NEW JERSEY RESOURCES CORP

Storage and Transportation

S&T invests in natural gas assets, such as natural gas transportation and storage facilities. We believe that acquiring, owning and developing these storage and transportation assets, which operate under a tariff structure that has either cost- or market-based rates, can provide us a growth opportunity. S&T is subject to various risks, including the construction, development and operation of our transportation and storage assets, obtaining necessary governmental, environmental and regulatory approvals, our ability to obtain necessary property rights and our ability to obtain financing at reasonable costs for the construction, operation and maintenance of our assets.

S&T is comprised of Leaf River, a 32.2M Dth salt dome natural gas storage facility that operates under market-based rates and Adelphia, an existing 84-mile pipeline in southeastern Pennsylvania that operates under cost of service rates but can enter into negotiated rates with counterparties. S&T also has a 50% ownership interest in Steckman Ridge, a storage facility that operates under market-based rates.

The financial results of S&T are summarized as follows:

(1)Includes related party transactions of approximately $0.7M and $1.6M during the three months ended March 31, 2024 and 2023, respectively, and approximately $1.3M and $2.7M during the six months ended March 31, 2024 and 2023, respectively, which are eliminated in consolidation.

Net income remained relatively consistent during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, and decreased approximately $3.2M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, respectively, due primarily to the following factors:

•$5.4M increase in O&M due to increased compensation costs and contractor expenses; partially offset by

•$1.7M increase in other income, net due to increased interest income from the outstanding loan with Steckman Ridge, as a result of higher interest rates.

Part I

Management uses NFE, a non-GAAP financial measure, when evaluating the operating results of S&T. Certain transactions associated with equity method investments and their impact, including impairment charges, which are non-cash charges, and the return of capital in excess of the carrying value of our investment, are excluded for NFE purposes. The details of such adjustments can be found in the table below. Non-GAAP financial measures are not in accordance with, or an alternative to GAAP, and should be considered in addition to, and not as a substitute for the comparable GAAP measure.

A reconciliation of S&T's net income, the most directly comparable GAAP financial measure to NFE, is as follows:

NFE remained relatively consistent during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, and decreased approximately $3.1M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, respectively, due primarily to a decrease in net income, as previously discussed.