What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-11-26 compared with 2023-11-21 · 270 added, 349 removed, 1256 unchanged (33% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Factors that the Company analyzes in determining whether an impairment in its long-lived assets exists include:

a significant decrease in the market price of a long-lived asset;

a significant adverse change in the extent in which a long-lived asset is being used in its physical condition;

legal proceedings or other contributing factors;

significant business climate changes;

accumulations of costs in significant excess of the amounts expected;

a current-period operating or cash flow loss combined with a history of such events;

and current expectations that more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its estimated useful life.

During fiscal 2024 and 2023, there were no events or circumstances that indicated that the carrying value of long-lived assets or finite-lived intangibles was not recoverable.

Debt Issuance Costs

Debt issuance costs are capitalized and amortized as interest expense on a basis which approximates the effective interest method over the term of the related debt.

Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt.

Debt for the total unamortized debt issuance costs that are recorded as a reduction to long-term debt on the Consolidated Balance Sheets.

Sale Leasebacks

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These agreements include options to renew the lease or repurchase the asset at the end of the term.

As NJNG retains control of the natural gas meters, these arrangements do not qualify as a sale.

Proceeds from sale leaseback transactions are accounted for as financing arrangements and are included in long-term debt on the Consolidated Balance Sheets.

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Under the financing method, the Company recognizes the proceeds received from the buyer-lessor that constitute a payment to acquire the solar energy asset as a financing arrangement, which is recorded as a component of debt on the Consolidated Balance Sheets.

The Company continues to operate the solar assets and is responsible for related expenses and entitled to retain the revenue generated from SRECs, TRECs, SREC IIs and energy sales.

The ITCs and other tax benefits associated with these solar projects transfer to the buyer;

The Company continues to operate its solar assets and is responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales.

ITCs and other tax attributes associated with these solar projects transfer to the buyer;

however, the payments are structured so that CEV is compensated for the transfer of the related tax attributes.

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Commitments and Contingent Liabilities for more details.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Pension and Postemployment Plans

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Plan assets consist of equity securities, fixed-income securities and short-term investments.

The Company did no t make any discretionary contributions to the pension plans during fiscal 2023 and 2022.

The Company also provides two primarily noncontributory medical and life insurance plans for eligible retirees and dependents.

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Funding of these benefits is made primarily into Voluntary Employee Beneficiary Association trust funds.

The Company contributed $ 4.2 M and $ 6.1 M in aggregate to these plans during fiscal 2023 and 2022, respectively, which is recorded in postemployment employee benefit liability on the Consolidated Balance Sheets.

Employee Benefit Plans for a more detailed description of the Company’s pension and postemployment plans.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Asset Retirement Obligations

The Company recognizes ARO related to the costs associated with cutting and capping NJNG’s main and service natural gas distribution mains, which is required by New Jersey law when taking such natural gas distribution mains out of service.

The Company also recognizes ARO associated with CEV’s solar assets when there are decommissioning provisions in lease agreements that require removal of the asset at the end of the lease term.

ARO are initially recognized when the legal obligation to retire an asset has been incurred and a reasonable estimate of fair value can be made.

The Company recognizes AROs related to the costs associated with cutting and capping NJNG’s main and service natural gas distribution mains, which is required by New Jersey law when taking such natural gas distribution mains out of service.

The Company also recognizes AROs associated with CEV’s solar assets when there are decommissioning provisions in lease agreements that require removal of the asset at the end of the lease term.

AROs are initially recognized when the legal obligation to retire an asset has been incurred and a reasonable estimate of fair value can be made.

The discounted fair value is recognized as an ARO liability with a corresponding amount capitalized as part of the carrying cost of the underlying asset.

The obligation is subsequently accreted to the future value of the expected retirement cost, and the corresponding asset retirement cost is depreciated over the life of the related asset.

Accretion expense associated with CEV’s ARO is recognized as a component of operations and maintenance expense on the Consolidated Statements of Operations.

Accretion amounts associated with NJNG’s ARO are recognized as part of its depreciation expense, and the corresponding regulatory asset and liability will be shown gross on the Consolidated Balance Sheets.

Accretion expense associated with CEV’s AROs are recognized as a component of operations and maintenance expense on the Consolidated Statements of Operations.

Accretion amounts associated with NJNG’s AROs are recognized as part of its depreciation expense, and the corresponding regulatory asset and liability will be shown gross on the Consolidated Balance Sheets.

Estimating future removal costs requires management to make significant judgments because most of the removal obligations span long time frames and removal may be conditioned upon future events.

Asset removal technologies are also constantly changing, which makes it difficult to estimate removal costs.

Accordingly, inherent in the estimate of ARO are various assumptions including the ultimate settlement date, expected cash outflows, inflation rates, credit-adjusted risk-free rates and consideration of potential outcomes where settlement of the ARO can be conditioned upon events.

Accordingly, inherent in the estimate of AROs are various assumptions including the ultimate settlement date, expected cash outflows, inflation rates, credit-adjusted risk-free rates and consideration of potential outcomes where settlement of the AROs can be conditioned upon events.

In the latter case, the Company develops possible retirement scenarios and assigns probabilities based on management’s reasonable judgment and knowledge of industry practice.

Accordingly, ARO are subject to change.

Accordingly, AROs are subject to change.

The following is an analysis of the change in the Company’s ARO for the fiscal years ended September 30:

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Employee Benefit Plans .

Foreign Currency Transactions

The market area of ES includes Canadian delivery points and, as a result, ES incurs certain natural gas commodity costs and demand fees denominated in Canadian dollars.

Gains or losses that occur as a result of these foreign currency transactions are reported as a component of natural gas purchases on the Consolidated Statements of Operations.

Gains and losses recognized for the fiscal years ended September 30, 2023, 2022 and 2021, are considered immaterial.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Deferred income taxes and postemployment employee benefit assets previously classified within other noncurrent assets on the Consolidated Balance Sheets have been reclassified to their own category.

Intangible assets, net previously classified in its own category on the Consolidated Balance Sheets has been reclassified into other noncurrent assets.

Other noncurrent assets and other noncurrent liabilities previously classified in their own categories on the Consolidated Statements of Cash Flow have been combined into one category.

Recently Adopted Updates to the Accounting Standards Codification

Debt and Other

In August 2020, the FASB issued ASU No.

2020-06, an amendment to ASC 470, Debt , and ASC 815, Derivatives and Hedging , which changes the accounting for convertible instruments by reducing the number of acceptable accounting models to three models, including the embedded derivative, substantial premium and traditional no proceeds allocated models.

The Company adopted this guidance on October 1, 2022.

The Company does not currently have convertible debt instruments, and as a result there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

In May 2021, the FASB issued ASU No.

2021-04, an amendment to ASC 470, Debt , ASC 260, Earnings per Share , ASC 718, Stock Compensation , and ASC 815, Derivatives and Hedging.

The update impacts equity-classified written call options that remain equity-classified after a modification or exchange.

The Company adopted this guidance on October 1, 2022, on a prospective basis.

As the Company does not currently have equity-classified written call options, there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

In July 2021, the FASB issued ASU No.

2021-05, an amendment to ASC 842, Leases , which requires a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or rate as an operating lease if another classification, including sales-type or direct financing, would trigger a loss at the lease commencement date.

The Company adopted this guidance on October 1, 2022, on a prospective basis.

The Company currently does not have any leases that meet this criteria, and as such there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

Other Recent Updates to the Accounting Standards Codification

Business Combinations

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2021-08 , an amendment to ASC 805, Business Combinations , which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers .

The guidance is effective for the Company beginning October 1, 2023, and the Company will apply the updated guidance on a prospective basis to new acquisitions following the date of adoption.

In August 2023, the FASB issued ASU No.

2023-05, an amendment to ASC 805, Business Combinations , which addresses how a joint venture should recognize contributions received upon its formation.

Joint ventures must account for initial assets and liabilities received at fair value on the date the joint venture is formed.

The guidance is effective for the Company for joint ventures formed beginning January 1, 2025, and the Company can elect to apply it either prospectively or retrospectively back to a joint venture’s formation date provided adequate information is available.

Early adoption is permitted.

This amendment would only impact the Company upon adoption if, in the future, it entered into an applicable transaction.

The guidance was effective for the Company beginning October 1, 2023, and was applied on a prospective basis to new acquisitions following the date of adoption.

As the Company has not executed a transaction that would qualify as a business combination, there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

Derivatives and Hedging

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2022-01 , an amendment to ASC 815, Derivatives and Hedging , which addresses fair value hedge accounting of interest rate risk for portfolios of financial assets.

This update further clarifies guidance previously released in ASU 2017-12, which established the “last-of-layer” method, and this update renames that method as the “portfolio layer” method.

The guidance is effective for the Company beginning October 1, 2023, and the transition method can be on a prospective basis for a multiple-layer hedging strategy or a modified retrospective basis for a portfolio layer method.

As the Company does not currently apply hedge accounting to any of its risk management activities, the amendment will have no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

This update further clarifies guidance previously released in ASU No.

2017-12, which established the ”last-of-layer” method, and this update renames that method as the “portfolio layer” method.

The guidance was effective for the Company beginning October 1, 2023.

As the Company does not currently apply hedge accounting to any of its risk management activities, there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Financial Instruments

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The amendment also adds new disclosures for creditors with loan refinancing and restructuring for borrowers experiencing financial difficulty.

The guidance is effective for the Company beginning October 1, 2023, and the Company can elect to apply it on either a modified retrospective or prospective basis.

At this time, the Company has not experienced a troubled debt restructuring, and therefore the amendments will have no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

The guidance was effective for the Company beginning October 1, 2023.

Since the Company has not experienced a troubled debt restructuring, there was no impact on its financial position, results of operations, cash flows and disclosures upon adoption.

Other Recent Updates to the Accounting Standards Codification

Fair Value Measurement

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The amendment clarifies the fair value principles when measuring the fair value of an equity security subject to a contractual sale restriction.

The guidance is effective for the Company on October 1, 2024, and will be applied on a prospective basis.

At this time, the Company does not have equity securities subject to contractual sale restrictions, and therefore this amendment would only impact the Company upon adoption if, in the future, it entered into such transactions.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The guidance became effective for the Company on October 1, 2024, and the Company elected to apply it on a prospective basis.

At this time, the Company does not have equity securities subject to contractual sale restrictions, and therefore this amendment would only impact the Company if, in the future, it entered into such transactions.

In March 2023, the FASB issued ASU No.

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If the lessee in these types of arrangements continues to control the use of the underlying asset through a lease, the leasehold improvements are to be amortized over the improvements’ useful life to the common control group, regardless of the lease term.

The guidance is effective for the Company on October 1, 2024, and the Company can elect to apply it either on a prospective basis or retrospectively beginning October 1, 2019, representing the date which the Company adopted ASC 842.

The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations, cash flows and disclosures upon adoption.

The guidance became effective for the Company on October 1, 2024, and the Company elected to apply it on a prospective basis.

At this time, the Company does not have leases that are impacted by this amendment, and therefore it would only impact the Company if, in the future, it entered into applicable transactions.

Business Combinations

In August 2023, the FASB issued ASU No.

