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      svirgo@njresources.com
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 20pt; FONT-FAMILY: Times New Roman, Times New Roman, serif"><strong>UNITED
        STATES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 20pt; FONT-FAMILY: Times New Roman, Times New Roman, serif"><strong>SECURITIES
        AND EXCHANGE COMMISSION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Washington,
        D.C. 20549</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 20pt; FONT-FAMILY: Times New Roman, Times New Roman, serif"><strong>FORM
        10-Q</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>x</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)&#160;OF</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        SECURITIES EXCHANGE ACT OF 1934</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FOR
        THE QUARTERLY PERIOD ENDED MARCH 31, 2007</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OR</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>o</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
        TRANSITION REPORT PURSUANT TO SECTION&#160;13 OR 15(d) </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OF
        THE SECURITIES EXCHANGE ACT OF 1934</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FOR
        THE TRANSITION PERIOD FROM
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
TO</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Commission
        file number 1-8359</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
        name of registrant as specified in its charter)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>New
                  Jersey</strong></font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>22-2376465</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                  or other jurisdiction of</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporation
                  or organization)</font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
                  Employer</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
                  Number)</font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1415
                  Wyckoff Road, Wall, New Jersey - 07719</strong></font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>732-938-1489</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
                  of principal</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">executive
                  offices)</font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant&#8217;s
                  telephone number,</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">including
                  area code)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
        registered pursuant to Section&#160;12 (b)&#160;of the Act:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

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              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Common
                  Stock - $2.50 Par Value</strong></font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>New
                  York Stock Exchange</strong></font></div>
              </td>
            </tr>
            <tr>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Title
                  of each class)</font></div>
              </td>
              <td valign="top" width="39%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Name
                  of each exchange on which
                  registered)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
        registered pursuant to Section&#160;12 (g)&#160;of the Act:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>None</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
        by check mark whether the Registrant (1)&#160;has filed all reports required to
        be filed by Section&#160;13 or 15 (d)&#160;of the Securities Exchange Act of
        1934 during the preceding 12 months (or for such shorter period that the
        Registrant was required to file such reports), and (2)&#160;has been subject to
        such filing requirements for the past 90&#160;days.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>YES:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>x</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;No:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>o</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of &#8220;accelerated
        filer and large accelerated filer&#8221; in Rule&#160;12-b-2 of the Exchange Act.
        (Check one):</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Large
        accelerated filer:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>x</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Accelerated
        filer:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>o</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
        Non-accelerated filer:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>o</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>YES:&#160;&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>o</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;No:&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings"><strong>x</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        number of shares outstanding of $2.50 par value Common Stock as of May 1,
        2007
        was 27,993,844</font>
        <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
        <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORWARD-LOOKING
        STATEMENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: black" align="left" noshade size="2" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
        statements contained in this report, including, without limitation, statements
        as to management expectations and beliefs presented in Part I, Item 2.
&#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of
        Operations,&#8221; Part I, Item 3. &#8220;Quantitative and Qualitative Disclosures about
        Market Risk,&#8221; Part II, Item I. &#8220;Legal Proceedings&#8221; and in the notes to the
        financial statements are forward-looking statements within the meaning of
        the
        Private Securities Litigation Reform Act of 1995. Forward-looking statements
        can
        also be identified by the use of forward-looking terminology such as &#8220;may,&#8221;
&#8220;intend,&#8221; &#8220;expect,&#8221; &#8220;believe&#8221; or &#8220;continue&#8221; or comparable terminology and are
        made based upon management&#8217;s expectations and beliefs concerning future
        developments and their potential effect upon New Jersey Resources Corporation
        (NJR or the Company). There can be no assurance that future developments
        will be
        in accordance with management&#8217;s expectations or that the effect of future
        developments on the Company will be those anticipated by
        management.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company cautions readers that the assumptions that form the basis for
        forward-looking statements regarding customer growth, customer usage, financial
        condition, results of operations, cash flows, capital requirements, market
        risk
        and other matters for fiscal 2007 and thereafter include many factors that
        are
        beyond the Company&#8217;s ability to control or estimate precisely, such as estimates
        of future market conditions, the behavior of other market participants and
        changes in the debt and equity capital markets. The factors that could cause
        actual results to differ materially from NJR&#8217;s expectations include, but are not
        limited to the following: </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">weather
                and economic conditions;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">demographic
                changes in the New Jersey Natural Gas (NJNG) service
                territory;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                rate of NJNG customer growth;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">volatility
                of natural gas commodity prices and its impact on customer usage,
                NJR
                Energy Services&#8217; (NJRES) operations and on the Company&#8217;s risk management
                efforts;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">changes
                in rating agency requirements and/or credit ratings and their effect
                on
                availability and cost of capital to the
                Company;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">commercial
                and wholesale credit risks, including creditworthiness of customers
                and
                counterparties;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                ability to obtain governmental approvals and/or financing for the
                construction, development and operation of certain non-regulated
                energy
                investments;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">risks
                associated with the management of the Company&#8217;s joint ventures and
                partnerships;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                impact of governmental regulation (including the regulation of
                rates);</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">fluctuations
                in energy-related commodity prices;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">conversion
                activity and other marketing efforts;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">actual
                energy usage of NJNG&#8217;s customers;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                pace of deregulation of retail gas
                markets;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">access
                to adequate supplies of natural gas;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                regulatory and pricing policies of federal and state regulatory
                agencies;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">changes
                due to legislation at the federal and state
                level;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                availability of an adequate number of appropriate counterparties
                in the
                wholesale energy trading market;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">sufficient
                liquidity in the wholesale energy trading market and continued access
                to
                the capital markets; </font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                disallowance of recovery of environmental-related expenditures and
                other
                regulatory changes;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">environmental-related
                and other litigation and other
                uncertainties;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                effects and impacts of inflation on NJR and its subsidiaries
                operations;</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">change
                in accounting pronouncements issued by the appropriate standard setting
                bodies; and</font></div>
            </td>
          </tr>

      </table>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 28pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">terrorist
                attacks or threatened attacks on energy facilities or unrelated energy
                companies.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">While
        the
        Company periodically reassesses material trends and uncertainties affecting
        the
        Company&#8217;s results of operations and financial condition in connection with its
        preparation of management&#8217;s discussion and analysis of results of operations and
        financial condition contained in its Quarterly and Annual Reports, the Company
        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.</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="TOC">T</a>ABLE
        OF CONTENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#patr1fininfo"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Part
        I</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
        Information</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item1finstmt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        1</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
        Statements</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 49pt; TEXT-INDENT: -51pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;<a href="#item2mdaoffincondresultsofop">Item
        2</a></strong></font><a href="#item2mdaoffincondresultsofop"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Management&#8217;s
        Discussion and Analysis of Financial Condition and Results of Operations
        for the
        Three and Six Months Ended March 31, 2007</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 49pt; TEXT-INDENT: -51pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item3qqdiscmktrisk"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;Item
        3</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quantitative
        and Qualitative Disclosures about Market Risk</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item4contproced"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        4</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Controls
        and Procedures</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#partIIotherinfo"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Part
        II</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
        Information</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item1legproced"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        1</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Legal
        Proceedings</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item1ariskfact"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        1a</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risk
        Factors</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item2unregsaleeqsec"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        2</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Unregistered
        Sale of Equity Securities and Use of Proceeds</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item4submattersvote"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        4</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 38pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Submission
        of Matters to a Vote of Security Holders</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a href="#item6exhibits"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
        6</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibits</strong></font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="#sigs">Signatures</a></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="ex10_1.htm">Limited
          Liability Company Agreement of Steckman Ridge GP,
          LLC</a></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font size="2"><a href="ex10_2.htm">Limited
          Partnership
          Agreement of Steckman Ridge, LP</a></font></strong></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font size="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 7pt">&#160;</font></strong></font></font></strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="ex-31_1.htm">Certification</a></strong></font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="ex31_2.htm">Certification</a></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="ex32_1.htm">Certification</a></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="ex32_2.htm">Certification</a></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 49pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div>
      <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="patr1fininfo">P</a>ART
        I - FINANCIAL INFORMATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item1finstmt">I</a>TEM
        1. </strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 38pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
        STATEMENTS</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONDENSED
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          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="5" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
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                  <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                    31,</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
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                    31,</strong></font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands,&#160;except&#160;per&#160;share&#160;data)</em></font></div>
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                <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OPERATING
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                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OPERATING
                    EXPENSES</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gas
                    purchases</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">882,688</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,424,154</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,921,163</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operation
                    and maintenance</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">31,026</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,653</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58,757</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                    rider expenses</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,405</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,601</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
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                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,612</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,888</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,188</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                    and other taxes</font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,268</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26,003</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44,670</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">960,734</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,574,516</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,063,641</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OPERATING
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                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">103,688</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">191,585</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">165,357</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    income and expense</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,650</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,874</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,639</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,516</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                    charges, net</font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,091</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,173</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,966</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,656</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INCOME
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                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">99,389</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">180,258</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">156,217</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Income
                    tax provision</font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">53,473</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">39,188</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">71,607</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">61,752</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NET
                    INCOME</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,527</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,201</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,651</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,465</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EARNINGS
                    PER COMMON SHARE</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BASIC</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.16</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.91</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.41</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DILUTED</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.14</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.89</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.37</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIVIDENDS
                    PER COMMON SHARE</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$0.38</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$0.36</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$0.76</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right">&#160;</div>
                </td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$0.72</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WEIGHTED
                    AVERAGE SHARES OUTSTANDING</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BASIC</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,893</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,822</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,803</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,686</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DILUTED</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black double;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,047</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,145</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,959</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
                <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
        Notes
        to Condensed Unaudited Consolidated Financial Statements</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Unaudited)</strong></font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="18%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CASH
                  FLOWS FROM OPERATING ACTIVITIES</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
                  Net income</font></div>
              </td>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ADJUSTMENTS
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FROM
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,188</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unrealized
                  gain on derivatives </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(192</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,206</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
                  of deferred charges</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">151</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">152</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                  income taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,231</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,960</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Manufactured
                  gas plant remediation costs</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(8,814</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(16,457</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gain
                  on asset sale</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(617</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                  of removal - asset retirement obligations</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(488</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contribution
                  to employee benefit plans</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(300</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(300</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Changes
                  in:</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Working
                  capital</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,121</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(8,833</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  noncurrent assets</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,229</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
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              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CASH
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,976</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,192</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tax
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,138</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,250</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,800</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                  from sale-leaseback transaction</font></div>
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,482</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,090</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchases
                  of treasury stock</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,109</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                  of long-term debt</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,950</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(22,483</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                  of common stock dividends</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(20,605</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(19,285</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                  of short-term debt, net of proceeds </font></div>
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(153,700</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(85,600</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  flows used in financing activities</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(158,659</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(79,145</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CASH
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                  for:</font></div>
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
                  plant</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(24,540</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(21,913</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Real
                  estate properties and other </font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,822</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,720</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                  of removal</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,736</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,154</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                  investments</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(52,500</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  in restricted cash construction fund</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(12,500</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                  from asset sales </font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,792</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,006</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  flows used in investing activities</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(79,806</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(35,281</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
                  in cash and temporary investments</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,158</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(16,308</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  and temporary investments at beginning of period</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,991</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,008</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  and temporary investments at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,149</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,700</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CHANGES
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Receivables</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(191,654</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(134,008</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventories</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">204,313</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">166</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Underrecovered
                  gas costs </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,330</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">67,315</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gas
                  purchases payable</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,970</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(24,190</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                  and accrued taxes, net</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">67,402</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,850</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                  payable and other</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,984</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(12,959</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
                  broker margin accounts </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(43,411</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">57,902</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customers&#8217;
                  credit balances and deposits</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(47,695</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,069</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  current assets</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">882</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(7,781</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  current liabilities</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">941</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,121</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(8,833</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  paid for</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                  (net of amounts capitalized)</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,954</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,341</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 28pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Income
                  taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,319</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,487</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.85pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.85pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
        Notes
        to Condensed Unaudited Consolidated Financial Statements</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONDENSED
        CONSOLIDATED BALANCE SHEETS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Unaudited)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ASSETS</strong></font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;PROPERTY,
                  PLANT AND EQUIPMENT</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
                  plant, at cost</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,267,108</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,243,586</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Real
                  estate properties and other, at cost</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,702</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,136</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,294,810</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,270,722</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                  depreciation and amortization</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(348,283</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(335,783</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property,
                  plant and equipment, net</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">946,527</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">934,939</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CURRENT
                  ASSETS</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                  and temporary investments</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,991</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
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              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Billed
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">133,615</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unbilled
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">53,915</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,543</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Allowance
                  for doubtful accounts</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,970</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,679</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                  assets</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gas
                  in storage, at average cost</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">305,737</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">512,942</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Materials
                  and supplies, at average cost</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,806</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,599</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                  state taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26,343</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Derivatives,
                  at fair value</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,430</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">223,559</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Broker
                  margin account</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,024</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,833</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,898</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,665</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  current assets</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">807,282</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">965,516</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;NONCURRENT
                  ASSETS</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                  investments</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,709</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,208</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">311,061</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">322,986</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Derivatives,
                  at fair value</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">40,731</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,638</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                  pension</font></div>
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,483</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,045</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
                  cash construction fund </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,500</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,500</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                  finance charges</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,089</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,876</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,644</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,220</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  noncurrent assets</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">474,217</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">498,473</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 42pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                  Assets</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,228,026</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,398,928</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
        Notes
        to Condensed Unaudited Consolidated Financial Statements</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONDENSED
        CONSOLIDATED BALANCE SHEETS (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Unaudited)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAPITALIZATION
        AND LIABILITIES</strong></font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CAPITALIZATION</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                  stock equity</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">652,805</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">621,662</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-term
                  debt</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">988,282</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">953,994</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;CURRENT
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                  maturities of long-term debt</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,126</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,739</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Short-term
                  debt</font></div>
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">127,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">280,700</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gas
                  purchases payable</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">388,849</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">297,879</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                  payable and other</font></div>
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">48,895</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">46,823</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
                  payable</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,615</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,056</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                  taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,559</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,267</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                  liabilities </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,040</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,710</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Clean
                  energy program</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,775</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,244</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Derivatives,
                  at fair value</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">106,955</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">163,557</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Broker
                  margin account</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,220</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customers&#8217;
                  credit balances and deposits</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,265</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,960</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  current liabilities</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">790,079</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">897,155</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,835</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
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              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,152</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Derivatives,
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">85,036</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 14pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Manufactured
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,400</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,400</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                  liabilities</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,488</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,220</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Clean
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,897</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,335</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Asset
                  retirement obligation</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,461</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,293</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other</font></div>
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,300</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,354</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  noncurrent liabilities</font></div>
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">449,665</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">547,779</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 42pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                  Capitalization and Liabilities</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,228,026</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,398,928</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
        Notes
        to Condensed Unaudited Consolidated Financial Statements</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>GENERAL</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        condensed consolidated financial statements have been prepared without audit,
        as
        of March 31, 2007 and for the six months ended March 31, 2007 and 2006, pursuant
        to the rules and regulations of the Securities and Exchange Commission (SEC).
        The September 30, 2006 balance sheet data is derived from the audited financial
        statements of New Jersey Resources Corporation (NJR or the Company). These
        condensed consolidated financial statements should be read in conjunction
        with
        the financial statements and the notes thereto included in NJR&#8217;s 2006 Annual
        Report on Form 10-K.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        consolidated financial statements include the accounts of NJR and its
        subsidiaries, New Jersey Natural Gas (NJNG), NJR Energy Services (NJRES),
        NJR
        Retail Holdings (Retail Holdings), NJR Capital Services (Capital) and NJR
        Service Company (NJR Service). Significant intercompany transactions and
        accounts have been eliminated. Retail Holdings principal subsidiary is NJR
        Home
        Services (NJRHS). Capital&#8217;s primary subsidiaries are NJNR Pipeline (Pipeline),
        which holds the Company&#8217;s 5.53 percent ownership interest in Iroquois Gas and
        Transmission System, L.P. (Iroquois), and NJR Steckman Ridge Storage Company,
        which holds the Company&#8217;s 50 percent combined interest in Steckman Ridge GP, LLC
        and Steckman Ridge, LP (collectively, Steckman Ridge), a natural gas storage
        facility that is being developed with a partner in western Pennsylvania.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        the
        opinion of management, the information furnished reflects all adjustments
        necessary for a fair presentation of the results of the interim periods.
        Because
        of the seasonal nature of NJR&#8217;s utility and wholesale energy services
        operations, in addition to other factors, the financial results for the interim
        periods presented are not indicative of the results to be expected for the
        fiscal year ending September 30, 2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Recently
        Issued Accounting Standards</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        July
        2006, the Financial Accounting Standards Board (FASB) issued Interpretation
        No.
        48, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
        for Uncertainty in Income Taxes</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (FIN
        48), which alters the framework for recognizing income tax contingencies.
        Previously, under Statement of Financial Accounting Standards (SFAS) No.
        5,
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
        for Contingencies</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        the
        focus</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        was on
        the subsequent liability recognition for estimated losses from tax contingencies
        where such losses were probable and the related amounts could be reasonably
        estimated. Under this new interpretation, a contingent tax asset (i.e., an
        uncertain tax position) may only be recognized if it is more likely than
        not
        that it will ultimately be sustained upon audit. The Company will adopt FIN
        48
        by the commencement of fiscal 2008. The Company is evaluating its tax positions
        for all jurisdictions and all years for which the statute of limitations
        remains
        open, as well as evaluating the impact that the adoption will have on its
        financial condition and results of operations.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2006, the FASB issued SFAS No. 157, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Fair
        Value Measurements</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (SFAS
        157). SFAS 157 defines fair value as the amount that would be exchanged to
        sell
        an asset or transfer a liability in an orderly transaction between market
        participants and establishes a fair value hierarchy of quotes and unobservable
        data that should be used to develop pricing assumptions. In addition, for
        assets
        and liabilities that are not actively traded, for example, certain kinds
        of
        derivatives, SFAS 157 requires that a fair value measurement include an
        adjustment for risks inherent in a valuation technique and/or inputs, such
        as
        those used in pricing models. SFAS 157 is effective for fiscal years beginning
        after November 15, 2007; however, early adoption is permitted. The Company
        will
        adopt the provisions of the statement prospectively and is evaluating the
        adoption date and its effect on its financial condition.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2006, the FASB issued SFAS No. 158</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>,
        Employers&#8217; Accounting for Defined Benefit Pension and Other Postemployment
        Plans</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (SFAS
        158). The statement requires an employer to recognize the funded status,
        measured as the difference between the fair value of plan assets and the
        projected benefit obligation, of its benefit plans. SFAS 158 does not change
        how
        pensions and other postemployment benefits are accounted for and reported
        in the
        income statement. Certain economic events, which previously required disclosure
        only in the notes to the financial statements, will be recognized as assets
        and
        liabilities and offset in Accumulated other comprehensive income, net of
        tax, or
        as part of Regulatory assets, for those amounts related to NJNG that would
        be
        recoverable through allowed rates charged to customers, to the extent such
        amounts are not recognized in earnings as part of net periodic benefit costs.
        Amounts recognized in Accumulated other comprehensive income, or in Regulatory
        assets as it may relate to NJNG, will be adjusted as they are subsequently
        recognized in earnings through net periodic <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">benefit
        cost. The Company will adopt SFAS 158 on September 30, 2007 and will apply
        the
        provisions of the statement prospectively. The Company is currently evaluating
        the effect of adoption on its financial condition.</font></font></div>
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        <div id="HDR">&#160;</div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        February 2007, the FASB issued SFAS No. 159, The </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Fair
        Value Option for Financial Assets and Financial Liabilities</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (SFAS
        159). SFAS 159 permits entities to elect to measure eligible items at fair
        value
        as an alternative to hedge accounting and to mitigate volatility in earnings.
        The entity either elects the fair value option according to a preexisting
        policy, when the asset or liability is first recognized or when it enters
        into
        an eligible firm commitment. Changes in the fair value of assets and liabilities
        that the Company chooses to apply the fair value option to are reported in
        earnings at each reporting date. SFAS 159 also provides guidance on disclosures
        that are intended to provide comparability to other entity assets and
        liabilities that have different measurement attributes and to other entities
        with similar financial assets and liabilities. SFAS 159 is effective for
        fiscal
        years beginning after November 15, 2007; however, early adoption is permitted
        provided the Company also elects to apply the provisions of SFAS 157. The
        Company is evaluating SFAS 159 to determine its applicability to its current
        operations and effect, if any, on its financial condition.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>REGULATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Basic
        Gas Supply Service (BGSS)</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 25, 2006, NJNG filed supporting documentation with the Board of Public
        Utilities (BPU) for a self-implementing BGSS price reduction effective November
        1, 2006, which lowered residential and small commercial customers&#8217; bills by
        approximately 4 percent. This decrease was due to reduced demand charges,
        lower
        wholesale cost of natural gas and lower than expected pipeline fuel
        costs.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 1, 2006, NJNG filed notification with the BPU and the representative
        of
        the Public Advocate Division of Rate Counsel (Rate Counsel) to refund, in
        the
        form of a bill credit, approximately $51.5 million to residential and small
        commercial customers in December 2006. The refund was the result of a continued
        reduction in the wholesale cost of natural gas for NJNG relative to what
        it is
        allowed to charge in its rates to customers.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        March
        1, 2007, NJNG filed notification with the BPU and the representatives of
        Rate
        Counsel to refund, in the form of a bill credit, approximately $20 million
        to
        residential and small commercial customers in March 2007. The refund was
        the
        result of a continued reduction in the wholesale cost of natural
        gas.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Conservation
        Incentive Program (CIP)</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 12, 2006, the BPU issued its Decision and Order and approved the
        CIP
        stipulation, reached on September 30, 2006, without modification.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        CIP
        is a three-year pilot program, designed to decouple the link between customer
        usage and NJNG&#8217;s utility gross margin to allow NJNG to encourage its customers
        to conserve energy. The initial term of the CIP is October 1, 2006 through
        September 30, 2009. Under certain conditions, the CIP may be extended one
        additional year beyond the initial term. For the term of the pilot, the Weather
        Normalization Clause has been suspended and replaced with the CIP tracking
        mechanism, which addresses utility gross margin variations related to both
        weather and customer usage in comparison to established benchmarks. Recovery
        of
        such utility gross margin variations (filed for annually and recovered one
        year
        following the end of the CIP usage year) is subject to additional conditions
        including an earnings test and an evaluation of BGSS-related savings. If
        NJNG
        does not file for a rate review with the BPU by October 1, 2008, the return
        on
        equity for the earnings test will decline from 10.50 percent to 10.25 percent.
        NJNG continues to evaluate its expected returns and general market conditions
        with regard to filing for a potential rate review.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
        encourage energy efficiency, NJNG is obligated to initiate and fund programs
        to
        further customer conservation efforts over the term of the pilot. An annual
        filing reporting on NJNG&#8217;s conservation efforts will be made in June of each
        year, commencing in June 2007, coincident with its annual BGSS filing. The
        minimum <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">expected
        liability for funding these programs was recorded, at its present value of
        $1.8
        million, as of September 30, 2006. As a result of the accretion of interest
        and
        the payment of obligations for this program, the balance of this liability
        is
        approximately $1.5 million as of March 31, 2007.</font></font></div>
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        </div>
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        <div id="HDR"><br>&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        commencement of the CIP does not have any impact on the collection of previously
        accrued amounts for utility gross margin recovery under the Weather
        Normalization Clause.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Societal
        Benefits Clause (SBC) and Weather Normalization Clause
        (WNC)</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 25, 2006, NJNG filed its SBC and WNC requests for a price adjustment
        for
        all applicable service customers, which was expected to result in an approximate
        aggregate 1.6 percent increase in those customers&#8217; prices. On November 10, 2006,
        NJNG filed a separate petition with the BPU for its annual review and revision
        of the WNC recovery component relying on the information provided in the
        October
        25, 2006 filing. The SBC and WNC rate increases, currently pending before
        the
        BPU, were proposed to be effective on January 1, 2007. Pending review and
        approval by the BPU and Rate Counsel, the results of the SBC and WNC will
        be
        implemented upon receipt of a BPU order.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        SBC
        portion of the filed increase had accounted for approximately 0.3 percent
        of the
        expected price increase. The aggregate increase is comprised of an increase
        in
        rates for the Transportation Initiation Clause (TIC) and an increase in the
        recovery related to the New Jersey Clean Energy Program (NJCEP) from $7.1
        million to $13.6 million for the calendar year 2007. This increase was partially
        offset by a decrease to the Remediation Adjustment Clause (RAC) recovery
        from
        $19.2 million to $15.9 million annually. The proposed RAC decrease reflected
        recovery of expenditures through June 30, 2006 related to NJNG&#8217;s remediation of
        its former Manufactured Gas Plant (MGP) sites, except for those expenditures
        associated with the Mass Tort Litigation related to the Long Branch MGP sites
        (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        12. Commitments and Contingent Liabilities</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
        There
        was no change in the Universal Service Fund (USF) rate.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        WNC
        portion of the filed rate increase, which had represented approximately 1.3
        percent of the expected price increase, was proposed to increase the WNC
        recovery component in order to recover accrued utility gross margin of
        approximately $8.1 million from October 2005 through May 2006. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        signed a stipulation in March 2007 with the BPU and Rate Counsel regarding
        the
        resolution of the September 2005 and October 2006 SBC and WNC filings. The
        stipulation permits NJNG to include in its rates the current BPU approved
        after-tax SBC and WNC rates in effect until changed by the BPU. The stipulation
        will also allow the recovery of lost revenues, as a result of previous customer
        conservation efforts, through a reduction in the liability associated with
        the
        Market Development Fund. The stipulation also will increase the SBC and WNC
        rates for all applicable service customers&#8217; rates by an approximate aggregate
        3.1 percent.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        increase in customer rates from an aggregate 1.6 percent in the original
        filing
        to an aggregate 3.1 percent in the March 2007 stipulation reflects the removal
        of the expenditures through June 30, 2006 related to NJNG&#8217;s remediation of its
        former MGP sites, as noted above, and also excludes costs in excess of those
        received by NJNG from insurers stemming from the operation and remediation
        of
        the former MGP site in Long Branch, New Jersey as recovery of all such costs
        and
        expenditures is being resolved separately before the BPU (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        12</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Commitments
        and Contingent Liabilities&#8212;Legal Proceedings&#8212;Kemper Insurance Company
        Litigation).</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        The
        stipulation further provides that NJNG will file a BGSS notice to implement
        a
        price decrease to coincide with the effective date of any recommended SBC
        and
        WNC increase. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        April
        4, 2007, NJNG sent notification to the BPU and Division of Rate Counsel of
        its
        intent to implement a decrease to its periodic BGSS factor for residential
        and
        small commercial sales customers effective coincident with the implementation
        the SBC and WNC rate increase proposed in the March 2007 stipulation. The
        SBC
        and WNC rate changes, which are applicable to sales and transportation
        customers, were included in the October 2006 filing noted above and require
        BPU
        approval in order to implement them. As of May 2, 2007, the BPU has taken
        no
        action with respect to the approval to implement the stipulated SBC and WNC
        rates.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Other
        Incentive Programs</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        is
        eligible to receive financial incentives for reducing BGSS costs through
        a
        series of utility gross margin-sharing programs that include off-system sales,
        capacity release, storage incentive and financial risk management programs.
        On
        December 15, 2006, NJNG filed a petition with the BPU requesting that it
        approve
        an extension of the existing incentive mechanisms to coincide with the end
        of
        the CIP. The extension would preserve the status quo of the incentive programs
        to coincide with the initial three-year term of the CIP pilot program, but
        would
        expire no later than October 1, 2011.&#160;NJNG is currently holding discussions
        with the BPU regarding the continuation of these incentive programs. There
        can
        be no assurance as to whether these incentive programs will be extended in
        their
        current form, for the proposed term, or whether they will be modified or
        terminated by the BPU. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Regulatory
        Assets and Liabilities </em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company had the following regulatory assets, all related to NJNG, on the
        Condensed Consolidated Balance Sheets:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" colspan="2" valign="bottom" width="17%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;Recovery
                  Period</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Regulatory
                  assets-current</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WNC</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Less
                  than one year (1)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                  </font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,105</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Regulatory
                  assets-noncurrent</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Remediation
                  costs (Notes 2 and 12)</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expended,
                  net</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,158</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">83,746</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Liability
                  for future expenditures</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,400</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,400</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CIP
                  </font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,347</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                  income and other taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,554</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,476</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Various</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Postemployment
                  benefit costs (Note 9)</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,966</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,117</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Through
                  Sept. 2014 (5)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Derivatives
                  (Note 7)</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">70,850</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,451</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Through
                  Oct. 2011 (6)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SBC</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,786</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,796</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Various
                  (7)</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">311,061</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">322,986</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="15%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -23pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          Recoverable or refundable, subject to BPU approval, without interest. This
          balance relates to results from the winter 2005-2006 period. No new WNC
          activity
          is being recorded due to the existence of the CIP.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)
          Recoverable, subject to BPU approval, with interest over rolling 7-year
          periods.
          As of March 31, 2007, this amount is net of actual insurance proceeds received
          of $12.8 million, as the result of a settlement NJNG reached with certain
          parties for recovery of such amounts on January 24, 2007 (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
          12. Commitments and Contingent Liabilities - Legal Proceedings</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
          As of
          September 30, 2006 this amount is net of an estimated $10 million in expected
          insurance proceeds. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)
          Estimated future expenditures. Recovery will be requested when actual
          expenditures are incurred (see</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>
          Note
          12. Commitments and Contingent Liabilities - Legal
          Proceedings).</em></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)
          Recoverable or refundable, subject to BPU annual approval, without interest.
          Balance includes approximately $8.4 million relating to the weather component
          of
          the calculation and approximately $5.9 million relating to the customer
          usage
          component of the calculation. Recovery from customers is designed to be
          one year
          from date of rate approval by BPU.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.5pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)
          Recoverable or refundable, subject to BPU approval, without interest.
</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)
          Recoverable, subject to BPU approval, through BGSS, without
          interest.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Recoverable
          with interest, subject to BPU approval.</font></div><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        there
        are any changes in regulatory positions that indicate the recovery of any
        of the
        regulatory assets are not probable, the related cost would be charged to
        income
        in the period of such determination.</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company had the following regulatory liabilities, all related to NJNG, on
        the
        Condensed Consolidated Balance Sheets:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Thousands</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                  liabilities-current</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Overrecovered
                  gas costs (1)</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,040</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,710</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,040</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,710</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
                  liabilities-noncurrent</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                  of removal obligation (2)</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">59,340</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58,161</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Market
                  development fund (MDF) (3)</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,148</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,059</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,488</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,220</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -23pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;(1)&#160;&#160;
        &#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Refundable,
        subject to BPU approval, through BGSS, with interest.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -23pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;(2)&#160;&#160;&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        accrues and collects for cost of removal in rates. This liability represents
        collections in excess of actual expenditures. Approximately $18.4 million,
        including accretion of $656</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,000
        for
        the six-month period ended March 31, 2007, of regulatory assets relating
        to
        asset retirement obligations have been netted against the cost of removal
        obligation as of March 31, 2007 (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        11. Asset Retirement Obligations</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -23pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)&#160;&#160;&#160;
        </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 23pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        MDF,
        created with funds available as a result of the implementation of the Energy
        Tax
        Reform Act of 1997, provided financial incentives to encourage customers
        to
        switch to third party suppliers and has supported other unbundling related
        initiatives. Balance earns interest at prevailing SBC rate. The MDF funding
        obligations terminated as of October&#160;31, 2006. $4.9 million of this fund
        was credited to the NJCEP, as a result of the CIP Decision and Order of the
        BPU
        on December&#160;12, 2006. The remaining balance is being held until final
        resolution of NJNG&#8217;s fiscal 2005 SBC filing. A stipulation was signed in March
        2007 between NJNG, the BPU and Rate Counsel, that will allow a recovery of
        lost
        revenues, through previous customer conservation initiatives, through a
        reduction in this liability if approved by the BPU.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -23pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3.
