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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-11-20 compared with 2024-11-26 · 221 added, 45 removed, 570 unchanged (32% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)

The following is a summary of fair market value of financial derivatives as of September 30, 2025, by method of valuation and by maturity for each fiscal year period:

(Thousands) 2026 2027 2028 - 2030 After 2030 Total

Price based on ICE $ 7,035 $ 343 $ 312 $ — $ 7,690

The following is a summary of financial derivatives by type as of September 30, 2025:

Volume Bcf Price per MMBtu Amounts included in Derivatives (Thousands)

NJNG Futures 36.1 $1.10 - $4.36 $ 346

ES Futures (4.7) $1.69 - $5.19 7,344

Total $ 7,690

The following table reflects the changes in the fair market value of physical commodity contracts:

Balance Increase Less Balance

(Thousands) September 30,

2024 (Decrease) in Fair

Market Value Amounts

Settled September 30,

NJNG - Prices based on other external data $ (558) (7,073) (7,659) $ 28

ES - Prices based on other external data (12,717) 3,015 (4,914) (4,788)

Total $ (13,275) (4,058) (12,573) $ (4,760)

Our market price risk is predominately linked with changes in the price of natural gas at the Henry Hub, the delivery point for the NYMEX natural gas futures contracts.

Based on price sensitivity analysis, an illustrative 10% movement in the natural gas futures contract price, for example, increases (decreases) the reported derivative fair value of all open, unadjusted Henry Hub natural gas futures and fixed price swap positions by approximately $3.5M.

This analysis does not include potential changes to reported credit adjustments embedded in the $7.1M reported fair value.

Derivative Fair Value Sensitivity Analysis

(Thousands) Henry Hub Futures and Fixed Price Swaps

Percent increase in NYMEX natural gas futures prices 0% 5% 10% 15% 20%

Estimated change in derivative fair value $ — $ (1,732) $ (3,465) $ (5,197) $ (6,929)

Ending derivative fair value $ 7,144 $ 5,412 $ 3,679 $ 1,947 $ 215

Percent decrease in NYMEX natural gas futures prices 0% (5)% (10)% (15)% (20)%

Estimated change in derivative fair value $ — $ 1,732 $ 3,465 $ 5,197 $ 6,929

Ending derivative fair value $ 7,144 $ 8,876 $ 10,609 $ 12,341 $ 14,073

Wholesale Credit Risk

4 unchanged sentences

The amounts presented below exclude accounts receivable for NJNG retail natural gas sales and services.

New Jersey Resources Corporation

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)

ES’s, CEV’s and S&T’s counterparty credit exposure as of September 30, 2025, is as follows:

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Critical Audit Matter Description

New Jersey Natural Gas Company (“NJNG”), a subsidiary of the Company, is a regulated gas distribution company that serves customers in central and northern New Jersey.

NJNG is subject to regulation by the New Jersey Board of Public Utilities (the “BPU”), which has jurisdiction with respect to the rates of gas distribution companies in New Jersey.

Management has determined NJNG meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements in accordance with ASC 980, Regulated Operations.

New Jersey Natural Gas Company (“NJNG”), a subsidiary of the Company, is a regulated gas distribution company and is subject to regulation by the New Jersey Board of Public Utilities (the “BPU”).

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

NJNG is subject to cost-based regulation;

therefore, it is permitted to recover authorized operating expenses and earn a reasonable return on its utility capital investments based on the BPU’s approval.

The impact of the ratemaking process and decisions authorized by the BPU allows NJNG to capitalize or defer certain costs that are expected to be recovered from its customers as regulatory assets, and to recognize certain obligations representing amounts that are probable future expenditures as regulatory liabilities in accordance with accounting guidance applicable to regulated operations.

Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.

The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense.

Regulatory liabilities are recognized for amounts that are expected to be returned to customers through future regulated customer rates.

Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates.

Decisions to be made by the BPU in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required.

Accounting for the economics of rate-regulation impacts multiple financial statement line items and disclosures, such as regulated property, plant, and equipment, regulatory assets and liabilities, operating revenues and depreciation expense.

