New Jersey Resources Reports Fiscal 2009 Third-Quarter Earnings; Reaffirms Earnings Guidance

New Jersey Resources (NYSE:NJR) today reported earnings for the third quarter of fiscal 2009 and reaffirmed its net financial earnings guidance. Net financial earnings increased $5.3 million in the third quarter when compared with the same period last year.

A reconciliation of NJR’s net income to net financial earnings for the three and nine months ended June 30 in fiscal years 2009 and 2008 is provided below:

Net financial earnings is a financial measure not calculated in accordance with generally accepted accounting principles (GAAP) of the United States as it excludes all unrealized, and certain realized, gains and losses associated with derivative instruments. For further discussion of this financial measure, as well as a reconciliation to the most comparable GAAP measure, please see the explanation below under "Additional Non-GAAP Financial Information.”

• Fiscal 2009 Net Financial Earnings Guidance Reaffirmed

Subject to the factors discussed at the end of this release under "Forward-Looking Statements,” NJR is reaffirming its fiscal 2009 net financial earnings guidance in a range of $2.35 to $2.45 per basic share. This guidance has been raised twice during the fiscal year to reflect the impact of the base rate case at New Jersey Natural Gas (NJNG), which became effective in October 2008, as well as higher gross margin from incentive programs and lower interest rates.

"We are pleased to report continued strong financial results that reflect the excellent performance of NJNG,” said Laurence M. Downes, chairman and CEO of NJR. "Despite a challenging economic environment, we have been able to execute our disciplined financial strategy and provide benefits to our shareowners and customers.”

• New Jersey Natural Gas Earnings Increase 35 Percent

Fiscal 2009 year-to-date net income at NJNG increased 35 percent to $68.8 million, compared with $51 million for the first nine months of fiscal 2008. For the third fiscal quarter ended June 30, 2009, net income increased to $4.1 million, compared with $147,000 in the same period last year. The impact of the base rate case, as well as increased gross margin from regulated incentive programs, has driven the higher results in both periods.

New customer growth also remains stable through the first nine months of fiscal 2009. NJNG added 4,193 new customers during this period and 460 existing customers converted to natural gas heat and other services. NJNG currently forecasts adding approximately 6,100 new customers and converting 650 existing customers in fiscal 2009. This growth is expected to contribute approximately $3.6 million to annual utility gross margin.

• Several Regulatory Initiatives Approved or Pending

NJNG recently received approval from the New Jersey Board of Public Utilities (BPU) to implement a series of energy-efficiency programs that will augment those existing through New Jersey’s Clean Energy Program (NJCEP). The programs are expected to spur economic activity, including local jobs, while helping to achieve the state’s energy-efficiency and greenhouse gas reduction goals. Approximately $15 million of additional investment will be recognized in rates over a 4-year amortization period and have a rate of return based on the weighted average cost of capital authorized by the BPU in October 2008 of 7.76 percent which includes a return on equity component of 10.3 percent. The program’s cost of approximately $21.1 million, if fully subscribed, will be recovered through a new Energy-Efficiency Rider mechanism, effective August 1, 2009.

Projects resulting from the previously approved Accelerated Infrastructure Program (AIP) have commenced in Morris, Monmouth and Ocean counties. These projects will create and sustain local jobs while improving the safety and reliability of NJNG’s distribution system. Estimated construction costs for the 14 projects in the program are approximately $70.8 million. As construction proceeds, NJNG will be able to recognize a rate of return based on its authorized weighted average cost of capital of 7.76 percent. The AIP investments are expected to continue through August 31, 2011.

Additionally, NJNG has filed a request with the BPU to extend its Conservation Incentive Program (CIP), originally approved by the BPU in October 2006 for a 3-year pilot, as currently structured until October 1, 2010. Since its inception, the average residential heat customer has reduced their annual usage by 9 percent, or approximately 100 therms. Also, the CIP has recently received a positive evaluation from an independent external third party consultant.

• NJR Energy Services Contributes 34 Percent to Net Financial Earnings

NJR Energy Services (NJRES), NJR’s wholesale energy subsidiary, reported net financial earnings for the 9-month period ending June 30, 2009 of $36 million compared with $57 million in the same period last year. For the third quarter of fiscal 2009, the net financial loss narrowed to $4.5 million compared with $5.6 million in the same period last year. Losses in the third and fourth fiscal quarters are anticipated due to the seasonal use of natural gas while the expenses associated with the transportation and storage portfolio are generally incurred evenly throughout the year. Current economic conditions resulted in a slowing of the wholesale market during the third quarter, due primarily to reduced demand of natural gas for electric generation. The company continues to forecast NJRES’ net financial earnings to account for between 30 and 35 percent of NJR’s total net financial earnings for the current year.

