New Jersey Resources Reports Fiscal 2007 Results; Increases Dividend 5.3 Percent

New Jersey Resources (NYSE: NJR) today announced its fiscal 2007 results, marking its 16th consecutive year of earnings growth. The company reported earnings per basic share of $3.17, compared with $2.82 last year. The increase was driven by a 42.8 percent increase in earnings at NJR Energy Services (NJRES), the company’s wholesale energy subsidiary. "Our constant focus on consistent performance made fiscal 2007 another strong year for New Jersey Resources," said Laurence M. Downes, chairman and CEO of NJR. "We were able to surpass our initial earnings guidance and achieve another year of higher earnings while helping our customers to save energy with aggressive education initiatives and enhancing our own environmental efforts through Conserve to Preserve™.” NJR also announced that its Board of Directors approved a 5.3 percent increase in the quarterly dividend rate to $.40 per share from $.38 per share. The new quarterly rate is effective with the dividend payable January 2, 2008 to shareowners of record on December 15, 2007. The new indicated annual dividend rate is $1.60 per share. NJR has now increased its dividend in each of the last 13 years and has paid quarterly dividends since 1952. "We continue to deliver consistent results for our shareowners and appreciate the confidence they place in NJR,” Downes said. Share Repurchase Plan Increased Yesterday, the NJR Board of Directors authorized an increase in the share repurchase plan from 3.5 million to 4.5 million shares. The plan authorizes NJR to purchase its shares on the open market or in negotiated transactions, based on prevailing market prices. NJR purchased 340,000 shares under its share repurchase plan during fiscal 2007. Since the share repurchase plan began in September 1996, NJR has invested over $144 million to repurchase 3.49 million shares at a spilt-adjusted, average price of $34.72. Financial and operating highlights included: Higher Net Income and Basic Earnings per Share For the 12 months ended September 30, 2007, NJR earned $88.4 million, or $3.17 per basic share, compared with $78.5 million, or $2.82 per basic share, last year. In the fourth quarter, NJR posted a consolidated loss of $15.3 million or $.55 per basic share, compared with a loss of $12 million, or $.43 per basic share last year. It should be noted that NJR believes a loss in this 3-month period is typical for the company and due primarily to the seasonal nature of NJR’s primary businesses. Earnings decreased at NJNG, which earned $44.5 million in fiscal 2007, compared with $46.9 million last year. NJNG lost $11.2 million in the quarter versus a loss of $7 million last year. The increase in net loss during the quarter was driven primarily by pre-tax settlement charge with the New Jersey Board of Public Utilities (BPU) of $4 million related to certain previously deferred remediation claims associated with a manufactured gas plant in Long Branch, N.J. These claims were determined to be related to personal injury and therefore not recoverable under NJNG’s remediation adjustment clause. In fiscal 2007, NJRES reported a 42.8 percent increase in earnings to $40.1 million, compared with $28.1 million last year. The increase was due primarily to higher gross margin from its portfolio of storage and transportation capacity assets. For the three months ended September 30, 2007, NJRES reported a loss of $5.9 million, compared with a loss of $7.4 million last year. The improvement was driven by a slight increase in gross margin resulting from the impact of warmer-than-normal weather on electric demand in the Southeast and a decrease in interest expense. NJNG Customer Growth Driven by Conversions NJNG added 8,421 new customers in fiscal 2007, of which 39 percent converted from other fuels. NJNG also added natural gas heat and other services to 770 existing customers during the year. NJNG expects to maintain an approximate 1.8 percent annual customer growth rate in fiscal 2008, which it believes is above the national average for natural gas distribution companies. Conservation Incentive Program Allows Recovery of Impact from Weather and Usage "Normal” weather is based on 20-year average temperatures as calculated based on three reference areas representative of NJNG’s service territory. Weather during the 12-month period ended September 30, 2007 was 5.6 percent warmer than normal and 2.6 percent colder than last year. As with the weather normalization clause which preceded it, the impact of weather is significantly offset by the Conservation Incentive Program (CIP). This program is designed to normalize year-to-year fluctuations on both NJNG’s gross margin and customers’ bills that may result from changing weather and usage patterns. Included in the total CIP accrual of $16.5 million was $8.2 million associated with the warmer-than-normal weather and $8.3 million associated with lower customer usage. On October 3, 2007, the