New Jersey Resources(NJR) - 2025 Q3 - Quarterly Report

Cover Page This is a Quarterly Report on Form 10-Q filed by New Jersey Resources Corporation for the quarterly period ended June 30, 2025, with the registrant being a large accelerated filer and not a shell company - Filing Type: Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] - Registrant Status: Large accelerated filer, not a shell company[3][4][5] Common Stock Outstanding | As of Date | Shares Outstanding | | :---------- | :----------------- | | August 1, 2025 | 100,451,372 | Glossary of Key Terms This section provides definitions for key terms and acronyms used throughout the report, including company subsidiaries, financial measures, and regulatory bodies or programs - Defines key terms and acronyms related to company segments (NJNG, CEV, ES, S&T, HSO), financial metrics (Financial Margin, Utility Gross Margin, NFE), and regulatory aspects (BPU, FERC, SREC, TREC, ADI)[10][12] Information Concerning Forward-Looking Statements This section cautions readers that the report contains forward-looking statements based on management's current expectations, assumptions, and beliefs, which are subject to various risks and uncertainties beyond the company's control - Forward-looking statements are based on management's current expectations and are subject to risks beyond control, including regulatory approvals, climate change, clean energy project viability, commodity price volatility, and changes in debt/equity markets[13][14][16] - The company does not undertake to update forward-looking statements unless required by applicable laws[15] PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, cash flows, balance sheets, and common stock equity, along with detailed notes on business operations, accounting policies, revenue, regulation, and other financial disclosures Unaudited Condensed Consolidated Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, cash flows, balance sheets, and common stock equity Condensed Consolidated Statements of Operations (Unaudited) This statement provides a summary of the company's revenues, expenses, and net income or loss for the three and nine months ended June 30, 2025 and 2024 Consolidated Statements of Operations (Three Months Ended June 30) | (Thousands, except per share data) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total operating revenues | $298,946 | $275,636 | | Total operating expenses | $300,008 | $269,700 | | Operating (loss) income | $(1,062) | $5,936 | | Net (loss) income | $(15,051) | $(11,574) | | Basic (loss) income per common share | $(0.15) | $(0.12) | | Diluted (loss) income per common share | $(0.15) | $(0.12) | Consolidated Statements of Operations (Nine Months Ended June 30) | (Thousands, except per share data) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Total operating revenues | $1,700,334 | $1,400,759 | | Total operating expenses | $1,231,870 | $1,088,782 | | Operating income | $468,464 | $311,977 | | Net income | $320,555 | $198,649 | | Basic income per common share | $3.20 | $2.02 | | Diluted income per common share | $3.18 | $2.00 | - For the three months ended June 30, 2025, the company reported a net loss of $(15.05) million, an increase from $(11.57) million in the prior year. Basic and diluted EPS were $(0.15) for both periods[18] - For the nine months ended June 30, 2025, net income increased to $320.56 million from $198.65 million in the prior year. Basic EPS increased to $3.20 from $2.02, and diluted EPS increased to $3.18 from $2.00[18] Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) This statement details the components of comprehensive income or loss, including net income and other comprehensive income (loss), for the three and nine months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive (Loss) Income (Three Months Ended June 30) | (Thousands) | 2025 | 2024 | | :---------- | :--- | :--- | | Net (loss) income | $(15,051) | $(11,574) | | Other comprehensive income (loss), net of tax | $68 | $(105) | | Comprehensive (loss) income | $(14,983) | $(11,679) | Consolidated Statements of Comprehensive (Loss) Income (Nine Months Ended June 30) | (Thousands) | 2025 | 2024 | | :---------- | :--- | :--- | | Net (loss) income | $320,555 | $198,649 | | Other comprehensive income (loss), net of tax | $203 | $10,176 | | Comprehensive (loss) income | $320,758 | $208,825 | - Comprehensive loss for the three months ended June 30, 2025, was $(14.98) million, compared to $(11.68) million in the prior year[19] - Comprehensive income for the nine months ended June 30, 2025, was $320.76 million, significantly higher than $208.83 million in the prior year[19] Condensed Consolidated Statements of Cash Flows (Unaudited) This statement presents the cash flows from operating, investing, and financing activities for the nine months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (Nine Months Ended June 30) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Cash flows from operating activities | $385,174 | $362,894 | | Cash flows used in investing activities | $(305,931) | $(392,584) | | Cash flows (used in) from financing activities | $(78,866) | $51,307 | | Change in cash, cash equivalents and restricted