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Questar Corp., parent company of Mountain Fuel Supply Co., encountered "a difficult combination of events" in 1987 that hurt the company's financial performance, but a rough year also showed how strong the diversified energy company is, according to the company chairman, R.D. Cash.

Cash told Questar shareholders at the energy company's annual meeting Tuesday that Questar's fundamental strengths have never been more apparent - or necessary - than during the current challenging period for the energy industry. Those strengths, he said, include a conservative financial structure, growing markets, a capable work force and a distinctive and flexible organization."The energy industry is going to remain volatile and unpredictable," said Cash. "Companies that will do well in this environment are those with the financial strength and operational flexibility to adjust to market conditions, and Questar is one of those companies."

Record-warm temperatures and slower economic activity in the Utah-Wyoming area depressed results for the company's gas distribution and interstate transmission operations. In addition, declining gas prices, an unsuccessful exploratory well and restructuring of a brick-manufacturing subsidiary required write-downs that lowered income.

In other business, stockholders re-elected John S. Hinckley, Robert E. Kadlec, B.Z. Kastler and D.B. Ozmun to three-year terms on the Questar board.

Questar stockholders also approved an amendment to the corporation's articles of incorporation limiting directors' liability in certain situations permitted under Utah law. They also authorized a proposal to approve individual indemnification agreements with the company's directors.

In its proxy statement, directors said the amendment and agreements were necessary to allow the company to continue to attract and retain qualified directors in light of increasing litigation against corporate directors.

Questar's 47 cents-per-share quarterly dividend is the same as the previous quarter's and 2 cents higher than a year earlier. It is payable June 13 to shareholders of record May 27.

Mountain Fuel Supply Co. approved dividends of $2 per share on the 8 percent preferred stock series and $2.15625 per share on the $8.625 preferred series, payable July 1, to shareholders of record on June 3.