Good morning. My name is Katherine 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) Mr. Puma, you may begin your conference.

Thank you, Katherine, and good afternoon, everybody. Thank you and welcome to New Jersey Resources first quarter conference call and webcast. I'm joined 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 our news release and in 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 the Forward-Looking Statements section of today's news release filed today on Form 8-K and on our Form 10-K filed on November 24, 2008. All these items can be found at SEC.gov. NJR does not by including this statement assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. I'd also like to point out that there are slides accompanying today's discussion available on our website. With that being said, I'd like to turn the call over to our Chairman and CEO, Larry Downes. Larry?

Thanks, Dennis. Good morning, everyone. Thanks for joining us today. As you know, we announced our financial results for the first quarter of fiscal 2009 this morning and we also updated our outlook for the balance of the fiscal year. As Dennis mentioned, there is a slide presentation that I will be using, as I discuss those results with you. On slide one, we have more detail on what Dennis was just discussing about forward-looking statements. I will be giving some forward-looking statements today and slide one has all of the factors that could affect those statements. And again, I would refer you to the 10-K over there laid out and read those carefully. On slide two, we have discussion regarding non-GAAP financial measures. Those two are discussed in the 10-K. I would just say that the non-financial measures, primarily the use of net financial earnings, are not intended to be a substitute for GAAP, but we do believe that net financial earnings and the other non-GAAP measures that we described provided better basis for assessing our performance. Let me start out on slide three talking about some of our highlights. You saw in addition to announcing our financial results we also increased our net financial earnings guidance for the year to a range of $2.32 per share to $2.42 per basic share. We also reminded investors that earlier this year we had announced a 10.7% increase in our dividend, and we did implement that in January. We saw very strong results at New Jersey Resources. In fact, New Jersey Resources NFE increased by 38%. And at the same time, given some of the challenges that we are all familiar within the economy, we were able to record continued steady customer growth. We did make two filings with the BPU…

Thank you. (Operator instructions) All right. Our first question comes from the line of Jim Lykins. Your line is open. Jim Lykins – Hilliard Lyons: Good morning, everyone.

Hi, Jim. Jim Lykins – Hilliard Lyons: First of all, you commented on the lower gas volatility in the quarter. I was just wondering if you could give us a feel for what you are seeing so far into Q1 as well.

Let me ask Rick Gardner to take that question. Rick?

We’ve seen volatility at – January did show us some good volatility in the market area in relation to Appalachia pricing. And right now it’s really going to take a look at the weather and see how that really shapes out. Jim Lykins – Hilliard Lyons: Okay. And I was also wondering if you might be able to tell us what your assumption is and guidance for gas volatilities were?

That’s I think – that’s embedded in the 30% to 35% of the total and how we expect that volatility will affect the results of NJRES. Jim Lykins – Hilliard Lyons: Having said that, can you at least say whether you are assuming something similar to Q4 or if there is an improvement there?

Again, seasonality will always be an issue, and it’s part of the business based on when certain positions are put on and when certain assets are hedged. I can tell you that as usual we will look at the current market for storage spread, for example, when valuing any unhedged position, and we do not assume unusual weather or other events that would cause tremendous upside on margin. Jim Lykins – Hilliard Lyons: Okay. And the $77.5 million in CapEx, does that include the AIP or will there be some additional CapEx spend there?

That would be – that would be incremental to the $77.5 million, the AIP. Jim Lykins – Hilliard Lyons: And can you give us a feel for maybe what your interest rate in there? Or is it too early to tell?

The total over the likes of the program would be an additional $70.8 million. Jim Lykins – Hilliard Lyons: Okay. And –

Jim, that would unfold over. That’s not all in one year. Jim Lykins – Hilliard Lyons: Okay. And lastly, there was about a 22% drop in depreciation this quarter. Maybe if you could comment on that and if that’s maybe – or what we should expect over the next few quarters in depreciation?

The depreciation rate was lowered as part of our rate case, which is why you’re seeing that number go down. Jim Lykins – Hilliard Lyons: Okay. So, should we assume depreciation more in line with Q1 for the next couple of quarters then?

I think it’s important to look at it over the course of the year. So there is no skewing because of timing differences in the capital expenditures. But generally because of the lower rate, you will see that trend continue. Jim Lykins – Hilliard Lyons: Okay.

No, it is indicative of the trend that we would expect obviously with our (inaudible) being depreciated on an average of 2.34% instead of 3.0%. You can come up with your own estimates of how much that would equate on an annual basis. Jim Lykins – Hilliard Lyons: Okay, great Thank you, gentlemen.

Thanks, Jim.

Thanks, Jim.

Our next question comes from the line of Dan Fidell with Brean Murray. Your line is open. Dan Fidell – Brean Murray: Good morning, guys. Thanks for the call.

Hi, Dan. Dan Fidell – Brean Murray: Just following on one of Jim’s questions on the Accelerated Infrastructure Program and energy efficiency projects. Can you give us a little more color on sort of what those energy efficiency projects might be, and any kind of additional detail you could give us in terms of how we ought to be thinking about the CapEx? That would be helpful too.

Basically, as we said, the program is structured around the use of incentives. And what we’re trying to do is to build upon existing incentives that the state offers for the use of more efficient equipment. So if you have a customer, for example, whose equipment breaks, which he has a choice between higher energy efficient equipment or the lower efficiency equipment. The lower obviously costs less. So what we are trying to do through the program is to provide additional incentives on top of those which are already available through the state to make the purchase decision make that economically feasible for the higher energy equipment. And what we would do then is in providing those incentives, we would actually recover those and earn on those at our weighted average cost of capital. Equipment is one element of it. We expect that as part of the program that we will offer. We will have audits done of the different houses and identify other opportunities for increasing the efficiency of the homes and then use rebates to help the customer make the purchase decision to make that investment to reduce their use of energy. But the bottom line is that I think from your perspective is we would be – those incentives that we would be offering, we would effectively recover those and earn on those. That’s on the energy efficiency side. Do you want to add something, Glenn?