cash | $377 | $21,617 | | Cash, cash equivalents and restricted cash at end of period | $1,989 | $23,134 | - Operating cash flows increased by $22.3 million to $385.2 million for the nine months ended June 30, 2025, compared to $362.9 million in the prior year[22] - Investing activities used $305.9 million in 2025, a decrease from $392.6 million used in 2024, primarily due to proceeds from asset sales[22] - Financing activities shifted from a net inflow of $51.3 million in 2024 to a net outflow of $(78.9) million in 2025[22] Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, and September 30, 2024 Consolidated Balance Sheets (As of June 30, 2025 and September 30, 2024) | (Thousands) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :--- | :--- | | Total assets | $7,274,161 | $6,981,645 | | Total capitalization | $5,444,216 | $5,079,907 | | Total current liabilities | $739,057 | $887,774 | | Total noncurrent liabilities | $1,090,888 | $1,013,964 | | Total capitalization and liabilities | $7,274,161 | $6,981,645 | - Total assets increased by approximately $292.5 million to $7.27 billion as of June 30, 2025, from $6.98 billion as of September 30, 2024[25] - Total current liabilities decreased by $148.7 million, while total noncurrent liabilities increased by $76.9 million[27] Condensed Consolidated Statements of Common Stock Equity (Unaudited) This statement outlines the changes in common stock equity, including net income and dividends, for the nine months ended June 30, 2025 Common Stock Equity Changes (Nine Months Ended June 30, 2025) | (Thousands) | Common Stock | Premium on Common Stock | Retained Earnings | Total | | :--------------------------------- | :--- | :--- | :--- | :--- | | Balance as of Sep 30, 2024 | $248,159 | $633,811 | $1,298,774 | $2,200,443 | | Net income (loss) | — | — | $320,555 | $320,555 | | Cash dividend declared | — | — | $(135,314) | $(135,314) | | Balance as of June 30, 2025 | $250,454 | $672,034 | $1,484,015 | $2,423,616 | - Common stock equity increased from $2.20 billion as of September 30, 2024, to $2.42 billion as of June 30, 2025[29] - Retained earnings increased by $185.2 million, driven by net income partially offset by cash dividends declared[29] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements, covering business nature, accounting policies, revenue, regulation, and other key financial areas Note 1. Nature of the Business This note describes New Jersey Resources Corporation's (NJR) operating segments, including Natural Gas Distribution, Clean Energy Ventures, Energy Services, Storage and Transportation, and Home Services and Other - New Jersey Resources Corporation (NJR) operates through several segments: Natural Gas Distribution (NJNG), Clean Energy Ventures (CEV), Energy Services (ES), Storage and Transportation (S&T), and Home Services and Other (HSO)[33][34][36][37][38] - NJNG provides regulated natural gas utility services. CEV owns and operates clean energy projects, including commercial solar installations, and sold its residential solar portfolio in November 2024[33][34][35] - ES manages natural gas transportation and storage capacity, providing wholesale and retail energy services. S&T invests in energy-related ventures, operating natural gas storage and transmission assets[36][37] Note 2. Summary of Significant Accounting Policies This note outlines the significant accounting policies used in preparing the financial statements, including GAAP compliance, estimates, and the impact of recently adopted and new accounting pronouncements - Financial statements are prepared in accordance with GAAP and SEC rules, reflecting all necessary normal and recurring adjustments for interim periods. Results are not indicative of the full fiscal year due to seasonal operations[39][40] - The company makes estimates for various financial items, including equity method investments, lease liabilities, unbilled revenues, and derivative fair values, evaluating them quarterly or as needed[41] - Recently adopted accounting updates (ASU 2022-03, ASU 2023-01, ASU 2023-07, ASU 2023-05) had no material impact on financial position, results of operations, or cash flows upon adoption, primarily affecting disclosures or not applying to current transactions[68][70][71][72] - New ASUs on Income Taxes (ASU 2023-09) and Disaggregation of Income Statement Expenses (ASU 2024-03) are being evaluated for their impact on future disclosures, effective October 2025 and October 2027, respectively[73][74] Note 3. Revenue This note details the company's revenue recognition policies and disaggregated revenue information by product line and customer type for the nine months ended June 30, 2025 and 2024 - Revenue is recognized when performance obligations are satisfied, using the output method and invoice practical expedient. Sales taxes are presented net in operating revenues[75] - NJNG recognizes natural gas utility sales upon delivery and consumption. CEV recognizes revenue from commercial solar electricity generation and Renewable Energy Certificates (RECs) upon generation/transfer. ES recognizes natural gas services revenue upon physical delivery or straight-line for temporary pipeline capacity releases[77] Disaggregated