The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of our expected LIBOR-indexed floating-rate borrowings.



Hedged Item	Current Notional Amount		Designation Date	Effective Date	Termination Date	Fixed Interest Rate		Estimated Fair Value
								Assets (Liabilities)
3-month USD LIBOR	50,000		February 6, 2017	June 30, 2017	June 30, 2020	1.834	%	(2	)
1-month USD LIBOR	100,000		February 6, 2017	June 30, 2017	June 30, 2020	1.652	%	12
1-month USD LIBOR	100,000		March 27, 2017	December 31, 2017	June 30, 2021	1.971	%	(581	)
1-month USD LIBOR	150,000		December 13, 2017	January 1, 2018	December 31, 2022	2.201	%	(2,880	)
1-month USD LIBOR	150,000		December 13, 2017	January 1, 2018	December 31, 2022	2.201	%	(2,880	)
1-month USD LIBOR	100,000		December 13, 2017	July 1, 2019	June 30, 2024	2.423	%	(3,517	)
1-month USD LIBOR	50,000		December 13, 2017	July 1, 2019	June 30, 2024	2.423	%	(1,778	)
1-month USD LIBOR	200,000		December 13, 2017	January 1, 2018	December 31, 2024	2.313	%	(6,595	)
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.220	%	(5,750	)
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.199	%	(5,747	)
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.209	%	(5,807	)
1-month USD LIBOR	100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.885	%	(4,930	)
1-month USD LIBOR	100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.867	%	(4,691	)
Total interest rate derivatives designated as cash flow hedge	$	1,325,000						(45,145	)



Hedged Item	Current Notional Amount		Designation Date	Effective Date	Termination Date	Fixed Interest Rate		Estimated Fair Value
								Assets (Liabilities)
3-month USD LIBOR	50,000		June 22, 2016	December 31, 2016	June 30, 2019	1.062	%	$	410
3-month USD LIBOR	50,000		June 22, 2016	December 31, 2016	June 30, 2019	1.062	%	415
1-month USD LIBOR	50,000		July 12, 2016	December 31, 2016	June 30, 2019	0.825	%	418
3-month USD LIBOR	50,000		February 6, 2017	June 30, 2017	June 30, 2020	1.834	%	619
1-month USD LIBOR	100,000		February 6, 2017	June 30, 2017	June 30, 2020	1.652	%	1,287
1-month USD LIBOR	100,000		March 27, 2017	December 31, 2017	June 30, 2021	1.971	%	1,246
1-month USD LIBOR	150,000		December 13, 2017	January 1, 2018	December 31, 2022	2.201	%	1,491
1-month USD LIBOR	150,000		December 13, 2017	January 1, 2018	December 31, 2022	2.201	%	1,460
1-month USD LIBOR	100,000		December 13, 2017	July 1, 2019	June 30, 2024	2.423	%	418
1-month USD LIBOR	50,000		December 13, 2017	July 1, 2019	June 30, 2024	2.423	%	162
1-month USD LIBOR	200,000		December 13, 2017	January 1, 2018	December 31, 2024	2.313	%	2,076
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.220	%	(2,594		)
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.199	%	(2,551		)
1-month USD LIBOR	75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.209	%	(2,568		)
1-month USD LIBOR	100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.885	%	(797		)
1-month USD LIBOR	100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.867	%	(873		)
Total interest rate derivatives designated as cash flow hedges	$	1,475,000						$	619

The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time.

From time to time the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCL, net of tax, until the hedged item affects earnings. Once the related hedged item affects earnings, the Company reclassifies amounts recorded in AOCL to earnings. If the hedged forecasted transaction does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income (expense), net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency. The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows.

On November 28, 2017, the Company entered into a foreign currency forward contract, with a notional amount of $8.9 million to mitigate the foreign currency exchange risk related to a certain intercompany loan denominated in Swiss Francs ("CHF"). The contract is not designated as a hedging instrument. The foreign currency forward contract was settled on September 28, 2018. For the years ended December 31, 2018 and 2017, the Company recognized a $0.2 million loss and a $0.1 million gain, respectively, from the change in fair value of the contract, which was included in other income (expense), net in the consolidated statement of operations.

On October 2, 2017, the Company entered into cross currency swap agreements to convert a notional amount of $300.0 million equivalent to 291.2 million of CHF denominated intercompany loans into U.S. dollars. The CHF denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of the Codman Acquisition. The objective of these cross-currency swaps is to reduce volatility of cash flows associated with changes in the foreign currency exchange rate. Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in Swiss Francs and receive U.S. dollars from the counterparties.



						2019
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount		Fair Value Asset (Liability)

Pay CHF	October 2, 2017	October 2, 2020	1.75%	CHF	32,355	$	(101	)
Receive U.S.$	October 2, 2017	October 2, 2020	4.38%	$	33,333	$	(101	)

Pay CHF	October 2, 2017	October 2, 2021	1.85%	CHF	48,533	(119		)
Receive U.S.$	October 2, 2017	October 2, 2021	4.46%	$	50,000	(119		)

Pay CHF	October 2, 2017	October 2, 2022	1.95%	CHF	145,598	(289		)
Receive U.S.$	October 2, 2017	October 2, 2022	4.52%	$	150,000	(289		)

Total						$	(509	)

The Company held the following cross-currency rate swaps as of December 31, 2018 (dollar amounts in thousands):



						2018
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount		Fair Value Asset (Liability)

Pay CHF	October 2, 2017	October 2, 2020	1.75%	CHF	97,065	$	(215	)
Receive U.S.$	October 2, 2017	October 2, 2020	4.38%	$	100,000	$	(215	)

Pay CHF	October 2, 2017	October 2, 2021	1.85%	CHF	48,533	(422		)
Receive U.S.$	October 2, 2017	October 2, 2021	4.46%	$	50,000	(422		)

Pay CHF	October 2, 2017	October 2, 2022	1.95%	CHF	145,598	(2,193		)
Receive U.S.$	October 2, 2017	October 2, 2022	4.52%	$	150,000	(2,193		)

Total						$	(2,830	)

The cross- currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL. For the years ended December 31, 2019 and 2018, the Company recorded a loss of $4.0 million and gain $2.2 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains or losses recognized on the intercompany loan.

