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Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2019

Summary of Financial Instruments Subject to Recurring Fair Value Measurements

The following table summarizes financial instruments subject to recurring fair value measurements as of September 30, 2019. For additional information on fair value hierarchy measurements of pension plan asset holdings, see Note N.

					Quoted prices
					in active		Significant
					markets for		other		Significant
					identical		observable		unobservable
	Carrying		Total fair		assets		inputs		inputs
(In millions)	value		value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	232	$	232	$	232	$	—	$	—
Restricted investments (a)		334		334		334		—		—
Investments of captive insurance company (b)		5		5		5		—		—
Foreign currency derivatives		2		2		—		2		—
Total assets at fair value	$	573	$	573	$	571	$	2	$	—

Liabilities
Foreign currency derivatives	$	2	$	2	$	—	$	2	$	—

(a)	Included in restricted investments and $24 million within other current assets in the Consolidated Balance Sheets.

(b)	Included in other noncurrent assets in the Consolidated Balance Sheets.

The following table summarizes financial instruments subject to recurring fair value measurements as of September 30, 2018.

					Quoted prices
					in active		Significant
					markets for		other		Significant
					identical		observable		unobservable
	Carrying		Total fair		assets		inputs		inputs
(In millions)	value		value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	294	$	294	$	294	$	—	$	—
Restricted investments (a)		342		342		342		—		—
Investments of captive insurance company (b)		3		3		3		—		—
Foreign currency derivatives		11		11		—		11		—
Total assets at fair value	$	650	$	650	$	639	$	11	$	—

Liabilities
Foreign currency derivatives	$	3	$	3	$	—	$	3	$	—

(a)	Included in restricted investments and $30 million within other current assets in the Consolidated Balance Sheets.

(b)	Included in other noncurrent assets in the Consolidated Balance Sheets.

Summary of Available-for-sale Securities Portfolio

The following table provides a summary of the activity within the available-for-sale securities portfolio as of September 30, 2019 and 2018:

(In millions)	2019			2018
Original cost	$	335		$	335
Accumulated adjustments, net		(47	)		(38	)
Adjusted cost, beginning of year (a)		288			297
Investment income (b)		10			8
Net unrealized gain (c)		29			54
Realized gain (c)		32			6
Settlement funds		7			10
Disbursements		(32	)		(33	)
Fair value	$	334		$	342

(a)	The adjusted cost of the demand deposit includes accumulated investment income, realized gains, disbursements and settlements recorded in previous periods.

(b)	Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and corporate bond mutual funds.

(c)	Presented under the original cost method.

The following table presents gross unrealized gains and losses for the available-for-sale securities as of September 30, 2019 and 2018:

			Gross		Gross
(In millions)	Adjusted Cost		Unrealized Gain		Unrealized Loss			Fair Value
As of September 30, 2019
Demand Deposit	$	9	$	—	$	—		$	9
Equity Mutual Fund		120		24		(2	)		142
Bond Mutual Fund		176		7		—			183
Fair value	$	305	$	31	$	(2	)	$	334

As of September 30, 2018
Demand Deposit	$	20	$	—	$	—		$	20
Equity Mutual Fund		148		59		—			207
Bond Mutual Fund		120		—		(5	)		115
Fair value	$	288	$	59	$	(5	)	$	342

Summary of Investment Income, Net Unrealized Gains and Losses, Realized Gains and Disbursements Related to Investments

The following table presents the investment income, net unrealized gains and losses, realized gains and disbursements related to the investments within the portfolio during 2019, 2018 and 2017.

(In millions)	2019			2018			2017
Investment income	$	10		$	8		$	9
Net unrealized gains (losses) (a)		7			18			25
Realized gains (b)		—			6			2
Disbursements		(32	)		(33	)		(27	)

(a)

Ashland determined that all unrealized gains and losses were related to equity securities with readily determinable fair values. Due to the new accounting guidance adopted in the first quarter of fiscal year 2019, the net unrealized losses during the year ended September 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Income (Loss). In 2018 and 2017 these net unrealized gains (losses) were in AOCI.

(b)	Relates only to the years ended September 30, 2018 and 2017 prior to adoption of the new accounting guidance for equity securities.

Summary of Net Gains and Losses on Foreign Currency Derivatives

The following table summarizes the gains and losses recognized during 2019, 2018 and 2017 within the Statements of Consolidated Comprehensive Income (Loss).

(In millions)		2019				2018				2017
Foreign currency derivative gain (loss)		$	2			$	(32	)		$	3

Summary of Fair Values of Outstanding Foreign Currency Derivatives

The following table summarizes the fair values of the outstanding foreign currency derivatives as of September 30, 2019 and 2018 included in accounts receivable and accrued expenses and other liabilities of the Consolidated Balance Sheets.

(In millions)	2019		2018
Foreign currency derivative assets	$	2	$	11
Notional contract values		271		1,209

Foreign currency derivative liabilities	$	2	$	3
Notional contract values		168		755