While NJNG expects to recover costs from customers through regulated rates, there is a risk that the BPU will not approve full recovery of such costs or full recovery of all amounts invested in the utility business and a reasonable return on that investment.

We identified the impact of rate-regulation as a critical audit matter due to the significant judgments made by management to support its assertions about the impact of regulatory orders on the financial statements, including assessing the probability of both recovery in rates of incurred costs, and refunds to customers.

Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the BPU, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

We identified the impact of rate regulation at NJNG as a critical audit matter due to the significant judgments made by management to support its assertions about the impacted account balances and disclosures, including assessing the probability of both recovery in rates of incurred costs, and refunds to customers.

Auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty around the impact of regulatory orders on the financial statements, including the probability of both recovery in rates of incurred costs, and refunds to customers, included the following, among others:

• We tested the effectiveness of controls over the relevant regulatory account balances and disclosures, including management’s controls over the monitoring and evaluation of regulatory developments that may affect the probability of recovering costs in future rates or of a future reduction in rates due to refunds to customers.

• We read relevant regulatory orders issued by the BPU for NJNG and other public utilities in New Jersey, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the probability of recovery in future rates or of a future reduction in rates based on precedence of the BPU’s treatment of similar costs under similar circumstances.

We also obtained and read the November 21, 2024 BPU order adopting the stipulation of settlement for NJNG’s January 2024 base rate case.

We evaluated the external information and compared that to management’s assertions regarding the probability of recovery or refund of regulatory asset and liability balances for completeness.

• We obtained an analysis from management regarding the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities in order to assess management’s assertion that amounts are probable of recovery or a future reduction in rates.

Our audit procedures related to the impact of regulatory orders, including the probability of both recovery in rates of incurred costs, and refunds to customers, included the following, among others:

• We tested the effectiveness of management’s internal controls over the evaluation of the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.

We tested the effectiveness of management’s internal controls over the recognition of amounts deferred as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the probability of recovering costs in future rates or of a future reduction in rates due to refunds to customers.

• We obtained and read relevant regulatory orders issued by the BPU for NJNG and other publicly available information to assess the probability of recovery in future rates or of a future reduction in rates based on precedence of the BPU’s treatment of similar costs under similar circumstances.

• We obtained an analysis from management regarding the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities to assess management’s assertion that amounts are probable of recovery or a future reduction in rates.

• We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.

47 unchanged sentences

Depreciation and amortization 188,774 166,567 152,941

Gain on sale of assets ( 58,200 ) — —

Total operating expenses 1,527,545 1,338,435 1,555,994

15 unchanged sentences

Net income $ 335,627 $ 289,775 $ 264,724

Other comprehensive income (loss), net of tax

Other comprehensive (loss) income, net of tax

Reclassifications of losses to net income on derivatives designated as hedging instruments, net of tax of $( 317 ), $( 317 ) and $( 317 ), respectively

2 unchanged sentences

( 5,994 ) 2,384 ( 6,186 )

Other comprehensive income (loss), net of tax 3,438 ( 5,133 ) 29,702

Other comprehensive (loss) income, net of tax ( 4,942 ) 3,438 ( 5,133 )

Comprehensive income $ 330,685 $ 293,213 $ 259,591

7 unchanged sentences

Adjustments to reconcile net income to cash flows from operating activities

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

Unrealized (gain) loss on derivative instruments ( 12,126 ) 19,574 ( 38,081 )

Gain on sale of assets ( 58,200 ) — —

Depreciation and amortization 188,774 166,567 152,941

19 unchanged sentences

Distribution from equity investees in excess of equity in earnings 612 2,246 2,294

Investments in equity investees, net of return of capital — — 5,479

Proceeds from sale of assets 137,195 — —

Cash flows used in investing activities ( 568,271 ) ( 569,073 ) ( 538,625 )

2 unchanged sentences

Payments of long-term debt ( 206,922 ) ( 125,066 ) ( 71,934 )

Proceeds from term loan — — 150,000

Payments of term loan — — ( 150,000 )

Proceeds from (payments of) short-term debt, net 39,700 ( 21,850 ) ( 103,350 )

(Payments of) proceeds from short-term debt, net ( 96,200 ) 39,700 ( 21,850 )