Revenues by Product Line (Nine Months Ended June 30) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Natural gas utility sales | $973,993 | $767,698 | | Natural gas services | $114,708 | $119,996 | | Service contracts | $27,883 | $27,073 | | Installations and maintenance | $19,206 | $19,022 | | Renewable energy certificates | $10,726 | $10,194 | | Electricity sales | $17,680 | $22,842 | | Revenues from contracts with customers (Total) | $1,162,987 | $964,255 | | Revenues out of scope (Derivative instruments, etc.) | $537,347 | $436,504 | | Total operating revenues | $1,700,334 | $1,400,759 | Disaggregated Revenues by Customer Type (Nine Months Ended June 30) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Residential | $779,537 | $636,580 | | Commercial and industrial | $284,406 | $248,948 | | Firm transportation | $91,744 | $72,596 | | Interruptible, off-tariff and other | $7,300 | $6,131 | | Revenues out of scope | $537,347 | $436,504 | | Total operating revenues | $1,700,334 | $1,400,759 | Note 4. Regulation This note describes the regulatory environment for NJNG, including cost-based regulation by the BPU, key regulatory actions, and the recognition of regulatory assets and liabilities - NJNG is subject to cost-based regulation by the BPU, allowing recovery of operating expenses and a reasonable return on utility capital investments. Regulatory assets and liabilities are recognized for probable future expenditures and costs expected to be recovered[89] - Key regulatory actions include BPU approval of a new SAVEGREEN program ($385.6 million total investment) effective January 1, 2025, and a $157.0 million increase to base rates for NJNG effective November 21, 2024, with a 9.60% return on common equity[93] - NJNG filed its 2026 BGSS/CIP filing requesting a $63.3 million increase to annual BGSS revenues and a $25.5 million decrease to CIP rates, effective October 1, 2025[100] NJNG Regulatory Assets and Liabilities (Thousands) | (Thousands) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :--- | :--- | | Total current regulatory assets | $46,216 | $73,070 | | Total noncurrent regulatory assets | $610,866 | $604,097 | | Total current regulatory liabilities | $25,615 | $32,457 | | Total noncurrent regulatory liabilities | $171,688 | $175,847 | Note 5. Derivative Instruments This note details the company's use of derivative instruments to manage commodity price and interest rate risks, and their accounting treatment and fair value impacts - The Company uses derivative instruments (futures, forwards, options, swaps) to manage commodity price risk (natural gas, SRECs, electricity) and interest rate risk. ES does not designate its commodity derivatives as accounting hedges, recognizing fair value changes in operating revenues/expenses[96][97] - NJNG's financial commodity derivatives' fair value changes are recorded as regulatory assets/liabilities, with no impact on earnings as they are recoverable from or payable to customers[102] Fair Value of Derivatives (Thousands) | (Thousands) | June 30, 2025 Assets | June 30, 2025 Liabilities | September 30, 2024 Assets | September 30, 2024 Liabilities | | :--------------------------------- | :--- | :--- | :--- | :--- | | Total fair value of derivatives | $13,531 | $12,780 | $7,619 | $17,761 | Effect of Derivative Instruments on Statements of Operations (Nine Months Ended June 30) | (Thousands) | 2025 Gain (Loss) | 2024 Gain (Loss) | | :--------------------------------- | :--- | :--- | | ES Total unrealized and realized (loss) gain | $13,667 | $22,347 | | NJNG Total unrealized and realized (loss) gain | $(2,732) | $3,826 | Note 6. Fair Value This note discusses the fair value measurements of financial instruments and assets, including long-term debt and sale leasebacks, categorized by valuation input levels - The fair value of short-term financial instruments approximates their carrying amounts. Long-term debt fair value is determined using a discounted cash flow method with observable municipal and corporate yields (Level 2 inputs)[123][128] - Sale leasebacks for commercial solar assets and natural gas meters are recorded as financing arrangements. As of June 30, 2025, solar sale leasebacks had a carrying value of $336.9 million and fair value of $342.9 million, while natural gas meter sale leasebacks had a carrying value of $35.4 million and fair value of $34.0 million[127] Assets and Liabilities Measured at Fair Value (June 30, 2025) | (Thousands) | Level 1 | Level 2 | Level 3 | Total | | :--------------------------------- | :--- | :--- | :--- | :--- | | Assets: Physical commodity contracts | $— | $6,849 | $— | $6,849 | | Assets: Financial commodity contracts | $6,682 | $— | $— | $6,682 | | Liabilities: Physical commodity contracts | $— | $10,064 | $— | $10,064 | | Liabilities: Financial commodity contracts | $2,716 | $— | $— | $2,716 | Note 7. Investments in Equity Investees This note details the company's equity method investment in Steckman Ridge, a natural gas storage facility, including its ownership percentage and outstanding loans - The Company holds a 50% equity method investment in Steckman Ridge, a natural gas storage facility. The investment was approximately $101.0 million