Income Taxes

12 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The table below summarizes income from U.S. and foreign operations before taxes:

	2025	2024	2023
United States income (Loss)	($1,911.8)	$2,602.5	$1,050.5
Foreign income	823.4	1,571.0	1,227.6
Equity affiliates' income	647.7	647.7	604.3
Income (Loss) From Continuing Operations Before Taxes	($440.7)	$4,821.2	$2,882.4

The table below details the components of our income tax provision:

	2025		2024	2023
Current Tax Provision
Federal	$38.0		$550.3	$167.6
State		5.6	109.2	41.0
Foreign	416.9		354.7	367.3
Total Current Tax Provision	$460.5		$1,014.2	$575.9
Deferred Tax (Benefit) Provision
Federal	(497.4)		(97.8)	(12.5)
State	(95.0)		(15.0)	(5.8)
Foreign	37.6		43.5	(6.4)
Total Deferred Tax (Benefit) Provision	(554.8)		(69.3)	(24.7)
Total Income Tax (Benefit) Provision	($94.3)		$944.9	$551.2

Cash Paid for Taxes (Net of Cash Refunds)

Income tax payments, net of refunds, were $940.7, $615.9, and $645.2 in fiscal years 2025, 2024, and 2023, respectively. Our income tax payments increased in fiscal year 2025 primarily due to tax payments of approximately $395 related to the gain on the sale of the LNG business in fiscal year 2024. Income tax payments for fiscal year 2024 include cash paid to purchase $50.0 of transferable tax credits that were used to offset estimated tax payments in 2024.

U.S. Tax Cuts and Jobs Act

On 22 December 2017, the United States enacted the U.S. Tax Cuts and Jobs Act (the “Tax Act” or "Tax Reform"), which significantly changed existing U.S. tax laws, including a reduction in the federal corporate income tax rate to 21%, a deemed repatriation tax on unremitted foreign earnings, as well as other changes. As of 30 September 2025, our outstanding liability for the deemed repatriation tax was $60.8 which will be paid in our second quarter of fiscal year 2026.

Effective Tax Rate

The effective tax rate equals the income tax provision divided by income from continuing operations before taxes. A reconciliation of the differences between the United States federal statutory tax rate and the effective tax rate is provided below:

(Percent of income before taxes)	2025		2024		2023
U.S. federal statutory tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit	16.1		1.5		1.0
Income from equity affiliates	26.6		(2.4)		(3.8)
Foreign tax differentials	5.6		0.3		0.7
Tax on foreign repatriated earnings	—		—		0.5
Business and asset actions	(49.0)		—		0.7
Other	1.1		(0.8)		(1.0)
Effective Tax Rate	21.4	%	19.6	%	19.1	%

In fiscal year 2025, our effective tax rate was influenced by pre-tax charges of approximately $3.7 billion related to our decision to exit various projects and other cost reduction measures. These charges, which primarily related to our U.S. operations, resulted in an overall loss from continuing operations before taxes in fiscal year 2025. The related net tax benefit of these actions totaled $695.2, which includes an $11.3 cost for reserves established for uncertain tax positions related to the deductibility of certain costs in foreign subsidiaries. We also recorded a net tax cost of $197.4 resulting from a $364.9 increase in our valuation allowance net of $167.5 of deferred tax assets related to the future disposal of certain foreign subsidiaries.

The approximately $3.7 billion of business and asset actions inflated the presentation of regular, recurring effective tax rate reconciling items. The sale of our LNG business in the prior year resulted in a gain of approximately $1.6 billion. This gain diluted the impact of recurring effective tax rate reconciling items for fiscal year 2024.

Pre-tax charges for business and asset actions in fiscal year 2023 totaled $244.6. These charges included certain losses for which we could not recognize an income tax benefit and were subject to a valuation allowance of $36.0. Partially offsetting the valuation allowance cost was a $15.9 income tax benefit from a tax election related to a non-U.S. subsidiary. Fiscal year 2024 includes business and asset actions recorded at applicable statutory income tax rates.

The reconciling item for "State taxes, net of federal benefit" in fiscal year 2025 reflects the net state tax benefit recorded on our overall U.S. loss for the year.

Shareholder Activism-Related Costs

In fiscal year 2025, we incurred costs of $86.3 related to a proxy contest led by an activist shareholder as further discussed in Note 25, Supplemental Information. The related net tax benefit recorded in fiscal year 2025 was $14.6. Tax costs related to non-deductible amounts are included within "Business and asset actions" in our effective tax rate reconciliation.