Proceeds from sale leaseback transactions - solar 251,171 64,694 167,790

27 unchanged sentences

Accrued capital expenditures $ 60,965 $ 22,535 $ 25,867

Notes receivable recognized as non-cash investing activity $ 42,500 $ — $ —

See Notes to Consolidated Financial Statements

35 unchanged sentences

Postemployment employee benefit assets 40,813 24,660

Notes receivable 42,500 —

Other noncurrent assets 121,839 71,667

60 unchanged sentences

Net income — — — — — 264,724 264,724

Other comprehensive income — — — 29,702 — — 29,702

Other comprehensive loss — — — ( 5,133 ) — — ( 5,133 )

Common stock issued:

2 unchanged sentences

258 205 6,069 — 8,760 — 15,034

Waiver discount 948 1,298 28,059 — 13,450 — 42,807

Cash dividend declared ($ 1.59 per share)

3 unchanged sentences

Net income — — — — — 289,775 289,775

Other comprehensive loss — — — ( 5,133 ) — — ( 5,133 )

Other comprehensive income — — — 3,438 — — 3,438

Common stock issued:

8 unchanged sentences

Net income — — — — — 335,627 335,627

Other comprehensive income — — — 3,438 — — 3,438

Other comprehensive loss — — — ( 4,942 ) — — ( 4,942 )

Common stock issued:

14 unchanged sentences

NJNG comprises the Natural Gas Distribution segment.

NJRCEV, the Company’s clean energy subsidiary, comprises the CEV segment and owns and operates clean energy projects, including commercial and residential solar installations located in New Jersey, Rhode Island, New York, Connecticut, Michigan and Indiana.

On November 25, 2024, CEV completed the sale of its 91 MW 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.

Subsequent Events for more information regarding the transaction.

NJRCEV, the Company’s clean energy subsidiary, comprises the CEV segment, which owns and operates clean energy projects, including commercial solar installations located in New Jersey, Rhode Island, New York, Connecticut, Michigan, Indiana and Pennsylvania.

On November 25, 2024, CEV completed the sale of its residential solar portfolio, and related assets and liabilities, to a third party for a purchase price of $ 132.5 M.

Dispositions for more information regarding the transaction.

NJRES comprises the ES segment.

2 unchanged sentences

The Company operates natural gas storage and transmission assets through the wholly-owned subsidiaries of Leaf River and Adelphia and is subject to rate regulation by FERC.

The Company holds a 50 % combined ownership interest in Steckman Ridge, located in Pennsylvania, which is accounted for under the equity method of accounting.

The Company holds a 50 % combined ownership interest in Steckman Ridge, a FERC-jurisdictional natural gas storage facility located in Pennsylvania, which is accounted for under the equity method of accounting.

NJR Retail Holdings Corporation has one principal subsidiary:

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In addition, changes in the fair value of derivatives that economically hedge the forecasted sales of the natural gas are recognized in operating revenues as they occur.

ES also recognizes changes in the fair value of SREC derivative contracts as a component of operating revenues.

During December 2020, ES entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts, which commenced in November 2021.

ES also recognizes changes in the fair value of SREC derivative contracts for forward sales as a component of operating revenues.

In December 2020, ES entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts, which commenced in November 2021.

The AMAs include a series of temporary and permanent releases, and revenue under these agreements is recognized as the performance obligations are satisfied.

1 unchanged sentence

For permanent releases of pipeline capacity, which represent a transfer of contractual rights for such capacity, revenue is recognized upon the transfer of the underlying contractual rights.

ES recognized $ 137.2 M and $ 48.5 M of operating revenue related to the AMAs on the Consolidated Statements of Operations during fiscal 2024 and 2023, respectively.

Amounts received in excess of revenue recognized totaling $ 22.3 M and $ 58.7 M are included in deferred revenue on the Consolidated Balance Sheets as of September 30, 2024 and 2023, respectively.

ES recognized approximately $ 19.7 M, $ 137.2 M and $ 48.5 M of operating revenue related to the AMAs on the Consolidated Statements of Operations during fiscal 2025, 2024 and 2023, respectively.