2023-05 , an amendment to ASC 805, Business Combinations , which addresses how a joint venture should recognize contributions received upon its formation.

Joint ventures must account for initial assets and liabilities received at fair value on the date the joint venture is formed.

Early adoption is permitted.

This amendment would only impact the Company upon adoption if, in the future, it entered into an applicable transaction.

Segment Reporting

In November 2023, the FASB issued ASU No.

2023-07 , an amendment to ASC 280, Segment Reporting , which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The update requires entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss, and it enhances interim disclosure requirements to conform with annual requirements.

This update became effective for the Company on October 1, 2024, for the first annual period and will become effective on October 1, 2025, for the interim periods.

It will be applied retrospectively to all periods presented and the Company is currently evaluating the amendment to understand the impacts on its future disclosures.

In December 2023, the FASB issued ASU No.

2023-09 , an amendment to ASC 740, Income Taxes , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation and income taxes paid.

It will provide investors more detailed income tax disclosures that would be useful in making capital allocation decisions.

The guidance is effective for the Company on October 1, 2025, and can be applied either prospectively or retrospectively.

Early adoption is permitted.

The Company is currently evaluating the amendment to understand the impacts on its financial position, results of operations, cash flows and disclosures upon adoption.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024-03 , an amendment to ASC 220, Income Statement Reporting , which requires more detailed information about specified categories of expenses included in certain captions presented on the face of the income statement.

This update becomes effective for the Company on October 1, 2027, for the first annual period and on October 1, 2028, for the interim periods.

The Company can elect to apply it either prospectively or retrospectively to all periods presented, with early adoption permitted.

The Company is currently evaluating the amendment to understand the impacts on its disclosures upon adoption.

Revenue is recognized when a performance obligation is satisfied by transferring control of a product or service to a customer.

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Revenue is derived from the contract terms and is recognized as invoiced, with the payment due each month for the previous month’s services.

CEV Renewable energy certificates Certain CEV projects generate TRECs and SREC IIs under the established ADI Program.

A TREC or SREC II is created for every MWh of electricity produced by a solar generator.

The performance obligation of CEV is to generate electricity.

TRECs and SREC IIs under the ADI Program are purchased monthly by a REC Administrator.

Revenue is recognized upon generation.

New Jersey Resources Corporation

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Operations Performance Obligation Description

CEV Renewable energy certificates Certain CEV projects generate TRECs and SREC IIs under the established Administratively Determined Incentive Program.

A TREC or SREC II is created for every MWh of electricity produced by a solar generator.

The performance obligation of CEV is to generate electricity.

TRECs and SREC IIs under the Administratively Determined Incentive Program are purchased monthly by a REC Administrator.

Revenue is recognized upon generation.

ES Natural gas services The performance obligation of ES is to provide the customer transportation, storage and asset management services on an as-needed basis.

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Balance as of September 30, 2022 $ 222,297 $ 13,769 $ 33,246

Increase 9,459 3,418 660

Balance as of September 30, 2022 222,297 13,769 33,246

(Decrease) increase ( 124,757 ) 5,331 11,664

Balance as of September 30, 2023 97,540 19,100 44,910

Increase (decrease) 7,991 994 ( 6,315 )

Balance as of September 30, 2024 $ 105,531 $ 20,094 $ 38,595

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The following table provides information about receivables, which are included within accounts receivable, billed and unbilled, and customers’ credit balances and deposits, respectively, on the Consolidated Balance Sheets as of September 30:

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Total $ 21,120 18,278 23,716 6,565 2,051 $ 71,730

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The EDECA is the legal framework for New Jersey’s public utility and wholesale energy landscape.

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The primary purpose of the audit is to ensure that utilities and their affiliates offering unregulated retail services do not have an unfair competitive advantage over nonaffiliated providers of similar retail services.

A combined competitive services and management audit of NJNG commenced on August 1, 2013.

A draft management audit report was accepted by the BPU on July 23, 2014, for public comment.

To date, NJNG has implemented all audit recommendations with the approval of BPU staff and is waiting for final BPU approval.

A combined competitive services and management audit of NJNG commenced in November 2022.

The audit is still in progress.

NJNG is subject to cost-based regulation;

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Postemployment and other benefit costs 23,772 55,274

Deferred storm damage costs — 2,172

Cost of removal 130,885 112,362

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Overrecovered natural gas costs $ 32,457 $ 30,637

Derivatives at fair value, net — 7,972

Total current regulatory liabilities $ 32,457 $ 30,637

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The Tax Act is an Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, previously known as The Tax Cuts and Jobs Act of 2017.

Other noncurrent regulatory assets include deferred pandemic costs of approximately $ 3.9 M and $ 6.9 M as of September 30, 2023 and 2022, respectively, primarily related to a portion of bad debt associated with customer accounts receivable resulting from the impacts of the COVID-19 pandemic.

These costs are eligible for future regulatory recovery.

On January 5, 2023, NJNG advised the BPU that it will cease deferring COVID-19 costs as of December 31, 2022, and will seek recovery of its regulatory asset balance in its next base rate proceeding.

Other noncurrent regulatory assets include deferred pandemic costs of approximately $ 3.9 M as of both September 30, 2024 and 2023, primarily related to a portion of bad debt associated with customer accounts receivable resulting from the impacts of the novel coronavirus disease pandemic.

These costs are eligible for future regulatory recovery and are included in the base rate case filed on January 31, 2024.

Regulatory assets and liabilities included on the Consolidated Balance Sheets for Adelphia are comprised of the following, as of September 30:

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NJNG administers certain programs that supplement the state’s NJCEP and that allow NJNG to promote clean energy to its residential and commercial customers, as described further below.

NJNG will recover related expenditures and a weighted average cost of capital on the unamortized balance through a tariff rider, with interest, as approved by the BPU, over a two - to 10-year period depending upon the specific program incentive.

NJNG will recover related expenditures and a weighted average cost of capital on the unamortized balance through a tariff rider, with interest, as approved by the BPU, over a three - to 10-year period depending upon the specific program incentive.

Postemployment and Other Benefit Costs

Postemployment and Other Benefit Costs represents NJNG’s underfunded postemployment benefit obligations, as well as a fiscal 2010 tax charge resulting from a change in the deductibility of federal subsidies associated with Medicare Part D, both of which are deferred as regulatory assets and are recoverable, without interest, in base rates.

The BPU approved the recovery of the tax charge through NJNG’s base rates effective October 2016 over a seven-year amortization period.

Postemployment and Other Benefit Costs represents NJNG’s underfunded postemployment benefit obligations.

Employee Benefit Plans .

Deferred Storm Damage Costs

Portions of NJNG’s distribution system incurred significant damage as a result of Post-Tropical Cyclone Sandy in October 2012.

NJNG deferred the uninsured incremental O&M costs associated with its restoration efforts, which were approved for recovery by the BPU through NJNG’s base rates, without interest, effective October 2016 over a seven-year amortization period.

Cost of Removal

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Consistent with GAAP, amounts recorded within accumulated depreciation for regulatory accounting purposes are reclassified out of accumulated depreciation to either a regulatory asset or a regulatory liability depending on whether actual cost of removal is still subject to collection or amounts overcollected will be refunded back to customers.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Other Regulatory Assets

Other regulatory assets consist primarily of deferred costs associated with certain components of NJNG’s SBC, as discussed further in the regulatory proceedings section, and NJNG’s compliance with federal and state-mandated PIM provisions.

Other regulatory assets consist primarily of deferred costs associated with certain components of NJNG’s SBC, as discussed further in the regulatory proceedings section.

NJNG’s related costs to maintain the operational integrity of its distribution and transmission main are recoverable, without interest, subject to BPU review and approval.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Overrecovered Natural Gas Costs

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NJNG’s cost of natural gas includes the purchased cost of the natural gas commodity, fees paid to pipelines and storage facilities, adjustments as a result of BGSS incentive programs and hedging transactions.

Overrecovered natural gas costs represent a regulatory liability that generally occurs when NJNG’s BGSS rates are higher than actual costs and returns to customers, including interest when applicable, in accordance with NJNG’s approved BGSS tariff.

Overrecovered natural gas costs represent a regulatory liability that generally occurs when NJNG’s BGSS rates are higher than actual costs and result in returns to customers, including interest when applicable, in accordance with NJNG’s approved BGSS tariff.

Conversely, underrecovered natural gas costs generally occur during periods when NJNG’s BGSS rates are lower than actual costs, in which case NJNG records a regulatory asset and requests amounts to be recovered from customers in the future.

The following is a description of certain regulatory proceedings during fiscal 2023 and 2024:

On November 2021, the BPU issued an order adopting a stipulation of settlement approving a $ 79.0 M increase to base rates, effective December 1, 2021.

On January 31, 2024, NJNG filed a base rate case with the BPU requesting a natural gas revenue increase of approximately $ 222.6 M including a recovery of infrastructure investments, a change in the Company’s overall rate of return on rate base to 7.57 % and a change in the return on common equity to 10.42 %.

On May 15, 2024, the filing was updated to reflect actual results through March 31, 2024, which reduced the requested increase to approximately $ 219.6 M.

On August 7, 2024, the filing was updated to reflect actual results through June 30, 2024, which modified the requested increase to approximately $ 219.9 M.

On November 21, 2024, the BPU issued an order adopting a stipulation of settlement approving a $ 157.0 M increase to base rates, effective November 21, 2024.

The increase includes an overall rate of return on rate base of 7.08 %, return on common equity of 9.60 %, a common equity ratio of 54.0 % and a depreciation rate of 3.21 %.

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NJNG’s annual BGSS and CIP filings are summarized as follows:

• In November 2020, NJNG notified the BPU of its intent to provide BGSS bill credits to residential and small commercial sales customers effective December 1, 2020 to December 31, 2020.

In December 2020, NJNG notified the BPU of the extension of the BGSS bill credits through January 2021.

The actual bill credits given to customers totaled $ 20.6 M, $ 19.3 M net of tax.

• 2021 BGSS/CIP filing — In May 2021, NJNG submitted to the BPU the annual petition to modify its BGSS, balancing charge and CIP rates.

In November 2021, the BPU approved a $ 2.9 M increase to the annual revenues credited to BGSS and a $ 13.0 M annual increase related to its balancing charge, as well as changes to CIP rates, which will result in a $ 6.3 M decrease to the annual recovery, effective December 1, 2021.

• In November 2021, the BPU approved, on a preliminary basis, NJNG’s annual petition to modify its BGSS, balancing charge and CIP rates for residential and small commercial customers.

The rate changes resulted in a $ 2.9 M increase to the annual revenues credited to BGSS and a $ 13.0 M annual increase related to its balancing charge, as well as changes to CIP rates, which resulted in a $ 6.3 M annual recovery decrease, effective December 1, 2021, and was approved on a final basis in May 2022.

• In November 2021, NJNG submitted notification of its intent to self-implement an increase to its BGSS rate which results in an approximate $ 24.2 M increase to annual revenues credited to BGSS, effective December 1, 2021.

• 2022 BGSS/CIP filing — In June 2022, NJNG submitted its annual petition to modify its BGSS, balancing charge and CIP rates for residential and small commercial customers.

