NewJersey Resources Q3 2025 Earnings Report

NewJersey Resources EPS Results

• Actual EPS: $0.06
• Consensus EPS: -$0.06
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: -$0.09

NewJersey Resources Revenue Results

• Actual Revenue: $298.95 million
• Expected Revenue: $305.05 million
• Beat/Miss: Missed by -$6.10 million
• YoY Revenue Growth: +8.50%

NewJersey Resources Announcement Details

• Quarter: Q3 2025
• Date: 8/4/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 10:00AM ET

New Jersey Resources Corporation, an energy services holding company, distributes natural gas. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 576,000 customers in Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates clean energy projects, including commercial and residential solar installation situated in New Jersey, Rhode Island, New York, Connecticut, Michigan, and Indiana. The Energy Services segment maintains and operates natural gas transportation and storage capacity contracts, as well as provides physical wholesale energy, retail energy and energy management services in the United States and Canada. The Storage and Transportation segment invests in invests in energy-related ventures. It provides heating, ventilation, and cooling services; sales and installation of appliances; offers solar equipment installation, and plumbing repair and installation services; and holds commercial real estate properties. The company was incorporated in 1981 and is headquartered in Wall, New Jersey.

NewJersey Resources Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Raised the lower end of its full-year NFEPS guidance by $0.05 to $3.20–$3.30 per share, exceeding the company’s long-term 7–9% growth target.
• Positive Sentiment: Increased 2025 capital projections for the SaveGreen energy efficiency program by over 30% to $90–$95 million, benefiting from accelerated cost recovery and strong customer adoption.
• Positive Sentiment: Clean Energy Ventures placed 63 MW into service year-to-date and is advancing a flexible 131 MW solar pipeline representing roughly $350 million of future investment.
• Positive Sentiment: Reached a settlement in principle in the Adelphia Gateway rate case, with an offer of settlement to be filed with FERC soon and resolution expected by year-end.
• Positive Sentiment: Projects strong cash flow of $460–$500 million for FY 2025, maintains a 19–21% adjusted FFO-to-debt ratio and $825 million of credit capacity to support its capital plan.

Presentation

[Operator]

Thank you for standing by, and welcome to the New Jersey Resources Fiscal twenty twenty five Third Quarter Financial Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Now I would like to turn the call over to Adam Prior, Director of Investor Relations. Please go ahead,

[Adam Prior, Director of Investor Relations at New Jersey Resources]

Thank you. Welcome to New Jersey Resources' twenty twenty five third quarter conference call and webcast. I'm joined here today by Steve Westhoven, our President and CEO Pat Migliaccio, our Senior Vice President and Chief Operating Officer of New Jersey Natural Gas Roberto Bell, our Senior Vice President and Chief Financial Officer as well as other members of our senior management team. Certain statements in today's call contain estimates and other forward looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions and beliefs forming the basis of our forward looking statements include many factors that are beyond our ability to control or estimate precisely.

[Adam Prior, Director of Investor Relations at New Jersey Resources]

This could cause results to materially differ from our expectations as found on Slide two. These items can also be found in the forward looking statements section of yesterday's earnings release furnished on Form eight ks and in our most recent Forms 10 ks and 10 Q as filed with the SEC. We do not, by including this statement, assume any obligation to review or revise any particular forward looking statement referenced herein in light of future events. We will also be referring to certain non GAAP financial measures such as net financial earnings or NFE. We believe that NFE, net financial loss, utility gross margin, financial margin, adjusted funds from operations and adjusted debt provide a more complete understanding of our financial performance.

[Adam Prior, Director of Investor Relations at New Jersey Resources]

However, these non GAAP measures are not intended to be a substitute for GAAP. Our non GAAP financial measures are discussed more fully in Item seven of our 10 ks. The slides accompanying today's presentation are available on our website and were furnished on our Form eight ks filed yesterday. Steve will begin with this quarter's highlights beginning on Slide four, followed by Pat, who will discuss New Jersey Natural Gas highlights Roberto, who will review our financial results and then we will open the call for your questions. With that said, I will turn the call over to our President and CEO, Steve Westhoven. Please go ahead,

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Thanks, Adam, and good morning, everyone. Fiscal twenty twenty five continues to be an excellent year for NJR marked by disciplined execution and consistent performance across all segments. This quarter was no exception. NJR raised the lower end of its full year guidance, increased CapEx projections driven by utility investments, advanced projects through the CEV pipeline and made regulatory progress while identifying multiple expansion opportunities at S and T. We reported robust investment at New Jersey Natural Gas under our Save Green program, investments that are delivering near real time returns while helping customers manage their energy use.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