Tax on Repatriation of Foreign Earnings

"Tax on foreign repatriated earnings" includes costs related to U.S. taxation of foreign operations (net of foreign tax credits) and foreign taxation on the repatriation of foreign earnings. Our fiscal year 2025 includes an income tax expense of $31.4 recorded in our second quarter related to withholding taxes on foreign earnings that we no longer intend to indefinitely reinvest. There were no other changes to our assumptions regarding the reinvestment of foreign earnings during fiscal year 2025. Our fiscal year 2025 also includes a net income tax benefit of $34.9 related to our intent to file a refund claim after a review of several U.S. Tax Court cases regarding the U.S. taxation of deemed foreign dividends in the transition year of the U.S. Tax Cuts and Jobs Act (our fiscal year 2018). While we were not a party to these cases, the opinions resulted in a change to our intent to pursue a refund claim. The $34.9 income tax benefit is net of a $67.8 reserve for an uncertain tax position related to the calculation of the refund amount.

Income from Equity Affiliates

Equity affiliates’ income, which is primarily presented net of income taxes on our consolidated income statements, favorably impacts our effective tax rate. See Note 10, Equity Affiliates, for additional information.

Foreign Tax Differentials

"Foreign tax differentials" represent the differences between foreign earnings subject to foreign tax rates that are different than the U.S. federal statutory rate and include tax holidays, credits, and other incentives. Our income tax holidays relate to operations in jurisdictions that provide reduced income tax rates for certain qualifying activities and are conditioned upon us satisfying certain requirements. These holidays are effective through fiscal years 2030 and 2033, and may be extended. The impact of these tax holidays decreased foreign taxes by $30.3, $25.7, and $24.8 for fiscal years 2025, 2024, and 2023, respectively. The benefit of the tax holidays on net income per share was $0.14, $0.12, and $0.11 per diluted share for fiscal years 2025, 2024, and 2023, respectively.

Fiscal year 2025 includes an overall net benefit for foreign tax differentials primarily due to business and asset actions that reduced our overall earnings in foreign jurisdictions with higher tax rates.

Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities are as follows:

30 September	2025	2024
Gross Deferred Tax Assets
Basis difference in foreign subsidiaries	$182.3	$—
Revenue recognition	148.5	100.3
Tax loss carryforwards	137.5	132.2
Reserves and accruals	115.6	83.1
Currency losses	60.3	12.6
Retirement benefits and compensation accruals	59.2	62.5
Tax credits and other tax carryforwards	49.9	45.5
Other	76.2	44.6
Valuation allowance	(506.3)	(158.4)
Deferred Tax Assets	$323.2	$322.4
Gross Deferred Tax Liabilities
Plant and equipment	$623.5	$1,205.8
Unremitted earnings of foreign entities	125.4	103.4
Partnership and other investments	18.1	19.2
Intangible assets	5.2	17.3
Other	2.7	8.8
Deferred Tax Liabilities	$774.9	$1,354.5
Net Deferred Income Tax Liability	$451.7	$1,032.1

Deferred tax assets and liabilities are included within the consolidated balance sheets as follows:

	2025	2024
Deferred Tax Assets
Other noncurrent assets	$127.9	$127.8
Deferred Tax Liabilities
Deferred income taxes	579.6	1,159.9
Net Deferred Income Tax Liability	$451.7	$1,032.1

Deferred tax assets for "Revenue recognition" were impacted by increases in revenue recognized for income tax purposes in advance of GAAP. The deferred tax assets for "Reserves and accruals" were impacted by changes in tax deferred deductions, including business and asset actions, which impacted our accounts receivable and severance accruals. The deferred tax assets for "Basis difference in foreign subsidiaries" were the result of recognizing assets related to our tax investment basis in excess of U.S. GAAP for certain foreign subsidiaries where we have moved the corresponding assets and liabilities to held for sale on our consolidated balance sheet. Deferred tax assets for "Currency losses" changed primarily due to movements in unrealized foreign currency losses for income tax purposes.

Deferred tax liabilities related to "Plant and equipment" decreased primarily due to the impact of business and asset action charges recorded during the current fiscal year. "Unremitted earnings of foreign entities" increased primarily due to accruals for future foreign withholding taxes upon earnings' repatriation.