Amounts received in excess of revenue recognized totaling approximately $ 36.8 M and $ 22.3 M are included in deferred revenue on the Consolidated Balance Sheets as of September 30, 2025 and 2024, respectively.

S&T generates revenues from firm storage contracts and transportation contracts, related usage fees and hub services for the use of storage space, injections and withdrawals from their natural gas storage facility and the delivery of natural gas to customers.

52 unchanged sentences

Upon retirement, the cost of depreciable property, plus removal costs less salvage, is charged to accumulated depreciation with no gain or loss recorded.

Depreciation is computed on a straight-line basis over the useful life of the assets for the Company’s nonutility entities, and using rates based on the estimated average lives of the various classes of depreciable property for NJNG.

Depreciation is computed on a straight-line basis over the useful life of the assets for the Company’s nonutility entities, using rates based on the estimated average lives of the various classes of depreciable property for NJNG.

The composite rate of depreciation used for NJNG was 3.19 % of average depreciable property in fiscal 2025, 2.69 % in fiscal 2024 and 2.68 % in fiscal 2023.

24 unchanged sentences

This natural gas is not depreciated, as it is expected to be recovered and sold.

As of September 30, 2024 and 2023, the base gas had a cost basis of $ 21.4 M and $ 20.9 M, respectively.

The base gas had a cost basis of $ 21.4 M for both September 30, 2025 and 2024.

Capitalized and Deferred Interest

35 unchanged sentences

The Company segregates financial assets, primarily trade receivables and unbilled revenues due in one year or less, into portfolio segments based on shared risk characteristics, such as geographical location and regulatory environment, for evaluation of expected credit losses.

Historical and current information, such as average write-offs, are applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables.

Historical and current information, such as average write-offs, is applied to each portfolio segment to estimate the allowance for losses on uncollectible receivables.

Additionally, the allowance for losses on uncollectible receivables is adjusted for reasonable and supportable forecasts of future economic conditions, which can include changing weather, commodity prices, regulations and macroeconomic factors, such as unemployment rates, among others.

Loans Receivable

NJNG currently provides loans, with terms ranging from three to 10 years, to customers that elect to purchase and install certain energy-efficient equipment in accordance with its BPU-approved SAVEGREEN program.

Loans and Notes Receivable

NJNG currently provides loans, with terms ranging from five to 10 years, to customers that elect to purchase and install certain energy-efficient equipment in accordance with its BPU-approved SAVEGREEN program.

The loans are recognized at fair value on the Consolidated Balance Sheets.

The Company has $ 18.1 M and $ 15.1 M recorded in other current assets and $ 53.6 M and $ 39.0 M in other noncurrent assets as of September 30, 2024 and 2023, respectively, on the Consolidated Balance Sheets, related to the loans.

The Company regularly evaluates the credit quality and collection profile of its customers.

If NJNG determines a loan is impaired, the basis of the loan would be subject to regulatory review for recovery.

As of September 30, 2024 and 2023, the Company has not recorded any impairments for SAVEGREEN loans.

The Company has approximately $ 21.5 M and $ 18.1 M recorded in other current assets and approximately $ 69.4 M and $ 53.6 M in other noncurrent assets as of September 30, 2025 and 2024, respectively, on the Consolidated Balance Sheets, related to the loans.

On August 28, 2025, CEV entered into a seller-based financing arrangement with a third party for the sale of certain solar energy modules totaling $ 42.5 M.

Amounts related to the financing are due to CEV no later than December 31, 2027, and are recorded as notes receivable within the Company’s consolidated balance sheet as of September 30, 2025.

The Company evaluates loans and notes receivable for collectability each reporting period in accordance with the current expected credit loss model.

If necessary, an allowance is recorded to reflect potential losses.

As of September 30, 2025, the Company has not recorded a reserve for credit losses associated with outstanding loans and notes receivable.

Regulatory Assets & Liabilities

7 unchanged sentences

Natural gas in storage is reflected at average cost on the Consolidated Balance Sheets and represents natural gas and LNG that will be utilized in the ordinary course of business.

