NJR 10-K & 10-Q changes, risk factors and insider trading

Occasionally, the federal and state taxing authorities determine that it is necessary to make certain changes to the income tax laws. These changes may includeinclude, but are not limited toto, changes in the tax rates and/or the treatment of certain items of income or expense. Accounting guidance requires that the Company reflect the effect of changes in tax laws or tax rates at the date of enactment. Additionally, the Company is required to re-measure its deferred tax assets and liabilities as of the date of enactment. For non-regulated entities, the effects of changes in tax laws or tax rates are required to be included in income from continuing operations for the period that includes the enactment date. For regulated entities, if as the result of an action by a regulator it is probable that the future increase or decrease in taxes payable for items such as changes in tax laws or rates will be recovered from or returned to customers through future rates, an asset or liability shall be recognized for that probable increase or decrease in future revenue. Accounting guidance also requires that regulatory liabilities and/or assets be considered a temporary difference for which a related deferred tax asset and/or liability shall be recognized.

The following sections include a discussion of results for fiscal 20242025 compared to fiscal 2023.2024. The comparative results for fiscal 20232024 with fiscal 20222023 have been omitted from this Form 10-K,10-K but may be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations on Form 10-K of our Annual Report for the fiscal year ended September 30, 2023,2024, filed with the SEC on November 21,26, 2023.2024.

ReportingReportable Segments

We have four primary reportingreportable segments as presented in the chart below:

In addition to our four reportingreportable segments above, we have nonutility operations that either provide corporate support services or do not meet the criteria to be treated as a separate reportingreportable segment. These operations, which comprise HSO, include appliance repair services, sales and installations at NJRHS and commercial real estate holdings at CR&R.

Net income (loss) and assets by reportingreportable segment and other business operations for the fiscal years ended September 30, are as follows:

The primary drivers of the changes noted above are described in more detail in the individual reportingreportable segment and other business operations discussions.

Our management uses net income and NFE, a non-GAAP financial measure, when evaluating our operating results. ES economically hedges its natural gas inventory with financial derivative instruments. NFE is a measure of the earnings based on eliminating timing differences surrounding the recognition of certain gains or losses, to effectively match the earnings effects of the economic hedges with the physical sale of natural gas and, therefore, eliminates the impact of volatility to GAAP earnings associated with the derivative instruments. To the extent we utilize forwards, futures or other derivatives to hedge forecasted SREC production, unrealized gains and losses are also eliminated from NFE. NFE also excludes certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These are considered unusual in nature and occur infrequently such that they are not indicative of our performance for ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE.

NFE by reportingreportable segment and other business operations for the fiscal years ended September 30, discussed in more detail within the operating results sections of each reportingreportable segment and other business operations, is summarized as follows:

Natural Gas Distribution is comprised of NJNG, a natural gas utility that provides regulated natural gas service to residential and commercial customers throughout Burlington, Middlesex, Monmouth, Morris, Ocean and Sussex counties in New Jersey and also participates in the off-system sales and capacity release markets. The business is subject to various risks, which may includeinclude, but are not limited toto, impacts to customer growth and customer usage, customer collections, the timing and costs of capital expenditures and construction of infrastructure projects, operating and financing costs, fluctuations in commodity prices andprices, customer conservation efforts.efforts and changes in how customers consume energy. In addition, NJNG may be subject to adverse economic conditions such as inflation and rising natural gas costs, certain regulatory actions, environmental remediation and severe weather conditions. It is often difficult to predict the impact of events or trends associated with these risks.

NJNG continues to implementimplemented BPU-approved infrastructure projects that are designed to enhance the reliability and integrity of NJNG’s natural gas distribution system.

In October 2020, the BPU approved NJNG’s five-year IIP filing for $150.0M of transmission and distribution investments, effective November 1, 2020, which will be recovered through annual filings to adjust base rates. On July 25, 2025, NJNG submitted a filing with the BPU to extend the IIP through June 30, 2026.