        FINANCIAL INSTRUMENTS AND RISK MANAGEMENT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company and its subsidiaries are subject to market risk due to fluctuations
        in
        the price of natural gas. To hedge against such fluctuations, the Company
        and
        its subsidiaries enter into futures contracts, option agreements and swap
        agreements to hedge purchases and sales of natural gas.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Generally,
        all of the commodity contracts of NJRES meet the &#8220;normal purchase normal sale&#8221;
scope exception of SFAS No. 133, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
        for Derivative Instruments and Hedging Activities (as amended)</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (SFAS
        133) and are accounted for under accrual accounting, or are designated as
        a
        hedge for accounting purposes. If these commodity contracts do not meet the
        normal purchase normal sale scope exception, or if they do not qualify as
        a
        hedge, they are recorded at fair value as a component of Gas
        purchases.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        amounts included in Accumulated other comprehensive income related to natural
        gas instruments, which have been designated as cash flow hedges, will reduce
        or
        increase Gas purchases as the underlying physical transaction occurs and
        is
        settled. Based on the amount recorded in Accumulated other comprehensive
        income
        as of March 31, 2007, $817,000 is expected to be recorded as an increase
        to Gas
        purchases during the remainder of fiscal 2007. For the three months ended
        March
        31, 2007 and 2006, $67.5 million and $14.2 million, respectively, were charged
        to Gas purchases; and for the six months ended March 31, 2007 and 2006, $91.8
        million and $34.8 million, respectively, were charged to Gas
        purchases.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table summarizes the ineffective portions of the Company&#8217;s cash flow
        hedges that are included as a benefit as part of Gas purchases in the Condensed
        Consolidated Statements of Income for the three and six months ended March
        31,
        2007, and 2006, respectively.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="9%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td colspan="5" valign="bottom" width="9%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td colspan="2" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">507</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,173</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">275</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,767</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR
                  Energy</font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">50</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                  Consolidated</font></div>
              </td>
              <td width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">528</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,193</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">325</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,802</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Generally,
        exchange-traded futures and swap contracts require a deposit of margin cash,
        the
        amount of which is subject to change based on market movements and in accordance
        with exchange rules. The Company maintains separate broker margin accounts
        for
        NJNG and NJRES. The balances as of March 31, 2007 and September 30, 2006
        are as
        follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)
                  </em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="4" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
                  broker margin deposit</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,187</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,833</font></div>
              </td>
              <td width="1%">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
                  broker margin deposit (liability)</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">36,837</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(14,220
                  </font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">)
</div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EQUITY
        INVESTMENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        March
        2, 2007, NJR, through NJR Steckman Ridge Storage Company, a wholly-owned
        subsidiary of NJR Energy Holdings, entered into a series of joint venture
        agreements with subsidiaries of Spectra Energy Corporation and formed the
        Steckman Ridge partnership. The purpose of the partnership is to develop
        and
        operate a natural gas storage facility in western Pennsylvania, which will
        serve
        the Northeastern and Mid-Atlantic regions of the United States. NJR and Spectra
        each own 50 percent of the equity interests in Steckman Ridge and are required
        to fund 50 percent of total acquisition and development costs up to a maximum
        of
        $125 million each. As NJR has the ability to exert significant influence,
        but
        not control, it uses the equity method of accounting for its investment in
        Steckman Ridge.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;NJR&#8217;s
        equity
        investments at March 31, 2007 and September 30, 2006 include the following
        investments:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" colspan="4" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steckman
                  Ridge</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,749</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Iroquois</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,349</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20,414</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  </font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,611</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,794</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,709</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="5%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,208</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EARNINGS
        PER SHARE</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table presents the calculation of the Company&#8217;s basic and diluted
        earnings per share:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="15%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td colspan="5" valign="bottom" width="15%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  income, as reported</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,527</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,201</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,651</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,465</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                  earnings per share:</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average shares of common stock outstanding - basic</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,893</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,822</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,803</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,686</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                  Earnings per Common Share</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.89</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.16</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.91</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.41</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Diluted
                  earnings per share:</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average shares of common stock outstanding - basic</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,893</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,822</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,803</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,686</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incremental
                  shares </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">154</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">323</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">156</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">314</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average shares of common stock outstanding - diluted</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,047</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,145</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,959</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Diluted
                  Earnings per Common Share</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.87</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right">&#160;</div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$2.14</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.89</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.37</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)</em></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 8pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Incremental
        shares consist of stock options, stock awards and performance
        units.</em></font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>6.
        </strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DEBT
        </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        October 2005, under the New Jersey Economic Development Authority (EDA) Act,
        NJNG used proceeds from EDA Series 2005A and 2005B bonds to refinance NJNG&#8217;s
        $10.3 million, 5.38 percent Series&#160;W First Mortgage Bonds and its $10.5
        million, 6.25 percent Series&#160;Y First Mortgage Bonds. Also in October 2005,
        the EDA issued its 4.9 percent (Series 2005C) Natural Gas Facilities Revenue
        Bonds. The net proceeds from the 2005C bonds were deposited into a construction
        fund. NJNG immediately drew down $2.5 million from the construction fund
        and
        issued its $15 million, 4.9 percent Series KK bonds to the EDA with a maturity
        date of October 1, 2040. NJNG drew down an additional $4 million from the
        construction fund in the fourth quarter of fiscal 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        October 2006, NJRES entered into a 3-year, $30 million committed credit facility
        with a multinational financial institution. Borrowings under this facility
        are
        guaranteed by NJR. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        has
        a $44.5 million letter of credit outstanding, which will expire on June&#160;30,
        2007, supporting a long-term natural gas swap agreement. The long-term natural
        gas swap agreement was entered into as a hedge related to an offsetting physical
        purchase of natural gas for the same period and volume. This letter of credit
        reduces the amount available under NJNG&#8217;s committed credit facility by the same
        amount. NJNG does not anticipate that this letter of credit will be drawn
        upon
        by the counterparty and it will be renewed as necessary. NJNG expects to
        renew
        this letter of credit agreement upon its expiration in June 2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of
        March 31, 2007, NJR had a letter of credit outstanding for $6.0 million,
        due to
        expire on June 30, 2007, related to margin requirements for NJRES&#8217; natural gas
        transactions. Including this letter of credit, as of March 31, 2007, NJR
        had
        letters of credit outstanding on behalf of NJRES and Commercial Realty and
        Resources (CR&amp;R) totaling approximately $11.0 million, which expire through
        various dates in fiscal 2007. These letters of credit reduce the amount
        available under NJR&#8217;s committed credit facility by the same amount. NJR does not
        anticipate that these letters of credit will be drawn upon by the counterparties
        and they will be renewed as necessary.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        December 2006 and 2005, NJNG received $5.5 million and $4.1 million in
        connection with the sale-leaseback of its vintage 2006 and 2005 meters,
        respectively. NJNG plans to continue the sale-leaseback meter program on
        an
        annual basis.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
        were no other new issuances or redemptions of long-term debt securities for
        NJR,
        NJNG or NJRES during the six months ended March 31, 2007. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following is a summary of debt and committed credit facilities outstanding
        as of
        March 31, 2007 and September 30, 2006:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006
                  </strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJR</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Long
                  - term debt </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Bank
                  credit facilities</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">325,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">325,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Amount
                  outstanding at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                  payable to banks</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,900</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">129,200</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Weighted
                  average interest rate at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                  payable to banks</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.6</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.0</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Long
                  - term debt </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">254,800</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">254,800</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Bank
                  credit facilities</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">250,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">250,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Amount
                  outstanding at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commercial
                  paper</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">66,100</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">151,500</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Weighted
                  average interest rate at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commercial
                  paper</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.3</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4.7</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Bank
                  credit facilities</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Amount
                  outstanding at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                  payable to banks</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Weighted
                  average interest rate at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                  payable to banks</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)
        Long - term debt excludes lease obligations of $55.7 million and $52.5 million
        at March 31, 2007 and September 30, 2006, respectively</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>7.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAPITALIZED
        AND DEFERRED INTEREST</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Included
        in Utility plant, Real estate properties and other and Equity investments
        on the
        Condensed Consolidated Balance Sheets, and reflected in the Condensed
        Consolidated Statements of Income as a reduction to interest charges, net,
        are
        the following amounts recorded for capitalized interest:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="14%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="14%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>($
                  in Thousands) </em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
                  interest - Utility plant</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">358</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">299</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">737</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">560</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average interest rates</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.36</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4.54</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.36</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4.22</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
                  interest - Real estate properties and other</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">86</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">129</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average interest rates</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.37</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.46</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
                  interest - Equity investments</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">211</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">211</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average interest rates</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.40</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.40</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        does
        not capitalize a cost of equity for its utility plant construction activities.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to a BPU order, NJNG is permitted to recover carrying costs on uncollected
        balances related to SBC program costs, which include NJCEP, RAC and USF
        expenditures (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        2. Regulation</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
        Accordingly, Other income includes $780,000 and $617,000 of interest related
        to
        these SBC program costs for the three months ended March 31, 2007 and 2006,
        respectively, and $1.6 million and $1.2 million for the six months ended
        March
        31, 2007 and 2006, respectively.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR,
          through its subsidiary CR&amp;R, capitalizes interest associated with the
          development and construction of its commercial buildings. Interest is also
          capitalized associated with the acquisition, development and construction
          of
          certain natural gas storage facilities through NJR&#8217;s equity investment in
          Steckman Ridge (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
          4. Equity Investments</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
          </font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman">13</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>STOCK
        BASED COMPENSATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
        January 24, 2007, the shareholders of NJR approved the NJR 2007 Stock Award
        and
        Incentive Plan (2007 Plan) which replaced the 2002 Employee and Outside Director
        Long-Term Incentive Plan (Long-Term Plan). The Long-Term Plan had 591,471
        and
        87,280 shares, respectively, reserved for employees and directors, which
        were
        rolled into the 2007 Plan. In addition to those shares, the 2007 Plan reserved
        an additional 750,000 shares for issuance to employees for a total reserve
        of
        1,341,471 and 87,280 respectively for employees and directors and provides
        for a
        broader range of equity awards. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        January 24, 2007, the Company issued 36,687 shares of Restricted Stock under
        the
        2007 Plan, which vest in equal annual installments over three years, subject
        to
        certain conditions, and 17,741 restricted shares&#160;that vested immediately.
        In addition, 8,053 shares were issued to directors during the second quarter
        of
        fiscal 2007. As of March 31, 2007, 1,287,043 and 79,227 shares, respectively,
        remain available for future awards to employees and directors.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the first six months of fiscal 2007, included in Operations and maintenance
        expense is $506,000 related to stock based compensation. As of March 31,
        2007
        there remains $2.6 million of deferred compensation related to unvested shares
        and options, which is expected to be recognized over the next 2 years.
</font></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>9.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BUSINESS
        SEGMENT DATA</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
        related to the Company&#8217;s various business segments, is detailed below. The
        Natural Gas Distribution segment consists of regulated natural gas delivery,
        as
        well as off-system, capacity and storage management operations related to
        NJNG.
        The Energy Services segment consists of the unregulated wholesale energy
        operations of NJRES. The Retail and Other segment consists of appliance and
        installation services, commercial real estate development, investments and
        other
        corporate activities. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="18%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
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                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
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                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  Revenues</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
                  Gas Distribution</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450,811</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">471,406</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">690,218</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">865,752</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                  Services</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">568,388</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">587,525</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,064,175</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,350,720</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
                  and Other</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,508</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,560</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,848</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,663</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Subtotal</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,024,707</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,064,491</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,766,241</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,229,135</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Intersegment
                  revenues </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup><em>(1)</em></sup></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(71</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(69</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(140</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(137</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,766,101</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,228,998</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  Income</font></div>
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
                  Gas Distribution</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58,736</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">57,514</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">95,452</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,961</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                  Services</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,410</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">46,863</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,256</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,964</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
                  and Other</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(705</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(689</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(123</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">432</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">139,441</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">103,688</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">191,585</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">165,357</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Net
                  Income</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
                  Gas Distribution</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,226</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,509</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,192</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
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              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">47,180</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26,999</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">54,999</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,896</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
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              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">121</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(307</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">518</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">377</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,527</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60,201</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,651</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,465</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(1)
        Consists of transactions between subsidiaries that are eliminated and
        reclassified in consolidation</em></font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s assets for the various business segments are detailed
        below:</font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Assets
                  at end of period</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
                  Gas Distribution</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,520,716</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,586,934</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                  Services</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">554,709</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">714,867</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
                  and Other</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167,621</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">107,213</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Intersegment
                  Assets </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup><em>(1)</em></sup></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(15,020</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(10,086</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
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              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
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              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,398,928</font></div>
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        of transactions between subsidiaries that are eliminated and reclassified
        in
        consolidation.</em></font></div>
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        BENEFIT PLANS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Pension
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        components of the net periodic cost for pension benefits and OPEB costs
        (principally health care and life insurance) for employees and covered
        dependents were as follows:</font></div>
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      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="11" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pension</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="11" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OPEB</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">&#160;</td>
              <td width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="11%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="11%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
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                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="11%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="11%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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            <tr>
              <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
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              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Service
                  cost</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">713</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">751</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,426</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,502</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">454</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">380</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">909</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">760</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="27%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
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              </td>
              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,525</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,408</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,050</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,816</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">757</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">615</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,230</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expected
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,052</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,782</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,104</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
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                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
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              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(916</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="27%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior
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              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">39</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transition
                  obligation amortization</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">89</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">89</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">179</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="27%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Recognized
                  actuarial loss</font></div>
              </td>
              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">399</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">433</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">798</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">866</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">266</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">206</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">531</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">178</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  initial obligation</font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">412</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="27%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Recognized
                  net periodic cost</font></div>
              </td>
              <td width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">606</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">828</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,212</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,656</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,045</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">851</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,091</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,702</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        fiscal
        2007, the Company has no minimum pension funding requirements. The Company&#8217;s
        funding level to its OPEB plans is expected to be approximately $600,000
        annually over the next five years. Additional contributions may be made based
        on
        market conditions and various assumptions.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>11.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ASSET
        RETIREMENT OBLIGATIONS (ARO)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
        September 30, 2006, NJR adopted FASB Interpretation Number 47, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
        for Conditional Asset Retirement Obligations</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        (FIN
        47), which requires NJR to recognize a reasonably estimated liability for
        the
        fair value of an ARO. NJR has AROs related to the costs associated with cutting
        and capping its main and service gas distribution pipelines of NJNG, which
        is
        required by New Jersey law when taking such gas distribution pipeline out
        of
        service.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following is an analysis of the change in the ARO liability for the six months
        ended March 31, 2007, in thousands:</font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="85%" style="border-bottom: black thin solid;">&#160;</td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balance
                  at October 1, 2006</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,293</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accretion</font></div>
              </td>
              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">656</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additions</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="85%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retirements</font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(488</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="85%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balance
                  at March 31, 2007</font></div>
              </td>
              <td width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,461</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
        </div>
        <div id="HDR">&#160;</div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accretion
        amounts are not reflected as an expense on NJR&#8217;s Condensed Consolidated
        Statements of Income, but rather are deferred as a regulatory asset and netted
        against NJNG&#8217;s regulatory liabilities, for presentation purposes, on the
        Condensed Consolidated Balance Sheet.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>12.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>COMMITMENTS
        AND CONTINGENT LIABILITIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Cash
        Commitments</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        has
        entered into long-term contracts, expiring at various dates through 2022,
        for
        the supply, storage and delivery of natural gas. These contracts include
        current
        annual fixed &#8220;demand&#8221; charges of approximately $81 million at current contract
        rates and volumes, which are recovered through the&#160;BGSS.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        the
        purpose of securing adequate storage and pipeline capacity, NJRES enters
        into
        storage and pipeline capacity contracts, which require the payment of certain
        demand charges by NJRES, in order to maintain the ability to access such
        natural
        gas storage or pipeline capacity, during a fixed time period <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">which
        generally range from one to five years</font>. Demand charges are based on
        established rates as regulated by the Federal Energy Regulatory Commission
        (FERC). These demand charges represent commitments to pay storage providers
        or
        pipeline companies for the right to store and transport natural gas utilizing
        their respective assets. As of March 31, 2007, NJRES had contractual payments
        for demand charges related to storage contracts and pipeline capacity contracts
        of $26.6 million and $45.0 million, respectively, for the next 12 month period.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Demand
        charges are recognized in the Consolidated Statements of Income as incurred
        <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">over
        the
        fiscal year </font>as part of Gas purchases as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="6" valign="bottom" width="17%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td colspan="5" valign="bottom" width="12%" style="border-bottom: medium none;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Millions)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38.8</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16.9</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">74.1</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">34.1</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19.0</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21.4</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38.2</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42.5</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">57.8</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38.3</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">112.3</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76.6</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of
        March 31, 2007, there were NJR guarantees covering approximately $270 million
        of
        natural gas purchases, demand fee commitments and swap agreements of NJRES,
        NJNG
        and NJR Energy, not yet reflected in Accounts payable on the Condensed
        Consolidated Balance Sheet. These NJR guarantees are related to transactions
        with various expiration dates through October 2016. NJR would have to provide
        for payment in the event of default by NJRES, NJNG and NJR Energy.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        capital expenditures are estimated at $39.0 million for the remainder of
        fiscal
        2007 and $63.3 million in fiscal 2008, consisting primarily of its construction
        program to support customer growth, maintenance of its distribution system
        and
        replacement needed under proposed pipeline safety rulemaking.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s future minimum lease payments under various operating leases are <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">approximately</font>
        $3.4 million annually for the next five years and $589,000 in the aggregate
        for
        all years thereafter. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Legal
        Proceedings</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Manufactured
        Gas Plant Remediation</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        has
        identified <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">eleven</font>
        former MGP sites, dating back to the late 1800s and early 1900s, which contain
        contaminated residues from the former gas manufacturing operations. Ten of
        the
<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">eleven</font>
        sites in question were acquired by NJNG in 1952. Gas manufacturing operations
        ceased at these sites at least by the mid-1950s and, in some cases, had been
        discontinued many years earlier. Since October 1989, NJNG has been operating
        under Administrative Consent Orders or Memoranda of Agreement with the New
        Jersey Department of Environmental Protection (NJDEP) covering all <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">eleven</font>
        sites. These orders and agreements establish the procedures to be followed
        in
        developing </font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
        final
        remedial cleanup plan for each site. NJNG is currently involved in
        administrative proceedings with the NJDEP with respect to the MGP sites in
        question, as well as participating in various studies and investigations
        by
        outside consultants to determine the nature and extent of any such contaminated
        residues and to develop appropriate programs of remedial action, where
        warranted. Until September&#160;2000, most of the cost of such studies and
        investigations had been shared under an agreement with the former owner and
        operator of <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ten</font>
        of the MGP sites, Jersey Central Power&#160;&amp; Light Company (JCP&amp;L), a
        subsidiary of FirstEnergy Corporation (FirstEnergy).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2000, a revised agreement was executed pursuant to which NJNG is
        responsible for two of the sites&#8212; Long Branch and Toms River, New Jersey&#8212; while
        JCP&amp;L is responsible for the remaining eight sites. On September&#160;14,
        2004, the BPU approved a simultaneous transfer of properties whereby, upon
        closing of the transfer, NJNG will take ownership of two sites and JCP&amp;L
        will take ownership of eight sites. NJNG continues to participate in the
        investigation and remedial action and bears the cost related to the one MGP
        site
        that was not subject to the original cost-sharing agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        June
        1992, the BPU approved the RAC through which NJNG may, subject to BPU approval,
        recover its remediation expenditures, including carrying costs, over rolling
        7-year periods. Currently, NJNG is recovering $19.2 million annually for
        MGP
        remediation expenditures incurred through June 30, 2004. The remediation
        expenditures for the 24-month period ended June 30, 2006, including expenditures
        related to the Mass Tort Litigation as discussed below in the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Kemper
        Insurance Company Litigation </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">section,
        are pending BPU approval and are part of an on-going discussion with the
        BPU
        (See </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        2. Regulation</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
        As of
        March 31, 2007, $82.2 million of previously incurred remediation costs, net
        of
        recoveries from customers and insurance proceeds, are included in Regulatory
        assets on the Condensed Consolidated Balance Sheet.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2006, with the assistance of an outside consulting firm, NJNG updated
        an environmental review of the MGP sites, including a review of potential
        liability for investigation and remedial action. Based on this review, NJNG
        estimated at the time of the review that, exclusive of any insurance recoveries,
        total future expenditures to remediate and monitor the three MGP sites for
        which
        it is responsible, will range from $105.4 million to $174.6 million. NJNG&#8217;s
        estimate of these liabilities is based upon known facts, existing technology
        and
        enacted laws and regulations in place when the review was completed. However,
        actual costs are expected to differ from these estimates. Where available
        information is sufficient to estimate the amount of the liability, it is
        NJNG&#8217;s
        policy to accrue the full amount of such estimate. Where the information
        is
        sufficient only to establish a range of probable liability, and no point
        within
        the range is more likely than any other, it is NJNG&#8217;s policy to accrue the lower
        end of the range. Accordingly, NJNG has recorded an MGP remediation liability
        and a corresponding Regulatory asset of $105.4 million on the Condensed
        Consolidated Balance Sheet. The actual costs to be incurred by NJNG are
        dependent upon several factors, including final determination of remedial
        action, changing technologies and governmental regulations, the ultimate
        ability
        of other responsible parties to pay and any insurance recoveries. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        will
        continue to seek recovery of such costs through the RAC. If any future
        regulatory position indicates that the recovery of such costs is not probable,
        the related cost would be charged to income in the period of such determination.
        However, because recovery of such costs is subject to BPU approval, there
        can be
        no assurance as to the ultimate recovery through the RAC or the impact on
        the
        Company&#8217;s results of operations, financial position or cash flows, which could
        be material.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        is
        presently investigating the potential settlement of alleged Natural Resource
        Damage (NRD) claims that might be brought by the NJDEP concerning the three
        MGP
        sites. NJDEP has not made any specific demands for compensation for alleged
        injury to groundwater or other natural resources. NJNG&#8217;s evaluation of these
        potential claims is in the early stages, and it is not yet possible to quantify
        the amount of compensation, if any, that NJDEP might seek to recover. NJNG
        anticipates any costs associated with this matter would be recoverable through
        the RAC.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Kemper
        Insurance Company Litigation</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September&#160;2000, NJNG purchased two insurance policies from Kemper Insurance
        Company: (i) a 20-year Clean-Up Cost-Containment insurance policy (Cost-Cap)
        and
        (ii) an Environmental Response <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
        and Liability Insurance Policy (ERCLIP). The policies were intended to limit
        NJNG&#8217;s liability for remediation and third-party claims arising from
        environmental contamination at the former MGP sites in Long Branch and Toms
        River.</font></font></div>
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          </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
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          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beginning
        in July&#160;2003, a series of complaints were filed in the New Jersey Superior
        Court against NJNG, NJR, JCP&amp;L and FirstEnergy alleging, among other things,
        personal injuries, wrongful death, survivorship actions, property damage
        and
        claims for medical monitoring stemming from the operation and remediation
        of the
        former MGP site in Long Branch, New Jersey (the Mass Tort Litigation). The
        relief sought included compensatory damages, the establishment of a medical
        monitoring fund, disgorgement of alleged profits, cost of cleanup and
        remediation, natural resource damages and punitive damages.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        December 2005, a confidential settlement between NJNG and the plaintiffs
        in the
        Mass Tort Litigation was finalized and approved by the New Jersey Superior
        Court
        in Bergen County. Subsequent to the settlement, JCP&amp;L and FirstEnergy made a
        demand upon NJNG and NJR for indemnification pursuant to the September 2000
        agreement among these entities and NJNG, whereby NJNG assumed responsibility
        for
        the Long Branch site. NJNG agreed to honor the indemnification terms of the
        agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        January 24, 2007, NJNG entered into a written Settlement Agreement and Mutual
        Release (the &#8220;Settlement Agreement&#8221;) with Lumbermens Mutual Casualty Company and
        its subsidiaries and affiliates, including but not limited to, American
        Motorists Insurance Company, American Manufacturers Mutual Company and Kemper
        Indemnity Insurance Company (collectively, &#8220;Kemper&#8221;) pursuant to which the
        parties settled a lawsuit pending in the Superior Court of New Jersey, Law
        Division, Ocean County arising out of Cost Cap and the ERCLIP (the &#8220;Lawsuit&#8221;).
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the terms of the Settlement Agreement, NJNG received a payment in the
        amount
        of $12.8 million (the &#8220;Settlement Payment&#8221;). The Settlement Agreement provided
        for a mutual and global release of all claims, against the Company or Kemper
        that were or could have been made in the litigation, including all claims
        NJNG
        could have made under the ERCLIP and Cost-Cap. The Settlement Payment was
        made
        in exchange for a general release of all such claims asserted in the litigation;
        no portion of the Settlement Payment was allocated to any particular claim.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        RAC
        does not permit NJNG to recover costs, expenses or other liabilities incurred
        in
        connection with personal injury claims. Pursuant to the RAC, NJNG will seek
        recovery of costs in excess of those recovered from Kemper and other insurers.
        Management believes that, subject to BPU approval, these&#160;costs, net of all
        insurance proceeds,&#160;are recoverable pursuant to the RAC. However, because
        recovery of such costs is subject to BPU approval, there can be no assurance
        as
        to the ultimate recovery of outstanding costs through the RAC or the impact
        of
        these matters on the Company&#8217;s financial condition, results of operations or
        cash flows, which could be material. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>General</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company is a party to various other claims, legal actions, complaints and
        investigations arising in the ordinary course of business. In the Company&#8217;s
        opinion, the ultimate disposition of these matters will not have a material
        adverse effect on its financial condition, results of operations or cash
        flows.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>13.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OTHER</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        March
        31, 2007, there were </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27,940,080
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        of
        common stock outstanding and the book value per share was $23.36.
</font></div><br>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
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        </div>
        <div id="HDR">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item2mdaoffincondresultsofop">I</a>TEM
        2.</strong><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt" size="3">&#160;</font><strong>&#160;&#160;MANAGEMENT&#8217;S
        DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND&#160;</strong></font><strong><font size="2">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">RESULTS
        OF </font></font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font size="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31,
        2007</font></font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Management&#8217;s
        Overview</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New
        Jersey Resources Corporation (NJR or the Company) is an energy services holding
        company providing retail natural gas service in New Jersey and wholesale
        natural
        gas and related energy services to customers from states in the Gulf Coast
        and
        Mid-Continent to New England and Canada through its two principal subsidiaries,
        New Jersey Natural Gas (NJNG) and NJR Energy Services (NJRES).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        is a
        natural gas utility which provides regulated retail natural gas service in
        central and northern New Jersey and also participates in the off-system sales
        and capacity release markets, and comprises the Natural Gas Distribution
        segment. NJNG is regulated by the New Jersey Board of Public Utilities
        (BPU).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
        maintains and trades around a portfolio of physical assets consisting of
        natural
        gas storage and natural gas pipeline transportation contracts. NJRES also
        provides wholesale energy services to non-affiliated utility and energy
        companies. NJRES comprises the Energy Services segment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Retail and Other segment includes NJR Home Services (NJRHS), which provides
        service, sales and installation of appliances; NJR Energy (NJRE), an investor
        in
        energy-related ventures, most significantly, through NJNR Pipeline which
        holds
        the Company&#8217;s 5.53 percent interest in Iroquois Gas and Transmission System, LP
        (Iroquois), which is a 412-mile natural gas pipeline from the New York-Canadian
        border to Long Island, New York and NJR Steckman Ridge Storage Company, which,
        in March 2007, acquired a 50 percent equity ownership interest in Steckman
        Ridge
        GP, LLC and Steckman Ridge, LP (collectively, Steckman Ridge), a natural
        gas
        storage facility that will be constructed in western Pennsylvania; Commercial
        Realty and Resources (CR&amp;R), which holds and develops commercial real
        estate; and NJR Investment, which makes energy-related equity investments.
        </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
        income by business segment is as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="11" valign="bottom" width="15%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended </strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>($
                  in Thousands)</em></font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="5" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="5" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  Income</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" colspan="12" valign="bottom" width="15%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
                  Gas Distribution</font></div>
              </td>
              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">53,134</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">49</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,192</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">55</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                  Services</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">54,999</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">50</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,896</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
                  and Other</font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">518</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">377</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,651</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,465</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Natural
        Gas Distribution Segment </em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
        Gas Distribution operations have focused on the following to provide for
        growth:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Working
                with the BPU and New Jersey Department of the Public Advocate, Division
                of
                Rate Counsel (Rate Counsel), for the development of the decoupling
                of the
                impact of customer usage on utility gross margin, which has allowed
                for
                the implementation of the Customer Incentive Program (CIP). The CIP
                allows
                NJNG to promote conservation programs to its customers while maintaining
                protection of its utility gross margin associated with reduced customer
                usage. CIP usage differences are calculated annually and are recovered
                one
                year following the end of the CIP usage year;
</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Managing
                its customer growth, which is expected to total about 2.0 percent
                annually;</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Generating
                earnings from various BPU-authorized gross margin-sharing incentive
                programs, which are currently approved through October&#160;31, 2007. An
                extension has been requested to link the expiration of these programs
                with
                the end of the initial three-year pilot program of the CIP. The initial
                term of the CIP is October 1, 2006 through September 30, 2009. Under
                certain conditions the CIP may be extended one additional year beyond
                the
                initial term;</font></div>
            </td>
          </tr>

      </table><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Managing
                the volatility of wholesale natural gas prices through a hedging
                program
                designed to keep customers&#8217; prices as stable as possible;
                and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Improving
                its cost structure through various productivity
                initiatives.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        conducting NJNG&#8217;s business, management focuses on factors it believes may have
        significant influence on its future financial results. NJNG&#8217;s policy is to work
        with all stakeholders, including customers, regulators and policymakers,
        to
        achieve favorable results. These factors include the rate of NJNG&#8217;s customer
        growth in its service territory, which can be influenced by general economic
        conditions as well as political and regulatory policies that may impact the
        new
        housing market. A portion of NJNG&#8217;s customer growth comes from the conversion
        market, which is influenced by the delivered cost of natural gas compared
        with
        competing fuels, interest rates and other economic conditions.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        the
        reporting period through September 30, 2006, which includes the three and
        six
        month periods ending March 31, 2006, the impact on weather was mitigated
        by a
        Weather Normalization Clause (WNC). The WNC did not, however, capture lower
        customer usage per degree day. To mitigate this, NJNG obtained approval of
        the
        CIP effective as of October 1, 2006. Therefore, for the three and six months
        periods ended March 31, 2007, the impact of weather and usage on NJNG&#8217;s utility
        gross margin was significantly mitigated due to the CIP.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        CIP
        is a three-year pilot program, expiring October 1, 2009, designed to decouple
        the link between customer usage and NJNG&#8217;s utility gross margin to allow NJNG to
        encourage its customers to conserve energy. For the term of the pilot the
        existing WNC has been suspended and replaced with the CIP tracking mechanism,
        which addresses utility gross margin variations related to both weather and
        customer usage in comparison to established benchmarks. Under certain conditions
        the CIP may be extended one additional year beyond the initial term. Recovery
        of
        such utility gross margin variations, which are recovered in the year subsequent
        to the CIP usage year, is subject to additional conditions including an earnings
        test and an evaluation of Basic Gas Supply Service (BGSS)-related savings
        achieved. Under the CIP agreement, if NJNG does not file for a rate review
        with
        the BPU by October 1, 2008, the return on equity for the earnings test will
        decline from 10.50 percent to 10.25 percent. NJNG continues to evaluate its
        expected returns and general market conditions with regard to filing for
        a
        potential rate review.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
        encourage energy efficiency, NJNG is also required to initiate programs to
        further customer conservation efforts over the term of the pilot. NJNG is
        required to provide a minimum of $2 million in funding for such programs
        and
        will continue to fund programs throughout the term of the pilot. As of September
        30, 2006, NJNG accrued $1.8 million for this obligation, representing its
        present value at that date, in the Condensed Consolidated Balance Sheets.
