Good afternoon, my name is Janice and I will be your conference operator today. At this time, I would like to welcome everyone to the New Jersey Resources quarterly earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. I will now turn the conference over to Dennis Puma. Please go ahead, sir.

Thank you, Janice. Good afternoon everyone and welcome to the New Jersey Resources third quarter fiscal 2008 conference call and webcast. I am joined today by Larry Downes, our Chairman and CEO; Glenn Lockwood, our CFO; as well as other members of our senior management team. As you know, certain statements in today’s news release and on today’s call contain estimates or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We wish to caution readers of our news release and listeners to this call that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR's ability to control or estimate precisely, which could cause results to materially differ from the company's expectations. A list of these items can be found but is not limited to items in the forward-looking statements section of today’s news release filed on Form 8-K – on Form 10-K filed on December 10, 2007, and on our quarterly Form 10-Q to be filed on or before August 11, 2008. All these items can be found at sec.gov. NJR does not, by including the statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. And also note that there are slides accompanying today’s presentation which are available on our website. Given that, I would like to turn our call over to our Chairman and CEO, Larry Downes. Larry?

Thanks, Dennis. Good afternoon everyone and as always, thank you for taking the time to join us on our earnings conference call. As you know, we released our earnings for the first nine months of fiscal 2008 this morning. And once again, I am pleased to report to you that we are on track to report another year of excellent financial performance. Now, as Dennis said, one thing that we are doing new with this conference call is we are using slides. Hopefully, you are able to access those, but I think that will help us as we explain the results for the quarter and for the nine months. I want to begin, first of all, by reminding everyone, and I think all of you know this, that our primary financial objective is to deliver value to our investors in two ways; consistent financial performance and superior long-term dividend growth. Also, I want to remind everyone that we report our performance using net financial earnings, which is a non-GAAP measure and excludes the impact of changes in the value of derivatives that we use in our non-regulated subsidiaries. We believe, as you know, that the use of NFE is a better measure for assessing our financial performance. However, the fact that we use that, it is not intended to be a replacement for our GAAP results. I want to start with slide four where we are outlining our net financial earnings per share. And as you can see for the nine months ended June 30, 2008, our NFE rose by 6.4% to $110.2 million, which equated to $2.64 per basic share. When we compare that with last year, it’s a strong performance. Last year was $103.7 million, which is $2.48 per basic share. And again, that was in a comparable…

(Operator instructions) Your first question from Jim Likens [ph] of Hilliard Lyons. Jim Likens – Hilliard Lyons: Good afternoon everyone. I like the slide presentation. I hope you will consider using that going forward with your conference calls.

We will definitely do that Jim. Thanks for sharing that with us. Jim Likens – Hilliard Lyons: I have a question about the new 16-inch main. You mentioned the potential for thousands of new customers. I’m wondering, first of all, if that was part of slide nine and also if you could maybe quantify a little bit what you mean by thousands and what the timing could be for getting these new customers?

Let me take that in a couple of pieces. First of all, the work as far as quantifying the thousands is still ongoing, and that’s an area that does not currently have natural gas service and we have seen at least in a preliminary sense what I would call very good interest in potential customers wanting natural gas service there. But the work of assessing that, very specifically, the size of that market is still ongoing. Tom Massaro, our Vice President of Marketing is here. Tom, do you want to add anything to that?

No, and I think, when you look at where those customers will pop out on slide number nine, they would currently be in that non-gas off main segment of customers. Jim Likens – Hilliard Lyons: Okay. I was just going to do the math real quickly. It looks like you are going to add about 40,000 customers between now and 2012. So, it’s like 6,000 a year. So, I'm just wondering if you could maybe give us a feel for – if you are going to stay at that. You talked previously about being around, I believe, 1.6% customer gross for the rest of ‘08. I'm just wondering, if part of this is back end loaded, or if you are going to stay around that 1.26% or maybe if you could change your projections for customer growth for this year or what you see in ’09 as well?

