Financial Risk Management Commodity Market Risks Natural gas is a nationally traded commodity. Its prices are determined effectively by the NYMEX, ICE and over-the-counter markets. The prices on the NYMEX, CME, ICE and over-the-counter markets generally reflect the national balance of natural gas supply and demand, but are also significantly influenced from time to time by other events. Our regulated and unregulated businesses are subject to market risk due to fluctuations in the price of natural gas. To economically hedge against such fluctuations, we have entered into forwards, futures, options and swap agreements. To manage these derivative instruments, we have well-defined risk management policies and procedures that include daily monitoring of volumetric limits and monetary guidelines. Our natural gas businesses are conducted through two of our operating subsidiaries. NJNG is a regulated utility that uses futures, options and swaps to provide relative price stability, and its recovery of natural gas costs is governed by the BPU. ES uses futures, options, swaps and physical contracts to economically hedge purchases and sales of natural gas. The following table reflects the changes in the fair market value of financial derivatives related to natural gas purchases and sales: Balance Increase (Decrease) Less Balance (Thousands) September 30, 2025 in Fair Market Value Amounts Settled June 30, 2026 NJNG $ 346 (9,490) (9,128) $ (16) ES 7,344 3,019 6,857 3,506 Total $ 7,690 (6,471) (2,271) $ 3,490 There were no changes in methods of valuations during the nine months ended June 30, 2026. The following is a summary of fair market value of financial derivatives as of June 30, 2026, by method of valuation and by maturity for each fiscal year period: (Thousands) 2026 2027 2028 - 2030 After 2030 Total Fair Value Price based on ICE $ (310) 3,874 (74) — $ 3,490 The following is a summary of financial derivatives by type as of June 30, 2026: Volume Bcf Price per MMBtu Amounts included in Derivatives (Thousands) NJNG Futures 27.1 $2.89 - $4.36 $ (16) ES Futures (9.8) $1.78 - $4.78 3,506 Total $ 3,490 60 New Jersey Resources Corporation Part I ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued) The following table reflects the changes in the fair market value of physical commodity contracts: Balance Increase Less Balance (Thousands) September 30, 2025 (Decrease) in Fair Market Value Amounts Settled June 30, 2026 NJNG - Prices based on other external data $ 28 2,009 1,993 $ 44 ES - Prices based on other external data (4,788) 243 865 (5,410) Total $ (4,760) 2,252 2,858 $ (5,366) Our market price risk is predominately linked with changes in the price of natural gas at the Henry Hub, the delivery point for the NYMEX natural gas futures contracts. Based on price sensitivity analysis, an illustrative 10% movement in the natural gas futures contract price, for example, increases (decreases) the reported derivative fair value of all open, unadjusted Henry Hub natural gas futures and fixed price swap positions by approximately $3.5M. This analysis does not include potential changes to reported credit adjustments embedded in the $3.2M reported fair value. Derivative Fair Value Sensitivity Analysis (Thousands) Henry Hub Futures and Fixed Price Swaps Percent increase in NYMEX natural gas futures prices 0% 5% 10% 15% 20% Estimated change in derivative fair value $ — $ (1,760) $ (3,520) $ (5,280) $ (7,040) Ending derivative fair value $ 3,180 $ 1,420 $ (340) $ (2,100) $ (3,860) Percent decrease in NYMEX natural gas futures prices 0% (5)% (10)% (15)% (20)% Estimated change in derivative fair value $ — $ 1,760 $ 3,520 $ 5,280 $ 7,040 Ending derivative fair value $ 3,180 $ 4,940 $ 6,700 $ 8,460 $ 10,220 Wholesale Credit Risk The following is a summary of gross and net credit exposures, grouped by investment and non-investment grade counterparties, as of June 30, 2026. Gross credit exposure for ES is defined as the unrealized fair value of derivative and energy trading contracts plus any outstanding wholesale receivable for the value of natural gas or power delivered and/or financial derivative commodity contract that has settled for which payment has not yet been received. Gross credit exposure for S&T is defined as demand and estimated usage fees for contracted services and/or market value of loan balances for which payment has not yet been received. Net credit exposure is defined as gross credit exposure reduced by collateral received from counterparties and/or payables, where netting agreements exist. The amounts presented below exclude accounts receivable for NJNG retail natural gas sales and services. ES's, CEV's and S&T's counterparty credit exposure as of June 30, 2026, is as follows: (Thousands) Gross Credit Exposure Net Credit Exposure Investment grade $ 87,372 $ 80,367 Noninvestment grade 9,143 2,829 Internally rated investment grade 13,639 13,356 Internally rated noninvestment grade 15,804 8,639 Total $ 125,958 $ 105,191 NJNG's counterparty credit exposure as of June 30, 2026, is as follows: (Thousands) Gross Credit Exposure Net Credit Exposure Investment grade $ 9,369 $ 8,105 Noninvestment grade 5,028 — Internally rated investment grade 112 53 Internally rated noninvestment grade 2,445 — Total $ 16,954 $ 8,158 61 New Jersey Resources Corporation Part I ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued) Due to the inherent volatility in the market price for natural gas, electricity and RECs, the market value of contractual positions with individual counterparties could exceed established credit limits or collateral provided by those counterparties. If a counterparty failed to perform the obligations under its contract (for example, failed to make payment for natural gas received), we could sustain a loss. This loss would comprise the loss on natural gas delivered but not paid for and/or the cost of replacing natural gas not delivered or received at a price that exceeds the original contract price. Any such loss could have a material impact on our financial condition, results of operations or cash flows. Effects of Interest Rate Fluctuations We are also exposed to changes in interest rates on our debt hedges and variable rate debt. We do not believe an immediate 10% increase or decrease in interest rates would have a material effect on our operating results or cash flows. Information regarding NJR's interest rate risk can be found in Item 3. Quantitative and Qualitative Disclosures About Market Risks and the Liquidity and Capital Resources - Debt section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Effects of Inflation Any change in price levels has an effect on operating results due to the capital-intensive and regulated nature of our utility subsidiary. The Company’s operations are sensitive to increases in the rate of inflation because of its operational and capital spending requirements in both its regulated and non-regulated businesses. We attempt to minimize the effects of inflation through cost control, productivity improvements and regulatory actions, when appropriate. See Item 1A. Risk Factors of our 2025 Annual Report on Form 10-K for additional information related to the impact of recent increases in inflation rates.