Good day and welcome to the New Jersey Resources 3Q 2013 Results Tele Conference. All participants will be in a listen only mode. (Operator Instructions). After today's presentation there will an opportunity to ask questions. (Operator Instructions). Please note that this event is being recorded. Now I'd like to turn the conference over to Dennis Puma of Investor Relations. Mr. Puma please go ahead.

Thank you, Keith. Good morning, everyone. Welcome to New Jersey Resources' third quarter fiscal 2013 conference call and webcast. I'm joined today by Larry Downes, our Chairman and CEO; Glenn Lockwood, our Chief Financial Officer, as well as other members of our senior management team. As you know, certain statements in our 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 assumptions forming the basis for forward-looking statements include many factors that are beyond NJR's ability to estimate or control 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 statement section of today's news release filed this morning on Form 8-K, and on our Form 10-Q to be filed on or after August 7, 2013. Both of these items can be found on our website as well as 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 which are available on our website, and that were also filed on our Form 8-K this morning. With that said, I'd like to turn the call over to our Chairman and CEO, Larry Downes. Larry?

As always we appreciate you taking the time to join us. I want to begin by pointing out that during my presentation I will be making forward looking statements and our actual results will be affected by many factors including those that are listed on slide one of our presentation. The complete list is included in our 10-K so I would ask you to please take the time to review them carefully. Also as we note on slide 2, I will be referring to certain non-GAAP measures such as net financial earnings which I will refer to as NFE, as I discuss our results this morning. We believe I think as everyone knows that NFE provides a better measure of our performance, however I want to stress these non-GAAP measures including NFE are not intended in any way to be a substitute for GAAP, they are discussed more fully in item 7 of our 10-K. and they are being provided pursuant to SEC regulation G. So I would ask you again to please take the time and review that disclosure as well. Turning to slide three, I think everyone knows from our press release this morning that we turned in a very strong third fiscal quarter, when I discussed these results in more detail shortly. But I wanted to start out by reminding you of our financial goals. I know that these are familiar to many of you and I want you to think about our performance this quarter in the context of those goals going forward. First of all, we remain committed to average long term net financial earnings growth of between 4% and 7%. Second, we will continue to strive to provide dividend growth of at least 5%, we've targeted a payout ratio between 60% and 65% of…

Thank you. We will now begin the question-and-answer session. (Operator Instructions) and the first question comes from Andy Levy from Avon Capital.

Just want to see if I can get some more details on the reallocating of capital into wind and combined heating power and I guess the mid-stream business. So may be just with the wind, I am not familiar with OwnEnergy so maybe you can just kind of, just talk about the partnership itself and basically where you would be doing this project and is it just on the 1300 megawatts that they currently have in their pipeline that you would be investing in or this would be new and then obviously the PTCs that to expire after this year, they could be extended but just kind of going into that and then I have some questions on the other two businesses.

I will give you the overview and then I will ask Stan Kosierowski to comment on that as well. We entered into the agreement with Own last year, made in equal investment of about $9 million and what it did was give us the opportunity access to Own’s portfolio, so we have the opportunity but not the obligation to invest in their projects. The focus is going to be on states that had the renewable portfolios standard which why I mentioned those 29 states and we will be looking for opportunities that are supported by Purchase Power Agreement and from the financing point of view we’ll look for project financing as well. So what Own is doing is they are actually developing the projects and taking all of that development risk and then as I said we have the opportunity to then review those projects decide if they make sense, if they meet our return criteria and decide whether to invest at that point. So the focus right now as I said would be on those 29 states but Stan do you want to add anything to that?

Yes, the states that we are looking at is the state that not only have RPS standards but also in the future will require capacity, you know it doesn’t exist today, so (wind) is the low cost require that capacity so it provide some good opportunities in those states.

Right but the opportunities on this current pipeline of 1300 megawatt, is that where the opportunity is right now?

Yes, it is.

Okay and are these 1300 megawatts are signed PPAs already or these are the things, have they broken ground on this 1300 megawatts, can you tell me about them?

They are all, Andy the 1300 megawatts are divided into various stages of the development process, so we would not really get involved with considering them until they were far enough for long including the PPA being in place. Stan, do you want to add anything to this?

Yes, the purpose of the Own investment was the fact they would be the developers and we would be at late stage. So that is early, significant time in early stage development and rejection of projects that Own would certify those projects, determine where the projects were most viable and then bring those project to us in a late stage so that’s a relationship with Own that we have fit in with them.

We did not want to be in the development business and Andy you have also mentioned the PTC which is ongoing conversation in Washington, quite frankly not all of the projects will be dependent upon PTC for the economics and we would factor that into our overall evaluation as to whether or not they qualify for PTC.

How many megawatts of wind does Own operate right now?

The Own, they are developer, they don’t operate wind project.