A significant portion of the $3.7 billion business and asset actions charges were not recognized in the current year for income tax purposes and resulted in a significant reduction in our net deferred tax liabilities. The majority of these deferred deductions impacted plant and equipment within the United States. We believe it is more likely than not that future earnings and the reversal of deferred tax liabilities will be sufficient to recognize the benefit of these deductions in the future.

As of 30 September 2025, we had the following deferred tax assets for certain tax credits:

Jurisdiction	Gross Tax Asset	Expiration Period
U.S. State	$1.8	2028 - 2039
U.S. Federal	27.6	2030 - 2034
Credits in Foreign Jurisdictions	16.2	Indefinite

All of our $16.2 credits in foreign jurisdictions have indefinite carryforward periods.

As of 30 September 2025, we had the following loss carryforwards:

Jurisdiction	Gross Loss Carryforward	Expiration Period
U.S. State Net Operating Loss	$207.2	2027 - 2045
Foreign Net Operating Loss	371.1	2026 - 2035; Indefinite
Foreign Capital Loss	208.4	Indefinite

Of the $371.1 of foreign net operating loss carryforwards, $202.8 have indefinite carryforward periods.

The valuation allowance was $506.3 and $158.4 as of 30 September 2025 and 2024, respectively. As of 30 September 2025, the balance primarily related to deferred tax assets of $392.0, including those established from foreign business and asset actions, $55.3 related to foreign capital losses, $44.6 of foreign loss carryforwards and credits, and $10.8 of U.S. federal foreign income tax credits. If events warrant the reversal of the valuation allowance, it would result in a reduction of tax expense. We believe it is more likely than not that future earnings and reversal of deferred tax liabilities will be sufficient to utilize our deferred tax assets, net of existing valuation allowance, as of 30 September 2025.

We record income taxes on the undistributed earnings of our foreign subsidiaries and corporate joint ventures unless those earnings are indefinitely reinvested. Such earnings may be subject to foreign withholding and other taxes. The cumulative undistributed earnings that are considered to be indefinitely reinvested in foreign subsidiaries and corporate joint ventures are included in retained earnings on the consolidated balance sheets and amounted to $9.8 billion as of 30 September 2025. An estimated $923.1 in additional foreign withholding and other income taxes would be due if these earnings were remitted as dividends.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, which excludes interest and penalties, is as follows:

	2025	2024	2023
Unrecognized tax benefits balance at beginning of year	$101.0	$96.5	$103.5
Additions for tax positions of the current year	21.2	14.6	10.9
Additions for tax positions of prior years	92.6	1.4	1.2
Reductions for tax positions of prior years	(0.6)	(0.3)	(6.0)
Settlements	—	(3.7)	(3.9)
Statute of limitations expiration	(20.0)	(9.9)	(10.6)
Foreign currency translation	0.6	2.4	1.4
Unrecognized tax benefits balance at end of year	$194.8	$101.0	$96.5

Of our unrecognized tax benefits as of 30 September 2025, $150.5 would impact the effective tax rate from continuing operations if recognized.

In fiscal year 2025 we recorded a $67.8 reserve related to our intent to file a refund claim after a review of several U.S. Tax Court cases regarding the U.S. taxation of deemed foreign dividends in the transition year of the U.S. Tax Cuts and Jobs Act. We also recorded a total of $11.3 in reserves for uncertain tax positions related to the deductibility of business and asset actions incurred in foreign subsidiaries.

Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense and totaled ($0.2), $1.8, and $5.0 in fiscal years 2025, 2024, and 2023, respectively, and include benefits when reserves are released, typically due to the expiration of various statutes of limitation. Our accrued balance for interest and penalties was $27.8 and $28.5 as of 30 September 2025 and 2024, respectively.

Income Tax Examinations

We are currently under examination in a number of tax jurisdictions. It is reasonably possible that a change in our unrecognized tax benefits may occur in fiscal year 2026 if any of these examinations are resolved during the next twelve months. However, quantification of an estimated range cannot be made as of the date of this report.

We generally remain subject to examination in the following major tax jurisdictions for the years indicated below:

Major Tax Jurisdiction	Open Tax Years
North America
United States – Federal	2022 - 2025
United States – State	2015 - 2025
Canada	2018 - 2025
Europe
France	2022 - 2025
Netherlands	2020 - 2025
Spain	2017 - 2025
United Kingdom	2021 - 2025
Middle East
Saudi Arabia	2020 - 2025
Asia
China	2011 - 2025
South Korea	2015 - 2025
Taiwan	2020 - 2025
Latin America
Chile	2020 - 2025