BPU provisionally approved $15.6 million of CIP recovery reflecting actual balances through June 30, 2007 and estimated levels from July through September 30, 2007. Customers have already realized annual Basic Gas Supply Service savings of $10.6 million in fixed cost reductions through the CIP. Additionally, the lower level of gas usage in fiscal 2007 represents another estimated $37.6 million in commodity cost savings achieved by customers. Incentives Provide Benefit to Customers, Shareowners; Regulators Approve Extension During the fiscal year, NJNG’s utility gross margin-sharing incentive programs, which include off-system sales, capacity release, storage optimization and financial risk management programs, totaled 36.5 billion cubic feet (Bcf) and $8.1 million of utility gross margin, compared with 38.4 Bcf and $7.4 million of utility gross margin for the same period last year. For the three months ended September 30, 2007, these programs totaled 9.7 Bcf and $1.7 million of utility gross margin, compared with 8.4 Bcf and $876,000 of utility gross margin for the same period last year. NJNG shares the utility gross margin earned from these incentive programs with customers and shareowners according to utility gross margin-sharing formulas. Since the establishment of these incentive programs in 1992, NJNG customers have saved over $338 million on their natural gas bills, or approximately 4 percent annually. In October 2007, the utility received regulatory approval for an extension of its incentive programs through October 31, 2008 with all but one mechanism remaining at its present sharing levels. The financial risk management program changed from an 80/20 sharing to an 85/15 sharing between customers and NJNG, respectively, effective November 1, 2007. Wholesale Energy Services Achieves Record Earnings NJRES earned $40.1 million during fiscal 2007, compared with $28.1 million last year. The increase in earnings was primarily the result of favorable market-related conditions during fiscal 2007. These conditions included the ability to arbitrage storage positions and capitalize on seasonal pricing fluctuations, as well as the optimization of pipeline capacity with respect to geographic pricing differentials. The increase was due primarily to higher gross margin generated by colder-than-normal weather in the Northeast during the second fiscal quarter. This increase in gross margin offset higher labor costs and other operating expense increases. Retail and Other This business segment consists of NJR Home Services (NJRHS), which provides service, sales and installation of appliances to over 149,000 customers; NJR Energy, which consists of a 5.53 percent equity investment in Iroquois Gas Transmission System, L.P. (Iroquois), a partnership of subsidiaries of energy companies that owns an interstate natural gas pipeline in the Northeast; a 50 percent equity investment, through two wholly-owned subsidiaries, in Steckman Ridge GP, LLC and Steckman Ridge LP, a natural gas storage facility under joint development with a partner in western Pennsylvania; and Commercial Realty & Resources, which develops commercial real estate. Earnings in fiscal 2007 were $3.7 million, compared with $3.5 million last year as a result of additional contracts at NJRHS and improved performance from the Iroquois investment. For the three months ended September 30, 2007, this business segment earned $1.8 million, compared with $2.4 million last year. The decrease in fourth-quarter earnings is primarily due to greater corporate overhead allocations, which were partially offset by increased earnings from the investment in Iroquois and greater earnings at NJRHS. Fiscal 2008 Earnings Guidance Assuming the continued positive impact of the CIP, stable economic conditions, continued customer growth at NJNG, continued volatility in the wholesale natural gas markets affecting NJRES and subject to the factors discussed below under "Forward-Looking Statements,” NJR estimates earnings for fiscal 2008 will be in the $3.20 to $3.30 per basic share range. Additional Non-GAAP Financial Information NJRES’ gross margin and NJNG’s utility gross margin are included as supplemental disclosures because such items are the primary measures used by management in analyzing the results of their operations. NJRES’ gross margin represents natural gas revenues and management fees less natural gas costs and fixed portfolio costs. NJNG’s utility gross margin represents natural gas revenues less natural gas costs, sales and other taxes and regulatory rider expenses. These measurements represent the results of revenues less certain costs, which are key components of our operations and move in relation to each other and can be dramatically influenced by the changes in the wholesale price of natural gas. In addition, management believes that NJNG’s utility gross margin provides a more meaningful basis for evaluating utility operations than revenue as natural gas costs, sales and other taxes and regulatory rider expenses are passed through to customers, and therefore have no effect on gross margin. Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of our performance. Management believes these gross margin amounts are more reflective of our operations, provide transparency to investors and enable period-to-period comparability of financial performance. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP. Management’s definition of NJRES’ gross margin and NJNG’s gross margin may not be comparable to the definition of gross margin used by other companies in either the natural gas distribution business or other industries. 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. Forward-Looking Statements This news release contains estimates, earnings guidance and other 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, including gross margin, earnings and customer growth, 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 NJRES operations, the impact of the company’s risk management efforts, including commercial and wholesale credit risks, 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, conversion activity, 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 and continued access to the capital markets, the disallowance of recovery of environmental-related expenditures and other regulatory changes, environmental and other litigation and other uncertainties. More detailed information about these factors is set forth in NJR’s filings with the Securities and Exchange Commission (SEC), including its annual report on Form 10-K filed on November 22, 2006, its quarterly report filed on August 2, 2007 and its annual report for fiscal 2007 on Form 10-K to be filed on, or about, November 21, 2007. NJR’s SEC documents are available at www.sec.gov. 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. Webcast Information NJR will host a live webcast to discuss its financial results today at 2 p.m. ET. A few minutes prior to the webcast, go to 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. About New Jersey Resources New Jersey Resources (NYSE:NJR), a Fortune 1000 company and a member of the Forbes Platinum 400, provides reliable retail and wholesale energy services to customers in New Jersey and in states from the Gulf Coast to New England, and Canada. Its principal subsidiary, New Jersey Natural Gas, is one of the fastest-growing local distribution companies in the United States, serving more than 478,000 customers in central and northern New Jersey. Other major NJR subsidiaries include NJR Energy Services and NJR Home Services. NJR Energy Services provides customer service and management of natural gas storage and capacity assets in the energy services market. NJR Home Services offers retail customers heating, air conditioning and appliance services. NJR’s progress is a tribute to the more than 5,000 dedicated employees who have shared their expertise and focus on quality through more than 50 years of serving customers and the community to make NJR a leader in the competitive energy marketplace. For more information, visit NJR’s Web site at njliving.com. NEW JERSEY RESOURCES CONSOLIDATED FINANCIAL RESULTS   Three Months Ended Twelve Months Ended Thousands, except per share data September 30, September 30, (Unaudited)   2007       2006       2007     2006   Operating Revenues $ 597,474 $ 534,507 $ 3,028,933 $ 3,299,608   Net (Loss) Income $ (15,345 ) $ (11,971 ) $ 88,354 $ 78,519   (Loss) Earnings Per Common Share Basic $ (.55 ) $ (.43 ) $ 3.17 $ 2.82   Diluted $ (.55 ) $ (.43 ) $ 3.15 $ 2.80   Average Shares Outstanding Basic 27,995 28,020 27,903 27,862   Diluted 28,166 28,276 28,075 28,081 NEW JERSEY RESOURCES CONSOLIDATED STATEMENTS OF INCOME                     Three Months Ended   Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except per share data)     2007       2006       2007     2006 OPERATING REVENUES   $ 597,474     $ 534,507     $ 3,028,933   $ 3,299,608     OPERATING EXPENSES Gas purchases 556,352 498,949 2,590,684 2,909,789 Operation and maintenance 41,979 33,799 136,601 121,384 Regulatory rider expenses 3,778 2,719 37,605 28,587 Depreciation and amortization 9,267 8,830 36,235 34,753 Energy and other taxes     6,801       5,534       62,499     58,632 Total operating expenses     618,177       549,831       2,863,624     3,153,145   OPERATING INCOME (20,703 ) (15,324 ) 165,309 146,463   Other income 1,062 1,182 4,294 4,725   Interest charges, net     7,260       7,655       27,613     25,669   INCOME BEFORE INCOME TAXES (26,901 ) (21,797 ) 141,990 125,519   Income tax provision (11,196 ) (9,159 ) 55,298 48,817   Equity in earnings, net of tax     360       667       1,662     1,817   NET INCOME     ($15,345 )     ($11,971 )   $ 88,354   $ 78,519 EARNINGS PER COMMON SHARE BASIC ($0.55 ) ($0.43 ) $ 3.17 $ 2.82 DILUTED     ($0.55 )     ($0.43 )   $ 3.15   $ 2.80   DIVIDENDS PER COMMON SHARE   $ 0.38     $ 0.36     $ 1.52   $ 1.44   AVERAGE SHARES OUTSTANDING BASIC 27,995 28,020 27,903 