I would like to welcome everyone to the New Jersey Resources third quarter earnings conference call. (Operator Instructions) At this time it gives me pleasure to turn the conference over to the Director of Investor Relations, Dennis Puma.

Good morning everyone. Welcome to New Jersey Research's third quarter fiscal 2009 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 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-Q to be filed on or about August 5, 2009 and our Form 10K 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 statements reference here and in light of future events. I'd also like to point out that there are slides accompanying today's presentation available on our website. With that being said, I'd like to turn the call over to our Chairman and CEO, Larry Downes.

Good morning everyone. Thanks for joining us here today. As Dennis mentioned we do have a presentation I will be using as I give you an update not only on the quarter but also the fiscal year to date. So if you move to Slide 2 which is the forward-looking statements that Dennis mentioned, I will be using forward-looking statements this morning. Slide 2 lists the factors that could affect those statements are listed here, our 10-K and our 10-Q. I would ask you to please take a moment to review them very carefully. Moving to Slide 3, I'll also be referring to certain non-GAAP financial measures, mainly net financial earnings and financial margin, and while we believe these metrics provide a better understanding of our performance, they are not intended in any way to replace GAAP. Item 7 of our report on Form 10-K provides a more detailed discussion of these measures and I would encourage you to please review that so that you can understand the non-GAAP measures as well as our GAAP numbers. So with that, let me move to Slide 4 and provide you with some of the highlights of what has been a strong performance by the company thus far in fiscal 2009. This morning we reaffirmed our guidance for net financial earnings, a range of $2.35 to $2.45. As you know, previously we had increased that guidance on two occasions. Earlier this year we implemented a 10.7% dividend increase. We've seen very strong results from New Jersey Natural Gas reflecting both new base rates as well as excellent performance of our incentive programs. Working with not only the Board of Public Utilities but also rate council, we were able to put in place important regulatory achievements; our accelerated infrastructure program as well as our…

We're ready to open the lines for questions now.

(Operator Instructions) Your first question comes from James Lykins – Hilliard Lyons. James Lykins – Hilliard Lyons: First thing I wanted to ask you is about the new energy mechanism. It sounds like it's very similar to the AIP. Maybe you can just comment on what the difference is between the two might be.

First of all the AIP program is a true rate based program so our base rates actually get adjusted while the energy efficiency program from a financial perspective is a, we will recover with the cost of capital, our investment and cost over a four year period. So there is in effect a start and finish to the EE program while the AIP is just like any capital investment for a utility and base rates are adjusted. James Lykins – Hilliard Lyons: Regarding energy services, I know it's difficult for you to comment specifically on what's happening there, but just given that storage has been at an all time high levels, and there may or may not have been any volatility there, maybe if you could just give us a feel for what you're doing to get to the third best year ever there.

We have seen some lower volatility. We also as we've disclosed publicly had a contract last year that was profitable for us that ran off. But I have Steve Westhoven, who is the Vice President and I'll ask him to comment on that.

We continue to look for new opportunities in the marketplace. There's certainly some new opportunities in some of the new shelf plays that are coming online, and certainly the volatility, as much as it's been down in volatility due to some cooler than normal weather in the Northeast and such, it's still given us those opportunities. We still managed to trade our book and manage our assets in such a way to produce income and make some positive contributions to the corporation.

I think all of the factors that you're raising are embedded in the guidance and the specific range of earnings contribution that we expect from NJRS. James Lykins – Hilliard Lyons: When you go down to the 30% to 35% overall contribution there, in the past you've been more 40% to 45%. Is this a change in strategy or is it more a part of market conditions?

It's more the improvement in the utilities results. Remember the utilities went through the normal regulatory process and came out of the rate case, so you're seeing more of the improvement in New Jersey Natural Gas that will get us back to what I think is a range that has been close to what we've seen historically. James Lykins – Hilliard Lyons: If you could give me the CapEx numbers for the quarter?

We don't have, the Q will be filed next week, but for the nine months, the CapEx on the utility was $51 million for the nine month and we invested $41 million for the nine months in our Steckman Ridge investment.

