PART II  ITEM 8 Financial Statements and Supplementary Data The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements  (dollar amounts in millions). (2)  Gross liability, prior to impact of collateral posted (1)  Gross asset or liability of each contract prior to consideration of offsetting positions with each counterparty Any outstanding derivative instrument exposes us to credit loss in connection  with our fuel contracts in the event of nonperformance by the counterparties  to the agreements, but we do not expect any of our three counterparties  will fail to meet their obligations. The amount of such credit exposure is  generally the fair value of our outstanding contracts for which we are in  a receivable position. To manage credit risks, we select counterparties  based on credit assessments, limit our overall exposure to any single  counterparty and monitor the market position with each counterparty.  Some of our agreements require cash deposits from either counterparty  if market risk exposure exceeds a specified threshold amount. We have master netting arrangements with our counterparties allowing  us the right of offset to mitigate credit risk in derivative transactions. The  financial derivative instrument agreements we have with our counterparties  may require us to fund all, or a portion of, outstanding loss positions  related to these contracts prior to their scheduled maturities. The amount  of collateral posted, if any, is periodically adjusted based on the fair value  of the hedge contracts. Our policy is to offset the liabilities represented  by these contracts with any cash collateral paid to the counterparties. We  did not have any collateral posted related to our outstanding fuel hedge  contracts at December 31, 2013 or December 31, 2012. We had $3 million  and $12 million posted in collateral related to our interest rate derivatives  which offset the hedge liability in other current liabilities at December 31,  2013 and 2012, respectively. The impact of offsetting derivative instruments  is depicted below (dollar amounts in millions): Under the  Fair Value Measurements and Disclosures  topic of the Codification,  disclosures are required about how fair value is determined for assets and  liabilities and a hierarchy for which these assets and liabilities must be grouped  is established, based on significant levels of inputs as follows: • Level 2  quoted prices in active markets for similar assets and liabilities  and inputs that are observable for the asset or liability; or • Level 3  unobservable inputs for the asset or liability, such as discounted  cash flow models or valuations. • Level 1  quoted prices in active markets for identical assets or liabilities; NOTE 14  Fair Value Gross Amount of  Recognized Gross Amount of  Cash Collateral Net Amount Presented  in Balance Sheet Assets Liabilities Offset Assets Liabilities As of December 31, 2013 Fuel derivatives $ 6 $ — $ — $ 6 $ — Interest rate derivatives — 3 3 — — As of December 31, 2012 Fuel derivatives — 1 — — 1 Interest rate derivatives — 12 12 — — As of December 31, 2013 2012 Fuel derivatives Asset fair value recorded in prepaid expenses and other  (1) $ 6 $ — Liability fair value recorded in other accrued liabilities  (1) — 1 Longest remaining term  (months) 12 9 Hedged volume  (barrels, in thousands) 1,320 675 Estimated amount of existing gains (losses) expected to be reclassified into earnings in the next 12 months 3 (1) Interest rate derivatives Liability fair value recorded in other long term liabilities  (2) 3 12 Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months (2 ) (9 ) 2013 2012 2011 Fuel derivatives Hedge effectiveness gains (losses) recognized in aircraft fuel expense $ (10 ) $ 10 $ 3 Hedge ineffectiveness losses recognized in other expense — — (2 ) Losses on derivatives not qualifying for hedge accounting recognized in other expense — (3) —  Hedge gains (losses) on derivatives recognized in comprehensive income (6 ) 14 (11 ) Percentage of actual consumption economically hedged 21 % 30% 40% Interest rate derivatives Hedge gains (losses) on derivatives recognized in comprehensive income 1 (3) (7) Hedge losses on derivatives recognized in interest expense (8 ) (11 ) (10 ) JETBLUE AIRWAYS CORPORATION  -  2013 Annual Report 61