Financial Instruments (Tables)

3 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value of financial instruments

Fair values of financial instruments are summarized as follows (in millions):

	December 31, 2016				September 30, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	125	$	125	$	160	$	160
Short-term debt	11		11		14		14
Long-term debt	983		1,071		982		1,051
Foreign exchange forward contracts (other assets)	2		2		1		1
Foreign exchange forward contracts (other liabilities)	2		2		2		2
Short-term foreign currency option contracts (other assets)	1		1		—		—
Long-term foreign currency option contracts (other asset)	2		2		2		2

Offsetting of derivative assets and liabilities

The following table reflects the offsetting of derivative assets and liabilities (in millions):

	December 31, 2016				September 30, 2016
	Gross Amounts Recognized	Gross Amounts Offset		Net Amounts Reported	Gross Amounts Recognized	Gross Amounts Offset	Net Amounts Reported
Derivative Asset
Foreign exchange forward contract	3	(1	)	2	1	—	1
Derivative Liabilities
Foreign exchange forward contract	3	(1	)	2	2	—	2

Fair value of financial instruments by valuation hierarchy

Fair value of financial instruments by the valuation hierarchy at December 31, 2016 is as follows (in millions):

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	125	$	—	$	—
Short-term debt	—		—		11
Long-term debt	—		1,060		11
Foreign exchange forward contracts (asset)	—		2		—
Foreign exchange forward contracts (liability)	—		2		—
Short-term foreign currency option contracts (asset)	—		—		1
Long-term foreign currency option contracts (asset)	—		—		2

Fair value of financial instruments by the valuation hierarchy at September 30, 2016 is as follows (in millions):

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	160	$	—	$	—
Short-term debt	—		—		14
Long-term debt	—		1,040		11
Foreign exchange forward contracts (asset)	—		1		—
Foreign exchange forward contracts (liability)	—		2		—
Short-term foreign currency option contracts (asset)	—		—		—
Long-term foreign currency option contracts (asset)	—		—		2

Reconciliation of changes in fair value

No transfers of assets between any of the Levels occurred during these periods.

Three months ended December 31, 2016 (in millions)	Short-term foreign currency option contracts (asset)		Long-term foreign currency option contracts (asset)			Total
Fair Value as of September 30, 2016	$	—	$	2		$	2
Total unrealized gains (losses):
Included in other income	—		—			—
Included in cost of sales	—		1			1
Total realized gains (losses):
Included in other income	—		—			—
Included in cost of sales	—		—			—
Purchases, issuances, sales and settlements:
Purchases	—		—			—
Settlements	—		—			—
Transfer in and / or out of Level 3 (1)	—		—			—
Reclass between short-term and long-term	1		(1		)	—
Fair Value as of December 31, 2016	$	1	$	2		$	3

Three months ended December 31, 2015 (in millions)	Short-term foreign currency option contracts (asset)		Long-term foreign currency option contracts (asset)			Total
Fair Value as of September 30, 2015	$	1	$	1		$	2
Total unrealized gains (losses):
Included in other income	—		—			—
Included in cost of sales	—		(1		)	(1		)
Total realized gains (losses):
Included in other income	—		—			—
Included in cost of sales	—		—			—
Purchases, issuances, sales and settlements:
Purchases	1		—			1
Settlements	—		—			—
Transfer in and / or out of Level 3 (1)	—		—			—
Reclass between short-term and long-term	—		—			—
Fair Value as of December 31, 2015	$	2	$	—		$	2

⁽¹⁾ Transfers as of the last day of the reporting period.