CEV placed 63 megawatts into service so far this year and will likely finish the year with close to a record amount of capacity placed into service, while also maintaining a project pipeline of investment options that remains diverse and flexible. In storage and transportation, we have reached a settlement in principle at the Adelphia Gateway rate case and expect resolution by the end of the year. At Leaf River, we continue to evaluate expansion opportunities that support future growth. Energy Services provides stability through fee based performance from our asset management agreements. And finally, NJR Home Services was named a top Root Pro partner for the ninth consecutive year.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

This recognition is a testament to our entire team's dedication to service excellence and meeting our customers' home comfort needs with the installation of high quality and reliable equipment. Turning to slide five for more details on our guidance for the year. We are raising the lower end of our fiscal twenty twenty five NFEPS guidance range by $05 to $3.2 to $3.3 per share. This reflects strong operating performance across our businesses and greater visibility into full year results. The revised range, which is above our long term seven to 9% growth target, demonstrates our ability to execute through dynamic environments.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

On Slide six, we present our updated NFEPS guidance by segment. New Jersey Natural Gas remains the strongest contributor to NFEPS benefiting from our recent rate case settlement and customer growth. CED is expected to contribute over 20% of our NFEPS this year based on high performing operating assets and the monetization of the residential solar portfolio. We are slightly narrowing the range of contributions across our business lines consistent with our practice as the year progresses. These updates reflect outperformance in Energy Services and a modest change in the relative contributions from New Jersey Natural Gas and CEV.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Roughly 65% of our full year NFEPS is expected to come from utility operations rising to over 70% when excluding the CEV gain related to the sale of our residential solar business. This shows how our platform is anchored in stable reoccurring earnings. With that, I'll turn the call over to Pat to discuss New Jersey Natural Gas on slide seven. Pat?

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

Thanks, Steve. At New Jersey Natural Gas, customer growth continues to be consistent and reliable contributor to our performance. We now serve approximately 588,000 customers with over 90% of these customers being residential and the vast majority being located in our core counties, Monmouth, Ocean, and Morris. These counties are experiencing solid population growth, steady housing starts, and new commercial development. Our service territories remain among the most economically vibrant in New Jersey with stable trends and high demand for affordable reliable energy.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

As these customers are integrated into our system, they drive recurring margin that compounds over time that supports continued capital investment. I want to take a moment to highlight the importance of SAIGRIN as part of our future investment. SAIGRIN remains one of the most impactful and unique utility energy efficient programs in the country, serves as a model for how regular utilities can simultaneously deliver benefits to customers and shareholders. This quarter, we are raising our 2025 capital projections for Save Green by over 30%, bringing the expected range up to 90,000,000 to $95,000,000 which represents another year of record investment. This increase is driven by growing adoption of more efficient HVAC systems, installation and weatherization for both residential and commercial customers.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

From a financial standpoint, SAIGRIN investment benefits from an accelerated cost recovery mechanism. This allows us to begin recovering our investment in real time, eliminating regulatory lag and improving capital efficiency, strategically saving lives like decarbonization goals. It reduces customer bills, lowers emissions and positions NGNG as a forward looking utility committed to sustainability. It's an example of how policy alignment, customer service and investor returns can coexist within a single program. We expect Sabrean to remain a core element of NGNG's capital strategy in the years ahead.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

As of third quarter, NGNG has invested approximately $383,000,000 in capital projects, which we highlight on slide nine. More than 47% of these investments are earning near real time returns through mechanisms such as SaveGreen. These programs provide timely recovery and reduced earnings lag traditionally associated with utility CapEx. Our capital allocation at NJ and D is designed to support our three strategic pillars, safe and reliable service, customer focused growth, and clean energy leadership. We maintain clear visibility into our capital plan supported by a multiyear pipeline of planned work, strong regulatory relationships, and predictable customer demand.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

