Financial Instruments (Tables)

3 Months Ended

Dec. 31, 2018

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, 2018				September 30, 2018
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	127	$	127	$	115	$	115
Short-term debt	172		189		94		116
Long-term debt	731		725		730		776
Foreign exchange forward contracts (other assets)	3		3		2		2
Foreign exchange forward contracts (other liabilities)	—		—		—		—
Foreign currency option contracts (other assets)	—		—		—		—
Cross-currency Swap (other assets)	11		11		6		6

Offsetting of derivative assets and liabilities

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

	December 31, 2018				September 30, 2018
	Gross Amounts Recognized	Gross Amounts Offset		Net Amounts Reported	Gross Amounts Recognized	Gross Amounts Offset	Net Amounts Reported
Derivative Assets
Foreign exchange forward contracts	3	—		3	2	—	2
Cross-currency swap	11	—		11	6	—	6
Derivative Liabilities
Foreign exchange forward contracts	1	(1	)	—	—	—	—

Fair value of financial instruments by valuation hierarchy

Fair value of financial instruments by the valuation hierarchy at December 31, 2018 is as follows (in millions):

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	127	$	—	$	—
Short-term debt	—		187		2
Long-term debt	—		720		5
Foreign exchange forward contracts (other assets)	—		3		—
Foreign exchange forward contracts (other liabilities)	—		—		—
Foreign currency option contracts (other assets)	—		—		—
Cross-currency Swap (other assets)	—		11		—

Fair value of financial instruments by the valuation hierarchy at September 30, 2018 is as follows (in millions):

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	115	$	—	$	—
Short-term debt	—		114		2
Long-term debt	—		771		5
Foreign exchange forward contracts (other assets)	—		2		—
Foreign exchange forward contracts (other liabilities)	—		—		—
Foreign currency option contracts (other assets)	—		—		—
Cross-currency Swap (other assets)	—		6		—

Reconciliation of changes in fair value

The tables below provide a reconciliation of changes in fair value of the Level 3 financial assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet for the three months ended December 31, 2018 and 2017, respectively. No transfers of assets between any of the Levels occurred during these periods.

Three months ended December 31, 2018 (in millions)	Short-term foreign currency option contracts		Long-term foreign currency option contracts		Total
Fair Value as of September 30, 2018	$	—	$	—	$	—
Total unrealized gains (losses):
Included in other income	—		—		—
Included in cost of sales	—		—		—
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	—		—		—
Fair Value as of December 31, 2018	$	—	$	—	$	—

Three months ended December 31, 2017 (in millions)	Short-term foreign currency option contracts (asset)		Long-term foreign currency option contracts (asset)		Total
Fair Value as of September 30, 2017	$	2	$	1	$	3
Total unrealized gains (losses):
Included in other income	—		—		—
Included in cost of sales	—		—		—
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	—		—		—
Fair Value as of December 31, 2017	$	2	$	1	$	3

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