        As of
        March 31, 2007, the obligation to fund these conservation programs has a
        present
        value of $1.5 million, including accrued interest costs and amounts expended
        on
        such conservation programs. An annual filing of the CIP results will be made
        in
        June&#160;of each year, commencing in June 2007, coincident with NJNG&#8217;s annual
        BGSS filing.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        operating expenses are heavily influenced by labor costs, large components
        of
        which are covered by a negotiated collective bargaining agreement that expires
        in 2008. Labor-related fringe benefit costs may also influence NJNG&#8217;s
        results.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        a
        regulated company, NJNG is required to recognize the impact of regulatory
        decisions on its financial statements. As a result, significant costs are
        deferred and treated as regulatory assets, pending BPU decisions regarding
        their
        ultimate recovery from customers. The most significant costs incurred that
        are
        subject to this accounting treatment include manufactured gas plant (MGP)
        remediation costs and wholesale natural gas costs. Actual remediation costs
        may
        vary from management&#8217;s estimates due to the developing nature of remediation
        requirements, regulatory decisions by the New Jersey Department of Environmental
        Protection (NJDEP) and related litigation. If there are changes in the
        regulatory position on the recovery of these costs, such costs would be charged
        to income.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Due
        to
        the capital-intensive nature of NJNG&#8217;s operations and the seasonal nature of its
        working capital requirements, significant changes in interest rates can also
        impact NJNG&#8217;s results.</font></div><br>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Energy
        Services Segment</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
        provides unregulated wholesale energy services, including base load natural
        gas,
        peaking and balancing services, utilizing physical assets it controls, as
        well
        as providing asset management services to customers in states from the Gulf
        Coast and Mid-continent regions to the Appalachian and Northeast regions
        and
        Canada.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES&#8217;
        incorporates the following elements to provide for growth, while focusing
        on
        maintaining a low-risk operating and counterparty credit profile:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Providing
                natural gas portfolio management services to nonaffiliated utilities
                and
                electric generation facilities; </font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identifying
                and benefiting from variations in pricing of natural gas transportation
                and storage assets due to location or timing differences of natural
                gas
                prices to generate gross margin; and </font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;
</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Managing
                hedging programs that are designed to mitigate adverse market price
                fluctuations in natural gas transportation and storage commitments
                utilized to generate gross margin through the use of a cash-flow
                hedging
                strategy.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
        has
        built a portfolio of customers including local distribution companies,
        industrial companies, electric generators and retail aggregators. Sales to
        these
        customers have allowed NJRES to leverage its transportation and storage capacity
        and manage sales to these customers in an aggregate fashion. This strategy
        allows NJRES to extract more value from its portfolio of natural gas storage
        and
        pipeline transportation capacity. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
        also focuses on creating value from underutilized natural gas assets, which
        are
        typically amassed through contractual rights to natural gas transportation
        and
        storage capacity. NJRES has developed a portfolio of natural gas storage
        and
        transportation capacity in states in the Northeast, Gulf Coast, Mid-continent
        and Appalachian regions and eastern Canada. These assets become more valuable
        when prices change between these areas and across time periods. NJRES seeks
        to
        optimize this process on a daily basis as market conditions change by evaluating
        all the natural gas supplies, transportation and opportunities to which it
        has
        access, to find the most profitable alternative to serve its various
        commitments. This enables NJRES to capture geographic pricing differences
        across
        these various regions as delivered natural gas prices change. NJRES&#8217; focuses on
        earning a gross margin, which is defined as natural gas revenues and management
        fees less natural gas costs and fixed demand costs, on a single original
        transaction and then utilizing that transaction, and the changes in prices
        across the regions or across time periods, as the basis to further improve
        the
        initial gross margin result.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        a
        similar manner, NJRES participates in natural gas storage transactions where
        it
        seeks to identify pricing differences that occur over time, as prices for
        future
        delivery periods at many locations are readily available. For example, NJRES
        generates gross margin by locking in the differential between purchasing
        natural
        gas at a low current or future price and, in a related transaction, selling
        that
        natural gas at a high current or future price, all within the constraints
        of its
        credit and contracts policies. Through the use of transportation and storage
        services, NJRES is able to generate gross margin through pricing differences
        that occur over the duration of time the assets are held.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES&#8217;
        portfolio management customers include nonaffiliated utilities and electric
        generation plants. Services provided by NJRES include optimization of
        underutilized natural gas assets and basic gas supply functions. Revenue
        is
        customarily derived by a combination of a base service fee and incentive-based
        arrangements.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        conducting its business, NJRES mitigates risk by following formal risk
        management guidelines, including trading limits, approval processes, segregation
        of duties, and formal contract and credit review and approval procedures.
        NJRES
        continuously monitors and seeks to reduce the risk associated with various
        counterparties credit exposure. The Risk Management Committee (RMC) of NJR,
        which consists of senior officers from several business units of NJR, oversees
        compliance with these established guidelines.</font></div><br>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></div>
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          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Critical
        Accounting Policies</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        summary
        of NJR&#8217;s critical accounting policies is included in Item 7. &#8220;Management&#8217;s
        Discussion and Analysis of Financial Condition and Results of Operations&#8221; of our
        Annual Report on Form 10-K for the period ended September 30, 2006. NJR&#8217;s
        critical accounting policies have not changed materially from those reported
        in
        the 2006 Annual Report on Form 10-K. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Recently
        Issued Accounting Standards</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        July
        2006, the Financial Accounting Standards Board (FASB) issued Interpretation
        No.
        48, &#8220;Accounting for Uncertainty in Income Taxes&#8221; (FIN 48), which alters the
        framework for recognizing income tax contingencies. Previously, under Statement
        of Financial Accounting Standards (SFAS) No. 5, &#8220;Accounting for Contingencies,&#8221;
the focus was on the subsequent liability recognition for estimated losses
        from
        tax contingencies where such losses were probable and the related amounts
        could
        be reasonably estimated. Under this new interpretation, a contingent tax
        asset
        (i.e., an uncertain tax position) may only be recognized if it is more likely
        than not that it will ultimately be sustained upon audit. The Company will
        adopt
        FIN 48 by the commencement of fiscal 2008. The Company is evaluating its
        tax
        positions for all jurisdictions and all years for which the statute of
        limitations remains open, as well as evaluating the impact that the adoption
        will have on its financial condition and results of operations.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2006, the FASB issued SFAS No. 157, &#8220;Fair Value Measurements&#8221; (SFAS
        157). SFAS 157 defines fair value as the amount that would be exchanged to
        sell
        an asset or transfer a liability in an orderly transaction between market
        participants and establishes a fair value hierarchy of quotes and unobservable
        data that should be used to develop pricing assumptions. In addition, for
        assets
        and liabilities that are not actively traded, for example, certain kinds
        of
        derivatives, SFAS 157 requires that a fair value measurement include an
        adjustment for risks inherent in a valuation technique and/or inputs, such
        as
        those used in pricing models. SFAS 157 is effective for fiscal years beginning
        after November 15, 2007, however, early adoption is permitted. The Company
        will
        adopt the provisions of the statement prospectively and is evaluating the
        adoption date and its effect on its financial condition.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        September 2006, the FASB issued SFAS No. 158, &#8220;Employers&#8217; Accounting for Defined
        Benefit Pension and Other Postemployment Plans&#8221; (SFAS 158). The statement
        requires an employer to recognize the funded status, measured as the difference
        between the fair value of plan assets and the projected benefit obligation,
        of
        its benefit plans. SFAS 158 does not change how pensions and other
        postemployment benefits are accounted for and reported in the income statement.
        Certain economic events, which previously required disclosure only in the
        notes
        to the financial statements, will be recognized as assets and liabilities
        and
        offset in Accumulated other comprehensive income, net of tax, or to regulatory
        assets, for those amounts related to NJNG that would be recoverable through
        allowed rates charged to customers, to the extent such amounts are not
        recognized in earnings as part of net periodic benefit costs. Amounts recognized
        in Accumulated other comprehensive income, or as a regulatory asset as it
        may
        relate to NJNG, will be adjusted as they are subsequently recognized in earnings
        through net periodic benefit cost. The Company will adopt SFAS 158 on September
        30, 2007 and will apply the provisions of the statement prospectively. The
        Company is currently evaluating the effect of adoption on its financial
        condition.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        February 2007, the FASB issued SFAS No. 159, &#8220;The Fair Value Option for
        Financial Assets and Financial Liabilities&#8221; (SFAS 159). SFAS 159 permits
        entities to elect to measure eligible items at fair value as an alternative
        to
        hedge accounting and to mitigate volatility in earnings. The entity either
        elects the fair value option according to a preexisting policy, when the
        asset
        or liability is first recognized or when it enters into an eligible firm
        commitment. Changes in the fair value of assets and liabilities that the
        Company
        chooses to apply the fair value option to are reported in earnings at each
        reporting date. SFAS 159 also provides guidance on disclosures that are intended
        to provide comparability to other entity assets and liabilities that have
        different measurement attributes and to other entities with similar financial
        assets and liabilities. SFAS 159 is effective for fiscal years beginning
        after
        November 15, 2007; however, early adoption is permitted provided the entity
        also
        elects to apply the provisions of SFAS 157. The Company is evaluating SFAS
        159
        to determine its applicability to its current operations and effect, if any,
        on
        its financial condition.</font></div><br>
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        </div>
        <div id="HDR">
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            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Results
        of Operations</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
        income for the quarter ended March 31, 2007 increased by 33.8 percent to
        $80.5
        million, compared with $60.2 million for the same period last fiscal year.
        Basic
        earnings per share (EPS) increased by 33.8 percent to $2.89, compared with
        $2.16
        for the same period last fiscal year and diluted EPS increased 34.1 percent
        to
        $2.87, compared with $2.14 for the same period last fiscal year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
        income for the six months ended March 31, 2007 increased 15</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">percent</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        $108.7
        million, compared with $94.5 million for the same period last fiscal year.
        Basic
        EPS increased 14.7 percent to $3.91, compared with $3.41 for the same period
        last fiscal year and diluted EPS increased 15.4 percent to $3.89 compared
        with
        $3.37 for the same period last fiscal year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        increase in earnings for the three and six months ended March 31, 2007, as
        compared with the same periods in the prior fiscal year, was due primarily
        to
        higher gross margin at NJRES due to strategic natural gas storage withdrawals
        that captured favorable market pricing conditions during the quarter ended
        March
        31, 2007 and increased storage and intra-month natural gas trading positions,
        primarily driven by the impact of colder weather in NJRES&#8217; market (delivery)
        areas allowing for favorable market pricing movements during the three-month
        period. Increased earnings at NJNG were due primarily to the impact of the
        CIP
        tariff and continued customer growth, partially offset by higher interest
        expense, which was due primarily to an increase in short-term borrowings
        and
        higher rates over the same period in the prior fiscal year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s Operating revenues and Gas purchases are as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="8" valign="bottom" width="24%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="8" valign="bottom" width="24%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><strong>&#160;%</strong></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><strong>&#160;%</strong></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="32%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;($
                  in Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Change</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Change</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  revenues</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,024,636</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,064,422</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3.7</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,766,101</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,228,998</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(20.8</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)%</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="32%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Gas
                  purchases</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">795,469</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">882,688</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9.9</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)%</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,424,154</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,921,163</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(25.9</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)%</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
        revenues decreased $39.8 million for the three months ended March 31, 2007
        compared to the same period of the prior fiscal year due primarily
        to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Increased
                refunds to NJNG customers in fiscal 2007;
                and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reduced
                off-system sales</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        decrease in operating revenues was partially offset by:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
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                revenues at NJRES due to greater market pricing volatility as a result
                of
                the impact of weather in relation to the cost to acquire gas and
                contracts
                to sell gas in NJRES&#8217; market area; and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
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                impact of 12.4 percent colder weather than prior fiscal year on NJNG&#8217;s
                revenues</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
        revenues decreased $462.9 million for the six months ended March 31, 2007
        compared to the same period of the prior fiscal year due primarily
        to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Refunds
                to NJNG residential and small commercial customers</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">;
                and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                favorable market pricing conditions affecting NJRES&#8217; revenues as a result
                of volatility in the markets due to severe weather conditions in
                fiscal
                2006 that did not recur in fiscal 2007.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
        same factors resulted in a decrease in Gas purchases of $87.2 million for
        the
        three months ended March 31, 2007 and $497.0 million for the six months ended
        March 31, 2007, as compared to the same periods in the prior fiscal
        year.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Natural
        Gas Distribution Operations</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        is a
        local natural gas distribution company that provides regulated retail energy
        services to approximately 477,000 residential and commercial customers in
        central and northern New Jersey and participates in the off-system sales
        and
        capacity release markets.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        business is seasonal by nature, as weather conditions directly influence
        the
        volume of natural gas delivered. Specifically, customer demand substantially
        increases during the winter months when natural gas is used for heating
        purposes. As a result, NJNG receives most of its gas distribution revenues
        during the first and second fiscal quarters and is subject to variations
        in
        earnings and working capital during the year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        February&#160;1999, the Electric Discount and Energy Competition Act (EDECA),
        which provides the framework for the restructuring of New Jersey&#8217;s energy
        markets, became law. In March&#160;2001, the BPU issued an order to fully open
        NJNG&#8217;s residential markets to competition, restructure its rates to segregate
        its BGSS and delivery (i.e., transportation) service prices as required by
        EDECA
        and expand an incentive for residential and small commercial customers to
        switch
        to transportation service. NJNG earns no utility gross margin on the commodity
        portion of its natural gas sales. NJNG earns utility gross margin through
        the
        delivery of natural gas to its customers. In January&#160;2002, the BPU ordered
        that BGSS could be provided by suppliers other than the state&#8217;s natural gas
        utilities, but BGSS should be provided by the state&#8217;s natural gas utilities
        until further BPU action. No additional action has been taken by the BPU
        subsequent to its initial order in January 2002.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        financial results are summarized as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended </strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;
</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Utility
                  Gross Margin</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                  revenues</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450,811</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">471,406</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">690,218</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">865,752</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 35pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less:</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gas
                  purchases</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">312,863</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">346,650</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">463,856</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">651,782</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                  and other taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,778</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,481</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,298</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,766</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,135</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,405</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,601</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,863</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total
                  Utility Gross Margin</font></div>
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              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">91,035</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,870</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">157,463</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">150,341</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Utility
                  Gross Margin</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Residential
                  and commercial</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,154</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">78,237</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,664</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">130,906</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transportation</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,884</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,479</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,321</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,861</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total
                  Utility Firm Gross Margin</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,038</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">84,716</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">152,985</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">143,767</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incentive
                  programs </font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">906</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,932</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,184</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,046</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interruptible</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">91</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">294</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">528</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">91,035</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,870</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">157,463</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">150,341</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operation
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              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,692</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,083</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,947</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">40,950</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Depreciation
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              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,848</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,477</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,586</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,900</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Other
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              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">759</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">796</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,478</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,530</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  income</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58,736</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">57,514</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">95,452</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,961</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Other
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              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">838</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">715</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,885</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,540</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Interest
                  charges, net</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,244</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,990</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,637</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,774</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Income
                  tax provision</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,104</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20,730</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,566</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">32,535</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Net
                  income</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,226</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,509</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">53,134</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,192</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.5pt" align="justify"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Utility
          Gross Margin</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
          utility gross margin is defined as natural gas revenues less natural gas
          purchases, sales tax, a Transitional Energy Facilities Assessment (TEFA)
          and
          regulatory rider expenses. Management believes that utility gross margin
          provides a more meaningful basis than revenue for evaluating utility operations
          since natural gas costs, sales tax, TEFA </font>and regulatory rider expenses
          are included in operating revenue and passed through to customers and,
          therefore, have no effect on utility gross margin. This definition of utility
          gross margin may not be comparable to the definition of gross margin used
          by
          others in the natural gas distribution business and other
          industries.</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
        gas costs are charged to operating expenses on the basis of therm sales at
        the
        prices in NJNG&#8217;s BGSS tariff, approved by the BPU. The BGSS tariff includes
        projected natural gas costs, net of supplier refunds, the impact of hedging
        activities and credits from non-firm sales and transportation activities.
        Any
        underrecoveries or overrecoveries from the projected amounts are deferred
        and
        reflected in the BGSS tariff in subsequent periods.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
        tax
        was calculated at 6 percent of revenue during the first and second quarters
        of
        fiscal 2006, and at 7 percent, during the first and second quarters of fiscal
        2007. The sales tax calculation excludes sales to cogeneration facilities,
        other
        utilities, off-system sales and federal accounts.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TEFA,
        which is included in Energy and other taxes on the Condensed Consolidated
        Statements of Income, is calculated on a per-therm basis and excludes sales
        to
        cogeneration facilities, other utilities and off-system sales. TEFA represents
        a
        regulatory allowed assessment imposed on all energy providers in the state
        of
        New Jersey, as TEFA has replaced the previously used utility gross receipts
        tax
        formula. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
        rider expenses consist of recovery of state-mandated programs and the
        remediation adjustment clause costs. These expenses are offset by corresponding
        revenues and are calculated on a per-therm basis.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        Operating revenues decreased by $175.5 million, or 20.3 percent, and gas
        purchases decreased by $187.9 million, or 28.8 percent, respectively, for
        the
        six months ended March 31, 2007, compared with the same period in the prior
        fiscal year. These decreases were primarily the result of refunds of $51.5
        million and $20 million in December 2006 and March 2007, respectively, to
        residential and small commercial customers and a decrease in off-system sales
        of
        $84.7 million, partially offset by customer growth. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        Operating revenues and Gas purchases for the three months ended March 31,
        2007
        decreased $20.6 million, and $33.8 million, respectively, compared with same
        period in the prior fiscal year as a result of the $20 million refund to
        customers in March 2007, partially offset by customer growth. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
        tax
        and TEFA, which are presented as both components of Revenues and Operating
        Expenses in the Condensed Consolidated Statements of Income, totaled $41.3
        million and $41.8 million for the six months ended and $28.8 million and
        $24.5
        million for the three months ended March 31, 2007 and 2006, respectively.
        The
        change in the sales tax rate from 6 percent to 7 percent, as applied to NJNG&#8217;s
        operating revenue, drove the increase&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
        the
        three month period ended March 31, 2007 as compared to the same period in
        the
        prior fiscal year</font>. For the six month period ended March 31, 2007, as
        compared to the same period in the prior year, the sales tax increase was
        partially offset by reduced revenues, as a result of customer refunds, and
        TEFA
        expense as total therm usage, as a result of weather being 1 percent warmer
        than
        the same period in the prior fiscal year, was lower.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulation
        rider expenses totaled $27.6 million and $21.9&#160;million for the six months
        ended March&#160;31, 2007 and 2006, respectively, and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$18.1&#160;million
        and $12.4&#160;million for the three months ended March&#160;31, 2007 and 2006,
        respectively. The increase in regulatory rider expenses is due primarily
        to an
        increase in firm throughput sales as a result of customer growth. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
        gross margin is comprised of three major categories:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
                Firm Gross Margin, which is derived from residential and commercial
                customers who receive natural gas service from NJNG through either
                sales
                or transportation tariffs;</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incentive
                programs, where margins generated or savings achieved from BPU-approved
                off-system sales, capacity release, Financial Risk Management (defined
                in
                Incentive Programs, below) or storage incentive programs are shared
                between customers and NJNG; and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
                gross margin from interruptible customers, which is generated from
                large
                commercial and industrial customers who receive non-firm natural
                gas
                service at lower rates, and is subject to BPU-approved
                incentives.</font></div>
            </td>
          </tr>

      </table><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">&#160;</div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Utility
        Firm Gross Margin</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
        October 1, 2006, the BPU approved the CIP to encourage energy savings while
        allowing NJNG to recover the necessary costs of operations. The three-year
        pilot
        program eliminates the disincentive to promote conservation and energy
        efficiency, since utility gross margin is no longer directly linked to customer
        usage. The CIP tariff normalizes NJNG&#8217;s utility gross margin recoveries for
        variances not only in weather but also other factors affecting usage, including
        customer conservation. Recovery of utility gross margin through the CIP is
        limited to the amount of certain gas supply cost savings achieved.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
        the
        three and six months ended March 31, 2006, utility gross margin from residential
        and commercial customers was impacted by the WNC, which provided for a revenue
        adjustment if the weather varied by more than one-half percent from normal
        weather (i.e., 20-year average). The accumulated adjustment from one heating
        season (i.e., October&#160;through May) was billed or credited to customers in
        subsequent periods. This mechanism reduced the variability of both customers&#8217;
bills and NJNG&#8217;s earnings due to weather fluctuations. The existing WNC has been
        suspended as of October 1, 2006 due to the implementation of the CIP pilot
        program.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customers
        switching between sales service and transportation service affect the components
        of utility gross margin from firm customers. NJNG&#8217;s total utility gross margin
        is not negatively affected by customers who use its transportation service
        and
        purchase natural gas from another supplier because its tariff is designed
        so
        that no profit is earned on the natural gas commodity portion of sales to
        firm
        customers. All customers who purchase natural gas from another supplier continue
        to use NJNG for transportation service.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
        utility firm gross margin increased $5.3 million, or 6.3 percent, for the
        three
        months and $9.2 million, or 6.4 percent, for the six months ended March 31,
        2007, respectively, compared with the same periods of the prior fiscal year.
        The
        changes were due primarily to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 35pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                effect of the CIP in the current fiscal year, which captures the
                impact
                from both weather and customer usage, when compared to the same periods
                in
                the prior fiscal year when the WNC, which did not capture the impact
                of
                lower usage per degree day, was in effect;
                and</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 35pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                increase in fixed revenue as a result of customer
                growth.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
        gross margin from residential and commercial customers is impacted by the
        CIP,
        which provides for a revenue adjustment if the weather and usage varies from
        the
        established baseline weather and usage factors. The accumulated adjustment
        from
        one year is billed or credited to customers in subsequent periods. This
        mechanism protects NJNG&#8217;s utility gross margin due to weather and customer usage
        fluctuations while allowing NJNG to promote conservation. The weather for
        the
        six months ended March 31, 2007 was 6.6 percent warmer than normal, which
        resulted in an accrual of utility gross margin under the CIP of $8.4 million.
        In
        addition, customer usage was lower than the established benchmark, which
        resulted in an additional accrual of utility gross margin under the CIP of
        $5.9
        million.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Utility
        firm gross margin from transportation service increased $5.5 million, or
        42.5
        percent, for the six months ended March 31, 2007, and $3.4 million or 52.6
        percent for the three months ended March 31, 2007, respectively, compared
        with
        the same periods in the prior fiscal year. NJNG transported 6.3 Bcf and 4.9
        Bcf
        for the six months ended March 31, 2007 and March 31, 2006, respectively,
        and
        3.8 Bcf and 2.3 Bcf for the three months ended March 31, 2007 and March 31,
        2006, respectively. The increase in utility firm gross margin was due primarily
        to an increase in the number of commercial customers switching from firm
        to
        transportation services, combined with the impact of the CIP
        program.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        had
        8,665 and 9,129 residential customers and 4,494 and 3,602 commercial customers
        using its transportation service at March 31, 2007 and 2006, respectively.
        The
        decrease in residential transportation customers was due primarily to a change
        in marketing efforts by third-party natural gas service providers in NJNG&#8217;s
        service territory to focus on the commercial sector.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the six months ended March 31, 2007, NJNG added 4,333 new customers, 35.8
        percent of which converted from other fuels. In addition, 230 existing customers
        added natural gas heat to their existing service. In fiscal 2007, NJNG currently
        expects to add approximately 9,150 new customers and <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">convert
        700 existing customers to natural gas heat. Achieving these expectations
        would
        represent an estimated annual customer growth rate of approximately 2.0 percent.
        </font></font></div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
        growth expectations are based upon management&#8217;s review of local planning board
        data, recent market research performed by third parties, builder surveys
        and
        studies of population growth rates in NJNG&#8217;s service territory. However, future
        sales will be affected by the weather, actual energy usage patterns of NJNG&#8217;s
        customers, economic conditions in NJNG&#8217;s service territory, conversion and
        conservation activity, the impact of changing from a regulated to a competitive
        environment, changes in state regulation and other marketing efforts, as
        has
        been the case in prior years.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Incentive
        Programs</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
        reduce
        the overall cost of its natural gas supply commitments, NJNG has entered
        into
        contracts to sell natural gas to wholesale customers outside its franchise
        territory when the natural gas is not needed for system requirements. These
        off-system sales enable NJNG to spread its fixed demand costs, which are
        charged
        by pipelines to access their supplies year round, over a larger and more
        diverse
        customer base. NJNG also participates in the capacity release market on the
        interstate pipeline network when the capacity is not needed for its firm
        system
        requirements. NJNG retains 15 percent of the utility gross margin from these
        sales, with 85 percent credited to firm customers through the BGSS.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Financial Risk Management (FRM) program is designed to provide price stability
        to NJNG&#8217;s natural gas supply portfolio. The FRM program includes an incentive
        mechanism designed to encourage the use of financial instruments to hedge
        NJNG&#8217;s
        natural gas costs, enabling NJNG customers to retain 80 percent, and NJNG
        shareowners to retain 20 percent, of these costs and results.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        storage incentive program shares gains and losses on an 80 percent to 20
        percent
        basis between customers and shareowners, respectively. This program measures
        the
        difference between the actual cost of natural gas in storage and a benchmark
        applicable to the April-through-October injection season. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        incentive programs totaled 9.8 Bcf and generated $906,000 of utility gross
        margin for the three months ended March 31, 2007, compared with 11.5 Bcf
        and
        $2.9 million of utility gross margin in the same period in the prior fiscal
        year. NJNG&#8217;s incentive programs totaled 20.3 Bcf and generated $4.2 million of
        utility gross margin for the six months ended March 31, 2007, compared with
        21.7
        Bcf and $6.0 million of utility gross margin, for the same period in the
        prior
        fiscal year. For both the three and six month periods ended March 31, 2007,
        the
        decrease in utility gross margin was due primarily to a decrease in the market
        prices for natural gas as compared to the same periods in the prior fiscal
        year.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New
        York
        Mercantile Exchange (NYMEX) settlement prices for natural gas are a general
        indication of the monthly market movements. NYMEX prices have decreased from
        an
        average of $10.977/dth for the six months ending March 31, 2006 to $6.662/dth
        for the six months ended March 31, 2007, which represents a 39 percent decrease,
        while the average off-system price was lower by 31 percent from an average
        of
        $11.038/dth for the six months ended March 31, 2006 to $7.623 /dth for the
        six
        months ended March 31, 2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Interruptible</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        serves 49 customers through interruptible sales and/or transportation tariffs.
        Sales made under the interruptible sales tariff are priced on market-sensitive
        energy parity rates. Although therms sold and transported to interruptible
        customers represented approximately 2.8 percent and 4 percent of total
        throughput for the six months ended March 31, 2007 and 2006, respectively,
        they
        accounted for less than 1 percent of the total utility gross margin in both
        periods due to the sharing formulas that govern these sales. Under these
        formulas, NJNG retains 10 percent of the utility gross margin from interruptible
        sales and 5 percent of the utility gross margin from transportation sales,
        with
        90 percent and 95 percent, respectively, credited to firm sales customers
        through the BGSS. Interruptible sales were .03 and .2 Bcf for the six months
        ended March 31, 2007, and 2006, respectively. In addition, NJNG transported
        1.87
        Bcf and 2.6 Bcf for the six months ended March 31, 2007 and 2006, respectively,
        for its interruptible customers.</font></div><br>
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          </div>
        </div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Operation
        and Maintenance Expense</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operation
        and maintenance (O&amp;M) expense increased $1.6 million, or 7.6 percent, and
        $2.0 million, or 4.9 percent, for the three months and six months ended March
        31, 2007, respectively, compared with the same periods in the prior fiscal
        year.
        The increase was due primarily to higher labor costs of $1.1 million, a reserve
        for an anticipated BPU settlement relating to BGSS costs of $500,000, partially
        offset by lower bad debt expense of $393,000 during the first half of fiscal
        year 2007. Higher labor costs are due primarily to an increase in the number
        of
        employees as well as annual wage increases, while lower bad debt expense
        is a
        direct result of decreased revenue, through customer refunds and lower sales,
        as
        noted above. The reserve for an anticipated BPU settlement charge is related
        to
        a proposed stipulation that includes settlement of a prior gas supply audit
        with
        the BPU related to natural gas purchased and used for the Company&#8217;s own
        operational purposes.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Operating
        Income</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
        income increased $1.2 million, or 2.1 percent, and $4.5 million, or&#160;4.9
        percent, for the three months and six months ended March 31, 2007, respectively,
        compared with the same periods in the prior fiscal year. The increase was
        due
        primarily to the implementation of the CIP tariff which became effective
        beginning in fiscal 2007. The implementation of the CIP allowed for the recovery
        of lower utility gross margin, as a result of the decrease in natural gas
        used
        due to the warmer than normal weather, as well as the reduction in customer
        usage per degree day, as noted in the discussion above. During the six months
        ended March 31, 2006, the WNC did not capture reductions in customer usage,
        but
        only the variability experienced by NJNG&#8217;s utility gross margin as a result of
        weather fluctuations.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Interest
        Charges</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
        charges increased $1.3 million and $2.9 million for the three months and
        six
        months ended March 31, 2007, respectively, as compared to the same periods
        in
        the prior fiscal year, due primarily to an increase in short-term borrowings
        and
        higher interest rates, as well as greater costs associated with overrecovered
        gas costs. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Net
        Income</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
        income decreased $283,000, or 0.8 percent, and increased $942,000 or 1.8
        percent
        in the three and six months ended March 31, 2007, respectively, as compared
        to
        the same periods in the prior fiscal year, due primarily to higher operating
        income as a result of the implementation of the CIP and a reduction in bad
        debt
        expense, partially offset by higher labor expense and the reserve for the
        anticipated BPU settlement charge, as well as higher interest
        expense.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Energy
        Services Operations</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
        believes that NJRES&#8217; gross margin, which is defined as natural gas revenues and
        management fees less natural gas costs and fixed demand costs, is a better
        indicator of results, as revenues from the sale of natural gas to its customers,
        on a wholesale basis, is highly correlated to the wholesale price of natural
        gas. NJRES utilizes contractual assets that it controls for natural gas storage
        and pipeline transportation to meet its various sale and delivery commitments
        to
        its customers.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;NJRES
          purchases gas predominantly in the eastern United States and Canada, and
          transports that gas, through the use of pipeline contracts to which it
          has
          reserved capacity through the payment of a fixed demand charge, to either
          storage facilities that it has reserved, primarily in the Appalachian,
          Mid-Continent and Gulf regions of the United States and Canada or directly
          to
          customers in various market areas including the Northeastern region of
          the
          Unite</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">d</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          States
          and eastern Canada. Through the use of these contracts for natural gas
          storage
          and pipeline capacity, NJRES is able to take advantage of pricing differences
          between geographic locations, commonly referred to as &#8220;locational spreads,&#8221; as
          well as over different time periods, for the delivery of natural gas to
          its
          customers. NJRES utilizes financial futures, forwards and swap contracts
          to fix
          and protect the cash flows surrounding these transactions.</font></div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2">Predominantly
        all of NJRES&#8217; sales to customers result
        in the delivery of natural gas, and therefore, NJRES accounts for its sales
        using the accrual method of accounting by employing the &#8220;normal purchase normal
        sale&#8221; scope exception of SFAS No. 133, <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
        for Derivative Instruments and Hedging Activities</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
        as
        amended (SFAS 133). NJRES&#8217; use of financial futures, forwards and swap contracts
        are designed to qualify as cash flow hedges <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">under
        SFAS 133, whereby the underlying change in the fair value of these derivative
        instruments is deferred on the balance sheet and recognized in earnings,
        as a
        component of Gas purchases, when the underlying transaction is settled through
        the delivery of natural gas.&#160;&#160; </font></font></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
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          <div id="FTR">&#160;</div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">
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              of Contents</a></font></div>
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;<font id="TAB2" style="LETTER-SPACING: 7pt">&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Demand
        charges of NJRES, which represent the right to use natural gas pipeline and
        storage capacity assets of a third-party for a fixed period of time, are
        expensed ratably over the term of the related natural gas pipeline or storage
        contract. Due to the seasonality of NJRES&#8217; revenue stream, and the fixed nature
        of the demand charges, NJRES normally incurs losses during the non-peak summer
        operating period.</font></font><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES&#8217;
        financial results are summarized as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="13%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="17%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
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              <td width="2%" style="border-bottom: medium none;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
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              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">568,388</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">587,525</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,064,175</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,350,720</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Gas
                  purchases (including fixed demand charges)</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">482,606</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">536,038</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">960,298</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,269,381</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Gross
                  margin</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">85,782</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">51,487</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">103,877</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,339</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;
</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operation
                  and maintenance expense</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,150</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,423</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,153</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,941</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Depreciation
                  and amortization</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">54</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">51</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">103</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  taxes</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">168</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">150</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">360</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">331</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  income</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,410</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">46,863</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,256</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,964</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Net
                  income</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">47,180</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26,999</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">54,999</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,896</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES'
        gross margin increased by $34.3 million&#160;for the three months ended March
        31, 2007, compared with the same period last fiscal year as a result of
        favorable pricing differentials for natural gas storage positions between
        the
        cost to acquire the storage position and the market price for natural gas.
