As of June 30, 2022 the Company used foreign currency exchange contracts to hedge the foreign currency effects related to the forecasted purchase of MPOS devices in U.S. dollars owed by a Brazilian subsidiary whose functional currency is the Brazilian Reais. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. As of June 30, 2022, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive income will be reclassified into earnings within the next 12 months.

In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt issued by one of its Brazilian subsidiaries. The Company designated the swap contracts as cash flow hedges. The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings within the next 12 months.

The Company used cross currency swap contracts, to reduce the foreign currency exchange risk related to its investment in its Brazilian foreign subsidiaries and the interest rate risk. This derivative was designated as a net investment hedge and, accordingly, gains and losses are reported as a component of accumulated other comprehensive income. The derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings in the same period that the interest expense affects earnings.

As of June 30, 2022, the Company entered into certain foreign currency exchange contracts to hedge the foreign currency fluctuations related to certain transactions denominated in U.S. dollars of certain of its Brazilian and Mexican subsidiaries, whose functional currencies are the Brazilian Reais and Mexican Peso, respectively. These transactions were not designated as hedges for accounting purposes.

In addition, the Company has entered into full cross currency swap contracts to hedge the interest rate fluctuation and foreign currency fluctuations of its financial debt nominated in U.S. dollars held by its Brazilian subsidiaries that mature in 2022. These transactions were not designated as hedges for accounting purposes.

Finally, as of June 30, 2022, the Company entered into swap contracts to hedge the interest rate fluctuation of its financial debt related to its credit card receivables securitization transactions. These transactions were not designated as hedges for accounting purposes.

The following table presents the notional amounts of the Company’s outstanding derivative instruments:


		Notional Amount as of		Notional Amount as of
		June 30, 2022		December 31, 2021
		(In millions)
Designated as hedging instrument
Foreign exchange contracts	$	82	$	89
Interest rate contracts	$	228	$	—
Cross currency swap contracts	$	96	$	94

Not designated as hedging instrument
Foreign exchange contracts	$	82	$	—
Interest rate contracts	$	345	$	249
Cross currency swap contracts	$	160	$	160

The fair values of the Company’s outstanding derivative instruments as of June 30, 2022 and December 31, 2021 were as follows:


			June 30,		December 31,
	Balance sheet location		2022		2021
		(In millions)
Derivatives
Foreign exchange contracts not designated as hedging instruments	Other current Assets	$	2	$	—
Interest rate contracts designated as cash flow hedges	Other current Assets		1		—
Cross currency swap contracts designated as net investment hedge	Other non-current Assets		1		7
Cross currency swap contracts not designated as hedging instruments	Other current Assets		—		8
Foreign exchange contracts designated as cash flow hedges	Other current Assets		1		2
Interest rate contracts not designated as hedging instruments	Other current Assets		1		—
Cross currency swap contracts not designated as hedging instruments	Other current Liabilities		12		5
Cross currency swap contracts designated as net investment hedge	Other non-current Liabilities		3		—
Interest rate contracts designated as cash flow hedges	Other current Liabilities		2		—
Foreign exchange contracts designated as cash flow hedges	Other current Liabilities		4		1

The effects of derivative contracts on the unaudited interim condensed consolidated statement of comprehensive income as of June 30, 2022 were as follows:


		Amount of	Amount of loss reclassified
	December 31,	gains recognized	from accumulated	June 30,
	2021	in other comprehensive loss	other comprehensive loss	2022
	(In millions)
Foreign exchange contracts designated as cash flow hedges	$ 1	$ (9)	$ 4	$ (4)
Interest Swap Contracts designated as cash flow hedges	—	(6)	1	(5)
Cross currency swap contract designated as net investment hedge	7	(9)	4	2
	8	(24)	9	(7)

The effects of derivative contracts not designated as hedging instruments on the unaudited interim condensed consolidated statements of income for the six and three-month periods ended June 30, 2022 and 2021 were as follows:


		Six Months Ended June 30,				Three Months Ended June 30,
	2022		2021		2022		2021
		(In millions)				(In millions)
Foreign exchange contracts not designated as hedging instruments recognized in foreign exchange losses, net	$	—	$	(11)	$	5	$	(30)
Currency Swap contracts not designated as hedging instruments recognized in foreign exchange losses, net		(22)		—		10		—