In September 2022, the BPU approved, on a preliminary basis, an $ 81.9 M increase to the annual revenues credited to BGSS and a $ 9.0 M annual increase related to its balancing charge, as well as a $ 10.2 M increase to CIP rates, effective October 1, 2022, which was approved on a final basis on April 12, 2023.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

• On February 22, 2023, NJNG advised the BPU of a bill credit and a reduction to the BGSS rate for residential and small commercial customers, which reduced recoveries by approximately $ 29.9 M, effective March 1, 2023, and was approved on a final basis by the BPU on April 12, 2023.

• In February 2023, NJNG advised the BPU of a bill credit and a reduction to the BGSS rate for residential and small commercial customers, which reduced recoveries by approximately $ 29.9 M, effective March 1, 2023, and was approved on a final basis by the BPU on April 12, 2023.

Bill credits provided to customers from March 2023 through May 2023 totaled approximately $ 32.4 M.

• 2023 BGSS/CIP filing — On June 1, 2023, NJNG filed its annual petition to modify its BGSS, balancing charge and CIP rates for residential and small business customers.

This includes a $ 38.6 M decrease to the annual revenues credited to BGSS, a $ 7.4 M annual decrease related to its balancing charge and a $ 27.5 M increase to CIP rates, effective October 1, 2023.

On September 18, 2023, the BPU approved, on a provisional basis, the filed BGSS and balancing charge changes and a $ 27.0 M increase to CIP rates, based on updated information since the initial filing.

• 2023 BGSS/CIP filing — On April 30, 2024, the BPU approved on a final basis NJNG’s annual filing, which included a decrease of approximately $ 38.6 M to the annual revenues credited to BGSS, an annual decrease of approximately $ 7.4 M related to its balancing charge and an increase of approximately $ 27.0 M to CIP rates for residential and small business customers, effective October 1, 2023.

• 2024 BGSS/CIP filing — On May 31, 2024, NJNG filed its annual petition to modify its BGSS rates for residential and small business customers, the balancing charge and CIP rates.

On September 25, 2024, the BPU approved, on a provisional basis, a decrease of approximately $ 31.0 M to the annual revenues credited to BGSS, an annual increase of approximately $ 40.3 M related to its balancing charge and a decrease of approximately $ 0.8 M to CIP rates, effective October 1, 2024.

BGSS Incentive Programs

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The Company is permitted to annually propose a process to evaluate and discuss alternative incentive programs, should performance of the existing incentives or market conditions warrant re-evaluation.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Energy Efficiency Programs

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Depending on the specific initiative or approval, NJNG recovers costs associated with the programs over a three - to 10-year period through a tariff rider mechanism.

In March 2021, the BPU approved a three-year SAVEGREEN program that included $ 126.1 M of direct investment, $ 109.4 M in financing options and $ 23.4 M in operation and maintenance expenses.

In March 2021, the BPU approved a three-year SAVEGREEN program that included approximately $ 126.1 M of direct investment, approximately $ 109.4 M in financing options and approximately $ 23.4 M in O&M.

SAVEGREEN investments and costs are filed with the BPU on an annual basis.

NJNG’s annual EE filings are summarized as follows:

• 2020 EE filing — In May 2020, NJNG filed a petition with the BPU to minimally decrease its EE recovery rate.

Throughout the course of the proceeding, the Company updated the filing for additional actual information.

Based on the updated information, the BPU approved the request to maintain its existing rate, which results in an annual recovery of approximately $ 11.4 M, effective November 1, 2020.

• 2021 EE filing — In June 2021, NJNG submitted its annual cost recovery filing for the SAVEGREEN programs established from 2010 through 2018.

In January 2022, the BPU approved the stipulation to resolve the current EE annual cost recovery filing, which increases annual recoveries by $ 2.2 M, effective February 1, 2022.

• 2022 EE filing — In June 2022, NJNG submitted its annual cost recovery filing for the SAVEGREEN programs established from 2010 through the present.

In September 2022, the BPU approved the filing, which decreases annual recoveries by $ 3.5 M, effective October 1, 2022.

• 2023 EE filing — On June 1, 2023, NJNG submitted its annual EE filing with the BPU for the recovery of SAVEGREEN costs, proposing an increase in annual recoveries of approximately $ 10.7 M.

On September 27, 2023, the BPU approved an increase to the EE rate increasing annual recoveries by $ 9.0 M based on updated information since the initial filing, effective October 1, 2023

• 2023 EE filing — In June 2023, NJNG submitted its annual EE filing with the BPU for the recovery of SAVEGREEN costs, proposing an increase in annual recoveries of approximately $ 10.7 M.

In September 2023, the BPU approved an increase to the EE rate increasing annual recoveries by approximately $ 9.0 M based on updated information since the initial filing, effective October 1, 2023.

• On November 9, 2023, NJNG filed a letter petition seeking BPU approval to extend NJNG’s current SAVEGREEN program through December 31, 2024, with an additional $ 76.9 M in order to meet customer demand for this program, which was approved by the BPU on April 30, 2024.

• On December 1, 2023, NJNG filed a petition seeking BPU approval of its 2024 SAVEGREEN program, which would support new energy efficiency, demand response and building decarbonization start-up programs from January 1, 2025 through June 30, 2027.

The 2024 SAVEGREEN program includes approximately $ 245.1 M of direct investment, approximately $ 217.2 M in financing options and approximately $ 20.1 M in O&M.

On October 30, 2024, the BPU approved a settlement consisting of $ 205.0 M of direct investment, $ 160.5 M in financing options and $ 20.1 M in O&M, which totals $ 385.6 M.

• 2024 EE filing — On May 31, 2024, NJNG submitted its annual EE filing with the BPU for the recovery of SAVEGREEN costs, proposing an increase in annual recoveries of approximately $ 5.6 M, to be effective January 1, 2025, if approved.

Societal Benefits Charge

1 unchanged sentence

NJNG has submitted the following filings to the BPU, which include a report of program expenditures incurred each program year:

• 2020 SBC filing — In April 2021, the BPU approved a stipulation resolving NJNG’s annual SBC application requesting to recover remediation expenses, including an increase in the RAC of approximately $ 1.3 M annually and an increase to the NJCEP factor, which resulted in an annual increase of approximately $ 6.0 M, effective May 1, 2021.

• 2023 USF filing — In June 2023, NJNG submitted its annual USF filing to the BPU requesting an increase to the statewide USF rate, which will result in an approximately $ 0.7 M increase to annual recoveries.

The BPU approved this matter in September 2023, effective October 1, 2023.

• 2023 SBC filing — In September 2023, NJNG submitted its annual SBC filing to the BPU requesting approval of RAC expenditures through June 2023, which included an increase to the RAC annual recoveries of approximately $ 2.4 M and an increase to the NJCEP annual recoveries of approximately $ 5.5 M, effective April 1, 2024.

On March 20, 2024, the BPU approved NJNG's annual SBC filing.

• 2024 USF filing — On June 28, 2024, NJNG submitted its annual USF filing to the BPU requesting an increase to the statewide USF rate, which resulted in an approximately $ 6.8 M increase to annual recoveries.

On September 25, 2024, the BPU approved this filing, effective October 1, 2024.

• 2024 SBC filing — On September 30, 2024, NJNG submitted its annual SBC filing to the BPU requesting approval of RAC expenditures through June 2024, which included an increase to the RAC annual recoveries of approximately $ 2.4 M and an increase to the NJCEP annual recoveries of approximately $ 1.6 M, which would be effective April 1, 2025.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

• 2021 USF filing — In June 2021, NJNG filed its annual USF compliance filing proposing an annual increase to the statewide USF rate of approximately $ 4.9 M.

In September 2021, the BPU approved the increase, effective October 1, 2021.

• 2021 SBC filing — In March 2022, the BPU approved NJNG’s annual filing to increase the RAC by $ 0.6 M and decrease the NJCEP by $ 2.9 M, effective April 1, 2022.

• 2022 USF filing — In June 2022, NJNG filed its annual USF compliance filing proposing a decrease to the statewide USF rate.

In August 2022, an additional update was submitted on behalf of all NJ utilities with actual information through July 31, 2022.

In September 2022, the BPU approved a decrease based on the August update, which resulted in an annual decrease of approximately $ 1.6 M, effective October 1, 2022.

• 2022 SBC filing — In September 2022, NJNG submitted its annual SBC filing to the BPU requesting approval of RAC expenditures through June 30, 2022, as well as an increase to the RAC annual recoveries of $ 3.8 M and an increase to the NJCEP annual recoveries of $ 2.2 M, with a proposed effective date of April 1, 2023.

On April 12, 2023, the BPU approved on a final basis an increase to the RAC annual recoveries of $ 3.7 M and a decrease to the NJCEP annual recoveries of $ 0.9 M, effective May 1, 2023.

• 2023 USF filing — On June 28, 2023, NJNG submitted its annual USF filing to the BPU requesting an increase to the statewide USF rate, which will result in a $ 0.7 M increase to annual recoveries.

The BPU approved this matter on September 27, 2023, effective October 1, 2023.

• 2023 SBC filing — On September 11, 2023 , NJNG submitted its annual SBC filing to the BPU requesting approval of RAC expenditures through June 2023, as well as an increase to the RAC annual recoveries of $ 2.4 M and an increase to the NJCEP annual recoveries of $ 5.0 M, which would be effective April 1, 2024.

Infrastructure Programs

NJNG has significant annual capital expenditures associated with the management of its natural gas distribution and transmission system, including new utility plant for customer growth and its associated PIM and infrastructure programs.

NJNG continues to implement BPU-approved infrastructure projects that are designed to enhance the reliability of NJNG’s natural gas distribution system, including SAFE and NJ RISE.

The SAFE program replaced portions of NJNG’s natural gas distribution unprotected steel, cast iron infrastructure and associated services to improve the safety and reliability of the natural gas distribution system.

SAFE I was approved to invest up to $ 130.0 M, exclusive of AFUDC, over a four-year period.

SAFE II was approved to invest up to $ 200.0 M, excluding AFUDC, over a five-year period.

NJNG recovered approximately $ 157.5 M through annual rate filings, with the remainder recovered through subsequent rate cases.

As a condition of approval of the program, NJNG was required to file a base rate case no later than November 2019 and satisfied this requirement with its March 29, 2019 base rate case filing.

NJ RISE consisted of six capital investment projects estimated to cost $ 102.5 M over a five-year period, excluding AFUDC, for natural gas distribution storm-hardening and mitigation projects, along with incremental depreciation expense.

NJ RISE includes a weighted average cost of capital that ranges from 6.74 % to 6.9 % and a return on equity of 9.75 %.

Requests for recovery of future NJ RISE capital costs occurred in conjunction with SAFE II.

In March 2021, NJNG filed a petition with the BPU requesting the final base rate increase for the recovery associated with NJ RISE and SAFE II capital investments cost of approximately $ 3.4 M made through June 30, 2021.

In June 2021, this filing was consolidated with the 2021 base rate case.

In November 2021, the BPU issued an order for the consolidated matter which included approval for the final increase for the NJ RISE and SAFE II programs of $ 0.3 M.

With this approval, the BPU filings with respect to NJ RISE and SAFE II are complete.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

NJNG continues to implement BPU-approved infrastructure projects that are designed to enhance the reliability of NJNG’s natural gas distribution system.

