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Financial instruments | 9 Months Ended
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Sep. 29, 2013
Financial instruments | Note 9 — Financial instruments The Company uses derivative instruments for risk management purposes. Forward rate contracts are used to manage foreign currency transaction exposure. These derivative instruments are designated as cash flow hedges and are recorded on the balance sheet at fair market value. The effective portion of the gains or losses on derivatives is reported as a component of other comprehensive income and thereafter is recognized in the statement of income (loss) in the period or periods during which the hedged transaction affects earnings. Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 10, “Fair value measurement” for additional information. The following table presents the location and fair values of derivative instruments designated as hedging instruments in the condensed consolidated balance sheet as of September 29, 2013 and December 31, 2012:
|  | September 29, 2013 Fair Value |  |  | December 31, 2012 Fair Value |
|  | (Dollars in thousands) |
Asset derivatives: |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets |  | $ | 184 |  |  | $ | 1,279 |
Total asset derivatives |  | $ | 184 |  |  | $ | 1,279 |
Liability derivatives: |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |
Other current liabilities |  | $ | 1,171 |  |  | $ | 598 |
Total liability derivatives |  | $ | 1,171 |  |  | $ | 598 |
The following table provides information as to the gains and losses attributable to derivatives in cash flow hedging relationships that were reported in other comprehensive income (“OCI”) for the three and nine months ended September 29, 2013 and September 30, 2012:
|  | After Tax Gain/(Loss) Recognized in OCI |
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 29, 2013 |  |  | September 30, 2012 |  |  | September 29, 2013 |  |  | September 30, 2012 |
|  | (Dollars in thousands) |
Interest rate swap |  | $ | — |  |  | $ | 2,329 |  |  | $ | — |  |  | $ | 7,032 |
Foreign exchange contracts |  |  | (40 | ) |  |  | 377 |  |  |  | (52 | ) |  |  | (20 | )
Total |  | $ | (40 | ) |  | $ | 2,706 |  |  | $ | (52 | ) |  | $ | 7,012 |
See Note 11 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from accumulated other comprehensive income (“AOCI”) to expense (income), net of tax. There was no ineffectiveness related to the Company’s derivatives used during the three and nine months ended September 29, 2013 and September 30, 2012. Based on exchange rates at September 29, 2013, approximately $0.4 million of unrealized losses, net of tax, within AOCI are expected to be reclassified from AOCI to the statement of income (loss) during the next three months. However, the actual amount reclassified from AOCI could vary due to future changes in exchange rates. In 2011, the Company terminated its interest rate swap covering a notional amount of $350 million designated as a hedge against the variability of the cash flows in the interest payments under the Company’s term loan. The $11.7 million pre-tax value of the interest rate swap was amortized as interest expense over the remaining term of the hedge agreement. As of the end of the third quarter of 2012, all unrealized losses within AOCI associated with this interest rate swap were reclassified into the statement of income (loss). 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 financial stability and creditworthiness of those countries’ economies. In the ordinary course of business, the Company grants non-interest bearing trade credit to its customers on normal credit terms. In an effort to reduce its credit risk, the Company (i) establishes credit limits for all of its customer relationships, (ii) performs ongoing credit evaluations of its customers’ financial condition, (iii) monitors the payment history and aging of its customers’ receivables, and (iv) monitors open orders against an individual customer’s outstanding receivable balance. An allowance for doubtful accounts is maintained for accounts receivable based on the Company’s historical collection experience and expected collectability of the accounts receivable, considering the period an account is outstanding, the financial position of the customer and information provided by credit rating services. The adequacy of this allowance is reviewed each reporting period and adjusted as necessary. In light of the disruptions in global economic markets, the Company instituted enhanced measures, within countries where the Company has collectability concerns, to facilitate customer-by-customer risk assessment when estimating the allowance for doubtful accounts. Such measures included, among others, monthly credit control committee meetings, at which customer credit risks are identified after review of, among other things, accounts that exceed specified credit limits, payment delinquencies and other customer issues. In addition, for some of the Company’s non-government customers, the Company instituted measures designed to reduce its risk exposures, including issuing dunning letters, reducing credit limits, requiring that payments accompany orders and instituting legal action with respect to delinquent accounts. With respect to government customers, the Company evaluates receivables for potential collection risks associated with the availability of government funding and reimbursement practices. Some of the Company’s customers, particularly in Europe, have extended or delayed payments for products and services already provided. Collectability concerns regarding the Company’s accounts receivable from these customers, for the most part in Greece, Italy, Spain and Portugal, resulted in an increase in the allowance for doubtful accounts related to these countries. If the financial condition of these customers or the healthcare systems in these countries continue to deteriorate such that the ability of an increasing number of customers to make payments is uncertain, additional allowances may be required in future periods. The Company’s aggregate accounts receivable, net of the allowance for doubtful accounts, in Spain, Italy, Greece and Portugal and the percentage of the Company’s total accounts receivable, net of the allowance for doubtful accounts, represented by the net accounts receivable in those countries at September 29, 2013 and December 31, 2012 are as follows:
|  | September 29, 2013 |  |  | December 31, 2012 |
|  | (Dollars in thousands) |
Accounts receivable (net of allowances of $8.4 million and $6.3 million at September 29, 2013 and December 31, 2012, respectively) in Spain, Italy, Greece and Portugal |  | $ | 106,571 |  |  | $ | 101,009 |
Percentage of total accounts receivable, net |  |  | 34 | % |  |  | 34 | %
For the nine months ended September 29, 2013 and September 30, 2012, net revenues from customers in Spain, Italy, Greece and Portugal were $106.3 million and $101.4 million, respectively.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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