In Its 2013 Annual Report to Shareholders, Border Airlines Inc

question 42

Essay

In its 2013 annual report to shareholders, Border Airlines Inc. presented the following balance sheet information about its liabilities: In addition, Border presented the following among its note disclosures:
Maturities of long-term debt (including sinking fund requirements) for the next five years are: 2014 - $421 million; 2015 - $212 million; 2016 - $273 million; 2017 - $1.0 billion; 2018 - $777 million.
Required:
Consider the appropriate classification of these long-term debt obligations. Assuming no more long-term debt will be issued, what are the implications of the information above for Border's liquidity and solvency risk in 2013 and the following years?

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Definitions:

Clarification and Justification

The process of making something clearer or more understandable while also providing reasons or evidence to support a position, action, or decision.

Negotiation

A process where two or more parties discuss an issue with the aim of reaching a mutually acceptable agreement.

Proposal

A plan or suggestion, especially a formal or written one, put forward for consideration or discussion by others.

Protective Gear

Clothing or equipment designed to protect the wearer's body from injury or infection.