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DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS | 9 Months Ended
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Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS | DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS Honeywell's foreign currency, interest rate, credit, and commodity price risk management policies are described in Note 11 Derivative Instruments and Hedging Transactions of Notes to Consolidated Financial Statements in the Company's 2022 Annual Report on Form 10-K. The following table summarizes the notional amounts and fair values of the Company’s outstanding derivatives by risk category and instrument type within the Consolidated Balance Sheet as of September 30, 2023, and December 31, 2022:
| Notional |  | Fair Value Asset |  | Fair Value (Liability)
September 30, 2023 |  | December 31, 2022 |  | September 30, 2023 |  | December 31, 2022 |  | September 30, 2023 |  | December 31, 2022
Derivatives in fair value hedging relationships |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements | $ | 4,967 |  |  | $ | 4,984 |  |  | $ | — |  |  | $ | 16 |  |  | $ | (323) |  |  | $ | (303) |
Derivatives in cash flow hedging relationships |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | 705 |  |  | 866 |  |  | 47 |  |  | 19 |  |  | — |  |  | (5) |
Commodity contracts | 7 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | (1) |
Derivatives in net investment hedging relationships |  |  |  |  |  |  |  |  |  |  |
Cross currency swap agreements | 4,189 |  |  | 3,189 |  |  | 44 |  |  | 90 |  |  | — |  |  | — |
Total derivatives designated as hedging instruments | 9,868 |  |  | 9,048 |  |  | 91 |  |  | 125 |  |  | (323) |  |  | (309) |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | 9,256 |  |  | 9,679 |  |  | 7 |  |  | 74 |  |  | (22) |  |  | (3) |
Total derivatives at fair value | $ | 19,124 |  |  | $ | 18,727 |  |  | $ | 98 |  |  | $ | 199 |  |  | $ | (345) |  |  | $ | (312) |
All derivative assets are presented in Other current assets or Other assets. All derivative liabilities are presented in Accrued liabilities or Other liabilities. In addition to the foreign currency derivative contracts designated as net investment hedges, certain of the Company's foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $5,880 million and $3,836 million as of September 30, 2023, and December 31, 2022, respectively. The following table sets forth the amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
| Carrying Amount of Hedged Item |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Item
September 30, 2023 |  | December 31, 2022 |  | September 30, 2023 |  | December 31, 2022
Long-term debt | $ | 4,644 |  |  | $ | 4,696 |  |  | $ | (323) |  |  | $ | (287) |
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
| Three Months Ended September 30, 2023
| Net Sales |  | Cost of Products Sold |  | Cost of Services Sold |  | Selling, General and Administrative Expenses |  | Other (Income) Expense |  | Interest and Other Financial Charges
| $ | 9,212 |  |  | $ | 4,090 |  |  | $ | 1,580 |  |  | $ | 1,252 |  |  | $ | (247) |  |  | $ | 206 |
Gain or (loss) on cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount reclassified from accumulated other comprehensive income (loss) into income | 5 |  |  | 10 |  |  | 4 |  |  | 2 |  |  | — |  |  | — |
Gain or (loss) on fair value hedges |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  |  |  |  |  |  |
Hedged items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 38 |
Derivatives designated as hedges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (38) |
Gain or (loss) on derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | — |  |  | — |  |  | — |  |  | — |  |  | 212 |  |  | — |
| Three Months Ended September 30, 2022
| Net Sales |  | Cost of Products Sold |  | Cost of Services Sold |  | Selling, General and Administrative Expenses |  | Other (Income) Expense |  | Interest and Other Financial Charges
| $ | 8,951 |  |  | $ | 4,286 |  |  | $ | 1,308 |  |  | $ | 1,228 |  |  | $ | (337) |  |  | $ | 98 |
Gain or (loss) on cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount reclassified from accumulated other comprehensive income (loss) into income | 4 |  |  | 20 |  |  | 6 |  |  | (2) |  |  | — |  |  | — |
Gain or (loss) on fair value hedges |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  |  |  |  |  |  |
Hedged items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 186 |
Derivatives designated as hedges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (186) |
Gain or (loss) on net investment hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount excluded from effectiveness testing recognized in earnings using an amortization approach | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |
Gain or (loss) on derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | — |  |  | — |  |  | — |  |  | — |  |  | 402 |  |  | — |
| Nine Months Ended September 30, 2023
| Net Sales |  | Cost of Products Sold |  | Cost of Services Sold |  | Selling, General and Administrative Expenses |  | Other (Income) Expense |  | Interest and Other Financial Charges
| $ | 27,222 |  |  | $ | 12,291 |  |  | $ | 4,503 |  |  | $ | 3,831 |  |  | $ | (715) |  |  | $ | 563 |
Gain or (loss) on cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount reclassified from accumulated other comprehensive income (loss) into income | 8 |  |  | 19 |  |  | 7 |  |  | 6 |  |  | — |  |  | — |
Gain or (loss) on fair value hedges |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  |  |  |  |  |  |
Hedged items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 36 |
Derivatives designated as hedges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (36) |
Gain or (loss) on derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | — |  |  | — |  |  | — |  |  | — |  |  | 63 |  |  | — |
| Nine Months Ended September 30, 2022
| Net Sales |  | Cost of Products Sold |  | Cost of Services Sold |  | Selling, General and Administrative Expenses |  | Other (Income) Expense |  | Interest and Other Financial Charges
| $ | 26,280 |  |  | $ | 12,674 |  |  | $ | 3,904 |  |  | $ | 3,965 |  |  | $ | (846) |  |  | $ | 270 |
Gain or (loss) on cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount reclassified from accumulated other comprehensive income (loss) into income | 7 |  |  | 32 |  |  | 9 |  |  | (2) |  |  | — |  |  | — |
Gain or (loss) on fair value hedges |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  |  |  |  |  |  |
Hedged items | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 354 |
Derivatives designated as hedges | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (354) |
Gain or (loss) on net investment hedges |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |  |
Amount excluded from effectiveness testing recognized in earnings using an amortization approach | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11 |
Gain or (loss) on derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts | — |  |  | — |  |  | — |  |  | — |  |  | 749 |  |  | — |
The following table summarizes the amounts of gain or (loss) on net investment hedges recognized in Accumulated other comprehensive income (loss):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
2023 |  | 2022 |  | 2023 |  | 2022
Euro-denominated long-term debt | $ | 157 |  |  | $ | 207 |  |  | $ | 71 |  |  | $ | 474 |
Euro-denominated commercial paper | 68 |  |  | 41 |  |  | 25 |  |  | 94 |
Cross currency swap agreements | 69 |  |  | 97 |  |  | (6) |  |  | 177 |
Foreign currency exchange contracts | — |  |  | 31 |  |  | — |  |  | 62 |

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