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FORM 10-Q/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-6033
UAL CORPORATION
---------------
(Exact name of registrant as specified in its charter)
Delaware 36-2675207
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 East Algonquin Road, Elk Grove Township, Illinois 60007
Mailing Address: P. O. Box 66919, Chicago, Illinois 60666
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 700-4000
-----------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class October 31, 1997
----- ----------------
Common Stock ($0.01 par value) 58,782,762
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.
- ------ --------------------------------
(a) Exhibits
A list of exhibits included as part of this Form 10-Q is
set forth in an Exhibit Index which immediately precedes
such exhibits.
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
UAL CORPORATION
By: /s/ Douglas A. Hacker
---------------------
Douglas A. Hacker
Senior Vice President and
Chief Financial Officer
(principal financial and
accounting officer)
Dated: November 19, 1997
Exhibit Index
-------------
Exhibit No. Description
- ---------- -----------
10.1 Supplemental Agreement No. 10 dated as of April 11, 1997
to the Agreement dated December 18, 1990 between The
Boeing Company ("Boeing") and United Air Lines, Inc.
("United") (and United Worldwide Corporation) for
acquisition of Boeing 747-400 aircraft (as previously
amended and supplemented, the "747-400 Purchase
Agreement" (filed as Exhibit 10.8 to UAL Corporation's
("UAL") Form 10-K for the year ended December 31, 1990,
and incorporated herein by reference; supplements
thereto filed as (i) Exhibits 10.4 and 10.5 to UAL's
Form 10-K for the year ended December 31, 1991, (ii)
Exhibits 10.3, 10.4, 10.5, 10.6 and 10.22 to UAL's Form
10-Q for the quarter ended June 30, 1993, (iii) Exhibit
10.3 to UAL's Form 10-K for the year ended December 31,
1993, (iv) Exhibit 10.14 to UAL's Form 10-Q for the
quarter ended June 30, 1994, (v) Exhibits 10.29 and
10.30 to UAL's Form 10-K for the year ended December 31,
1994, (vi) Exhibits 10.4 through 10.8 to UAL's Form 10-Q
for the quarter ended March 31, 1995, (vii) Exhibits
10.7 and 10.8 to UAL's Form 10-Q for the quarter ended
June 30, 1995, (viii) Exhibit 10.41 to UAL's Form 10-K
for the year ended December 31, 1995, and (ix) Exhibits
10.4 and 10.5 to UAL's Form 10-Q for the quarter ended
June 30, 1996, as amended, and incorporated herein by
reference)). (Exhibit 10.1 hereto is filed with a
request for confidential treatment of certain portions
thereof.)
10.2 Supplemental Agreement No. 11 dated as of April 11, 1997
to the 747-400 Purchase Agreement. (Exhibit 10.2 hereto
is filed with a request for confidential treatment of
certain portions thereof.)
10.3 Letter Agreement No. 6-1162-DLJ-891R5 dated April 11,
1997 to the 747-400 Purchase Agreement. (Exhibit 10.3
hereto is filed with a request for confidential
treatment of certain portions thereof.)
* 10.4 Amendment No. 5 dated August 22, 1996 to the
Agreement dated August 10, 1992 between AVSA, S.A.R.L.,
as seller, and United, as buyer, for the acquisition of
Airbus Industrie A320-200 model aircraft (as previously
amended and supplemented, "A320-200 Purchase Agreement"
(filed as Exhibit 10.14 to UAL's Form 10-K for the year
ended December 31, 1992, and incorporated herein by
reference; supplements thereto filed as (i) Exhibits
10.4 and 10.5 to UAL's Form 10-K for the year ended
December 31, 1993, (ii) Exhibits 10.15 and 10.16 to
UAL's Form 10-Q for the quarter ended June 30, 1994,
(iii) Exhibit 10.31 to UAL's Form 10-K for the year
ended December 31, 1994, (iv) Exhibit 10.9 to UAL's Form
10-Q for the quarter ended June 30, 1995, and (v)
Exhibit 10.42 to UAL's Form 10-K for the year ended
December 31, 1995, and incorporated herein by
reference)). (Exhibit 10.4 hereto is filed with a
request for confidential treatment of certain portions
thereof.)
* 10.5 Amendment No. 6 dated January 31, 1997 to the A320-
200 Purchase Agreement dated August 10, 1992. (Exhibit
10.5 hereto is filed with a request for confidential
treatment of certain portions thereof.)
* 10.6 Amendment No. 7 dated January __, 1997 to the A320-
200 Purchase Agreement dated August 10, 1992. (Exhibit
10.6 hereto is filed with a request for confidential
treatment of certain portions thereof.)