Infrastructure Investment Program

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The total investment for the IIP is approximately $ 507.0 M.

Upon approval from the BPU, investments will be recovered through annual filings to adjust base rates.

Upon approval from the BPU, investments are being recovered through annual filings to adjust base rates.

In October 2020, the BPU approved the Company’s transmission and distribution component of the IIP for $ 150.0 M over five years , effective November 1, 2020.

The recovery of information technology replacement and enhancements that was included in the original IIP filing will be included as part of base rate filings as projects are placed in service.

In March 2022, NJNG filed its first rate recovery request for its BPU-approved IIP with capital expenditures estimated through June 30, 2022, including AFUDC.

In July 2022, NJNG filed its update with actual capital expenditures of $ 28.9 M through June 30, 2022.

In September 2022, the BPU approved the rate increase resulting in a $ 3.2 M revenue increase, effective October 1, 2022.

On March 30, 2023, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for estimated capital expenditures of $ 31.4 M through June 30, 2023.

This filing was updated on July 28, 2023, with actual expenses of approximately $ 28.2 M through June 30, 2023.

The BPU approved this filing on September 27, 2023, which resulted in a $ 3.2 M revenue increase, effective October 1, 2023.

• 2023 IIP filing — In March 2023, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for estimated capital expenditures of approximately $ 31.4 M through June 30, 2023.

This filing was updated in July 2023, with actual expenses of approximately $ 28.2 M through June 30, 2023.

The BPU approved this filing in September 2023, which resulted in an approximately $ 3.2 M revenue increase, effective October 1, 2023.

• 2024 IIP filing — On March 28, 2024, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for capital expenditures of approximately $ 43.5 M through June 30, 2024.

The filing was updated July 26, 2024, to reflect actual expenses of approximately $ 41.2 M through June 30, 2024.

The BPU approved this filing on September 25, 2024, which resulted in an approximately $ 4.7 M revenue increase, effective October 1, 2024.

DERIVATIVE INSTRUMENTS

9 unchanged sentences

For ES at settlement, realized gains and losses on all financial derivative instruments are recognized as a component of natural gas purchases, and realized gains and losses on all physical derivatives follow the presentation of the related unrealized gains and losses as a component of either natural gas purchases or operating revenues.

ES also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S.

ES may utilize foreign currency derivatives to lock in the exchange rates associated with natural gas transactions denominated in Canadian currency.

The derivatives may include currency forwards, futures or swaps and are accounted for as derivatives.

These derivatives are typically used to hedge demand fee payments on pipeline capacity, storage and natural gas purchase agreements.

As a result of ES entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term.

11 unchanged sentences

The average cost of natural gas is charged to expense in the current period earnings based on the BGSS factor times the therm sales.

Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on a portfolio basis.

NJNG no longer elects NPNS accounting treatment on a portfolio basis.

However, since NPNS is a contract-by-contract election, where it makes sense to do so, NJNG can and may elect to treat certain contracts as normal.

15 unchanged sentences

Derivatives - noncurrent 79 732 762 97

Foreign currency contracts Derivatives - current — — 18 17

Total fair value of derivatives $ 7,619 $ 17,761 $ 32,319 $ 24,112

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Offsetting of Derivatives

1 unchanged sentence

However, the Company’s policy is to present its derivative assets and liabilities on a gross basis at the contract level unit of account on the Consolidated Balance Sheets.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The following table summarizes the reported gross amounts, the amounts that the Company has the right to offset but elects not to, financial collateral and the net amounts the Company could present on the Consolidated Balance Sheets but elects not to.

19 unchanged sentences

Financial commodity 19,155 ( 2,977 ) ( 16,178 ) — 2,977 ( 2,977 ) — —

Foreign currency 18 ( 17 ) — 1 17 ( 17 ) — —

Total ES $ 26,166 ( 4,213 ) ( 16,178 ) $ 5,775 $ 23,604 ( 4,213 ) ( 9,728 ) $ 9,663

9 unchanged sentences

The gains or (losses) on the financial transactions that are economic hedges of the cost of the purchased natural gas are recognized prior to the gains or (losses) on the physical transaction, which are recognized in earnings when the natural gas is delivered.

Therefore, mismatches between the timing of the recognition of realized gains or (losses) on the financial derivative instruments and gains or (losses) associated with the actual sale of the natural gas that is being economically hedged, along with fair value changes in derivative instruments, creates volatility in the results of ES, although the Company’s intended economic results relating to the entire transaction are unaffected.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Therefore, mismatches between the timing of the recognition of realized gains or (losses) on the financial derivative instruments and gains or (losses) associated with the actual sale of the natural gas that is being economically hedged, along with fair value changes in derivative instruments, create volatility in the results of ES, although the Company’s intended economic results relating to the entire transaction are unaffected.

The following table presents the effect of derivative instruments recognized on the Consolidated Statements of Operations as of September 30:

7 unchanged sentences

Foreign currency contracts Natural gas purchases — — ( 14 )

Total unrealized and realized gain (loss) $ 107,170 $ 9,400 $ ( 12,696 )

Total unrealized and realized gain $ 21,401 $ 107,170 $ 9,400

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

NJNG’s derivative contracts are part of the Company’s risk management activities that relate to its natural gas purchases and BGSS incentive programs.

4 unchanged sentences

Financial commodity contracts 11,064 ( 50,130 ) 32,868

Total unrealized and realized (loss) gain $ ( 84,371 ) $ 39,984 $ 34,899

During fiscal 2020, NJR entered into treasury lock transactions to fix the benchmark treasury rate associated with debt issuances that were finalized in 2020.

NJR designates its treasury lock contracts as cash flow hedges;

therefore, changes in fair value of the effective portion of the hedges are recorded in OCI and upon settlement of the contracts, realized gains and (losses) are reclassified from OCI to interest expense on the Consolidated Statements of Operations ratable over the term of the associated debt.

Pre-tax losses of $ 1.4 M were reclassified during both fiscal 2023 and 2022.

Total unrealized and realized gain (loss) $ 5,849 $ ( 84,371 ) $ 39,984

NJNG and ES had the following outstanding long (short) derivatives as of September 30:

3 unchanged sentences

2023 32.1 12.1 ( 6.9 ) 0.2

Not included in the above table are 1.3 M and 1.2 M SRECs that were open as of September 30, 2023 and 2022, respectively, and the notional amount of foreign currency transactions for the periods were immaterial .

Not included in the above table are 1.2 M and 1.3 M SRECs that were open as of September 30, 2024 and 2023, respectively .

Broker Margin

7 unchanged sentences

Restricted broker margin accounts - current liabilities $ 1,146 $ 8,029

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Wholesale Credit Risk

9 unchanged sentences

The netting provisions refer to payment netting, whereby receivables and payables with the same counterparty are offset and the resulting net amount is paid to the party to which it is due.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Internally-rated exposure applies to counterparties that are not rated by Fitch or Moody’s.

15 unchanged sentences

Collateral amounts associated with any of these conditions are determined based on a sliding scale and are contingent upon the degree to which the Company’s credit rating and/or financial metrics deteriorate, and the extent to which liability amounts exceed applicable threshold limits.

There was approximately $ 0.1 M and $ 0.2 M of derivative instruments with credit-risk-related contingent features that were in a liability position for which collateral is required as of September 30, 2023 and 2022, respectively.

Derivative instruments with credit-risk-related contingent features that were in a liability position for which collateral is required were immaterial as of both September 30, 2024 and 2023.

These amounts differ from the respective net derivative liabilities reflected on the Consolidated Balance Sheets because the agreements also include clauses, commonly known as “Rights of Offset,” that would permit the Company to offset its derivative assets against its derivative liabilities for determining additional collateral to be posted, as previously discussed.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Fair Value of Assets and Liabilities

The fair value of cash and cash equivalents, accounts receivable, current loans receivable, accounts payable, commercial paper and borrowings under revolving credit facilities are estimated to equal their carrying amounts due to the short maturity of those instruments.

Non-current loans receivable are recorded based on what the Company expects to receive, which approximates fair value, in other noncurrent assets on the Consolidated Balance Sheets.

Noncurrent loans receivable are recorded based on what the Company expects to receive, which approximates fair value, in other noncurrent assets on the Consolidated Balance Sheets.

The Company regularly evaluates the credit quality and collection profile of its customers to approximate fair value.

2 unchanged sentences

Carrying value (1)

$ 1,647,845 $ 1,467,845

Fair market value $ 1,439,849 $ 1,097,088

Carrying value (1)

$ 1,120,000 $ 1,120,000

Fair market value $ 1,085,955 $ 1,009,448

1 unchanged sentence

Debt f or a reconciliation to long-term and short-term debt .

(2) Excludes the sale leasebacks of natural gas meters of $ 31.4 M and $ 30.3 M as of September 30, 2023 and 2022, respectively.

The fair value of certain sale leasebacks of natural gas meters amounted to $ 20.9 M and $ 15.7 M as of September 30, 2023 and 2022, respectively.

(3) Excludes NJNG’s debt issuance costs of $ 9.8 M and $ 9.5 M as of September 30, 2023 and September 30, 2022, respectively.

(4) Excludes NJR’s debt issuance costs of $ 3.7 M and $ 3.8 M as of September 30, 2023 and September 30, 2022, respectively.

CEV enters into transactions to sell certain commercial solar assets and lease the assets back for a term specified in the lease.

These transactions are considered financing obligations for accounting purposes and are recorded within long-term debt on the Consolidated Balance Sheets.

The estimated fair value of solar asset financing obligations as of September 30, 2023 and 2022 was $ 268.1 M and $ 124.1 M, respectively.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The Company enters into sale leaseback transactions for certain commercial solar assets and natural gas meters.

These transactions are recorded within long-term debt on the Consolidated Balance Sheets.

The carrying value of solar sale leasebacks was approximately $ 283.0 M and $ 278.4 M and the estimated fair value was approximately $ 290.4 M and $ 268.1 M as of September 30, 2024 and 2023, respectively.

The carrying value of the natural gas meter sale leasebacks was approximately $ 31.6 M and $ 31.4 M and the estimated fair value of certain natural gas meter sale leasebacks amounted to approximately $ 26.7 M and $ 20.9 M as of September 30, 2024 and 2023, respectively.

The Company utilizes a discounted cash flow method to determine the fair value of its debt.

Inputs include observable municipal and corporate yields, as appropriate for the maturity of the specific issue and the Company’s credit rating.

As of September 30, 2023, the Company discloses its debt within Level 2 of the fair value hierarchy.

Inputs include observable municipal and corporate yields, as appropriate, for the maturity of the specific debt instrument and the Company’s credit rating.

As of September 30, 2024 and 2023, the Company discloses its debt within Level 2 of the fair value hierarchy.

Fair Value Hierarchy

1 unchanged sentence

In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs-to-valuation techniques used to measure fair value based on the source of the data used to develop the price inputs.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and includes the following:

22 unchanged sentences

If required, ES’s policy is to use the best information available to determine fair value based on internal pricing models, which would include estimates extrapolated from broker quotes or other pricing services.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The Company also has other financial assets that include listed equities, mutual funds and money market funds for which there are active exchange quotes available.

