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Financial Instruments
12 Months Ended
Sep. 30, 2018
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Financial Instruments
FINANCIAL INSTRUMENTS

Hedging Activities
As of September 30, 2018, the notional amount of foreign currency hedge positions was approximately $1.9 billion, while commodity hedge contracts totaled approximately $140 (primarily 52 million pounds of copper and aluminum). All derivatives receiving deferral accounting are cash flow hedges. The majority of hedging gains and losses deferred as of September 30, 2018 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and losses on foreign currency derivatives reported in other deductions, net reflect hedges of balance sheet exposures that do not receive deferral accounting.

Amounts included in earnings and other comprehensive income follow:
 
 
 
Gain (Loss) to Earnings
 
Gain (Loss) to OCI
 
 
 
2016

 
2017

 
2018

 
2016

 
2017

 
2018

 
Location
 
 
 
 
 
 
 
 
 
 
 
 
Commodity
Cost of sales
 
$
(35
)
 
10

 
13

 
(9
)
 
25

 
(7
)
Foreign currency
Sales, cost of sales
 
(41
)
 
(15
)
 
2

 
(38
)
 
30

 
9

Foreign currency
Other deductions, net
 
(27
)
 
(39
)
 
(15
)
 
 
 
 
 
 
     Total
 
 
$
(103
)
 
(44
)
 

 
(47
)
 
55

 
2



Regardless of whether derivatives receive deferral accounting, the Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving deferral accounting are highly effective and no amounts were excluded from the assessment of hedge effectiveness. Hedge ineffectiveness was immaterial in all years shown.

Fair Value Measurement
The estimated fair value of long-term debt was $4.0 billion and $4.4 billion, respectively, as of September 30, 2018 and 2017, which exceeded the carrying value by $135 and $321, respectively. As of September 30, 2018, the fair value of commodity contracts and foreign currency contracts was reported in other current assets and accrued expenses. Valuations of derivative contract positions as of September 30 follow:
 
 
2017
 
2018
 
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Foreign currency
 
 
$
26

 
 
18

 
35

 
11

Commodity
 
 
$
12

 
 

 
1

 
10