• Steckman Ridge Construction Continues

Construction activities will continue through the summer at Steckman Ridge and additional facilities are being prepared to support the initial winter season. The Federal Energy Regulatory Commission (FERC) previously authorized the placement of certain injection related facilities at the site into commercial operation and customers have been injecting natural gas inventory since April 2009. There is approximately 4 billion cubic feet (Bcf) of natural gas currently stored at Steckman Ridge.

Webcast Information

NJR will host a live webcast to discuss its financial results today at 9 a.m. ET. A few minutes prior to the webcast, go to www.njliving.com and select "New Jersey Resources” from the top navigation bar. Choose "Investor Relations,” then click just below the microphone under the heading "Latest Webcast” on the Investor Relations home page.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. NJR cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Other factors that could cause actual results to differ materially from the company’s expectations include, but are not limited to, weather, economic conditions and demographic changes in NJNG’s service territory, rate of customer growth, volatility of natural gas commodity prices and its impact on customer usage and NJR Energy Services operations, changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the company, conditions in the credit markets and their potential impact on the company’s access to capital and borrowing costs, increased interest costs resulting from failures in the market for auction rate securities, the impact of the company’s risk management efforts, including commercial and wholesale credit risks, changes in the costs of providing pension and post-employment benefits to current and former employees, the company’s ability to obtain governmental approvals, property rights and/or financing for the construction, development and operation of its non-regulated energy investments, risks associated with the management of the company’s joint ventures and partnerships, the impact of regulation (including the regulation of rates), the outcome of any future base rate cases, fluctuations in energy-related commodity prices, customer conversions, other marketing efforts, actual energy usage patterns of NJNG’s customers, the pace of deregulation of retail gas markets, access to adequate supplies of natural gas, the regulatory and pricing policies of federal and state regulatory agencies, changes due to legislation at the federal and state level, an adequate number of appropriate counterparties, sufficient liquidity in the energy trading market, the disallowance of recovery of environmental-related expenditures, environmental and other litigation and other uncertainties, the effects and impacts of inflation, change in accounting pronouncements issued by the appropriate standard setting bodies and terrorist attacks or threatened attacks on energy facilities or unrelated energy companies. NJR does not, by including this paragraph, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. More detailed information about these factors is set forth under the heading "Risk Factors” in NJR’s filings with the Securities and Exchange Commission (SEC) including its most recent Form 10-K.

Non-GAAP Financial Information

This press release includes the non-GAAP measures net financial earnings (losses), financial margin and utility gross margin. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found below. As an indicator of the company’s operating performance, these measures should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP.

Net financial earnings (losses) and financial margin exclude unrealized gains or losses on derivative instruments related to the company’s unregulated subsidiaries and certain realized gains and losses on derivative instruments related to natural gas that has been placed into storage at NJRES. Volatility associated with the change in value of these financial and physical commodity contracts is reported in the income statement in the current period. In order to manage its business, NJR views its results without the impacts of the unrealized gains and losses, and certain realized gains and losses, caused by changes in value of these financial instruments and physical commodity contracts prior to the completion of the planned transaction because it shows changes in value currently as opposed to when the planned transaction ultimately is settled. NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and other taxes and regulatory rider expenses, which are key components of the company’s operations that move in relation to each other. Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of the company’s performance. Management believes these non-GAAP measures are more reflective of the company’s business model, provide transparency to investors and enable period-to-period comparability of financial performance. A reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found below. For a full discussion of NJR’s non-GAAP financial measures, please see NJR’s most recent Form 10-K, Item 7.

About New Jersey Resources

New Jersey Resources, a Fortune 1000 company, provides natural gas and clean energy services to customers in New Jersey and in states from the Gulf Coast to New England, and Canada. With over $3 billion in annual revenues, NJR safely and reliably delivers natural gas through more than 6,500 miles of main to nearly half a million customers; develops and manages a diverse portfolio of more than 777,000 dth/d of transportation capacity and nearly 52 Bcf of storage capacity; and provides appliance installation and service to approximately 150,000 homes and businesses. NJR has also made significant investments in the midstream asset sector through equity partnerships, including Steckman Ridge and Iroquois. Through Conserve to Preserve®, NJR is helping customers use less energy and save money. For more information about NJR, visit www.njliving.com.