Income Taxes (Tables)

12 Months Ended

Mar. 31, 2025

Schedule of components of income before income taxes, domestic and foreign

The domestic (Canada) and foreign components of our income from continuing operations before income tax provision (and after removing our equity in net income of non-consolidated affiliates) are as follows.


in millions	Fiscal 2025		Fiscal 2024		Fiscal 2023
Domestic (Canada)	$	92	$	73	$	61
Foreign (all other countries)	747		741		729
Pre-tax income before equity in net income of non-consolidated affiliates	$	839	$	814	$	790

Schedule of components of income tax provision

The components of our income tax provision are as follows.


in millions	Fiscal 2025		Fiscal 2024		Fiscal 2023
Current provision:
Domestic (Canada)	$	26	$	15	$	3
Foreign (all other countries)	160		183		189
Total current	$	186	$	198	$	192
Deferred provision:
Domestic (Canada)	$	(61)	$	13	$	9
Foreign (all other countries)	34		7		(54)
Total deferred	$	(27)	$	20	$	(45)
Income tax provision	$	159	$	218	$	147

Reconciliation of Canadian statutory tax rates to effective tax rates

The reconciliation of the Canadian statutory tax rates to our effective tax rates are shown below.


in millions, except percentages	Fiscal 2025			Fiscal 2024			Fiscal 2023
Pre-tax income before equity in net income of non-consolidated affiliates	$	839		$	814		$	790
Canadian statutory tax rate	25		%	25		%	25		%
Provision at the Canadian statutory rate	$	210		$	204		$	198
Increase (decrease) for taxes on income (loss) resulting from:
Exchange translation items	17			5			9
Exchange remeasurement of deferred income taxes	(7)			1			(4)
Change in valuation allowances	(55)			12			(36)
Tax credits	(35)			(36)			(36)
Expense (income) items not subject to tax	9			(9)			(13)
State tax expense, net	(1)			(2)			3

Enacted tax rate changes	—			1			3
Tax rate differences on foreign earnings	48			36			19
Uncertain tax positions	(24)			19			3
Prior year adjustments	(7)			(18)			(13)
Income tax settlements	7			—			—
Non-deductible expenses and other, net	(3)			5			14
Income tax provision	$	159		$	218		$	147
Effective tax rate	19		%	27		%	19		%

Summary of Valuation Allowance

The following table summarizes changes in the valuation allowances.


in millions	Balance at Beginning of Period		Deductions	Additions		Balance at End of Period
Fiscal 2025	$	696	(88)	$	20	$	628
Fiscal 2024	711		(28)	13		696
Fiscal 2023	763		(57)	5		711

Schedule of deferred tax assets and liabilities

Our deferred income tax assets and deferred income tax liabilities are as follows.


	March 31,
in millions	2025		2024
Deferred income tax assets:
Provisions not currently deductible for tax purposes	$	347	$	365
Tax losses/benefit carryforwards, net	787		847
Depreciation and amortization	91		102
Other assets	38		38
Total deferred income tax assets	1,263		1,352
Less: valuation allowance	(628)		(696)
Net deferred income tax assets	$	635	$	656

Deferred income tax liabilities:
Depreciation and amortization	$	478	$	542
Inventory valuation reserves	163		130
Monetary exchange gains, net	25		24
Other liabilities	76		70
Total deferred income tax liabilities	$	742	$	766
Net deferred income tax liabilities	$	107	$	110

Reconciliation of unrecognized tax benefits

The following table summarizes the changes in unrecognized tax benefits.


in millions	Fiscal 2025		Fiscal 2024		Fiscal 2023
Beginning balance of unrecognized tax benefits	$	80	$	73	$	71
Additions based on tax positions related to the current period	5		9		7
Additions based on tax positions of prior years(1)	6		12		28
Reductions based on tax positions of prior years (2)	(17)		(4)		(32)
Settlements (3)	(6)		(10)		—
Foreign exchange	—		—		(1)
Ending Balance of unrecognized tax benefits	$	68	$	80	$	73

_________________________

(1)Additions based on tax positions of prior years in fiscal year 2023 includes $19 million for Novelis Germany.

(2)Reductions based on tax positions of prior years in fiscal 2025 includes $12 million for Novelis Germany as a result of tax assessments for fiscal 2014 through fiscal 2016 audit and corresponding appeals and mutual agreement procedures filed. Reductions based on tax positions of prior years in fiscal 2023 includes $24 million for positions of Aleris Germany for years prior to the acquisition of Aleris.

(3)Settlements in fiscal 2025 includes $3 million for Germany as a result of tax assessments for fiscal 2013 through 2016 audit. Settlements in fiscal 2024 includes $10 million principal reduction for Aleris Germany as a result of audit settlements for years prior to the acquisition of Aleris.