Your next question comes from Ryan Rosenthal – Sidoti & Company. Ryan Rosenthal – Sidoti & Company: My first question concerns the utility. Certainly significantly better performance year over year, largely as a result of rate case. Could you also discuss the incentive mechanisms during the quarter including the AIP and the benefit that you received there in terms of a net number?

The AIP is just starting so there's no impact yet. We'll see a very small impact in the fourth fiscal quarter, but for any noticeable numbers, that won't start until fiscal 2010. And on the incentive margin, again we are taking advantage in the utility of dropping wholesale prices which allows us through some of those mechanism lock in gas costs lower than some pre-established benchmarks. So I would say really no AIP margins. You can see in the press release the actual numbers that we earned in the incentive margins in the table. We have a margin breakout on page 9 of the press release and you can see that in total shareholders earned $1.9 million of margin from those programs compared with $1.2 million last year in the quarter. Ryan Rosenthal – Sidoti & Company: On the NJRS, in the press release you mentioned that the current economic conditions resulted in a slowing of the wholesale market during the third quarter. Can you discuss how sensitive the business is to power demands? It's been my understanding in the past that much of the transportation capacity has had just in event and what the sensitivity may be on a quarterly basis in that sense.

I'm sorry, could you repeat that? I didn't catch a few words there. Ryan Rosenthal – Sidoti & Company: My question concerns the weakened demand for power generation and how that may affect NJRS in the next couple of quarters and looking forward as well.

You are correct. We do employ hedging in managing our assets on the short and the long term portion of the market so we don't rely totally on the spot market when we're managing our assets both with transportation and storage. So like I said before, we expect to contribute to the corporation and help the corporation hit their earnings targets for the year. So all of those conditions are built into as I said earlier, the guidance and the percentage we expect from the NJRS. But that decline in the economy and the lower demand when we do have any heat does impact the amount of volatility we're seeing, so it's one of the factors why this business is in our forecast not going to earn quite what it's earned over the last two years. But that is one of the factors that has kept that volatility down. Ryan Rosenthal – Sidoti & Company: During a particular quarter such as the last one, given that much of the capacity is hedged in advance, is there any sensitivity to the current economic environment during a particular period?

You certainly have some impact when it's got really hot and we had the right positions in place and certainly we could have profited from that, so it is going to have some impact, but we try to employ a disciplined approach to managing our assets so we have some contribution coming from those assets during this period regardless of the short term impact on the market. Ryan Rosenthal – Sidoti & Company: Looking forward fiscal 2010 and beyond, given the weak energy demand that we're experiencing now, is that the locational opportunities looking forward?

We haven't come out with guidance yet. Obviously the amount of profitability we get from this business is somewhat dependent on how volatile the market could be and how wide the spreads get. So it will have an impact but it will be obviously incorporated into our forecast when we come out with 2010 guidance. Ryan Rosenthal – Sidoti & Company: Regarding non regulated growth opportunities as well, I know that Steckman Ridge storage facility is slated for commercial operations by October. Looking beyond that, are you considering any further non reg growth projects at this point?

We're constantly looking at opportunities, but we have not announced as you know, anything specific. But we're in all of the businesses looking for potential growth opportunities and being mindful as to what that would imply for our valuation.

Your next question comes from Daniel Fidel – Brean Murray. Daniel Fidel – Brean Murray: If you could give us a little more detail on your quest for an extension, if you see any kind of issues there and then just a broader update on how things are looking with New Jersey's master energy plan.

I think as you know, the program will be automatically extended through the end of fiscal 2010 unless there was some action to let it be [inaudible]. We do not expect or have any indication that that's a problem. We're in the process now. We're working here in the State looking to get a longer extension, but nothing to announce yet on that. As far as the energy master plan, that process is still unfolding. We are actively participating in that and our focus is really trying to define and identify what role that we can plan in helping the State implement the goals of the energy master plan. As you know, there's been a master plan but there's also been a number of other legislative and policy direction that has been put forward, one of the biggest ones being the Regional Greenhouse Gas imitative which gives natural gas utilities the opportunity to participate in investing in solar and efficiency and we're in the process now of trying to identify what those opportunities might mean for us. Kathy Ellis, our Chief Operating Officer of New Jersey Natural Gas is here as well.