1 unchanged sentence

The Company determines these adjustments by using historical default probabilities that correspond to the applicable S&P issuer ratings, while also taking into consideration collateral and netting arrangements that serve to mitigate risk.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Assets and liabilities measured at fair value on a recurring basis are summarized as follows:

13 unchanged sentences

Financial commodity contracts 25,265 — — 25,265

Financial commodity contracts - foreign exchange — 18 — 18

Money market funds 145 — — 145

3 unchanged sentences

Financial commodity contracts 2,997 — — 2,997

Financial commodity contracts - foreign exchange — 17 — 17

Total liabilities at fair value $ 2,997 $ 21,115 $ — $ 24,112

3 unchanged sentences

The Company’s investment in Steckman Ridge was $ 101.7 M and $ 104.1 M as of September 30, 2024 and 2023, respectively, which includes loans with a total outstanding principal balance of $ 70.4 M for both September 30, 2024 and 2023.

On October 1, 2023, we entered into an Amended and Restated Loan Agreement with Steckman Ridge to extend the existing loan agreement for an additional five years and moved from London Interbank Offered Rate to SOFR.

On October 1, 2023, the Company entered into an Amended and Restated Loan Agreement with Steckman Ridge to extend the existing loan agreement and moved from London Interbank Offered Rate to Secured Overnight Financing Rate.

These loans accrue interest at a variable rate that resets quarterly and are now due October 1, 2027.

1 unchanged sentence

Related Party Transactions for more information on these intercompany transactions.

The Company, through its subsidiary NJR Midstream Company, is a 20 % investor in PennEast, a partnership whose purpose was to construct and operate a 120 -mile natural gas pipeline that would have extended from northeast Pennsylvania to western New Jersey.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

During the third quarter of fiscal 2021, the Company recognized an other-than-temporary impairment charge of $ 92.0 M, or approximately $ 74.5 M, net of income taxes, which represented the best estimate of the salvage value of the remaining assets of the project and was recorded in equity in earnings of affiliates in the Consolidated Statements of Operations.

In September 2021, the PennEast partnership determined that this project was no longer supported, and all further development ceased.

In March 2022, the PennEast board of managers approved cash distributions to members of the partnership following the sale of certain project-related assets and refunds of interconnection fees received from interstate pipelines.

The return of capital received by the Company from March 2022 through September 2022 totaled $ 11.0 M and reduced the remaining carrying value of its equity method investment in PennEast to zero in the Consolidated Balance Sheets, with the excess recorded in equity in earnings of affiliates in the Consolidated Statements of Operations.

The Company received additional return of capital of $ 0.3 M during fiscal 2023, which is recognized in equity in earnings of affiliates in the Consolidated Statements of Operations.

The following is the summarized financial information for Steckman Ridge and PennEast for fiscal years ended September 30:

(Thousands) 2023 2022 2021

Steckman Ridge

Operating revenues $ 22,659 $ 19,812 $ 21,847

Gross profit $ 13,385 $ 11,349 $ 13,350

Income from continuing operations $ 5,769 $ 8,686 $ 11,483

Net income $ 5,769 $ 8,686 $ 11,483

Net income attributable to NJR $ 2,884 $ 4,343 $ 5,741

Current assets $ 12,724 $ 28,609

Noncurrent assets $ 193,779 $ 198,052

Current liabilities $ 148,577 $ 23,618

Noncurrent liabilities $ — $ 140,810

Operating revenues $ — $ — $ —

Gross profit $ — $ — $ —

Loss from continuing operations $ ( 9,543 ) $ ( 3,778 ) $ ( 406,305 )

Net loss $ ( 9,543 ) $ ( 3,778 ) $ ( 406,305 )

Net loss attributable to NJR $ ( 1,909 ) $ ( 756 ) $ ( 81,261 )

Current assets $ 1,481 $ 1,801

Noncurrent assets $ — $ —

Current liabilities $ 127 $ 82

Noncurrent liabilities $ — $ 500

EARNINGS PER SHARE

11 unchanged sentences

(1) Incremental shares consist primarily of unvested stock awards and performance units, which are calculated using the treasury stock method.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

NJNG and NJR finance working capital requirements and capital expenditures through various short-term debt and long-term financing arrangements, including a commercial paper program and committed unsecured credit facilities.

30 unchanged sentences

Series OOO 5.56 % September 28, 2033 50,000 50,000

Series PPP 5.85 % October 30, 2053 50,000 —

Series QQQ 5.82 % June 26, 2054 125,000 —

Series RRR 5.49 % September 30, 2034 75,000 —

Meter financing obligation Various dates 31,574 31,352

2 unchanged sentences

Total NJNG long-term debt 1,609,871 1,410,950

Unsecured senior notes 3.20 % August 18, 2023 — 50,000

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

NJR 2024 2023

First mortgage bonds:

Maturity date:

Unsecured senior notes 3.48 % November 7, 2024 100,000 100,000

16 unchanged sentences

Total long-term debt $ 2,879,464 $ 2,768,017

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Annual long-term debt redemption requirements, excluding meter financing obligations, debt issuance costs and solar asset financing obligations, as of September 30, are as follows:

2 unchanged sentences

NJNG $ 50,000 $ — $ — $ 50,000 $ — $ 1,547,845

On October 24, 2022, NJR entered into a Note Purchase Agreement, which closed on December 15, 2022, under which NJR issued $ 50 M, senior notes at a fixed rate of 6.14 %, maturing in 2032.

The senior notes are unsecured and guaranteed by certain unregulated subsidiaries of NJR.

On November 7, 2024, NJR entered into a Note Purchase Agreement under which NJR issued $ 100 M senior notes at a fixed interest rate of 5.55 %, maturing in 2034.

First Mortgage Bonds

5 unchanged sentences

As of September 30, 2024, NJNG’s equity-to-total-capitalization ratio is 53.4 % and NJNG has the capacity to issue up to $ 1.4 B of FMB under the terms of the Mortgage Indenture.

On October 24, 2022, NJNG entered into a Note Purchase Agreement under which it sold $ 125 M of its senior notes at an interest rate of 5.47 %, maturing in 2052.

On September 28, 2023, NJNG entered into a Note Purchase Agreement for $ 100 M aggregate principal amount of its senior notes consisting of $ 50 M of 5.56 % senior notes due September 28, 2033, which closed on September 28, 2023, and $ 50 M of 5.85 % senior notes due October 30, 2053, which closed on October 30, 2023.

In September 2023, NJNG entered into a Note Purchase Agreement for $ 100 M aggregate principal amount of its senior notes consisting of $ 50 M of 5.56 % senior notes due September 28, 2033, which closed on September 28, 2023, and $ 50 M of 5.85 % senior notes due October 30, 2053, which closed on October 30, 2023.

On June 26, 2024, NJNG entered into a Note Purchase Agreement for $ 200 M aggregate principal amount of its senior notes consisting of $ 125 M of 5.82 % senior notes due June 26, 2054, which closed on June 26, 2024, and $ 75 M of 5.49 % senior notes due September 30, 2034, which closed on September 30, 2024.

The senior notes are secured by an equal principal amount of NJNG’s FMBs issued under NJNG’s Mortgage Indenture.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Sale Leasebacks

NJNG received $ 8.4 M and $ 17.3 M during fiscal 2023 and 2022, respectively, in connection with the sale leaseback of its natural gas meters, with terms ranging from seven to 10 years.

These transactions are treated as financing obligations that are paid over the term of the arrangement and NJNG has the option to purchase the meters back upon lease expiration.

During fiscal 2022, NJNG exercised an early purchase option with respect to certain outstanding meter leases by making a final principal payment of $ 1.1 M for fiscal 2022.

There were no early purchase options exercised during fiscal 2023.

Contractual commitments for meter financing obligation payments, which include the most likely outcome of cash payments to the lessor, as of the fiscal years ended September 30, are as follows:

NJNG received approximately $ 8.8 M and $ 8.4 M during fiscal 2024 and 2023, respectively, in connection with the sale leaseback of its natural gas meters, with terms ranging from six to 10 years.

NJNG records the sale leaseback as a financing obligation for accounting purposes that is paid over the term of the arrangement and has the option to purchase the meters back at fair value upon expiration of the lease.

Contractual commitments for meter sale leaseback arrangements, which represent the most likely outcome of cash payments, as of the fiscal years ended September 30, are as follows:

(Thousands) 2025 2026 2027 2028 2029 Thereafter Subtotal

Lease Payments $ 9,362 7,479 6,407 4,083 4,715 1,676 $ 33,722

Future payments $ 9,665 7,906 5,579 6,211 3,171 1,852 $ 34,384

Interest component ( 2,810 )

Total $ 31,574

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Clean Energy Ventures

CEV enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five to 15 years.

CEV enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five to seven years .

These transactions are treated as financing obligations for accounting purposes and are typically secured by the renewable energy facility asset and its future cash flows from RECs and energy sales.

1 unchanged sentence

however, the lease payments are structured so that CEV is compensated for the transfer of the related tax incentives.

CEV continues to operate the solar assets, including related expenses, and retain the revenue generated from RECs and energy sales, and has the option to renew the lease or repurchase the assets sold at the end of the lease term.

CEV received proceeds of $ 167.8 M and $ 24.1 M during fiscal 2023 and 2022, respectively, in connection with the sale leaseback of commercial solar assets.

CEV continues to operate the solar assets, including related expenses, and retain the revenue generated from RECs and energy sales, and has the option to repurchase the assets sold or renew the lease at the end of the lease term.

CEV received proceeds of approximately $ 64.7 M and $ 167.8 M during fiscal 2024 and 2023, respectively, in connection with the sale leaseback of commercial solar assets.

The proceeds received were recognized as a financing obligation on the Consolidated Balance Sheets.

Contractual commitments for the solar asset financing obligation payments, as of the fiscal years ended September 30, are as follows:

Contractual commitments for the solar sale leaseback arrangements, which represent the most likely outcome of cash payments, as of the fiscal years ended September 30, are as follows:

(Thousands) 2025 2026 2027 2028 2029 Thereafter Subtotal

Lease Payments $ 54,033 50,663 13,875 16,385 26,392 87,881 $ 249,229

Future payments $ 57,184 20,396 22,907 34,293 81,586 32,610 $ 248,976

Interest component ( 43,234 )

1 unchanged sentence

Credit Facilities and Short-term Debt

On February 7, 2023, NJR's 364-day $ 150 M term loan credit agreement, that was entered into in February 2022, expired.

The Company had $ 50 M that was borrowed on February 9, 2022 and $ 100 M that was borrowed on February 14, 2022, which was paid in full at expiration of the term loan agreement.

The following table summarizes NJR’s credit facility and NJNG’s commercial paper program and credit facility as of September 30:

At end of period

(Thousands) Total borrowing capacity Loans outstanding Weighted average interest rate Remaining borrowing capacity Expiration dates

Bank revolving credit facilities (1)

$ 650,000 $ 217,300 6.53 % $ 426,967 (2) Sep 2027

Bank revolving credit facilities (3)

$ 250,000 $ 34,800 5.48 % $ 214,469 (4) Sep 2027

Bank revolving credit facilities (1)

$ 650,000 $ 200,150 3.97 % $ 440,177 (2) Sep 2027

Bank term loan credit agreement $ 150,000 $ 150,000 3.81 % $ — Feb 2023

Bank revolving credit facilities (3)

$ 250,000 $ 73,800 3.34 % $ 175,469 (4) Sep 2027

(1) Committed credit facilities, which require commitment fees of 0.10 % on the unused amounts.

