Financial instruments

On October 4, 2018, the Company executed cross-currency interest rate swaps to hedge against the effect of variability in the U.S. dollar to euro exchange rate. See Note 16 for additional details.

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 exposure related to near term foreign currency denominated monetary assets and liabilities. For the three and nine months ended September 30, 2018 the Company recognized a gain related to non-designated foreign currency forward contracts of $1.0 million and $0.3 million, respectively. 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.

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of September 30, 2018 and December 31, 2017:



	September 30, 2018		December 31, 2017
	Fair Value
	(Dollars in thousands)
Asset derivatives:
Designated foreign currency forward contracts	$	2,158	$	914
Non-designated foreign currency forward contracts	175		307
Prepaid expenses and other current assets	$	2,333	$	1,221
Total asset derivatives	$	2,333	$	1,221
Liability derivatives:
Designated foreign currency forward contracts	$	572	$	1,373
Non-designated foreign currency forward contracts	1,064		53
Other current liabilities	$	1,636	$	1,426
Total liability derivatives	$	1,636	$	1,426

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of September 30, 2018 and December 31, 2017 was $127.5 million and $88.5 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of September 30, 2018 and December 31, 2017 was $124.6 million and $110.6 million, respectively. All open foreign currency forward contracts as of September 30, 2018 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 September 30, 2018 and October 1, 2017.

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. However, a portion of the Company’s trade accounts receivable outside the United States 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 the healthcare systems in those countries and the financial stability of those countries' 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 September 30, 2018 and December 31, 2017:



	September 30, 2018			December 31, 2017
	(Dollars in thousands)
Allowance for doubtful accounts ₍₁₎	$	9,657		$	10,255
Current and long-term trade accounts receivable, net in Greece, Italy, Spain and Portugal ₍₂₎	$	51,468		$	49,054
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal	14.1		%	14.6		%

(1) The current portion of the allowance for doubtful accounts was $3.9 million and $3.5 million as of September 30, 2018 and December 31, 2017, 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 September 30, 2018 and December 31, 2017 was $4.2 million and $3.3 million, respectively.

For the nine months ended September 30, 2018 and October 1, 2017, net revenues from customers in Greece, Italy, Spain and Portugal were $107.7 million and $96.0 million, respectively.