v3.26.1
Leases
 12 Months Ended
Mar. 31, 2026
Leases [Abstract]  
9. LEASES
9. LEASES
We lease certain land, buildings, and equipment under non-cancelable operating lease arrangements and certain equipment and office space under finance lease arrangements.
We used the following policies and/or assumptions in evaluating our lease population.
•Lease determination: Novelis considers a contract to be or to contain a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.
•Discount rate: When our lease contracts do not provide a readily determinable implicit rate, we use the estimated incremental borrowing rate based on information available at the inception of the lease. The discount rate is determined by region and asset class.
•Variable payments: Novelis includes payments that are based on an index or rate within the calculation of right-of-use leased assets and lease liabilities, which is initially measured at the lease commencement date. Other variable lease payments include, but are not limited to, maintenance, service, and supply costs. These costs are disclosed as a component of total lease costs.
•Purchase options: Certain leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.
•Renewal options: Most leases include one or more options to renew with renewal terms that can extend the lease term from one or more years. The exercise of lease renewal options is at our sole discretion.
•Residual value guarantees, restrictions, or covenants: Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
•Short-term leases: Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term and expense the associated operating lease costs to selling, general and administrative expenses on the consolidated statements of operations.
•Non-lease components: Leases that contain non-lease components (primarily equipment maintenance) are accounted for as a single component and recorded on the consolidated balance sheets for certain asset classes including real estate and certain equipment. Non-lease components include, but are not limited to, common area maintenance, service arrangements, and supply agreements.
The table below presents the classification of leasing assets and liabilities within our consolidated balance sheets.
March 31,
in millionsConsolidated Balance Sheet Classification20262025
ASSETS
Operating lease right-of-use assetsOther long–term assets$116 $115 
Finance lease assets(1)
Property, plant and equipment, net35 16 
Total lease assets$151 $131 
LIABILITIES
Current:
Operating lease liabilitiesAccrued expenses and other current liabilities$21 $21 
Finance lease liabilitiesCurrent portion of long–term debt9 6 
Long-term:
Operating lease liabilitiesOther long–term liabilities91 89 
Finance lease liabilitiesLong–term debt, net of current portion24 9 
Total lease liabilities$145 $125 
_________________________
(1)Finance lease assets are recorded net of accumulated depreciation of $31 million and $26 million as of March 31, 2026 and March 31, 2025, respectively.
The table below presents the classification of lease related expenses or income as reported within the consolidated statements of operations. Amortization of right-of-use assets and interest on liabilities related to finance leases were $8 million, $7 million and $9 million during fiscal 2026, 2025 and 2024, respectively.
in millionsIncome Statement Classification
Fiscal 2026
Fiscal 2025
Fiscal 2024
Operating lease costs(1)
Selling, general and administrative expenses$79 $70 $59 
_________________________
(1)Operating lease costs include short-term leases and variable lease costs.
Future minimum lease payments as of March 31, 2026, for our operating and finance leases having an initial or remaining non-cancelable lease term in excess of one year are as follows (in millions).
Fiscal Year Ending March 31,
Operating leases(1)
Finance leases(2)
2027$27 $9 
202820 7 
202916 4 
203011 3 
20318 2 
Thereafter56 10 
Total minimum lease payments138 35 
Less: interest26 2 
Present value of lease liabilities$112 $33 
_________________________
(1)Operating lease payments related to options to extend lease terms that are reasonably certain of being exercised are immaterial as of March 31, 2026.
(2)Finance lease payments related to options to extend lease terms that are reasonably certain of being exercised are immaterial, and we do not have leases signed but not yet commenced as of March 31, 2026.
The following table presents the weighted-average remaining lease term and discount rates.
March 31,
20262025
Weighted-average remaining lease term
Operating leases8.6 years9.5 years
Finance leases6.7 years3.6 years
Weighted-average discount rate
Operating leases4.77 %5.29 %
Finance leases4.73 %4.61 %
The following table presents supplemental information on our leases for fiscal 2026, fiscal 2025, and fiscal 2024.
in millions
Fiscal 2026
Fiscal 2025
Fiscal 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$64 $67 $65 
Financing cash flows from finance leases8 6 8 
Leased assets obtained in exchange for new finance lease liabilities25 4 11 
Leased assets obtained in exchange for new operating lease liabilities30 22 11 
9. LEASES
9. LEASES
We lease certain land, buildings, and equipment under non-cancelable operating lease arrangements and certain equipment and office space under finance lease arrangements.