They don’t operate, so they do the turn-key type of thing?

Right, they develop the projects and turn it over an asset owner.

Okay and then so you would make money on the construction of it or you would be part of the PPA?

No, we would then, if we sign out a project that met our criteria by the project from Own…

Okay.

Again it will be constructed Own it and then we would be the beneficiary of the PPA with the local electric utility or whoever is the other side of it.

I understand and when do you think we would see some capital flowing in that direction?

We are looking projects as we speak and when they have the project that meets all of our criteria including long term PPAs which we have not ready to announce any yet that’s one we will start announcing the transactions but nothing imminent but we have already for example looked at these potential transaction that we do not take because it didn’t meet all of our criteria.

And what’s your return threshold on this?

We are looking for unlevered returns around 9%, which is market-based and based on appropriate leverage and project financing that would be a return on equity in high teens.

High teens and that would be financed 50-50 or how would that work? As far as trying to figure out what your return..

I think we see the market financing at about 60% equity and 40% and we also are expecting up to 40% project financing.

And over the next three years how much capital would you like to put into that business?

That's going to depend on the deal flow; I think what we mentioned in the presentation the average project is, the projects that were specialized in are $25 million to $100 million size projects. We're hoping to look at least one per year, but we do not have a specific capital budget yet. Again, we need to get a better look at the projects that have become available to us.

And d same type of questions on combined heat and power kind of maybe you can give us the same type of run down; don't have to repeat all these questions, but kind of the same line of questioning.

The combining heating power just gives some overview on that, it's got these two comments on that as well. That's a market that we see evolving here in the state right now. I think that it's gotten a higher level of focus in the aftermath of Sandy and the increased focus on the need for backup power and things like that. So as a result of that we have seen more projects that have been developing, and we expect that that's going to continue over the next several years. The Board public utilities has been involved, we view that as a preliminary conversations that are going on there right now about a potential portfolio standard. But we think that market will continue to evolve going forward. Similar to Own, different types of deals of course, but similar to Own, we’re looking at equity returns that would be in the mid teens range as far as the equity returns goes. But right now we're looking at food processors, hospitals and have identified potential opportunities in the range of 6 megawatts.

The average project size of these from a capital perspective is much smaller than Wind we’re talking upwards high side $5 million for a large project that we're look at. So again the amount of capital would be on a relative basis smaller than Wind.

And on the mid-stream?

The mid-stream as I said in the presentation we have developed very strong customer relationships in NJRES and then with the services we provide to them, we think there might be opportunities to participate with them, with potential investments on the mid-stream side. That's a bit of a challenging area because of the MLP money and what we're not prepared to do is to reduce our return criteria to try and compete with that. But we do think in combination with some of the other services we provide to customers that there could be appropriate opportunities for us.

And you said the partnership with whom? You mentioned a company or something or did I miss?

Customers in general.

Yeah the customers that we work with at NJR.

How about your existing pipe investments are there any expansion opportunities there from what you are hearing from the main guys running those pipes?

No we don't see that right now.

And then the last question is just of the 4% to 7% growth rate that you threw out there. Does that include these type of investments, would that be additive or I mean I also understood you are doing this to replace the lost solar tax credit. But just want to understand would this be kind of part of the 4% to 7% additive, the 4% to 7%?

Yes Andy this will be part, inclusive in the 4% to 7%; including as we just, mentioned the lower expected tax credits going forward. In fact to the extent we're successful with capital opportunities and CHP in Wind, we would probably as you have been talking about in this presentation reallocate solar sooner than later again to get off of the relying on those solar tax credits.

The next question comes from Glenn Barnett from Morningstar.

Just a couple of quick question, the first on the new capital projects that you listed on the slide. You mentioned that the timing of the rate base earnings would be about 27 teen, maybe you already kind of hit on this in your comments but if you are filling in 2015 is there any reasons why those aren't 2016 or is it just timing of project completion?

It’s actually a function of our fiscal year. If we file a rate case in November, say November of 15th, that’s fiscal ’16 already and takes a good nine months or so on average to settle a rate case, so that brings a strike to the beginning of fiscal ’17 because we’re also 30 year end…

That’s right. You did file late in ’15, okay, that make sense. And then as a second small issue with the deferral that you had approved for the kind of incremental O&M from dealing with Sandy, your estimate in the past is about 15-20 million first part is that is still about the number that we’ll do looking at and second would be how much of that have you already hung up on the balance sheet?

The 15-20 is not changed and as of June, I think, we’re at 14.9 million actually spent then on the balance sheet.

And the next question comes from Jay Yannello from Skyden Capital.

Good morning. Larry, I know it’s not a huge part of your business but the home standby generation market is really hot still, in my town it’s roughly I’d say 10% penetration, it’s within your service territory. I know you were busy after Sandy with maintenance and then some installs. Are you being aggressive enough in this market? It seems like it’s continuing to go and I’m just wondering if you’re spending enough in this market if you have enough resources allocated toward, and if you know roughly what percentage of the market you have so far.

