NEW JERSEY RESOURCES CORP

Manufactured Gas Plant Remediation

NJNG is responsible for the remedial cleanup of certain former MGP sites, dating back to gas operations in the late 1800s and early 1900s, which contain contaminated residues from former gas manufacturing operations. NJNG is currently involved in administrative proceedings with the NJDEP, and is participating in various studies and investigations by outside consultants, to determine the nature and extent of any such contaminated residues and to develop appropriate programs of remedial action, where warranted, under NJDEP regulations.

NJNG periodically, and at least annually, performs an environmental review of former MGP sites located in Atlantic Highlands, Berkeley, Long Branch, Manchester, Toms River, Freehold and Aberdeen, New Jersey, including a review of potential liability for investigation and remedial action. NJNG estimated at the time of the most recent review that total future expenditures at the former MGP sites for which it is responsible, including potential liabilities for natural resource damages that might be brought by the NJDEP for alleged injury to groundwater or other natural resources concerning these sites, will range from approximately $144.3 M to $200.2 M. 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. Accordingly, as of September 30, 2025, NJNG recorded a MGP remediation liability and a corresponding regulatory asset of approximately $167.0 M on the Consolidated Balance Sheets based on the most likely amount. 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 insurance recoveries, if any.

NJNG recovers its remediation expenditures, including carrying costs, over rolling seven-year periods pursuant to a RAC approved by the BPU. As of September 30, 2025, approximately $75.0 M of previously incurred remediation costs, net of recoveries from customers and insurance proceeds, are included in regulatory assets on the Consolidated Balance Sheets. 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.

General

The Company is involved, and from time to time in the future may be involved, in a number of pending and threatened judicial, regulatory and arbitration proceedings relating to matters that arise in the ordinary course of business. In view of the inherent difficulty of predicting the outcome of litigation matters, particularly when such matters are in their early stages or where the claimants seek indeterminate damages, the Company cannot state with confidence what the eventual outcome of the pending litigation will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter will be, if any. In accordance with applicable accounting guidance, the Company establishes accruals for litigation for those matters that present loss contingencies as to which it is both probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company also discloses contingent matters for which there is a reasonable possibility of a loss. 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 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. The Company has a number of threatened and pending litigation matters at various stages.

15. REPORTABLE SEGMENT DATA

The Company hasfour reportable segments which are determined based upon a combination of factors, including the nature of business activities, product and service offerings and the regulatory environment in which the businesses operate. NJNG consists of regulated utility operations that provide energy and off-system, capacity and storage management operations primarily to residential and commercial customers; CEV consists of capital investments in clean energy projects, primarily in commercial solar installations; ES consists of unregulated wholesale and retail energy operations and asset management services; S&T consists of the Company’s investments in natural gas transportation and storage facilities.

The accounting policies of the Company as described in Note 2. Summary of Significant Accounting Policies are the same as those of the reportable segments. Intercompany transactions are eliminated in consolidation.

The CODM, the CEO of the Company, uses net income, NFE, as well as various other financial and operational metrics as measures of profitability. Net income is the measure of segment profit or loss that most closely aligns with GAAP. Performance is evaluated based upon profitability and budget and/or forecast-to-actual variances when making decisions about the allocation of resources and capital to segment operations.

Information related to the Company’s various reportable segments, as of September 30, is detailed below:

(1)Corporate and other includes HSO and intercompany eliminations.

(2)Interest income is included in other income, net on the Consolidated Statements of Operations.

(3)Includes other income, net less interest income on the Consolidated Statements of Operations.

The Company’s capital expenditures and assets for the various reportable segments, as of September 30, are detailed below:

(1)Corporate and other includes HSO and intercompany eliminations.

16. RELATED PARTY TRANSACTIONS

In April 2020, NJNG entered into afive-year agreement for 3 Bcf of firm storage capacity with Steckman Ridge, which expired on March 31, 2025. In March 2025, NJNG entered into a newtwo-year agreement for 3 Bcf of firm storage capacity with Steckman Ridge, which expires on March 31, 2027. Under the terms of the new agreement, NJNG incurs demand fees, at market rates, of approximately $6.5 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 Steckman Ridge. As of September 30, 2025, 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:

The following table summarizes demand fees payable to Steckman Ridge as of September 30:

NJNG and ES enter into various AMAs, the effects of which are eliminated in consolidation. 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 intotwo transportation agreements with Adelphia, each for committed capacity of 130,000 Dths per day. The first is forfive years in Zone South with an expiration date of August 8, 2027, and the second is for 15 years in Zone North, which began in November 2023, with an expiration date of October 31, 2038.

ES had afive-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, each 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.

On January 3, 2025, Adelphia and ES entered into a transportation agreement for committed capacity of 10,000 Dths per day, which expired on February 28, 2025, and was not renewed.

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

17. DISPOSITIONS

On November 25, 2024, CEV completed the sale of its residential solar portfolio to a third party, which primarily included residential solar energy projects and host customer contracts, for a purchase price of $132.5 M. The transaction also included a post-closing working capital adjustment and was subject to a transition services agreement.

CEV had certain residential solar energy projects under contract and in various stages of development that were transferred to the buyer once the assets became operational. The transfer of these projects commenced in January 2025 and continued throughout fiscal 2025. As of September 30, 2025, CEV received approximately $4.7 M related to the transfer of these assets.

During fiscal 2025, the Company recognized a pre-tax gain on sale of assets of approximately $58.2 M on the Consolidated Statements of Operations.

Also, in connection with the sale, CEV entered into an agreement with the buyer to leaseback certain residential solar energy projects that have not yet passed the fifth anniversary of their placed-in-service dates. The assets are subject to leaseback until the fifth anniversary of the applicable placed-in-service date of the project. The impact of these transactions is considered immaterial to the Company’s Consolidated Financial Statements.