Income Taxes |
9 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Production tax credits under the Inflationary Reduction Act - On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes multiple incentives to promote clean energy and energy storage manufacturing among other provisions. The tax credits are available from calendar year 2023 to 2032 subject to phase out beginning in calendar year 2030. In December 2024, the United States Treasury issued final regulations related to the Section 45X Advanced Manufacturing Production Credit ("production credit"), which provided updated definitions and additional guidance and examples on production credits. The production credit is a refundable tax credit for battery cells and modules manufactured in the United States, as well as a credit for electrode active material and other components produced for batteries. Refundable tax credits are accounted for by analogy to government grants, as the taxpayer can realize the benefit regardless of whether or not they have an income tax liability. Therefore, these amounts are not considered income taxes and fall outside the scope of Topic 740, Income Tax. The Company accounts for government assistance that is not subject to the scope of ASC 740 using a grant accounting model, by analogy to International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance, and recognizes such grants when the Company has reasonable assurance that it will comply with the grant’s conditions and that the grant will be received. Following the final regulations on Section 45X that became effective in December 2024, the Company began reviewing the potential applicability to our batteries and various components produced in the United States for application of the production credits. The Company achieved reasonable assurance over our ability to claim the production credits during the third quarter of fiscal 2025 and recognized an estimated $112.4 reduction to Cost of products sold within the Consolidated (Condensed) Statement of Income for the tax credit on production and sales retroactive to January 1, 2023. The credit was also reflected on the Consolidated (Condensed) Balance Sheet as a reduction of income tax payable within Other current liabilities and any credit generated in excess of those liabilities is reflected in Other current assets or Other assets depending on the estimated timing of the refund or future utilization. The credit recognized in the three and nine months ended June 30, 2025 included an estimated $33.9 for the credit related to fiscal 2025 production and an additional $78.5 retroactive adjustment to the beginning of the effective date of the IRA, January 1, 2023. The effective tax rate for the quarter and nine months ended June 30, 2025 was 6.5% and 11.5%, respectively as compared to a benefit of 23.8% and expense of 66.7% for the prior year comparative periods, respectively. The current year rates are impacted by the retroactive and current year production credits recorded in the current period. The prior year rate was significantly impacted by the pre-tax impairment loss of $110.6 recorded in the quarter and nine months ended June 30, 2024, which resulted in an income tax benefit in the prior year quarter. The nine months ended June 30, 2024 pre-tax results included the December 2023 Argentina Reform currency exchange and related losses of $22.0, which were not deductible for tax purposes and did not result in a statutory tax benefit. This partially offset the full year benefit resulting in the income tax expense for the nine months ended June 30, 2024. Subsequent to June 30, 2025, the One Big Beautiful Bill Act was signed into law on July 4, 2025. The Company is reviewing the impacts of the new legislation, including any potential adjustments to future production credits, but does not expect significant changes.
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