In September 2023,2024, the BPU approved NJNG’s annual IIP filing, which requested a rate increase for capital expenditures of $28.2Mapproximately $41.2M through June 30, 2023,2024, which resulted in a $3.2M revenue increase,increase of approximately $4.7M, effective October 1, 2023.2024.

On MarchSeptember 28,5, 2024,2025, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for capital expenditures of $43.5M$33.1M through JuneOctober 30,31, 2024.2025, Thewhich, filingif wasapproved, updatedwould July 26, 2024, to reflect actual expenses of $41.2M. The BPU approved this filing on September 25, 2024, which resultedresult in a $4.7M$4.0M revenue increase, with a proposed effective Octoberdate of January 1, 2024.2026.

During fiscal 2024, 2023 and 2022, NJNG added 8,079, 8,800 and 7,808 new customers, respectively. NJNG expects new customer additions,additions during fiscal 2025, and those customers who added additional natural gas services to their premises, to contribute approximately $6.8M$9.4M of incremental Utility Gross Margin on an annualized basis.

SAVEGREEN conducts home energy audits and provides various grants, incentives and financing alternatives designed to encourage the installation of high-efficiency heating and cooling equipment and other energy efficiency upgrades. Depending on the specific incentive or approval, NJNG recovers costs associated with the programs over a three- to 10-year period through a tariff rider mechanism. In March 2021, the BPU approved a three-year SAVEGREEN program consisting of approximately $126.1M of direct investment, $109.4M in financing options and approximately $23.4M in O&M. In April 2024, the BPU approved NJNG’s $76.9M extension to this SAVEGREEN program through December 2024.

On MayDecember 31,18, 2024, NJNG submitted its annual EE filing with the BPU approved NJNG’s annual SAVEGREEN filing for the recovery of SAVEGREEN costs, proposingwhich an increase inincreased annual recoveries ofby approximately $5.6M, to be$3.1M, effective January 1, 2025, if approved.2025.

LoansProgram amountedexpenses, toeligible for recovery, were approximately $37.5M$15.7M and $23.3M and grants, rebates and related investments amounted to approximately $33.8M and $36.5M$28.6M during the fiscal years ended September 30, 20242025 and 2023,2024, respectively. ProgramRecovery recoveriesof fromSAVEGREEN customersinvestments duringis thebased fiscal years ended September 30, 2024 and 2023, were $28.6M and $26.3M, respectively. The recovery includesupon a weighted average cost of capital that ranges from 6.84%6.9% to 6.9%,7.08%, with a return on equity of 9.6% to 9.75%.9.6%.

On SeptemberMay 25,21, 2024,2025, the BPU approved, on a provisionalfinal basis, NJNG’s May 2024 annual BGSS/CIP filing, which included a decrease of approximately $31.0M to the annual revenues credited to BGSS, an annual increase of approximately $40.3M related to its balancing charge and a decrease of approximately $0.8M to CIP rates, effective October 1, 2024. The balancing charge rate includes the cost of balancing natural gas deliveries with customer usage for sales and transportation customers, and balancing charge revenues are credited to BGSS.

NJNG is eligible to receive financial incentives for reducing BGSS costs through a series of Utility Gross Margin-sharing programs that include off-system sales, capacity release and storage incentive programs. These programs are designed to encourage better utilization and hedging of NJNG’s natural gas supply and transportation and storage assets. Depending on the program, NJNG shares 8080% or 85% of Utility Gross Margin generated by these programs with firm customers. Utility Gross Margin from incentive programs was $17.9M,approximately $20.0M$18.4M, $17.9M and $19.6M$20.0M during the fiscal years ended September 30, 2024,2025, 20232024 and 2022,2023, respectively.

NJNG is affected by the price of natural gas, which can have a significant impact on our cash flows and short-term financing costs, the price of natural gas charged to our customers through the BGSS clause, our ability to collect accounts receivable, which impacts our bad debt expense, and our ability to maintain a competitive advantage over other energy sources. Natural gas commodity prices are shown in the graph below, which illustrates the daily natural gas prices per MMBtu(1) in the Northeast market region, also known as TETCO M-3.

