What changed in this filing

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Item 1A. Risk Factors

2025-11-20 compared with 2024-11-26 · 102 added, 71 removed, 183 unchanged (49% of the section changed)

6 unchanged sentences

Such impairment could have a material adverse effect on our financial condition, results of operations and cash flows.

Weather and weather patterns, including normal seasonal and quarterly fluctuations of weather, as well as extreme weather events that, individually or in aggregate, may be associated with climate change, could adversely affect our ability to manage our operational requirements to serve our customers, and ultimately adversely affect our results of operations and liquidity.

ES’s earnings and cash flows are dependent upon optimization of its contractual assets.

ES’s earnings and cash flows are based, in part, on its ability to optimize its portfolio of contractually based natural gas storage and pipeline assets.

The optimization strategy involves utilizing its physical assets to take advantage of differences in natural gas prices between geographic locations and/or time periods.

Any change among various pricing points could affect these differentials.

In addition, significant increases in the supply of natural gas in ES’s market areas, including as a result of increased production along the Marcellus Shale, can reduce ES’s ability to take advantage of pricing fluctuations in the future.

Changes in pricing dynamics and supply could have an adverse impact on ES’s optimization activities, earnings and cash flows.

ES incurs fixed demand fees to acquire its contractual rights to transportation and storage assets.

Should commodity prices at various locations or time periods change in such a way that ES is not able to recoup these costs from its customers, the cash flows and earnings at ES, and ultimately the Company, could be adversely impacted.

NJNG and ES rely on storage, transportation assets and suppliers, which they do not own or control, to deliver natural gas, which may affect their ability to deliver their products and services.

NJNG and ES depend on natural gas pipelines and other transportation and storage facilities owned and operated by third parties to deliver natural gas to wholesale and retail markets and to provide retail energy services to customers.

Their ability to provide natural gas for their present and projected sales will depend upon their suppliers’ ability to obtain and deliver additional supplies of natural gas, as well as NJNG’s ability to acquire supplies directly from new sources.

Factors beyond the control of NJNG, its suppliers and the independent suppliers that have obligations to provide natural gas to certain NJNG customers may affect NJNG’s ability to deliver such supplies.

These factors include other parties’ control over the drilling of new wells and the facilities to transport natural gas to NJNG’s citygate stations;

development of additional interstate pipeline infrastructure;

availability of supply sources;

third-party pipelines or other midstream facilities interconnected to our gathering or transportation system, such as the TETCO or Transcontinental Pipeline, becoming partially or fully unavailable;

competition for the acquisition of natural gas;

priority allocations;

impact of severe weather disruptions to natural gas supplies;

and the regulatory and pricing policies of federal and state regulatory agencies.

Energy deregulation legislation may increase competition among natural gas utilities and impact the quantities of natural gas requirements needed for sales service.

ES also relies on a firm supply source to meet its energy management obligations to its customers.

If supply, transportation or storage is disrupted, including for reasons of force majeure, the ability of NJNG and ES to sell and deliver their products and services may be hindered.

As a result, they may be responsible for damages incurred by their customers, such as the additional cost of acquiring alternative supply at then-current market rates.

Particularly for ES, these conditions could have a material impact on our financial condition, results of operations and cash flows.

Failure to attract and retain an appropriately qualified workforce could adversely affect operations.

Our ability to implement our business strategy and serve our customers is dependent upon our continuing ability to attract and retain talented professionals and a technically skilled workforce, and being able to transfer the knowledge and expertise of our workforce to new employees as our aging employees retire.

Failure to hire and adequately train replacement employees, including the transfer of significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor, could adversely affect the ability to manage and operate our business.

Disputes with the Union over terms and conditions of the collective bargaining agreements could result in instability in our labor relationship and work stoppages that could impair the timely delivery of natural gas and other services from our utility and Home Services business, which could strain relationships with customers and state regulators and cause a loss of revenues that could adversely affect our results of operations.

Our collective bargaining agreements may also increase the cost of employing NJNG and Home Services workforce, affect our ability to continue offering market-based salaries and employee benefits, limit our flexibility in dealing with our workforce and limit our ability to change work rules and practices and implement other efficiency-related improvements to successfully compete in today’s challenging marketplace.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Our success depends upon our ability to attract, effectively transition, motivate and retain key employees and identify and develop talent to succeed senior management.

