Fair Value Measurements

9 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy:

	As of June 30, 2021
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	17	$	17	$	—	$	—	$	—
Time deposits	64		—		64		—		—
Prepaid expenses and other current assets
Currency derivatives (b)	2		—		2		—		—
Other noncurrent assets
Non-qualified trust funds	12		—		4		—		8
Interest rate swap agreements	2		—		2		—		—
Total assets at fair value	$	97	$	17	$	72	$	—	$	8
Accrued expenses and other liabilities
Currency derivatives (b)	$	1	$	—	$	1	$	—	$	—
Interest rate swap agreements	1		—		1		—		—
Other noncurrent liabilities
Deferred compensation obligations	25		—		—		—		25
Total liabilities at fair value	$	27	$	—	$	2	$	—	$	25

	As of September 30, 2020
(In millions)	Total		Level 1		Level 2		Level 3		NAV (a)
Cash and cash equivalents
Money market funds	$	296	$	296	$	—	$	—	$	—
Time deposits	139		—		139		—		—
Prepaid expenses and other current assets
Currency derivatives (b)	3		—		3		—		—
Other noncurrent assets
Non-qualified trust funds	16		—		8		—		8
Total assets at fair value	$	454	$	296	$	150	$	—	$	8
Accrued expenses and other liabilities
Currency derivatives (b)	$	2	$	—	$	2	$	—	$	—
Interest rate swap agreements	1		—		1		—		—
Other noncurrent liabilities
Deferred compensation obligations	25		—		—		—		25
Total liabilities at fair value	$	28	$	—	$	3	$	—	$	25

(a)Funds measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy.

(b)The Company had outstanding contracts with notional values of $156 million and $149 million as of June 30, 2021 and September 30, 2020, respectively.

There were no material gains or losses recognized in earnings during the three and nine months ended June 30, 2021 or 2020 related to these assets and liabilities.

Long-term debt

The fair values of the Company’s outstanding fixed rate senior notes shown in the table below are based on recent trading values, which are considered Level 2 inputs within the fair value hierarchy. Long-term debt is included in the Condensed Consolidated Balance Sheets at carrying value, rather than fair value, and is therefore excluded from the fair value table above. Carrying values shown in the following table are net of unamortized discounts and issuance costs.

	June 30, 2021						September 30, 2020
(In millions)	Fair value		Carrying value		Unamortized discounts and issuance costs		Fair value		Carrying value		Unamortized discounts and issuance costs
2025 Notes	$	—	$	—	$	—	$	827	$	790	$	(10)
2030 Notes	621		593		(7)		613		592		(8)
2031 Notes	535		529		(6)		—		—		—
Total	$	1,156	$	1,122	$	(13)	$	1,440	$	1,382	$	(18)

Refer to Note 5 for more information regarding Valvoline’s other debt instruments that have variable interest rates, and accordingly, their carrying amounts approximate fair value.