Question

300 Analyzing Debt Terms, Yields, Prices, and Credit Ratings Assume Reproduced below is the long-term debt footnote from the 10-K report of Southwest Airlines. Long-Term Debt (in millions) 2012 2011 7 7/896 Notes due 2012 $- $100 French Credit Agreements due 2017 50 37 6 1/296 Notes due 2017 370 369 5 1/496 Notes due 2019 350 336 5 3/496 Notes due 2021 300 5 1/896 Notes due 2022 311 300 French Credit Agreements due 2022 94 100 Pass Through Certificates 480 7 3/8% Debentures due 2032 103* 100 Capital leases 52 63 2,110 1,705 Less current maturities 45 122 Less debt discount and issuant costs 19 - 16 $ 2,046 $ 1,567

* The carrying value of these debentures is 103 while the face value is 100. The company marks these debentures to market each period because the debentures are hedged with interest-rate swaps. The swap and the debentures are both marked to market, where any gains and losses offset each other.

As of December 31, 2012, aggregate annual principal maturities of debt and capital leases (not including amounts associated with interest rate swap agreements and interest on capital leases) for the five-year period ending December 31, 2017, were $45 million in 2013, $40 million in 2014, $55 million in 2015, $38 million in 2016, $416 million in 2017, and $1.5 billion thereafter.
Assume below is a summary of the market values of the Southwest Airlines' bonds maturing from 2017 to 2032 (from Capital IQ).

Im having trouble with the portion of the question marked incorrectly. I have tried $1.5 for billion and $1050 for million as well as adding them up. Not sure where I'm going wrong... please show work!

Answer 1

ANSWER

As per the given question,

a) $ 2,046 millions (which is mention in the balance sheet)

2013   =   $45 millions

2014 = $40 millions

2015 = $55 millions

2016 = $38 millions

2017 = $416 million

There after =   $1.5 billion

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