We depend on senior executive officers and other key personnel to develop, implement and execute on our overall business strategy.

The inability to recruit and retain or effectively transition key personnel or the unexpected loss of key personnel may adversely affect our operations.

Weather and weather patterns, including normal seasonal fluctuations of weather, as well as extreme weather events that, individually or in aggregate, may be associated with climate change, could adversely affect our ability to manage our operational requirements to serve our customers, and ultimately adversely affect our results of operations and liquidity.

NJNG’s business is seasonal, and weather patterns can have a material impact on our financial performance.

18 unchanged sentences

We may be adversely impacted by natural disasters, pandemic illness, war or terrorist activities and other extreme events to which we may be unable to promptly respond.

Local or national natural disasters, pandemic illness, actual or threatened acts of war or terrorist activities, including the political and economic disruption and uncertainty related to Russia’s military invasion of Ukraine and conflicts in the Middle East, catastrophic failure of the interstate pipeline system and other extreme events are a threat to our assets and operations.

Local or national natural disasters, pandemic illness, actual or threatened acts of war or terrorist activities, including the political and economic disruption and uncertainty related to international conflicts, catastrophic failure of the interstate pipeline system and other extreme events are a threat to our assets and operations.

Companies in our industry that are located in our service territory may face a heightened risk due to exposure to acts of terrorism that could target or impact our natural gas distribution, transmission and storage facilities and disrupt our operations and ability to meet customer requirements.

1 unchanged sentence

Natural disasters, political unrest or actual or threatened terrorist activities may also disrupt capital markets and our ability to raise capital or may impact our suppliers or our customers directly.

New Jersey Resources Corporation

RISK FACTORS (Continued)

A local disaster or pandemic illness could result in part of our workforce being unable to operate or maintain our infrastructure or perform other tasks necessary to conduct our business.

2 unchanged sentences

Our regulators may not allow us to recover from our customers part or all of the increased cost related to the foregoing events, which could negatively affect our financial condition, results of operations and cash flows.

A slow or inadequate response to events that could cause business interruption may have an adverse impact on operations and earnings.

We may be unable to obtain sufficient insurance (or such insurance may be costly) to cover all risks associated with local and national disasters, pandemic illness, terrorist activities, catastrophic failure of the interstate pipeline system and other events, which could increase the risk that an event adversely affects our financial condition, results of operations and cash flows.

Risks Related to Technologies

Cyberattacks, ransomware, terrorism, other malicious acts against, or failure of, information technology systems could adversely affect our business operations, financial condition and results of operations.

We continue to place ever-greater reliance on technological tools that support our business operations and corporate functions, including tools that help us manage our natural gas distribution and energy trading operations and infrastructure.

The failure of, or security breaches related to, these technologies could materially adversely affect our business operations, financial position, results of operations and cash flows.

We rely on information technology to manage our natural gas distribution and storage, energy trading and other corporate operations;

maintain customer, employee, Company and vendor data;

and prepare our financial statements and perform other critical business processes.

This technology may fail due to cyberattack, physical disruption, design and implementation defects or human error.

Disruption or failure of business operations and information technology systems could harm our facilities or otherwise adversely impact our ability to safely deliver natural gas to our customers, serve our customers effectively or manage our assets.

Additionally, an attack on, or failure of, information technology systems could result in the unauthorized release of customer, employee or other confidential or sensitive data.

Cyberattacks, ransomware, terrorism or other malicious acts could damage, destroy or disrupt these systems for an extended period of time.

The energy sector, including natural gas utility companies, has become the subject of cyberattacks with increased frequency.

Additionally, the facilities and systems of clients, suppliers and third-party service providers could be vulnerable to the same cyber or terrorism risks as our facilities and systems, and such third-party systems may be interconnected to our systems both physically and technologically.

Therefore, an event caused by cyberattacks, ransomware or other malicious acts at an interconnected third party could impact our business and facilities.