* 11 Calculation of Fully Diluted Net Earnings Per Share.
* 12.1 Computation of Ratio of Earnings to Fixed Charges.
* 12.2 Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividend Requirements.
* 27 Financial Data Schedule.
- -----------------------
* As Previously Filed
Exhibit 10.1
Supplemental Agreement No. 10
to
Purchase Agreement No. 1670
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
Relating to Boeing Model 747-422 Aircraft
THIS SUPPLEMENTAL AGREEMENT, entered into as of the
11th day of April 1997, by and between THE BOEING COMPANY, a
Delaware corporation (hereinafter called Boeing), and UNITED AIR
LINES, INC., a Delaware corporation (hereinafter called Buyer);
W I T N E S S E T H:
-------------------
WHEREAS, the parties entered into that certain Purchase
Agreement No. 1670, dated as of December 18, 1990, relating to
the purchase and sale of Boeing Model 747-422 aircraft
(hereinafter referred to as "The Aircraft", or the "Firm
Aircraft", [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT] or the "Option Aircraft", as such
capitalized terms, and any other capitalized terms used herein,
unless otherwise specifically defined herein, are defined in the
"Purchase Agreement" (as such term is defined below)), which
agreement, as amended and supplemented, together with all
exhibits, specifications and letter agreements related or
attached thereto, is hereinafter called the "Purchase Agreement"
and;
WHEREAS, on July 12, 1996 Buyer and Boeing signed
Supplemental Agreement No. 9 to the Purchase Agreement; and
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
WHEREAS, Buyer and Boeing wish to make certain
additional amendments to the Purchase Agreement to reflect the
agreements set forth in Supplemental Agreement No. 9.
NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree to amend the Purchase
Agreement as follows:
1. The Table of Contents is deleted in its entirety and
replaced with a new Table of Contents contained in Attachment 1
hereto.
P.A. No. 1670 SA10-1
2. Article 3, entitled Price of Aircraft is deleted in its
entirety and replaced with a new Article 3 contained in
Attachment 2 hereto.
3. Delete the following "Months to be Utilized in
Determining the Value of H & W" from the table on page 3 of
Exhibit D, entitled Price Adjustment due to Economic Fluctuations
- - Airframe & Engine.
Month of Scheduled
Aircraft Delivery as Set Months to be Utilized
Forth in Article 2.1 of Determining the Value
the Agreement of H & W
------------------------ ---------------------
[*CONFIDENTIAL MATERIAL OMITTED [*CONFIDENTIAL MATERIAL
AND FILED SEPARATELY WITH THE OMITTED AND FILED SEPARATELY
SECURITIES AND EXCHANGE COMMISSION WITH THE SECURITIES AND EX-
PURSUANT TO A REQUEST FOR CONFIDENTIAL CHANGE COMMISSION PURSUANT
TREATMENT] TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
4. The Purchase Agreement is amended by adding Exhibit D-
1, entitled Price Adjustment due to Economic Fluctuations -
Airframe & Engine contained in Attachment 3 hereto.
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
6. This Supplemental Agreement is subject to the
confidentiality provisions of Letter Agreement 6-1162-DLJ-886.
P.A. No. 1670 SA10-2
7. The Purchase Agreement shall be deemed amended to the
extent herein provided and as amended shall continue in full
force and effect.
EXECUTED IN DUPLICATE as of the day and year first above written.
THE BOEING COMPANY UNITED AIR LINES, INC.
By: /s/ M.D. Hurt By: /s/ Douglas A. Hacker
------------- ---------------------
Its: Attorney In Fact Its: Senior Vice President and
---------------- Chief Financial Officer
-------------------------
P.A. No. 1670 SA10-3
TABLE OF CONTENTS
Page
Number
------
ARTICLE 1. Subject Matter of Sale.......................1-1
ARTICLE 2. Delivery of Aircraft; Title and Risk
of Loss......................................2-1
ARTICLE 3. Price of Aircraft............................3-1
ARTICLE 4. Taxes and Customs Duties.....................4-1
ARTICLE 5. Payment......................................5-1
ARTICLE 6. Excusable Delay..............................6-1
ARTICLE 7. Changes to Detail Specification..............7-1
ARTICLE 8. Federal Aviation Administration
Requirements.................................8-1
ARTICLE 9. Demonstration Flights and Test Data..........9-1
ARTICLE 10. Assignment, Resale or Lease.................10-1
ARTICLE 11. Termination for Certain Events..............11-1
ARTICLE 12. Inspections; Plant Representatives..........12-1
ARTICLE 13. Spare Parts and Certain Exhibit
Documents...................................13-1
ARTICLE 14. Notices and Requests........................14-1
ARTICLE 15. Miscellaneous...............................15-1
EXHIBIT A Aircraft Configuration.........................A
EXHIBIT B Product Assurance Document.....................B
EXHIBIT C Customer Support Document......................C
EXHIBIT D Price Adjustment Due to Economic
Fluctuations - Airframe and Engine.............D
EXHIBIT D-1 Price Adjustment Due to Economic
Fluctuations - Airframe and Engine...........D-1
EXHIBIT E Buyer Furnished Equipment Document.............E
EXHIBIT F Acceptance Certificate.........................F
P.A. No 1670 I
Attachment 2 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
ARTICLE 3. Price of Aircraft.
