New Jersey Resources (NJR), a leader in the energy industry, has ushered in a new era with the implementation of our Conserve to Preserve business philosophy. It is designed to help customers conserve energy, while saving money on their energy bills. At the same time, the program helps to fully align the financial interests of the Company, which allows NJR to remain committed to delivering a superior return to shareowners.

NJR's commitment to a superior return is reflected in 15 consecutive years of earnings growth. In fiscal 2006, shareowners were rewarded with a 1-year total return of 10.4 percent, and on a longer-term basis, have enjoyed a 3-year average annual total return of 14 percent.

NJR's major operating subsidiaries include New Jersey Natural Gas (NJNG), NJR Energy Services (NJRES) and NJR Home Services (NJRHS). The NJR family of companies serves customers in New Jersey and in states from the Gulf Coast to New England, and Canada.

Principal subsidiary NJNG is one of the fastest-growing local distribution companies in the nation, serving over 470,000 customers. NJNG's annual customer growth rate is about 2.2 percent, better than the national average. Ninety five percent of the new homes built in NJNG's service territory use natural gas. In addition, over 130,000 homes currently heat with other fuels, representing the market for potential conversions to natural gas.

For the 14th consecutive year, NJNG achieved the best customer satisfaction record with the New Jersey Board of Public Utilities among all the state's major gas and electric utilities.

NJRES provides unregulated wholesale energy services. Through storage, pipeline capacity, supply management and associated services, NJRES delivers outstanding customer service and expert management of fuel storage and capacity assets.

NJRHS offers retail customers heating, air conditioning and appliance services.