Looking ahead, we expect NG and G to continue driving value through targeted capital deployment that aligns with the liability, safety, decarbonization goals and providing an appropriate return to our shareholders. With that, I'll turn it back to Steve.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Thanks, Pat. I'll move to a discussion of our other operating businesses beginning on Slide 10 with Clean Energy Ventures. CED continues to demonstrate the value of the diversified and flexible development model. Year to date, we've placed approximately 63 megawatts into service, including adding over 30 megawatts since our last conference call. We've been closely monitoring the implications of the Big Beautiful bill on the renewable sector.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Our development pipeline is advancing projects through construction and we are identifying attractive opportunities that will align with our investment criteria. Our current pipeline includes approximately 131 megawatts of solar projects scheduled to be brought into service in the next two years representing approximately $350,000,000 of investment with over 800 megawatts of additional investment opportunities in the future. Our project pipeline includes a range of opportunities varying in size, location and timeline and our agreements with developer partners are scheduled to preserve returns. These contracts give NJR the right, but not the obligation to move forward with individual projects at our discretion. This approach gives CED the flexibility to advance only those projects that are aligned with our long term capital plan and offer the most attractive risk adjusted returns.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

It also allows us to scale investment based on market dynamics, interconnection timing and return profiles, ensuring disciplined capital deployment and a focus on value creation. CEV plays a strategic role in NJR's portfolio through disciplined return focused investments aligning with the broader capital plan that remains anchored in our core utility and infrastructure businesses. The sale of our residential solar portfolio earlier this year not only unlocked value, but demonstrated the strength of our execution and the underlying quality of our assets. Solar remains one of the fastest and most efficient ways to answer the need for new generating capacity. With a robust pipeline, flexible capital approach and strong operational capabilities, we believe CEV is well positioned to address this need while contributing to NJR's long term growth.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Now let's turn to our Storage and Transportation segment. Our portfolio of midstream assets, Adelphia Gateway and Leaf River positions us to serve growing energy demand in constrained markets with highly reliable infrastructure. At Adelphia, we reached a settlement in principle with the FERC staff and the customers participating in our Section four rate case. We expect to file an offer of settlement with FERC in the coming weeks and remain optimistic about reaching a resolution this year. At Leaf River, we're advancing our capacity enhancement efforts and evaluating multiple expansion opportunities for both existing and new caverns aimed at delivering attractive long term returns.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

As noted on our last call, we recently completed a non binding open season for a potential fourth cavern which drew encouraging interest. As we assess the economics and refine the design criteria at the site, our due diligence has identified several organic growth opportunities. We expect to advance a subset of these projects and begin the regulatory process at FERC in the coming months. Market conditions for storage remain favorable and the site's structural and geographic advantages reinforce its long term value. As part of NJR's broader strategy, our S and T business complements both our utility and clean energy platforms contributing stable fee based cash flows and offering accretive reinvestment potential.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

With that, I'll turn the call over to Roberto for a review of our financial results. Roberto? Thank you, Steve, and good morning, everyone.

[Roberto Bel, SVP & CFO at New Jersey Resources]

Slide 13 shows the main drivers of our NFE for the third quarter and year to date period of fiscal twenty twenty five. In the third quarter, we reported an EPS of $06 per share compared with a net financial loss of $09 per share last year. Year to date, NFE is $313,400,000 or $3.13 per share, an increase of nearly 55% year over year. Drivers include higher utility margins at New Jersey Natural Gas post rate case, a net benefit of approximately $0.30 per share for the sale of our residential solar portfolio during our fiscal first quarter, improved performance in our Storage and Transportation business and strong results from Energy Services during the winter period. These results show the resiliency and balance of our business model.

[Roberto Bel, SVP & CFO at New Jersey Resources]

Now let's move to slide 14, where we will discuss in Europe's capital plan. For fiscal twenty twenty five and fiscal twenty twenty six, our planning capital expenditures ranging from 1,300,000,000.0 to $1,600,000,000 which aligns with our long term NFEPS growth target of seven to 9%. We increased the lower end of our capital plan from our prior disclosures driven by better than expected safe redeployment at the utility. We now expect spending between $650,000,000 and $770,000,000 in capital investments during fiscal twenty twenty five. We plan to update our fiscal twenty twenty six capital plan in November consistent with our typical timeline.

[Roberto Bel, SVP & CFO at New Jersey Resources]

This update may include several areas of potential incremental upside including Safegreen. These investments align with our long term strategy to enhance utility infrastructure, expand clean energy investments and optimize our storage and transportation capabilities. As highlighted on slide 15, our strong balance sheet and disciplined financial management remain foundational to NGR's long term strategy and our ability to invest through various economic or market conditions. We're projecting an adjusted FFO to adjusted debt ratio of 19% to 21% reflecting our conservative approach to balance sheet management and ensuring ongoing access to low cost capital. For fiscal twenty twenty five, we project cash flow from operations between $460,000,000 and $500,000,000 This robust cash generation is supported by stable utility earnings and contributions from CV, S and T and Energy Services.

