
	Years Ended March 31
(Millions of US dollars)	2026		2025		2024
Change in actuarial estimate - asbestos liability	$	46.7	$	139.6	$	148.1
Change in actuarial estimate - insurance receivable	3.0		(2.1)		(3.1)
Change in estimate - AICF claims-handling costs	0.8		(0.5)		8.5
Subtotal - Change in estimates	50.5		137.0		153.5
Effect of foreign exchange on Asbestos net liabilities	—		—		(9.7)
Loss on foreign currency forward contracts	—		—		7.8
Other	1.3		0.6		0.1
Asbestos adjustments	$	51.8	$	137.6	$	151.7

At the end of each fiscal year, KPMG provides the Company with an updated actuarial study of potential asbestos-related liabilities. Based on KPMG’s assumptions, the study determines a range of possible total cash flows and calculates a central estimate, which is intended to reflect a probability-weighted expected outcome of those actuarial estimated future cash flows.


	As of March 31, 2026
(Millions of US and Australian dollars, respectively)	US$	A$
Central Estimate – Discounted and Inflated	924.7	1,351.1
Central Estimate – Undiscounted but Inflated	1,264.3	1,847.3
Central Estimate – Undiscounted and Uninflated	939.2	1,372.3

In estimating the potential financial exposure, KPMG has made a number of assumptions, including, but not limited to, assumptions related to the peak period of claims, total number of claims that are reasonably estimated to be asserted through 2074, the typical cost of settlement (which is sensitive to, among other factors, the industry in which a plaintiff claims exposure, the alleged disease type, the age of the claimant and the jurisdiction in which the action is brought), the legal costs incurred in the litigation of such claims, the rate of receipt of claims, the settlement strategy in dealing with outstanding claims and the timing of settlements. Changes to the assumptions may be necessary in future periods should claims reporting escalate or decline.

Due to inherent uncertainties in the legal and medical environment, the number and timing of future claim notifications and settlements, the recoverability of claims against insurance contracts, and estimates of future trends in average claim awards, the actual liability could differ materially from that which is currently recorded.

The potential range of costs as estimated by KPMG is affected by a number of variables such as nil settlement rates, peak year of claims, past history of claims numbers, average settlement rates, past history of Australian asbestos-related medical injuries, current number of claims, average defense and

A sensitivity analysis was performed by KPMG to determine how the actuarial estimates would change if certain assumptions (i.e., the rate of inflation and superimposed inflation, the average costs of claims and legal fees, and the projected numbers of claims) were different from the assumptions used to determine the central estimates. The sensitivity analysis performed in the actuarial report is directly related to the discounted but inflated central estimate and the undiscounted but inflated central estimate. The actual cost of the liabilities could be outside of that range depending on the results of actual experience relative to the assumptions made.

Potential variation in the estimated peak period of claims has an impact much greater than the other assumptions used to derive the discounted central estimate. In performing the sensitivity assessment of the estimated incidence pattern reporting for mesothelioma, if the pattern of incidence was shifted by two years, the central estimate could increase by approximately 19% on a discounted basis.

Prior to March 31, 2024, the effect of foreign exchange on Asbestos net liabilities resulted from a USD functional currency subsidiary funding the required AICF payments under the AFFA. Effective March 31, 2024, the Company funds its AICF payments primarily using operating profits of its Australian subsidiary, an Australian dollar functional currency entity. As a result, to the extent that the Australian entity is able to provide funding to meet payment obligations under the AFFA, the foreign currency movements related to the asbestos liability is accounted for as foreign exchange translation adjustments and included in Accumulated other comprehensive loss on the consolidated balance sheets.


	For the Years Ended March 31
	2026	2025	2024	2023	2022
Number of open claims at beginning of period	482	379	359	365	360
Number of new claims
Direct claims	348	443	410	403	411
Cross claims	150	210	154	152	144
Number of closed claims	535	550	544	561	550
Number of open claims at end of period	445	482	379	359	365
Average settlement amount per settled claim	A$307,000	A$327,000	A$289,000	A$303,000	A$314,000
Average settlement amount per case closed 1	A$257,000	A$291,000	A$262,000	A$271,000	A$282,000

Average settlement amount per settled claim	US$203,000	US$213,000	US$190,000	US$208,000	US$232,000
Average settlement amount per case closed 1	US$170,000	US$190,000	US$172,000	US$186,000	US$208,000
1 The average settlement amount per case closed includes nil settlements.

Under the terms of the AFFA, the Company has rights of access to actuarial information produced for AICF by the actuary appointed by AICF, which is currently KPMG. The Company’s disclosures with respect to claims statistics are subject to it obtaining such information, however, the AFFA does not provide the Company an express right to audit or otherwise require independent verification of such information or the methodologies to be adopted by the approved actuary. As such, the Company relies on the accuracy and completeness of the information provided by AICF to the approved actuary and the resulting information and analysis of the approved actuary when making disclosures with respect to claims statistics.


(Millions of US dollars)	Asbestos Liability		Insurance Receivables		Restricted Cash and Investments		Other Assets and Liabilities		Net Unfunded AFFA Liability		Deferred Tax Assets		Income Tax Payable		Net Unfunded AFFA Liability, net of tax
Opening Balance - March 31, 2025	$	(983.6)	$	28.7	$	213.7	$	0.7	$	(740.5)	$	284.5	$	37.9	$	(418.1)
Asbestos claims paid	105.4		—		(105.4)		—		—		—		—		—
Payment received in accordance with AFFA	—		—		125.4		—		125.4		—		—		125.4
AICF claims-handling costs incurred (paid)	1.6		—		(1.6)		—		—		—		—		—
AICF operating costs paid - non claims-handling	—		—		(1.9)		—		(1.9)		—		—		(1.9)
Change in actuarial estimate	(46.7)		(3.0)		—		—		(49.7)		—		—		(49.7)
Change in claims handling cost estimate	(0.8)		—		—		—		(0.8)		—		—		(0.8)
Impact on deferred income tax due to change in actuarial estimate	—		—		—		—		—		15.2		—		15.2
Insurance recoveries	—		(3.8)		3.8		—		—		—		—		—
Movement in income tax payable	—		—		—		—		—		(38.5)		(0.2)		(38.7)
Other movements	—		—		17.6		(0.5)		17.1		(2.9)		0.4		14.6
Effect of foreign exchange	(84.5)		2.4		17.1		—		(65.0)		24.2		2.1		(38.7)
Closing Balance - March 31, 2026	$	(1,008.6)	$	24.3	$	268.7	$	0.2	$	(715.4)	$	282.5	$	40.2	$	(392.7)

AICF invests its excess cash in time deposits, which are classified as HTM investments and the carrying value materially approximates the fair value for each investment. The following table represents the investments outstanding as of March 31, 2026:

AICF may borrow, subject to certain conditions, up to an aggregate amount of A$320.0 million ($219.0 million, based on the exchange rate at March 31, 2026). The AICF Loan Facility is guaranteed by the Former James Hardie Companies and is available to be drawn for the payment of claims through November 1, 2030, at which point, all outstanding borrowings must be repaid. At March 31, 2026 and 2025, AICF had no amounts outstanding under the AICF Loan Facility.