PARTIV Note10—DerivativeInstruments PayPalHoldings,Inc. NotestoConsolidatedFinancialStatements—(Continued) FairValueofDerivativeContracts Thefair value of our outstandingderivativeinstrumentsas of December31, 2022and2021wasasfollows: BalanceSheetLocation AsofDecember31, 2022 2021 DerivativeAssets: (In millions) Foreigncurrencyexchangecontractsdesignatedashedginginstruments Othercurrentassets $ 167 $ 205 Foreigncurrencyexchangecontractsdesignatedashedginginstruments Otherassets(non-current) 15 21 ANNU Foreigncurrencyexchangecontractsnotdesignatedashedging AL instruments Othercurrentassets 62 78 REPOR TOTALDERIVATIVEASSETS $ 244 $ 304 DerivativeLiabilities: T Foreigncurrencyexchangecontractsdesignatedashedginginstruments Othercurrentliabilities $ 68 $ 27 Foreigncurrencyexchangecontractsdesignatedashedginginstruments Otherlong-termliabilities 133 — Foreigncurrencyexchangecontractsnotdesignatedashedging instruments Othercurrentliabilities 97 103 TOTALDERIVATIVELIABILITIES $ 298 $ 130 MasterNettingAgreements—RightsofSet-off Under master netting agreements with certain counterparties to our foreign currency exchange contracts, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by oneparty to the other. However, we have elected to present the derivative assets and derivative liabilities on a gross basis onourconsolidatedbalancesheets.Rightsofset-offassociatedwithourforeigncurrencyexchangecontractsrepresented a potential offset to both assets and liabilities of $70 million as of December 31, 2022 and $102 million as of December 31, 2021. Wehaveenteredintocollateralsecurity arrangementsthat provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. The following table provides the collateral exchangedpostedandreceived: December31, December31, 2022 2021 (In millions) (1) Cashcollateralposted $24 $5 (2) Cashcollateralreceived $ 203 $ 209 (1) Right to reclaim cash collateral related to our derivative liabilities recognized in other current assets on our consolidated balance sheets. (2) Obligationtoreturncounterpartycashcollateralrelatedtoourderivativeassets recognizedinothercurrentliabilitiesonourconsolidatedbalancesheets. •2022AnnualReport 95