Any failure or unexpected or unauthorized use of technology systems could result in the unavailability of such systems, and could result in a loss of operating revenues, an increase in operating expenses and costs to repair or replace damaged assets.

Any of the above could also result in the loss or release of confidential customer and/or employee information or other proprietary data that could adversely affect our reputation and competitiveness, could result in costly litigation and could negatively impact our results of operations.

These cyberattacks have become more common and sophisticated and, as such, we could be required to incur costs to strengthen our systems and respond to emerging concerns.

There is no guarantee that redundancies built into our networks and technology, or the procedures we have implemented to protect against cyberattacks and other unauthorized access to secured data, will guarantee protection against all failures of technology or security breaches.

Furthermore, despite our efforts to investigate, improve and remediate the capability and performance of our information technology system, we may not be able to discover all weaknesses, breaches and vulnerabilities, and failure to do so may expose us to higher risk of data loss and adversely affect our business operations and results of operations.

Failure to keep pace with technological change may limit customer growth and have an adverse effect on our operations.

Advances in technology and changes in laws or regulations are reducing the cost of alternative methods of producing and/or consuming energy.

In addition, customers are increasingly expecting enhanced communications regarding their electric and natural gas services, which, in some cases, may involve additional investments in technology.

Our future success will depend, in part, on our ability to anticipate and successfully adapt to technological changes and to offer services that meet customer demand.

Failure to adapt to advances in technology and manage the related costs could make us less competitive and negatively impact our financial condition, results of operations and cash flows.

New Jersey Resources Corporation

RISK FACTORS (Continued)

A slow or inadequate response to events that could cause business interruption may have an adverse impact on operations and earnings.

Risks Related to Regulations and Litigation

9 unchanged sentences

Changes in regulations or the imposition of additional regulations could influence our operating environment and may result in substantial costs to us.

Our regulated operations are subject to certain operating risks incidental to handling, storing, transporting and providing customers with natural gas.

Our regulated operations are subject to all operating hazards and risks incidental to handling, storing, transporting and providing customers with natural gas, including our natural gas vehicle refueling stations and LNG facilities.

These risks include catastrophic failure of the interstate pipeline system, explosions, pollution, release of toxic substances, fires, storms, safety issues and other adverse weather conditions and hazards, each of which could result in damage to or destruction of facilities or damage to persons and property.

We could suffer substantial losses should any of these events occur.

Although we maintain insurance coverage, insurance may not be sufficient to cover all material expenses related to these risks, and such insurance may be costly.

We are involved in legal or administrative proceedings before various courts and governmental bodies that could adversely affect our results of operations, cash flows and financial condition.

6 unchanged sentences

Additionally, any alleged violations of environmental laws and regulations may require us to expend resources in our defense against alleged violations.

Furthermore, the U.S.

Congress has for some time been considering various forms of climate change legislation.

In addition, in July 2019, the State of New Jersey amended the GWRA, which targets 80% reduction in greenhouse gas emissions below 2006 levels economy-wide by 2050.

In July 2019, the State of New Jersey amended the GWRA, which targets 80% reduction in greenhouse gas emissions below 2006 levels economy-wide by 2050.

In January 2020, New Jersey released the EMP confirming its commitment to achieve 100% clean energy by 2050, and the GWRA mandate of reducing state greenhouse gas emissions.

The EMP addressed New Jersey’s energy system, including electric generation, transportation and buildings, and their associated greenhouse gas emissions and related air pollutants.

The EMP defines 100% clean energy by 2050 to mean 100% carbon-neutral electric generation and maximum electrification of the transportation and building sectors, which are the greatest carbon emission-producing sectors in the state, to meet or exceed the GWRA emissions reductions by 2050.

Our goals, to reduce our New Jersey operational emissions by 60% from 2006 levels by 2030 and to achieve net-zero carbon emissions from our New Jersey operations by 2050, may require additional technological, legislative and regulatory developments, the impacts and costs of which may not be fully known at this time.

1 unchanged sentence

RISK FACTORS (Continued)

While the EMP does not place a moratorium or end date on natural gas hook ups, further legislation or rulemaking that de-emphasizes the role of natural gas in providing clean, low-cost energy in the state of New Jersey could put upward pressure on natural gas prices and place customer growth targets at risk.