No, we haven’t changed our projections. As I said, the residential side is a little soft right now. What we try to do is obviously, I mean, the customer numbers are important but the real important number, I think, is more the margin that we expect from those customers.

That's why we’d emphasized the commercial growth staying fairly strong while the new constructions weakened a little bit, in that we on average get at least three times the margin from a commercial customer, we get from a residential customer. So that's why you have seen our protected margin from new customers stay relatively steady throughout this downturn.

And we have been stepping up our activities, marketing activities, focusing on the commercial market as well as the conversion market because the potential inventory there is attractive for us. Jim Likens – Hilliard Lyons: Okay. And one last thing, and I'll let someone ask a question, but your O&M expense this quarter increased really just negligibly from the year-ago period. Maybe if you could just talk a little about what’s driving the O&M margin right now?

Yes. At this time of the year, we have had some couple of things going on the O&M side, Jim. We have on one hand written off some costs associated with some regulatory assets that we currently don't think we are going to recover. On the other hand, we have had some lower than expected heath claims through our medical program. So, we have adjusted accordingly our medical reserves for that. The net effect, it has sustained a little bit of unusual quarter in O&M. Jim Likens – Hilliard Lyons: Okay. So, it’s more of a one-off thing then – that's okay. Alright, that’s all I got for now. Thanks gentlemen.

Your next question is from Jay Yannello from Pali Capital. Jay Yannello – Pali Capital: Larry, you may have touched on this with your marketing comments, but why is commercial so strong? Is it the marketing or is it something else?

Combination of things, let me ask the expert, Tom Massaro, to talk about that. Tom, why don't (inaudible) to what you are seeing in the marketplace?

Jay, we still see very strong commercial growth especially in the retail sector and a lot of that is on the feeder routes going to New Jersey shoreline, and I thought that we will see continuing traditionally the lag between the commercial developments following the residential. So, even though you see the residential slow down, that commercial development is still forecasted to be holding steady or as we are saying, resilient, especially in the retail sector and more specifically in the big box retail sector. Jay Yannello – Pali Capital: Okay. And as far as conversions, is there any way to gauge what percentage of it is from your marketing efforts or what percentage of it is from just people calling up. I know a few people who are scared to death about their home fuel bills this season and I’m just wondering if you are getting a lot of cold incoming calls with people saying we want to convert?

Tom happily believes it’s all because of his marketing effort. Jay Yannello – Pali Capital: I'm sure he would.

He'll speak for himself.

There is an increased number of phone calls coming in and people are starting to either fill their oil tanks or their propane tanks and starting to get positioned into being locked in for that fuel cost for the winter period. So, we are seeing an increased number potential customers calling in for conversion.

And that's why, Jay, you see us including that slide on the price comparison to give you a sense of, even in a high-priced environment, the relative advantage that we have versus the other choices out there. Jay Yannello – Pali Capital: Do you think the convergence would be stronger than they are if it wasn’t for the economy and all the issues associated with that, and what sort of subsidization are you providing on incentives to people to convert?

The first part of the question, yes, the state of the economy is slowing down. In some respect, the number of customers are putting (inaudible) in some customers although it is still a very strong market. Right now, there is the – the only (inaudible) is the price differential between our fuel and the competing fuels and then the higher efficiency offers that are available through the state. Jay Yannello – Pali Capital: Okay, all right. Thank you.

Thanks, Jay.

Your next question is from Oliver King of Zimmer Lucas. Oliver King – Zimmer Lucas: Hey, guys, how are you doing?

Okay. Oliver King – Zimmer Lucas: My first question is on the rate case. Are there any other briefs or hearings or staff recommendations that are going to occur in the next couple of weeks?

I'm going to ask Mark Sperduto, our Regulatory Vice President, to take that one. Mark?

Right now, there are no additional hearings scheduled. We are, as Larry indicated, we are in a negotiation phase right now with the case. There has been no schedule or briefs or anything like that, that would only apply if you are fully litigating the case. Oliver King – Zimmer Lucas: Does the staff issued a recommendation at all?

No, they have not. Oliver King – Zimmer Lucas: Do they plan on it, do they usually in these New Jersey rate cases?