(2) Letters of credit outstanding total $ 5.7 M and $ 9.7 M as of September 30, 2023 and September 30, 2022, respectively, which reduces amount available by the same amount.

(3) Committed credit facilities, which require commitment fees of 0.075 % on the unused amounts.

(4) Letters of credit outstanding total $ 0.7 M as of both September 30, 2023 and 2022, which reduces amount available by the same amount.

Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit.

Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.

(Thousands) As of date Total

borrowing capacity Loans outstanding Weighted average interest rate Remaining borrowing capacity Expiration dates

NJR bank revolving credit facility (1)

2024 $ 575,000 $ 236,700 6.23 % $ 325,951 (2) August 2029

2023 $ 650,000 $ 217,300 6.53 % $ 426,967 (2) September 2027

NJNG bank revolving credit facility (3)

2024 $ 250,000 $ 55,100 4.98 % $ 194,169 (4) August 2029

2023 $ 250,000 $ 34,800 5.48 % $ 214,469 (4) September 2027

(1) Committed credit facility, which requires commitment fees of 0.10 % on the unused amount.

(2) Letters of credit outstanding total approximately $ 12.3 M and $ 5.7 M as of September 30, 2024 and 2023, respectively, which reduces the amount available by the same amount.

(3) Committed credit facility, which requires commitment fees of 0.075 % on the unused amount.

(4) Letters of credit outstanding total approximately $ 0.7 M at both September 30, 2024 and 2023, which reduces the amount available by the same amount.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

On August 30, 2022, NJR entered into a First Amendment to NJR’s Second Amended and Restated Credit Agreement governing a $ 650 M NJR Credit Facility with a maturity date of September 2, 2027.

The NJR Credit Facility is subject to a one-year extension beyond that date and includes an accordion feature, which allows NJR, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJR Credit Facility in increments of $ 50 M, with the total revolving credit commitments not exceeding $ 750 M.

Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit.

Neither NJNG nor the results of its operations are obligated or pledged to support the NJR Credit Facility.

On August 7, 2024, NJR entered into a second amendment to NJR’s Second Amended and Restated Credit Agreement, which reduced the NJR Credit Facility from $ 650 M to $ 575 M and extended the maturity date to August 7, 2029, pursuant to NJR’s option to extend the maturity date under the NJR Second Amended and Restated Credit Agreement, and permits NJR to request that the maturity date be extended up to two times for an additional period of one year each.

The NJR Credit Facility includes an accordion feature, which allows NJR, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJR Credit Facility in increments of at least $ 50 M, with the total revolving credit commitments not exceeding $ 750 M.

The NJR Credit Facility also permits the borrowing of revolving loans and swingline loans, as well as a $ 75 M sublimit for the issuance of letters of credit.

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The credit facility is used primarily to finance its share repurchases, to satisfy ES’s short-term liquidity needs and to finance, on an initial basis, unregulated investments.

As of September 30, 2023, NJR had seven letters of credit outstanding totaling $ 5.7 M on behalf of ES and CEV.

These letters of credit reduce the amount available under NJR’s committed credit facility by the same amount.

As of September 30, 2024, NJR had eleven letters of credit outstanding totaling $ 12.3 M, which reduced the amount available under the NJR 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.

ES’s letters of credit are used for margin requirements for natural gas transactions, collateral and security deposit for retail natural gas sales, and they expire on dates ranging from September 2024 to December 2024.

Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities.

On August 30, 2022, NJNG amended the Second Amended and Restated Credit Agreement governing a $ 250 M NJNG Credit Facility with a maturity date of September 2, 2027.

The NJNG Credit Facility is subject to a one-year extension beyond that date and includes an accordion feature, which allows NJNG, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJNG Credit Facility in minimum increments of $ 50 M up to a maximum of $ 100 M.

On August 7, 2024, NJNG entered into a second amendment to NJNG’s Second Amended and Restated Credit Agreement governing a $ 250 M NJNG Credit Facility, which extended the maturity date of the facility to August 7, 2029, pursuant to NJNG’s option to extend the maturity date under the NJNG Second Amended and Restated Credit Agreement, and permits NJNG to request that the maturity date be extended up to two times for an additional period of one year each.

The NJNG Credit Facility includes an accordion feature, which allows NJNG, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJNG Credit Facility in increments of at least $ 50 M with the total revolving credit commitments not exceeding $ 350 M.

The NJNG Credit Facility also permits the borrowing of revolving loans and swingline loans, as well as a $ 30 M sublimit for the issuance of letters of credit.

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STOCK-BASED COMPENSATION

In January 2017, the NJR 2017 Stock Award and Incentive Plan replaced the NJR 2007 Stock Award and Incentive Plan.

Shares have been issued in the form of performance share units, restricted stock units, deferred retention stock units and unrestricted common stock to non-employee directors.

NJR issues shares out of its 2017 Stock Award and Incentive Plan, in the form of performance share units, restricted stock units, deferred retention stock units and unrestricted common stock to non-employee directors.

As of September 30, 2024, 2,620,389 shares remain available for future issuance.

9 unchanged sentences

Total, net of tax $ 12,130 $ 11,153 $ 11,203

(1) Excludes additional tax (expense) benefit related to delivered shares of $( 0.6 )M, $( 0.1 )M and $( 0.2 )M as of September 30, 2023, 2022 and 2021, respectively.

(1) Excludes additional tax expense related to delivered shares of $ 1.2 M, $ 0.6 M and $ 0.1 M as of September 30, 2024, 2023 and 2022, respectively.

New Jersey Resources Corporation

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In fiscal 2022, the Company granted to certain officers 44,965 performance shares, which are market condition awards that vested on September 30, 2024, subject to the Company meeting certain conditions.

In fiscal 2021, the Company also granted to certain officers 70,138 performance shares, of which 44,156 vested in September 30, 2023 and 25,982 vest annually over a three-year period beginning in September 2021, both of which were subject to the Company meeting certain performance conditions.

In fiscal 2022, the Company also granted to certain officers 73,561 performance shares, of which 44,596 vested on September 30, 2024, and 28,965 vest annually over a three-year period beginning in September 2022, both of which were subject to the Company meeting certain performance conditions.

The vesting of these awards are shown in the table below.

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(1) The number of common shares issued related to certain performance shares may range from zero to 150 % of the number of shares shown in the table above based on the Company’s achievement of performance goals.

(2) As certified by the Company’s Leadership and Compensation Committee on November 10, 2021, there were no common shares earned related to TSR performance, the number of common shares earned related to NFE performance was 93 % or 31,116 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100 % or 25,982 shares.

(2) As certified by the Company’s Leadership and Compensation Committee on November 9, 2022, the number of common shares earned related to TSR performance was 112 % or 30,472 shares, the number of common shares earned related to NFE performance was 105 % or 26,282 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100 % or 28,965 shares.

Each award earned excludes accumulated dividends.

6 unchanged sentences

The number represented on this line is the target number of 100 %.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The Company measures compensation expense related to performance shares based on the fair value of these awards at their date of grant.

2 unchanged sentences

Performance condition grants are initially fair valued at the Company’s stock price on the grant date and are subsequently adjusted for actual achievement of the performance goals.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Restricted Stock Units

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The shares vest annually over a three-year period beginning in October of the fiscal year in which they were granted.

On April 25, 2024, the Company also granted an additional 3,465 shares of restricted stock that vest annually over a three-year period beginning in April of the fiscal year in which they were granted.

There is approximately $ 1.7 M of deferred compensation related to unvested restricted stock shares that is expected to be recognized over the weighted average period of 1.8 years.

25 unchanged sentences

Delivered ( 163,499 ) $ 47.95 $ 6,167

Forfeited ( 6,818 ) $ 40.33 —

Outstanding at September 30, 2022 231,267 $ 39.16 —

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Delivered ( 38,115 ) $ 40.67 $ 1,517

Forfeited ( 6,818 ) $ 40.33 —

Outstanding at September 30, 2023 328,093 $ 41.74 —

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Delivered ( 5,089 ) $ 35.86 $ 213

Forfeited ( 235 ) $ 42.55 —

Outstanding at September 30, 2024 477,957 $ 42.07 —

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Non-Employee Director Stock

Non-employee director compensation includes an annual equity retainer that is awarded at the time of the Company’s annual meeting of shareowners.

The shares vest upon the earlier of the first anniversary of the grant date or the date of the Company’s next annual meeting of shareowners following the grant date and are subsequently amortized to expense over a 12-month period.

The shares vest upon the earlier of the first anniversary of the grant date or the date of the Company’s next annual meeting of shareowners following the grant date and are amortized to expense over a 12-month period.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The following summarizes non-employee director share awards for the past three fiscal years:

2 unchanged sentences

Weighted average grant date fair value $ 41.67 $ 49.58 $ 39.09

(1) Approximately $ 0.3 M of expense remains as of September 30, 2023, to be recognized through December 31, 2023.

EMPLOYEE BENEFIT PLANS

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Additional contributions may be required based on market conditions and changes to assumptions.

In January 2024, the Company announced changes to its postretirement medical benefits plan.

Beginning on January 1, 2025, the Company will replace the existing retiree medical coverage for certain eligible employees age 65 and older and their Medicare-eligible dependents with an employer-funded Health Reimbursement Arrangement.

Medicare-eligible participants may use the Health Reimbursement Arrangement toward the purchase of supplemental insurance coverage and for other qualified medical expenses.

The liability associated with postretirement medical benefits was remeasured as of January 1, 2024.

The change in post-retirement medical benefits is being amortized into earnings over approximately eight years , the average remaining service to retirement for all plan participants.

New Jersey Resources Corporation

6 unchanged sentences

Interest cost 16,240 15,174 8,327 9,146

Plan amendments — — ( 79,881 ) —

Plan participants’ contributions (2)

27 32 703 552

Actuarial (gain) loss ( 7,057 ) ( 109,320 ) 25,363 ( 77,775 )

Actuarial loss (gain) 36,863 ( 7,057 ) 54,518 25,363

Benefits paid, net of retiree subsidies received ( 14,895 ) ( 14,053 ) ( 6,679 ) ( 7,343 )

2 unchanged sentences

Fair value of plan assets at beginning of year $ 298,361 $ 284,347 $ 106,783 $ 99,736

Actual return (loss) on plan assets 27,456 ( 58,239 ) 9,826 ( 15,996 )

Actual return on plan assets 58,682 27,456 21,249 9,826

Employer contributions 535 579 7,846 4,192

11 unchanged sentences

(1) Includes the Company’s PEP.

(2) Employees hired prior to July 1, 1998, that were eligible to elect an additional participant contribution to enhance their benefits, and contributions made during the periods were immaterial.

(2) Contributions made by employees hired prior to July 1, 1998, that were eligible to elect an additional participant contribution to enhance their benefits, were immaterial during the periods.