        The
        pricing differentials were the result of weather impacts. In the prior fiscal
        year, as a result of the disruptive effects of hurricanes Rita and Katrina
        the
        pricing differentials were greater in the first quarter of fiscal year 2006,
        and
        then became more normalized during the three months ended March 31, 2006.
        As
        part of its operational strategy, NJRES had secured natural gas storage and
        sales positions that <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">resulted
        in&#160;</font>a gross margin amount that was greater on a quarter over quarter
        basis, which was the result of both larger volumes and different market prices
        for natural gas. The weather impacts on market prices for the three months
        ended
        March 31, 2007 further increased the gross margin of NJRES on a comparative
        basis to the same period in the prior fiscal year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES'
        gross margin increased by $22.5 million,&#160;for the six months ended March 31,
        2007, compared with the same period last fiscal year due to the impact of
        weather on prices during the three months ended March 31, 2007 as described
        above, larger gas volumes being sold and a change in market prices between
        the
        cost to acquire and transport natural gas, partially offset by the absence
        of
        benefits from certain natural gas basis swaps that were deemed ineffective
        cash
        flow hedges upon adoption of SFAS 133, which were concluded and settled in
        October 2006. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES'
        operations and maintenance expense decreased by $273,000 and increased $212,000
        for the three and six months ended March 31, 2007, respectively, compared
        with
        the same periods last fiscal year. The decrease for the three months ended
        March
        31, 2007, as compared to the same period in the prior fiscal year, is due
        primarily to charitable contributions made in fiscal 2006 that did not recur
        in
        the current fiscal year, partially offset by higher labor and incentive costs.
        The increase for the six months ended March 31, 2007, as compared to the
        same
        period in the prior fiscal year, was due to increased labor and incentive
        costs
        associated with operational growth.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
        income increased by $34.5 million and $22.3 million and net income increased
        by
        $20.2 million and $13.1 million for the three and six months ended March
        31,
        2007, respectively, compared with the same periods in the prior fiscal year
        due
        primarily to the increases in gross margin and variance in operations and
        maintenance expense described above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Future
        results are subject to NJRES&#8217; ability to maintain and expand its wholesale
        marketing activities and are contingent upon many other factors, including
        an
        adequate number of appropriate counterparties, sufficient liquidity in the
        energy trading market and continued access to the capital markets. In addition,
        NJRES&#8217; gross margin from its portfolio of capacity assets is generally greater
        in the winter months, while the fixed costs of these assets are spread
        throughout the year. Accordingly, the results for the three and six months
        ended
        March 31, 2007 are not expected to be an indication of the results for the
        fiscal year.</font><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">&#160;</div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">29</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="1">
            </div>
          </div>
          <div id="HDR">&#160;</div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Retail
        and Other Operations</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        financial results of Retail and Other consists primarily of NJRHS, which
        provides service, sales and installation of appliances to over 144,000
        customers; CR&amp;R, which holds and develops commercial real estate; NJR
        Energy, an investor in energy-related ventures through its operating
        subsidiaries; NJNR Pipeline, which consists of the Company&#8217;s equity investment
        in Iroquois; &#160;NJR Steckman Ridge Storage Company, which holds the Company&#8217;s
        equity investment in Steckman Ridge; and NJR Investment, which makes certain
        energy-related equity investments. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Consolidated financial results of Retail and Other are summarized as
        follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="12%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                  Months Ended</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="5" valign="bottom" width="13%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Six
                  Months Ended </strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  revenues</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,508</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,560</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,848</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,663</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Other
                  income</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">832</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">788</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,639</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,442</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Net
                  income </font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">121</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(307</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">518</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">377</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
        and Other Operating revenue decreased by $52,000, or 1 percent, and $815,000,
        or
        6.4 percent, for the three and six months ended March 31, 2007, respectively,
        compared with the same periods last year. The decreases were due primarily
        to a
        gain of $617,000 in the first half of fiscal 2006 on the completion of land
        and
        building sales contracts by CR&amp;R that did not recur in fiscal
        2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        increase in Other income is attributed to improved earnings from NJNR Pipeline&#8217;s
        equity investment in Iroquois. Through March 31, 2007, NJR has invested $52.5
        million for the right to acquire, develop, construct and finance Steckman
        Ridge.
        It is currently under development and operational start-up is expected in
        fiscal
        2009.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Liquidity
        and Capital Resources</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Consolidated</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR&#8217;s
        objective is to maintain a consolidated capital structure that reflects the
        different characteristics of each business segment and provides adequate
        financial flexibility for accessing capital markets as required. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR&#8217;s
        consolidated capital structure was as follows:</font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">&#160;</td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                  31,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                  30,</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                  stock equity</font></div>
              </td>
              <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">50</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-term
                  debt</font></div>
              </td>
              <td width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Short-term
                  debt</font></div>
              </td>
              <td width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
              </td>
              <td align="left" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR
        did
        not repurchase any shares of its common stock during the six month period
        ending
        March 31, 2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR
        and
        its unregulated subsidiaries rely on utilizing committed credit facilities
        to
        provide liquidity to meet working capital and external debt-financing
        requirements.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        satisfies its debt needs by issuing short- and long-term debt based upon
        its own
        financial profile. NJNG does not guarantee or otherwise directly support
        the
        debt of NJR. The seasonal nature of NJNG&#8217;s operations creates large short-term
        cash requirements, primarily to finance natural gas purchases and customer
        accounts receivable. NJNG obtains working capital for these requirements,
        and
        for the temporary financing of construction and MGP remediation expenditures
        and
        energy tax payments, through the issuance of commercial paper and short-term
        bank loans. </font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of
        March 31, 2007, NJR, NJRES and NJNG had committed credit facilities of $605
        million with approximately $423 million available under these facilities
        (see
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        6. Debt).</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR,
        NJNG
        and NJRES currently anticipate that their financing requirements in fiscal
        2007
        will be met through internally generated cash, the issuance of short-term
        debt
        and proceeds from the Company&#8217;s Automatic Dividend Reinvestment Plan.
</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table is a summary of NJR&#8217;s, NJNG&#8217;s and NJRES&#8217;s contractual cash
        obligations and their applicable payment due dates as of March 31,
        2007:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Up&#160;to</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
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              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Years</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Years</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5&#160;Years</strong></font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Long-term
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              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">448,822</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,835</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">72,973</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">340,904</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Capital
                  lease obligations </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>*</em></font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,399</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,994</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,988</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,178</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44,239</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Operating
                  leases </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>*</em></font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,897</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,652</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,401</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,254</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">590</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Short-term
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              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">127,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">127,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Clean
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              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,672</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,775</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,897</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Construction
                  obligations</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,826</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,826</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Natural
                  gas supply purchase obligations - NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">155,550</font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">150,306
                  </font></div>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">548</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,696
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Demand
                  fee commitments - NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">429,831</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,848</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,479
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">110,956</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">89,548</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Natural
                  gas supply purchase obligations - NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,043,587</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">534,858
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">508,729
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Demand
                  fee commitments - NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">207,855</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">71,576</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">86,624</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">34,968</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,687</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total
                  NJR, NJNG and NJRES contractual cash </font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Obligations</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,529,439</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,004,670</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">790,776</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">244,025</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">489,968</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>*These
        obligations include an interest component.</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of
        March 31, 2007, there were NJR guarantees covering approximately $270 million
        of
        natural gas purchases, demand fee commitments and swap agreements of NJRES,
        NJNG
        and NJR Energy, not yet reflected in Accounts payable on the Condensed
        Consolidated Balance Sheet. These NJR guarantees are related to transactions
        with various expiration dates through October 2016. NJR would have to provide
        for payment in the event of default by NJRES, NJNG or NJR Energy.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
        included in the table above is NJR&#8217;s obligation to fund up to $125 million for
        the development and construction of the natural gas storage facility to be
        owned
        and operated by Steckman Ridge.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company is not currently required to make minimum pension funding contributions
        during fiscal 2007. The Company&#8217;s funding level to its OPEB plans is expected to
        be approximately $600,000 annually over the next five years.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Off-Balance
        Sheet Arrangements</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company does not have any off-balance sheet financing arrangements.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Cash
        Flows</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Operating
        Activities</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        presented in the Condensed Consolidated Statements of Cash Flows, net cash
        provided by operating activities was $241.6 million for the six months ended
        March 31, 2007, compared with $98.1 million provided by operating activities
        in
        the same period in the prior fiscal year. The increase in operating cash
        flow
        during the first half of fiscal 2007 primarily reflects higher net income,
        lower
        MGP expenditures and the following changes in the components of working
        capital:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Symbol">&#183;</font>&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                decrease in the change in accounts receivable of $57.6 million and
                an
                increase in customer credit balances of $56.7 million, primarily
                as a
                result of a $71.5 million credit issued to retail customers and warmer
                weather and reduced customer usage at NJNG.
</font></div>
            </td>
          </tr>

      </table><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                decrease in gas inventory at NJNG due to lower volumes held in inventory,
                as well as lower wholesale natural gas
                prices.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;
              </font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                increase in gas purchases payable at NJNG and NJRES as a result of
                increased customer demand.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 42pt;"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Symbol">&#183;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                increase in broker margin balances resulting from settlements during
                the
                six month period and lower market prices on natural gas futures
                contracts.</font></div>
            </td>
          </tr>

      </table>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        MGP expenditures, exclusive of insurance recoveries, are currently expected
        to
        total $26.8 million in fiscal 2007 (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        12. Commitments and Contingent Liabilities).</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Operating cash flows for the six months ended March 31, 2007 include the
        receipt
        of $12.8 million in January, 2007 related to the settlement of certain claims
        against NJNG&#8217;s insurance company (see </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Note
        12. Commitments and Contingent Liabilities - Legal Proceedings - Kemper
        Insurance Company Litigation)</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Financing
        Activities</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
        flow
        used in financing activities totaled $158.7 million for the six months ended
        March 31, 2007, compared with $79.1 million used in the same period in the
        prior
        fiscal year. The change was due primarily to a decrease in short-and long-term
        borrowings, compared with the same period in the prior fiscal year.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        short-term debt primarily supports Gas inventory build-up during the summer
        months and Gas purchases. NJNG&#8217;s short-term debt decreased due primarily to
        seasonal cash flows during the winter heating season. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR&#8217;s
        short-term borrowings decreased during the six months ended March 31, 2007
        due
        primarily to an increase in cash attributed to the reduction in NJRES&#8217; natural
        gas storage inventory, which was offset by acquisition costs relating to
        NJR&#8217;s
        investment in the Steckman Ridge gas storage facility.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES&#8217;
        use of high-injection, high-withdrawal storage facilities and anticipated
        pipeline park-and-loan arrangements, combined with related hedging activities
        in
        the volatile wholesale natural gas market, create significant short-term
        cash
        requirements, which are funded by NJR or its committed credit facility
        guaranteed by NJR.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        October 2005, under the New Jersey Economic Development Authority (EDA) Act,
        NJNG used proceeds from EDA Series 2005A and 2005B bonds to refinance NJNG&#8217;s
        $10.3 million, 5.38 percent Series&#160;W First Mortgage Bonds and its $10.5
        million, 6.25 percent Series&#160;Y First Mortgage Bonds. Also in October 2005,
        the EDA issued its 4.9 percent (Series 2005C) Natural Gas Facilities Revenue
        Bonds. The net proceeds from the 2005C bonds were deposited into a construction
        fund. NJNG immediately drew down $2.5 million from the construction fund
        and
        issued its $15 million, 4.9 percent Series KK bonds to the EDA with a maturity
        date of October 1, 2040. NJNG drew down an additional $4 million from the
        construction fund in the fourth quarter of fiscal 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        December 2006 and 2005, NJNG received $5.5 million and $4.1 million in
        connection with the sale-leaseback of its vintage 2006 and 2005 meters,
        respectively. NJNG plans to continue the sale-leaseback meter program on
        an
        annual basis.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Investing
        Activities</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
        flow
        used in investing activities totaled $79.8 million for the six months ended
        March 31, 2007, compared with $35.3 million for the same period in the prior
        fiscal year. The increase in cash used during the first half of fiscal 2007,
        as
        compared with the same period in the prior fiscal year, was due to NJR&#8217;s
        investment of $52.5 million in the Steckman Ridge partnership assets along
        with
        increased capital expenditures for utility plant additions, partially offset
        by
        the absence of the net $12.5 million deposit into a construction fund created
        under the EDA financing arrangement in fiscal 2006 described above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        capital expenditures result primarily from the need for services, mains and
        meters to support its continued customer growth, pipeline safety rulemaking
        and
        general system improvements. NJNG&#8217;s capital expenditures are expected to
        increase in fiscal 2007 and 2008, compared with fiscal 2006, as a result
        of
        increased system integrity projects and expected replacement required under
        pipeline safety rulemaking.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES
        does not currently anticipate any significant capital expenditures in fiscal
        2007 and 2008. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Retail
        and Other capital expenditures each year have been primarily made in connection
        with investments made to preserve the value of real estate holdings. During
        the
        second quarter of fiscal 2007, NJR and Spectra Energy Corporation, through
        their
        respective subsidiaries, formed a partnership to develop and operate the
        Steckman Ridge gas storage facility. NJR will share 50 percent of the
        acquisition and development costs of the storage facility, up to a maximum
        of
        $125 million, of which $52.5 million was expended through March 2007, as
        noted
        above.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;<u>Credit
        Ratings</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        table
        below summarizes NJNG&#8217;s credit ratings issued by two rating entities, Standard
        and Poor&#8217;s (S&amp;P), and Moody&#8217;s Investors Service,&#160;Inc.
        (Moody&#8217;s).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <div>
          <table border="0" bordercolor="black" cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="bottom" width="45%" style="border-bottom: black thin solid;">&#160;</td>
                <td valign="bottom" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Standard&#160;&amp;
                    </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Poor&#8217;s</font></div>
                </td>
                <td valign="bottom" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Moody&#8217;s</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate
                    Rating</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A+</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="45%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commercial
                    Paper</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-1</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P-1</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior
                    Secured</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AA-</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Aa3</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="45%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratings
                    Outlook</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Negative</font></div>
                </td>
                <td valign="top" width="17%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stable</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
      <div>&#160;</div>
      <div>&#160;</div>
      <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;NJNG&#8217;s
        S&amp;P and Moody&#8217;s Senior Secured ratings are investment grade ratings and
        represent the sixth highest rating within the investment grade category.
        Moody&#8217;s
        and S&amp;P give NJNG&#8217;s commercial paper the highest rating within the
        Commercial Paper investment grade category. Investment grade ratings are
        generally divided into three groups: high, upper medium and medium. NJNG&#8217;s
        senior secured ratings and the commercial paper ratings fall into the high
        group. NJR is not a rated entity.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG
        is
        not party to any lending agreements that would accelerate the maturity date
        of
        any obligation caused by a failure to maintain any specific credit rating.
        A
        rating set forth above is not a recommendation to buy, sell or hold the
        Company&#8217;s or NJNG&#8217;s securities and may be subject to revision or withdrawal at
        any time. Each rating set forth above should be evaluated independently of
        any
        other rating.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        timing and mix of any external financings will target a common equity ratio
        that
        is consistent with maintaining the Company&#8217;s current short- and long-term credit
        ratings.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item3qqdiscmktrisk">IT</a>EM
        3.&#160; QUANTITATIVE AND QUALITATIVE
        DISCLOSURES ABOUT MARKET RISK</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Financial
        Risk Management</em></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Commodity
        Market Risks</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Natural
        gas is a nationally traded commodity, and its prices are determined effectively
        by the New&#160;York Mercantile Exchange (NYMEX) and over-the-counter markets.
        The prices on the NYMEX and over-the-counter markets generally reflect the
        notional balance of natural gas supply and demand, but are also influenced
        significantly from time to time by other events.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        regulated and unregulated natural gas businesses of the Company and its
        subsidiaries are subject to market risk due to fluctuations in the price
        of
        natural gas. To hedge against such fluctuations, the Company and its
        subsidiaries have entered into futures contracts, options agreements and
        swap
        agreements. To manage these instruments, the Company has well-defined risk
        management policies and procedures that include daily monitoring of volumetric
        limits and monetary guidelines. The Company&#8217;s natural gas businesses are
        conducted through three of its operating subsidiaries. First, NJNG is a
        regulated utility that uses futures, options and swaps to hedge against price
        fluctuations and its recovery of natural gas costs is governed by the BPU.
        Second, NJRES uses futures, options and swaps to hedge purchases and sales
        of
        natural gas. Finally, NJR Energy has entered into two swap transactions to
        hedge
        an 18-year fixed-price contract to sell remaining volumes of approximately
        8.5
        Bcf of natural gas (Gas Sales Contract) to an energy marketing company which
        expire on October 31, 2010.&#160;NJR Energy has hedged both the price and
        physical delivery risks associated with the Gas Sales Contract.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table reflects the changes in the fair market value of commodity
        derivatives from September 30, 2006 to March 31, 2007:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Balance</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September&#160;30,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Increase</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Decrease)</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;in&#160;Fair</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amounts</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Balance</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March&#160;31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Market&#160;Value</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Settled</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(82,451</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,399</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,202</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(70,850</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">116,547</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(26,373</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">91,495</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,321</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJR
                  Energy</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,423</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">754</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">360</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,817</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">69,519</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(15,220</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">90,653</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(36,354</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
        were no changes in methods of valuations during the three months ended March
        31,
        2007.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following is a summary of fair market value of commodity derivatives at March
        31, 2007, by method of valuation and by maturity for each fiscal year
        period:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Remaining</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2008</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2009
                  - 2011</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>After</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2011</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FairValue</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Price
                  based on NYMEX</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(29,616</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,761</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,071</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(34,448</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Price
                  based on over-the-counter</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Published
                  quotations</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,128</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(840</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">62</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,906</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="43%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(30,744</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,601</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,009</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(36,354</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">34</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following is a summary of commodity derivatives by type as of March 31,
        2007:</font></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="57%" style="border-bottom: medium none;">&#160;</td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: medium none;">
                <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Volume</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Price&#160;per</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amounts
                  Included in</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Derivatives</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">&#160;</td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Bcf)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Mmbtu</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(Thousands)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Futures</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(18.3)</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.45
                  - $ 9.39</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(18,296</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;5.0</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7.50
                  - $ 11.00</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,934</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Swaps</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;6.1</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.99
                  - $ 8.74</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(55,488</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJRES</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Futures</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(16.9)</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.32
                  - $ 11.59</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,596</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Swaps</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(42.5)</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.30
                  - $ 11.98</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,275</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;NJRE</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 7pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                  Swaps</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;39.0</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.07
                  - $ 4.41</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,817</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="57%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="right" valign="bottom" width="8%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="6%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(36,354</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company uses a value-at-risk (VaR) model to assess the market risk of its
        net
        futures, options and swap positions. VaR represents the potential loss in
        value
        of NJRES&#8217; trading portfolio due to adverse market movements over a defined time
        horizon (NJRES utilizes holding periods of 1 day and 10 days) with a specified
        confidence level (NJRES utilizes either a 95 percent or 99 percent confidence
        level). As an example, utilizing a 1 day holding period with a 95 percent
        confidence level would indicate that there is a 5 percent chance that the
        liquidation value of the NJRES portfolio would fall below the expected trading
        value by an amount at least as large as the calculated VaR. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        VaR
        as of March 31, 2007, using the variance-covariance method with a 95 percent
        confidence level and a 1-day holding period, was $2.4 million. The VaR with
        a 99
        percent confidence level and a 10-day holding period was $10.7 million. These
        estimates may not be indicative of actual results because actual market
        fluctuations may differ from forecasted fluctuations.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Wholesale
        Credit Risk</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG,
        NJRES and NJR Energy engage in wholesale marketing activities. NJR monitors
        and
        manages the credit risk of its wholesale marketing operations through credit
        policies and procedures that management believes reduce overall credit risk.
        These policies include a review and evaluation of prospective counterparties&#8217;
financial statements and/or credit ratings, daily monitoring of counterparties&#8217;
credit limits, daily communication with traders regarding credit status and
        the
        use of credit mitigation measures, such as minimum margin requirements,
        collateral requirements and netting agreements. Examples of collateral include
        letters of credit and cash received for either prepayment or margin
        deposit.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s Risk Management Committee (RMC) continuously monitors NJR&#8217;s credit
        risk management policies and procedures. The RMC is a group of senior officers
        from NJR-affiliated companies that meets twice a month and, among other things,
        evaluates the effectiveness of existing credit policies and procedures, reviews
        material transactions and discusses emerging issues.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
        is a summary of gross and net credit exposures, grouped by investment and
        noninvestment grade counterparties, as of March 31, 2007. Gross credit exposure
        is defined as the unrealized fair value of derivative and energy trading
        contracts plus any outstanding receivable for the value of natural gas delivered
        for which payment has not yet been received. Net credit exposure is defined
        as
        gross credit exposure reduced by collateral received from counterparties
        and/or
        payables, where netting agreements exist. The amounts presented below exclude
        accounts receivable for retail natural gas sales and services.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unregulated
        counterparty credit exposure as of March 31, 2007, is as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="3" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Gross
                  Credit</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exposure</strong></font></div>
              </td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                  Credit</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exposure</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Investment
                  grade</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">216,864</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">182,915</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Noninvestment
                  grade</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,148</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Internally
                  rated investment grade</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,005</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,275</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Internally
                  rated noninvestment grade</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,666</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">240,683</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">190,190</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJNG&#8217;s
        counterparty credit exposure as of March 31, 2007, is as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;(Thousands)</em></font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td colspan="3" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Gross
                  Credit</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exposure</strong></font></div>
              </td>
              <td colspan="3" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                  Credit</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -0.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exposure</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Investment
                  grade</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29,196</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,794</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Noninvestment
                  grade</font></div>
              </td>
              <td width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">60</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Internally
                  rated investment grade</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,189</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">997</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Internally
                  rated noninvestment grade</font></div>
              </td>
              <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">290</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="71%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 14pt; TEXT-INDENT: -16pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Total</font></div>
              </td>
              <td width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">31,735</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: black double;">&#160;</td>
              <td align="left" valign="bottom" width="4%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="3%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,791</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Due
        to
        the inherent volatility in the prices of natural gas commodities and
        derivatives, the market value of contractual positions with individual
        counterparties could exceed established credit limits or collateral provided
        by
        those counterparties. If a counterparty failed to perform the obligations
        under
        its contract (for example, failed to deliver or pay for natural gas), then
        the
        Company could sustain a loss. This loss would comprise the loss on natural
        gas
        delivered but not paid for and/or the cost of replacing natural gas not
        delivered at a price higher than the price in the original contract. Any
        such
        loss could have a material impact on the Company&#8217;s financial condition, results
        of operations or cash flows.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Interest
        Rate Risk-Long-Term Debt</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        March
        31, 2007, the Company (excluding NJNG) had no variable-rate long-term
        debt.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        March
        31, 2007, NJNG had total variable-rate, tax-exempt long-term debt of $97
        million, which is hedged by interest rate caps expiring in July&#160;2009 that
        limit NJNG&#8217;s variable-rate debt exposure from the tax-exempt EDA bonds at 4.5
        percent. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item4contproced">I</a>TEM
        4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONTROLS
        AND PROCEDURES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of the
        end of the period reported on in this report, NJR has undertaken an evaluation
        under the supervision and with the participation of management, including
        the
        Chief Executive Officer and Chief Financial Officer, of the effectiveness
        of the
        design and operation of its disclosure controls and procedures, pursuant
        to
        Rule&#160;13a-15 of the Securities Exchange Act of 1934. Based upon that
        evaluation, the Chief Executive Officer and Chief Financial Officer concluded
        that NJR&#8217;s disclosure controls and procedures were effective with regard to the
        recording, processing, summarizing and reporting, within the time periods
        specified in the SEC&#8217;s rules&#160;and forms, of information required to be
        disclosed by NJR in the reports that it files or submits under the
        Exchange&#160;Act.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 7pt">&#160;&#160;&#160;</font>&#160;NJR
        continually reviews its disclosure controls and procedures and makes changes,
        as
        necessary, to ensure the quality of its financial reporting. There have been
        no
        changes in internal control over financial reporting that occurred during
        the
        second quarter of 2007 that have materially affected, or are reasonably likely
        to materially affect, internal control over financial
        reporting.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="partIIotherinfo">P</a>ART
        II - OTHER INFORMATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item1legproced">I</a>TEM
        1.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 38pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 3pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
        PROCEEDINGS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
        regarding reportable legal proceedings is contained in Part I, "Item 3. Legal
        Proceedings" in our Annual Report on Form 10-K for the year ended September
        30,
        2006, as updated in our subsequent Quarterly Report on Form 10-Q for the
        quarter
        ended December 31, 2006 and is set forth in Part I, Item 1, Note 12,
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Commitment
        and Contingent Liabilities&#8212;Legal Proceedings</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        following describes legal proceedings, if any, that became reportable during
        the
        quarter ended March 31, 2007 and amends and restates descriptions of previously
        reported legal proceedings in which there have been material developments
        during
        such quarter or which are otherwise updated in this report.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
        legal
        proceedings became reportable during the quarter ended March 31, 2007 and
        there
        have been no material developments during such quarter regarding any previously
        reported legal proceedings, which have not been previously
        disclosed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item1ariskfact">I</a>TEM
        1A.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 48pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RISK
        FACTORS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Part
        I,
        Item 1A, "Risk Factors," of our 2006 Annual Report on Form 10-K includes
        a
        detailed discussion of our risk factors. The information presented below
        updates, and should be read in conjunction with, the risk factors and
        information disclosed in our 2006 Form 10-K.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 28pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Investing
        through partnerships or joint ventures decreases NJR&#8217;s ability to manage
        risk.</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NJR
        and&#160;its subsidiaries have utilized joint ventures for certain non-regulated
        energy investments, including Steckman Ridge and Iroquois, and although they
        currently have no specific plans to do so, NJR and its subsidiaries may acquire
        interests in other joint ventures in the future. In these joint ventures,
        NJR
        and its subsidiaries may not have the right or power to direct the management
        and policies of the joint ventures and other participants may take action
        contrary to their instructions or requests and against their policies and
        objectives. In addition, the other participants may become bankrupt or have
        economic or other business interests or goals that are inconsistent with
        those
        of NJR and its subsidiaries. If a joint venture participant acts contrary
        to the
        interests of NJR or its subsidiaries, it could harm NJR&#8217;s financial condition,
        results of operations or cash flows. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>NJR
        and its subsidiaries may be unable to obtain governmental approvals, property
        rights and/or financing for the construction, development and operation of
        its
        non-regulated energy investments.</em></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Construction,
        development and operation of energy investments, such as natural gas storage
        facilities and pipeline transportation systems, is subject to federal and
        state
        regulatory oversight and requires certain property rights and approvals,
        including permits and licenses for such facilities and systems. NJR, its
        subsidiaries, or its join venture partnerships may be unable to obtain, in
        a
        cost-efficient or timely manner, all such needed property rights, permits
        and
        licenses in order to successfully construct and develop its non-regulated
        energy
        facilities and systems. Successful financing of NJR&#8217;s energy investments will
        require participation by willing financial institutions and lenders, as well
        as
        acquisition of capital at favorable interest rates. If NJR and its subsidiaries
        do not obtain the necessary regulatory approvals and financing, their equity
        investments could become impaired and such impairment could have a materially
        adverse effect on NJR&#8217;s financial condition, results of operations or cash
        flows. </font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">38</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item2unregsaleeqsec">I</a>TEM
        2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 48pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNREGISTERED
        SALE OF EQUITY SECURITIES AND USE OF PROCEEDS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        1996,
        the NJR Board of Directors authorized the repurchase of up to 1 million of
        the
        Company&#8217;s common shares. Since 1996, the repurchase plan has been expanded
        several times, most recently in January 2006, to permit the repurchase of
        up to
        3.5 million shares. As of March 31, 2007, the Company has repurchased 3.15
        million shares of its common stock. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        following table sets forth NJR&#8217;s repurchase activity for the quarter ended March
        31, 2007:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="bottom" width="29%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Period</strong></font></div>
              </td>
              <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                  Number of Shares (or Units) Purchased</strong></font></div>
              </td>
              <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Average
                  Price Paid per Share (or Unit)</strong></font></div>
              </td>
              <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                  Number of Shares (or Units) Purchased as Part of Publicly Announced
                  Plans
                  or Programs</strong></font></div>
              </td>
              <td valign="bottom" width="15%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Maximum
                  Number (or Approximate Dollar Value) of Shares (or Units) That
                  May Yet Be
                  Purchased Under the Plans or Programs</strong></font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="29%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;01/1/07
                  - 01/31/07</font></div>
              </td>
              <td align="right" valign="top" width="12%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="12%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">348,147</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="29%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;02/1/07
                  - 02/28/07</font></div>
              </td>
              <td align="right" valign="top" width="12%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="9%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="12%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">348,147</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="29%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;03/1/07
                  - 03/31/07</font></div>
              </td>
              <td align="right" valign="top" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="15%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">348,147
                  </font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="29%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td align="right" valign="top" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;</font></div>
              </td>
              <td align="right" valign="top" width="15%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">348,147</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item4submattersvote">I</a>TEM
        4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 48pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 29pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
        annual
        meeting of shareholders was held on January&#160;24, 2007 and information
        regarding such meeting was included in the Company&#8217;s Quarterly Report on Form
        10-Q for the quarter ended December 31, 2006,</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -30pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 21pt; TEXT-INDENT: -30pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="item6exhibits">I</a>TEM
        6.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 38pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXHIBITS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Limited
                  Liability Company Agreement of Steckman Ridge GP, LLC dated as
                  of March 2,
                  2007</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Limited
                  Partnership Agreement of Steckman Ridge, LP dated as of March 2,
                  2007</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.1</font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
                  of the Chief Executive Officer pursuant to section 302 of the
                  Sarbanes-Oxley Act</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.2
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
                  of the Chief Financial Officer pursuant to section 302 of the
                  Sarbanes-Oxley Act</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.1
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
                  of the Chief Executive Officer pursuant to section 906 of the
                  Sarbanes-Oxley Act*</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">&#160;</td>
              <td align="left" valign="bottom" width="71%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="7%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.2
                  </font></div>
              </td>
              <td align="left" valign="bottom" width="71%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
                  of the Chief Financial Officer pursuant to section 906 of the
                  Sarbanes-Oxley Act*</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*This
        certificate accompanies this report pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002 and shall not be deemed filed by NJR for purposes
        of
        Section 18 or any other provision of the Securities Exchange Act of 1934,
        as
        amended.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="center">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="1">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><a href="#TOC">Table
            of Contents</a></font></div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" colspan="2" valign="bottom" width="80%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="sigs">S</a>IGNATURES</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="justify" colspan="2" valign="top" width="80%">&#160;</td>
            </tr>
            <tr>
              <td align="justify" colspan="2" valign="top" width="80%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 21pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
                  to the requirements of the Securities Exchange Act of 1934, the
                  Registrant
                  has duly caused this report to be signed on its behalf by the undersigned
                  thereunto duly authorized.</font></div>
              </td>
            </tr>
            <tr>
              <td align="justify" valign="top" width="40%">&#160;</td>
              <td align="left" valign="top" width="40%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="40%">&#160;</td>
              <td align="left" valign="top" width="40%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEW
                  JERSEY RESOURCES</strong></font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                  May 2, 2007</font></div>
              </td>
              <td align="left" valign="top" width="40%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="40%">&#160;</td>
              <td align="left" valign="top" width="40%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/Glenn
                  C. Lockwood</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="40%">&#160;</td>
              <td align="left" valign="top" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Glenn
                  C. Lockwood</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="40%">&#160;</td>
              <td align="left" valign="top" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior
                  Vice President and Chief Financial
                  Officer</font></div>
              </td>
            </tr>

        </table>
      </div>
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{"company-data": {"conformed-name": "NEW JERSEY RESOURCES CORP", "cik": "0000356309", "assigned-sic": "4924", "irs-number": "222376465", "state-of-incorporation": "NJ", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-08359", "film-number": "07812075"}, "business-address": {"street1": "1415 WYCKOFF RD", "street2": "PO BOX 1468", "city": "WALL", "state": "NJ", "zip": "07719", "phone": "9089381494"}, "mail-address": {"street1": "1350 CAMPUS PKWY", "street2": "P O BOX 1468", "city": "WALL", "state": "NJ", "zip": "07719"}}
svirgo@njresources.com
UNITED
        STATES
SECURITIES
        AND EXCHANGE COMMISSION
Washington,
        D.C. 20549
FORM
        10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE
        SECURITIES EXCHANGE ACT OF 1934
FOR
        THE QUARTERLY PERIOD ENDED MARCH 31, 2007
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
        THE SECURITIES EXCHANGE ACT OF 1934
FOR
        THE TRANSITION PERIOD FROM
             
TO
Commission
        file number 1-8359
NEW
        JERSEY RESOURCES CORPORATION
(Exact
        name of registrant as specified in its charter)
New
                  Jersey
22-2376465
(State
                  or other jurisdiction of
incorporation
                  or organization)
(I.R.S.
