Long-Term Debt Problem C-HC Accounting-WORK BACKWARDS From AMR Corporation (American Airlines) 2008 annual report Decenber 31 Longlerm debt consisted of (in millions): Secured variable and fxed rate indebledness due through 202 (effectve rates from 4 25%-1136% at December 31, 2008) Enhanced equipment trust certicates due through 2012 (rates from 386%-12.00% at December 31, 2008) 4783 $ 4 2382 2.482 688 60%-85% specialfaCity revenue bonds due trough 2036 1 674 Credit facility agreement due through2010 (effectve rate of 8.60% at December 31, 2008 91 314 213 400 619 213 425% , 450% senioranvetble notes due 2023-2024 90%-1020% debentures due trough 2021 788%-10.55% notes due trough 2039 Less current maturides Long-term debt, less cument maturites Maturities of long-term debt (including sinking fund requirements) for the next five years are 2009-$1.8 billion; 2010-$1.3 billion; 2011-$2.2 bllion, 2012-$1.0 billion, 2013-$700 31 As of December 31, 2008, the Company had outstanding $318 milion principal amount of its 4.50 percent senior convertble notes due 2024 (the 4.50 Notes). On February 17, 2009 virtually all of the holders of the 4.50 Notes exercised their elective put rights and the Company purchased and retired these notes at a price equal to 100 percent of their principal amount. Under the terms of the 4.50 Notes, the Company had the option to pay the purchase price with cash, stock, or a combination of cash and stock, and the Company elected to pay for he 4.50 Notes solely with cash. The $318 milion principal amount of the 4.50 Notes is recorded as Current matuities of long-term debt as of December 31, 2008 n August 2008, AMR retired, by purchasing with cash, $75 milion of the $300 million prinoipal amount of the 4.25 peroent senior convertble notes due 2023 (the 4.25 Notes). In September 2008, the remaining holders of the 4.25 Notes exercised their elactive put rights and the Company purchased and retired these notes at a price equal to 100 percent of their principal amount, totaling $225 million. Under the terms of the 4.25 Notes, the Company had the option to pay the purchase price with cash, stock, or a combination of cash and stock, and the Company elected to pay for the 4.25 Notes solely with cash. Certain debt is secured by aircraft, engines, equipment and other assets having a net book value of approximately $10.5 bilion as of December 31, 2008. In 2008, the Company raised approximately $500 million under a loan secured by aircraft The loan bears interest at a LIBOR-based (London Interbank Offered Rate) variable rate with a fixed margin which resets quarterly and is due in instailments through 2015 As of December 31, 2008, AMR has issued guarantees covering approximately $1.7 billion of American's tax-exempt bond debt and American has issued guarantees covering approximately $745 milion of AMR's unsecured debt. In addtion, as of December 31, 2008, AMR and American have issued guarantees covering approximately $305 million of AMR Eagle's secured debt, and AMR has issued guarantees covering an additional $2.1 billion of AMR Eagle's secured debt In 2008, AMR issued guarantees covering $204 milion of American's leases d 39 Super ATR aircraf, which are subleased to AMR Eagle Long-Term Debt Problem C-HC Accounting-WORK BACKWARDS From AMR Corporation (American Airlines) 2008 annual report Decenber 31 Longlerm debt consisted of (in millions): Secured variable and fxed rate indebledness due through 202 (effectve rates from 4 25%-1136% at December 31, 2008) Enhanced equipment trust certicates due through 2012 (rates from 386%-12.00% at December 31, 2008) 4783 $ 4 2382 2.482 688 60%-85% specialfaCity revenue bonds due trough 2036 1 674 Credit facility agreement due through2010 (effectve rate of 8.60% at December 31, 2008 91 314 213 400 619 213 425% , 450% senioranvetble notes due 2023-2024 90%-1020% debentures due trough 2021 788%-10.55% notes due trough 2039 Less current maturides Long-term debt, less cument maturites Maturities of long-term debt (including sinking fund requirements) for the next five years are 2009-$1.8 billion; 2010-$1.3 billion; 2011-$2.2 bllion, 2012-$1.0 billion, 2013-$700 31 As of December 31, 2008, the Company had outstanding $318 milion principal amount of its 4.50 percent senior convertble notes due 2024 (the 4.50 Notes). On February 17, 2009 virtually all of the holders of the 4.50 Notes exercised their elective put rights and the Company purchased and retired these notes at a price equal to 100 percent of their principal amount. Under the terms of the 4.50 Notes, the Company had the option to pay the purchase price with cash, stock, or a combination of cash and stock, and the Company elected to pay for he 4.50 Notes solely with cash. The $318 milion principal amount of the 4.50 Notes is recorded as Current matuities of long-term debt as of December 31, 2008 n August 2008, AMR retired, by purchasing with cash, $75 milion of the $300 million prinoipal amount of the 4.25 peroent senior convertble notes due 2023 (the 4.25 Notes). In September 2008, the remaining holders of the 4.25 Notes exercised their elactive put rights and the Company purchased and retired these notes at a price equal to 100 percent of their principal amount, totaling $225 million. Under the terms of the 4.25 Notes, the Company had the option to pay the purchase price with cash, stock, or a combination of cash and stock, and the Company elected to pay for the 4.25 Notes solely with cash. Certain debt is secured by aircraft, engines, equipment and other assets having a net book value of approximately $10.5 bilion as of December 31, 2008. In 2008, the Company raised approximately $500 million under a loan secured by aircraft The loan bears interest at a LIBOR-based (London Interbank Offered Rate) variable rate with a fixed margin which resets quarterly and is due in instailments through 2015 As of December 31, 2008, AMR has issued guarantees covering approximately $1.7 billion of American's tax-exempt bond debt and American has issued guarantees covering approximately $745 milion of AMR's unsecured debt. In addtion, as of December 31, 2008, AMR and American have issued guarantees covering approximately $305 million of AMR Eagle's secured debt, and AMR has issued guarantees covering an additional $2.1 billion of AMR Eagle's secured debt In 2008, AMR issued guarantees covering $204 milion of American's leases d 39 Super ATR aircraf, which are subleased to AMR Eagle