You can rest assured we are being very aggressive in generator market if you could look around the table you could see the smiles on my colleagues. So that has emerged as you suggest as a very strong growth opportunity for us. I’d ask Stan Kosierowski who is head of that, I don’t think we have the specific percentages but I’ll let you answer that…

I think generator sales is obviously is a big market, it hasn’t slowed down. We saw a hurricane there was a uplift and deep along the economics how much across the people walked away. This damages continues and its is a way of life. And we’ve had over 3,000 sales leads when we probably have less than couple of 100 leads, couple of years ago. And we’ve put in maybe 10 generators in five years ago we’ve already installed over 300. So it is a very viable market for us and we’re going after it it’s in the people dedicated to it and it’s certainly something that our custom prices is interested in.

And I know Jay you live in the service territory if you want to buy one we’ll be happy to sell you one too.

I actually have base window issues I can’t get over with, but I’m still debating it. Do you have off the shelf contract, services contract or are you working on more of them? I haven’t seen that much marketing on that side as far as for generators and also while I’m on it the plumbing and electrical, can you give us any early feedback on those contracts, how that’s…

And too, I’m going to ask Stan take those but I got to ask you to look more at the local papers and things like that because we’ve got a pretty aggressive ad campaign out there right now.

Okay, I was referring to home flyers but I don’t read the local paper I guess I should.

No home flyers, not at all. Okay, let me ask Stan to answer your other question.

The issue is we have a product a service contract on generators that we offer and we offer it not just to the units that we sold but anybody else that might have had it installed by some other competitors. So we do have that product and we are advertising it quite aggressively. And regarding the plumbing, the plumbing and electrical contracts they are going well. We’ve sold several thousand both to customers who have them leveled and we’re using that as a really an advertising brand we get addition people to buy the contracts, they are very successful.

Okay, and as these things cycle on in often test, do you still think you will start seeing that eventually as more and more installed they are (inaudible) just totally be lost, I’m talking obviously in the off season.

Stan.

Jay, can you repeat that please?

I guess once a week these things cycle on and off and as a thousands and thousands and thousands of more of these are installed in our service territory in the off season, do you think you will start to see this demand?

On service contracts?

No, as the generator cycle on and off, they themselves once a week for 10 minutes or so, so as again you have tens of thousands of these things pop. Will you start to seeing that in your low demand?

But we have decoupled rates Jay, so…

No, I realize that. I just mean from managing your throughput, your flows and things like that.

And there is amount of throughput involved with the cycling part of this whole, of the machine.

Okay, thank you.

And have the opportunity to deal with that issue.

Exactly, all right. Thank you.

Next question comes from Paul Patterson with Glenrock Associates.

Good morning. Just getting away from the tax credit and you said you’re going into wind and what have you. Generally speaking I mean I think the PTC is being a pretty significant economic impact associated with wind. But you mentioned that you saw economics outside of that, and I just wonder if you could elaborate little bit on that?

Stan, you want to take that?

Yeah, the issue is that the PTC is a short term event, however, the areas of the country that where wind is being successfully constructed are areas that have capacity demand probably not today but there are (inaudible) over the next five years requires them to either replace or considered new generation sources and with this I want to lower clean power sources that utilities are looking at to provide that power, so in the future what I think we’re looking at is where those states are needing the capacity and then taking also the alternatives and there is a lot of (lifecycle) alternatives but when this one of lower cost and probably the second lowest cost compared to the combined cycle gas project.

I think Paul underscores as you all know the importance of those renewable portfolio standards.

By that mean, how about the underlying purpose of getting away from the tax credit? Is there, what is the reason for that is that because of your own tax appetite or what you see for the market? What’s leading you to, what’s actually causing this? Glenrock Associates: By that mean, how about the underlying purpose of getting away from the tax credit? Is there, what is the reason for that is that because of your own tax appetite or what you see for the market? What’s leading you to, what’s actually causing this?

Look here Paul, right now in the laws as tax credit reduces some 30% down to 10% at the end of the calendar ’16, so we’re basically planning assuming that’s going to happen, so obviously without a change we all of sudden going to get a third of the tax credit we get from new capital than we get now. So we needed appropriately so plan ahead and not be so reliant on that tax credit if we want to continue the consistent annual earnings growth which we’re obviously doing.

Okay. Glenrock Associates: Okay.

And I think the other point there Paul, I mentioned briefly in the presentation is, it should be focused on as the growing inventory of SRECs and what we expect to come from that.