OnIn March 20, 2024, the BPU approved NJNG’s annual SBC filing of RAC expenditures through June 30, 2023, which included an increase to the RAC annual recoveries of approximately $2.4M and an increase to the NJCEP annual recoveries of approximately $5.5M, effective April 1, 2024.

OnIn June 28, 2024, NJNG submitted its annual USF filing to the BPU requesting an increase to the statewide USF rate. OnIn September 25, 2024, the BPU approved the filing, which resulted in a $6.8Man increase to annual recoveries,recoveries of approximately $6.8M, effective October 1, 2024.

On SeptemberApril 30,23, 2024,2025, NJNGthe submittedBPU itsapproved NJNG’s annual SBC filing to the BPU requesting approval of RAC expenditures through June 30, 2024, which included an increase to the RAC annual recoveries of approximately $2.4M and an increase to the NJCEP annual recoveries of approximately $1.6M, which would be effective AprilMay 1, 2025.

NJNG is responsible for the environmental remediation of former MGP sites, which contain contaminated residues from former gas manufacturing operations that ceased operating at these sites by the mid-1950s and, in some cases, had been discontinued many years earlier. Actual MGP remediation costs may vary from management’s estimates due to the developing nature of remediation requirements, regulatory decisions by the NJDEP and related litigation. NJNG reviews these costs periodically, and at least annually, and adjusts its liability and corresponding regulatory asset as necessary to reflect its expected future remediation obligation. Accordingly, NJNG recognized a regulatory asset and an obligation of $161.7Mapproximately $167.0M as of September 30, 2024,2025, aan decreaseincrease of $7.8Mapproximately $5.3M compared with the prior fiscal period. See Note 14. Commitments and Contingent Liabilities for a more detailed description of MGP expenditures.

(3)Includes related party transactions of approximately $9.3M$7.9M for fiscal 2024, 20232025 and 2022,$9.3M for both fiscal 2024 and 2023, a portion of which is eliminated in consolidation.

Operating revenues increased 0.7%27.7% and natural gas purchases increased 27.6% during fiscal 20242025 compared with fiscal 2023. Natural gas purchases decreased 2.5% during fiscal 2024 compared with fiscal 2023.2024. The factors contributing to the increases and (decreases) in operating revenues and natural gas purchases during fiscal 20242025 are as follows:

Management uses Utility Gross Margin, a non-GAAP financial measure, when evaluating the operating results of NJNG. NJNG’s Utility Gross Margin is defined as operating revenues less natural gas purchases, sales tax and regulatory rider expenses. This measure differs from gross margin as presented on a GAAP basis, as it excludes certain operations and maintenance expense and depreciation and amortization. Utility Gross Margin may also not be comparable to the definition of gross margin used by others in the natural gas distribution business and other industries. ManagementWe believesbelieve that Utility Gross Margin provides a meaningful basis for evaluating utility operations since natural gas costs, sales tax and regulatory rider expenses are included in operating revenues and passed through to customers and, therefore, have no effect on Utility Gross Margin. 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 gross margin, the closest GAAP financial measure to NJNG’s Utility Gross MarginMargin, for the fiscal years ended September 30, is as follows:

•Utility Gross Margin generated from off-tariff customers, as well asand interruptible customers.

Utility firm gross margin increased approximately $10.4M$140.1M during fiscal 20242025 compared with fiscal 2023,2024, due primarily to an increase in customers.base rates, effective November 21, 2024.

The decreaseincrease in BGSS incentive programs was due primarily to decreasedincreased margins from storage incentives along with lower off-system sales margin due to less market volatility and lower capacity release volumes.incentives.