The following table summarizes natural gas in storage, at average cost by company, as of September 30:

The following table summarizes natural gas in storage, at average cost by reportable segment, as of September 30:

($ in thousands) Natural Gas in Storage Bcf Natural Gas in Storage Bcf

1 unchanged sentence

ES 30,686 13.2 21,378 13.1

S&T 1,051 0.3 92 —

Total $ 215,836 44.3 $ 199,125 43.9

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Derivative Instruments

3 unchanged sentences

Cash flows from derivative financial instruments are included in cash flows from operating activities on the Consolidated Statements of Cash Flows.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

ASC 815, Derivatives and Hedging, also provides for a NPNS scope exception for qualifying physical commodity contracts for which physical delivery is probable and the quantities delivered are expected to be used or sold over a reasonable period of time in the normal course of business.

21 unchanged sentences

Amortization is recorded on the straight-line basis over the estimated useful lives.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

The following table presents the software costs included in the Consolidated Financial Statements, as of September 30:

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If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value of the asset to its fair value.

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 2025 and 2024, 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 that 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

NJNG utilizes sale leaseback arrangements as a financing mechanism to fund certain of its capital expenditures related to natural gas meters, whereby the physical asset is sold concurrent with an agreement to lease the asset back.

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.

In addition, for certain of its commercial solar energy projects, the Company enters into lease agreements that provide for the sale of commercial solar energy assets to third parties and the concurrent leaseback of the assets.

For sale leaseback transactions where the Company has concluded that the arrangement does not qualify as a sale as the Company retains control of the underlying assets, the Company uses the financing method to account for the transaction.

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 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.

Accordingly, CEV recognizes the equivalent value of the tax attributes in other income on the Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease.

Debt for more details regarding sale leaseback transactions recorded as financing arrangements.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

Environmental Contingencies

Loss contingencies are recorded as liabilities when it is probable a liability has been incurred and the amount of the loss is reasonably estimable in accordance with accounting standards for contingencies.

Estimating probable losses requires an analysis of uncertainties that often depend upon judgments about potential actions by third parties.

Accruals for loss contingencies are recorded based on an analysis of potential results.

With respect to environmental liabilities and related costs, NJNG periodically, and at least annually, performs an environmental review of MGP sites, including a review of potential liability for investigation and remedial action.

NJNG’s estimate of these liabilities is based upon known facts, existing technology and enacted laws and regulations in place when the review was completed.

Where it is probable that costs will be incurred, and the information is sufficient to establish a range of possible liability, NJNG accrues the most likely amount in the range.

If no point within the range is more likely than the other, it is NJNG’s policy to accrue the lower end of the range.

The actual costs to be incurred by NJNG are dependent upon several factors, including final determination of remedial action, changing technologies and governmental regulations, the ultimate ability of other responsible parties to pay and any insurance recoveries.

NJNG will continue to seek recovery of MGP-related costs through the RAC.

If any future regulatory position indicates that the recovery of such costs is not probable, the related non-recoverable costs would be charged to income in the period of such determination.

Commitments and Contingent Liabilities for more details.

Pension and Postemployment Plans

The Company has two noncontributory defined pension plans covering eligible employees, including officers.

Benefits are based on each employee’s years of service and compensation.

The Company’s funding policy is to contribute annually to these plans at least the minimum amount required under the Employee Retirement Income Security Act, as amended, and not more than can be deducted for federal income tax purposes.

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

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

Medical benefits, which make up the largest component of the plans, are based upon an age and years-of-service vesting schedule and other plan provisions.

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

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

Asset Retirement Obligations

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 AROs is 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 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, AROs are subject to change.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

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

(Thousands) Balance at October 1 Accretion Additions Change in assumptions Retirements Balance at period end

NJNG $ 59,674 3,353 351 7,079 ( 2,044 ) $ 68,413

NJRCEV $ 7,023 256 815 — — $ 8,094

NJNG $ 55,285 3,039 152 2,925 ( 1,727 ) $ 59,674

NJRCEV $ 6,708 236 79 — — $ 7,023

Accretion for the next five years, for the fiscal years ended September 30, is estimated to be as follows:

(Thousands) 2026 2027 2028 2029 2030 Total

Estimated Accretion $ 3,955 4,156 4,376 4,616 4,868 $ 21,971

Accumulated Other Comprehensive Income

The following table presents the changes in the components of accumulated other comprehensive income, net of related tax effects:

(Thousands) Cash Flow Hedges Postemployment Benefit Obligation Total

Balance as of September 30, 2023 $ ( 7,269 ) $ ( 2,690 ) $ ( 9,959 )

Other comprehensive income, net of tax

Other comprehensive income, before reclassifications, net of tax of $ 0 , $( 1,002 ) and $( 1,002 ), respectively

— 3,360 3,360

Amounts reclassified from accumulated other comprehensive income, net of tax of $( 317 ), $ 296 and $( 21 ), respectively

1,054 ( 976 ) (1) 78

Net current-period other comprehensive income, net of tax of $( 317 ), $( 706 ) and $( 1,023 ), respectively

1,054 2,384 3,438

Balance as of September 30, 2024 $ ( 6,215 ) $ ( 306 ) $ ( 6,521 )

Other comprehensive income, net of tax

Other comprehensive income, before reclassifications, net of tax of $ 0 , $ 1,571 and $ 1,571 , respectively

— ( 5,213 ) ( 5,213 )

Amounts reclassified from accumulated other comprehensive income, net of tax of $( 317 ), $ 232 and $( 85 ), respectively

1,052 ( 781 ) (1) 271

Net current-period other comprehensive income, net of tax of $( 317 ), $ 1,803 and $ 1,486 , respectively

1,052 ( 5,994 ) ( 4,942 )

Balance as of September 30, 2025 $ ( 5,163 ) $ ( 6,300 ) $ ( 11,463 )

(1) Included in the computation of net periodic pension cost, a component of O&M on the Consolidated Statements of Operations.

For more details, see Note 11.

Employee Benefit Plans .

Recently Adopted Updates to the Accounting Standards Codification

Fair Value Measurement

In June 2022, the FASB issued ASU No.

2022-03 , an amendment to ASC 820, Fair Value Measurement .

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

The guidance became effective for the Company on October 1, 2024, and was applied on a prospective basis.

As the Company does not have equity securities subject to contractual sale restrictions, there was no impact on the Company’s financial position, results of operations, cash flows, and disclosures upon adoption.

New Jersey Resources Corporation

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (Continued)

In March 2023, the FASB issued ASU No.

2023-01 , an amendment to ASC 842, Leases, which applies to arrangements between related parties under common control.

The ASU requires leasehold improvements associated with common control leases to be amortized over the improvements’ useful life to the common control group, regardless of the lease term.

The guidance became effective for the Company on October 1, 2024, and was applied on a prospective basis.

As the Company does not have leases that are impacted by this amendment, there was no impact on the Company’s financial position, results of operations, cash flows and disclosures upon adoption.

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 CODM and included within segment profit and loss, and it enhances interim disclosure requirements to conform with annual requirements.

The guidance became effective for the Company on October 1, 2024, for the first annual period and on October 1, 2025, for the interim periods.

It was applied retrospectively to all periods presented.

As the amendments in this update only impact disclosures, there was no impact on the Company’s financial position, results of operations, and cash flows upon adoption.

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.

The guidance became effective for the Company for joint ventures formed beginning January 1, 2025, and was applied on a prospective basis.

As the Company does not have any applicable transactions, there was no impact to the Company's financial position, results of operations, cash flows and disclosures upon adoption.

Other Recent Updates to the Accounting Standards Codification

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 becomes effective for the Company beginning with our annual report for the fiscal year ended September 30, 2026, and can be applied either prospectively or retrospectively.

As the amendments in this update only impact disclosures, there are no anticipated impacts on the Company’s financial position, results of operations, and cash flows upon adoption.

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.

The guidance 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.

Internal-Use Software

In September 2025, the FASB issued ASU No.

2025-06 , an amendment to ASC 350, Intangibles—Goodwill and Other , which simplifies the capitalization guidance as it relates to Internal-Use Software by removing all references to project stages and clarifying the threshold to apply to begin capitalizing costs.

The guidance becomes effective for the Company on October 1, 2028.

The Company can elect to apply it prospectively, retrospectively or through a modified transition approach, with early adoption permitted.

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

New Jersey Resources Corporation

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 7A. Quantitative and Qualitative Disclosures About Market Risk