Yes, if the case is fully litigated at the end of the process, they would issue a recommendation. The Public Advocate's Division of Rate Counsel is the primary litigant and they previously issued a recommendation on that case. Oliver King – Zimmer Lucas: If no settlement is reached, when would the BPU make a final decision?

That schedule hasn’t been established yet. It would have to – first, the Administrative Law Judge would set a briefing schedule. Once the final brief was issued, the records get considered closed and the Administrative Law Judge would have 45 days to render her initial decision. Subsequent to that, the BPU has 45 days to act on the ALJ's recommendation. So, I can tell you it is 90 days from the last piece of paper being filed, but there has been no schedule established for that. Oliver King – Zimmer Lucas: Okay. And in order for not to go fully litigated, where would a settlement have to be reached by?

All we can say right now is we are actively negotiating the resolution of the case. Oliver King – Zimmer Lucas: Okay. And then my last question is just on the buybacks. How much is left on your program and how many shares did you buy back this quarter if any?

We have not bought back any share this quarter and I don’t have in front the number of shares left, but we have not bought shares back in the last couple of quarters. Oliver King – Zimmer Lucas: Okay, thank you.

Your next question is from Dan Fidell of Brean Murray, Carret. Dan Fidell – Brean Murray, Carret: Good afternoon guys. Thanks for the call. A lot of my questions already have been asked and answered. I did have a question maybe from a broader sense, can you give us a little bit of color on some of the opportunities you said you are exploring as it relates to renewable? You talked a little bit about the New Jersey Energy master plan and the RGGI in your release. Can you just share with us some of the thoughts that you have on that side?

On the RGGI side, I think there are probably two opportunities, one relating to solar investment and investments in efficiency. And I think as we said, we are considering those opportunities right now. The energy master plan is still in process, so there may be things related to distributed generation CHP, but that is still very much up in the air right now. Dan Fidell – Brean Murray, Carret: Okay. And then maybe just another question, switching topics quickly on Steckman, can you just give us some idea of what the next events we should be watching for, or new constructions under way? Can you give us a little – maybe just refresh us in terms of capital budget for that and then the timing for the end service, we are looking about a year for now, is that right?

I'm going to ask Joe Shields to take that down. Dan Fidell – Brean Murray, Carret: Great, thanks.

As far as the construction out there, the next period is going to be more of construction work before the drilling starts, so the major construction would be the drilling of the well and we hope that starts by the end of summer beginning of fall, and then we're hoping for injection next summer with fully service storage of the following winter. Dan Fidell – Brean Murray, Carret: Great. Okay, thank you very much.

The next question from Eric Beaumont of Copia Capital. Eric Beaumont – Copia Capital: Good afternoon guys. Most of my questions were answered, but I guess one thing I'm looking and I appreciate you guys doing the net financial earnings and realized the reason. And since your statement, I’m going back through, there has been a pretty big gap in favor of net financial gross earnings and I guess I'd expect to see more ebb and flow as unrealized gains of mark-to-market reverse. Can you just talk a little about, and not that you want us to be mired in this, but could you talk about how that should generally flow?

This is Glenn. A major variable obviously in how the direction of those unrealized gains or losses are going to be the general direction of the NYMEX and at any given time, especially on the unregulated side, are we hedging – how much of a foresale are we hedging. So in an environment for example that prices have been generally rising, yes, even as prior unrealized losses have turned around, even additional positions have been put on to future sales and as prices have been going higher and higher, that's why you are seeing the unrealized losses just continuing to increase. So, you are right, we are try not to get mired in that because of the obvious impossibility of predicting the direction of the NYMEX and at any given time, how of our sales are hedged, but the important part from our perspective is that we were always 100% hedging our commodity risk. So that number will dramatically swing depending on quite simply the volumes hedged plus or minus the direction from the last reporting period, which way the forward market has moved. Eric Beaumont – Copia Capital: So, in theory, just as I think about it right away, if gas were just to flat line forever from here, you would slowly, as you basically deliver from your hedge position be reversing the charges from the GAAP increasing and then there would be realistically no impact of gas reduced to flat line going forward?