The estimated gain that is expected to be reclassified to other income, net from AOCL as of December 31, 2019 within the next twelve months is $4.9 million. As of December 31, 2019, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.

The Company manages certain foreign exchange risks through a variety of strategies, including hedging. The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business. On October 1, 2018, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.



						December 31, 2019
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount		Fair Value Asset (Liability)

Pay EUR	October 3, 2018	September 30, 2021	—	EUR	44,859	2,459
Receive U.S.$	October 3, 2018	September 30, 2021	3.01%	$	52,000	2,459

Pay EUR	October 3, 2018	September 30, 2023	—	EUR	51,760	3,087
Receive U.S.$	October 3, 2018	September 30, 2023	2.57%	$	60,000	3,087

Pay EUR	October 3, 2018	September 30, 2025	—	EUR	38,820	2,032
Receive U.S.$	October 3, 2018	September 30, 2025	2.19%	$	45,000	2,032

Pay GBP	October 3, 2018	September 30, 2025	1.67%	GBP	128,284	(154		)
Receive U.S.$	October 3, 2018	September 30, 2025	2.71%	$	167,500	(154		)

Pay CHF	October 3, 2018	September 30, 2025	—	CHF	165,172	1,221
Receive GBP	October 3, 2018	September 30, 2025	1.67%	GBP	128,284	1,221

Total						$	8,645



						December 31, 2018
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount		Fair Value Asset (Liability)

Pay EUR	October 3, 2018	September 30, 2021	—	EUR	70,738	1,359
Receive U.S.$	October 3, 2018	September 30, 2021	3.01%	$	82,000	1,359

Pay EUR	October 3, 2018	September 30, 2023	—	EUR	51,760	(421		)
Receive U.S.$	October 3, 2018	September 30, 2023	2.57%	$	60,000	(421		)

Pay EUR	October 3, 2018	September 30, 2025	—	EUR	38,820	(150		)
Receive U.S.$	October 3, 2018	September 30, 2025	2.19%	$	45,000	(150		)

Pay GBP	October 3, 2018	September 30, 2025	1.67%	GBP	128,284	2,360
Receive U.S.$	October 3, 2018	September 30, 2025	2.71%	$	167,500	2,360

Pay CHF	October 3, 2018	September 30, 2025	—	CHF	165,172	(3,780		)
Receive GBP	October 3, 2018	September 30, 2025	1.67%	GBP	128,284	(3,780		)

Total						$	(632	)

The cross-currency swaps were carried on the consolidated balance sheet at fair value, and changes in the fair values were recorded as unrealized gains or losses in AOCL. For the year ended December 31, 2019 and 2018, the Company recorded a gain of $20.5 million and $1.7 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.

The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency.

The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair values of the interest rate swaps and cross-currency swaps were developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk.



	Fair Value as of December 31,
	2019		2018
Location on Balance Sheet ⁽¹⁾:	(In thousands)
Derivatives designated as hedges — Assets:
Prepaid expenses and other current assets
Cash Flow Hedges
Interest rate swap⁽²⁾	$	12	$	4,654
Cross-currency swap	5,032		7,615
Net Investment Hedges
Cross-currency swap	$	7,952	$	8,888
Other assets
Cash Flow Hedges
Interest rate swap⁽²⁾	—		5,350
Net Investment Hedges
Cross-currency swap	$	3,465	$	1,774
Total Derivatives designated as hedges — Assets	$	16,461	$	28,281

Derivatives designated as hedges — Liabilities
Accrued expenses and other current liabilities
Cash Flow Hedges
Interest rate swap⁽²⁾	$	6,635	$	—
Cross-currency swap	101		—
Other liabilities
Cash Flow Hedges
Interest rate swap⁽²⁾	38,522		9,385
Cross-currency swap	5,440		10,445
Net Investment Hedges
Cross-currency swap	$	2,772	$	11,294
Total Derivative designated as hedges — Liabilities	$	53,470	$	31,124



	Balance in AOCL Beginning of Year			Amount of Gain (Loss) Recognized in AOCL			Amount of Gain (Loss) Reclassified from AOCL into Earnings		Balance in AOCL End of Year			Location in Statements of Operations
	(In thousands)
Year Ended December 31, 2019
Cash Flow Hedges
Interest rate swap	$	619		$	(43,493	)	$	2,271	$	(45,145	)	Interest expense
Cross-currency swap	(6,190		)	9,334			2,967		177			Other income, net
Net Investment Hedges
Cross-currency swap	(632		)	20,488			9,627		10,229			Interest income
	$	(6,203	)	$	(13,671	)	$	14,865	$	(34,739	)
Year Ended December 31, 2018
Cash Flow Hedges
Interest rate swap	$	592		$	924		$	897	$	619		Interest expense
Cross-currency swap	(5,104		)	9,062			10,148		(6,190		)	Other income, net
Net Investment Hedges
Cross-currency swap	—			1,723			2,355		(632		)	Interest income
	$	(4,512	)	$	11,709		$	13,400	$	(6,203	)