Higher cost levels could impact the competitive position of natural gas and negatively affect our growth opportunities, cash flows and earnings.

In February 2023, the Governor of New Jersey issued two executive orders that established, or accelerated, previously established 2050 targets for clean-sourced electricity and electric heat pump adoption, with target dates of 2030 or 2035, as applicable.

An additional executive order opened a proceeding to plan for the future of natural gas utilities in New Jersey.

Additionally, New Jersey continues to work on updating the EMP to examine the progress that has been made toward the seven strategies enumerated in the 2019 EMP, as well as to provide an overview of New Jersey’s progress toward achieving 100% clean energy by 2035 and an 80% reduction in greenhouse gas emissions by 2050.

In addition, the U.S.

Congress may from time to time consider various forms of climate change legislation.

We are unable to predict the outcomes of these proceedings, but they could have a material impact on our business, results of operations and cash flows.

Higher cost levels could impact the competitive position of natural gas and negatively affect our growth opportunities, cash flows and earnings.

Risks related to regulation could affect the rates we are able to charge, various costs and our profitability.

3 unchanged sentences

Additionally, in fiscal 2019, NJR began the process of transitioning away from its enterprise platform, which will no longer receive extended support after 2025.

The first phase of IT enhancements and upgrades were placed into service in July 2020.

The first phase of information technology enhancements and upgrades were placed into service in July 2020.

The remaining phases of planned upgrades relate to work order and asset management and customer information systems and experience, which are expected to require significant capital investment.

There can be no assurance that NJNG will be able to obtain rate increases and continue its BGSS incentive, CIP, RAC, or SAVEGREEN programs and IT upgrades and enhancements or continue to earn its currently authorized rates of return.

There can be no assurance that NJNG will be able to obtain rate increases and continue its BGSS incentive, CIP, RAC or SAVEGREEN programs and information technology upgrades and enhancements or continue to earn its currently authorized rates of return.

Adelphia is subject to regulation by FERC.

2 unchanged sentences

There can be no assurance that Adelphia will be able to obtain rate increases or continue to earn its currently authorized rate of return.

Risks Related to Technologies

Cyberattacks, ransomware, terrorism or other malicious acts against, or failure of, operations and information technology systems could adversely affect our business operations, financial condition and results of operations.

The failure of, or security breaches related to, these technologies could materially adversely affect our business operations, financial position, results of operations and cash flows.

We rely on information technology to manage our natural gas distribution and storage, energy trading and other corporate operations;

maintain customer, employee, Company and vendor data;

and prepare our financial statements and perform other critical business processes.

This technology may fail due to cyberattack, physical disruption, design and implementation defects or human error.

Additionally, an attack on, or failure of, information technology systems could result in the unauthorized release of customer, employee or other confidential or sensitive data.

Cyberattacks, ransomware, terrorism or other malicious acts could damage, destroy or disrupt these systems for an extended period of time.

The energy sector, including natural gas utility companies, has become the subject of cyberattacks with increasing frequency.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Therefore, an event caused by cyberattacks, ransomware or other malicious acts at an interconnected third party could impact our business and facilities.

Any failure or unexpected or unauthorized use of technology systems could result in the unavailability of such systems and could result in a loss of operating revenues, an increase in operating expenses and an increase in costs to repair or replace damaged assets.

Any of the above could also result in the loss or release of confidential customer and/or employee information or other proprietary data that could adversely affect our reputation and competitiveness, result in costly litigation and negatively impact our results of operations.

These cyberattacks have become more common and sophisticated and, as such, we could be required to incur costs to strengthen our systems and respond to emerging concerns.

Failure to keep pace with technological change may limit customer growth and have an adverse effect on our operations.

Advances in technology and changes in laws or regulations are reducing the cost of alternative methods of producing and/or consuming energy.

In addition, customers are increasingly expecting enhanced communications regarding their electric and natural gas services, which, in some cases, may involve additional investments in technology.

Our future success will depend, in part, on our ability to anticipate and successfully adapt to technological changes and to offer services that meet customer demand.