Capital expenditures related to clean energy projects are subject to change due to a variety of factors that may affect our ability to commence operations at these projects on a timely basis or at all, including logistics associated with the start-up of commercial solar projects, changes to U.S. trade policy and the impact tariffs and other costs and assessments may have on equipment used to construct, generate and deliver clean energy, such as timing of construction schedules, the permitting and regulatory process,process and any delays related to electric grid interconnection,interconnection. Other factors include economic trends, changes in law, governmental policies or incentives that support clean energy projects, unforeseen events and the ability to access capital or allocation of capital to other investments or business opportunities. CEV is also subject to various risks, which may include our ability to identify and develop commercial solar asset investments, impacts to our supply chain and our ability to source materials for construction.

The primary contributors toward the value of qualifying clean energy projects are tax incentives, RECs and electricity sales. Changes in the federallaws statutesand regulations related to the ITC and/or relevant state legislation and regulatory policies affecting the market for solar renewable energy credits could significantly affect future results.

Net income (loss) by reportable segment and other business operations, which are discussed in more detail within the operating results sections of each reportable segment and other business operations, are as follows:

Below is a summary of NJNG’s capital expenditures, including accruals, for the sixnine months ended MarchJune 31,30, 2026, and estimates of expected investments for fiscal 2026 and 2027:

NJNG expects new customer additions during the sixnine months ended MarchJune 31,30, 2026, and those customers who added additional natural gas services to their premises, to contribute approximately $4.0M$5.9M of incremental Utility Gross Margin on an annualized basis.

(1)Compared with the 20-year average, weather was 4.6%3.3% warmer and 6.5%5.5% colder-than-normal during the three and sixnine months ended MarchJune 31,30, 2026, and 0.4%respectively, and 3.4%17.8% and 4.9% warmer-than-normal during the three and sixnine months ended MarchJune 31,30, 2025.2025, respectively.

NJNG is eligible to receive financial incentives for reducing BGSS costs through a series of Utility Gross Margin-sharing programs that include off-system sales, capacity release and storage incentive programs. These programs are designed to encourage better utilization and hedging of NJNG’s natural gas supply and transportation and storage assets. Depending on the program, NJNG shares 80% or 85% of Utility Gross Margin generated by these programs with firm customers. Utility Gross Margin from incentive programs was approximately $11.7M$3.1M and $7.4M$3.9M during the three months ended MarchJune 31,30, 2026 and 2025, respectively, and approximately $17.3M$20.4M and $10.6M$14.5M during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

The maximum price per MMBtu was $122.84 and $40.02 and the minimum price was $1.42 and $1.05 for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively. As a result of NJNG's hedging strategy as previously discussed, customers are protected from much of the short-term price volatility during the winter months. A more detailed discussion of the impacts of the price of natural gas on operating revenues, natural gas purchases and cash flows can be found in the Operating Results and Cash Flow sections of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

NJNG is responsible for the environmental remediation of former MGP sites, which contain contaminated residues from former gas manufacturing operations that ceased operating at these sites by the mid-1950s and, in some cases, had been discontinued many years earlier. Actual MGP remediation costs may vary from management’s estimates due to the developing nature of remediation requirements, regulatory decisions by the NJDEP and related litigation. NJNG reviews these costs periodically, and at least annually, and adjusts its liability and corresponding regulatory asset as necessary to reflect its expected future remediation obligation. Accordingly, NJNG recognized a regulatory asset and an obligation of approximately $166.1M$165.2M as of MarchJune 31,30, 2026, a decrease of approximately $0.9M$1.8M compared with September 30, 2025. See Note 13. Commitments and Contingent Liabilities in the accompanying Unaudited Condensed Consolidated Financial Statements for a more detailed description of MGP expenditures.

(3)Includes related party transactions of approximately $1.6M andduring $2.3M duringboth the three months ended MarchJune 31,30, 2026 and 2025, respectively,and $4.9M and $3.2M and $4.7M$6.3M during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively, a portion of which is eliminated in consolidation.

Operating revenues increaseddecreased 3.6%1.9% and natural gas purchases increaseddecreased 0.5%12.1% during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025. Operating revenues increased 10.4%8.2% and natural gas purchases increased 10.4%6.9% during the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025.

