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DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
 9 Months Ended
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:
NotionalFair Value AssetFair Value (Liability)
September 30, 2023December 31, 2022September 30, 2023December 31, 2022September 30, 2023December 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 contracts705 866 47 19 — (5)
Commodity contracts7 9 — — — (1)
Derivatives in net investment hedging relationships
Cross currency swap agreements4,189 3,189 44 90 — — 
Total derivatives designated as hedging instruments9,868 9,048 91 125 (323)(309)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts9,256 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 ItemCumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Item
September 30, 2023December 31, 2022September 30, 2023December 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 SalesCost 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 income5 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 SalesCost 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 income4 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 SalesCost 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 income8 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 SalesCost 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 income7 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,
2023202220232022
Euro-denominated long-term debt$157 $207 $71 $474 
Euro-denominated commercial paper68 41 25 94 
Cross currency swap agreements69 97 (6)177 
Foreign currency exchange contracts— 31 — 62