[Roberto Bel, SVP & CFO at New Jersey Resources]

In terms of liquidity, we have $825,000,000 of credit capacity across our credit facilities. This flexibility positions us to fund our capital plan and manage working capital needs. Our debt maturity profile is well laddered with no outsized refinancing risk in the near term limiting interest rate exposure. Our cash flow strength, liquidity position and prudent financial policy support NGR's ability to fund growth, maintain flexibility and preserve shareholder value across a variety of market conditions. With that, I'll turn the call back to Steve for concluding remarks on slide 16.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Thanks, Roberto. Fiscal twenty twenty five has been an excellent year for NJR. In the third quarter, we delivered solid operational and financial results, raised the lower end of our full year earnings guidance and advanced key strategic investments across all of our core business lines. These businesses work together to form a well balanced enterprise that generates predictable earnings and a peer leading long term growth rate, supports consistent capital deployment with the ability for incremental upside and creates meaningful value for customers and shareholders alike. Just as important, our success this year has been supported by a healthy balance sheet, ample liquidity and disciplined capital allocation.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

That financial strength allows us to maintain flexibility in how we fund growth, manage risk and respond to changing market conditions. And at the core of all this is a team of dedicated employees who show up every day to serve our customers and communities. I want to give a special thank you to our employees out in the field working through 95 degree heat this summer to ensure our customers are safe and comfortable. Your hard work does not go unnoticed. To conclude, we believe NJR is well positioned to deliver attractive long term risk adjusted returns.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Our track record flex not only the ability to navigate changing environments, but also to allocate capital to where it matters most, serving the evolving needs of our customers. So with that, we'll now open the line for questions.

[Operator]

We will now begin the question and answer session. And your first question comes from the line of Richard Sunderland with JPMorgan. Richard, please go ahead.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Hi. Good morning. Thanks for the time today.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Hey, Richard.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

For the Adelphia rate case, what would be the year over year impact of the settlement in 2026? And are there any other key considerations here?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Rich, so right now, we're we're still in the, I guess, the middle of the the settlement, and none of those details have been made public at this time. So, you know, negotiations been constructive, and we're nearing an end, but we're not going to divulge any more information around that at this point. We'll reach out and obviously we'll we'll share what we can.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Understood. Fair enough. And then turning to CEV, the 131 megawatt target over the next two years, how have you sized that relative to initial expectations last fall when you rolled out your twenty five and twenty six capital plan? And then I guess similarly, has OBBB changed your expectations at all around CEV?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

So I'll that in a few different parts. One, we're trying to improve the way that we report future capital that we're going invest in CEV. So the 131 megawatts is really, you know, what's under construction or or really nearing construction at this point in time. So we've got some good visibility on the investments that we'll make, you know, there, you know, over the next two years, and and you'll see those, you know, come into service. You know, addressing, you know, o b OBD and and all the other questions that are around that, you know, we just talked about, you know, our capital plans and, you know, the clarity of that over the next few years.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

We've got high confidence in the projections that we're sharing with you, and and that really drives your seven to 9% growth rate. So when you look at OVD and you look at its potential impact, you know, on our total CapEx, you know, you'll notice majority of our infrastructure, our assets that deliver natural gas are natural gas related, and that's reflected in our earnings mix. You know? In fact, over 80% of our CapEx in the past five years has come from natural gas business, And we expect the majority of our growth still to continue in that space. So you heard Pat talk today about the energy efficiency program and the growth that's there.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

We talked a little bit about the potential expansion at Leaf River the organic growth of our core businesses. And we feel that this is gonna drive the value across all of NJR's assets. So, you know, to put it into context, you know, majority of the dollars that we're gonna spend, know, are gonna be in our gas related businesses. So regardless of how b b, you know, BBB, you know, turns out, you know, we remain confident that we're gonna hit our capital targets over the next few years, you know, through our portfolio of businesses and through the examples that I just had shared with you. So, you know, obviously, that flexibility and our ability to invest in multiple platforms is gonna drive, you know, our growth going forward.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

And, you know, of course, that's driven by the fact that you've got some really you know, some very real growth coming in the electric side of the market that, you know, we've all talked about all this time. So all our infrastructure, you know, is gonna be able to participate in that. You know, we still think solar is important. You know, it's the quickest, you know, capacity that you can bring to the market. But, you know, overall, you know, just to put it in context, you know, we we feel good about, you know, our business as moving forward and our ability to invest and grow.

[Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan]

Great. Thanks for the thoughts there. I'll leave it there. Thank you.

[Operator]

And your next question comes from the line of Chris Ellinghaus with Siebert William Shank. Chris, please go ahead.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Hey guys, how are you?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Hey Chris.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Steve, the the expansion of Leaf River, do you have any sense after the open season, you know, when a decision timeline might look or what a what a decision timeline might look like?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Yeah. You know, we're you know, we said during the, you know, during the call, you know, that we expect that in the coming months we're making, you know, filing it first. But right now, we have another open season, a binding open season that's taking place at reefer. So, you know, we're narrowing in on exactly what, you know, the expansion looks like, and and certainly, you know, size, scope, customers, and things like that. So, you know, to me, yeah, this is something that, you know, hopefully will take place over the next, you know, few months, you know, depending on, you know, how these processes turn out.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

And is there any incremental color you can add on S and T's relative strength this quarter?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

I think it's just a strong natural gas market. You saw weather certainly has contributed quite a bit. If you look at transportation demands and storage demands balancing extremely hot days, it's the things that we talk about all the time. This is real growth in the energy markets and you need infrastructure to be able to supply that. And, you know, natural gas is a flexible, you know, fuel that's able to supply, you know, those needs, when it's called upon.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Okay. Going back to the Adelphia case, it's certainly a a really big catalyst for 2026. When you make your filing, do you anticipate you'll do a release for that?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

When we you say when we complete the, you know, I guess, the settlement and the rate case and everything goes into effect?

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Yeah.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

I mean, there'll be there'll definitely be a, you know, a public, disclosure at that point in time. You know, we'll have to update tariffs. There'll be a number of things that will be required, you know, to do. But, certainly, we'll talk about it.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Roberto, the the utility gross margin for the quarter was a little bit bigger than I was expecting. I'm guessing that that just has to do with some variance in my seasonality expectation for the rate case. But can you break out at all that $25,000,000 case versus sort of organic growth?

[Roberto Bel, SVP & CFO at New Jersey Resources]

Yes. So maybe maybe what I would say on that, Chris, is you you have benefits certainly from the new rate case. But then also, we have been making a lot of progress on the OpEx side. So it's a combination of the two.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

And lastly, I think you sort of intimated this, Steve, vis a vis the tax bill and what the outlook for CEB might be going forward. But the pricing in PJM is pretty was very strong. So are you kind of thinking part of your thought process is you have fungibility of CapEx across the board, but are you also thinking that sort of the pricing for solar is going to equalize to a certain extent where power prices are headed and and solar project economics will also adjust over time.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Yeah. There's certainly going to be a re rationalization in this market on what, you know, costs are. And you're right. You know, prices have been, you know, have been moving up in the electric side of the market, and that's driven, you know, kind of the valuable infrastructure. And it's really, you know, placed into our general premise that, you know, infrastructure is gonna become more valuable and NJR owns a lot of infrastructure that you're able to organically expand and participate in those markets.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

So, you know, it's been a thesis that that, you know, we've been talking about for a while, and we continue to make investments and grow the company, basically, feeding into that real market demand. So, you know, one with the way of saying yes, you know, you know, the the demands of the market, you know, the pricing has to support new investment, and that's occurring real time.

[Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.]

Okay. Great. Thanks for the details. Appreciate it.

[Operator]

All right. Thank you. And your next question comes from the line of Travis Miller with Morningstar. Travis, please go ahead.

[Travis Miller, Senior Equity Analyst at Morningstar]

Good morning, everyone. Thank you.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Thanks, Travis.

[Travis Miller, Senior Equity Analyst at Morningstar]

Just following up on the Leaf River conversation and the expansion. Are there a series of discrete steps that have to be done for the expansion versus it sounds like you're also doing an open season for some of the existing capacity. What are the steps in terms of the expansion that you're looking at that would be next? The profiling, and then is it up to you to decide an FID?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Yeah. I mean, really, you know, we'll get the customers lined up and, you know, what services that they need, you know, run through your FEED studies to see what equipment and what construction needs to take place. That's all, you know, in motion right now. Then there'll be a FERC filing that approval, and then they'll set in motion to construction to be able to build the services and then go into commercial operations to meet the customers' needs.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. At what point in that process would you know around the CapEx number that you'd either be willing to share or be putting explicitly into your CapEx forecast? At what point in this process for the expansion would you expect to have some kind of number?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Yeah. I think that's you know, that'll be in the coming months, but we hope to have it done. We normally update our CapEx schedule in November, and we expect that we take place then if everything lines up the way that we're expecting at this point.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. Great. Then different topic, the dividends. Traditionally, the Board's considered a dividend increase here in the next couple of months. Given the EPS that you've had over the last few years, how do you think the Board is going to look at not necessarily the payout ratio, but just generally capital allocated to the dividend given, again, your payout ratio will be pretty low on this year's earnings, but then you also talk about the base earnings number.