(1)Excludes SG&A of approximately $51.0M$27.8M and $31.7M$27.1M for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $55.1M$82.9M and $57.8M$85.0M for the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

Utility firm gross margin increased approximately $6.1M$6.8M during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025, due primarily to customer growth. Utility firm gross margin increased $28.7M$35.5M during the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025, due primarily to an increase in base rates, effective November 21, 2024, along with customer growth.

BGSS incentive programs increaseddecreased during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025, due primarily to lower margins from storage and off-system sales. BGSS incentive programs increased during the nine months ended June 30, 2026, compared with the nine months ended June 30, 2025, due primarily to higher margins from off-system sales and capacity release,release related to market volatility due to colder weather. BGSS incentive programs increased during the six months ended March 31, 2026, compared with the six months ended March 31, 2025, due primarily to higher margins from off-system sales and storage.

While there have been no material impacts to the Company’s financial position or results of operations as of MarchJune 31,30, 2026, resulting from the change in law and revised IRS guidance, these changes may impact our ability to identify, develop and source materials to construct future projects in a way that meets the new requirements established for the ITC framework.

CEV placed onefive commercial solar projectprojects in service, totaling 3.744.4 MWs, during the three months ended MarchJune 31,30, 2026, with related expenditures of approximately $9.3M.$123.8M. CEV placed threeeight commercial solar projects in service totaling 13.457.8 MWs during the sixnine months ended MarchJune 31,30, 2026, with related expenditures of approximately $30.2M.$154.0M. CEV placed onetwo commercial solar projectprojects in service totaling 2.219.3 MWs during the three months ended MarchJune 31,30, 2025, with related expenditures of approximately $8.3M.$55.0M. CEV placed threefive commercial solar projects in service totaling 12.732.0 MWs during the sixnine months ended MarchJune 31,30, 2025, with related expenditures of approximately $28.7M.$83.7M. CEV has approximately 493537 MW of commercial solar capacity in service.service as of June 30, 2026.

CEVITEM may2. enterMANAGEMENT’S intoDISCUSSION transactionsAND toANALYSIS sellOF certainFINANCIAL ofCONDITION itsAND commercialRESULTS solar assets concurrent with agreements to lease the assets back over a period of five to seven years. The Company will continue to operate the solar assets and is responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales. ITCs and other tax attributesOF associated with these solar projects transfer to the buyer if applicable; however, the lease payments are structured so that CEV is compensated for the transfer of the related tax incentives. Accordingly, for solar projects financed under sale leasebacks for which the assets were sold during the first five years of in-service life, CEV recognizes the equivalent value of the ITC in other income on the Unaudited Condensed Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease. CEV received proceeds of approximately $26.0M$51.3M and $13.2M$74.5M during the three months ended MarchJune 31,30, 2026 and 2025, and approximately $49.3M$100.6M and $25.7M$100.3M during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively, in connection with the sale leaseback of commercial solar assets. As an alternative, CEV may evaluate other structures to monetize the value of ITCs, such as the direct transfer of ITCs to a third party in exchange for cash.

CEV operated a residential solar portfolio, which provided qualifying homeowners with the opportunity to have a solar system installed at their home in exchange for monthly lease payments and with no installation or maintenance expenses. In November 2024, CEV completed the sale of its residential solar portfolio, and related assets and liabilities to a third party for a purchase price of $132.5M. See Note 16. Dispositions in the accompanying Unaudited Condensed Consolidated Financial Statements for more details.

