Fair Value Measurements

6 Months Ended

Mar. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and is generally classified in one of the following categories:

Level 1 - Quoted prices for identical instruments in active markets

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

The Company’s assets and liabilities measured at fair value are summarized in the following tables by fair value measurement Level: 

	Fair Value Measurement at March 30, 2019
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	20	$	—		$	—	$	20
Derivatives
Interest rate	—		18			—		18
Foreign exchange	—		525			—		525
Other	—		6			—		6
Liabilities
Derivatives
Interest rate	—		(158		)	—		(158		)
Foreign exchange	—		(425		)	—		(425		)
Other	—		(2		)	—		(2		)
Total recorded at fair value	$	20	$	(36	)	$	—	$	(16	)
Fair value of borrowings	$	—	$	41,482		$	17,833	$	59,315

	Fair Value Measurement at September 29, 2018
	Level 1		Level 2			Level 3		Total
Assets
Investments	$	38	$	—		$	—	$	38
Derivatives
Foreign exchange	—		469			—		469
Other	—		15			—		15
Liabilities
Derivatives
Interest rate	—		(410		)	—		(410		)
Foreign exchange	—		(274		)	—		(274		)
Total recorded at fair value	$	38	$	(200	)	$	—	$	(162	)
Fair value of borrowings	$	—	$	19,826		$	1,171	$	20,997

The fair values of Level 2 derivatives are primarily determined by internal discounted cash flow models that use observable inputs such as interest rates, yield curves and foreign currency exchange rates. Counterparty credit risk, which is mitigated by master netting agreements and collateral posting arrangements with certain counterparties, did not have a material impact on derivative fair value estimates.

Level 2 borrowings, which include commercial paper, U.S. and European notes and certain foreign currency denominated borrowings, are valued based on quoted prices for similar instruments in active markets or identical instruments in markets that are not active.

Level 3 borrowings include the Asia Theme Park borrowings, which are valued based on the current borrowing cost and credit risk of the Asia Theme Parks as well as prevailing market interest rates. Level 3 borrowings at March 30, 2019 also include a bridge loan facility used to finance the acquisition of 21CF. The carrying value approximates fair value of this floating rate financial instrument.

The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values.

The Company also has assets that are required to be recorded at fair value on a non-recurring basis. These assets are evaluated when certain triggering events occur (including a decrease in estimated future cash flows) that indicate the asset should be evaluated for impairment. For the quarter and six-month period ending March 30, 2019, the Company recorded an impairment charge of $353 million for the write-off of an equity method investment as a result of a level 3 fair value measurement. The impairment was recorded in “Equity in the income / (loss) of investees, net” in the Condensed Consolidated Statements of Income.