Business and Asset Actions

3 Months Ended

Dec. 31, 2025

Restructuring and Related Activities [Abstract]

Business and Asset Actions

BUSINESS AND ASSET ACTIONS

Project Exit Costs

During the first quarter of fiscal year 2026, we recorded charges for business and asset actions totaling $28.3 ($24.6 after tax) related to project exits announced in fiscal year 2025. Of these charges, $22.0 were recorded within operating income to reflect updated cost estimates as we settle project‑related commitments and sell associated assets. The remaining $6.3 was recorded to "Other non‑operating income (expense), net" and reflects losses on cross‑currency interest rate swaps terminated in connection with the early repayment of related intercompany loans for one of the affected gasification projects.

Project exit decisions reached in fiscal year 2025 were part of a review initiated by our Board of Directors and Chief Executive Officer to focus resources on projects we believe will deliver the greatest value to our shareholders. These actions primarily affected clean‑energy generation and distribution projects, including three U.S.-based projects within the Americas segment, as well as several smaller-scale projects across our global portfolio. The exit decisions were driven by several factors, including challenging commercial conditions and unfavorable regulatory actions, as well as customer‑related challenges for two coal gasification plants in China that resulted in assets and liabilities being classified as held for sale. Assets held for sale primarily include plant and equipment. The project review remains ongoing and may result in additional costs in future periods.

Cumulative charges incurred in connection with these decisions totaled approximately $3.6 billion through 31 December 2025, the majority of which were recognized in the second quarter of fiscal year 2025. Noncash expenses of approximately $3.3 billion included $2.5 billion to write down plant and equipment, with the remainder primarily related to other assets associated with our exit from the sustainable aviation fuel expansion project with World Energy as discussed in Note 3, Variable Interest Entities.

Cash obligations primarily relate to costs to terminate contractual commitments and settle asset retirement obligations. Total cash outflows are expected to be approximately $360 once the actions are fully implemented. Approximately $200 has been paid through 31 December 2025.

The table below provides a reconciliation of the beginning and ending liability balances associated with project exit activities, which are reflected within “Payables and Accrued Liabilities” on our consolidated balance sheets:

Amount accrued as of 30 September 2025	$178.3
Changes in estimates	9.3
Cash payments	(25.7)
Currency translation adjustment	0.1
Amount accrued as of 31 December 2025	$162.0

Both the held-for-sale assets and other marketable plant and equipment were subject to Level 3 fair value measurements due to the use of significant unobservable inputs. There were no material changes to the valuation assumptions during the first quarter of fiscal year 2026. Refer to Note 9, Fair Value Measurements, for additional information.

Estimates related to the actions described above reflect our best judgment based on information available as of 31 December 2025. Final settlement of these items may differ materially from current estimates, which could impact our consolidated financial statements in future periods. While we expect the related exit activities to be completed in fiscal year 2026, we cannot predict the occurrence of future events and circumstances that could extend this process beyond one year in certain cases.

Global Cost Reduction Plan

In June 2023, we initiated a global cost reduction plan that provides severance and other postemployment benefits to employees designated for involuntary separation. In accordance with our accounting policy, we recognize related costs in the period management formally commits to a defined set of actions under the plan. Benefits are determined based on the terms of our established ongoing benefit arrangements. Since the plan was initiated, we have incurred cumulative costs totaling $207.7 for approximately 3,600 employees globally. No costs were incurred under the plan for the periods presented on the consolidated income statements.

The table below provides a reconciliation of the beginning and ending liability balances associated with our global cost reduction plan, which are reflected within “Payables and Accrued Liabilities” on our consolidated balance sheets:

Amount accrued as of 30 September 2025	$101.6
Cash payments	(14.8)
Currency translation adjustment	0.1
Amount accrued as of 31 December 2025	$86.9

The remaining liability as of 31 December 2025 relates to employees identified during fiscal year 2025. We expect implementation of these actions to be substantially complete by the end of fiscal year 2026. However, position eliminations are subject to legal requirements that vary by jurisdiction, which may extend this process beyond one year in certain cases.