XML 47 R32.htm IDEA: XBRL DOCUMENT
v3.25.0.1

DERIVATIVE INSTRUMENTS | 12 Months Ended
--- | ---
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS Cash flow hedges As of December 31, 2024, 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 Real. The Company designated the foreign currency exchange contracts as cash flow hedges, the derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the “Cost of net revenues and financial expenses” line item, in the same period the forecasted transaction affects earnings. As of December 31, 2024, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into the consolidated statements of income within the next 12 months. In addition, the Company has entered into swap contracts to hedge the interest rate fluctuation of its financial debt held by one of its Brazilian subsidiaries. The Company designated the swap contracts as cash flow hedges. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the Cost of net revenues and financial expenses line item within the next 12 months. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges. Fair value hedges The Company has entered into swap contracts to hedge the interest rate and the foreign currency exposure of its fixed-rate, foreign currency financial debt held by its Brazilian subsidiaries. The Company designated the swap contracts as fair value hedges. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial debt due to the hedged risks. Since the terms of the interest rate swaps match the terms of the hedged debts, changes in the fair value of the interest rate swaps are offset by changes in the fair value of the hedged debts attributable to changes in interest rates. Accordingly, the net impact in current earnings is that the interest expense associated with the hedged debts is recorded at the floating rate. The Company also uses future contracts to hedge the interest rate exposure of its asset-backed loan portfolio originated in Brazil. In these cases, where the assets included in the portfolio share the same risk exposure, the Company designated the future contracts as fair value hedges under the portfolio layer method. The derivatives’ gain or loss is reported in the consolidated statements of income in the same line items as the change in the value of the financial assets due to the hedged risks. Accordingly, the Company will unlock its portfolio's fixed-rate to mitigate the effect of interest rate fluctuations. Net investment hedge 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 loss. The derivatives’ gain or loss is initially reported as a component of accumulated other comprehensive loss and subsequently reclassified into the consolidated statements of income in the Interest expense and other financial losses and “Foreign currency losses, net” line items, in the same period that the interest expense affects earnings. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate fluctuation of the financial debt designated as cash flow hedges. Derivative instruments not designated as hedging instruments 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 subsidiaries, whose functional currencies are the Brazilian Real. These transactions were not designated as hedges for accounting purposes. As of December 31, 2024, there are no outstanding derivatives hedging the foreign currency fluctuation not designated as hedging instruments. In addition, the Company 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. These transactions were not designated as hedges for accounting purposes. As of December 31, 2024, there are no outstanding derivatives hedging the interest rate and foreign currency fluctuation not designated as hedging instruments. Finally, as of December 31, 2024, the Company entered into swap contracts to hedge the interest rate fluctuation of certain portion of its financial debt in its Brazilian subsidiaries and VIEs. 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 December 31,
| 2024 |  | 2023
| (In millions)
Designated as hedging instrument |  |  |
Foreign exchange contracts | $ | 85 |  |  | $ | 91 |
Cross currency swap contracts | 400 |  |  | 244 |
Future contracts | 86 |  |  | — |
Not designated as hedging instrument |  |  |
Foreign exchange contracts | — |  |  | 16 |
Interest rate swap contracts | 103 |  | 245 |
Derivative instruments contracts The fair values of the Company’s outstanding derivative instruments as of December 31, 2024 and 2023 were as follows:
Derivative Instruments | Balance sheet location |  | December 31,
| 2024 |  | 2023
|  |  | (In millions)
Foreign exchange contracts designated as cash flow hedges | Other current assets |  | $ | 6 |  |  | $ | — |
Interest rate swap contracts not designated as hedging instruments | Other current assets |  | 9 |  |  | — |
Cross currency swap contracts designated as fair value hedge | Other current assets |  | 23 |  |  | 1 |
Interest rate swap contracts not designated as hedging instruments | Other non-current assets |  | 20 |  |  | 22 |
Cross currency swap contracts designated as net investment hedge | Other current liabilities |  | — |  |  | 6 |
Cross currency swap contracts designated as fair value hedge | Other current liabilities |  | 2 |  |  | 4 |
Interest rate swap contracts not designated as hedging instruments | Other current liabilities |  | 15 |  |  | 7 |
Foreign exchange contracts not designated as hedging instruments | Other current liabilities |  | — |  |  | 1 |
Foreign exchange contracts designated as cash flow hedges | Other current liabilities |  | — |  |  | 3 |
Interest rate swap contracts not designated as hedging instruments | Other non-current liabilities |  | 14 |  |  | 10 |
The effects of derivative contracts designated as hedging instruments on the consolidated statements of comprehensive income as of December 31, 2024 and 2023 were as follows:
| December 31, 2023 |  | Amount of gain recognized in other comprehensive loss |  | Amount of (gain) loss reclassified from accumulated other comprehensive loss |  | December 31, 2024
| (In millions)
Foreign exchange contracts designated as cash flow hedges | $ | (4) |  |  | $ | 13 |  |  | $ | (4) |  |  | $ | 5 |
Cross currency swap contracts designated as net investment hedge | (3) |  |  | 2 |  |  | 1 |  |  | — |
| $ | (7) |  |  | $ | 15 |  |  | $ | (3) |  |  | $ | 5 |
| December 31, 2022 |  | Amount of gain (loss) recognized in other comprehensive loss |  | Amount of (gain) loss reclassified from accumulated other comprehensive loss |  | December 31, 2023
| (In millions)
Foreign exchange contracts designated as cash flow hedges | $ | (2) |  |  | $ | (12) |  |  | $ | 10 |  |  | $ | (4) |
Interest swap contracts designated as cash flow hedges | (2) |  |  | 8 |  |  | (6) |  |  | — |
Cross currency swap contracts designated as net investment hedge | (1) |  |  | (9) |  |  | 7 |  |  | (3) |
| $ | (5) |  |  | $ | (13) |  |  | $ | 11 |  |  | $ | (7) |
The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 was a gain of $51 million, a loss of $19 million and a loss of less than $1 million, respectively, and affected Cost of net revenues and financial expenses and Foreign currency losses, net. The carrying amount of the hedged items for fair value hedges over its fixed-rate financial debt included in the “Loans payable and other financial liabilities” lines item of the consolidated balance sheets as of December 31, 2024 and 2023 are $401 million and $216 million, respectively. The effect of the Company’s fair value hedge relationships over its fixed-rate financial debt on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of December 31, 2024 and 2023 are $2 million and $1 million, respectively. The effects of derivative contracts not designated as hedging instruments on the consolidated statements of income during the years ended December 31, 2024, 2023 and 2022 were as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (In millions)
Foreign exchange contracts not designated as hedging instruments recognized in Foreign currency losses, net | $ | — |  |  | $ | (11) |  |  | $ | (10) |
Currency swap contracts not designated as hedging instruments recognized in Foreign currency losses, net | — |  |  | — |  |  | (29) |
Interest rate contracts not designated as hedging instruments recognized in Interest expense and other financial losses | (12) |  |  | 2 |  |  | (7) |
| $ | (12) |  |  | $ | (9) |  |  | $ | (46) |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration