Derivatives

In December 2015, we began entering into short-duration foreign currency forward derivative contracts to reduce the risk of foreign currency fluctuations. We use these instruments to mitigate our exposure to non-local currency operating working capital. We record these contracts at fair value on our condensed consolidated balance sheets. Although the derivative contracts will serve as an economic hedge of the cash flow of our currency exchange risk exposure, they are not formally designated as hedge contracts for hedge accounting treatment. Accordingly, any changes in the fair value of the derivative instruments during a period will be included in our condensed consolidated statements of operations.

As of June 30, 2016 and December 31, 2015, we had the following foreign currency derivative contracts outstanding in U.S. dollars (in thousands):



	June 30, 2016
	Notional		Contractual	Settlement
Derivative Contracts	Amount		Exchange Rate	Date
Canadian dollar	$	3,765	1.2749	9/13/2016
Euro	4,420		1.1334	9/13/2016
Euro	3,470		1.1192	7/14/2016
Norwegian kroner	5,891		8.1482	9/13/2016
Pound sterling	3,620		1.4480	9/13/2016



	December 31, 2015
	Notional		Contractual	Settlement
Derivative Contracts	Amount		Exchange Rate	Date
Canadian dollar	$	5,091	1.3751	1/13/2016
Euro	19,706		1.0948	1/13/2016
Norwegian kroner	11,498		8.6973	1/13/2016
Pound sterling	7,516		1.5031	1/13/2016

The following table summarizes the location and fair value amounts of all derivative contracts in the condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015 (in thousands):



Derivatives not Designated as Hedging Instruments	Consolidated Balance Sheet Location	June 30, 2016		December 31, 2015
Foreign currency contracts	Accounts receivable, net	$	529	$	210

The following table summarizes the location and amounts of the realized and unrealized losses on derivative contracts in the condensed consolidated statements of operations (in thousands):



		Three Months Ended					Six Months Ended
		June 30,					June 30,
Derivatives not Designated as Hedging Instruments	Location of Loss Recognized in Income on Derivative Contracts	2016			2015		2016			2015
Unrealized gain on foreign currency contracts	Other income	$	1,293		$	—	$	319		$	—
Realized loss on foreign currency contracts	Other income	(865		)	—		(1,579		)	—
Total net income (loss) on foreign currency contracts		$	428		$	—	$	(1,260	)	$	—

Our derivative transactions are governed through International Swaps and Derivatives Association ("ISDA") master agreements. These agreements include stipulations regarding the right of offset in the event that we or our counterparty default on our performance obligations. If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties. Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists.

The following table presents the gross and net fair values of our derivatives at June 30, 2016 and December 31, 2015 (in thousands):



	Derivative Asset Positions						Derivative Liability Positions
	June 30, 2016			December 31, 2015			June 30, 2016			December 31, 2015
Gross position - asset / (liability)	$	551		$	316		$	(22	)	$	(106	)
Netting adjustment	(22		)	(106		)	22			106
Net position - asset / (liability)	$	529		$	210		$	—		$	—