Failure to adapt to advances in technology and manage the related costs could make us less competitive and negatively impact our financial condition, results of operations and cash flows.

Risks Related to Our Markets

11 unchanged sentences

or the inability to source needed materials, which has occurred and could reoccur, could adversely affect the Company’s results of operations, financial condition and cash flows.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Changes in customer growth may affect earnings and cash flows.

2 unchanged sentences

Furthermore, while our estimates regarding customer growth are based in part upon information from third parties, the estimates have not been verified by an independent source and are subject to the aforementioned risks and uncertainties, which could cause actual results to materially deviate from the estimates.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Our economic hedging activities that are designed to protect against commodity and financial market risks, including the use of derivative contracts in the normal course of our business, may cause fluctuations in reported financial results and financial losses that negatively impact results of operations and our stock price.

6 unchanged sentences

We are exposed to market risk and may incur losses in our wholesale business.

Our transportation and storage portfolios consist of contracts to transport and store natural gas.

Our transportation and storage portfolio consists of contracts to transport and store natural gas.

The value of our transportation and storage portfolio could be negatively impacted if the value of these contracts changes in a direction or manner that we do not anticipate.

7 unchanged sentences

This situation could also result in higher short-term debt levels and increased bad debt expense.

Risks Related to Acquisition and Investment Strategies

Any acquisitions that we may undertake involve risks and uncertainties.

We may not realize the anticipated synergies, cost savings and growth opportunities as a result of these transactions.

The integration of acquisitions requires significant time and resources.

Investments of resources are required to support any acquisition, which could result in significant ongoing operating expenses, and we may experience challenges when combining separate business cultures, information technology systems and employees, and those challenges may divert senior management’s time and attention.

If we fail to successfully integrate assets and liabilities through the entities which we acquire, we may not fully realize all of the growth opportunities, benefits expected from the transaction, cost savings and other synergies and, as a result, the fair value of assets acquired could be impaired.

We assess long-lived assets, including intangible assets associated with acquisitions, for impairment whenever events or circumstances indicate that an asset’s carrying amount may not be recoverable.

To the extent the value of long-lived assets becomes impaired, the impairment charges could have a material impact on our financial condition and results of operations.

The benefits that we expect to achieve from acquisitions will depend, in part, on our ability to realize anticipated growth opportunities and other synergies with our existing businesses.

The success of these transactions will depend on our ability to integrate these transactions within our existing businesses in a timely and seamless manner.

Even if we are able to complete an integration successfully, we may not fully realize all the growth opportunities, cost savings and other synergies that we expect.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Investing through partnerships or joint ventures decreases our ability to manage risk.

We have utilized joint ventures through partnerships for certain S&T investments.

Although we currently have no specific plans to do so, we may acquire interests in other joint ventures or partnerships in the future.

In these joint ventures or partnerships, we may not have the right or power to direct the management and policies of the joint ventures or partnerships, and other participants or investors may take action contrary to our instructions or requests and against our policies and objectives.

In addition, the other participants may become bankrupt or have economic or other business interests or goals that are inconsistent with those of NJR and our subsidiaries and affiliates.

Our financial condition, results of operations or cash flows could be harmed if a joint venture participant acts contrary to our interests.

Risks Related to Credit and Liquidity

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Additionally, lower credit ratings could adversely affect relationships with NJNG’s state regulators, who may be unwilling to allow NJNG to pass along increased costs to its natural gas customers.

New Jersey Resources Corporation

RISK FACTORS (Continued)

If we are unable to access the financial markets or there are adverse conditions in the equity or credit markets, including, but not limited to, inflationary pressures, recessionary pressures or rising interest rates, it could affect management’s ability to execute our business plans.

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• fluctuations in interest rates and increased borrowing costs.

New Jersey Resources Corporation

RISK FACTORS (Continued)

Failure by NJR and/or NJNG to comply with debt covenants may impact our financial condition.

11 unchanged sentences

ES and NJNG execute derivative transactions with financial institutions as a part of their economic hedging strategy and could incur losses associated with the inability of a financial counterparty to meet or perform under its obligations as a result of adverse conditions in the credit markets or their ability to access capital or post collateral.