                  Employer
Identification
                  Number)
1415
                  Wyckoff Road, Wall, New Jersey - 07719
732-938-1489
(Address
                  of principal
executive
                  offices)
(Registrant's
                  telephone number,
including
                  area code)
Securities
        registered pursuant to Section 12 (b) of the Act:
Common
                  Stock - $2.50 Par Value
New
                  York Stock Exchange
(Title
                  of each class)
(Name
                  of each exchange on which
                  registered)
Securities
        registered pursuant to Section 12 (g) of the Act:
None
Indicate
        by check mark whether the Registrant (1) has filed all reports required to
        be filed by Section 13 or 15 (d) of the Securities Exchange Act of
        1934 during the preceding 12 months (or for such shorter period that the
        Registrant was required to file such reports), and (2) has been subject to
        such filing requirements for the past 90 days.
YES:
x
No:
o
Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of "accelerated
        filer and large accelerated filer" in Rule 12-b-2 of the Exchange Act.
        (Check one):
Large
        accelerated filer:
x
Accelerated
        filer:
o
Non-accelerated filer:
o
Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
YES:
o
No:
x
The
        number of shares outstanding of $2.50 par value Common Stock as of May 1,
        2007
        was 27,993,844
FORWARD-LOOKING
        STATEMENTS
Certain
        statements contained in this report, including, without limitation, statements
        as to management expectations and beliefs presented in Part I, Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
        Operations," Part I, Item 3. "Quantitative and Qualitative Disclosures about
        Market Risk," Part II, Item I. "Legal Proceedings" and in the notes to the
        financial statements are forward-looking statements within the meaning of
        the
        Private Securities Litigation Reform Act of 1995. Forward-looking statements
        can
        also be identified by the use of forward-looking terminology such as "may,"
"intend," "expect," "believe" or "continue" or comparable terminology and are
        made based upon management's expectations and beliefs concerning future
        developments and their potential effect upon New Jersey Resources Corporation
        (NJR or the Company). There can be no assurance that future developments
        will be
        in accordance with management's expectations or that the effect of future
        developments on the Company will be those anticipated by
        management.
The
        Company cautions readers that the assumptions that form the basis for
        forward-looking statements regarding customer growth, customer usage, financial
        condition, results of operations, cash flows, capital requirements, market
        risk
        and other matters for fiscal 2007 and thereafter include many factors that
        are
        beyond the Company's ability to control or estimate precisely, such as estimates
        of future market conditions, the behavior of other market participants and
        changes in the debt and equity capital markets. The factors that could cause
        actual results to differ materially from NJR's expectations include, but are not
        limited to the following:
·
weather
                and economic conditions;
·
demographic
                changes in the New Jersey Natural Gas (NJNG) service
                territory;
·
the
                rate of NJNG customer growth;
·
volatility
                of natural gas commodity prices and its impact on customer usage,
                NJR
                Energy Services' (NJRES) operations and on the Company's risk management
                efforts;
·
changes
                in rating agency requirements and/or credit ratings and their effect
                on
                availability and cost of capital to the
                Company;
·
commercial
                and wholesale credit risks, including creditworthiness of customers
                and
                counterparties;
·
the
                ability to obtain governmental approvals and/or financing for the
                construction, development and operation of certain non-regulated
                energy
                investments;
·
risks
                associated with the management of the Company's joint ventures and
                partnerships;
·
the
                impact of governmental regulation (including the regulation of
                rates);
·
fluctuations
                in energy-related commodity prices;
·
conversion
                activity and other marketing efforts;
·
actual
                energy usage 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;
·
the
                availability of an adequate number of appropriate counterparties
                in the
                wholesale energy trading market;
·
sufficient
                liquidity in the wholesale energy trading market and continued access
                to
                the capital markets;
·
the
                disallowance of recovery of environmental-related expenditures and
                other
                regulatory changes;
·
environmental-related
                and other litigation and other
                uncertainties;
·
the
                effects and impacts of inflation on NJR and its subsidiaries
                operations;
·
change
                in accounting pronouncements issued by the appropriate standard setting
                bodies; and
·
terrorist
                attacks or threatened attacks on energy facilities or unrelated energy
                companies.
While
        the
        Company periodically reassesses material trends and uncertainties affecting
        the
        Company's results of operations and financial condition in connection with its
        preparation of management's discussion and analysis of results of operations and
        financial condition contained in its Quarterly and Annual Reports, the Company
        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.
Table
            of Contents
T
ABLE
        OF CONTENTS
Part
        I
Financial
        Information
Item
        1
Financial
        Statements
Item
        2
Management's
        Discussion and Analysis of Financial Condition and Results of Operations
        for the
        Three and Six Months Ended March 31, 2007
Item
        3
Quantitative
        and Qualitative Disclosures about Market Risk
Item
        4
Controls
        and Procedures
Part
        II
Other
        Information
Item
        1
Legal
        Proceedings
Item
        1a
Risk
        Factors
Item
        2
Unregistered
        Sale of Equity Securities and Use of Proceeds
Item
        4
Submission
        of Matters to a Vote of Security Holders
Item
        6
Exhibits
Signatures
Limited
          Liability Company Agreement of Steckman Ridge GP,
          LLC
Limited
          Partnership
          Agreement of Steckman Ridge, LP
Certification
Certification
Certification
Certification
P
ART
        I - FINANCIAL INFORMATION
I
TEM
        1.
FINANCIAL
        STATEMENTS
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three
                    Months Ended
March
                    31,
Six
                    Months Ended
March
                    31,
(Thousands, except per share data)
2007
2006
2007
2006
OPERATING
                    REVENUES
$
1,024,636
$
1,064,422
$
1,766,101
$
2,228,998
OPERATING
                    EXPENSES
Gas
                    purchases
795,469
882,688
1,424,154
1,921,163
Operation
                    and maintenance
32,337
31,026
60,653
58,757
Regulatory
                    rider expenses
18,135
12,405
27,601
21,863
Depreciation
                    and amortization
8,986
8,612
17,888
17,188
Energy
                    and other taxes
30,268
26,003
44,220
44,670
Total
                    operating expenses
885,195
960,734
1,574,516
2,063,641
OPERATING
                    INCOME
139,441
103,688
191,585
165,357
Other
                    income and expense
1,650
1,874
3,639
3,516
Interest
                    charges, net
7,091
6,173
14,966
12,656
INCOME
                    BEFORE INCOME TAXES
134,000
99,389
180,258
156,217
Income
                    tax provision
53,473
39,188
71,607
61,752
NET
                    INCOME
$
80,527
$
60,201
$
108,651
$
94,465
EARNINGS
                    PER COMMON SHARE
BASIC
$2.89
$2.16
$3.91
$3.41
DILUTED
$2.87
$2.14
$3.89
$3.37
DIVIDENDS
                    PER COMMON SHARE
$0.38
$0.36
$0.76
$0.72
WEIGHTED
                    AVERAGE SHARES OUTSTANDING
BASIC
27,893
27,822
27,803
27,686
DILUTED
28,047
28,145
27,959
28,000
See
        Notes
        to Condensed Unaudited Consolidated Financial Statements
1
Table
            of Contents
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
CASH
                  FLOWS FROM OPERATING ACTIVITIES
Net income
$
108,651
$
94,465
ADJUSTMENTS
                  TO RECONCILE NET INCOME TO CASH FLOWS
FROM
                  OPERATING ACTIVITIES
Depreciation
                  and amortization
17,888
17,188
Unrealized
                  gain on derivatives
(192
)
(5,206
)
Amortization
                  of deferred charges
151
152
Deferred
                  income taxes
15,231
(3,960
)
Manufactured
                  gas plant remediation costs
(8,814
)
(16,457
)
Gain
                  on asset sale
—
(617
)
Cost
                  of removal - asset retirement obligations
(488
)
—
Contribution
                  to employee benefit plans
(300
)
(300
)
Changes
                  in:
Working
                  capital
96,121
(8,833
)
Other
                  noncurrent assets
23,229
25,509
Other
                  noncurrent liabilities
(9,854
)
(3,823
)
Cash
                  flows from operating activities
241,623
98,118
CASH
                  FLOWS FROM FINANCING ACTIVITIES
Proceeds
                  from common stock
9,976
13,192
Tax
                  benefit from stock options exercised
2,138
4,250
Proceeds
                  from long-term debt
—
35,800
Proceeds
                  from sale-leaseback transaction
5,482
4,090
Purchases
                  of treasury stock
—
(9,109
)
Payments
                  of long-term debt
(1,950
)
(22,483
)
Payments
                  of common stock dividends
(20,605
)
(19,285
)
Payments
                  of short-term debt, net of proceeds
(153,700
)
(85,600
)
Cash
                  flows used in financing activities
(158,659
)
(79,145
)
CASH
                  FLOWS USED IN INVESTING ACTIVITIES
Expenditures
                  for:
Utility
                  plant
(24,540
)
(21,913
)
Real
                  estate properties and other
(1,822
)
(1,720
)
Cost
                  of removal
(2,736
)
(2,154
)
Equity
                  investments
(52,500
)
—
Investment
                  in restricted cash construction fund
—
(12,500
)
Proceeds
                  from asset sales
1,792
3,006
Cash
                  flows used in investing activities
(79,806
)
(35,281
)
Change
                  in cash and temporary investments
3,158
(16,308
)
Cash
                  and temporary investments at beginning of period
4,991
25,008
Cash
                  and temporary investments at end of period
$
8,149
$
8,700
CHANGES
                  IN COMPONENTS OF WORKING CAPITAL
Receivables
$
(191,654
)
$
(134,008
)
Inventories
204,313
166
Underrecovered
                  gas costs
13,330
67,315
Gas
                  purchases payable
90,970
(24,190
)
Prepaid
                  and accrued taxes, net
67,402
52,850
Accounts
                  payable and other
1,984
(12,959
)
Restricted
                  broker margin accounts
(43,411
)
57,902
Customers'
                  credit balances and deposits
(47,695
)
(9,069
)
Other
                  current assets
882
(7,781
)
Other
                  current liabilities
—
941
Total
$
96,121
$
(8,833
)
SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION
Cash
                  paid for
Interest
                  (net of amounts capitalized)
$
13,954
$
11,341
Income
                  taxes
$
28,319
$
33,487
See
        Notes
        to Condensed Unaudited Consolidated Financial Statements
2
Table
            of Contents
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED
        CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
(Thousands)
March
                  31,
2007
September
                  30,
2006
PROPERTY,
                  PLANT AND EQUIPMENT
Utility
                  plant, at cost
$
1,267,108
$
1,243,586
Real
                  estate properties and other, at cost
27,702
27,136
1,294,810
1,270,722
Accumulated
                  depreciation and amortization
(348,283
)
(335,783
)
Property,
                  plant and equipment, net
946,527
934,939
CURRENT
                  ASSETS
Cash
                  and temporary investments
8,149
4,991
Accounts
                  receivable:
Billed
285,188
133,615
Unbilled
53,915
12,543
Allowance
                  for doubtful accounts
(3,970
)
(2,679
)
Regulatory
                  assets
8,105
8,105
Gas
                  in storage, at average cost
305,737
512,942
Materials
                  and supplies, at average cost
3,806
3,599
Prepaid
                  state taxes
—
26,343
Derivatives,
                  at fair value
75,430
223,559
Broker
                  margin account
60,024
30,833
Other
10,898
11,665
Total
                  current assets
807,282
965,516
NONCURRENT
                  ASSETS
Equity
                  investments
82,709
27,208
Regulatory
                  assets
311,061
322,986
Derivatives,
                  at fair value
40,731
94,638
Prepaid
                  pension
19,483
21,045
Restricted
                  cash construction fund
8,500
8,500
Deferred
                  finance charges
8,089
8,876
Other
3,644
15,220
Total
                  noncurrent assets
474,217
498,473
Total
                  Assets
$
2,228,026
$
2,398,928
See
        Notes
        to Condensed Unaudited Consolidated Financial Statements
3
Table
            of Contents
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
CONDENSED
        CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
CAPITALIZATION
        AND LIABILITIES
(Thousands)
March
                  31,
2007
September
                  30,
2006
CAPITALIZATION
Common
                  stock equity
$
652,805
$
621,662
Long-term
                  debt
335,477
332,332
Total
                  capitalization
988,282
953,994
CURRENT
                  LIABILITIES
Current
                  maturities of long-term debt
4,126
3,739
Short-term
                  debt
127,000
280,700
Gas
                  purchases payable
388,849
297,879
Accounts
                  payable and other
48,895
46,823
Dividends
                  payable
10,615
10,056
Accrued
                  taxes
64,559
9,267
Regulatory
                  liabilities
15,040
1,710
Clean
                  energy program
10,775
8,244
Derivatives,
                  at fair value
106,955
163,557
Broker
                  margin account
—
14,220
Customers'
                  credit balances and deposits
13,265
60,960
Total
                  current liabilities
790,079
897,155
NONCURRENT
                  LIABILITIES
Deferred
                  income taxes
179,748
227,100
Deferred
                  investment tax credits
7,674
7,835
Deferred
                  revenue
10,152
10,206
Derivatives,
                  at fair value
45,545
85,036
Manufactured
                  gas plant remediation
105,400
105,400
Regulatory
                  liabilities
60,488
64,220
Clean
                  energy program
4,897
11,335
Asset
                  retirement obligation
23,461
23,293
Other
12,300
13,354
Total
                  noncurrent liabilities
449,665
547,779
Total
                  Capitalization and Liabilities
$
2,228,026
$
2,398,928
See
        Notes
        to Condensed Unaudited Consolidated Financial Statements
4
Table
            of Contents
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.
GENERAL
The
        condensed consolidated financial statements have been prepared without audit,
        as
        of March 31, 2007 and for the six months ended March 31, 2007 and 2006, pursuant
        to the rules and regulations of the Securities and Exchange Commission (SEC).
        The September 30, 2006 balance sheet data is derived from the audited financial
        statements of New Jersey Resources Corporation (NJR or the Company). These
        condensed consolidated financial statements should be read in conjunction
        with
        the financial statements and the notes thereto included in NJR's 2006 Annual
        Report on Form 10-K.
The
        consolidated financial statements include the accounts of NJR and its
        subsidiaries, New Jersey Natural Gas (NJNG), NJR Energy Services (NJRES),
        NJR
        Retail Holdings (Retail Holdings), NJR Capital Services (Capital) and NJR
        Service Company (NJR Service). Significant intercompany transactions and
        accounts have been eliminated. Retail Holdings principal subsidiary is NJR
        Home
        Services (NJRHS). Capital's primary subsidiaries are NJNR Pipeline (Pipeline),
        which holds the Company's 5.53 percent ownership interest in Iroquois Gas and
        Transmission System, L.P. (Iroquois), and NJR Steckman Ridge Storage Company,
        which holds the Company's 50 percent combined interest in Steckman Ridge GP, LLC
        and Steckman Ridge, LP (collectively, Steckman Ridge), a natural gas storage
        facility that is being developed with a partner in western Pennsylvania.
In
        the
        opinion of management, the information furnished reflects all adjustments
        necessary for a fair presentation of the results of the interim periods.
        Because
        of the seasonal nature of NJR's utility and wholesale energy services
        operations, in addition to other factors, the financial results for the interim
        periods presented are not indicative of the results to be expected for the
        fiscal year ending September 30, 2007.
Recently
        Issued Accounting Standards
In
        July
        2006, the Financial Accounting Standards Board (FASB) issued Interpretation
        No.
        48,
Accounting
        for Uncertainty in Income Taxes
(FIN
        48), which alters the framework for recognizing income tax contingencies.
        Previously, under Statement of Financial Accounting Standards (SFAS) No.
        5,
Accounting
        for Contingencies
,
        the
        focus
was on
        the subsequent liability recognition for estimated losses from tax contingencies
        where such losses were probable and the related amounts could be reasonably
        estimated. Under this new interpretation, a contingent tax asset (i.e., an
        uncertain tax position) may only be recognized if it is more likely than
        not
        that it will ultimately be sustained upon audit. The Company will adopt FIN
        48
        by the commencement of fiscal 2008. The Company is evaluating its tax positions
        for all jurisdictions and all years for which the statute of limitations
        remains
        open, as well as evaluating the impact that the adoption will have on its
        financial condition and results of operations.
In
        September 2006, the FASB issued SFAS No. 157,
Fair
        Value Measurements
(SFAS
        157). SFAS 157 defines fair value as the amount that would be exchanged to
        sell
        an asset or transfer a liability in an orderly transaction between market
        participants and establishes a fair value hierarchy of quotes and unobservable
        data that should be used to develop pricing assumptions. In addition, for
        assets
        and liabilities that are not actively traded, for example, certain kinds
        of
        derivatives, SFAS 157 requires that a fair value measurement include an
        adjustment for risks inherent in a valuation technique and/or inputs, such
        as
        those used in pricing models. SFAS 157 is effective for fiscal years beginning
        after November 15, 2007; however, early adoption is permitted. The Company
        will
        adopt the provisions of the statement prospectively and is evaluating the
        adoption date and its effect on its financial condition.
In
        September 2006, the FASB issued SFAS No. 158
,
        Employers' Accounting for Defined Benefit Pension and Other Postemployment
        Plans
(SFAS
        158). The statement requires an employer to recognize the funded status,
        measured as the difference between the fair value of plan assets and the
        projected benefit obligation, of its benefit plans. SFAS 158 does not change
        how
        pensions and other postemployment benefits are accounted for and reported
        in the
        income statement. Certain economic events, which previously required disclosure
        only in the notes to the financial statements, will be recognized as assets
        and
        liabilities and offset in Accumulated other comprehensive income, net of
        tax, or
        as part of Regulatory assets, for those amounts related to NJNG that would
        be
        recoverable through allowed rates charged to customers, to the extent such
        amounts are not recognized in earnings as part of net periodic benefit costs.
        Amounts recognized in Accumulated other comprehensive income, or in Regulatory
        assets as it may relate to NJNG, will be adjusted as they are subsequently
        recognized in earnings through net periodic
benefit
        cost. The Company will adopt SFAS 158 on September 30, 2007 and will apply
        the
        provisions of the statement prospectively. The Company is currently evaluating
        the effect of adoption on its financial condition.
5
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
In
        February 2007, the FASB issued SFAS No. 159, The
Fair
        Value Option for Financial Assets and Financial Liabilities
(SFAS
        159). SFAS 159 permits entities to elect to measure eligible items at fair
        value
        as an alternative to hedge accounting and to mitigate volatility in earnings.
        The entity either elects the fair value option according to a preexisting
        policy, when the asset or liability is first recognized or when it enters
        into
        an eligible firm commitment. Changes in the fair value of assets and liabilities
        that the Company chooses to apply the fair value option to are reported in
        earnings at each reporting date. SFAS 159 also provides guidance on disclosures
        that are intended to provide comparability to other entity assets and
        liabilities that have different measurement attributes and to other entities
        with similar financial assets and liabilities. SFAS 159 is effective for
        fiscal
        years beginning after November 15, 2007; however, early adoption is permitted
        provided the Company also elects to apply the provisions of SFAS 157. The
        Company is evaluating SFAS 159 to determine its applicability to its current
        operations and effect, if any, on its financial condition.
2.
REGULATION
Basic
        Gas Supply Service (BGSS)
On
        October 25, 2006, NJNG filed supporting documentation with the Board of Public
        Utilities (BPU) for a self-implementing BGSS price reduction effective November
        1, 2006, which lowered residential and small commercial customers' bills by
        approximately 4 percent. This decrease was due to reduced demand charges,
        lower
        wholesale cost of natural gas and lower than expected pipeline fuel
        costs.
On
        December 1, 2006, NJNG filed notification with the BPU and the representative
        of
        the Public Advocate Division of Rate Counsel (Rate Counsel) to refund, in
        the
        form of a bill credit, approximately $51.5 million to residential and small
        commercial customers in December 2006. The refund was the result of a continued
        reduction in the wholesale cost of natural gas for NJNG relative to what
        it is
        allowed to charge in its rates to customers.
On
        March
        1, 2007, NJNG filed notification with the BPU and the representatives of
        Rate
        Counsel to refund, in the form of a bill credit, approximately $20 million
        to
        residential and small commercial customers in March 2007. The refund was
        the
        result of a continued reduction in the wholesale cost of natural
        gas.
Conservation
        Incentive Program (CIP)
On
        December 12, 2006, the BPU issued its Decision and Order and approved the
        CIP
        stipulation, reached on September 30, 2006, without modification.
The
        CIP
        is a three-year pilot program, designed to decouple the link between customer
        usage and NJNG's utility gross margin to allow NJNG to encourage its customers
        to conserve energy. The initial term of the CIP is October 1, 2006 through
        September 30, 2009. Under certain conditions, the CIP may be extended one
        additional year beyond the initial term. For the term of the pilot, the Weather
        Normalization Clause has been suspended and replaced with the CIP tracking
        mechanism, which addresses utility gross margin variations related to both
        weather and customer usage in comparison to established benchmarks. Recovery
        of
        such utility gross margin variations (filed for annually and recovered one
        year
        following the end of the CIP usage year) is subject to additional conditions
        including an earnings test and an evaluation of BGSS-related savings. If
        NJNG
        does not file for a rate review with the BPU by October 1, 2008, the return
        on
        equity for the earnings test will decline from 10.50 percent to 10.25 percent.
        NJNG continues to evaluate its expected returns and general market conditions
        with regard to filing for a potential rate review.
To
        encourage energy efficiency, NJNG is obligated to initiate and fund programs
        to
        further customer conservation efforts over the term of the pilot. An annual
        filing reporting on NJNG's conservation efforts will be made in June of each
        year, commencing in June 2007, coincident with its annual BGSS filing. The
        minimum
expected
        liability for funding these programs was recorded, at its present value of
        $1.8
        million, as of September 30, 2006. As a result of the accretion of interest
        and
        the payment of obligations for this program, the balance of this liability
        is
        approximately $1.5 million as of March 31, 2007.
6
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
The
        commencement of the CIP does not have any impact on the collection of previously
        accrued amounts for utility gross margin recovery under the Weather
        Normalization Clause.
Societal
        Benefits Clause (SBC) and Weather Normalization Clause
        (WNC)
On
        October 25, 2006, NJNG filed its SBC and WNC requests for a price adjustment
        for
        all applicable service customers, which was expected to result in an approximate
        aggregate 1.6 percent increase in those customers' prices. On November 10, 2006,
        NJNG filed a separate petition with the BPU for its annual review and revision
        of the WNC recovery component relying on the information provided in the
        October
        25, 2006 filing. The SBC and WNC rate increases, currently pending before
        the
        BPU, were proposed to be effective on January 1, 2007. Pending review and
        approval by the BPU and Rate Counsel, the results of the SBC and WNC will
        be
        implemented upon receipt of a BPU order.
The
        SBC
        portion of the filed increase had accounted for approximately 0.3 percent
        of the
        expected price increase. The aggregate increase is comprised of an increase
        in
        rates for the Transportation Initiation Clause (TIC) and an increase in the
        recovery related to the New Jersey Clean Energy Program (NJCEP) from $7.1
        million to $13.6 million for the calendar year 2007. This increase was partially
        offset by a decrease to the Remediation Adjustment Clause (RAC) recovery
        from
        $19.2 million to $15.9 million annually. The proposed RAC decrease reflected
        recovery of expenditures through June 30, 2006 related to NJNG's remediation of
        its former Manufactured Gas Plant (MGP) sites, except for those expenditures
        associated with the Mass Tort Litigation related to the Long Branch MGP sites
        (see
Note
        12. Commitments and Contingent Liabilities
).
        There
        was no change in the Universal Service Fund (USF) rate.
The
        WNC
        portion of the filed rate increase, which had represented approximately 1.3
        percent of the expected price increase, was proposed to increase the WNC
        recovery component in order to recover accrued utility gross margin of
        approximately $8.1 million from October 2005 through May 2006.
NJNG
        signed a stipulation in March 2007 with the BPU and Rate Counsel regarding
        the
        resolution of the September 2005 and October 2006 SBC and WNC filings. The
        stipulation permits NJNG to include in its rates the current BPU approved
        after-tax SBC and WNC rates in effect until changed by the BPU. The stipulation
        will also allow the recovery of lost revenues, as a result of previous customer
        conservation efforts, through a reduction in the liability associated with
        the
        Market Development Fund. The stipulation also will increase the SBC and WNC
        rates for all applicable service customers' rates by an approximate aggregate
        3.1 percent.
The
        increase in customer rates from an aggregate 1.6 percent in the original
        filing
        to an aggregate 3.1 percent in the March 2007 stipulation reflects the removal
        of the expenditures through June 30, 2006 related to NJNG's remediation of its
        former MGP sites, as noted above, and also excludes costs in excess of those
        received by NJNG from insurers stemming from the operation and remediation
        of
        the former MGP site in Long Branch, New Jersey as recovery of all such costs
        and
        expenditures is being resolved separately before the BPU (see
Note
        12
.
Commitments
        and Contingent Liabilities—Legal Proceedings—Kemper Insurance Company
        Litigation).
The
        stipulation further provides that NJNG will file a BGSS notice to implement
        a
        price decrease to coincide with the effective date of any recommended SBC
        and
        WNC increase.
On
        April
        4, 2007, NJNG sent notification to the BPU and Division of Rate Counsel of
        its
        intent to implement a decrease to its periodic BGSS factor for residential
        and
        small commercial sales customers effective coincident with the implementation
        the SBC and WNC rate increase proposed in the March 2007 stipulation. The
        SBC
        and WNC rate changes, which are applicable to sales and transportation
        customers, were included in the October 2006 filing noted above and require
        BPU
        approval in order to implement them. As of May 2, 2007, the BPU has taken
        no
        action with respect to the approval to implement the stipulated SBC and WNC
        rates.
7
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
Other
        Incentive Programs
NJNG
        is
        eligible to receive financial incentives for reducing BGSS costs through
        a
        series of utility gross margin-sharing programs that include off-system sales,
        capacity release, storage incentive and financial risk management programs.
        On
        December 15, 2006, NJNG filed a petition with the BPU requesting that it
        approve
        an extension of the existing incentive mechanisms to coincide with the end
        of
        the CIP. The extension would preserve the status quo of the incentive programs
        to coincide with the initial three-year term of the CIP pilot program, but
        would
        expire no later than October 1, 2011. NJNG is currently holding discussions
        with the BPU regarding the continuation of these incentive programs. There
        can
        be no assurance as to whether these incentive programs will be extended in
        their
        current form, for the proposed term, or whether they will be modified or
        terminated by the BPU.
Regulatory
        Assets and Liabilities
The
        Company had the following regulatory assets, all related to NJNG, on the
        Condensed Consolidated Balance Sheets:
(Thousands)
March
                  31,
2007
September
                  30,
2006
Recovery
                  Period
Regulatory
                  assets-current
WNC
$
8,105
$
8,105
Less
                  than one year (1)
Total
$
8,105
$
8,105
Regulatory
                  assets-noncurrent
Remediation
                  costs (Notes 2 and 12)
Expended,
                  net
$
82,158
$
83,746
(2)
Liability
                  for future expenditures
105,400
105,400
(3)
CIP
14,347
—
(4)
Deferred
                  income and other taxes
13,554
13,476
Various
Postemployment
                  benefit costs (Note 9)
1,966
2,117
Through
                  Sept. 2014 (5)
Derivatives
                  (Note 7)
70,850
82,451
Through
                  Oct. 2011 (6)
SBC
22,786
35,796
Various
                  (7)
Total
$
311,061
$
322,986
(1)
Recoverable or refundable, subject to BPU approval, without interest. This
          balance relates to results from the winter 2005-2006 period. No new WNC
          activity
          is being recorded due to the existence of the CIP.
(2)
          Recoverable, subject to BPU approval, with interest over rolling 7-year
          periods.
          As of March 31, 2007, this amount is net of actual insurance proceeds received
          of $12.8 million, as the result of a settlement NJNG reached with certain
          parties for recovery of such amounts on January 24, 2007 (see
Note
          12. Commitments and Contingent Liabilities - Legal Proceedings
).
          As of
          September 30, 2006 this amount is net of an estimated $10 million in expected
          insurance proceeds.
(3)
          Estimated future expenditures. Recovery will be requested when actual
          expenditures are incurred (see
Note
          12. Commitments and Contingent Liabilities - Legal
          Proceedings).
(4)
          Recoverable or refundable, subject to BPU annual approval, without interest.