I got you, the CHP, you’ve mentioned that your current pipeline is 6 megawatt, but I think it sounds to me like you’re planning on growing that. How much do you think you’re growing that? Glenrock Associates: I got you, the CHP, you’ve mentioned that your current pipeline is 6 megawatt, but I think it sounds to me like you’re planning on growing that. How much do you think you’re growing that?

It is hard to estimate that right now because as I said that market is still evolving here in the state, I think the added benefit right now that we think supports growth in that market as I said the increased focus on reliability after Sandy.

One of the things is that, this didn’t perpetually discuss for sometime at the BPU and it doesn’t seem like this really sort of gets off the ground, and I’m just wondering you’ve mentioned Sandy and the impact associated with that. How are these projects, what is the benefit, where the economy that drive them, is there some sort of subsidy that comes from other ratepayers or what is sort of holding it up if you following? Glenrock Associates: One of the things is that, this didn’t perpetually discuss for sometime at the BPU and it doesn’t seem like this really sort of gets off the ground, and I’m just wondering you’ve mentioned Sandy and the impact associated with that. How are these projects, what is the benefit, where the economy that drive them, is there some sort of subsidy that comes from other ratepayers or what is sort of holding it up if you following?

This is Kathy Ellis the COO of New Jersey natural gas.

As I mentioned before, there are ongoing discussions at the BPU and there has been indication on very high interest from the governor’s office about reliability following Sandy and there is a direct focus on CHP, we don’t know what the outcomes going to be but there is money being set aside both at BPU and EDA to support these installations. And as I said we don’t know how it’s going to end up, it’s an ongoing discussion, but everything points to a lot of support for CHP installation across the state both and from the governor’s office and from the BHU which is a bit different as you said, but it’s been ongoing discussion for years and years but this focus is a bit difference that it’s been in the past.

And it is fair to avoid, I mean they’ve got a lot different stakeholders that they’re dealing with and as they always do try to maintain a thoughtful and delivered a process here to come up with a policy.

And now (to add) we’re seeing for the first time here that because of Sandy a lot of business and hospitals being basically out of business for over a week. Because of Sandy, they’re interested and being proactive and come to us to get more information about CHP and they want basically get off the grid and not have that risk to their business.

And he was asking about the economics of the PTC, are you just refusing of the wind, are you guys thinking that the CHP will be similar just without getting it all the detail that’s similar kind of return or you think that’s going to be different? Glenrock Associates: And he was asking about the economics of the PTC, are you just refusing of the wind, are you guys thinking that the CHP will be similar just without getting it all the detail that’s similar kind of return or you think that’s going to be different?

We think slightly better than wind, wind with long term PPA and the proven technology has the slightly lower return economics, but CHP would be slightly higher.

I appreciate it, thank you. Glenrock Associates: I appreciate it, thank you.

(Operator Instructions) And the next question comes from the Spencer Joyce for Hilliard Lyons.

Good morning, nice quarter. Just one quick question here for me and for once this is not about the solar. I wanted to touch on the energy services just for second. Just ready to the press release you all noted whether helping I guess both in fiscal Q2 and year to date a little bit. Aside from whether is there any sort of maybe secular tailwind or are we returning maybe to growth I that or is the upside this year kind of an anomaly a little?

I am going to ask Steve Westhoven, who runs that business for us to answer that, Spencer.

Spencer, we certainly had seen when weather comes through a little bit of increase in volatility you’ve also had shifting production areas that are creating the real need for physical service out the market and that NJRG services we concentrate on meeting the physical needs of those market and like what I said before we restructured out portfolio to be competitive in its environment. So when the market needs those real physical services that we're able to meet it, when they need it the most. So I think in the physical market that you say, you've got production that's certainly growing and NJR Energy services we're trying to be a part of that market and as far as where it's going to go in the future, I think it looks positive.

Okay, so I guess maybe weather aside, some of the weakening that we've seen with depressed gas prices or less volatile prices, maybe some of that downside (audio gap)

(Operator Instructions)

And I think our reaction to that structure and portfolios been positive. But you know, (inaudible) this market is growing. There's more gas coming online and even from previous conversation, CHP and other parts of the business are looking to utilize that gas and I think that's a area to concentrate on.

It's Spencer, I think again, it's the main messages on your question apart that our fundamental beliefs that the demand for physical gas services is going to continue to increase number one, and number two is because of the steps that we have taken to restructure the portfolio, we had positioned ourselves to meet those physical needs. There's been a lot of discussion about the strategies of others, but that's how we've been able to maintain profitability in that market. Steve you want to add anything to that?

Yeah that was great color. That’s all I think I had. Thanks guys.

Thank you. As there are no more questions at present this concludes our question and answer session, I'd now like to turn the call back over to management for any closing remarks.

All right, thank you, Keith, thank you all for joining us this morning, as a reminder recording of the call will be available on our website, again we appreciate your interest and investment in New Jersey resources, thank you so much, good bye.

Thank you, the conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Have a nice day.