as of June 30, 2025, including $70.4 million in outstanding loans[132] Note 8. Earnings Per Share This note presents the basic and diluted earnings per common share calculations for the three and nine months ended June 30, 2025 and 2024 Earnings Per Share (Three Months Ended June 30) | (Thousands, except per share amounts) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net (loss) income | $(15,051) | $(11,574) | | Basic (loss) earnings per common share | $(0.15) | $(0.12) | | Diluted (loss) earnings per common share | $(0.15) | $(0.12) | Earnings Per Share (Nine Months Ended June 30) | (Thousands, except per share amounts) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net income | $320,555 | $198,649 | | Basic earnings per common share | $3.20 | $2.02 | | Diluted earnings per common share | $3.18 | $2.00 | - For the three months ended June 30, 2025, basic and diluted EPS were $(0.15), compared to $(0.12) in the prior year. For the nine months ended June 30, 2025, basic EPS was $3.20 and diluted EPS was $3.18, up from $2.02 and $2.00, respectively, in the prior year[133] Note 9. Debt This note describes the company's short-term and long-term debt financing, including credit facilities, senior notes, and sale leaseback transactions - NJR and NJNG finance working capital and capital expenditures through short-term debt (commercial paper, credit facilities) and long-term financing[136] Credit Facilities and Short-term Debt (Thousands) | (Thousands) | June 30, 2025 Loans Outstanding | June 30, 2025 Remaining Borrowing Capacity | | :--------------------------------- | :--- | :--- | | NJR bank revolving credit facility | $199,950 | $353,668 | | NJNG bank revolving credit facility | $106,700 | $142,569 | - NJR issued $100 million senior notes at 5.55% interest, maturing November 7, 2034. NJNG's $50 million senior notes matured on April 15, 2025[139][140] - CEV received $100.3 million and NJNG received $11.7 million from sale leaseback transactions of commercial solar assets and natural gas meters, respectively, during the nine months ended June 30, 2025, treated as financing obligations[140][141] Note 10. Employee Benefit Plans This note details changes to the company's postretirement medical benefits plan and presents the net periodic benefit cost for pension and other postretirement employee benefits (OPEB) - In January 2024, the Company changed its postretirement medical benefits plan to an employer-funded Health Reimbursement Arrangement, remeasuring the liability as of January 1, 2024[143] Net Periodic Benefit (Credit) Cost (Nine Months Ended June 30, Thousands) | (Thousands) | Pension 2025 | Pension 2024 | OPEB 2025 | OPEB 2024 | | :--------------------------------- | :--- | :--- | :--- | :--- | | Service cost | $4,142 | $3,732 | $819 | $1,151 | | Interest cost | $11,575 | $12,180 | $6,290 | $6,519 | | Expected return on plan assets | $(17,775) | $(15,260) | $(7,039) | $(5,899) | | Recognized actuarial loss | $902 | $88 | $5,378 | $3,007 | | Prior service cost (credit) amortization | $— | $47 | $(9,810) | $(6,676) | | Net periodic benefit (credit) cost | $(1,156) | $787 | $(4,362) | $(1,898) | - The Company does not expect to make additional contributions to pension plans in fiscal 2025, but funding requirements are subject to change[144] Note 11. Income Taxes This note provides information on the company's effective tax rates, tax credit carryforwards, state net operating losses, and recent tax audits - The estimated annual effective tax rates were 23.1% for 2025 and 21.7% for 2024 (nine months ended June 30). The actual effective tax rates were 22.6% for 2025 and 21.4% for 2024[149][150] - The Company has tax credit carryforwards of approximately $192.0 million (2025) and $191.6 million (2024), with a 20-year life, expected to be fully utilized[151] - State net operating losses were $453.8 million (2025) and $634.7 million (2024), with varying carry-forward periods. A valuation allowance of $0.5 million (2025) and $0.6 million (2024) was recorded for unrealizable state income tax attributes[152] - The State of New Jersey completed an audit of the Company's Corporate Business Tax return for fiscal periods 2019-2022 with no further action required. The OBBBA tax reform is not expected to have a material impact[153][154] Note 12. Leases This note outlines the company's accounting for leases under ASC 842, including right-of-use assets, lease liabilities, and total lease costs - The Company accounts for leases under ASC 842, recognizing right-of-use assets and lease liabilities based on the present value of lease payments. Lease agreements primarily cover commercial solar land, storage and capacity, equipment, real property, and natural gas meters[155][156] Total Lease Cost (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Operating lease cost | $8,350 | $7,659 | | Finance lease cost | $1,796 | $2,330 | | Variable lease cost | $611 | $551 | | Total lease cost | $10,757 | $10,540 | Lease Assets and Liabilities (Thousands) | (Thousands) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :--- | :--- | | Total lease assets | $216,635 | $210,573 | | Total lease liabilities | $191,909 | $187,808 | - Weighted average remaining