          Balance includes approximately $8.4 million relating to the weather component
          of
          the calculation and approximately $5.9 million relating to the customer
          usage
          component of the calculation. Recovery from customers is designed to be
          one year
          from date of rate approval by BPU.
(5)
          Recoverable or refundable, subject to BPU approval, without interest.
(6)
          Recoverable, subject to BPU approval, through BGSS, without
          interest.
(7)
Recoverable
          with interest, subject to BPU approval.
If
        there
        are any changes in regulatory positions that indicate the recovery of any
        of the
        regulatory assets are not probable, the related cost would be charged to
        income
        in the period of such determination.
8
Table
            of Contents
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
The
        Company had the following regulatory liabilities, all related to NJNG, on
        the
        Condensed Consolidated Balance Sheets:
(
Thousands
)
March
                  31,
2007
September
                  30,
2006
Regulatory
                  liabilities-current
Overrecovered
                  gas costs (1)
$
15,040
$
1,710
Total
$
15,040
$
1,710
Regulatory
                  liabilities-noncurrent
Cost
                  of removal obligation (2)
$
59,340
$
58,161
Market
                  development fund (MDF) (3)
1,148
6,059
Total
$
60,488
$
64,220
(1)
Refundable,
        subject to BPU approval, through BGSS, with interest.
(2)
NJNG
        accrues and collects for cost of removal in rates. This liability represents
        collections in excess of actual expenditures. Approximately $18.4 million,
        including accretion of $656
,000
        for
        the six-month period ended March 31, 2007, of regulatory assets relating
        to
        asset retirement obligations have been netted against the cost of removal
        obligation as of March 31, 2007 (see
Note
        11. Asset Retirement Obligations
).
(3)
The
        MDF,
        created with funds available as a result of the implementation of the Energy
        Tax
        Reform Act of 1997, provided financial incentives to encourage customers
        to
        switch to third party suppliers and has supported other unbundling related
        initiatives. Balance earns interest at prevailing SBC rate. The MDF funding
        obligations terminated as of October 31, 2006. $4.9 million of this fund
        was credited to the NJCEP, as a result of the CIP Decision and Order of the
        BPU
        on December 12, 2006. The remaining balance is being held until final
        resolution of NJNG's fiscal 2005 SBC filing. A stipulation was signed in March
        2007 between NJNG, the BPU and Rate Counsel, that will allow a recovery of
        lost
        revenues, through previous customer conservation initiatives, through a
        reduction in this liability if approved by the BPU.
3.
        FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The
        Company and its subsidiaries are subject to market risk due to fluctuations
        in
        the price of natural gas. To hedge against such fluctuations, the Company
        and
        its subsidiaries enter into futures contracts, option agreements and swap
        agreements to hedge purchases and sales of natural gas.
Generally,
        all of the commodity contracts of NJRES meet the "normal purchase normal sale"
scope exception of SFAS No. 133,
Accounting
        for Derivative Instruments and Hedging Activities (as amended)
(SFAS
        133) and are accounted for under accrual accounting, or are designated as
        a
        hedge for accounting purposes. If these commodity contracts do not meet the
        normal purchase normal sale scope exception, or if they do not qualify as
        a
        hedge, they are recorded at fair value as a component of Gas
        purchases.
The
        amounts included in Accumulated other comprehensive income related to natural
        gas instruments, which have been designated as cash flow hedges, will reduce
        or
        increase Gas purchases as the underlying physical transaction occurs and
        is
        settled. Based on the amount recorded in Accumulated other comprehensive
        income
        as of March 31, 2007, $817,000 is expected to be recorded as an increase
        to Gas
        purchases during the remainder of fiscal 2007. For the three months ended
        March
        31, 2007 and 2006, $67.5 million and $14.2 million, respectively, were charged
        to Gas purchases; and for the six months ended March 31, 2007 and 2006, $91.8
        million and $34.8 million, respectively, were charged to Gas
        purchases.
The
        following table summarizes the ineffective portions of the Company's cash flow
        hedges that are included as a benefit as part of Gas purchases in the Condensed
        Consolidated Statements of Income for the three and six months ended March
        31,
        2007, and 2006, respectively.
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
NJRES
$
507
$
5,173
$
275
$
8,767
NJR
                  Energy
21
20
50
35
Total
                  Consolidated
$
528
$
5,193
$
325
$
8,802
9
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NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
Generally,
        exchange-traded futures and swap contracts require a deposit of margin cash,
        the
        amount of which is subject to change based on market movements and in accordance
        with exchange rules. The Company maintains separate broker margin accounts
        for
        NJNG and NJRES. The balances as of March 31, 2007 and September 30, 2006
        are as
        follows:
(Thousands)
March
                  31,
2007
September
                  30,
2006
NJNG
                  broker margin deposit
$
23,187
$
30,833
NJRES
                  broker margin deposit (liability)
$
36,837
$
(14,220
)
4.
EQUITY
        INVESTMENTS
On
        March
        2, 2007, NJR, through NJR Steckman Ridge Storage Company, a wholly-owned
        subsidiary of NJR Energy Holdings, entered into a series of joint venture
        agreements with subsidiaries of Spectra Energy Corporation and formed the
        Steckman Ridge partnership. The purpose of the partnership is to develop
        and
        operate a natural gas storage facility in western Pennsylvania, which will
        serve
        the Northeastern and Mid-Atlantic regions of the United States. NJR and Spectra
        each own 50 percent of the equity interests in Steckman Ridge and are required
        to fund 50 percent of total acquisition and development costs up to a maximum
        of
        $125 million each. As NJR has the ability to exert significant influence,
        but
        not control, it uses the equity method of accounting for its investment in
        Steckman Ridge.
NJR's
        equity
        investments at March 31, 2007 and September 30, 2006 include the following
        investments:
(Thousands)
March
                  31,
2007
September
                  30,
2006
Steckman
                  Ridge
$
52,749
$
—
Iroquois
21,349
20,414
Other
8,611
6,794
Total
$
82,709
$
27,208
5.
EARNINGS
        PER SHARE
The
        following table presents the calculation of the Company's basic and diluted
        earnings per share:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
Net
                  income, as reported
$
80,527
$
60,201
$
108,651
$
94,465
Basic
                  earnings per share:
Weighted
                  average shares of common stock outstanding - basic
27,893
27,822
27,803
27,686
Basic
                  Earnings per Common Share
$2.89
$2.16
$3.91
$3.41
Diluted
                  earnings per share:
Weighted
                  average shares of common stock outstanding - basic
27,893
27,822
27,803
27,686
Incremental
                  shares
(1)
154
323
156
314
Weighted
                  average shares of common stock outstanding - diluted
28,047
28,145
27,959
28,000
Diluted
                  Earnings per Common Share
$2.87
$2.14
$
$3.89
$
$3.37
(1)
Incremental
        shares consist of stock options, stock awards and performance
        units.
10
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
6.
DEBT
In
        October 2005, under the New Jersey Economic Development Authority (EDA) Act,
        NJNG used proceeds from EDA Series 2005A and 2005B bonds to refinance NJNG's
        $10.3 million, 5.38 percent Series W First Mortgage Bonds and its $10.5
        million, 6.25 percent Series Y First Mortgage Bonds. Also in October 2005,
        the EDA issued its 4.9 percent (Series 2005C) Natural Gas Facilities Revenue
        Bonds. The net proceeds from the 2005C bonds were deposited into a construction
        fund. NJNG immediately drew down $2.5 million from the construction fund
        and
        issued its $15 million, 4.9 percent Series KK bonds to the EDA with a maturity
        date of October 1, 2040. NJNG drew down an additional $4 million from the
        construction fund in the fourth quarter of fiscal 2006.
In
        October 2006, NJRES entered into a 3-year, $30 million committed credit facility
        with a multinational financial institution. Borrowings under this facility
        are
        guaranteed by NJR.
NJNG
        has
        a $44.5 million letter of credit outstanding, which will expire on June 30,
        2007, supporting a long-term natural gas swap agreement. The long-term natural
        gas swap agreement was entered into as a hedge related to an offsetting physical
        purchase of natural gas for the same period and volume. This letter of credit
        reduces the amount available under NJNG's committed credit facility by the same
        amount. NJNG does not anticipate that this letter of credit will be drawn
        upon
        by the counterparty and it will be renewed as necessary. NJNG expects to
        renew
        this letter of credit agreement upon its expiration in June 2007.
As
        of
        March 31, 2007, NJR had a letter of credit outstanding for $6.0 million,
        due to
        expire on June 30, 2007, related to margin requirements for NJRES' natural gas
        transactions. Including this letter of credit, as of March 31, 2007, NJR
        had
        letters of credit outstanding on behalf of NJRES and Commercial Realty and
        Resources (CR&R) totaling approximately $11.0 million, which expire through
        various dates in fiscal 2007. These letters of credit reduce the amount
        available under NJR's committed credit facility by the same amount. NJR does not
        anticipate that these letters of credit will be drawn upon by the counterparties
        and they will be renewed as necessary.
In
        December 2006 and 2005, NJNG received $5.5 million and $4.1 million in
        connection with the sale-leaseback of its vintage 2006 and 2005 meters,
        respectively. NJNG plans to continue the sale-leaseback meter program on
        an
        annual basis.
There
        were no other new issuances or redemptions of long-term debt securities for
        NJR,
        NJNG or NJRES during the six months ended March 31, 2007.
11
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NEW
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NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
The
        following is a summary of debt and committed credit facilities outstanding
        as of
        March 31, 2007 and September 30, 2006:
(Thousands)
March
                  31,
2007
September
                  30,
2006
NJR
Long
                  - term debt
(1)
$
25,000
$
25,000
Bank
                  credit facilities
$
325,000
$
325,000
Amount
                  outstanding at end of period
Notes
                  payable to banks
$
60,900
$
129,200
Weighted
                  average interest rate at end of period
Notes
                  payable to banks
5.6
%
6.0
%
NJNG
Long
                  - term debt
(1)
$
254,800
$
254,800
Bank
                  credit facilities
$
250,000
$
250,000
Amount
                  outstanding at end of period
Commercial
                  paper
$
66,100
$
151,500
Weighted
                  average interest rate at end of period
Commercial
                  paper
5.3
%
4.7
%
NJRES
Bank
                  credit facilities
$
30,000
$
—
Amount
                  outstanding at end of period
Notes
                  payable to banks
$
—
$
—
Weighted
                  average interest rate at end of period
Notes
                  payable to banks
—
—
(1)
        Long - term debt excludes lease obligations of $55.7 million and $52.5 million
        at March 31, 2007 and September 30, 2006, respectively
.
12
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NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
7.
CAPITALIZED
        AND DEFERRED INTEREST
Included
        in Utility plant, Real estate properties and other and Equity investments
        on the
        Condensed Consolidated Balance Sheets, and reflected in the Condensed
        Consolidated Statements of Income as a reduction to interest charges, net,
        are
        the following amounts recorded for capitalized interest:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
($
                  in Thousands)
2007
2006
2007
2006
Capitalized
                  interest - Utility plant
$
358
$
299
$
737
$
560
Weighted
                  average interest rates
5.36
%
4.54
%
5.36
%
4.22
%
Capitalized
                  interest - Real estate properties and other
$
86
$
—
$
129
$
—
Weighted
                  average interest rates
5.37
%
—
%
5.46
%
—
%
Capitalized
                  interest - Equity investments
$
211
$
—
$
211
$
—
Weighted
                  average interest rates
5.40
%
—
%
5.40
%
—
%
NJNG
        does
        not capitalize a cost of equity for its utility plant construction activities.
Pursuant
        to a BPU order, NJNG is permitted to recover carrying costs on uncollected
        balances related to SBC program costs, which include NJCEP, RAC and USF
        expenditures (see
Note
        2. Regulation
).
        Accordingly, Other income includes $780,000 and $617,000 of interest related
        to
        these SBC program costs for the three months ended March 31, 2007 and 2006,
        respectively, and $1.6 million and $1.2 million for the six months ended
        March
        31, 2007 and 2006, respectively.
NJR,
          through its subsidiary CR&R, capitalizes interest associated with the
          development and construction of its commercial buildings. Interest is also
          capitalized associated with the acquisition, development and construction
          of
          certain natural gas storage facilities through NJR's equity investment in
          Steckman Ridge (see
Note
          4. Equity Investments
).
13
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
8.
STOCK
        BASED COMPENSATION
Effective
        January 24, 2007, the shareholders of NJR approved the NJR 2007 Stock Award
        and
        Incentive Plan (2007 Plan) which replaced the 2002 Employee and Outside Director
        Long-Term Incentive Plan (Long-Term Plan). The Long-Term Plan had 591,471
        and
        87,280 shares, respectively, reserved for employees and directors, which
        were
        rolled into the 2007 Plan. In addition to those shares, the 2007 Plan reserved
        an additional 750,000 shares for issuance to employees for a total reserve
        of
        1,341,471 and 87,280 respectively for employees and directors and provides
        for a
        broader range of equity awards.
On
        January 24, 2007, the Company issued 36,687 shares of Restricted Stock under
        the
        2007 Plan, which vest in equal annual installments over three years, subject
        to
        certain conditions, and 17,741 restricted shares that vested immediately.
        In addition, 8,053 shares were issued to directors during the second quarter
        of
        fiscal 2007. As of March 31, 2007, 1,287,043 and 79,227 shares, respectively,
        remain available for future awards to employees and directors.
During
        the first six months of fiscal 2007, included in Operations and maintenance
        expense is $506,000 related to stock based compensation. As of March 31,
        2007
        there remains $2.6 million of deferred compensation related to unvested shares
        and options, which is expected to be recognized over the next 2 years.
9.
BUSINESS
        SEGMENT DATA
Information
        related to the Company's various business segments, is detailed below. The
        Natural Gas Distribution segment consists of regulated natural gas delivery,
        as
        well as off-system, capacity and storage management operations related to
        NJNG.
        The Energy Services segment consists of the unregulated wholesale energy
        operations of NJRES. The Retail and Other segment consists of appliance and
        installation services, commercial real estate development, investments and
        other
        corporate activities.
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
Operating
                  Revenues
Natural
                  Gas Distribution
$
450,811
$
471,406
$
690,218
$
865,752
Energy
                  Services
568,388
587,525
1,064,175
1,350,720
Retail
                  and Other
5,508
5,560
11,848
12,663
Subtotal
1,024,707
1,064,491
1,766,241
2,229,135
Intersegment
                  revenues
(1)
(71
)
(69
)
(140
)
(137
)
Total
$
1,024,636
$
1,064,422
$
1,766,101
$
2,228,998
Operating
                  Income
Natural
                  Gas Distribution
$
58,736
$
57,514
$
95,452
$
90,961
Energy
                  Services
81,410
46,863
96,256
73,964
Retail
                  and Other
(705
)
(689
)
(123
)
432
Total
$
139,441
$
103,688
$
191,585
$
165,357
Net
                  Income
Natural
                  Gas Distribution
$
33,226
$
33,509
$
53,134
$
52,192
Energy
                  Services
47,180
26,999
54,999
41,896
Retail
                  and Other
121
(307
)
518
377
Total
$
80,527
$
60,201
$
108,651
$
94,465
(1)
        Consists of transactions between subsidiaries that are eliminated and
        reclassified in consolidation
14
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
The
        Company's assets for the various business segments are detailed
        below:
(Thousands)
March
                  31,
2007
September
                  30,
2006
Assets
                  at end of period
Natural
                  Gas Distribution
$
1,520,716
$
1,586,934
Energy
                  Services
554,709
714,867
Retail
                  and Other
167,621
107,213
Intersegment
                  Assets
(1)
(15,020
)
(10,086
)
Total
$
2,228,026
$
2,398,928
(1)
Consists
        of transactions between subsidiaries that are eliminated and reclassified
        in
        consolidation.
10.
EMPLOYEE
        BENEFIT PLANS
Pension
        and Other Postemployment Benefit Plans (OPEB)
The
        components of the net periodic cost for pension benefits and OPEB costs
        (principally health care and life insurance) for employees and covered
        dependents were as follows:
Pension
OPEB
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
2007
2006
2007
2006
Service
                  cost
$
713
$
751
$
1,426
$
1,502
$
454
$
380
$
909
$
760
Interest
                  cost
1,525
1,408
3,050
2,816
757
615
1,514
1,230
Expected
                  return on plan assets
(2,052
)
(1,782
)
(4,104
)
(3,564
)
(541
)
(458
)
(1,081
)
(916
)
Prior
                  service cost amortization
21
21
42
42
20
19
39
—
Transition
                  obligation amortization
—
—
—
—
89
89
179
38
Recognized
                  actuarial loss
399
433
798
866
266
206
531
178
Net
                  initial obligation
—
(3
)
—
(6
)
—
—
—
412
Recognized
                  net periodic cost
$
606
$
828
$
1,212
$
1,656
$
1,045
$
851
$
2,091
$
1,702
In
        fiscal
        2007, the Company has no minimum pension funding requirements. The Company's
        funding level to its OPEB plans is expected to be approximately $600,000
        annually over the next five years. Additional contributions may be made based
        on
        market conditions and various assumptions.
11.
ASSET
        RETIREMENT OBLIGATIONS (ARO)
Effective
        September 30, 2006, NJR adopted FASB Interpretation Number 47,
Accounting
        for Conditional Asset Retirement Obligations
(FIN
        47), which requires NJR to recognize a reasonably estimated liability for
        the
        fair value of an ARO. NJR has AROs related to the costs associated with cutting
        and capping its main and service gas distribution pipelines of NJNG, which
        is
        required by New Jersey law when taking such gas distribution pipeline out
        of
        service.
The
        following is an analysis of the change in the ARO liability for the six months
        ended March 31, 2007, in thousands:
Balance
                  at October 1, 2006
$
23,293
Accretion
656
Additions
—
Retirements
(488
)
Balance
                  at March 31, 2007
$
23,461
15
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
Accretion
        amounts are not reflected as an expense on NJR's Condensed Consolidated
        Statements of Income, but rather are deferred as a regulatory asset and netted
        against NJNG's regulatory liabilities, for presentation purposes, on the
        Condensed Consolidated Balance Sheet.
12.
COMMITMENTS
        AND CONTINGENT LIABILITIES
Cash
        Commitments
NJNG
        has
        entered into long-term contracts, expiring at various dates through 2022,
        for
        the supply, storage and delivery of natural gas. These contracts include
        current
        annual fixed "demand" charges of approximately $81 million at current contract
        rates and volumes, which are recovered through the BGSS.
For
        the
        purpose of securing adequate storage and pipeline capacity, NJRES enters
        into
        storage and pipeline capacity contracts, which require the payment of certain
        demand charges by NJRES, in order to maintain the ability to access such
        natural
        gas storage or pipeline capacity, during a fixed time period
which
        generally range from one to five years
. Demand charges are based on
        established rates as regulated by the Federal Energy Regulatory Commission
        (FERC). These demand charges represent commitments to pay storage providers
        or
        pipeline companies for the right to store and transport natural gas utilizing
        their respective assets. As of March 31, 2007, NJRES had contractual payments
        for demand charges related to storage contracts and pipeline capacity contracts
        of $26.6 million and $45.0 million, respectively, for the next 12 month period.
Demand
        charges are recognized in the Consolidated Statements of Income as incurred
over
        the
        fiscal year
as part of Gas purchases as follows:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Millions)
2007
2006
2007
2006
NJRES
$
38.8
$
16.9
$
74.1
$
34.1
NJNG
19.0
21.4
38.2
42.5
Total
$
57.8
$
38.3
$
112.3
$
76.6
As
        of
        March 31, 2007, there were NJR guarantees covering approximately $270 million
        of
        natural gas purchases, demand fee commitments and swap agreements of NJRES,
        NJNG
        and NJR Energy, not yet reflected in Accounts payable on the Condensed
        Consolidated Balance Sheet. These NJR guarantees are related to transactions
        with various expiration dates through October 2016. NJR would have to provide
        for payment in the event of default by NJRES, NJNG and NJR Energy.
NJNG's
        capital expenditures are estimated at $39.0 million for the remainder of
        fiscal
        2007 and $63.3 million in fiscal 2008, consisting primarily of its construction
        program to support customer growth, maintenance of its distribution system
        and
        replacement needed under proposed pipeline safety rulemaking.
The
        Company's future minimum lease payments under various operating leases are
approximately
$3.4 million annually for the next five years and $589,000 in the aggregate
        for
        all years thereafter.
Legal
        Proceedings
Manufactured
        Gas Plant Remediation
NJNG
        has
        identified
eleven
former MGP sites, dating back to the late 1800s and early 1900s, which contain
        contaminated residues from the former gas manufacturing operations. Ten of
        the
eleven
sites in question were acquired by NJNG in 1952. Gas manufacturing operations
        ceased at these sites at least by the mid-1950s and, in some cases, had been
        discontinued many years earlier. Since October 1989, NJNG has been operating
        under Administrative Consent Orders or Memoranda of Agreement with the New
        Jersey Department of Environmental Protection (NJDEP) covering all
eleven
sites. These orders and agreements establish the procedures to be followed
        in
        developing
16
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NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
a
        final
        remedial cleanup plan for each site. NJNG is currently involved in
        administrative proceedings with the NJDEP with respect to the MGP sites in
        question, as well as participating in various studies and investigations
        by
        outside consultants to determine the nature and extent of any such contaminated
        residues and to develop appropriate programs of remedial action, where
        warranted. Until September 2000, most of the cost of such studies and
        investigations had been shared under an agreement with the former owner and
        operator of
ten
of the MGP sites, Jersey Central Power & Light Company (JCP&L), a
        subsidiary of FirstEnergy Corporation (FirstEnergy).
In
        September 2000, a revised agreement was executed pursuant to which NJNG is
        responsible for two of the sites— Long Branch and Toms River, New Jersey— while
        JCP&L is responsible for the remaining eight sites. On September 14,
        2004, the BPU approved a simultaneous transfer of properties whereby, upon
        closing of the transfer, NJNG will take ownership of two sites and JCP&L
        will take ownership of eight sites. NJNG continues to participate in the
        investigation and remedial action and bears the cost related to the one MGP
        site
        that was not subject to the original cost-sharing agreement.
In
        June
        1992, the BPU approved the RAC through which NJNG may, subject to BPU approval,
        recover its remediation expenditures, including carrying costs, over rolling
        7-year periods. Currently, NJNG is recovering $19.2 million annually for
        MGP
        remediation expenditures incurred through June 30, 2004. The remediation
        expenditures for the 24-month period ended June 30, 2006, including expenditures
        related to the Mass Tort Litigation as discussed below in the
Kemper
        Insurance Company Litigation
section,
        are pending BPU approval and are part of an on-going discussion with the
        BPU
        (See
Note
        2. Regulation
).
        As of
        March 31, 2007, $82.2 million of previously incurred remediation costs, net
        of
        recoveries from customers and insurance proceeds, are included in Regulatory
        assets on the Condensed Consolidated Balance Sheet.
In
        September 2006, with the assistance of an outside consulting firm, NJNG updated
        an environmental review of the MGP sites, including a review of potential
        liability for investigation and remedial action. Based on this review, NJNG
        estimated at the time of the review that, exclusive of any insurance recoveries,
        total future expenditures to remediate and monitor the three MGP sites for
        which
        it is responsible, will range from $105.4 million to $174.6 million. NJNG's
        estimate of these liabilities is based upon known facts, existing technology
        and
        enacted laws and regulations in place when the review was completed. However,
        actual costs are expected to differ from these estimates. Where available
        information is sufficient to estimate the amount of the liability, it is
        NJNG's
        policy to accrue the full amount of such estimate. Where the information
        is
        sufficient only to establish a range of probable liability, and no point
        within
        the range is more likely than any other, it is NJNG's policy to accrue the lower
        end of the range. Accordingly, NJNG has recorded an MGP remediation liability
        and a corresponding Regulatory asset of $105.4 million on the Condensed
        Consolidated Balance Sheet. The actual costs to be incurred by NJNG are
        dependent upon several factors, including final determination of remedial
        action, changing technologies and governmental regulations, the ultimate
        ability
        of other responsible parties to pay and any insurance recoveries.
NJNG
        will
        continue to seek recovery of such costs through the RAC. If any future
        regulatory position indicates that the recovery of such costs is not probable,
        the related cost would be charged to income in the period of such determination.
        However, because recovery of such costs is subject to BPU approval, there
        can be
        no assurance as to the ultimate recovery through the RAC or the impact on
        the
        Company's results of operations, financial position or cash flows, which could
        be material.
NJNG
        is
        presently investigating the potential settlement of alleged Natural Resource
        Damage (NRD) claims that might be brought by the NJDEP concerning the three
        MGP
        sites. NJDEP has not made any specific demands for compensation for alleged
        injury to groundwater or other natural resources. NJNG's evaluation of these
        potential claims is in the early stages, and it is not yet possible to quantify
        the amount of compensation, if any, that NJDEP might seek to recover. NJNG
        anticipates any costs associated with this matter would be recoverable through
        the RAC.
Kemper
        Insurance Company Litigation
In
        September 2000, NJNG purchased two insurance policies from Kemper Insurance
        Company: (i) a 20-year Clean-Up Cost-Containment insurance policy (Cost-Cap)
        and
        (ii) an Environmental Response
Compensation
        and Liability Insurance Policy (ERCLIP). The policies were intended to limit
        NJNG's liability for remediation and third-party claims arising from
        environmental contamination at the former MGP sites in Long Branch and Toms
        River.
17
NEW
        JERSEY RESOURCES CORPORATION AND SUBSIDIARIES
NOTES
        TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
        (Continued)
Beginning
        in July 2003, a series of complaints were filed in the New Jersey Superior
        Court against NJNG, NJR, JCP&L and FirstEnergy alleging, among other things,
        personal injuries, wrongful death, survivorship actions, property damage
        and
        claims for medical monitoring stemming from the operation and remediation
        of the
        former MGP site in Long Branch, New Jersey (the Mass Tort Litigation). The
        relief sought included compensatory damages, the establishment of a medical
        monitoring fund, disgorgement of alleged profits, cost of cleanup and
        remediation, natural resource damages and punitive damages.
In
        December 2005, a confidential settlement between NJNG and the plaintiffs
        in the
        Mass Tort Litigation was finalized and approved by the New Jersey Superior
        Court
        in Bergen County. Subsequent to the settlement, JCP&L and FirstEnergy made a
        demand upon NJNG and NJR for indemnification pursuant to the September 2000
        agreement among these entities and NJNG, whereby NJNG assumed responsibility
        for
        the Long Branch site. NJNG agreed to honor the indemnification terms of the
        agreement.
On
        January 24, 2007, NJNG entered into a written Settlement Agreement and Mutual
        Release (the "Settlement Agreement") with Lumbermens Mutual Casualty Company and
        its subsidiaries and affiliates, including but not limited to, American
        Motorists Insurance Company, American Manufacturers Mutual Company and Kemper
        Indemnity Insurance Company (collectively, "Kemper") pursuant to which the
        parties settled a lawsuit pending in the Superior Court of New Jersey, Law
        Division, Ocean County arising out of Cost Cap and the ERCLIP (the "Lawsuit").
Pursuant
        to the terms of the Settlement Agreement, NJNG received a payment in the
        amount
        of $12.8 million (the "Settlement Payment"). The Settlement Agreement provided
        for a mutual and global release of all claims, against the Company or Kemper
        that were or could have been made in the litigation, including all claims
        NJNG
        could have made under the ERCLIP and Cost-Cap. The Settlement Payment was
        made
        in exchange for a general release of all such claims asserted in the litigation;
        no portion of the Settlement Payment was allocated to any particular claim.
The
        RAC
        does not permit NJNG to recover costs, expenses or other liabilities incurred
        in
        connection with personal injury claims. Pursuant to the RAC, NJNG will seek
        recovery of costs in excess of those recovered from Kemper and other insurers.
        Management believes that, subject to BPU approval, these costs, net of all
        insurance proceeds, are recoverable pursuant to the RAC. However, because
        recovery of such costs is subject to BPU approval, there can be no assurance
        as
        to the ultimate recovery of outstanding costs through the RAC or the impact
        of
        these matters on the Company's financial condition, results of operations or
        cash flows, which could be material.
General
The
        Company is a party to various other claims, legal actions, complaints and
        investigations arising in the ordinary course of business. In the Company's
        opinion, the ultimate disposition of these matters will not have a material
        adverse effect on its financial condition, results of operations or cash
        flows.
13.
OTHER
At
        March
        31, 2007, there were
27,940,080
shares
        of
        common stock outstanding and the book value per share was $23.36.
18
I
TEM
        2.
MANAGEMENT'S
        DISCUSSION AND ANALYSIS OF
        FINANCIAL CONDITION AND
RESULTS
        OF
OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31,
        2007
Management's
        Overview
New
        Jersey Resources Corporation (NJR or the Company) is an energy services holding
        company providing retail natural gas service in New Jersey and wholesale
        natural
        gas and related energy services to customers from states in the Gulf Coast
        and
        Mid-Continent to New England and Canada through its two principal subsidiaries,
        New Jersey Natural Gas (NJNG) and NJR Energy Services (NJRES).
NJNG
        is a
        natural gas utility which provides regulated retail natural gas service in
        central and northern New Jersey and also participates in the off-system sales
        and capacity release markets, and comprises the Natural Gas Distribution
        segment. NJNG is regulated by the New Jersey Board of Public Utilities
        (BPU).
NJRES
        maintains and trades around a portfolio of physical assets consisting of
        natural
        gas storage and natural gas pipeline transportation contracts. NJRES also
        provides wholesale energy services to non-affiliated utility and energy
        companies. NJRES comprises the Energy Services segment.
The
        Retail and Other segment includes NJR Home Services (NJRHS), which provides
        service, sales and installation of appliances; NJR Energy (NJRE), an investor
        in
        energy-related ventures, most significantly, through NJNR Pipeline which
        holds
        the Company's 5.53 percent interest in Iroquois Gas and Transmission System, LP
        (Iroquois), which is a 412-mile natural gas pipeline from the New York-Canadian
        border to Long Island, New York and NJR Steckman Ridge Storage Company, which,
        in March 2007, acquired a 50 percent equity ownership interest in Steckman
        Ridge
        GP, LLC and Steckman Ridge, LP (collectively, Steckman Ridge), a natural
        gas
        storage facility that will be constructed in western Pennsylvania; Commercial
        Realty and Resources (CR&R), which holds and develops commercial real
        estate; and NJR Investment, which makes energy-related equity investments.
Net
        income by business segment is as follows:
Six
                  Months Ended
March
                  31,
($
                  in Thousands)
2007
2006
Net
                  Income
Natural
                  Gas Distribution
$
53,134
49
%
$
52,192
55
%
Energy
                  Services
54,999
50
41,896
44
Retail
                  and Other
518
1
377
1
Total
$
108,651
100
%
$
94,465
100
%
Natural
        Gas Distribution Segment
Natural
        Gas Distribution operations have focused on the following to provide for
        growth:
·
Working
                with the BPU and New Jersey Department of the Public Advocate, Division
                of
                Rate Counsel (Rate Counsel), for the development of the decoupling
                of the
                impact of customer usage on utility gross margin, which has allowed
                for
                the implementation of the Customer Incentive Program (CIP). The CIP
                allows
                NJNG to promote conservation programs to its customers while maintaining
                protection of its utility gross margin associated with reduced customer
                usage. CIP usage differences are calculated annually and are recovered
                one
                year following the end of the CIP usage year;
·
Managing
                its customer growth, which is expected to total about 2.0 percent
                annually;
·
Generating
                earnings from various BPU-authorized gross margin-sharing incentive
                programs, which are currently approved through October 31, 2007. An
                extension has been requested to link the expiration of these programs
                with
                the end of the initial three-year pilot program of the CIP. The initial
                term of the CIP is October 1, 2006 through September 30, 2009. Under
                certain conditions the CIP may be extended one additional year beyond
                the
                initial term;
19
Table
            of Contents
·
Managing
                the volatility of wholesale natural gas prices through a hedging
                program
                designed to keep customers' prices as stable as possible;
                and
·
Improving
                its cost structure through various productivity
                initiatives.
