XML 46 R17.htm IDEA: XBRL DOCUMENT v3.22.1
DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
Honeywell's credit, market, foreign currency, and interest rate risk management policies are described in Note 11 Derivative Instruments and Hedging Transactions of Notes to Consolidated Financial Statements in the Company's 2021 Annual Report on Form 10-K. During March 2022, the Company entered into certain commodity contracts. The Company's risk management policy related to commodity contracts is described in the below section. All derivative assets are presented in Other current assets or Other assets. All derivative liabilities are presented in Accrued liabilities or Other liabilities.
COMMODITY CONTRACTS RISK MANAGEMENT
The Company's operations subject us to risk related to the price volatility of certain commodities. To mitigate the commodity price risk associated with the Company's operations, the Company may enter into commodity derivative instruments. In March 2022, the Company entered into various contracts to mitigate commodity price volatility. The Company elected to apply hedge accounting to these contracts.
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 March 31, 2022, and December 31, 2021:
NotionalFair Value AssetFair Value (Liability)
March 31, 2022December 31, 2021March 31, 2022December 31, 2021March 31, 2022December 31, 2021
Derivatives in Fair Value Hedging Relationships:   
Interest rate swap agreements$3,150 $3,150 $3 $60 $(80)$— 
Derivatives in Cash Flow Hedging Relationships:
Foreign currency exchange contracts3,876 647 13 4 — — 
Commodity contracts12 — — — (2)— 
Derivatives in Net Investment Hedging Relationships:
Foreign currency exchange contracts284 746 93 92 — — 
Cross currency swap agreements1,200 1,200 70 39 — — 
Total Derivatives Designated as Hedging Instruments8,522 5,743 179 195 (82)— 
Derivatives Not Designated as Hedging Instruments:
Foreign currency exchange contracts8,944 11,278 286 278 (286)(282)
Total Derivatives at Fair Value$17,466 $17,021 $465 $473 $(368)$(282)
In addition to the derivative instruments listed above, 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 $2,593 million and $4,074 million as of March 31, 2022, and December 31, 2021, respectively.
The following table sets forth the amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Line in the Consolidated Balance Sheet of Hedged ItemCarrying Amount of the Hedged ItemCumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Item
March 31, 2022December 31, 2021March 31, 2022December 31, 2021
Long-term debt$3,073 $3,210 $(77)$60 
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
Three Months Ended March 31, 2022
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$8,376 $4,373 $1,301 $1,431 $(319)$85 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income1 1 — 1 — — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 137 
Derivatives designated as hedges— — — — — (137)
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— — — — 66 — 
Three Months Ended March 31, 2021
Net SalesCost of
Products Sold		Cost of
Services Sold		Selling, general and administrative expensesOther
(Income)
Expense		Interest and Other
Financial Charges
$8,454 $4,551 $1,158 $1,236 $(442)$90 
Gain or (loss) on cash flow hedges:
Foreign currency exchange contracts:
Amount reclassified from accumulated other comprehensive income into income1 1 — 2 — — 
Gain or (loss) on fair value hedges:
Interest rate swap agreements:
Hedged items— — — — — 94 
Derivatives designated as hedges— — — — — (94)
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— — — — 60 — 
The following table summarizes the amounts of gain or (loss) on net investment hedges recognized in Accumulated other comprehensive income (loss):
Derivatives Net Investment Hedging RelationshipsThree Months Ended March 31,
20222021
Euro-denominated long-term debt$83 $150 
Euro-denominated commercial paper17 30 
Cross currency swap17 44 
Foreign currency exchange contracts— (2)