So, again, assuming at all points in time you have these (inaudible) amount of future sales hedge, but sales actually occur and if you are not replacing them with future sales, then yes, they would over time just reverse themselves and go away. Eric Beaumont – Copia Capital: Okay.

On a going concern, you will always have future sales that we are hedging. Eric Beaumont – Copia Capital: Okay, that's fine. I guess that just given that like seven straight months have kind been or the aggregate seven straight months, there has been a big gap there. I just didn't know if it had to do with the restatement or trajectory of commodity.

No, the trajectory of the commodity combined with the amount of gas sales hedge. Eric Beaumont – Copia Capital: Okay, thanks guys, I appreciate it.

(Operator instructions) Your next question from Jang Flooney [ph] of Decade Capital Management. Jang Flooney – Decade Capital Management: Good afternoon, guys. I have two quick questions. The first one is on the conservation incentive program. You said that 2.7 million is primarily related to other non-weather factors such as usage. Is it lion's share of that usage? Or is there other stuff in there?

It's fair to assume as you suggest. Jang Flooney – Decade Capital Management: Okay. And then second question, can you give us a feel for underlying customer usage, excluding the effects of customer growth and a more normal weather environment? Like same-store sales customers, are they – have you seen customer demands going – is demand going up or is it actually going down because of your conservation efforts?

No, usage has been going down which is again what the CIP has been benefitting us on it seems. If you go back to the time of the last REIT case, the usage imbedded in the rain design was 1200 dirhams [ph] plus or minus. When we did the CIP, that number was down to 1,113. So we have seen that continue to go down. Jang Flooney – Decade Capital Management: Okay, thank you.

We think it's probably down, from that point, probably another 45. But again that's where the CIP has been helpful because it's – you see the obvious financial benefit but (inaudible) we've been able to proactively help our costumers figure out how to use less in an environment of higher prices which is good for them. So, without getting too jargonny, it has been a win-win for both costumers and share owners. Jang Flooney – Decade Capital Management: Perfect, thank you very much.

You're welcome.

The next question is from Justin Maurer of Lord Abbett. Justin Maurer – Lord Abbett: Good afternoon, guys.

Good afternoon. Justin Maurer – Lord Abbett: Just follow up on the hedge on hedge, is that for FASB treatment that you are unable to do it under FASB just because there's no way to match exact hedges to exact contracts?

That's correct. The reason for the restatement quite frankly was that particular issue and in our case, we cannot match to a level needed for FASB reasons, the change in derivatives with the underlying transaction. That's why we reported both ways. Justin Maurer – Lord Abbett: And is the hedges typically – are they typically encapsulated within a fiscal year or do some actually – can they bleed over either to the year prior or the year forward?

Yes, typically for example, very common to have contracts going out to the next winter, for example. So, November 2008 till March 2009 positions are very common, for example. So, as of today, we would definitely have – any positions we're talking about our forward only, any prior period positions have obviously been terminated because they've matured. So everything we're talking about are forward looking and it is typical to go at least one fiscal year. Justin Maurer – Lord Abbett: Okay. And this applies both to the wholesale business and the midstream business right?

In our midstream asset business, we would not have any need for derivative instrument.

It's as a result of the equity investment.

Yes. Justin Maurer – Lord Abbett: All right, got it, okay. All right, thanks a lot.

You're welcome.

(Operator instructions) There are no further questions. Sir, you have any closing comments sir?

Yes, just want to thank everyone for participating, and if you have again feedback on our use of slides, we'd love to hear that as well.

Thank you very much.

Thank you all.

Thank you for participating in today's New Jersey Resources quarterly conference call. This call will be available for replay beginning at 3 PM Eastern Time today through 11.59 PM Eastern Time on Monday August 4, 2008. The conference ID number for the replay is 54817317. Again, the conference ID number for the replay is 54817317. The number to dial for the replay is 1-800-642-1687 or 706-645-9291. You may now disconnect.