REC activity for the sixnine months ended, consisted of the following:

CEV hedges its expected SREC production through the use of forward sales contracts. The following table reflects the hedged percentage of our projected inventory of SRECs related to CEV's in-service solar assets at MarchJune 31,30, 2026:

ES has a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts. The AMAs include a series of temporary and permanent releases, and revenue under these agreements is recognized as the performance obligations are satisfied. For temporary releases of pipeline capacity, revenue is recognized on a straight-line basis over the agreed-upon term. 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 approximately $4.9M of operating revenue related to the AMAs on the Unaudited Condensed Consolidated Statements of Operations during both the three months ended MarchJune 31,30, 2026 and 2025, and $9.9M$14.8M during both the sixnine months ended MarchJune 31,30, 2026 and 2025. Amounts received in excess of revenue recognized totaling approximately $61.3M$56.4M and $36.8M are included in deferred revenue on the Unaudited Condensed Consolidated Balance Sheets as of MarchJune 31,30, 2026 and September 30, 2025, respectively.

(2)Includes related party transactions of approximately $0.3M during both the three months ended MarchJune 31,30, 2026 and 2025, and $0.6M$0.9M during both the sixnine months ended MarchJune 31,30, 2026 and 2025, a portion of which is eliminated in consolidation.

During the sixnine months ended MarchJune 31,30, 2026 and 2025, the net short position resulted in unrealized gains (losses) of approximately $3.0M$3.5M and $(8.2)M,$3.8M, respectively.

Operating revenues decreasedincreased approximately $2.2M$41.1M during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025, due primarily to a 19%48% decreaseincrease in natural gas prices, along with a 39% increase in volumes of natural gas sold, partially offset by a 23% increase in natural gas prices.sold. Natural gas purchases decreasedincreased approximately $11.9M$14.3M during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025, due primarily to a 19%39% decreaseincrease in volumes of natural gas purchased, partially offset by a 15%13% increasedecrease in natural gas purchase prices.

Operating revenues increased approximately $30.6M$71.7M during the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025, due primarily to a 22%19% increase in natural gas prices, partiallyalong offset bywith a 10%1% decreaseincrease in volumes of natural gas sold. Natural gas purchases increased approximately $6.0M$20.3M during the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025, respectively, due primarily to a 16%7% increase in natural gas purchase prices, partiallyalong offset bywith a 10%1% decreaseincrease in volumes of natural gas purchased.

(1)Excludes SG&A of approximately $0.2M and $0.3M during the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $0.5M$0.7M and $0.6M$0.9M during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.

Financial Margin increasedremained approximatelyrelatively $46.8M and $59.3Mflat during the three and six months ended MarchJune 31,30, 2026, respectively,2026 compared with the three andmonths sixended June 30, 2025. Financial margin increased approximately $60.5M during the nine months ended MarchJune 31,30, 2026, compared with the nine months ended June 30, 2025, respectively, due primarily to favorable pricing spreads related to the colder weather, as previously discussed.

NFE increasedremained approximatelyrelatively $37.0M and $45.4Mflat during the three and six months ended MarchJune 31,30, 2026, compared with the three andmonths sixended June 30, 2025. NFE increased approximately $45.1M during the nine months ended MarchJune 31,30, 2026, compared with the nine months ended June 30, 2025, respectively, due primarily to higher Financial Margin, as previously discussed.

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-cost-of-service or market-based rates, can provide us organic growth opportunities. S&T is subject to various risks, including the construction, development and operation of our transportation and storage assets, as well as our ability to obtain necessary governmental, environmental and regulatory approvals, property rights and financing at reasonable costs for the construction, operation and maintenance of our assets.

S&T has a 50% ownership interest in Steckman Ridge, a storage facility located in western Pennsylvania that operates under market-based rates. As of MarchJune 31,30, 2026, our investment in Steckman Ridge was $102.8M.$101.4M.

(1)Includes related party transactions that were immaterial during the three and sixnine months ended MarchJune 31,30, 2026 and 2025.

Adjusted EBITDA increased approximately $5.9M$4.3M and $7.3M$11.6M during the three and sixnine months ended MarchJune 31,30, 2026 compared with the three and sixnine months ended MarchJune 31,30, 2025, respectively, due primarily to higher net income, as previously discussed.

