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 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 consolidated statements of operations.

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



	December 31, 2018
	Notional		Contractual	Settlement
Derivative Contracts	Amount		Exchange Rate	Date
Canadian dollar	$	2,248	1.3343	3/18/2019
Euro	6,967		1.1421	3/18/2019
Norwegian krone	7,713		8.5566	3/18/2019
Pound sterling	16,452		1.2655	3/18/2019



	December 31, 2017
	Notional		Contractual	Settlement
Derivative Contracts	Amount		Exchange Rate	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 consolidated balance sheets as of December 31, 2018 and 2017 (in thousands):



Derivatives not designated as Hedging Instruments	Consolidated Balance Sheet Location	December 31, 2018			December 31, 2017
Foreign currency contracts	Accounts payable and accrued liabilities	$	(101	)	$	(487	)

The following table summarize the location and amounts of the unrealized and realized gains and losses on derivative contracts in the consolidated statements of operations as of December 31, 2018, 2017 and 2016 (in thousands):



Derivatives not designated as Hedging Instruments	Location of gain (loss) recognized in income on derivative contracts	December 31, 2018		December 31, 2017			December 31, 2016
Unrealized gain (loss) on foreign currency contracts	Other income, net	$	386	$	(634	)	$	(64	)
Realized gain (loss) on foreign currency contracts	Other income, net	1,661		(1,699		)	(296		)
Total net gain (loss) on foreign currency contracts		$	2,047	$	(2,333	)	$	(360	)

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 as of December 31, 2018 and 2017 (in thousands):



	Derivative Asset Positions					Derivative Liability Positions
	December 31,					December 31,
	2018			2017		2018			2017
Gross position - asset / (liability)	$	113		$	—	$	(214	)	$	(487	)
Netting adjustment	(113		)	—		113			—
Net position - asset / (liability)	$	—		$	—	$	(101	)	$	(487	)