lease term for operating leases was 28.3 years (2025) and 28.6 years (2024), with discount rates of 3.9% and 3.8%, respectively. For finance leases, terms were 2.6 years (2025) and 3.0 years (2024), with discount rates of 3.3% and 3.4%[165] Note 13. Commitments and Contingent Liabilities This note details the company's long-term natural gas supply, transportation, and storage contracts, guarantees, and environmental remediation liabilities - NJNG has long-term natural gas supply, transportation, and storage contracts expiring through July 2039, with annual fixed charges of approximately $64.6 million for the remainder of the fiscal year, recoverable through BGSS[166] Future Demand Fees and Natural Gas Purchases Commitments (Thousands) | (Thousands) | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | :--------------------------------- | :--- | :--- | :--- | :--- | :--- | :--- | | ES Sub-total | $27,963 | $85,311 | $58,283 | $33,313 | $15,734 | $54,176 | | NJNG Sub-total | $71,731 | $263,688 | $194,364 | $146,634 | $134,506 | $958,661 | | Total | $99,694 | $348,999 | $252,647 | $179,947 | $150,240 | $1,012,837 | - NJR guarantees approximately $133.5 million of ES's natural gas purchases and demand fee commitments. NJNG's estimated MGP remediation liability is $130.9 million to $194.6 million, with $155.9 million accrued as of June 30, 2025, and a corresponding regulatory asset of $70.5 million for previously incurred costs[171][173][174] Note 14. Reporting Segment and Other Operations Data This note provides financial data by operating segment, including net income, total assets, and a reconciliation of net income to Net Financial Earnings (NFE) - The Company manages its businesses through NJNG, CEV, ES, S&T, and HSO. The CEO uses Net Financial Earnings (NFE) to measure segment performance, which adjusts for timing differences in derivative recognition[178][186] Net (Loss) Income by Segment (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | NJNG | $221,518 | $152,400 | | CEV | $37,315 | $(1,808) | | ES | $46,567 | $36,042 | | S&T | $13,905 | $9,761 | | HSO | $418 | $665 | | Eliminations | $832 | $1,589 | | Total | $320,555 | $198,649 | Total Assets by Segment (Thousands) | (Thousands) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :--- | :--- | | NJNG | $5,039,492 | $4,789,835 | | CEV | $1,199,871 | $1,157,573 | | ES | $119,101 | $108,710 | | S&T | $1,026,379 | $1,025,457 | | HSO | $127,208 | $159,444 | | Intercompany assets | $(237,890) | $(259,374) | | Total | $7,274,161 | $6,981,645 | Reconciliation of Net (Loss) Income to Net Financial Earnings (NFE) (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net (loss) income | $320,555 | $198,649 | | Unrealized loss (gain) on derivative instruments and related transactions | $(10,072) | $23,860 | | Tax effect | $2,394 | $(5,670) | | Effects of economic hedging related to natural gas inventory | $747 | $(19,458) | | Tax effect | $(178) | $4,624 | | NFE tax adjustment | $(58) | $116 | | Net financial earnings (loss) | $313,388 | $202,121 | Note 15. Related Party Transactions This note discloses related party transactions, including NJNG's storage agreement with Steckman Ridge and transportation agreements with Adelphia - NJNG entered a new two-year agreement with Steckman Ridge for 3 Bcf of firm storage capacity, incurring demand fees of approximately $6.5 million annually, recoverable through BGSS[187] Demand Fees Payable to Steckman Ridge (Thousands) | (Thousands) | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :--- | :--- | | NJNG | $540 | $775 | | ES | $106 | $100 | | Total | $646 | $875 | - NJNG has two transportation agreements with Adelphia for committed capacity of 130,000 Dekatherms per day, expiring in 2027 and 2038[193] Note 16. Dispositions This note details the disposition of CEV's residential solar portfolio, including the sale price, gain recognized, and related leaseback arrangements - On November 25, 2024, CEV sold its 91 MW residential solar portfolio (The Sunlight Advantage® program) to a third party for $132.5 million, recognizing a pre-tax gain on sale of assets of $56.1 million for the nine months ended June 30, 2025[198][200] - CEV also entered into a leaseback agreement for certain residential solar projects until their fifth anniversary of placed-in-service dates, with immaterial financial impact[201] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, and results of operations, analyzing key drivers and segment-specific outcomes Management's Overview This overview introduces NJR's diversified energy services business, its primary reporting segments, and a summary of consolidated financial performance - NJR is a diversified energy services holding company with four primary reporting segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation, plus Home Services and Other operations[205][206][208] Consolidated Net Income (Loss) by Segment (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | NJNG | $221,518 | $152,400 | | CEV | $37,315 | $(1,808) | | ES | $46,567 | $36,042 | | S&T | $13,905 | $9,761 | | HSO | $418 | $665 | | Eliminations | $832 | $1,589 | | Total | $320,555 | $198,649 | - Consolidated net income increased by $121.9 million