PARTIV Note10—DerivativeInstruments PayPalHoldings,Inc. NotestoConsolidatedFinancialStatements—(Continued) EffectofDerivativeContractsonConsolidatedFinancialStatements The following table provides the location in the consolidated statements of income (loss) and amount of recognized gains or losses related to our derivative instruments: YearEndedDecember31, 2022 2021 2020 (In millions) Other Other Other income income income Net (expense), Net (expense), Net (expense), revenues net revenues net revenues net Total amountspresentedintheconsolidated statementsofincome(loss)inwhichtheeffectsof derivatives are recorded $ 27,518 $ (471) $ 25,371 $ (163) $ 21,454 $ 1,776 Gains(losses)onderivativesincashflow hedgingrelationship: Amountofgains(losses)onforeignexchange contractsreclassifiedfrom AOCI 462 — (190) — 20 — Gainsonderivativesinnetinvestmenthedging relationship: Amountofgainsonforeignexchangecontracts excludedfromtheassessmentofeffectiveness — 84 — — — — Gains(losses)onderivativesnotdesignatedas hedginginstruments: Amountofgains(losses)onforeignexchange contracts — 118 — 144 — (110) Amountoflossesonequityderivativecontracts(1) — (174) — — — (64) TOTALGAINS(LOSSES) $ 462 $ 28 $ (190) $ 144 $ 20 $ (174) (1) DuringtheyearsendedDecember31,2022andDecember31,2020,equityderivativecontractswereenteredintoandmaturedwhichrelatedtothesaleofmarketableequity securities related to a strategic investment. The cash flows associated with the equity derivative contracts were classified in cash flows from investing activities on our consolidated statementsofcashflows. The following table provides the amount of pre-tax unrealized gains or losses included in the assessment of hedge effectiveness related to our derivative instruments designated as hedging instruments that are recognized in other comprehensiveincome(loss): YearEndedDecember31, 2022 2021 2020 (In millions) Unrealizedgains(losses)onforeignexchangecontractsdesignatedascashflowhedges $ 374 $ 332 $ (309) Unrealized(losses)gainsonforeignexchangecontractsdesignatedasnetinvestment hedges (25) — 55 TOTALUNREALIZEDGAINS(LOSSES)RECOGNIZEDFROMDERIVATIVECONTRACTS DESIGNATEDASHEDGINGINSTRUMENTSINTHECONSOLIDATEDSTATEMENTSOF COMPREHENSIVEINCOME(LOSS) $ 349 $ 332 $ (254) NotionalAmountsofDerivativeContracts Derivative transactions are measured in terms of the notional amount; however, this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the derivative instruments. The notional amountis generallynot exchanged,but is used only as the underlyingbasison whichthevalueof foreigncurrency 96 •2022AnnualReport