The Company recognizes a liability for its underfunded benefit plans as required by ASC 715, Compensation - Retirement Benefits .

The Company records the offset to regulatory assets for the portion of liability relating to NJNG and to accumulated OCI for the portion of the liability related to its unregulated operations.

The increase in actuarial loss during fiscal 2024 compared with fiscal 2023 for both pension and OPEB was due primarily to the decrease in the discount rate.

The following table summarizes the amounts recognized in regulatory assets and accumulated OCI as of September 30:

3 unchanged sentences

Amounts arising during the period:

Net actuarial (gain) ( 14,922 ) ( 35,781 ) ( 14,885 ) ( 18,422 )

Net actuarial (gain) loss ( 10,493 ) 9,936 ( 4,048 ) 12,320

Amounts amortized to net periodic costs:

Net actuarial (loss) ( 87 ) — ( 213 ) —

Prior service (cost) credit ( 101 ) 133 — 11

Prior service (cost) ( 103 ) — — —

Balance at September 30, 2023 $ 24,638 $ 30,046 $ 742 $ 5,498

1 unchanged sentence

Net actuarial (gain) loss ( 2,407 ) 27,108 934 14,080

Prior service (credit) — ( 60,504 ) — ( 19,376 )

Amounts amortized to net periodic costs:

Net actuarial (loss) ( 87 ) — ( 213 ) —

Prior service (cost) ( 103 ) — — —

Net actuarial gain (loss) 2 ( 3,098 ) ( 119 ) ( 1,164 )

Prior service (cost) credit ( 61 ) 7,458 — 2,555

Balance at September 30, 2024 $ 22,172 $ 1,010 $ 1,557 $ 1,593

6 unchanged sentences

(Thousands) 2024 2023 2024 2023 2024 2023 2024 2023

Net actuarial loss (gain) $ 24,577 $ 35,157 $ 30,046 $ 20,110 $ 742 $ 5,003 $ 5,498 $ ( 6,822 )

Prior service cost 61 164 — — — — — —

Net actuarial loss $ 22,172 $ 24,577 $ 54,056 $ 30,046 $ 1,557 $ 742 $ 18,414 $ 5,498

Prior service cost (credit) — 61 ( 53,046 ) — — — ( 16,821 ) —

Total $ 22,172 $ 24,638 $ 1,010 $ 30,046 $ 1,557 $ 742 $ 1,593 $ 5,498

To the extent the unrecognized amounts in accumulated OCI or regulatory assets exceed 10% of the greater of the benefit obligation or the fair value of plan assets, an amortized amount over the average expected future working lifetime of the active plan participants is recognized.

Amounts included in regulatory assets and accumulated OCI expected to be recognized as components of net periodic benefit cost in fiscal 2024 are as follows:

Regulatory Assets Accumulated Other Comprehensive Income (Loss)

(Thousands) Pension OPEB Pension OPEB

Net actuarial loss (gain) $ 815 $ 667 $ ( 12 ) $ 661

Prior service cost 62 — — —

Total $ 877 $ 667 $ ( 12 ) $ 661

The projected benefit and accumulated benefit obligations and the fair value of plan assets as of September 30, are as follows:

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The Company applies the duration-specific spot rates from the full yield curve, as of the measurement date, to each year’s future benefit payments, which aligns the timing of the plans’ separate future cash flows to the corresponding spot rates on the yield curve.

Information relating to the assumed HCCTR used to determine expected OPEB benefits as of September 30, and the effect of a 1% change in the rate, are as follows:

Information relating to the assumed HCCTR used to determine expected OPEB benefits as of September 30, is as follows:

($ in thousands) 2024 2023 2022

2 unchanged sentences

Year ultimate HCCTR reached 2032 2032 2027

Effect of a 1 percentage point increase in the HCCTR on:

Year-end benefit obligation $ 30,818 $ 26,710 $ 43,217

Total service and interest cost $ 2,117 $ 2,544 $ 2,959

Effect of a 1 percentage point decrease in the HCCTR on:

Year-end benefit obligation $ ( 25,283 ) $ ( 21,853 ) $ ( 34,669 )

Total service and interest costs $ ( 1,700 ) $ ( 1,966 ) $ ( 2,253 )

The Company’s investment objective is a long-term real rate of return on assets before permissible expenses that is approximately 5% greater than the assumed rate of inflation, as measured by the consumer price index.

9 unchanged sentences

Total 100 % 100 % 100 %

The Company adopted the revised mortality assumptions published by the Society of Actuaries for its pension and other postemployment benefit obligations, which reflected increased life expectancies in the U.S.

The adoption of the new mortality projection scale, MP-2021, and the Pri-2012 mortality study, did not materially impact the projected benefit obligation for the plans.

The Company uses mortality assumptions published by the Society of Actuaries for its pension and other postemployment benefit obligations, which reflects life expectancies in the U.S.

The Company used projection scale MP-2021 and the Pri-2012 mortality study as of September 30, 2024 and 2023.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following fiscal years:

12 unchanged sentences

As of September 30, 2024

Money market funds $ — $ — $ 24 $ 24

Registered Investment Companies:

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As of September 30, 2023

Money market funds $ — $ — $ 28 $ 28

Registered Investment Companies:

6 unchanged sentences

Core Fixed Income — — 22,241 22,241

Opportunistic Income — — 3,283 3,283

Ultra Short Duration — — 3,296 3,296

High Yield Bond Fund 20,685 20,685 7,651 7,651

13 unchanged sentences

The NAV is based on the value of the underlying assets owned by the fund less liabilities.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Defined Contribution Plan

The Company offers a Savings Plan to eligible employees.

The Company matches 85 % of participants’ contributions up to 6 % of base compensation.

The Company matched 85 % of participants’ contributions up to 6 % of base compensation.

Beginning on March 6, 2024, the Company’s contribution changed to 100 % of the first 3 % and 80 % of the next 3 % of base compensation.

Represented NJRHS employees, non-represented employees hired on or after October 1, 2009, and NJNG represented employees hired on or after January 1, 2012, are eligible for an employer special contribution of between 4.0 % and 5.0 % of base compensation, depending on years of service, into the Savings Plan on their behalf.

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The Company and one or more of its subsidiaries files or expects to file income and/or franchise tax returns in the U.S.

federal jurisdiction and in the states of Colorado, Connecticut, Delaware, Florida, Indiana, Louisiana, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Texas and Virginia.

The Company neither files in, nor believes it has a filing requirement in, any foreign jurisdictions other than Canada.

Due to certain available tax treaty benefits, the Company incurs no tax liability in Canada.

federal jurisdiction and in the states of Colorado, Connecticut, Delaware, Florida, Georgia, Indiana, Louisiana, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and West Virginia.

The Company neither files in, nor believes it has a filing requirement in, any foreign jurisdictions.

The Company’s U.S.

1 unchanged sentence

federal income tax returns for periods subsequent to fiscal 2020 are open to examination by the IRS.

For all periods subsequent to those ended September 30, 2019, the Company’s state income tax returns are statutorily open to examination in all applicable states with the exception of Colorado, New Jersey and Texas.

In Colorado, New Jersey and Texas, all periods subsequent to September 30, 2018, are statutorily open to examination.

For all periods subsequent to those ended September 30, 2020, the Company’s state income tax returns are statutorily open to examination in all applicable states with the exception of Colorado and Texas.

In March 2024, the State of New Jersey commenced an examination of the Company’s Corporate Business Tax return for NJR and certain subsidiaries for the fiscal periods ended September 30, 2019 through September 30, 2022.

NJR evaluates its tax positions to determine the appropriate accounting and recognition of potential future obligations associated with uncertain tax positions.

1 unchanged sentence

Interest and penalties related to unrecognized tax benefits, if any, are recognized within income tax expense, and accrued interest and penalties are recognized within other noncurrent liabilities on the Consolidated Balance Sheets.

On March 27, 2020, the President of the U.S.

signed the CARES Act, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S.

The CARES Act provided for the delay in the required deposit of the employer portion of the OASDI payroll tax from the date of enactment through the end of 2020.

Of the taxes that the Company can defer, 50% of the deferred taxes were required to be deposited by the end of 2021 and the remaining 50% were required to be deposited by the end of 2022.

As of September 30, 2021, the Company deferred approximately $ 5.1 M related to the employer portion of the OASDI tax.

During fiscal 2022, the Company made the first of two installment payments, which reduced the balance to approximately $ 2.7 M.

The second installment payment was made during the first quarter of fiscal 2023, which reduced the balance to zero as of September 30, 2023.

Inflation Reduction Act

3 unchanged sentences

The Inflation Reduction Act raised the ITC from 26% to 30% through the end of 2032, dropping to 26% for property under construction before the end of 2033 and to 22% for property under construction before the end of 2034.

The ITC expires

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

starting in 2035 unless it is renewed.

The ITC expires starting in 2035 unless it is renewed.

There are additional opportunities to increase the credit amount for certain facilities that are placed in service after December 31, 2022.

3 unchanged sentences

Upon the repurchase of common stock through the Company’s share repurchase program, the Company would be subject to the 1% excise tax.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Other Tax Items

11 unchanged sentences

Balance at September 30, $ 4,993 $ 4,978

As of September 30, 2023, there are $ 5.0 M of unrecognized tax benefits that if recognized would affect the annual effective tax rate.

As of September 30, 2024 and 2023, there are $ 5.0 M of unrecognized tax benefits that if recognized would affect the annual effective tax rate.

The tax benefits relate to fiscal tax years open to examination by the IRS and the state of Pennsylvania and may be subject to subsequent adjustment.

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The Company’s office leases vary in duration, ranging from two to 11 years, and may or may not include extension or early purchase options.

The Company’s meter lease terms are between seven and 10 years with purchase options available prior to the end of the term.

Equipment leases include general office equipment that also vary in duration, with an average term of eight years .

The Company’s meter lease terms are between six and 10 years with purchase options available prior to the end of the term.

Equipment leases, including general office equipment, also vary in duration, with an average term of nine years .

The Company’s storage and capacity leases have assumed terms of 50 years to coincide with the expected useful lives of the cavern assets with which the leases are associated.

25 unchanged sentences

Financing cash flows for finance leases $ 7,792 $ 7,379 $ 7,145

Assets obtained or modified for operating lease liabilities totaled approximately $ 13.2 M and $ 0.9 M during fiscal 2023 and 2022, respectively.

Assets obtained or modified through other leases, including those which are finance leases and financing transactions for accounting purposes, totaled approximately $ 8.4 M and $ 17.3 M during fiscal 2023 and 2022, respectively.

Assets obtained or modified through operating lease liabilities totaled approximately $ 14.1 M and $ 13.2 M during fiscal 2024 and 2023, respectively.

Assets obtained or modified through other leases, including those which are finance leases and financing transactions for accounting purposes, totaled $ 8.4 M during fiscal 2023.

There were no assets obtained or modified through finance leases during fiscal 2024.

The following table presents the balance and classifications of the Company’s right of use assets and lease liabilities included in the Consolidated Balance Sheets for the fiscal year ended September 30:

8 unchanged sentences

Total lease liabilities $ 187,808 $ 184,147

For operating lease assets and liabilities, the weighted average remaining lease term was 29.2 years for both September 30, 2023 and 2022, and the weighted average discount rate used in the valuation over the remaining lease term was 3.5 % and 3.2 % for September 30, 2023 and 2022, respectively.

