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v3.22.1

Fair Value Measurements (Tables) | 6 Months Ended
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Mar. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] |
Summary of Financial Instruments Subject to Recurring Fair Value Measurements | The following table summarizes financial instruments subject to recurring fair value measurements as of March 31, 2022.
|  | 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 |  | $ | 964 |  |  | $ | 964 |  |  | $ | 964 |  |  | $ | — |  |  | $ | — |
Restricted investments (a) (b) |  |  | 423 |  |  |  | 423 |  |  |  | 423 |  |  |  | — |  |  |  | — |
Investment of captive insurance company (c) |  |  | 9 |  |  |  | 9 |  |  |  | 9 |  |  |  | — |  |  |  | — |
Foreign currency derivatives (d) |  |  | 3 |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | — |
Total return derivative (d) |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |
Commodity derivatives (d) |  |  | 5 |  |  |  | 5 |  |  |  | — |  |  |  | 5 |  |  |  | — |
Total assets at fair value |  | $ | 1,405 |  |  | $ | 1,405 |  |  | $ | 1,396 |  |  | $ | 9 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives (e) |  | $ | 2 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Total liabilities at fair value |  | $ | 2 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
(a) Included in restricted investments and $36 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Includes $300 million related to the Asbestos trust and $123 million related to the Environmental trust. (c) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. (d) Included in accounts receivable in the Condensed Consolidated Balance Sheets. (e) Included in accrued expenses and other liabilities in the Condensed Consolidated Balance Sheets. The following table summarizes financial asset instruments subject to recurring fair value measurements as of September 30, 2021.
|  | 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 |  | $ | 210 |  |  | $ | 210 |  |  | $ | 210 |  |  | $ | — |  |  | $ | — |
Restricted investments (a) (b) |  |  | 421 |  |  |  | 421 |  |  |  | 421 |  |  |  | — |  |  |  | — |
Investment of captive insurance company (c) |  |  | 8 |  |  |  | 8 |  |  |  | 8 |  |  |  | — |  |  |  | — |
Foreign currency derivatives (d) |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |
Commodity derivatives (d) |  |  | 5 |  |  |  | 5 |  |  |  | — |  |  |  | 5 |  |  |  | — |
Total assets at fair value |  | $ | 645 |  |  | $ | 645 |  |  | $ | 639 |  |  | $ | 6 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency derivatives (e) |  | $ | 2 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
(a) Included in restricted investments and $37 million within other current assets in the Condensed Consolidated Balance Sheets. (b) Includes $333 million related to the Asbestos trust and $88 million related to the Environmental trust. (c) Included in other noncurrent assets in the Condensed Consolidated Balance Sheets. (d) Included in accounts receivable in the Condensed Consolidated Balance Sheets. (e) Included in accrued expenses and other liabilities 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 March 31, 2022 and September 30, 2021:
(In millions) |  | March 31 2022 |  |  | September 30 2021 |
Original cost |  | $ | 335 |  |  | $ | 335 |
Accumulated adjustments, net |  |  | 37 |  |  |  | (50 | )
Adjusted cost, beginning of year (a) |  |  | 372 |  |  |  | 285 |
Investment income (b) |  |  | 10 |  |  |  | 12 |
Net unrealized gain (c) |  |  | 24 |  |  |  | 49 |
Realized gains (c) |  |  | 1 |  |  |  | 17 |
Funds restricted for specific transactions (d) |  |  | 44 |  |  |  | 91 |
Disbursements |  |  | (28 | ) |  |  | (33 | )
Fair value |  | $ | 423 |  |  | $ | 421 |
(a) The adjusted cost of the demand deposits includes accumulated investment income, realized gains, additional funds restricted for specific transactions and disbursements recorded in previous periods. The adjusted cost as of March 31, 2022 includes the $90 million funding to establish the Environmental trust. (b) Investment income relates to the demand deposit and includes interest income as well as dividend income transferred from the equity and fixed income mutual funds. (c) Presented under the original cost method. (d) The March 31, 2022 period included additional contributions to the Environmental trust from proceeds associated with the Performance Adhesives sale and excess land sales. The September 30, 2021 period included $90 million to establish the Environmental trust. The following table presents gross unrealized gains and losses for the restricted investment securities as of March 31, 2022 and September 30, 2021:
|  |  |  |  | Gross |  |  | Gross |  |  |  |
(In millions) |  | Adjusted Cost |  |  | Unrealized Gain |  |  | Unrealized Loss |  |  | Fair Value |
As of March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Demand deposit |  | $ | 4 |  |  | $ | — |  |  | $ | — |  |  | $ | 4 |
Equity mutual fund |  |  | 160 |  |  |  | 41 |  |  |  | (1 | ) |  |  | 200 |
Fixed income mutual fund |  |  | 235 |  |  |  | — |  |  |  | (16 | ) |  |  | 219 |
Fair value |  | $ | 399 |  |  | $ | 41 |  |  | $ | (17 | ) |  | $ | 423 |
As of September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Demand deposit |  | $ | 6 |  |  | $ | — |  |  | $ | — |  |  | $ | 6 |
Equity mutual fund |  |  | 143 |  |  |  | 44 |  |  |  | (1 | ) |  |  | 186 |
Fixed income mutual fund |  |  | 223 |  |  |  | 7 |  |  |  | (1 | ) |  |  | 229 |
Fair value |  | $ | 372 |  |  | $ | 51 |  |  | $ | (2 | ) |  | $ | 421 |
Summary of Investment Income, Net Gains and Losses Realized and Disbursements Related to Investments | The following table presents the investment income, net gains and losses realized and disbursements related to the investments within the portfolio for the three and six months ended March 31, 2022 and 2021.
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Investment income |  | $ | 2 |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | 8 |
Net gains (losses) |  |  | (28 | ) |  |  | (7 | ) |  |  | (24 | ) |  |  | 11 |
Disbursements |  |  | (21 | ) |  |  | (10 | ) |  |  | (28 | ) |  |  | (18 | )
Summary of Net Gains and Losses on Foreign Currency Derivatives | The following table summarizes the net gains and losses recognized during the three and six months ended March 31, 2022 and 2021 within the Statements of Consolidated Comprehensive Income (Loss).
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Foreign currency derivative gain (loss) |  | $ | (11 | ) |  | $ | — |  |  | $ | (9 | ) |  | $ | 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 March 31, 2022 and September 30, 2021 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.
|  | March 31 |  |  | September 30 |
(In millions) |  | 2022 |  |  | 2021 |
Foreign currency derivative assets |  | $ | 3 |  |  | $ | 1 |
Notional contract values |  |  | 202 |  |  |  | 150 |
Foreign currency derivative liabilities |  | $ | 2 |  |  | $ | 2 |
Notional contract values |  |  | 442 |  |  |  | 212 |
Commodity Derivatives [Member] |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] |
Summary of Net Gains and Losses on Derivatives | The following table summarizes the net gai ns and losses recognized during the three and six months ended March 31, 2022 and 2021 within the cost of sales caption of the Statements of Consolidated Comprehensive Income (Loss).
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Commodity derivative gain (loss) |  | $ | 2 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |
Summary of Fair Values of Outstanding Derivatives | The following table summarizes the fair values of the outstanding commodity derivatives as of March 31, 2022, and September 30, 2021 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.
|  | March 31 |  |  | September 30 |
(In millions) |  | 2022 |  |  | 2021 |
Commodity derivative assets |  | $ | 5 |  |  | $ | 5 |
Notional contract values |  |  | 10 |  |  |  | 6 |
Commodity derivative liabilities |  | $ | — |  |  | $ | — |
Notional contract values |  |  | 1 |  |  |  | — |
Total Return Derivatives [Member] |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] |
Summary of Net Gains and Losses on Derivatives | The following table summarized the net gains and losses recognized for the three and six months ended March 31, 2022 and 2021 within the selling, general and administrative expense caption of the Statements of Consolidated Comprehensive Income (Loss).
|  | Three months ended |  |  | Six months ended |
|  | March 31 |  |  | March 31 |
(In millions) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Total return swap gain (loss) |  | $ | (1 | ) |  | $ | — |  |  | $ | (1 | ) |  | $ | — |
Summary of Fair Values of Outstanding Derivatives | The following table summarizes the fair values of the outstanding TRS as of March 31, 2022 included in accounts receivable and accrued expenses and other liabilities of the Condensed Consolidated Balance Sheets.
|  | March 31 |  |  | September 30 |
(In millions) |  | 2022 |  |  | 2021 |
Total return swap assets |  | $ | 1 |  |  | $ | — |
Notional contract values |  |  | 8 |  |  |  | — |

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