and a forecast for calendar year ~~2010~~2011 are presented below:

			Forecast
	9 Months Ended Sept. 30,		12 Months Ended Dec. 31,
	3 Months Ended March 31,		12 Months Ended Dec. 31,
	2010	2009	2010
	2011	2010	2011
	(in millions)
Wexpro	$ 6123.59	$ 8917.85	$~~100~~108
Questar Pipeline	6825.7	7217.93	~~128~~105
Questar Gas	7925.9	5326.81	~~129~~132
Corporate	0.15	~~0.1~~-	14
Total cash capital expenditures of continuing operations	210.2	216.6	358
Total capital expenditures of continuing operations	$76.0	$60.9	$349
Change in capital expenditure accruals	2.2	(17.7)	-
Total accrued capital expenditures by continuing operations	$212.4	$198.9	$358

Financing Activities

In the ~~nine~~first ~~months~~quarter of ~~2010~~2011, net cash provided by operating activities by continuing operations of $283.6 million was less than net cash used in investing activities of continuing operations of $406.0 million by $122.4 million. Investing activities included a $250.0 million contribution to QEP prior to the ~~Spinoff.~~Company ~~Long-term~~reduced ~~debt was unchanged in 2010 and~~ short-term debt ~~increased~~ by ~~a net change of~~ $~~226~~156.0 million infrom the ~~first~~excess ~~nine months~~ of ~~2010.~~cash ~~Questar~~flow ~~borrowed~~from ~~$250~~operations ~~million~~over ~~and~~investing ~~contributed the proceeds to QEP prior to the Spinoff~~activities.

Questar issues commercial paper to meet short-term financing requirements. ~~Commercial~~The ~~paper~~bank-credit ~~outstanding~~commitments ~~amounted~~provide toback-up ~~$395~~credit ~~million~~liquidity atsupport ~~September~~for ~~30,~~Questar’s ~~2010~~commercial-paper ~~supported~~program. byCredit ~~$600~~commitments ~~million~~under ofthe ~~committed~~ bank ~~credit~~ lines. ~~The~~totaled ~~Company~~$600.0 ~~maintains~~million ~~committed~~at ~~credit~~March ~~lines~~31, 2011, with ~~banks~~no toamounts ~~provide~~borrowed. ~~liquidity~~Commitments ~~support~~of $250.0 Atmillion ~~September~~mature 30on June 29, ~~2010~~2011, ~~there~~and ~~were~~commitments noof ~~amounts~~$350.0 ~~borrowed~~million mature on ~~the~~July ~~committed~~1, ~~credit lines~~2013. InThe ~~June~~Company ofdoes ~~2010,~~not ~~the~~plan ~~Company~~to ~~entered~~renew ~~into~~the a $250.0 million ~~364-day~~bank ~~revolving~~line. ~~credit~~Commercial ~~agreement~~paper ~~that~~outstanding ~~matures~~amounted ~~June~~to 29$86.0 million at March 31, 2011, ~~and~~compared awith $~~350~~134.5 million ~~multi-~~a year ~~revolving credit agreement that matures July 1, 2013~~earlier. ~~Under~~The ~~the~~Company ~~terms~~believes of the ~~revolving~~ credit ~~agreements~~commitments ~~and~~are ~~defined~~adequate ~~within~~for ~~the~~its ~~agreements,~~working ~~"Consolidated~~capital ~~Funded~~and ~~Debt"~~short-term ~~cannot~~financing ~~exceed~~requirements ~~four~~during ~~times "Consolidated EBITDA"~~2011.

Questar ~~2010~~Pipeline ~~Form~~has 10$180.0 million and Questar Gas has $2.0 million of long-Qterm debt maturing in 2011. Questar Pipeline expects to refinance its maturing debt using publicly traded notes. The Company believes it will have adequate access to long-term capital based on current credit markets and its investment-grade credit ratings.

25At March 31, 2011, combined short-term and long-term debt was 52% and equity was 48% of total capital.

