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DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
 6 Months Ended
Jun. 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 June 30, 2023, and December 31, 2022:
NotionalFair Value AssetFair Value (Liability)
June 30, 2023December 31, 2022June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Derivatives in fair value hedging relationships   
Interest rate swap agreements$5,018 $4,984 $3 $16 $(288)$(303)
Derivatives in cash flow hedging relationships
Foreign currency exchange contracts502 866 40 19 — (5)
Commodity contracts8 9 — — (2)(1)
Derivatives in net investment hedging relationships
Cross currency swap agreements4,189 3,189 38 90 (22)— 
Total derivatives designated as hedging instruments9,717 9,048 81 125 (312)(309)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts8,582 9,679 4 74 (16)(3)
Total derivatives at fair value$18,299 $18,727 $85 $199 $(328)$(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 $6,109 million and $3,836 million as of June 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
June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Long-term debt$4,733 $4,696 $(285)$(287)
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
Three Months Ended June 30, 2023
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$9,146 $4,133 $1,493 $1,262 $(208)$187 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income2 6 2 3 — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 65 
Derivatives designated as hedges— — — — — (65)
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — (69)— 
Three Months Ended June 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$8,953 $4,329 $1,331 $1,306 $(190)$87 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income2 11 3 (1)— — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 31 
Derivatives designated as hedges— — — — — (31)
Gain or (loss) on net investment hedges
Foreign currency exchange contracts
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 3 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 281 — 
Six Months Ended June 30, 2023
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$18,010 $8,201 $2,923 $2,579 $(468)$357 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income3 9 3 4 — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — (2)
Derivatives designated as hedges— — — — — 2 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — (149)— 
Six Months Ended June 30, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling,
General and
Administrative
Expenses		Other
(Income)
Expense		Interest and Other
Financial Charges
$17,329 $8,388 $2,596 $2,737 $(509)$172 
Gain or (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive income (loss) into income3 12 3 — — — 
Gain or (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 168 
Derivatives designated as hedges— — — — — (168)
Gain or (loss) on net investment hedges
Foreign currency exchange contracts
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 7 
Gain or (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 347 — 
The following table summarizes the amounts of gain or (loss) on net investment hedges recognized in Accumulated other comprehensive income (loss):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Euro-denominated long-term debt$(37)$184 $(86)$267 
Euro-denominated commercial paper(15)36 (43)53 
Cross currency swap agreements(18)63 (75)80 
Foreign currency exchange contracts— 31 — 31