The financial results of HSO consist primarily of the operating results of NJRHS. NJRHS provides service, sales and installation of appliances to service contract customers and has been focused on growing its installation business and expanding its service contract customer base. HSO also includes organizational expenses incurred at NJR. Net (loss)income was $(0.2)M$0.6M and $(0.7)M$0.5M for the three months ended MarchJune 31,30, 2026 and 2025, respectively and $0.8M and $0.4M for the nine months ended June 30, 2026 and 2025, respectively. Net income (loss) was $0.3M and $(0.1)M for the six months ended March 31, 2026 and 2025, respectively.

We satisfy our external common equity requirements, if any, through issuances of our common stock, including the proceeds from stock issuances under our DRP. The DRP allows us, at our option, to use treasury shares or newly issued shares to raise capital. NJR raised approximately $3.8M$3.7M and $3.6M of equity through the DRP during both the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $7.6M$11.3M and $11.2M during both the sixnine months ended MarchJune 31,30, 2026 and 2025.2025, respectively.

During the sixthree and nine months ended MarchJune 31,30, 2026, we raised approximately $26.9M of equity by issuing approximately 482,000 shares through the waiver discount feature of the DRP. During the nine months ended June 30, 2025, we raised approximately $19.9M of equity by issuing approximately 418,000 shares through the waiver discount feature of the DRP. WeThere didwere not issueno shares issued through the waiver discount feature of the DRP during the three and six months ended MarchJune 31, 2026 or during the three months ended March 31,30, 2025.

In 1996, the Board of Directors authorized us to implement a share repurchase program, which was expanded seven times since the inception of the program, authorizing a total of 19.5M shares of common stock for repurchase. Since inception, we repurchased a total of approximately 17.8M of those shares and may repurchase an additional 1.7M shares under the approved program. There were no shares repurchased during the three and sixnine months ended MarchJune 31,30, 2026 and 2025.

We believe that as of MarchJune 31,30, 2026, NJR and NJNG were, and currently are, in compliance with all existing debt covenants, both financial and non-financial.

As of MarchJune 31,30, 2026, NJR had a revolving credit facility totaling $575M, with approximately $399.7M$328.9M available under the facility.

NJNG’s commercial paper is sold through several commercial banks under an issuing and paying agency agreement and is supported by the $250M NJNG Credit Facility. As of MarchJune 31,30, 2026, there was $249.3M available under the NJNG Credit Facility, including amounts allocated to the backstop under the commercial paper program, as applicable, and the issuance of letters of credit. Short-term borrowings were as follows:

As of MarchJune 31,30, 2026, NJR had 2935 letters of credit outstanding totaling approximately $25.3M,$26.1M, which reduced the amount available under the NJR Credit Facility by the same amount. NJR does not anticipate that these letters of credit will be drawn upon by the counterparties.

Based on its average borrowings during the sixnine months ended MarchJune 31,30, 2026, NJR’s average interest rate was 5.10%,5.00%, resulting in interest expense of approximately $5.7M.$8.6M. Based on average borrowings of $222.3M$227.7M during the period, a 100 basis point change in the underlying average interest rate would have caused a change in interest expense of approximately $1.1M$1.7M during the sixnine months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, NJNG had two letters of credit outstanding for $0.7M, which reduced the amount available under the NJNG Credit Facility by the same amount. NJNG does not anticipate that these letters of credit will be drawn upon by the counterparties.

Based on its average borrowings during the sixnine months ended MarchJune 31,30, 2026, NJNG’s average interest rate was 3.98%, resulting in interest expense of $1.5M. Based on average borrowings of $76.2M$50.8M during the period, a 100 basis point change in the underlying average interest rate would have caused a change in interest expense of approximately $0.4M during the sixnine months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, NJR's long-term debt consisted of approximately $1.1B in fixed-rate unsecured debt issuances, with maturities ranging from 2026 to 2034.

As of MarchJune 31,30, 2026, NJNG's long-term debt consisted of approximately $1.8B in fixed-rate debt issuances secured by the Mortgage Indenture, with maturities ranging from 2028 to 2061, and approximately $43.6M$41.2M in sale leasebacks of natural gas meters with various maturities ranging from 2026 to 2031.

