The Company values its financial instruments using an industry standard market approach, in which prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. No financial instruments were measured at fair value on a recurring basis, or disclosed at fair value, using unobservable inputs (Level 3). Fair value measurements made at the acquisition date of businesses, which use significant unobservable inputs, are described in Note 2, “Acquisitions.”


	Level	September 30, 2026		September 30, 2025
Assets:

Interest rate swap and collar agreements (1)	2	$	19	$	7

Interest rate swap and collar agreements (2)	2	117		8

Liabilities:

Foreign currency forward exchange contracts (3)	2	1		2
Interest rate collar agreements (4)	2	—		3

The Company’s derivatives consist of interest rate swap and collar agreements and foreign currency forward exchange contracts. The fair values of the interest rate swap and collar agreements were derived by taking the net present value of the expected cash flows using observable market inputs (Level 2) such as SOFR rate curves, futures, volatilities and basis spreads (when applicable). The fair values of the foreign currency forward exchange contracts were derived by using Level 2 inputs based on observable spot and forward exchange rates in active markets. There has not been any impact to the fair value of derivative liabilities due to the Company’s own credit risk. Similarly, there has not been any material impact to the fair value of derivative assets based on the Company’s evaluation of counterparties’ credit risks.

The fair value of cash and cash equivalents, trade accounts receivable-net, accounts payable and borrowings under the Securitization Facility approximated carrying value at September 30, 2026 and 2025 due to the short-term nature of these financial instruments or, in the case of the Securitization Facility, its variable interest rate (Level 2).

The estimated fair value of the Company’s term loans was based on information provided by the agent under the Company’s Credit Agreement (Level 2). The estimated fair values of the Company’s notes were based upon quoted market prices (Level 1). The carrying value of long-term debt, including the current portion and excluding borrowings under the Securitization Facility, government refundable advances, finance lease obligations, debt issuance costs, original issue discount and premium, and the fair value of long-term debt are as follows (in millions):