[Travis Miller, Senior Equity Analyst at Morningstar]

How is the board thinking about that base versus actual?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Yeah. Travis, we typically view that, you know, related to our historical growth rate. Right? So, you know, in years of outperformance, that payout ratio would become, you know, a little bit less. I think history is a good guide, you know, for the future.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

In this case, you know, we, we typically stay pretty tight to how we're growing the company longer term and the dividend will follow that. And you can see we've increased the dividend for the past twenty three, twenty four years, and we expect to continue to do so. So I think you know, historical performance would indicate, you know, how we'd act in the future.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. Great. Well, that's all I have. Thanks so much.

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Alright. Thanks, Travis.

[Operator]

And your next question comes from the line of Robert Moskow with Mizuho Securities. Robert, please go ahead.

[Robert Moskow, Managing Director at TD Cowen]

Hey, good morning, everyone. Wondering if you could Hey, Just wondering if you guys could speak to the higher CapEx in Save Green. Just wondering what's driving the stronger demand for that program. And early days here, but could this portend anything around the size of future iterations of this program as far as what gets approved?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

Thanks, Robert. I'm gonna ask Pat to to take that question.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

Hey, Rob. Good morning. Yeah. So the January marks the start of the new triadium as we refer to it in the energy efficiency program, and it's a combination of both strong demand for the market on the residential side for more efficient HVAC systems, but also on the commercial side, a direct install program, which is a newer feature of the saving program. And combined with, candidly, our team's really strong execution of the program led to the guidance for this year.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

And as we've already indicated, we typically update CapEx guidance in 2026, so we'll make any indications about any soon future saving rate increases at that point in time. But just just more broadly, as we think about the strategic advantage of the program and at the risk of repeating my remarks, it really is a win win win. Right? We're able to lower customers' customers' bills, which is particularly important in a period we're focused on affordability while at the same time reducing emissions. It is a strong decarbonization tool.

[Patrick Migliaccio, SVP & COO - New Jersey Natural Gas at New Jersey Resources]

We have a tool kit. And, you know, as as we pointed out a couple of different times, this is one of the real time recovery mechanisms that we have at our disposal.

[Robert Moskow, Managing Director at TD Cowen]

Got it. Thanks for that, Pat. And for my follow-up, it seems like the permitting environment for gas infrastructure in the Northeast might be easing a little bit. Is there anything NGR would be interested in, be it growth projects or trying to secure system or supply redundancy to support some of the customer growth you guys are experiencing and maybe improve reliability?

[Stephen Westhoven, CEO, President & Director at New Jersey Resources]

I mean, you know, those are programs that we've, you know, have continued to make investments, you know, reliability, expanding the system, you know, making sure you hit customer growth numbers, you know, that have been, that have been great, you know, over the past few years. So I would expect, you know, kind of more of the same item permitting and and, you know, conversations around it. You know, at times, it's been difficult in the past, but we've always been able to achieve, you know, that investment in in building infrastructure that we need. So I just expect it to continue.

[Robert Moskow, Managing Director at TD Cowen]

Got it. Appreciate the time, everyone.

[Operator]

That concludes our question and answer session. Will now turn the call over to Adam Pryor for closing remarks. Adam?

[Adam Prior, Director of Investor Relations at New Jersey Resources]

Thank you, and thank you all of you for joining us this morning. As always, we appreciate your interest and investment in NJR, and have a good rest of your day.

[Operator]

That concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Stephen Westhoven, CEO, President & Director
• Patrick Migliaccio, SVP & COO - New Jersey Natural Gas
• Roberto Bel, SVP & CFO

Analysts

• Adam Prior, Director of Investor Relations at New Jersey Resources
• Richard Sunderland, Equity Research - North American Utilities & Power at JP Morgan
• Chris Ellinghaus, MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative Energy at Siebert Williams Shank.
• Travis Miller, Senior Equity Analyst at Morningstar
• Robert Moskow, Managing Director at TD Cowen