27,862 DILUTED     28,166       28,276       28,075     28,081 NEW JERSEY RESOURCES       Three Months Ended Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except per share data)   2007     2006     2007     2006   Operating Revenues New Jersey Natural Gas $ 134,390 $ 109,108 $ 1,005,588 $ 1,138,774 NJR Energy Services 454,124 417,447 1,994,682 2,133,540 NJR Home Services and Other   9,030     8,021     28,944     27,568   Sub-total   597,544     534,576     3,029,214     3,299,882   Intercompany Eliminations   (70 )   (69 )   (281 )   (274 ) Total $ 597,474   $ 534,507   $ 3,028,933   $ 3,299,608             Operating Income New Jersey Natural Gas ($14,486 ) ($8,297 ) $ 88,528 $ 88,029 NJR Energy Services (9,349 ) (10,294 ) 71,804 53,745 NJR Home Services and Other   3,132     3,267     4,977     4,689   Total   ($20,703 )   ($15,324 ) $ 165,309   $ 146,463             Net Income New Jersey Natural Gas ($11,256 ) ($7,020 ) $ 44,480 $ 46,870 NJR Energy Services (5,936 ) (7,386 ) 40,148 28,113 NJR Home Services and Other   1,847     2,435     3,726     3,536   Total   ($15,345 )   ($11,971 ) $ 88,354   $ 78,519             Throughput (Bcf) NJNG, Core Customers 7.7 7.6 66.3 64.4 NJNG, Off System/Capacity Management 9.7 8.4 36.5 38.4 NJRES Fuel Mgmt. and Wholesale Sales   67.7     58.4     260.1     228.7   Total   85.1     74.4     362.9     331.5             Common Stock Data Yield at September 30 3.1 % 2.9 % 3.1 % 2.9 % Market Price High $ 52.70 $ 51.39 $ 56.45 $ 51.39 Low $ 45.50 $ 46.34 $ 45.50 $ 40.68 Close at September 30 $ 49.59 $ 49.30 $ 49.59 $ 49.30 Shares Out. at September 30 27,741 27,625 27,741 27,625 Market Cap. at September 30 $ 1,375,676 $ 1,361,913 $ 1,375,676 $ 1,361,913 NEW JERSEY NATURAL GAS       Three Months Ended Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except customer & weather data)   2007     2006       2007     2006   Utility Gross Margin Operating revenues $ 134,390 $ 109,108 $ 1,005,588 $ 1,138,774 Less: Gas purchases 98,478 77,406 687,201 847,276 Energy and other taxes 5,277 4,118 56,475 52,908 Regulatory rider expense   3,778     2,719       37,605     28,587   Total Utility Gross Margin $ 26,857   $ 24,865     $ 224,307   $ 210,003               Utility Gross Margin and Operating Income Residential $ 16,006 $ 16,174 $ 152,395 $ 150,135 Commercial, Industrial & Other 3,835 3,081 33,788 28,597 Firm Transportation   5,144     4,473       29,350     22,850   Total Firm Margin 24,985 23,728 215,533 201,582 Interruptible   173     261       649     1,018   Total System Margin   25,158     23,989       216,182     202,600   Off System/Capacity Management/FRM   1,699     876       8,125     7,403   TOTAL UTILITY GROSS MARGIN   26,857     24,865       224,307     210,003   Operation and maintenance expense 31,343 23,758 97,006 84,907 Depreciation and amortization 9,122 8,666 35,648 34,146 Other taxes not reflected in gross margin   878     738       3,125     2,921   OPERATING INCOME   ($14,486 )   ($8,297 )   $ 88,528   $ 88,029               Throughput (Bcf) Residential 3.1 3.0 41.8 39.4 Commercial, Industrial & Other 0.7 0.8 9.4 10.4 Firm Transportation   0.8     0.8       8.6     7.4   Total Firm Throughput 4.6 4.6 59.8 57.2 Interruptible   3.1     3.0       6.5     7.2   Total System Throughput   7.7     7.6       66.3     64.4   Off System/Capacity Management   9.7     8.4       36.5     38.4   TOTAL THROUGHPUT   17.4     16.0       102.8     102.8               Customers Residential 435,169 429,834 435,169 429,834 Commercial, Industrial & Other 28,916 28,914 28,916 28,914 Firm Transportation   14,104     12,874       14,104     12,874   Total Firm Customers 478,189 471,622 478,189 471,622 Interruptible   45     48       45     48   Total System Customers   478,234     471,670       478,234     471,670   Off System/Capacity Management   26     35       26     35   TOTAL CUSTOMERS   478,260     471,705       478,260     471,705               Degree Days Actual 30 38 4,481 4,367 Normal   42     44       4,745     4,846   Percent of Normal   71.4 %   86.4 %     94.4 %   90.1 % NJR ENERGY SERVICES       Three Months Ended Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except customer)   2007     2006       2007   2006 Operating Revenues $ 454,124 $ 417,447 $ 1,994,682 $ 2,133,540 Gas Purchases   457,874     421,543       1,903,483   2,062,513 Gross Margin (3,750 ) (4,096 ) 91,199 71,027 Operation and maintenance expense 5,401 5,983 18,521 16,415 Depreciation and amortization 53 55 214 211 Energy & Other Taxes   145     160       660   656 Operating Income   ($9,349 )   ($10,294 )   $ 71,804 $ 53,745   Net Income   ($5,936 )   ($7,386 )   $ 40,148 $ 28,113   Gas Sold and Managed (Bcf)   67.7     58.4       260.1   228.7 NJR HOME SERVICES AND OTHER         Operating Revenues $ 9,030 $ 8,021   $ 28,944 $ 27,568   Operating Income $ 3,132 $ 3,267   $ 4,977 $ 4,689   Net Income $ 1,847 $ 2,435   $ 3,726 $ 3,536   Total Customers at September 30   149,765   148,370     149,765   148,370