Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.25.4
Income Taxes
 3 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 9. Income Taxes
The Company’s effective tax rate for the three months ended December 31, 2025 was a benefit of 14.3%. The rate for the three months ended December 31, 2025 differed from the Federal Statutory rate of 21.0%, primarily due to a change in the valuation allowance. Based on both positive and negative evidence, management determined that it was not “more likely than not” that a portion of deferred tax assets will be realized. This conclusion is based upon an analysis of the Company's projected deferred tax assets and liabilities due to the expected cumulative three-year loss position during fiscal year ending September 30, 2026.
As the Company continues its strategic transformation, it has concluded that it cannot make a reasonable estimate of the annual effective tax rate due to an inability to reliably forecast the timing and implications of subsequent pending land lease agreements, principally depreciation expense (the Company’s most significant timing difference between its book and tax basis results), which will vary based on the noncancelable term, renewal options and likelihood of renewal of such options. Therefore, the valuation allowance analysis discussed above is based upon a projection of the Company's deferred tax position as of December 31, 2025.
The Company’s effective tax rate for the three months ended December 31, 2024 was a provision of 19.1%. The rate for the three months ended December 31, 2024 differed from the Federal Statutory rate of 21.0%, primarily due to a change in the valuation allowance. Based on both positive and negative evidence, management determined that it was not “more likely than not” the deferred tax assets will be realized. This is primarily due to the accelerated book depreciation on the citrus producing assets, which resulted in a cumulative three-year loss during fiscal year ending September 30, 2025.