For finance lease assets and liabilities as of September 30, 2023 and 2022, the weighted average remaining lease term was 3.3 years and 4.0 years, respectively, and the weighted average discount rate used in the valuation over the remaining lease term was 2.7 % as of both September 30, 2023 and 2022.

For operating lease assets and liabilities, the weighted average remaining lease term was 28.6 years and 29.2 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.8 % and 3.5 % as of September 30, 2024 and 2023, respectively.

For finance lease assets and liabilities, the weighted average remaining lease term was 3.0 years and 3.3 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.4 % and 2.7 % as of September 30, 2024 and 2023, respectively.

New Jersey Resources Corporation

13 unchanged sentences

Cash Commitments

NJNG has entered into long-term contracts, expiring at various dates through September 2039, for the supply, transportation and storage of natural gas.

NJNG has entered into long-term contracts, expiring at various dates through July 2039, for the supply, transportation and storage of natural gas.

These contracts include annual fixed charges of approximately $ 252.8 M at current contract rates and volumes, which are recoverable through BGSS.

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NJNG recovers its remediation expenditures, including carrying costs, over rolling seven-year periods pursuant to a RAC approved by the BPU.

In March 2022, the BPU approved an increase in the RAC, which increased the pre-tax annual recovery from $ 11.1 M to $ 11.7 M, effective April 1, 2022.

On April 12, 2023, the BPU approved on a final basis NJNG’s annual SBC filing of RAC expenditures through June 30, 2022, as well as an increase to the RAC annual recoveries of $ 3.7 M, which increased the pre-tax annual recovery to $ 15.4 M, effective May 1, 2023.

As of September 30, 2024, $ 77.5 M of previously incurred remediation costs, net of recoveries from customers and insurance proceeds, are included in regulatory assets on the Consolidated Balance Sheets.

6 unchanged sentences

Based upon currently available information, the Company believes that the results of litigation that are currently pending, taken together, will not have a materially adverse effect on the Company’s financial condition, results of operations or cash flows.

The actual results of resolving the pending litigation matters may be substantially higher than the amounts accrued.

The actual results of resolving the pending litigation matters may be substantially different than the amounts accrued.

The foregoing statements about the Company’s litigation are based upon the Company’s judgments, assumptions and estimates and are necessarily subjective and uncertain.

19 unchanged sentences

Interest expense, net of capitalized interest $ 62,288 28,545 15,233 23,441 $ 129,507 768 — $ 130,275

Income tax provision (benefit) $ 33,065 ( 7,683 ) 24,343 3,444 $ 53,169 ( 1,477 ) ( 2,417 ) $ 49,275

Income tax provision $ 31,793 11,406 33,331 4,551 $ 81,081 2,666 1,159 $ 84,906

Equity in earnings of affiliates $ — — — 2,816 $ 2,816 — 2,483 $ 5,299

8 unchanged sentences

Interest expense, net of capitalized interest $ 56,595 28,569 11,400 25,803 $ 122,367 647 — $ 123,014

Income tax provision $ 40,141 11,361 21,776 1,879 $ 75,157 1,059 ( 21 ) $ 76,195

Income tax provision (benefit) $ 33,065 ( 7,683 ) 24,343 3,444 $ 53,169 ( 1,477 ) ( 2,417 ) $ 49,275

Equity in earnings of affiliates $ — — — 3,126 $ 3,126 — 804 $ 3,930

Net financial earnings (loss) $ 140,124 39,403 39,121 22,454 $ 241,102 ( 781 ) — $ 240,321

Net financial earnings $ 131,414 44,458 68,517 12,835 $ 257,224 4,758 ( 155 ) $ 261,827

Capital expenditures $ 390,394 107,303 — 40,916 $ 538,613 2,306 — $ 540,919

Return of capital from equity investees $ — — — ( 5,479 ) $ ( 5,479 ) — — $ ( 5,479 )

Operating revenues

5 unchanged sentences

Interest expense, net of capitalized interest $ 46,394 21,968 4,725 12,097 $ 85,184 646 — $ 85,830

Income tax provision (benefit) $ 19,054 5,048 18,371 ( 10,043 ) $ 32,430 ( 196 ) 1,052 $ 33,286

Income tax provision $ 40,141 11,361 21,776 1,879 $ 75,157 1,059 ( 21 ) $ 76,195

Equity in loss of affiliates $ — — — 9,865 $ 9,865 — ( 1,688 ) $ 8,177

Net financial earnings (loss) $ 107,375 16,789 71,117 13,046 $ 208,327 ( 826 ) 211 $ 207,712

Net financial earnings $ 140,124 39,403 39,121 22,454 $ 241,102 ( 781 ) — $ 240,321

Capital expenditures $ 298,374 146,676 — 151,988 $ 597,038 1,390 — $ 598,428

Investments in equity investees $ — — — 690 $ 690 — — $ 690

(1) Includes sales to Canada for ES, which are $ 8.4 M, $ 2.4 M and $ 0.1 M in the fiscal years ended September 30, 2023, 2022 and 2021, respectively.

Return of capital from equity investees $ — — — ( 5,479 ) $ ( 5,479 ) — — $ ( 5,479 )

(1) Includes sales to Canada for ES, which were $ 8.4 M and $ 2.4 M during the fiscal years ended September 30, 2023 and 2022, respectively.

There were no sales to Canada for ES during the fiscal year ended September 30, 2024.

(2) The amortization of acquired wholesale energy contracts is excluded above and is included in natural gas purchases - nonutility on the Consolidated Statements of Operations.

9 unchanged sentences

(1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.

The Chief Executive Officer, who uses NFE as a measure of profit or loss in measuring the results of the Company’s reporting segments and other business operations, is the chief operating decision maker of the Company.

The CEO, who uses NFE as a measure of profit or loss in measuring the results of the Company’s reporting segments and other business operations, is the chief operating decision maker of the Company.

A reconciliation of consolidated NFE to consolidated net income, as of September 30, is as follows:

1 unchanged sentence

Net financial earnings $ 290,828 $ 261,827 $ 240,321

Unrealized (gain) loss on derivative instruments and related transactions ( 38,081 ) ( 59,906 ) 54,203

Unrealized loss (gain) on derivative instruments and related transactions 19,574 ( 38,081 ) ( 59,906 )

Tax effect ( 4,652 ) 9,050 14,248

1 unchanged sentence

Tax effect 4,323 ( 8,246 ) ( 4,738 )

(Gain on) impairment of equity method investment ( 300 ) ( 5,521 ) 92,000

Gain on equity method investment — ( 300 ) ( 5,521 )

Tax effect — ( 19 ) 1,377

14 unchanged sentences

Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

RELATED PARTY TRANSACTIONS

Effective April 1, 2020, NJNG entered into a 5-year agreement for 3 Bcf of firm storage capacity with Steckman Ridge, which expires on March 31, 2025.

In April 2020, NJNG entered into a five-year agreement for 3 Bcf of firm storage capacity with Steckman Ridge, which expires on March 31, 2025.

Under the terms of the agreement, NJNG incurs demand fees, at market rates, of approximately $ 9.3 M annually, a portion of which is eliminated in consolidation.

These fees are recoverable through NJNG’s BGSS mechanism and are included as a component of regulatory assets.

ES may periodically enter into storage or park and loan agreements with an affiliated FERC-jurisdictional natural gas storage facility, Steckman Ridge.

As of September 30, 2023, ES has entered into transactions with Steckman Ridge for varying terms, all of which expire by March 31, 2024.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

ES may periodically enter into storage or park and loan agreements with its affiliated FERC-jurisdictional natural gas storage facility, Steckman Ridge.

As of September 30, 2024, ES entered into transactions with Steckman Ridge for varying terms, all of which expire by March 31, 2027.

Demand fees, net of eliminations, associated with Steckman Ridge during the fiscal years ended September 30, were as follows:

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NJNG and ES enter into various AMAs, the effects of which are eliminated in consolidation.

Under the terms of these agreements, NJNG releases certain transportation and storage contracts to ES.

As of September 30, 2023, NJNG and ES had one AMA with an expiration date of March 31, 2024.

NJNG entered into a 5-year transportation agreement with Adelphia for committed capacity of 130,000 Dths per day in Zone South, which began on August 9, 2022.

ES has a 5-year agreement for 3 Bcf of firm storage capacity with Leaf River, which is eliminated in consolidation and expires in March 2024.

In March 2021, NJNG and CEV entered into a 15-year sublease and PPA related to an onsite solar array and the related energy output at the Company’s headquarters in Wall, New Jersey, the effects of which are immaterial to the consolidated financial statements.

In July 2021, NJNG entered into 16-year lease agreements, as Lessor, with various NJR subsidiaries, as Lessees, for office space at the Company’s headquarters in Wall, New Jersey, the effects of which are eliminated in consolidation.

In June 2022, NJNG and CEV entered into a 20-year sublease and PPA related to an onsite solar array and the related energy output at the Company’s LNG plant in Howell, New Jersey, the effects of which are immaterial to the consolidated financial statements.

NJNG entered into a 15-year transportation agreement with Adelphia for committed capacity of 130,000 Dth per day in Zone North, beginning November 1, 2023.

Under the terms of these AMAs, NJNG releases certain transportation and storage contracts to ES.

NJNG and ES had one AMA, which expired on March 31, 2024, and was not renewed.

NJNG entered into two transportation agreements with Adelphia, each for committed capacity of 130,000 Dths per day.

The first is for five years in Zone South with an expiration date of August 8, 2027, and the second is for 15 years in Zone North, with an expiration date of October 31, 2038.

ES had a five-year agreement for 3 Bcf of firm storage capacity with Leaf River, the effects of which were eliminated in consolidation.

The agreement expired on March 31, 2024, and was not renewed.

NJNG and CEV entered into a 15-year sublease and PPA related to an onsite solar array and the related energy output at the Company’s headquarters in Wall, New Jersey, with an expiration date of March 1, 2036, the effects of which are immaterial to the consolidated financial statements.

NJNG entered into 16-year lease agreements, as Lessor, with various NJR subsidiaries, as Lessees, for office space at the Company’s headquarters in Wall, New Jersey, with an expiration date of July 1, 2037, the effects of which are eliminated in consolidation.

NJNG and CEV entered into a 20-year sublease and PPA related to an onsite solar array and the related energy output at the Company’s LNG plant in Howell, New Jersey, with an expiration date of June 1, 2042, the effects of which are immaterial to the consolidated financial statements.

The intercompany profits for certain transactions between NJNG and ES and NJNG and Adelphia are not eliminated in accordance with ASC 980, Regulated Operations.

SUBSEQUENT EVENT

On November 25, 2024, CEV completed the sale of its residential solar portfolio and related assets and liabilities included in The Sunlight Advantage® program to a third party for a total purchase price of $ 132.5 M.

The transaction is expected to generate a pre-tax gain of approximately $ 45 M to $ 60 M, which will be recognized in the Consolidated Statements of Operations in the first quarter of fiscal 2025.

New Jersey Resources Corporation

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data