for the nine months ended June 30, 2025, primarily due to a $69.1 million increase at NJNG (base rates) and a $39.1 million increase at CEV (residential solar asset sale gain)[211][214][225] - Consolidated assets increased by $292.5 million as of June 30, 2025, driven by a $209.3 million increase in utility plant expenditures and an $80.8 million increase in customer receivables at NJNG[213] Consolidated Net Financial Earnings (NFE) by Segment (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | NJNG | $221,518 | $152,400 | | CEV | $37,315 | $(1,808) | | ES | $39,400 | $43,231 | | S&T | $13,905 | $9,761 | | HSO | $418 | $665 | | Eliminations | $832 | $(2,128) | | Total | $313,388 | $202,121 | - Consolidated NFE increased by $111.3 million for the nine months ended June 30, 2025, primarily due to a $69.1 million increase at NJNG and a $39.1 million increase at CEV[221][225] Natural Gas Distribution Segment This section discusses the performance of NJNG, focusing on customer growth, Utility Gross Margin, clean energy initiatives, and regulatory impacts - NJNG provides regulated natural gas service, focusing on customer growth, diversifying Utility Gross Margin, promoting clean energy, and mitigating risks like commodity price fluctuations and regulatory actions[221][224] - In November 2024, the BPU approved a $157.0 million increase to base rates for NJNG, effective November 21, 2024, with a 9.60% return on common equity[227] NJNG Capital Expenditures (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Utility plant | $274,028 | $259,125 | | Storage and Transportation and other | $18,586 | $33,013 | | Cost of removal | $32,911 | $29,552 | | Total | $325,525 | $321,690 | - NJNG added 5,659 new customers during the nine months ended June 30, 2025, expected to contribute $6.7 million in incremental Utility Gross Margin annually[235] - The BPU approved a new SAVEGREEN program (Jan 2025 - June 2027) totaling $385.6 million in direct investment, financing, and O&M, with expected recoveries of $12.3 million through Sep 2025[236] NJNG Utility Gross Margin (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Utility firm gross margin | $577,468 | $458,296 | | BGSS incentive programs | $14,535 | $16,186 | | Interruptible/off-tariff agreements | $3,236 | $2,680 | | Total Utility Gross Margin | $595,239 | $477,162 | - Utility firm gross margin increased by $119.2 million for the nine months ended June 30, 2025, primarily due to the base rate increase[272] - Net income for NJNG increased by $69.1 million for the nine months ended June 30, 2025, driven by the increase in Utility Gross Margin, partially offset by higher depreciation and income tax expense[274] Clean Energy Ventures Segment This section reviews CEV's performance, focusing on commercial solar project development, tax incentives, REC activity, and the impact of the residential solar portfolio sale - CEV develops, constructs, and operates net-metered and grid-connected commercial solar projects, with value driven by tax incentives, RECs, and electricity sales[276][278] - CEV placed 32.0 MWs of commercial solar projects in service during the nine months ended June 30, 2025, with related expenditures of $83.7 million[282] - The federal Investment Tax Credit (ITC) was restored to 30% through 2032, with additional opportunities for certain facilities[283] - CEV received $100.3 million from sale leaseback transactions of commercial solar assets during the nine months ended June 30, 2025, treated as financing obligations[284] - On November 25, 2024, CEV sold its 91 MW residential solar portfolio for $132.5 million, resulting in a $56.1 million pre-tax gain on sale of assets for the nine months ended June 30, 2025[286][299] REC Activity (Nine Months Ended June 30, 2025) | REC Type | Beginning Inventory | Generated | Delivered | Ending Inventory | Average Sale Price | | :--------------------------------- | :--- | :--- | :--- | :--- | :--- | | SRECs | 126,928 | 231,877 | (87,657) | 271,148 | $205 | | TRECs | 11,237 | 65,257 | (59,191) | 17,303 | $145 | | SREC IIs | 5,022 | 12,519 | (12,036) | 5,505 | $91 | - Net income for CEV increased by $39.1 million for the nine months ended June 30, 2025, primarily due to the $56.1 million gain on the sale of the residential solar asset portfolio, partially offset by decreased operating revenues and increased income tax expense[296][299] Energy Services Segment This section analyzes ES's performance, focusing on natural gas marketing, risk management through derivatives, and the impact of Asset Management Agreements (AMAs) on revenues and financial margin - ES markets and sells natural gas to wholesale and retail customers, managing a portfolio of natural gas transportation and storage contracts to capture price differentials[296][298] - ES uses financial derivative contracts (futures, options, swaps) to economically hedge natural gas purchases/sales and manage market price volatility[298] - ES entered into Asset Management Agreements (AMAs) to release pipeline capacity, expecting $34 million annually from fiscal 2025-2031. Operating revenue from AMAs was $14.8 million for the nine months ended June 30, 2025, down from $28.5 million in 2024[302][380] ES