I don't have anything to add. We are constantly looking for opportunities which have an amount in managing the master plan. Daniel Fidel – Brean Murray: I know that with Steckman being completed here shortly, obviously you're looking at probably some other opportunities, either storage or gathering other kinds of areas, but can you give us an update on where Steckman is at? I think you said in the press release it's about 4 bcf or so currently stored at Steckman. Can you refresh us in terms of what the base level of gas is going to be in that facility and the ultimate expandability that Steckman could hold down the road?

I think the whole facility is 17 bcf's, 5% of base gas; it would be 12% of working gas. One of the reasons we're hesitating on that is that we are not finished construction yet of the full amount of wells we think will be needed to get to the 12 bcf. So from an engineering perspective, we have started the injection. We're going to see how the field performs and see a, if we have to spend the rest of the money that we've committed to get to 12 bcf's or is the field working better than expected. Do we need more compression? Things like that from an engineering perspective is why we're hesitating a little bit on what the final investment would be and why it won't be fully operational until next year.

Your next question comes from Eric Beaumont – Copia Capital. Eric Beaumont – Copia Capital: When we look at the level you have made on incentives this year, it's obviously a very good year, I'm just trying to reconcile, if you could describe whether it's really the dynamics we're seeing in the gas market or is it the additional storage that went into the incentive program, or is it a combination of the two driving this year?

It's definitely a combination of both. Having more storage in the program to make some profits in that part of the program regardless of what happened in the market was definitely one contributor, but I think a little bit more of a factor this particular year was the dramatic decline in gas prices and the ability to lock in gas through our [Fram] program. Each quarter a new benchmark is set by a third party, and during the quarter if futures prices drop below that benchmark, we are allowed to lock in gas below that benchmark and then basically lock in that profit that gets shared between customers and shareholders. So I would say this year, that part of the program has been very successful. But I would also say that the extra 2 bcf or so storage helped as well.

I would just add that adding storage is one thing, but being able to manage it in a way that provides the benefit for customers and share owners, that goes to the extra piece of the team. Eric Beaumont – Copia Capital: On a going forward basis, until we know what the benchmark is, it's going to hard to gauge what you're going to make out of that. Is there anything you can point us to so we can think about that?

It depends on what each benchmark is, kind of on the view of the firm issuing that benchmark. If they see futures prices rising dramatically and the market actually stays down or goes further lower, there will be just as much opportunity this year as there was this year. It depends on what those benchmarks are and obviously what happens with the market. Eric Beaumont – Copia Capital: Understanding that you from short and long term contracts see a lot of optimization around your assets, one thing, power generation, how that's impacting you. The one thing I was curious about is that for one of the first times for a long time in the Northeast, we're hearing rumors of same basis compression for some of the transmission pipes. Can you just comment on that? Is that having an impact on the business?

Certainly it's going to impact the business and there have been certain basis differentials that have compressed and there has been some volatility to that forward-looking market. And again, we're managing it like we usually do and I don't think it's anything that is that unusual expect for a little increased focus on it more than anything else. [Eric Beaumont – Copia Capital]: And given how you work things, obviously a base of compression itself is maybe a neutral to slight negative with the balance around it, it might give you an opportunity to offset that compression?

Exactly. That's exactly it.

Your next question comes from Mark Barnett – Morningstar. Mark Barnett – Morningstar: As you are out in the physical market, obviously storage levels across the U.S. are pretty historically levels. Where do you see that going in the next three to six months from the business that you're doing out there?

Right now it seems to be common consensus that your ultimate U.S. natural gas storage levels are going to get to the very high 3.9 may 4 bcf level, so obviously they're going to get very full and that's why you see some of the prices that you do in the market itself. We try not to make too many predictions on where prices are going or where storage levels are going, but we'll continue to manage our assets around the situation.

At this time there are no further questions. I would like to turn the conference back to you for any additional or closing comments.

Thank you very much and we will see you guys next quarter.