At September 30, 2010, combined short-term and long-term debt was 56% and equity was 44% of total capital. Adjusted for the Spinoff, short-term and long-term debt was 48% and equity was 52% of total capital at December 31, 2009. Questar Pipeline has $180 million of long-term debt maturing in 2011.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Wexpro operations are subject to various government controls and regulation at the federal, state and local levels. Wexpro must obtain permits to drill and produce, maintain bonding requirements to drill and operate wells, submit and implement spill-prevention plans, and file notices relating to the presence, use, and release of specified contaminants incidental to gas and oil production. Wexpro is also subject to various conservation matters, including the regulation of the size of drilling and spacing units, the number of wells that may be drilled in a unit and the unitization or pooling of gas and oil properties. In addition, the Utah Division of Public Utilities has oversight responsibility and retains an outside reservoir-engineering consultant and a financial auditor to assess the prudence of Wexpro's activities.

Questar Pipeline’s primary market risk exposures arise from changes in demand for transportation and storage services and competition from other pipelines. The demand for transportation and storage services will vary based on the market’s expectations about future volumes of natural gas likely to be produced in the basins served by Questar Pipeline and changes in market demand for natural gas. On some portions of its pipeline system the Company faces the risk that it will not be successful in recontracting capacity under favorable terms once existing contracts expire. Revenue may also be reduced if NGL prices or volumes decline.

Questar Gas’s primary market risk exposures arise from changes in demand for natural gas and competition from other energy sources. The demand for natural gas will vary based on economic conditions, conservation efforts and prices. The temperature-adjusted usage per residential customer has decreased due to more energy efficient appliances and homes, and behavior changes in response to higher natural gas prices. The economic impact of this decline in usage per customer has been somewhat offset by the addition of new customers and the conservation-enabling tariff.

Credit Risk

Questar Pipeline requests credit support, such as letters of credit and cash deposits, from companies that pose unfavorable credit risks. All companies posing such concerns were current on their accounts at ~~September~~March 3031, ~~2010~~2011. Questar Pipeline's largest customers include Questar Gas, Rockies Express Pipeline, EOG Resources, XTO Energy, Wyoming Interstate Pipeline, EnCana Marketing, PacifiCorp and ~~PacifiCorp~~Anadarko Energy Services.

Questar 2011 Form 10-Q

Questar Gas's primary market area is located in Utah, southwestern Wyoming and southeastern Idaho. Exposure to credit risk may be affected by the concentration of customers in these regions due to changes in economic or other conditions. Customers include individuals and numerous commercial and industrial enterprises that may react differently to changing conditions. Management believes that its credit-review procedures, loss reserves, customer deposits and collection procedures have adequately provided for usual and customary credit-related losses.

Interest-Rate Risk Management

On ~~September~~March 3031, ~~2010~~2011, Questar had $~~831~~898.15 million of fixed-rate long-term subsidiary debt with a weighted-average life to maturity of 87.47 years. The Company also had $~~395~~182.0 million of subsidiary long-term debt maturing in the next six months and $86.0 million of floating-rate debt outstanding in the form of short-maturity commercial paper.

Forward-Looking Statements

This quarterly report 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," "may" "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, exploration efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining actual future results. 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. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Among factors that could cause actual results to differ materially are:

the risk factors discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2009 and discussed in Item 8.01 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 16,~~ 2010;

general economic conditions, including the performance of financial markets and interest rates;

Questar 2010 Form 10-Q

changes in industry trends;

changes in laws or regulations; and

other factors, most of which are beyond the Company's control.

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

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of ~~September~~March 3031, ~~2010~~2011. Based on such evaluation, such officers have concluded that, as of ~~September~~March 3031, ~~2010~~2011, the Company's disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to the Company, including its consolidated subsidiaries, required to be included in the Company's reports filed or submitted under the Exchange Act. The Company's Chief Executive Officer and Chief Financial Officer also concluded that the controls and procedures were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management including its principal executive and financial officers or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls.

There were no changes in the Company's internal controls over financial reporting that occurred during the quarter ended ~~September~~March 3031, ~~2010~~2011, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Questar 2011 Form 10-Q

PART II. OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Questar had no unregistered sales of equity during the ~~third~~first quarter of ~~2010~~2011. Questar repurchased shares in conjunction with tax-payment elections under the Company Long-term Stock Incentive Plan and rollover shares used in exercising stock options. The following table sets forth the Company's purchases of common stock registered under Section 12 of the Exchange Act that occurred during the quarter ended ~~September~~March 3031, ~~2010~~2011:

2010	Number of Shares Purchased*	Average Price per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans
2011	Number of Shares Purchased*	Average Price per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans
July	2,244	$16.48	-	-
January	28,810	$18.02	-	-
August	11,202	$16.53	-	-
February	73,496	$17.79	-	-
September	72,436	$17.04	-	-
March	58,341	$17.32	-	-
Total	85160,~~882~~647	$1617.9666	-	-

*Excludes any fractional shares purchased from terminating participants in the Questar Div idend Reinvestment and Stock Purchase Plan and any shares of restricted stock forfeited when failing to satisfy vesting conditions.

