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Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Summary of Financial Instruments Subject to Recurring Fair Value Measurements

The following table summarizes financial instruments subject to recurring fair value measurements as of June 30, 2019.

	Carrying				Total fair				Quoted prices in active markets for identical assets				Significant other observable inputs				Significant unobservable inputs
(In millions)	value				value				Level 1				Level 2				Level 3
Assets
Cash and cash equivalents	$	132			$	132			$	132			$	—			$	—
Restricted investments (a)		329				329				329				—				—
Deferred compensation investments (b)		168				168				—				168				—
Investment of captive insurance company		4				4				4				—				—
Foreign currency derivatives		3				3				—				3				—
Total assets at fair value	$	636			$	636			$	465			$	171			$	—
Liabilities
Foreign currency derivatives	$	3			$	3			$	—			$	3			$	—

(a) Included in restricted investments is $19 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.

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

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

	Carrying				Total fair				Quoted prices in active markets for identical assets				Significant other observable inputs				Significant unobservable 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				—				—
Deferred compensation investments (b)		165				165				—				165				—
Investment of captive insurance company		3				3				3				—				—
Foreign currency derivatives		11				11				—				11				—
Total assets at fair value	$	815			$	815			$	639			$	176			$	—
Liabilities
Foreign currency derivatives	$	3			$	3			$	—			$	3			$	—

(a) Included in restricted investments is $30 million classified in the other current assets caption on the Condensed Consolidated Balance Sheets.

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

Summary of Investment Portfolio

The following table provides a summary of the activity within the investment portfolio as of June 30, 2019 and September 30, 2018:

(In millions)	June 30 2019				September 30 2018
Original cost	$	335			$	335
Accumulated adjustments, net		(47	)			(38	)
Adjusted cost, beginning of year (a)		288				297
Investment income (b)		7				8
Net unrealized gain (c)		31				54
Realized gains (c)		26				6
Settlement funds		2				10
Disbursements		(25	)			(33	)
Fair value	$	329			$	342

(a) The accumulated adjustments include investment income, realized gains, disbursements and settlements recorded in previous periods.

(b) Investment income for the demand deposit 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 restricted investment securities as of June 30, 2019 and September 30, 2018:

					Gross				Gross
(In millions)	Adjusted Cost				Unrealized Gain				Unrealized Loss				Fair Value
As of June 30, 2019
Demand deposit	$	161			$	—			$	—			$	161
Equity mutual fund		71				29				—				100
Corporate bond mutual fund		66				2				—				68
Fair value	$	298			$	31			$	—			$	329
As of September 30, 2018
Demand deposit	$	20			$	—			$	—			$	20
Equity mutual fund		148				59				—				207
Corporate bond mutual fund		120				—				(5	)			115
Fair value	$	288			$	59			$	(5	)		$	342

Summary of Investment Income, 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 for the three and nine months ended June 30, 2019 and 2018.

	Three months ended								Nine months ended
	June 30								June 30
(In millions)	2019				2018				2019				2018
Investment income	$	2			$	2			$	7			$	6
Net unrealized gains (losses) (a)		6				4				3				6
Realized gains (b)		—				—				—				4
Disbursements		(5	)			(7	)			(25	)			(25	)

(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 three and nine months ended June 30, 2019 were recorded within the net interest and other expense (income) caption in the Statements of Consolidated Comprehensive Income (Loss). In 2018 these net unrealized gains (losses) were in AOCI.

(b) Relates only to the three and nine months ended June 30, 2018 prior to the adoption of the new accounting guidance for equity securities.

Summary of Net Gains and Losses on Foreign Currency Derivatives

The following table summarizes the net gains and losses recognized during the three and nine months ended June 30, 2019 and 2018 within the Statements of Consolidated Comprehensive Income (Loss).

	Three months ended								Nine months ended
	June 30								June 30
(In millions)	2019				2018				2019				2018
Foreign currency derivative gains (losses)	$	(4	)		$	(9	)		$	—			$	(36	)

Summary of Fair Values of Outstanding Foreign Currency Derivatives

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

	June 30				September 30
(In millions)	2019				2018
Foreign currency derivative assets	$	3			$	11
Notional contract values		254				1,209
Foreign currency derivative liabilities	$	3			$	3
Notional contract values		297				755

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