In
        conducting NJNG's business, management focuses on factors it believes may have
        significant influence on its future financial results. NJNG's policy is to work
        with all stakeholders, including customers, regulators and policymakers,
        to
        achieve favorable results. These factors include the rate of NJNG's customer
        growth in its service territory, which can be influenced by general economic
        conditions as well as political and regulatory policies that may impact the
        new
        housing market. A portion of NJNG's customer growth comes from the conversion
        market, which is influenced by the delivered cost of natural gas compared
        with
        competing fuels, interest rates and other economic conditions.
For
        the
        reporting period through September 30, 2006, which includes the three and
        six
        month periods ending March 31, 2006, the impact on weather was mitigated
        by a
        Weather Normalization Clause (WNC). The WNC did not, however, capture lower
        customer usage per degree day. To mitigate this, NJNG obtained approval of
        the
        CIP effective as of October 1, 2006. Therefore, for the three and six months
        periods ended March 31, 2007, the impact of weather and usage on NJNG's utility
        gross margin was significantly mitigated due to the CIP.
The
        CIP
        is a three-year pilot program, expiring October 1, 2009, designed to decouple
        the link between customer usage and NJNG's utility gross margin to allow NJNG to
        encourage its customers to conserve energy. For the term of the pilot the
        existing WNC has been suspended and replaced with the CIP tracking mechanism,
        which addresses utility gross margin variations related to both weather and
        customer usage in comparison to established benchmarks. Under certain conditions
        the CIP may be extended one additional year beyond the initial term. Recovery
        of
        such utility gross margin variations, which are recovered in the year subsequent
        to the CIP usage year, is subject to additional conditions including an earnings
        test and an evaluation of Basic Gas Supply Service (BGSS)-related savings
        achieved. Under the CIP agreement, if NJNG does not file for a rate review
        with
        the BPU by October 1, 2008, the return on equity for the earnings test will
        decline from 10.50 percent to 10.25 percent. NJNG continues to evaluate its
        expected returns and general market conditions with regard to filing for
        a
        potential rate review.
To
        encourage energy efficiency, NJNG is also required to initiate programs to
        further customer conservation efforts over the term of the pilot. NJNG is
        required to provide a minimum of $2 million in funding for such programs
        and
        will continue to fund programs throughout the term of the pilot. As of September
        30, 2006, NJNG accrued $1.8 million for this obligation, representing its
        present value at that date, in the Condensed Consolidated Balance Sheets.
        As of
        March 31, 2007, the obligation to fund these conservation programs has a
        present
        value of $1.5 million, including accrued interest costs and amounts expended
        on
        such conservation programs. An annual filing of the CIP results will be made
        in
        June of each year, commencing in June 2007, coincident with NJNG's annual
        BGSS filing.
NJNG's
        operating expenses are heavily influenced by labor costs, large components
        of
        which are covered by a negotiated collective bargaining agreement that expires
        in 2008. Labor-related fringe benefit costs may also influence NJNG's
        results.
As
        a
        regulated company, NJNG is required to recognize the impact of regulatory
        decisions on its financial statements. As a result, significant costs are
        deferred and treated as regulatory assets, pending BPU decisions regarding
        their
        ultimate recovery from customers. The most significant costs incurred that
        are
        subject to this accounting treatment include manufactured gas plant (MGP)
        remediation costs and wholesale natural gas costs. Actual remediation costs
        may
        vary from management's estimates due to the developing nature of remediation
        requirements, regulatory decisions by the New Jersey Department of Environmental
        Protection (NJDEP) and related litigation. If there are changes in the
        regulatory position on the recovery of these costs, such costs would be charged
        to income.
Due
        to
        the capital-intensive nature of NJNG's operations and the seasonal nature of its
        working capital requirements, significant changes in interest rates can also
        impact NJNG's results.
20
Table
            of Contents
Energy
        Services Segment
NJRES
        provides unregulated wholesale energy services, including base load natural
        gas,
        peaking and balancing services, utilizing physical assets it controls, as
        well
        as providing asset management services to customers in states from the Gulf
        Coast and Mid-continent regions to the Appalachian and Northeast regions
        and
        Canada.
NJRES'
        incorporates the following elements to provide for growth, while focusing
        on
        maintaining a low-risk operating and counterparty credit profile:
·
Providing
                natural gas portfolio management services to nonaffiliated utilities
                and
                electric generation facilities;
·
Identifying
                and benefiting from variations in pricing of natural gas transportation
                and storage assets due to location or timing differences of natural
                gas
                prices to generate gross margin; and
·
Managing
                hedging programs that are designed to mitigate adverse market price
                fluctuations in natural gas transportation and storage commitments
                utilized to generate gross margin through the use of a cash-flow
                hedging
                strategy.
NJRES
        has
        built a portfolio of customers including local distribution companies,
        industrial companies, electric generators and retail aggregators. Sales to
        these
        customers have allowed NJRES to leverage its transportation and storage capacity
        and manage sales to these customers in an aggregate fashion. This strategy
        allows NJRES to extract more value from its portfolio of natural gas storage
        and
        pipeline transportation capacity.
NJRES
        also focuses on creating value from underutilized natural gas assets, which
        are
        typically amassed through contractual rights to natural gas transportation
        and
        storage capacity. NJRES has developed a portfolio of natural gas storage
        and
        transportation capacity in states in the Northeast, Gulf Coast, Mid-continent
        and Appalachian regions and eastern Canada. These assets become more valuable
        when prices change between these areas and across time periods. NJRES seeks
        to
        optimize this process on a daily basis as market conditions change by evaluating
        all the natural gas supplies, transportation and opportunities to which it
        has
        access, to find the most profitable alternative to serve its various
        commitments. This enables NJRES to capture geographic pricing differences
        across
        these various regions as delivered natural gas prices change. NJRES' focuses on
        earning a gross margin, which is defined as natural gas revenues and management
        fees less natural gas costs and fixed demand costs, on a single original
        transaction and then utilizing that transaction, and the changes in prices
        across the regions or across time periods, as the basis to further improve
        the
        initial gross margin result.
In
        a
        similar manner, NJRES participates in natural gas storage transactions where
        it
        seeks to identify pricing differences that occur over time, as prices for
        future
        delivery periods at many locations are readily available. For example, NJRES
        generates gross margin by locking in the differential between purchasing
        natural
        gas at a low current or future price and, in a related transaction, selling
        that
        natural gas at a high current or future price, all within the constraints
        of its
        credit and contracts policies. Through the use of transportation and storage
        services, NJRES is able to generate gross margin through pricing differences
        that occur over the duration of time the assets are held.
NJRES'
        portfolio management customers include nonaffiliated utilities and electric
        generation plants. Services provided by NJRES include optimization of
        underutilized natural gas assets and basic gas supply functions. Revenue
        is
        customarily derived by a combination of a base service fee and incentive-based
        arrangements.
In
        conducting its business, NJRES mitigates risk by following formal risk
        management guidelines, including trading limits, approval processes, segregation
        of duties, and formal contract and credit review and approval procedures.
        NJRES
        continuously monitors and seeks to reduce the risk associated with various
        counterparties credit exposure. The Risk Management Committee (RMC) of NJR,
        which consists of senior officers from several business units of NJR, oversees
        compliance with these established guidelines.
21
Table
            of Contents
Critical
        Accounting Policies
A
        summary
        of NJR's critical accounting policies is included in Item 7. "Management's
        Discussion and Analysis of Financial Condition and Results of Operations" of our
        Annual Report on Form 10-K for the period ended September 30, 2006. NJR's
        critical accounting policies have not changed materially from those reported
        in
        the 2006 Annual Report on Form 10-K.
Recently
        Issued Accounting Standards
In
        July
        2006, the Financial Accounting Standards Board (FASB) issued Interpretation
        No.
        48, "Accounting for Uncertainty in Income Taxes" (FIN 48), which alters the
        framework for recognizing income tax contingencies. Previously, under Statement
        of Financial Accounting Standards (SFAS) No. 5, "Accounting for Contingencies,"
the focus was on the subsequent liability recognition for estimated losses
        from
        tax contingencies where such losses were probable and the related amounts
        could
        be reasonably estimated. Under this new interpretation, a contingent tax
        asset
        (i.e., an uncertain tax position) may only be recognized if it is more likely
        than not that it will ultimately be sustained upon audit. The Company will
        adopt
        FIN 48 by the commencement of fiscal 2008. The Company is evaluating its
        tax
        positions for all jurisdictions and all years for which the statute of
        limitations remains open, as well as evaluating the impact that the adoption
        will have on its financial condition and results of operations.
In
        September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
        157). SFAS 157 defines fair value as the amount that would be exchanged to
        sell
        an asset or transfer a liability in an orderly transaction between market
        participants and establishes a fair value hierarchy of quotes and unobservable
        data that should be used to develop pricing assumptions. In addition, for
        assets
        and liabilities that are not actively traded, for example, certain kinds
        of
        derivatives, SFAS 157 requires that a fair value measurement include an
        adjustment for risks inherent in a valuation technique and/or inputs, such
        as
        those used in pricing models. SFAS 157 is effective for fiscal years beginning
        after November 15, 2007, however, early adoption is permitted. The Company
        will
        adopt the provisions of the statement prospectively and is evaluating the
        adoption date and its effect on its financial condition.
In
        September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined
        Benefit Pension and Other Postemployment Plans" (SFAS 158). The statement
        requires an employer to recognize the funded status, measured as the difference
        between the fair value of plan assets and the projected benefit obligation,
        of
        its benefit plans. SFAS 158 does not change how pensions and other
        postemployment benefits are accounted for and reported in the income statement.
        Certain economic events, which previously required disclosure only in the
        notes
        to the financial statements, will be recognized as assets and liabilities
        and
        offset in Accumulated other comprehensive income, net of tax, or to regulatory
        assets, for those amounts related to NJNG that would be recoverable through
        allowed rates charged to customers, to the extent such amounts are not
        recognized in earnings as part of net periodic benefit costs. Amounts recognized
        in Accumulated other comprehensive income, or as a regulatory asset as it
        may
        relate to NJNG, will be adjusted as they are subsequently recognized in earnings
        through net periodic benefit cost. The Company will adopt SFAS 158 on September
        30, 2007 and will apply the provisions of the statement prospectively. The
        Company is currently evaluating the effect of adoption on its financial
        condition.
In
        February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
        Financial Assets and Financial Liabilities" (SFAS 159). SFAS 159 permits
        entities to elect to measure eligible items at fair value as an alternative
        to
        hedge accounting and to mitigate volatility in earnings. The entity either
        elects the fair value option according to a preexisting policy, when the
        asset
        or liability is first recognized or when it enters into an eligible firm
        commitment. Changes in the fair value of assets and liabilities that the
        Company
        chooses to apply the fair value option to are reported in earnings at each
        reporting date. SFAS 159 also provides guidance on disclosures that are intended
        to provide comparability to other entity assets and liabilities that have
        different measurement attributes and to other entities with similar financial
        assets and liabilities. SFAS 159 is effective for fiscal years beginning
        after
        November 15, 2007; however, early adoption is permitted provided the entity
        also
        elects to apply the provisions of SFAS 157. The Company is evaluating SFAS
        159
        to determine its applicability to its current operations and effect, if any,
        on
        its financial condition.
22
Table
            of Contents
Results
        of Operations
Net
        income for the quarter ended March 31, 2007 increased by 33.8 percent to
        $80.5
        million, compared with $60.2 million for the same period last fiscal year.
        Basic
        earnings per share (EPS) increased by 33.8 percent to $2.89, compared with
        $2.16
        for the same period last fiscal year and diluted EPS increased 34.1 percent
        to
        $2.87, compared with $2.14 for the same period last fiscal year.
Net
        income for the six months ended March 31, 2007 increased 15
percent
to
        $108.7
        million, compared with $94.5 million for the same period last fiscal year.
        Basic
        EPS increased 14.7 percent to $3.91, compared with $3.41 for the same period
        last fiscal year and diluted EPS increased 15.4 percent to $3.89 compared
        with
        $3.37 for the same period last fiscal year.
The
        increase in earnings for the three and six months ended March 31, 2007, as
        compared with the same periods in the prior fiscal year, was due primarily
        to
        higher gross margin at NJRES due to strategic natural gas storage withdrawals
        that captured favorable market pricing conditions during the quarter ended
        March
        31, 2007 and increased storage and intra-month natural gas trading positions,
        primarily driven by the impact of colder weather in NJRES' market (delivery)
        areas allowing for favorable market pricing movements during the three-month
        period. Increased earnings at NJNG were due primarily to the impact of the
        CIP
        tariff and continued customer growth, partially offset by higher interest
        expense, which was due primarily to an increase in short-term borrowings
        and
        higher rates over the same period in the prior fiscal year.
The
        Company's Operating revenues and Gas purchases are as follows:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
%
%
($
                  in Thousands)
2007
2006
Change
2007
2006
Change
Operating
                  revenues
$
1,024,636
$
1,064,422
(3.7
)%
$
1,766,101
$
2,228,998
(20.8
)%
Gas
                  purchases
$
795,469
$
882,688
(9.9
)%
$
1,424,154
$
1,921,163
(25.9
)%
Operating
        revenues decreased $39.8 million for the three months ended March 31, 2007
        compared to the same period of the prior fiscal year due primarily
        to:
·
Increased
                refunds to NJNG customers in fiscal 2007;
                and
·
Reduced
                off-system sales
The
        decrease in operating revenues was partially offset by:
·
Increased
                revenues at NJRES due to greater market pricing volatility as a result
                of
                the impact of weather in relation to the cost to acquire gas and
                contracts
                to sell gas in NJRES' market area; and
·
The
                impact of 12.4 percent colder weather than prior fiscal year on NJNG's
                revenues
Operating
        revenues decreased $462.9 million for the six months ended March 31, 2007
        compared to the same period of the prior fiscal year due primarily
        to:
·
Refunds
                to NJNG residential and small commercial customers
;
                and
·
Less
                favorable market pricing conditions affecting NJRES' revenues as a result
                of volatility in the markets due to severe weather conditions in
                fiscal
                2006 that did not recur in fiscal 2007.
These
        same factors resulted in a decrease in Gas purchases of $87.2 million for
        the
        three months ended March 31, 2007 and $497.0 million for the six months ended
        March 31, 2007, as compared to the same periods in the prior fiscal
        year.
23
Table
            of Contents
Natural
        Gas Distribution Operations
NJNG
        is a
        local natural gas distribution company that provides regulated retail energy
        services to approximately 477,000 residential and commercial customers in
        central and northern New Jersey and participates in the off-system sales
        and
        capacity release markets.
NJNG's
        business is seasonal by nature, as weather conditions directly influence
        the
        volume of natural gas delivered. Specifically, customer demand substantially
        increases during the winter months when natural gas is used for heating
        purposes. As a result, NJNG receives most of its gas distribution revenues
        during the first and second fiscal quarters and is subject to variations
        in
        earnings and working capital during the year.
In
        February 1999, the Electric Discount and Energy Competition Act (EDECA),
        which provides the framework for the restructuring of New Jersey's energy
        markets, became law. In March 2001, the BPU issued an order to fully open
        NJNG's residential markets to competition, restructure its rates to segregate
        its BGSS and delivery (i.e., transportation) service prices as required by
        EDECA
        and expand an incentive for residential and small commercial customers to
        switch
        to transportation service. NJNG earns no utility gross margin on the commodity
        portion of its natural gas sales. NJNG earns utility gross margin through
        the
        delivery of natural gas to its customers. In January 2002, the BPU ordered
        that BGSS could be provided by suppliers other than the state's natural gas
        utilities, but BGSS should be provided by the state's natural gas utilities
        until further BPU action. No additional action has been taken by the BPU
        subsequent to its initial order in January 2002.
NJNG's
        financial results are summarized as follows:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
Utility
                  Gross Margin
Operating
                  revenues
$
450,811
$
471,406
$
690,218
$
865,752
Less:
Gas
                  purchases
312,863
346,650
463,856
651,782
Energy
                  and other taxes
28,778
24,481
41,298
41,766
Regulatory
                  rider expense
18,135
12,405
27,601
21,863
Total
                  Utility Gross Margin
$
91,035
$
87,870
$
157,463
$
150,341
Utility
                  Gross Margin
Residential
                  and commercial
$
80,154
$
78,237
$
134,664
$
130,906
Transportation
9,884
6,479
18,321
12,861
Total
                  Utility Firm Gross Margin
90,038
84,716
152,985
143,767
Incentive
                  programs
906
2,932
4,184
6,046
Interruptible
91
222
294
528
Total
                  Utility Gross Margin
91,035
87,870
157,463
150,341
Operation
                  and maintenance expense
22,692
21,083
42,947
40,950
Depreciation
                  and amortization
8,848
8,477
17,586
16,900
Other
                  taxes not reflected in utility gross margin
759
796
1,478
1,530
Operating
                  income
$
58,736
$
57,514
$
95,452
$
90,961
Other
                  income
838
715
1,885
1,540
Interest
                  charges, net
5,244
3,990
10,637
7,774
Income
                  tax provision
21,104
20,730
33,566
32,535
Net
                  income
$
33,226
$
33,509
$
53,134
$
52,192
24
Utility
          Gross Margin
NJNG's
          utility gross margin is defined as natural gas revenues less natural gas
          purchases, sales tax, a Transitional Energy Facilities Assessment (TEFA)
          and
          regulatory rider expenses. Management believes that utility gross margin
          provides a more meaningful basis than revenue for evaluating utility operations
          since natural gas costs, sales tax, TEFA
and regulatory rider expenses
          are included in operating revenue and passed through to customers and,
          therefore, have no effect on utility gross margin. This definition of utility
          gross margin may not be comparable to the definition of gross margin used
          by
          others in the natural gas distribution business and other
          industries.
Natural
        gas costs are charged to operating expenses on the basis of therm sales at
        the
        prices in NJNG's BGSS tariff, approved by the BPU. The BGSS tariff includes
        projected natural gas costs, net of supplier refunds, the impact of hedging
        activities and credits from non-firm sales and transportation activities.
        Any
        underrecoveries or overrecoveries from the projected amounts are deferred
        and
        reflected in the BGSS tariff in subsequent periods.
Sales
        tax
        was calculated at 6 percent of revenue during the first and second quarters
        of
        fiscal 2006, and at 7 percent, during the first and second quarters of fiscal
        2007. The sales tax calculation excludes sales to cogeneration facilities,
        other
        utilities, off-system sales and federal accounts.
TEFA,
        which is included in Energy and other taxes on the Condensed Consolidated
        Statements of Income, is calculated on a per-therm basis and excludes sales
        to
        cogeneration facilities, other utilities and off-system sales. TEFA represents
        a
        regulatory allowed assessment imposed on all energy providers in the state
        of
        New Jersey, as TEFA has replaced the previously used utility gross receipts
        tax
        formula.
Regulatory
        rider expenses consist of recovery of state-mandated programs and the
        remediation adjustment clause costs. These expenses are offset by corresponding
        revenues and are calculated on a per-therm basis.
NJNG's
        Operating revenues decreased by $175.5 million, or 20.3 percent, and gas
        purchases decreased by $187.9 million, or 28.8 percent, respectively, for
        the
        six months ended March 31, 2007, compared with the same period in the prior
        fiscal year. These decreases were primarily the result of refunds of $51.5
        million and $20 million in December 2006 and March 2007, respectively, to
        residential and small commercial customers and a decrease in off-system sales
        of
        $84.7 million, partially offset by customer growth.
NJNG's
        Operating revenues and Gas purchases for the three months ended March 31,
        2007
        decreased $20.6 million, and $33.8 million, respectively, compared with same
        period in the prior fiscal year as a result of the $20 million refund to
        customers in March 2007, partially offset by customer growth.
Sales
        tax
        and TEFA, which are presented as both components of Revenues and Operating
        Expenses in the Condensed Consolidated Statements of Income, totaled $41.3
        million and $41.8 million for the six months ended and $28.8 million and
        $24.5
        million for the three months ended March 31, 2007 and 2006, respectively.
        The
        change in the sales tax rate from 6 percent to 7 percent, as applied to NJNG's
        operating revenue, drove the increase
for
        the
        three month period ended March 31, 2007 as compared to the same period in
        the
        prior fiscal year
. For the six month period ended March 31, 2007, as
        compared to the same period in the prior year, the sales tax increase was
        partially offset by reduced revenues, as a result of customer refunds, and
        TEFA
        expense as total therm usage, as a result of weather being 1 percent warmer
        than
        the same period in the prior fiscal year, was lower.
Regulation
        rider expenses totaled $27.6 million and $21.9 million for the six months
        ended March 31, 2007 and 2006, respectively, and
$18.1 million
        and $12.4 million for the three months ended March 31, 2007 and 2006,
        respectively. The increase in regulatory rider expenses is due primarily
        to an
        increase in firm throughput sales as a result of customer growth.
Utility
        gross margin is comprised of three major categories:
·
Utility
                Firm Gross Margin, which is derived from residential and commercial
                customers who receive natural gas service from NJNG through either
                sales
                or transportation tariffs;
·
Incentive
                programs, where margins generated or savings achieved from BPU-approved
                off-system sales, capacity release, Financial Risk Management (defined
                in
                Incentive Programs, below) or storage incentive programs are shared
                between customers and NJNG; and
·
Utility
                gross margin from interruptible customers, which is generated from
                large
                commercial and industrial customers who receive non-firm natural
                gas
                service at lower rates, and is subject to BPU-approved
                incentives.
25
Utility
        Firm Gross Margin
Effective
        October 1, 2006, the BPU approved the CIP to encourage energy savings while
        allowing NJNG to recover the necessary costs of operations. The three-year
        pilot
        program eliminates the disincentive to promote conservation and energy
        efficiency, since utility gross margin is no longer directly linked to customer
        usage. The CIP tariff normalizes NJNG's utility gross margin recoveries for
        variances not only in weather but also other factors affecting usage, including
        customer conservation. Recovery of utility gross margin through the CIP is
        limited to the amount of certain gas supply cost savings achieved.
For
        the
        three and six months ended March 31, 2006, utility gross margin from residential
        and commercial customers was impacted by the WNC, which provided for a revenue
        adjustment if the weather varied by more than one-half percent from normal
        weather (i.e., 20-year average). The accumulated adjustment from one heating
        season (i.e., October through May) was billed or credited to customers in
        subsequent periods. This mechanism reduced the variability of both customers'
bills and NJNG's earnings due to weather fluctuations. The existing WNC has been
        suspended as of October 1, 2006 due to the implementation of the CIP pilot
        program.
Customers
        switching between sales service and transportation service affect the components
        of utility gross margin from firm customers. NJNG's total utility gross margin
        is not negatively affected by customers who use its transportation service
        and
        purchase natural gas from another supplier because its tariff is designed
        so
        that no profit is earned on the natural gas commodity portion of sales to
        firm
        customers. All customers who purchase natural gas from another supplier continue
        to use NJNG for transportation service.
Total
        utility firm gross margin increased $5.3 million, or 6.3 percent, for the
        three
        months and $9.2 million, or 6.4 percent, for the six months ended March 31,
        2007, respectively, compared with the same periods of the prior fiscal year.
        The
        changes were due primarily to:
·
The
                effect of the CIP in the current fiscal year, which captures the
                impact
                from both weather and customer usage, when compared to the same periods
                in
                the prior fiscal year when the WNC, which did not capture the impact
                of
                lower usage per degree day, was in effect;
                and
·
An
                increase in fixed revenue as a result of customer
                growth.
Utility
        gross margin from residential and commercial customers is impacted by the
        CIP,
        which provides for a revenue adjustment if the weather and usage varies from
        the
        established baseline weather and usage factors. The accumulated adjustment
        from
        one year is billed or credited to customers in subsequent periods. This
        mechanism protects NJNG's utility gross margin due to weather and customer usage
        fluctuations while allowing NJNG to promote conservation. The weather for
        the
        six months ended March 31, 2007 was 6.6 percent warmer than normal, which
        resulted in an accrual of utility gross margin under the CIP of $8.4 million.
        In
        addition, customer usage was lower than the established benchmark, which
        resulted in an additional accrual of utility gross margin under the CIP of
        $5.9
        million.
Utility
        firm gross margin from transportation service increased $5.5 million, or
        42.5
        percent, for the six months ended March 31, 2007, and $3.4 million or 52.6
        percent for the three months ended March 31, 2007, respectively, compared
        with
        the same periods in the prior fiscal year. NJNG transported 6.3 Bcf and 4.9
        Bcf
        for the six months ended March 31, 2007 and March 31, 2006, respectively,
        and
        3.8 Bcf and 2.3 Bcf for the three months ended March 31, 2007 and March 31,
        2006, respectively. The increase in utility firm gross margin was due primarily
        to an increase in the number of commercial customers switching from firm
        to
        transportation services, combined with the impact of the CIP
        program.
NJNG
        had
        8,665 and 9,129 residential customers and 4,494 and 3,602 commercial customers
        using its transportation service at March 31, 2007 and 2006, respectively.
        The
        decrease in residential transportation customers was due primarily to a change
        in marketing efforts by third-party natural gas service providers in NJNG's
        service territory to focus on the commercial sector.
During
        the six months ended March 31, 2007, NJNG added 4,333 new customers, 35.8
        percent of which converted from other fuels. In addition, 230 existing customers
        added natural gas heat to their existing service. In fiscal 2007, NJNG currently
        expects to add approximately 9,150 new customers and
convert
        700 existing customers to natural gas heat. Achieving these expectations
        would
        represent an estimated annual customer growth rate of approximately 2.0 percent.
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These
        growth expectations are based upon management's review of local planning board
        data, recent market research performed by third parties, builder surveys
        and
        studies of population growth rates in NJNG's service territory. However, future
        sales will be affected by the weather, actual energy usage patterns of NJNG's
        customers, economic conditions in NJNG's service territory, conversion and
        conservation activity, the impact of changing from a regulated to a competitive
        environment, changes in state regulation and other marketing efforts, as
        has
        been the case in prior years.
Incentive
        Programs
To
        reduce
        the overall cost of its natural gas supply commitments, NJNG has entered
        into
        contracts to sell natural gas to wholesale customers outside its franchise
        territory when the natural gas is not needed for system requirements. These
        off-system sales enable NJNG to spread its fixed demand costs, which are
        charged
        by pipelines to access their supplies year round, over a larger and more
        diverse
        customer base. NJNG also participates in the capacity release market on the
        interstate pipeline network when the capacity is not needed for its firm
        system
        requirements. NJNG retains 15 percent of the utility gross margin from these
        sales, with 85 percent credited to firm customers through the BGSS.
The
        Financial Risk Management (FRM) program is designed to provide price stability
        to NJNG's natural gas supply portfolio. The FRM program includes an incentive
        mechanism designed to encourage the use of financial instruments to hedge
        NJNG's
        natural gas costs, enabling NJNG customers to retain 80 percent, and NJNG
        shareowners to retain 20 percent, of these costs and results.
The
        storage incentive program shares gains and losses on an 80 percent to 20
        percent
        basis between customers and shareowners, respectively. This program measures
        the
        difference between the actual cost of natural gas in storage and a benchmark
        applicable to the April-through-October injection season.
NJNG's
        incentive programs totaled 9.8 Bcf and generated $906,000 of utility gross
        margin for the three months ended March 31, 2007, compared with 11.5 Bcf
        and
        $2.9 million of utility gross margin in the same period in the prior fiscal
        year. NJNG's incentive programs totaled 20.3 Bcf and generated $4.2 million of
        utility gross margin for the six months ended March 31, 2007, compared with
        21.7
        Bcf and $6.0 million of utility gross margin, for the same period in the
        prior
        fiscal year. For both the three and six month periods ended March 31, 2007,
        the
        decrease in utility gross margin was due primarily to a decrease in the market
        prices for natural gas as compared to the same periods in the prior fiscal
        year.
New
        York
        Mercantile Exchange (NYMEX) settlement prices for natural gas are a general
        indication of the monthly market movements. NYMEX prices have decreased from
        an
        average of $10.977/dth for the six months ending March 31, 2006 to $6.662/dth
        for the six months ended March 31, 2007, which represents a 39 percent decrease,
        while the average off-system price was lower by 31 percent from an average
        of
        $11.038/dth for the six months ended March 31, 2006 to $7.623 /dth for the
        six
        months ended March 31, 2007.
Interruptible
NJNG
        serves 49 customers through interruptible sales and/or transportation tariffs.
        Sales made under the interruptible sales tariff are priced on market-sensitive
        energy parity rates. Although therms sold and transported to interruptible
        customers represented approximately 2.8 percent and 4 percent of total
        throughput for the six months ended March 31, 2007 and 2006, respectively,
        they
        accounted for less than 1 percent of the total utility gross margin in both
        periods due to the sharing formulas that govern these sales. Under these
        formulas, NJNG retains 10 percent of the utility gross margin from interruptible
        sales and 5 percent of the utility gross margin from transportation sales,
        with
        90 percent and 95 percent, respectively, credited to firm sales customers
        through the BGSS. Interruptible sales were .03 and .2 Bcf for the six months
        ended March 31, 2007, and 2006, respectively. In addition, NJNG transported
        1.87
        Bcf and 2.6 Bcf for the six months ended March 31, 2007 and 2006, respectively,
        for its interruptible customers.
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Operation
        and Maintenance Expense
Operation
        and maintenance (O&M) expense increased $1.6 million, or 7.6 percent, and
        $2.0 million, or 4.9 percent, for the three months and six months ended March
        31, 2007, respectively, compared with the same periods in the prior fiscal
        year.
        The increase was due primarily to higher labor costs of $1.1 million, a reserve
        for an anticipated BPU settlement relating to BGSS costs of $500,000, partially
        offset by lower bad debt expense of $393,000 during the first half of fiscal
        year 2007. Higher labor costs are due primarily to an increase in the number
        of
        employees as well as annual wage increases, while lower bad debt expense
        is a
        direct result of decreased revenue, through customer refunds and lower sales,
        as
        noted above. The reserve for an anticipated BPU settlement charge is related
        to
        a proposed stipulation that includes settlement of a prior gas supply audit
        with
        the BPU related to natural gas purchased and used for the Company's own
        operational purposes.
Operating
        Income
Operating
        income increased $1.2 million, or 2.1 percent, and $4.5 million, or 4.9
        percent, for the three months and six months ended March 31, 2007, respectively,
        compared with the same periods in the prior fiscal year. The increase was
        due
        primarily to the implementation of the CIP tariff which became effective
        beginning in fiscal 2007. The implementation of the CIP allowed for the recovery
        of lower utility gross margin, as a result of the decrease in natural gas
        used
        due to the warmer than normal weather, as well as the reduction in customer
        usage per degree day, as noted in the discussion above. During the six months
        ended March 31, 2006, the WNC did not capture reductions in customer usage,
        but
        only the variability experienced by NJNG's utility gross margin as a result of
        weather fluctuations.
Interest
        Charges
Interest
        charges increased $1.3 million and $2.9 million for the three months and
        six
        months ended March 31, 2007, respectively, as compared to the same periods
        in
        the prior fiscal year, due primarily to an increase in short-term borrowings
        and
        higher interest rates, as well as greater costs associated with overrecovered
        gas costs.
Net
        Income
Net
        income decreased $283,000, or 0.8 percent, and increased $942,000 or 1.8
        percent
        in the three and six months ended March 31, 2007, respectively, as compared
        to
        the same periods in the prior fiscal year, due primarily to higher operating
        income as a result of the implementation of the CIP and a reduction in bad
        debt
        expense, partially offset by higher labor expense and the reserve for the
        anticipated BPU settlement charge, as well as higher interest
        expense.