I would say that the way we would recover that is similar to our current writers in that account-wise. We would earn that return real-time. And in fact, as we spend the money in as any assets going to service, for example, on the AIP program, or as we spend the money on the environmental programs, and then from a cost recovery perspective, you have your slight lag as too many customers actually then pay us for whatever regulatory asset has been created through that real-time recovery.

Now on the – the second part of your question, Dan, is with regard to the AIP. As you know, we’ve maintained healthy capital budgets. The two main drivers of those budgets are customer growth and, what I would call in general terms, system integrity, system replacement. What we are doing – and our budgets have been, as we’ve disclosed, in north of $70 million. Roughly $25 million to $30 million of that customer growth related. The rest is in a variety of pipeline and system integrity/replacement projects. What we are talking about here is accelerating some of those system replacement/integrity projects, which enhance the reliability of the entire system to accelerate those dollars in order to create jobs and obviously simulate the economy through the purchase of materials, reinvestment of dollars. As Glenn noted with regard to the regulatory treatment of the costs associated with those investments, it would be similar at our weighted average cost of capital. Dan Fidell – Brean Murray: Okay, thank you.

Probably what – 9 or 10 discreet projects that were –?

Yes, there’s actually 14 projects occurring over 2.5 years approximately. And I would just say that just based on the timing of getting approvals for the program and then permitting and et cetera, it’s fair to say the majority of this actual spending and related to recovery would start in fiscal 2010 for us, not in next January [ph] month. Dan Fidell – Brean Murray: I see. Okay. Thanks. Maybe one other question on Steckman Ridge, can you maybe just comment on your overall level of satisfaction of that project, how it’s progressed and maybe your appetite for additional (inaudible) projects going forward. You’re certainly going to be busy with some of these other projects. Just wondering how you feel about Steckman and the future in that area?

I’m going to ask Rick Gardner to comment on that, Dan.

We are satisfied with the progress at Steckman. We are on plan, both timing and expense-wise. So we are very excited about it. As you mentioned, NJR will continue to look at other projects. As opportunities become available, we’ll bring those to management. And there are some opportunities out in the marketplace right now. So as always, we’re going to keep an eye on those and review them as they become available. Dan Fidell – Brean Murray: Could you give us any more specifics on that side? Just to press the case a little bit, should we be looking for any specific announcement in the next couple of quarters on that regard?

No, Dan, you shouldn’t be looking for any. Dan Fidell – Brean Murray: Okay. Thanks very much for your conference today again.

Okay. Thanks, Dan.

(Operator instructions) Our next question comes from the line of Ryan Rosenthal with Sidoti & Company. Your line is open. Ryan Rosenthal – Sidoti & Company: Good morning, everyone.

Hi, Ryan. Ryan Rosenthal – Sidoti & Company: Just a couple of questions for you. Going back to the Accelerated Infrastructure Program, when you suggest that you will be earning your weighted average cost of capital, in terms of the equity component of that, is that based on your regulated ROE? Is that what you are expecting?

That’s correct, the 10.3%. Ryan Rosenthal – Sidoti & Company: Okay. And I think you mentioned – to reconfirm – that that would most likely begin in fiscal 2010. I think you said the three-year – in terms of a three-year basis that you’d earn on those projects. Is that kind of the timeline in terms of estimating them?

Let me ask Mark Sperduto to comment on that line.

Ryan, the way it will work is spending that occurs between – at fiscal year closes will be reflected in October first rate change. So as Glenn mentioned, because of permitting and material acquisition, not much other than design work and some construction, minimal amount would occur in fiscal ’09. And then it accelerates in fiscal ’10 and fiscal ’11. Ryan Rosenthal – Sidoti & Company: Okay. And I know you guys are generally hesitant to discuss (inaudible) by margins going forward, but you guys really commented on the recent – looks like there has been a nice widening of spreads for fiscal 2010. Is that something you’re witnessing and are you considering hedging more of your storage capacity now because of that?

Yes, we’re certainly –

Hold on a second. Ryan, this is Steve Westhoven speaking.

We’re certainly keeping an eye on that looking forward. And obviously we have a lot of storage that we manage, and we are looking at spreads for not only this coming year, but the next years that follow and looking to put some hedges in our book accordingly. Ryan Rosenthal – Sidoti & Company: Okay. And then in terms of this quarter, you mentioned that there was less contracted transportation capacity in the Northeast. Is that a one-time event or is there some kind of fundamental change in the business there?

No, there isn’t any fundamental change in the business. It’s just a matter of having contracts that come into our book. And as they rollout and we look to renew, we look for the right assets for the right future period. And it’s been a continuous change for us. So it’s not something unusual in our business. It really hasn’t changed at all and we saw the same focus. Ryan Rosenthal – Sidoti & Company: Okay. And then one final question regarding the Home Services business, another set that was particularly [ph] weaker year-over-year, was there any particular item that caused the weakness this quarter?

Their team [ph] appeared in the Northeast, we had a very cold winter so far. So some of their labor costs are a little bit higher than planned because of overtime dealing with serving some customers, and we are seeing some impact from the economy on the level of service contracts being either renewed or new sales. So that of course is factored into our overall guidance. Ryan Rosenthal – Sidoti & Company: Okay. Thanks for your time, everybody.

Thank you.

At this time, I have no further questions in queue.

Okay.

Okay. Thank you very much. We’ll see next quarter.

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