LEASES

12 Months Ended

Sep. 30, 2025

Leases [Abstract]

LEASES

13. LEASES

Lessee Accounting

The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. After the criteria are satisfied, the Company accounts for these arrangements as leases in accordance with ASC 842, Leases. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. Leases in which the Company is the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases.

The Company’s lease agreements primarily consist of commercial solar land leases, storage and capacity leases, equipment and real property, including land and office facilities, office equipment and the sale leaseback of certain natural gas meters.

Certain leases contain escalation provisions for inflation metrics. The storage leases contain a variable payment component that relates to the change in the inflation metrics that are not known past the current payment period. The variable components of these lease payments are excluded from the lease payments that are used to determine the related right-of-use lease asset and liability. The variable portion of these leases are recognized as leasing expenses when they are incurred. The capacity lease payments are fully variable and based on the amount of natural gas stored in the storage caverns.

Generally, the Company’s solar land lease terms are between 20 and 50 years and may include multiple options to extend the terms for an additional five to 20 years. The Company’s office leases vary in duration, ranging from two to 11 years, and may or may not include extension or early purchase options. The Company’s meter lease terms are between seven and 10 years with purchase options available prior to the end of the term. Equipment leases, including general office equipment, also vary in duration, with an average term of ten years. The Company’s storage and capacity leases have assumed terms of 50 years to coincide with the expected useful lives of the cavern assets with which the leases are associated. The Company’s lease terms may include options to extend, purchase the leased asset or terminate a lease, and they are included in the lease liability calculation when it is reasonably certain that those options will be exercised. The Company has elected an accounting policy, which applies to all asset classes, that exempts leases with an original term of one year or less from the recognition requirements of ASC 842, Leases.

The Company has lease agreements with lease and non-lease components and has elected the practical expedient not to separate lease components from the associated non-lease components for certain classes of leases, such as office buildings, solar land leases and office equipment. The Company’s lease agreements do not contain any material residual value guarantees, material restrictions or material covenants. In July 2021, 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, the effects of which are eliminated in consolidation.

The following table presents the Company’s lease costs included in the Consolidated Statements of Operations for the fiscal year ended September 30:

(Thousands)	Income Statement Location	2025		2024		2023
Operating lease cost (1)	Operation and maintenance	$	11,560	$	10,368	$	9,336
Finance lease cost
Amortization of right-of-use assets	Depreciation and amortization	1,686		2,160		2,105
Interest on lease liabilities	Interest expense, net of capitalized interest	631		914		1,084
Total finance lease cost		$	2,317	$	3,074	$	3,189
Variable lease cost	Operation and maintenance	894		1,099		1,128
Total lease cost		$	14,771	$	14,541	$	13,653

(1)Net of capitalized costs.

The following table presents supplemental cash flow information related to leases for the fiscal year ended September 30:

(Thousands)	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	9,355	$	7,932	$	8,942
Operating cash flows for finance leases	$	631	$	914	$	1,084
Financing cash flows for finance leases	$	7,574	$	7,792	$	7,379

Operating lease assets obtained in exchange for new or modified operating lease liabilities totaled approximately $6.4M and $14.1M during fiscal 2025 and 2024, respectively. There were no finance lease assets obtained in exchange for new or modified finance lease liabilities during fiscal 2025 and 2024.

The following table presents the balance and classifications of the Company’s right of use assets and lease liabilities included in the Consolidated Balance Sheets for the fiscal year ended September 30:

(Thousands)	Balance Sheet Location	2025		2024
Assets
Noncurrent
Operating lease assets	Operating lease assets	$	185,596	$	184,485
Finance lease assets	Utility plant	24,402		26,088
Total lease assets		$	209,998	$	210,573
Liabilities
Current
Operating lease liabilities	Operating lease liabilities	$	4,388	$	4,945
Finance lease liabilities	Current maturities of long-term debt	5,568		7,534
Noncurrent
Operating lease liabilities	Operating lease liabilities	159,131		159,303
Finance lease liabilities	Long-term debt	10,366		16,026
Total lease liabilities		$	179,453	$	187,808

For operating lease assets and liabilities, the weighted average remaining lease term was 28.4 years and 28.6 years and the weighted average discount rate used in the valuation over the remaining lease term was 4.0% and 3.8% as of September 30, 2025 and 2024, respectively.

For finance lease assets and liabilities, the weighted average remaining lease term was 2.4 years and 3.0 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.4% and 3.4% as of September 30, 2025 and 2024, respectively.

The following table presents the Company’s maturities of lease liabilities as of September 30, 2025:

(Thousands)	Operating		Finance
2026	$	8,961	$	6,003
2027	9,120		4,402
2028	9,212		4,736
2029	9,279		1,676
2030	9,333		—
Thereafter	237,169		—
Total future payments	283,074		16,817
Less: interest	(119,555)		(883)
Total liability	$	163,519	$	15,934

LEASES

13. LEASES

Lessee Accounting

The Company determines if an arrangement is a lease at inception based on whether the Company has the right to control the use of an identified asset, the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. After the criteria are satisfied, the Company accounts for these arrangements as leases in accordance with ASC 842, Leases. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, including payments at commencement that depend on an index or rate. Leases in which the Company is the lessee do not have a readily determinable implicit rate, so an incremental borrowing rate, based on the information available at the lease commencement date, is utilized to determine the present value of lease payments. When a secured borrowing rate is not readily available, unsecured borrowing rates are adjusted for the effects of collateral to determine the incremental borrowing rate. The Company uses the implicit rate for agreements in which it is a lessor. The Company has not entered into any material agreements in which it is a lessor. Lease expense and lease income are recognized on a straight-line basis over the lease term for operating leases.

