Table of Contents APPLIED MATERIALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The effects of derivative instruments and hedging activities on the Consolidated Statements of Operations were as follows: Effective Portion  Ineffective Portion and Amount Excluded from Effectiveness Testing  Derivatives in Cash Flow Hedging Relationships Location of Gain or (Loss) Gain or (Loss) Gain or (Loss) Reclassified from AOCI into Income Gain or (Loss) Recognized in Income (In millions) 2019 Foreign exchange contracts  AOCI  $ (14) $ —  $ —  Foreign exchange contracts  Cost of products sold  —  2  15  Foreign exchange contracts  General and administrative  —  (3) (6) Interest rate contracts  Interest expense —  (3) —  Total  $ (14) $ (4) $ 9  2018 Foreign exchange contracts  AOCI  $ 3  $ —  $ —  Foreign exchange contracts  Cost of products sold  —  4  19  Foreign exchange contracts  General and administrative  —  (3) (7) Interest rate contracts  Interest expense —  (3) —  Total  $ 3  $ (2) $ 12  2017 Foreign exchange contracts  AOCI  $ 35  $ —  $ —  Foreign exchange contracts  Cost of products sold  —  7  (3) Foreign exchange contracts  General and administrative  —  7  (2) Interest rate contracts  AOCI  (14) —  —  Interest rate contracts  Interest expense —  (3) —  Total  $ 21  $ 11  $ (5) Amount of Gain or (Loss)  Recognized in Income Derivatives Not Designated as Hedging Instruments Location of Gain or (Loss) Recognized in Income 2019 2018 2017 (In millions) Foreign exchange contracts  General and administrative  $ (8) $ (5) $ 39  Total  $ (8) $ (5) $ 39  If Applied’s credit rating were to fall below investment grade, it would be in violation of credit risk contingent provisions of the derivative instruments discussed above, and certain counterparties to the derivative instruments could request immediate payment on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was immaterial as of October 27, 2019 and October 28, 2018. Entering into derivative contracts with banks exposes Applied to credit-related losses in the event of the banks’ nonperformance. However, Applied’s exposure is not considered significant. 81 Credit Risk Contingent Features