We used the following policies and/or assumptions in evaluating our lease population.
•Lease determination: Novelis considers a contract to be or to contain a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.
•Discount rate: When our lease contracts do not provide a readily determinable implicit rate, we use the estimated incremental borrowing rate based on information available at the inception of the lease. The discount rate is determined by region and asset class.
•Variable payments: Novelis includes payments that are based on an index or rate within the calculation of right-of-use leased assets and lease liabilities, which is initially measured at the lease commencement date. Other variable lease payments include, but are not limited to, maintenance, service, and supply costs. These costs are disclosed as a component of total lease costs.
•Purchase options: Certain leases include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.
•Renewal options: Most leases include one or more options to renew with renewal terms that can extend the lease term from one or more years. The exercise of lease renewal options is at our sole discretion.
•Residual value guarantees, restrictions, or covenants: Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
•Short-term leases: Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term and expense the associated operating lease costs to selling, general and administrative expenses on the consolidated statements of operations.
•Non-lease components: Leases that contain non-lease components (primarily equipment maintenance) are accounted for as a single component and recorded on the consolidated balance sheets for certain asset classes including real estate and certain equipment. Non-lease components include, but are not limited to, common area maintenance, service arrangements, and supply agreements.
The table below presents the classification of leasing assets and liabilities within our consolidated balance sheets.
March 31,
in millionsConsolidated Balance Sheet Classification20262025
ASSETS
Operating lease right-of-use assetsOther long–term assets$116 $115 
Finance lease assets(1)
Property, plant and equipment, net35 16 
Total lease assets$151 $131 
LIABILITIES
Current:
Operating lease liabilitiesAccrued expenses and other current liabilities$21 $21 
Finance lease liabilitiesCurrent portion of long–term debt9 6 
Long-term:
Operating lease liabilitiesOther long–term liabilities91 89 
Finance lease liabilitiesLong–term debt, net of current portion24 9 
Total lease liabilities$145 $125 
_________________________
(1)Finance lease assets are recorded net of accumulated depreciation of $31 million and $26 million as of March 31, 2026 and March 31, 2025, respectively.
The table below presents the classification of lease related expenses or income as reported within the consolidated statements of operations. Amortization of right-of-use assets and interest on liabilities related to finance leases were $8 million, $7 million and $9 million during fiscal 2026, 2025 and 2024, respectively.
in millionsIncome Statement Classification
Fiscal 2026
Fiscal 2025
Fiscal 2024
Operating lease costs(1)
Selling, general and administrative expenses$79 $70 $59 
_________________________
(1)Operating lease costs include short-term leases and variable lease costs.
Future minimum lease payments as of March 31, 2026, for our operating and finance leases having an initial or remaining non-cancelable lease term in excess of one year are as follows (in millions).
Fiscal Year Ending March 31,
Operating leases(1)
Finance leases(2)
2027$27 $9 
202820 7 
202916 4 
203011 3 
20318 2 
Thereafter56 10 
Total minimum lease payments138 35 
Less: interest26 2 
Present value of lease liabilities$112 $33 
_________________________
(1)Operating lease payments related to options to extend lease terms that are reasonably certain of being exercised are immaterial as of March 31, 2026.
(2)Finance lease payments related to options to extend lease terms that are reasonably certain of being exercised are immaterial, and we do not have leases signed but not yet commenced as of March 31, 2026.
The following table presents the weighted-average remaining lease term and discount rates.
March 31,
20262025
Weighted-average remaining lease term
Operating leases8.6 years9.5 years
Finance leases6.7 years3.6 years
Weighted-average discount rate
Operating leases4.77 %5.29 %
Finance leases4.73 %4.61 %
The following table presents supplemental information on our leases for fiscal 2026, fiscal 2025, and fiscal 2024.
in millions
Fiscal 2026
Fiscal 2025
Fiscal 2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$64 $67 $65 
Financing cash flows from finance leases8 6 8 
Leased assets obtained in exchange for new finance lease liabilities25 4 11 
Leased assets obtained in exchange for new operating lease liabilities30 22 11