Note 8 — Financial instruments

Foreign Currency Forward Contracts

The Company uses derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage exposure related to foreign currency transactions. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage near term foreign currency denominated monetary assets and liabilities. For the three and nine months ended October 1, 2017, the Company recognized a loss related to non-designated foreign currency forward contracts of $0.6 million and $3.7 million, respectively. For the three and nine months ended September 25, 2016, the Company recognized a loss related to non-designated foreign currency forward contracts of $0.1 million and $1.7 million, respectively.

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of October 1, 2017 and December 31, 2016:



	October 1, 2017		December 31, 2016
	Fair Value
	(Dollars in thousands)
Asset derivatives:
Designated foreign currency forward contracts	$	1,684	$	667
Non-designated foreign currency forward contracts	318		490
Prepaid expenses and other current assets	$	2,002	$	1,157
Total asset derivatives	$	2,002	$	1,157
Liability derivatives:
Designated foreign currency forward contracts	$	237	$	2,139
Non-designated foreign currency forward contracts	93		118
Other current liabilities	$	330	$	2,257
Total liability derivatives	$	330	$	2,257

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of October 1, 2017 and December 31, 2016 was $76.1 million and $101.8 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of October 1, 2017 and December 31, 2016 was $112.3 million and $73.4 million, respectively. All open foreign currency forward contracts as of October 1, 2017 have durations of twelve months or less.

There was no ineffectiveness related to the Company’s cash flow hedges during the three and nine months ended October 1, 2017 and September 25, 2016.

Concentration of Credit Risk

Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the Company’s large number of customers and their diversity across many geographic areas. A portion of the Company’s trade accounts receivable outside the United States, however, include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the creditworthiness of those countries and the financial stability of their economies. Certain of the Company’s customers, particularly in Greece, Italy, Spain and Portugal, have extended or delayed payments for products and services already provided, raising collectability concerns regarding the Company’s accounts receivable from these customers. As a result, the Company continues to closely monitor the allowance for doubtful accounts with respect to these customers. The following table provides information regarding the Company's allowance for doubtful accounts, the aggregate net current and long-term trade accounts receivable related to customers in Greece, Italy, Spain and Portugal and the percentage of the Company’s total net current and long-term trade accounts receivable represented by these customers' trade accounts receivable at October 1, 2017 and December 31, 2016:



	October 1, 2017			December 31, 2016
	(Dollars in thousands)
Allowance for doubtful accounts(1)	$	10,084		$	8,630
Current and long-term trade accounts receivable in Greece, Italy, Spain and Portugal (2)	$	50,613		$	51,098
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal	16.9		%	19.3		%


(1)	The current portion of the allowance for doubtful accounts was $3.1 million and $2.0 million as of October 1, 2017 and December 31, 2016, respectively, and was recognized in accounts receivable, net.


(2)	The long-term portion of trade accounts receivable, net from customers in Greece, Italy, Spain and Portugal at October 1, 2017 and December 31, 2016 was $3.5 million and $2.7 million, respectively. In January 2017, the Company sold $16.1 million of receivables outstanding with respect to publicly funded hospitals in Italy for $16.0 million.

For the nine months ended October 1, 2017 and September 25, 2016, net revenues from customers in Greece, Italy, Spain and Portugal were $96.0 million and $95.8 million, respectively.