Operating Revenues and Natural Gas Purchases (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Operating revenues | $371,548 | $306,971 | | Natural gas purchases | $287,496 | $226,841 | - Operating revenues increased by $64.6 million for the nine months ended June 30, 2025, primarily due to a 35% increase in natural gas prices, partially offset by decreased AMA revenues and an 11% decrease in volumes. Natural gas purchases increased by $60.7 million due to a 41% increase in purchase prices[308] - Net income for ES increased by $10.5 million for the nine months ended June 30, 2025, driven by higher operating revenues and lower O&M, partially offset by increased natural gas purchases and income tax expense[313] ES Financial Margin (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Financial Margin | $74,727 | $89,408 | - Financial Margin decreased by $14.7 million for the nine months ended June 30, 2025, primarily due to lower AMA related revenue[317] ES Net Financial Earnings (NFE) (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Net financial (loss) earnings | $39,400 | $43,231 | - NFE decreased by $3.8 million for the nine months ended June 30, 2025, due to lower AMA revenue, partially offset by lower O&M[319] Storage and Transportation Segment This section covers S&T's investments in natural gas transportation and storage facilities, including Leaf River and Adelphia, and its equity interest in Steckman Ridge - S&T invests in natural gas transportation and storage facilities, including Leaf River (32.2 million Dekatherms salt dome storage) and Adelphia (FERC-regulated interstate pipeline)[322][323] - S&T holds a 50% ownership interest in Steckman Ridge, a market-based natural gas storage facility, with an investment of $101.0 million as of June 30, 2025[325] - Adelphia reached a settlement in principle for its Section 4 rate case, with an offer of settlement expected to be filed with FERC in Q4 fiscal 2025, considered immaterial to financial statements[324] S&T Operating Revenues and Net Income (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Operating revenues | $79,064 | $71,379 | | Net income | $13,905 | $9,761 | - Net income for S&T increased by $4.1 million for the nine months ended June 30, 2025, primarily due to a $7.7 million increase in operating revenues from higher hub services at Leaf River, partially offset by a $3.7 million increase in O&M[327] Home Services and Other Business Operations This section describes HSO's operations, primarily NJR Home Services, which provides appliance services, sales, and installations, along with corporate organizational expenses - HSO primarily consists of NJR Home Services (NJRHS), which provides appliance service, sales, and installations, and also includes organizational expenses incurred at NJR[330] HSO Operating Revenues and Net Income (Nine Months Ended June 30, Thousands) | (Thousands) | 2025 | 2024 | | :--------------------------------- | :--- | :--- | | Operating revenues | $47,089 | $46,095 | | Net income | $418 | $665 | - Net income for HSO remained relatively consistent for both the three and nine months ended June 30, 2025, compared to the prior year[331] Liquidity and Capital Resources This section analyzes the company's financial flexibility, capital structure, debt compliance, and cash flow activities, outlining sources and uses of funds - The Company aims for an efficient consolidated capital structure and adequate financial flexibility. As of June 30, 2025, common stock equity was 42%, long-term debt 52%, and short-term debt 6%[332] - NJR raised $11.2 million and $19.9 million in equity through its Dividend Reinvestment Plan (DRP) and waiver discount feature, respectively, during the nine months ended June 30, 2025[333][334] - NJR and NJNG were in compliance with all debt covenants as of June 30, 2025. Existing borrowing availability, equity proceeds, and cash flows are expected to meet liquidity needs for the next 12 months[338][339] Short-Term Borrowings (Nine Months Ended June 30, Thousands) | (Thousands) | NJR 2025 | NJNG 2025 | | :--------------------------------- | :--- | :--- | | Balance at end of period | $199,950 | $106,700 | | Weighted average interest rate at end of period | 5.56 % | 4.61 % | | Average balance for the period | $167,605 | $63,943 | | Weighted average interest rate for average balance | 5.55 % | 4.67 % | - NJR's $575 million revolving credit facility had $353.7 million available as of June 30, 2025. NJNG's $250 million credit facility had $142.6 million available[341][343] - NJR's long-term debt was approximately $1.1 billion (fixed-rate, maturities 2026-2034). NJNG's long-term debt was approximately $1.6 billion (fixed-rate, maturities 2028-2061) plus $35.4 million in natural gas meter sale leasebacks[357][359] - NJNG's total capital expenditures are projected between $375 million and $420 million for fiscal 2025. S&T expects $5-15 million for Adelphia and $15-20 million for Leaf River. CEV estimates $165-220 million for solar-related capital expenditures[373][374][377] - Cash flows from operating activities increased by $22.3 million to $385.2 million for the nine months ended June 30, 2025, primarily due to higher base rates