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Risk Management
6 Months Ended
Jun. 27, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Risk Management Risk Management
Foreign Currency Risk
As of June 27, 2020, the Company had outstanding foreign exchange contracts with notional amounts totaling $1.0 billion, compared to $1.1 billion outstanding at December 31, 2019. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.
The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of June 27, 2020, and the corresponding positions as of December 31, 2019: 
 Notional Amount
Net Buy (Sell) by CurrencyJune 27, 2020December 31, 2019
Euro$213  $134  
British Pound100  107  
Danish Krone27  18  
Australian dollar(110) (123) 
Chinese renminbi(68) (79) 
Counterparty Risk
The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of June 27, 2020, all of the counterparties have investment grade credit ratings. As of June 27, 2020, the Company had $9 million of exposure to aggregate credit risk with all counterparties.
The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of June 27, 2020 and December 31, 2019:
 Fair Values of Derivative Instruments
June 27, 2020Other Current AssetsAccrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts$ $—  
Derivatives not designated as hedging instruments:
Foreign exchange contracts  
Total derivatives$ $ 

 Fair Values of Derivative Instruments
December 31, 2019Other Current AssetsAccrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts$ $—  
Derivatives not designated as hedging instruments:
Foreign exchange contracts  
Total derivatives$ $ 

The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended June 27, 2020 and June 29, 2019:
 Three Months EndedSix Months EndedFinancial Statement Location
Foreign Exchange ContractsJune 27, 2020June 29, 2019June 27, 2020June 29, 2019
Effective portion$(11) $ $ $ Accumulated other
comprehensive income
Forward points recognized    Other income
Undesignated derivatives recognized12  (3) (4) (7) Other expense
Net Investment Hedges
The Company uses foreign exchange forward contracts with contract terms of 12 to 15 months to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investment in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of foreign currency translation adjustments within other comprehensive income to offset a portion of the change in translated value of the net investment being hedged, until the investment is sold or liquidated. As of June 27, 2020, the Company had €94 million of net investment hedges in certain Euro functional subsidiaries and £50 million of net investment hedges in certain British pound functional subsidiaries.
The Company excludes the difference between the spot rate and the forward rate of the forward contract from its assessment of hedge effectiveness. The effect of the excluded components will be amortized on a straight line basis and recognized through interest expense. During the three and six months ended June 27, 2020, the Company amortized $1 million, and $2 million, respectively, of income from the excluded components through interest expense. During the three and six months ended June 29, 2019, the Company amortized $2 million, and $3 million, respectively, of income from the excluded components through interest expense.