NJNG received approximately $15.0M and $11.7M during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively, in connection with the sale leaseback of its natural gas meters. 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 repurchase the assets sold or renew the lease at the end of the term. As NJNG retains control of the natural gas meters, these arrangements do not qualify as a sale. NJNG uses the financing method to account for the transactions. NJNG continues to evaluate this sale leaseback program based on current market conditions. Natural gas meters are excluded from the lien on NJNG property under the Mortgage Indenture.

CEV enters into transactions to sell the commercial solar assets concurrent with agreements to lease the assets back over a period of five to seveneight years. The Company has concluded that these arrangements do not qualify as a sale for accounting purposes, as the Company retains control of the underlying assets, and are therefore treated as financing obligations, which are typically secured by the renewable energy facility asset and its future cash flows from RECs and energy sales. ITCs and other tax benefits associated with these solar projects are transferred to the buyer, if applicable; however, the lease payments are structured so that CEV is compensated for the transfer of the related tax incentives. CEV continues to operate the solar assets, including related expenses, and retain the revenue generated from RECs and energy sales, and has the option to renew the lease or repurchase the assets sold at the end of the lease term. During the sixnine months ended MarchJune 31,30, 2026 and 2025, CEV received proceeds of approximately $49.3M$100.6M and $25.7M,$100.3M, respectively, in connection with the sale leaseback of commercial solar projects. The proceeds received were recognized as a financing obligation on the Unaudited Condensed Consolidated Balance Sheets.

As of MarchJune 31,30, 2026, the Company had 3137 outstanding letters of credit totaling approximately $26.0M,$26.8M, as previously mentioned and there were NJR guarantees covering approximately $151.5M$136.1M of natural gas purchases and ES demand fee commitments, not yet reflected in accounts payable on the Unaudited Condensed Consolidated Balance Sheets.

NJNG's total capital expenditures spent or accrued during the sixnine months ended MarchJune 31,30, 2026, were approximately $218.9M.$355.7M. During fiscal 2026, total capital expenditures are projected to be between $430M$470M and $480M.$500M. NJNG expects to fund its obligations with a combination of cash flows from operations, cash on hand, issuance of commercial paper, available capacity under its revolving credit facility and the issuance of long-term debt. As of MarchJune 31,30, 2026, NJNG's future MGP expenditures are estimated to be approximately $166.1M.$165.2M. For a more detailed description of MGP expenditures see Note 13. Commitments and Contingent Liabilities in the accompanying Unaudited Condensed Consolidated Financial Statements.

During the sixnine months ended MarchJune 31,30, 2026, total capital expenditures spent or accrued related to the purchase and installation of solar equipment were approximately $109.2M.$147.9M. CEV's expenditures include clean energy projects that support our goal to promote renewable energy. Accordingly, CEV enters into agreements to install solar equipment for commercial projects. We estimate solar-related capital expenditures during fiscal 2026 to be between $210M and $290M.

During the sixnine months ended MarchJune 31,30, 2026, S&T had capital expenditures spent or accrued for Adelphia totaling approximately $2.4M$3.1M and capital expenditures spent or accrued for Leaf River totaling approximately $22.1M.$44.7M. During fiscal 2026, we expect expenditures related to Adelphia to be between $5M and $10M and expenditures related to Leaf River to be between $40M and $50M.

Cash flows from operating activities during the sixnine months ended MarchJune 31,30, 2026, totaled approximately $589.3M,$577.8M, compared with approximately $414.1M$385.2M during the sixnine months ended MarchJune 31,30, 2025. Operating cash flows are primarily affected by variations in working capital, which can be impacted by several factors, including:

Cash flows from operating activities increased approximately $175.2M$192.6M during the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025, due primarily to ES Financial Margin and higher base rates and ES Financial Margin,rates, along with the changes in the mix of working capital components.