ITEM 6. EXHIBITS.

The following exhibits are being filed as part of this report:

Exhibit No.

Exhibits

312.1.*

~~Amended and Restated Articles of Incorporation. (Appendix A to the Definitive Proxy Statement filed in connection with the~~ Questar's ~~May~~Corporation ~~18,~~ratio ~~2010, Annual Meeting~~ of ~~Shareholders.~~earnings ~~(Exhibit 3.1~~ to ~~Current~~fixed ~~Report on Form 8-K dated September 29, 2010~~charges.)

312.2.*

~~Amended~~Questar ~~and~~Pipeline ~~Restated~~Company ~~Bylaws~~ratio of ~~Questar~~earnings ~~Corporation. (Exhibit 3.1~~ to ~~Current~~fixed ~~Report on Form 8-K dated June 12, 2010~~charges.)

12.3.

Questar Gas Company ratio of earnings to fixed charges.

Questar 2010 Form 10-Q

31.1.

Questar Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2.

Questar Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3.

Questar Pipeline Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.4.

Questar Pipeline Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.5.

Questar Gas Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.6.

Questar Gas Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1.

Questar Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.2.

Questar Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.3.

Questar Pipeline Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.4.

Questar Pipeline Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.5.

Questar Gas Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.6.

Questar Gas Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

Questar 2011 Form 10-Q

101.INS

XBRL Instance.

101.SCH

XBRL Taxonomy.

101.LAB

XBRL Labels.

101.PRE

XBRL Presentation.

101.CAL

XBRL Calculations.

101.DEF

XBRL Definitions.

*Exhibits so marked have been filed with the Securities and Exchange Commission as part of the indicated filing and are incorporated herein by reference.

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 CORPORATION

QUESTAR PIPELINE COMPANY

QUESTAR GAS COMPANY

(Registrants)

~~November~~May 46, ~~2010~~2011

/s/ Ronald W. Jibson

Ronald W. Jibson,

President and Chief Executive Officer, Questar and Questar Gas

~~November~~May 46, ~~2010~~2011

/s/R. Allan Bradley

R. Allan Bradley,

President and Chief Executive Officer, Questar Pipeline

~~Questar~~May ~~2010~~6, ~~Form 10-Q~~2011

28/s/Kevin W. Hadlock

~~November~~Kevin 4,W. ~~2010~~Hadlock

~~/s/~~Executive ~~Martin~~Vice H.President ~~Craven~~and Chief Financial Officer,

Martin H. Craven,

Vice President and Chief Financial Officer,

Questar, Questar Pipeline and Questar Gas

Exhibits List

Exhibits

312.1.*

312.2.*

~~Amended~~Questar ~~and~~Pipeline ~~Restated~~Company ~~Bylaws~~ratio of ~~Questar~~earnings ~~Corporation. (Exhibit 3.1~~ to ~~Current~~fixed ~~Report on Form 8-K dated June 12, 2010~~charges.)

12.3.

Questar Gas Company ratio of earnings to fixed charges.

31.1.

Questar Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2.

Questar Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3.

Questar Pipeline Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.4.

Questar Pipeline Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.5.

Questar Gas Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.6.

Questar Gas Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Questar 2011 Form 10-Q

32.1.

Questar Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.2.

Questar Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.3.

Questar Pipeline Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.4.

Questar Pipeline Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.5.

Questar Gas Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.6.

Questar Gas Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS

XBRL Instance.

101.SCH

XBRL Taxonomy.

101.LAB

XBRL Labels.

101.PRE

XBRL Presentation.

101.CAL

XBRL Calculations.

101.DEF

XBRL Definitions.

*ExhibitsQuestar so2011 ~~marked~~Form ~~have been filed with the Securities and Exchange Commission as part of the indicated filing and are incorporated herein by reference.~~10-Q

Questar 2010 Form 10-Q

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