Energy
        Services Operations
Management
        believes that NJRES' gross margin, which is defined as natural gas revenues and
        management fees less natural gas costs and fixed demand costs, is a better
        indicator of results, as revenues from the sale of natural gas to its customers,
        on a wholesale basis, is highly correlated to the wholesale price of natural
        gas. NJRES utilizes contractual assets that it controls for natural gas storage
        and pipeline transportation to meet its various sale and delivery commitments
        to
        its customers.
NJRES
          purchases gas predominantly in the eastern United States and Canada, and
          transports that gas, through the use of pipeline contracts to which it
          has
          reserved capacity through the payment of a fixed demand charge, to either
          storage facilities that it has reserved, primarily in the Appalachian,
          Mid-Continent and Gulf regions of the United States and Canada or directly
          to
          customers in various market areas including the Northeastern region of
          the
          Unite
d
States
          and eastern Canada. Through the use of these contracts for natural gas
          storage
          and pipeline capacity, NJRES is able to take advantage of pricing differences
          between geographic locations, commonly referred to as "locational spreads," as
          well as over different time periods, for the delivery of natural gas to
          its
          customers. NJRES utilizes financial futures, forwards and swap contracts
          to fix
          and protect the cash flows surrounding these transactions.
Predominantly
        all of NJRES' sales to customers result
        in the delivery of natural gas, and therefore, NJRES accounts for its sales
        using the accrual method of accounting by employing the "normal purchase normal
        sale" scope exception of SFAS No. 133,
Accounting
        for Derivative Instruments and Hedging Activities
,
        as
        amended (SFAS 133). NJRES' use of financial futures, forwards and swap contracts
        are designed to qualify as cash flow hedges
under
        SFAS 133, whereby the underlying change in the fair value of these derivative
        instruments is deferred on the balance sheet and recognized in earnings,
        as a
        component of Gas purchases, when the underlying transaction is settled through
        the delivery of natural gas.
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Table
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Demand
        charges of NJRES, which represent the right to use natural gas pipeline and
        storage capacity assets of a third-party for a fixed period of time, are
        expensed ratably over the term of the related natural gas pipeline or storage
        contract. Due to the seasonality of NJRES' revenue stream, and the fixed nature
        of the demand charges, NJRES normally incurs losses during the non-peak summer
        operating period.
NJRES'
        financial results are summarized as follows:
Three
                  Months Ended
Six
                  Months Ended
March
                  31,
March
                  31,
(Thousands)
2007
2006
2007
2006
Operating
                  revenues
$
568,388
$
587,525
$
1,064,175
$
1,350,720
Gas
                  purchases (including fixed demand charges)
482,606
536,038
960,298
1,269,381
Gross
                  margin
85,782
51,487
103,877
81,339
Operation
                  and maintenance expense
4,150
4,423
7,153
6,941
Depreciation
                  and amortization
54
51
108
103
Other
                  taxes
168
150
360
331
Operating
                  income
$
81,410
$
46,863
$
96,256
$
73,964
Net
                  income
$
47,180
$
26,999
$
54,999
$
41,896
NJRES'
        gross margin increased by $34.3 million for the three months ended March
        31, 2007, compared with the same period last fiscal year as a result of
        favorable pricing differentials for natural gas storage positions between
        the
        cost to acquire the storage position and the market price for natural gas.
        The
        pricing differentials were the result of weather impacts. In the prior fiscal
        year, as a result of the disruptive effects of hurricanes Rita and Katrina
        the
        pricing differentials were greater in the first quarter of fiscal year 2006,
        and
        then became more normalized during the three months ended March 31, 2006.
        As
        part of its operational strategy, NJRES had secured natural gas storage and
        sales positions that
resulted
        in
a gross margin amount that was greater on a quarter over quarter
        basis, which was the result of both larger volumes and different market prices
        for natural gas. The weather impacts on market prices for the three months
        ended
        March 31, 2007 further increased the gross margin of NJRES on a comparative
        basis to the same period in the prior fiscal year.
NJRES'
        gross margin increased by $22.5 million, for the six months ended March 31,
        2007, compared with the same period last fiscal year due to the impact of
        weather on prices during the three months ended March 31, 2007 as described
        above, larger gas volumes being sold and a change in market prices between
        the
        cost to acquire and transport natural gas, partially offset by the absence
        of
        benefits from certain natural gas basis swaps that were deemed ineffective
        cash
        flow hedges upon adoption of SFAS 133, which were concluded and settled in
        October 2006.
NJRES'
        operations and maintenance expense decreased by $273,000 and increased $212,000
        for the three and six months ended March 31, 2007, respectively, compared
        with
        the same periods last fiscal year. The decrease for the three months ended
        March
        31, 2007, as compared to the same period in the prior fiscal year, is due
        primarily to charitable contributions made in fiscal 2006 that did not recur
        in
        the current fiscal year, partially offset by higher labor and incentive costs.
        The increase for the six months ended March 31, 2007, as compared to the
        same
        period in the prior fiscal year, was due to increased labor and incentive
        costs
        associated with operational growth.
Operating
        income increased by $34.5 million and $22.3 million and net income increased
        by
        $20.2 million and $13.1 million for the three and six months ended March
        31,
        2007, respectively, compared with the same periods in the prior fiscal year
        due
        primarily to the increases in gross margin and variance in operations and
        maintenance expense described above.
Future
        results are subject to NJRES' ability to maintain and expand its wholesale
        marketing activities and are contingent upon many other factors, including
        an
        adequate number of appropriate counterparties, sufficient liquidity in the
        energy trading market and continued access to the capital markets. In addition,
        NJRES' gross margin from its portfolio of capacity assets is generally greater
        in the winter months, while the fixed costs of these assets are spread
        throughout the year. Accordingly, the results for the three and six months
        ended
        March 31, 2007 are not expected to be an indication of the results for the
        fiscal year.
29
Retail
        and Other Operations
The
        financial results of Retail and Other consists primarily of NJRHS, which
        provides service, sales and installation of appliances to over 144,000
        customers; CR&R, which holds and develops commercial real estate; NJR
        Energy, an investor in energy-related ventures through its operating
        subsidiaries; NJNR Pipeline, which consists of the Company's equity investment
        in Iroquois;  NJR Steckman Ridge Storage Company, which holds the Company's
        equity investment in Steckman Ridge; and NJR Investment, which makes certain
        energy-related equity investments.
The
        Consolidated financial results of Retail and Other are summarized as
        follows:
Three
                  Months Ended
March
                  31,
Six
                  Months Ended
March
                  31,
(Thousands)
2007
2006
2007
2006
Operating
                  revenues
$
5,508
$
5,560
$
11,848
$
12,663
Other
                  income
$
832
$
788
$
1,639
$
1,442
Net
                  income
$
121
$
(307
)
$
518
$
377
Retail
        and Other Operating revenue decreased by $52,000, or 1 percent, and $815,000,
        or
        6.4 percent, for the three and six months ended March 31, 2007, respectively,
        compared with the same periods last year. The decreases were due primarily
        to a
        gain of $617,000 in the first half of fiscal 2006 on the completion of land
        and
        building sales contracts by CR&R that did not recur in fiscal
        2007.
The
        increase in Other income is attributed to improved earnings from NJNR Pipeline's
        equity investment in Iroquois. Through March 31, 2007, NJR has invested $52.5
        million for the right to acquire, develop, construct and finance Steckman
        Ridge.
        It is currently under development and operational start-up is expected in
        fiscal
        2009.
Liquidity
        and Capital Resources
Consolidated
NJR's
        objective is to maintain a consolidated capital structure that reflects the
        different characteristics of each business segment and provides adequate
        financial flexibility for accessing capital markets as required.
NJR's
        consolidated capital structure was as follows:
March
                  31,
2007
September
                  30,
2006
Common
                  stock equity
58
%
50
%
Long-term
                  debt
30
27
Short-term
                  debt
12
23
Total
100
%
100
%
NJR
        did
        not repurchase any shares of its common stock during the six month period
        ending
        March 31, 2007.
NJR
        and
        its unregulated subsidiaries rely on utilizing committed credit facilities
        to
        provide liquidity to meet working capital and external debt-financing
        requirements.
NJNG
        satisfies its debt needs by issuing short- and long-term debt based upon
        its own
        financial profile. NJNG does not guarantee or otherwise directly support
        the
        debt of NJR. The seasonal nature of NJNG's operations creates large short-term
        cash requirements, primarily to finance natural gas purchases and customer
        accounts receivable. NJNG obtains working capital for these requirements,
        and
        for the temporary financing of construction and MGP remediation expenditures
        and
        energy tax payments, through the issuance of commercial paper and short-term
        bank loans.
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As
        of
        March 31, 2007, NJR, NJRES and NJNG had committed credit facilities of $605
        million with approximately $423 million available under these facilities
        (see
Note
        6. Debt).
NJR,
        NJNG
        and NJRES currently anticipate that their financing requirements in fiscal
        2007
        will be met through internally generated cash, the issuance of short-term
        debt
        and proceeds from the Company's Automatic Dividend Reinvestment Plan.
The
        following table is a summary of NJR's, NJNG's and NJRES's contractual cash
        obligations and their applicable payment due dates as of March 31,
        2007:
Up to
2-3
4-5
After
(Thousands)
Total
1 Year
Years
Years
5 Years
Long-term
                  debt
*
$
448,822
$
12,835
$
22,110
$
72,973
$
340,904
Capital
                  lease obligations
*
87,399
7,994
15,988
19,178
44,239
Operating
                  leases
*
7,897
2,652
3,401
1,254
590
Short-term
                  debt
127,000
127,000
—
—
—
Clean
                  energy program
*
15,672
10,775
4,897
—
—
Construction
                  obligations
5,826
5,826
—
—
—
Natural
                  gas supply purchase obligations - NJNG
155,550
150,306
548
4,696
—
Demand
                  fee commitments - NJNG
429,831
80,848
148,479
110,956
89,548
Natural
                  gas supply purchase obligations - NJRES
1,043,587
534,858
508,729
—
—
Demand
                  fee commitments - NJRES
207,855
71,576
86,624
34,968
14,687
Total
                  NJR, NJNG and NJRES contractual cash
Obligations
$
2,529,439
$
1,004,670
$
790,776
$
244,025
$
489,968
*These
        obligations include an interest component.
As
        of
        March 31, 2007, there were NJR guarantees covering approximately $270 million
        of
        natural gas purchases, demand fee commitments and swap agreements of NJRES,
        NJNG
        and NJR Energy, not yet reflected in Accounts payable on the Condensed
        Consolidated Balance Sheet. These NJR guarantees are related to transactions
        with various expiration dates through October 2016. NJR would have to provide
        for payment in the event of default by NJRES, NJNG or NJR Energy.
Not
        included in the table above is NJR's obligation to fund up to $125 million for
        the development and construction of the natural gas storage facility to be
        owned
        and operated by Steckman Ridge.
The
        Company is not currently required to make minimum pension funding contributions
        during fiscal 2007. The Company's funding level to its OPEB plans is expected to
        be approximately $600,000 annually over the next five years.
Off-Balance
        Sheet Arrangements
The
        Company does not have any off-balance sheet financing arrangements.
Cash
        Flows
Operating
        Activities
As
        presented in the Condensed Consolidated Statements of Cash Flows, net cash
        provided by operating activities was $241.6 million for the six months ended
        March 31, 2007, compared with $98.1 million provided by operating activities
        in
        the same period in the prior fiscal year. The increase in operating cash
        flow
        during the first half of fiscal 2007 primarily reflects higher net income,
        lower
        MGP expenditures and the following changes in the components of working
        capital:
·
A
                decrease in the change in accounts receivable of $57.6 million and
                an
                increase in customer credit balances of $56.7 million, primarily
                as a
                result of a $71.5 million credit issued to retail customers and warmer
                weather and reduced customer usage at NJNG.
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            of Contents
·
A
                decrease in gas inventory at NJNG due to lower volumes held in inventory,
                as well as lower wholesale natural gas
                prices.
·
An
                increase in gas purchases payable at NJNG and NJRES as a result of
                increased customer demand.
·
An
                increase in broker margin balances resulting from settlements during
                the
                six month period and lower market prices on natural gas futures
                contracts.
NJNG's
        MGP expenditures, exclusive of insurance recoveries, are currently expected
        to
        total $26.8 million in fiscal 2007 (see
Note
        12. Commitments and Contingent Liabilities).
Operating cash flows for the six months ended March 31, 2007 include the
        receipt
        of $12.8 million in January, 2007 related to the settlement of certain claims
        against NJNG's insurance company (see
Note
        12. Commitments and Contingent Liabilities - Legal Proceedings - Kemper
        Insurance Company Litigation)
.
Financing
        Activities
Cash
        flow
        used in financing activities totaled $158.7 million for the six months ended
        March 31, 2007, compared with $79.1 million used in the same period in the
        prior
        fiscal year. The change was due primarily to a decrease in short-and long-term
        borrowings, compared with the same period in the prior fiscal year.
NJNG's
        short-term debt primarily supports Gas inventory build-up during the summer
        months and Gas purchases. NJNG's short-term debt decreased due primarily to
        seasonal cash flows during the winter heating season.
NJR's
        short-term borrowings decreased during the six months ended March 31, 2007
        due
        primarily to an increase in cash attributed to the reduction in NJRES' natural
        gas storage inventory, which was offset by acquisition costs relating to
        NJR's
        investment in the Steckman Ridge gas storage facility.
NJRES'
        use of high-injection, high-withdrawal storage facilities and anticipated
        pipeline park-and-loan arrangements, combined with related hedging activities
        in
        the volatile wholesale natural gas market, create significant short-term
        cash
        requirements, which are funded by NJR or its committed credit facility
        guaranteed by NJR.
In
        October 2005, under the New Jersey Economic Development Authority (EDA) Act,
        NJNG used proceeds from EDA Series 2005A and 2005B bonds to refinance NJNG's
        $10.3 million, 5.38 percent Series W First Mortgage Bonds and its $10.5
        million, 6.25 percent Series Y First Mortgage Bonds. Also in October 2005,
        the EDA issued its 4.9 percent (Series 2005C) Natural Gas Facilities Revenue
        Bonds. The net proceeds from the 2005C bonds were deposited into a construction
        fund. NJNG immediately drew down $2.5 million from the construction fund
        and
        issued its $15 million, 4.9 percent Series KK bonds to the EDA with a maturity
        date of October 1, 2040. NJNG drew down an additional $4 million from the
        construction fund in the fourth quarter of fiscal 2006.
In
        December 2006 and 2005, NJNG received $5.5 million and $4.1 million in
        connection with the sale-leaseback of its vintage 2006 and 2005 meters,
        respectively. NJNG plans to continue the sale-leaseback meter program on
        an
        annual basis.
Investing
        Activities
Cash
        flow
        used in investing activities totaled $79.8 million for the six months ended
        March 31, 2007, compared with $35.3 million for the same period in the prior
        fiscal year. The increase in cash used during the first half of fiscal 2007,
        as
        compared with the same period in the prior fiscal year, was due to NJR's
        investment of $52.5 million in the Steckman Ridge partnership assets along
        with
        increased capital expenditures for utility plant additions, partially offset
        by
        the absence of the net $12.5 million deposit into a construction fund created
        under the EDA financing arrangement in fiscal 2006 described above.
NJNG's
        capital expenditures result primarily from the need for services, mains and
        meters to support its continued customer growth, pipeline safety rulemaking
        and
        general system improvements. NJNG's capital expenditures are expected to
        increase in fiscal 2007 and 2008, compared with fiscal 2006, as a result
        of
        increased system integrity projects and expected replacement required under
        pipeline safety rulemaking.
32
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NJRES
        does not currently anticipate any significant capital expenditures in fiscal
        2007 and 2008.
Retail
        and Other capital expenditures each year have been primarily made in connection
        with investments made to preserve the value of real estate holdings. During
        the
        second quarter of fiscal 2007, NJR and Spectra Energy Corporation, through
        their
        respective subsidiaries, formed a partnership to develop and operate the
        Steckman Ridge gas storage facility. NJR will share 50 percent of the
        acquisition and development costs of the storage facility, up to a maximum
        of
        $125 million, of which $52.5 million was expended through March 2007, as
        noted
        above.
Credit
        Ratings
The
        table
        below summarizes NJNG's credit ratings issued by two rating entities, Standard
        and Poor's (S&P), and Moody's Investors Service, Inc.
        (Moody's).
Standard &
Poor's
Moody's
Corporate
                    Rating
A+
N/A
Commercial
                    Paper
A-1
P-1
Senior
                    Secured
AA-
Aa3
Ratings
                    Outlook
Negative
Stable
NJNG's
        S&P and Moody's Senior Secured ratings are investment grade ratings and
        represent the sixth highest rating within the investment grade category.
        Moody's
        and S&P give NJNG's commercial paper the highest rating within the
        Commercial Paper investment grade category. Investment grade ratings are
        generally divided into three groups: high, upper medium and medium. NJNG's
        senior secured ratings and the commercial paper ratings fall into the high
        group. NJR is not a rated entity.
NJNG
        is
        not party to any lending agreements that would accelerate the maturity date
        of
        any obligation caused by a failure to maintain any specific credit rating.
        A
        rating set forth above is not a recommendation to buy, sell or hold the
        Company's or NJNG's securities and may be subject to revision or withdrawal at
        any time. Each rating set forth above should be evaluated independently of
        any
        other rating.
The
        timing and mix of any external financings will target a common equity ratio
        that
        is consistent with maintaining the Company's current short- and long-term credit
        ratings.
33
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IT
EM
        3.  QUANTITATIVE AND QUALITATIVE
        DISCLOSURES ABOUT MARKET RISK
Financial
        Risk Management
Commodity
        Market Risks
Natural
        gas is a nationally traded commodity, and its prices are determined effectively
        by the New York Mercantile Exchange (NYMEX) and over-the-counter markets.
        The prices on the NYMEX and over-the-counter markets generally reflect the
        notional balance of natural gas supply and demand, but are also influenced
        significantly from time to time by other events.
The
        regulated and unregulated natural gas businesses of the Company and its
        subsidiaries are subject to market risk due to fluctuations in the price
        of
        natural gas. To hedge against such fluctuations, the Company and its
        subsidiaries have entered into futures contracts, options agreements and
        swap
        agreements. To manage these instruments, the Company has well-defined risk
        management policies and procedures that include daily monitoring of volumetric
        limits and monetary guidelines. The Company's natural gas businesses are
        conducted through three of its operating subsidiaries. First, NJNG is a
        regulated utility that uses futures, options and swaps to hedge against price
        fluctuations and its recovery of natural gas costs is governed by the BPU.
        Second, NJRES uses futures, options and swaps to hedge purchases and sales
        of
        natural gas. Finally, NJR Energy has entered into two swap transactions to
        hedge
        an 18-year fixed-price contract to sell remaining volumes of approximately
        8.5
        Bcf of natural gas (Gas Sales Contract) to an energy marketing company which
        expire on October 31, 2010. NJR Energy has hedged both the price and
        physical delivery risks associated with the Gas Sales Contract.
The
        following table reflects the changes in the fair market value of commodity
        derivatives from September 30, 2006 to March 31, 2007:
Balance
September 30,
Increase
(Decrease)
in Fair
Amounts
Balance
March 31,
(Thousands)
2006
Market Value
Settled
2007
NJNG
$
(82,451
)
$
10,399
$
(1,202
)
$
(70,850
)
NJRES
116,547
(26,373
)
91,495
(1,321
)
NJR
                  Energy
35,423
754
360
35,817
Total
$
69,519
$
(15,220
)
$
90,653
$
(36,354
)
There
        were no changes in methods of valuations during the three months ended March
        31,
        2007.
The
        following is a summary of fair market value of commodity derivatives at March
        31, 2007, by method of valuation and by maturity for each fiscal year
        period:
(Thousands)
Remaining
2007
2008
2009
                  - 2011
After
2011
Total
FairValue
Price
                  based on NYMEX
$
(29,616
)
$
(1,761
)
$
(3,071
)
$
—
$
(34,448
)
Price
                  based on over-the-counter
—
—
—
—
—
Published
                  quotations
(1,128
)
(840
)
62
—
$
(1,906
)
Total
$
(30,744
)
$
(2,601
)
$
(3,009
)
$
—
$
(36,354
)
34
Table
            of Contents
The
        following is a summary of commodity derivatives by type as of March 31,
        2007:
Volume
Price per
Amounts
                  Included in
Derivatives
(Bcf)
Mmbtu
(Thousands)
NJNG
Futures
(18.3)
$
6.45
                  - $ 9.39
$
(18,296
)
Options
5.0
$
7.50
                  - $ 11.00
2,934
Swaps
6.1
$
3.99
                  - $ 8.74
(55,488
)
NJRES
Futures
(16.9)
$
6.32
                  - $ 11.59
(9,596
)
Swaps
(42.5)
$
6.30
                  - $ 11.98
8,275
NJRE
Swaps
39.0
$
3.07
                  - $ 4.41
35,817
Total
$
(36,354
)
The
        Company uses a value-at-risk (VaR) model to assess the market risk of its
        net
        futures, options and swap positions. VaR represents the potential loss in
        value
        of NJRES' trading portfolio due to adverse market movements over a defined time
        horizon (NJRES utilizes holding periods of 1 day and 10 days) with a specified
        confidence level (NJRES utilizes either a 95 percent or 99 percent confidence
        level). As an example, utilizing a 1 day holding period with a 95 percent
        confidence level would indicate that there is a 5 percent chance that the
        liquidation value of the NJRES portfolio would fall below the expected trading
        value by an amount at least as large as the calculated VaR.
The
        VaR
        as of March 31, 2007, using the variance-covariance method with a 95 percent
        confidence level and a 1-day holding period, was $2.4 million. The VaR with
        a 99
        percent confidence level and a 10-day holding period was $10.7 million. These
        estimates may not be indicative of actual results because actual market
        fluctuations may differ from forecasted fluctuations.
Wholesale
        Credit Risk
NJNG,
        NJRES and NJR Energy engage in wholesale marketing activities. NJR monitors
        and
        manages the credit risk of its wholesale marketing operations through credit
        policies and procedures that management believes reduce overall credit risk.
        These policies include a review and evaluation of prospective counterparties'
financial statements and/or credit ratings, daily monitoring of counterparties'
credit limits, daily communication with traders regarding credit status and
        the
        use of credit mitigation measures, such as minimum margin requirements,
        collateral requirements and netting agreements. Examples of collateral include
        letters of credit and cash received for either prepayment or margin
        deposit.
The
        Company's Risk Management Committee (RMC) continuously monitors NJR's credit
        risk management policies and procedures. The RMC is a group of senior officers
        from NJR-affiliated companies that meets twice a month and, among other things,
        evaluates the effectiveness of existing credit policies and procedures, reviews
        material transactions and discusses emerging issues.
Following
        is a summary of gross and net credit exposures, grouped by investment and
        noninvestment grade counterparties, as of March 31, 2007. Gross credit exposure
        is defined as the unrealized fair value of derivative and energy trading
        contracts plus any outstanding receivable for the value of natural gas delivered
        for which payment has not yet been received. Net credit exposure is defined
        as
        gross credit exposure reduced by collateral received from counterparties
        and/or
        payables, where netting agreements exist. The amounts presented below exclude
        accounts receivable for retail natural gas sales and services.
35
Table
            of Contents
Unregulated
        counterparty credit exposure as of March 31, 2007, is as follows:
(Thousands)
Gross
                  Credit
Exposure
Net
                  Credit
Exposure
Investment
                  grade
$
216,864
$
182,915
Noninvestment
                  grade
1,148
-
Internally
                  rated investment grade
15,005
7,275
Internally
                  rated noninvestment grade
7,666
-
Total
$
240,683
$
190,190
NJNG's
        counterparty credit exposure as of March 31, 2007, is as follows:
(Thousands)
Gross
                  Credit
Exposure
Net
                  Credit
Exposure
Investment
                  grade
$
29,196
$
24,794
Noninvestment
                  grade
60
-
Internally
                  rated investment grade
2,189
997
Internally
                  rated noninvestment grade
290
-
Total
$
31,735
$
25,791
Due
        to
        the inherent volatility in the prices of natural gas commodities and
        derivatives, the market value of contractual positions with individual
        counterparties could exceed established credit limits or collateral provided
        by
        those counterparties. If a counterparty failed to perform the obligations
        under
        its contract (for example, failed to deliver or pay for natural gas), then
        the
        Company could sustain a loss. This loss would comprise the loss on natural
        gas
        delivered but not paid for and/or the cost of replacing natural gas not
        delivered at a price higher than the price in the original contract. Any
        such
        loss could have a material impact on the Company's financial condition, results
        of operations or cash flows.
Interest
        Rate Risk-Long-Term Debt
At
        March
        31, 2007, the Company (excluding NJNG) had no variable-rate long-term
        debt.
At
        March
        31, 2007, NJNG had total variable-rate, tax-exempt long-term debt of $97
        million, which is hedged by interest rate caps expiring in July 2009 that
        limit NJNG's variable-rate debt exposure from the tax-exempt EDA bonds at 4.5
        percent.
36
Table
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I
TEM
        4.
CONTROLS
        AND PROCEDURES
As
        of the
        end of the period reported on in this report, NJR has undertaken an evaluation
        under the supervision and with the participation of management, including
        the
        Chief Executive Officer and Chief Financial Officer, of the effectiveness
        of the
        design and operation of its disclosure controls and procedures, pursuant
        to
        Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that
        evaluation, the Chief Executive Officer and Chief Financial Officer concluded
        that NJR's disclosure controls and procedures were effective with regard to the
        recording, processing, summarizing and reporting, within the time periods
        specified in the SEC's rules and forms, of information required to be
        disclosed by NJR in the reports that it files or submits under the
        Exchange Act.
NJR
        continually reviews its disclosure controls and procedures and makes changes,
        as
        necessary, to ensure the quality of its financial reporting. There have been
        no
        changes in internal control over financial reporting that occurred during
        the
        second quarter of 2007 that have materially affected, or are reasonably likely
        to materially affect, internal control over financial
        reporting.
37
Table
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P
ART
        II - OTHER INFORMATION
I
TEM
        1.
LEGAL
        PROCEEDINGS
Information
        regarding reportable legal proceedings is contained in Part I, "Item 3. Legal
        Proceedings" in our Annual Report on Form 10-K for the year ended September
        30,
        2006, as updated in our subsequent Quarterly Report on Form 10-Q for the
        quarter
        ended December 31, 2006 and is set forth in Part I, Item 1, Note 12,
Commitment
        and Contingent Liabilities—Legal Proceedings
.
        The
        following describes legal proceedings, if any, that became reportable during
        the
        quarter ended March 31, 2007 and amends and restates descriptions of previously
        reported legal proceedings in which there have been material developments
        during
        such quarter or which are otherwise updated in this report.
No
        legal
        proceedings became reportable during the quarter ended March 31, 2007 and
        there
        have been no material developments during such quarter regarding any previously
        reported legal proceedings, which have not been previously
        disclosed.
I
TEM
        1A.
RISK
        FACTORS
Part
        I,
        Item 1A, "Risk Factors," of our 2006 Annual Report on Form 10-K includes
        a
        detailed discussion of our risk factors. The information presented below
        updates, and should be read in conjunction with, the risk factors and
        information disclosed in our 2006 Form 10-K.
Investing
        through partnerships or joint ventures decreases NJR's ability to manage
        risk.
NJR
        and its subsidiaries have utilized joint ventures for certain non-regulated
        energy investments, including Steckman Ridge and Iroquois, and although they
        currently have no specific plans to do so, NJR and its subsidiaries may acquire
        interests in other joint ventures in the future. In these joint ventures,
        NJR
        and its subsidiaries may not have the right or power to direct the management
        and policies of the joint ventures and other participants may take action
        contrary to their instructions or requests and against their policies and
        objectives. In addition, the other participants may become bankrupt or have
        economic or other business interests or goals that are inconsistent with
        those
        of NJR and its subsidiaries. If a joint venture participant acts contrary
        to the
        interests of NJR or its subsidiaries, it could harm NJR's financial condition,
        results of operations or cash flows.
NJR
        and its subsidiaries may be unable to obtain governmental approvals, property
        rights and/or financing for the construction, development and operation of
        its
        non-regulated energy investments.
Construction,
        development and operation of energy investments, such as natural gas storage
        facilities and pipeline transportation systems, is subject to federal and
        state
        regulatory oversight and requires certain property rights and approvals,
        including permits and licenses for such facilities and systems. NJR, its
        subsidiaries, or its join venture partnerships may be unable to obtain, in
        a
        cost-efficient or timely manner, all such needed property rights, permits
        and
        licenses in order to successfully construct and develop its non-regulated
        energy
        facilities and systems. Successful financing of NJR's energy investments will
        require participation by willing financial institutions and lenders, as well
        as
        acquisition of capital at favorable interest rates. If NJR and its subsidiaries
        do not obtain the necessary regulatory approvals and financing, their equity
        investments could become impaired and such impairment could have a materially
        adverse effect on NJR's financial condition, results of operations or cash
        flows.
38
Table
            of Contents
I
TEM
        2.
UNREGISTERED
        SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
In
        1996,
        the NJR Board of Directors authorized the repurchase of up to 1 million of
        the
        Company's common shares. Since 1996, the repurchase plan has been expanded
        several times, most recently in January 2006, to permit the repurchase of
        up to
        3.5 million shares. As of March 31, 2007, the Company has repurchased 3.15
        million shares of its common stock.
The
        following table sets forth NJR's repurchase activity for the quarter ended March
        31, 2007:
Period
Total
                  Number of Shares (or Units) Purchased
Average
                  Price Paid per Share (or Unit)
Total
                  Number of Shares (or Units) Purchased as Part of Publicly Announced
                  Plans
                  or Programs
Maximum
                  Number (or Approximate Dollar Value) of Shares (or Units) That
                  May Yet Be
                  Purchased Under the Plans or Programs
01/1/07
                  - 01/31/07
—
—
—
348,147
02/1/07
                  - 02/28/07
—
—
—
348,147
03/1/07
                  - 03/31/07
—
—
—
348,147
Total
—
—
—
348,147
I
TEM
        4.
SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a)
An
        annual
        meeting of shareholders was held on January 24, 2007 and information
        regarding such meeting was included in the Company's Quarterly Report on Form
        10-Q for the quarter ended December 31, 2006,
I
TEM
        6.
EXHIBITS
(a)
Exhibits
10.1
Limited
                  Liability Company Agreement of Steckman Ridge GP, LLC dated as
                  of March 2,
                  2007
10.2
Limited
                  Partnership Agreement of Steckman Ridge, LP dated as of March 2,
                  2007
31.1
Certification
                  of the Chief Executive Officer pursuant to section 302 of the
                  Sarbanes-Oxley Act
31.2
Certification
                  of the Chief Financial Officer pursuant to section 302 of the
                  Sarbanes-Oxley Act
32.1
Certification
                  of the Chief Executive Officer pursuant to section 906 of the
                  Sarbanes-Oxley Act*
32.2
Certification
                  of the Chief Financial Officer pursuant to section 906 of the
                  Sarbanes-Oxley Act*
*This
        certificate accompanies this report pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002 and shall not be deemed filed by NJR for purposes
        of
        Section 18 or any other provision of the Securities Exchange Act of 1934,
        as
        amended.
39
Table
            of Contents
S
IGNATURES
Pursuant
                  to the requirements of the Securities Exchange Act of 1934, the
                  Registrant
                  has duly caused this report to be signed on its behalf by the undersigned
                  thereunto duly authorized.
NEW
                  JERSEY RESOURCES
Date:
                  May 2, 2007
/s/Glenn
                  C. Lockwood
Glenn
                  C. Lockwood
Senior
                  Vice President and Chief Financial
                  Officer