and changes in working capital[381] - Cash flows used in investing activities decreased by $86.7 million, mainly due to proceeds from the sale of CEV's residential solar asset portfolio, partially offset by increased utility plant and solar asset expenditures[382] - Financing cash flows shifted from an inflow to an outflow, increasing by $130.2 million, due to increased long-term debt payments and lower proceeds from long-term debt and DRP, partially offset by higher proceeds from solar sale leasebacks and net short-term debt[386] NJNG Credit Ratings (June 30, 2025) | Rating Agency | Corporate Rating | Commercial Paper | Senior Secured | Ratings Outlook | | :--------------------------------- | :--- | :--- | :--- | :--- | | Moody's | N/A | P-2 | A1 | Stable | | Fitch | A | F-2 | A+ | Stable | Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's exposure to market risks, primarily commodity price risk (natural gas, SRECs, electricity) and interest rate risk. It outlines risk management policies, including the use of derivative instruments, and provides sensitivity analyses for natural gas prices and credit exposure - The Company is exposed to commodity price risk (natural gas, SRECs, electricity) and interest rate risk, managed through derivatives and well-defined risk management policies[390] Fair Market Value of Financial Derivatives (Thousands) | (Thousands) | Sep 30, 2024 Balance | Increase (Decrease) in Fair Market Value | Amounts Settled | June 30, 2025 Balance | | :--------------------------------- | :--- | :--- | :--- | :--- | | NJNG | $(2) | $1,882 | $1,743 | $137 | | ES | $3,135 | $3,201 | $2,507 | $3,829 | | Total | $3,133 | $5,083 | $4,250 | $3,966 | - A 10% movement in Henry Hub natural gas futures contract prices would result in an estimated change in derivative fair value of approximately $3.5 million[393][394] ES, CEV, S&T Counterparty Credit Exposure (June 30, 2025, Thousands) | (Thousands) | Gross Credit Exposure | Net Credit Exposure | | :--------------------------------- | :--- | :--- | | Investment grade | $101,487 | $98,252 | | Noninvestment grade | $6,608 | $1,863 | | Internally rated investment grade | $12,701 | $11,171 | | Internally rated noninvestment grade | $20,939 | $12,205 | | Total | $141,735 | $123,491 | NJNG Counterparty Credit Exposure (June 30, 2025, Thousands) | (Thousands) | Gross Credit Exposure | Net Credit Exposure | | :--------------------------------- | :--- | :--- | | Investment grade | $7,404 | $4,199 | | Noninvestment grade | $3,673 | $— | | Internally rated investment grade | $2,055 | $— | | Internally rated noninvestment grade | $275 | $23 | | Total | $13,407 | $4,222 | - The Company does not believe an immediate 10% increase or decrease in interest rates would materially affect operating results or cash flows[398] Controls and Procedures This section confirms that management, including the principal executive and financial officers, evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[402] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[403] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, other disclosures, and exhibits Legal Proceedings This section states that no new legal proceedings became reportable during the quarter ended June 30, 2025, and there have been no material developments regarding previously reported legal proceedings not already disclosed - No new reportable legal proceedings or material developments in previously reported proceedings occurred during the quarter ended June 30, 2025[405] - Information on legal proceedings is incorporated by reference from Note 13. Commitments and Contingent Liabilities[405] Risk Factors This section confirms that there have been no material changes to the Company's risk factors from those previously disclosed in Part I, Item 1A of its 2024 Annual Report on Form 10-K - No material changes in risk factors from those disclosed in the 2024 Annual Report on Form 10-K[406] - The Company's business is subject to inherent risks and uncertainties that could materially affect financial condition and results of operations[406] Unregistered Sale of Equity Securities and Use of Proceeds This section reports no share repurchase activity during the quarter ended June 30, 2025, and details the remaining shares available under the authorized repurchase program - No shares were repurchased during the quarter ended June 30, 2025[407] - Approximately 1.7 million shares remain available for repurchase under the authorized stock repurchase plan[407] Other Information This section states that no director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025 - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[408] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and Interactive Data Files (iXBRL) - Includes CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act) and Interactive Data Files (iXBRL)[410] Signatures This section contains the signature of Stephen M. Skrocki, Corporate Controller (Principal Accounting Officer), on behalf of New Jersey Resources Corporation, dated August 5, 2025, certifying the filing of the report - Report signed by Stephen M. Skrocki, Corporate Controller (Principal Accounting Officer), on August 5, 2025[415]