The Company’s lease agreements primarily consist of commercial solar land leases, storage and capacity leases, equipment and real property, including land and office facilities, office equipment and the sale leaseback of certain natural gas meters.

Certain leases contain escalation provisions for inflation metrics. The storage leases contain a variable payment component that relates to the change in the inflation metrics that are not known past the current payment period. The variable components of these lease payments are excluded from the lease payments that are used to determine the related right-of-use lease asset and liability. The variable portion of these leases are recognized as leasing expenses when they are incurred. The capacity lease payments are fully variable and based on the amount of natural gas stored in the storage caverns.

Generally, the Company’s solar land lease terms are between 20 and 50 years and may include multiple options to extend the terms for an additional five to 20 years. The Company’s office leases vary in duration, ranging from two to 11 years, and may or may not include extension or early purchase options. The Company’s meter lease terms are between seven and 10 years with purchase options available prior to the end of the term. Equipment leases, including general office equipment, also vary in duration, with an average term of ten years. The Company’s storage and capacity leases have assumed terms of 50 years to coincide with the expected useful lives of the cavern assets with which the leases are associated. The Company’s lease terms may include options to extend, purchase the leased asset or terminate a lease, and they are included in the lease liability calculation when it is reasonably certain that those options will be exercised. The Company has elected an accounting policy, which applies to all asset classes, that exempts leases with an original term of one year or less from the recognition requirements of ASC 842, Leases.

The Company has lease agreements with lease and non-lease components and has elected the practical expedient not to separate lease components from the associated non-lease components for certain classes of leases, such as office buildings, solar land leases and office equipment. The Company’s lease agreements do not contain any material residual value guarantees, material restrictions or material covenants. In July 2021, 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, the effects of which are eliminated in consolidation.

The following table presents the Company’s lease costs included in the Consolidated Statements of Operations for the fiscal year ended September 30:

(Thousands)	Income Statement Location	2025		2024		2023
Operating lease cost (1)	Operation and maintenance	$	11,560	$	10,368	$	9,336
Finance lease cost
Amortization of right-of-use assets	Depreciation and amortization	1,686		2,160		2,105
Interest on lease liabilities	Interest expense, net of capitalized interest	631		914		1,084
Total finance lease cost		$	2,317	$	3,074	$	3,189
Variable lease cost	Operation and maintenance	894		1,099		1,128
Total lease cost		$	14,771	$	14,541	$	13,653

(1)Net of capitalized costs.

The following table presents supplemental cash flow information related to leases for the fiscal year ended September 30:

(Thousands)	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	9,355	$	7,932	$	8,942
Operating cash flows for finance leases	$	631	$	914	$	1,084
Financing cash flows for finance leases	$	7,574	$	7,792	$	7,379

Operating lease assets obtained in exchange for new or modified operating lease liabilities totaled approximately $6.4M and $14.1M during fiscal 2025 and 2024, respectively. There were no finance lease assets obtained in exchange for new or modified finance lease liabilities during fiscal 2025 and 2024.

The following table presents the balance and classifications of the Company’s right of use assets and lease liabilities included in the Consolidated Balance Sheets for the fiscal year ended September 30:

(Thousands)	Balance Sheet Location	2025		2024
Assets
Noncurrent
Operating lease assets	Operating lease assets	$	185,596	$	184,485
Finance lease assets	Utility plant	24,402		26,088
Total lease assets		$	209,998	$	210,573
Liabilities
Current
Operating lease liabilities	Operating lease liabilities	$	4,388	$	4,945
Finance lease liabilities	Current maturities of long-term debt	5,568		7,534
Noncurrent
Operating lease liabilities	Operating lease liabilities	159,131		159,303
Finance lease liabilities	Long-term debt	10,366		16,026
Total lease liabilities		$	179,453	$	187,808

For operating lease assets and liabilities, the weighted average remaining lease term was 28.4 years and 28.6 years and the weighted average discount rate used in the valuation over the remaining lease term was 4.0% and 3.8% as of September 30, 2025 and 2024, respectively.

For finance lease assets and liabilities, the weighted average remaining lease term was 2.4 years and 3.0 years and the weighted average discount rate used in the valuation over the remaining lease term was 3.4% and 3.4% as of September 30, 2025 and 2024, respectively.

The following table presents the Company’s maturities of lease liabilities as of September 30, 2025:

(Thousands)	Operating		Finance
2026	$	8,961	$	6,003
2027	9,120		4,402
2028	9,212		4,736
2029	9,279		1,676
2030	9,333		—
Thereafter	237,169		—
Total future payments	283,074		16,817
Less: interest	(119,555)		(883)
Total liability	$	163,519	$	15,934