Income Taxes (Tables)

12 Months Ended

Mar. 31, 2026

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

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


in millions	Fiscal 2026		Fiscal 2025		Fiscal 2024
Domestic (Canada)	$	161	$	92	$	73
Foreign (all other countries)	(143)		747		741
Pre-tax income before equity in net loss (income) of non-consolidated affiliates	$	18	$	839	$	814

Schedule of components of income tax provision

The components of our income tax provision are as follows.


in millions	Fiscal 2026		Fiscal 2025		Fiscal 2024
Current provision:
Domestic (Canada)	$	45	$	26	$	15
Foreign (all other countries)	149		160		183
Total current	$	194	$	186	$	198
Deferred provision:
Domestic (Canada)	$	(46)	$	(61)	$	13
Foreign (all other countries)	(147)		34		7
Total deferred	$	(193)	$	(27)	$	20
Income tax provision	$	1	$	159	$	218

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.


	Fiscal 2026
Effective Tax Rate Reconciliation	Amount (in millions)		Percent
Canada Statutory Tax Rate	$	5	25	%
State and Local Income Taxes, net	2		11	%


Tax credits
Foreign tax credits	(18)		(100)	%
Valuation Allowance	(72)		(400)	%
Nontaxable or nondeductible items

Imputed income	7		39	%
Other	(2)		(11)	%
Other Adjustments	1		6	%
Foreign Tax Effects
United States
Tax rate differential	31		172	%
State and Local Income Taxes, net	(23)		(128)	%
Tax credits	(9)		(50)	%
Expense (income) items not subject to tax	2		11	%
Prior year adjustments	(2)		(11)	%
Brazil
Foreign exchange translation and remeasurement	12		68	%
Tax rate differential	25		139	%
Tax credits	(3)		(17)	%
Expense (income) items not subject to tax	(6)		(33)	%
Withholding tax expense	29		161	%
Germany
Tax rate differential	6		33	%
Expense (income) items not subject to tax	2		11	%
Valuation Allowance	(1)		(6)	%
Legislative changes including enacted tax rates	(17)		(94)	%
Prior year adjustments	4		22	%
Korea
Tax rate differential	(2)		(11)	%
Withholding tax expense	9		50	%
Legislative changes including enacted tax rates	2		11	%
Nontaxable dividends	(1)		(6)	%
China
Expense (income) items not subject to tax	1		6	%
Withholding tax expense	9		50	%
Valuation Allowance	10		56	%
Switzerland
Tax rate differential	(5)		(28)	%
Dubai
Tax rate differential	(4)		(22)	%
United Kingdom
Tax credits	(1)		(6)	%
Valuation Allowance	(1)		(6)	%
Italy
Expense (income) items not subject to tax	1		6	%
Hong Kong
Prior year adjustments	1		6	%
France
Withholding tax expense	1		6	%
Other Foreign Jurisdictions	(3)		(16)	%
Changes in unrecognized tax benefits	11		62	%

Effective Tax Rate	$	1	6	%

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


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

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

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 2026	$	628	(82)	$	35	$	581
Fiscal 2025	696		(88)	20		628
Fiscal 2024	711		(28)	13		696

Schedule of deferred tax assets and liabilities

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


	March 31,
in millions	2026		2025
Deferred income tax assets:
Provisions not currently deductible for tax purposes	$	482	$	347
Tax losses/benefit carryforwards, net	890		787
Depreciation and amortization	114		91
Other assets	42		38
Total deferred income tax assets	1,528		1,263
Less: valuation allowance	(581)		(628)
Net deferred income tax assets	$	947	$	635

Deferred income tax liabilities:
Depreciation and amortization	$	465	$	478
Inventory valuation reserves	184		163
Monetary exchange gains, net	28		25
Other liabilities	50		76
Total deferred income tax liabilities	$	727	$	742
Net deferred income tax (assets) liabilities	$	(220)	$	107

Reconciliation of unrecognized tax benefits

The following table summarizes the changes in unrecognized tax benefits.


in millions	Fiscal 2026		Fiscal 2025		Fiscal 2024
Beginning balance of unrecognized tax benefits	$	68	$	80	$	73
Additions based on tax positions related to the current period	5		5		9
Additions based on tax positions of prior years(1)	7		6		12
Reductions based on tax positions of prior years (2)	(5)		(17)		(4)
Settlements (3)	(5)		(6)		(10)
Foreign exchange	4		—		—
Ending Balance of unrecognized tax benefits	$	74	$	68	$	80

_________________________

(1)Additions based on tax positions of prior years in fiscal year 2026 are related to 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.

(3)Settlements in fiscal 2026 are for Aleris Germany and are the result of final audit settlements for years prior to the acquisition of Aleris. 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.

Schedule of Cash Flow, Supplemental Disclosures


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 leases	8		6		8
Leased assets obtained in exchange for new finance lease liabilities	25		4		11
Leased assets obtained in exchange for new operating lease liabilities	30		22		11

The Company implemented the new ASU 2023-09 disclosure guidelines regarding cash taxes paid both in the U.S. and foreign jurisdictions on a prospective basis beginning in the fiscal year ended March 31, 2026 as illustrated below.


	Fiscal 2026
Income Taxes Paid	Amount (in millions)		Percent
Domestic - Federal Tax	$	2	1	%

Foreign Tax
Brazil	92		51	%
Korea	48		27	%
China	15		8	%
Germany	9		5	%






Other Foreign Jurisdictions	14		8	%
Total Taxes Paid	$	180	100	%