Honeywell 2011 Annual Report Download - page 84
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December 31,
2011 December 31,
2010
Assets:
Foreign currency exchange contracts $ 26 $ 16
Available for sale investments 359 322
Interest rate swap agreements 134 22
Forward commodity contracts 1 2
Liabilities:
Foreign currency exchange contracts $ 52 $ 14
Forward commodity contracts 10 2
The foreign currency exchange contracts, interest rate swap agreements, and forward commodity contracts are valued using broker quotations, or
market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within level 2. The Company also
holds investments in commercial paper, certificates of deposits, and time deposits that are designated as available for sale and are valued using market
transactions in over-the-counter markets. As such, these investments are classified within level 2.
The carrying value of cash and cash equivalents, trade accounts and notes receivables, payables, commercial paper and short-term borrowings contained
in the Consolidated Balance Sheet approximates fair value. The following table sets forth the Company's financial assets and liabilities that were not carried at
fair value:
December 31, 2011 December 31, 2010
Carrying
Value Fair
Value Carrying
Value Fair
Value
Assets
Long-term receivables $ 132 $ 132 $ 203 $ 199
Liabilities
Long-term debt and related current maturities $ 6,896 $ 7,896 $ 6,278 $ 6,835
In the years ended December 31, 2011 and 2010, the Company had assets with a net book value of $262 million and $32 million, respectively,
specifically property, plant and equipment, software and intangible assets, which were accounted for at fair value on a nonrecurring basis. These assets were
tested for impairment and based on the fair value of these assets the Company recognized losses of $127 million and $30 million, respectively, in the years
ended December 31, 2011 and 2010, primarily in connection with our repositioning actions (see Note 3 Repositioning and Other Charges). The Company has
determined that the fair value measurements of these nonfinancial assets are level 3 in the fair value hierarchy.
The Company holds investments in marketable equity securities that are designated as available for sale securities. Due to an other-than-temporary
decline in fair value of these investments, the Company recognized an impairment charge of $62 million in the second quarter of 2009 that is included in
Other (Income) Expense.
The derivatives utilized for risk management purposes as detailed above are included on the Consolidated Balance Sheet and impacted the Statement of
Operations as follows:
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