Derivatives

We enter 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 September 30, 2018 and December 31, 2017, we had the following foreign currency derivative contracts outstanding in U.S. dollars (in thousands):



	September 30, 2018
Derivative Contracts	Notional Amount		Contractual Exchange Rate	Settlement Date
Canadian dollar	$	4,307	1.3003	12/17/2018
Euro	5,046		1.1734	12/17/2018
Norwegian krone	6,207		8.2171	12/17/2018
Pound sterling	13,136		1.3136	12/17/2018



	December 31, 2017
Derivative Contracts	Notional Amount		Contractual Exchange Rate	Settlement Date
Canadian dollar	$	6,226	1.2850	3/15/2018
Euro	5,326		1.1836	3/15/2018
Norwegian krone	6,212		8.3704	3/15/2018
Pound sterling	6,039		1.3419	3/15/2018

The following table summarizes the location and fair value amounts of all derivative contracts in the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 (in thousands):



Derivatives not Designated as Hedging Instruments	Consolidated Balance Sheet Location	September 30, 2018			December 31, 2017
Foreign currency contracts	Accounts payable and accrued liabilities	$	(45	)	$	(487	)

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



		Three Months Ended						Nine Months Ended
		September 30,						September 30,
Derivatives not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative Contracts	2018			2017			2018		2017
Unrealized gain (loss) on foreign currency contracts	Other income (expense), net	$	(323	)	$	681		$	442	$	(49	)
Realized gain (loss) on foreign currency contracts	Other income (expense), net	447			(1,794		)	572		(2,346		)
Total net gain (loss) on foreign currency contracts		$	124		$	(1,113	)	$	1,014	$	(2,395	)

Our derivative transactions are governed through International Swaps and Derivatives Association 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 September 30, 2018 and December 31, 2017 (in thousands):



	Derivative Asset Positions					Derivative Liability Positions
	September 30, 2018			December 31, 2017		September 30, 2018			December 31, 2017
Gross position - asset / (liability)	$	64		$	—	$	(109	)	$	(487	)
Netting adjustment	(64		)	—		64			—
Net position - asset / (liability)	$	—		$	—	$	(45	)	$	(487	)