-----------------
3.1 Basic Price.
-----------
3.1.1 Basic Price for Aircraft prior to
---------------------------------
1997.
The basic price of each Aircraft scheduled for delivery prior to
January 1, 1997 shall be equal to the sum of [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] and (ii) such price adjustments applicable to such
Aircraft as may be made pursuant to the provisions of this
Agreement, including Article 7 (Changes to Detail Specification)
and Article 8 (FAA Requirements) or other written agreements
executed by Buyer and Boeing.
3.1.2 Basic Price for Aircraft 1997 to 1998.
-------------------------------------
The basic price of each Aircraft scheduled for delivery
between January 1, 1997 and December 31, 1998 shall be
equal to the sum of [*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
and (ii) such price adjustments applicable to such Aircraft
as may be made pursuant to the provisions of this Agreement,
including Article 7 (Changes to Detail Specification) and
Article 8 (FAA Requirements) or other written agreements
executed by Buyer and Boeing.
3.1.3 Basic Price for Aircraft After 1998.
-----------------------------------
The basic price of each Aircraft scheduled for delivery after
December 31, 1998 shall be equal to the sum of [*CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] and (ii) such price adjustments applicable to such
Aircraft as may be made pursuant to the provisions of this
Agreement, including Article 7 (Changes to Detail Specification)
and Article 8 (FAA Requirements) or other written agreements
executed by Buyer and Boeing.
3.2 Purchase Price. The purchase price of
each Aircraft shall be equal to the sum of the following items as
determined at the time of such Aircraft delivery: (i) the basic
price of such Aircraft, (ii) the Airframe and Engine Price
Adjustments to be determined pursuant to Exhibit D (Price
Adjustment Due to Economic Fluctuations - Airframe and Engine)
attached hereto [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT] and the Airframe and
Engine Price Adjustments to be determined pursuant to Exhibit D-1
(Price Adjustment Due
P.A. No. 1670 3-1
Attachment 2 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
to Economic Fluctuations -Airframe and Engine) attached hereto
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] and (iii) such price adjustments
applicable to such Aircraft as may be made pursuant to the
provisions of this Agreement, including Exhibit E (Buyer
Furnished Equipment Document) or other written agreements
executed by Boeing and Buyer (the "Purchase Price").
P.A. No. 1670 3-2
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
AIRFRAME AND ENGINE PRICE ADJUSTMENT
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
Exhibit D-1 to Purchase Agreement Number 1670
P.A. No. 1670
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
PRICE ADJUSTMENT DUE TO
-----------------------
ECONOMIC FLUCTUATIONS
---------------------
AIRFRAME PRICE ADJUSTMENT
-------------------------
(1995 Base Price)
-----------------
1. Formula.
-------
For those Aircraft scheduled for delivery after
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] the Airframe Price Adjustment will be
determined at the time of Aircraft delivery in accordance with
the following formula:
Pa = (P) (L + M - 1)
Where:
Pa = Airframe Price Adjustment.
L = .65 x ECI
---
130.1
M = .35 x ICI
---
123.6
P = Aircraft Basic Price (as set forth in Article 3.1.3
of this Agreement) less the base price of Engines (as
defined in this Exhibit D-1) in the amount of
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
ECI = A value using the "Employment Cost Index for workers
in aerospace manufacturing" (aircraft manufacturing,
standard industrial classification code 3721,
compensation, base month and year June 1989 = 100), as
released by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for the months of
March, June, September and December, calculated as
follows: A three-month arithmetic average value
(expressed as a decimal and rounded to the nearest tenth)
will be determined using the months set forth in the table
below for the applicable Aircraft, with the released
Employment Cost Index value described above for the month
of March also being used for the months of January and
February; the value for June
P.A. No. 1670 D-1-1
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
also used for April and May; the value for
September also used for July and August; and the value for
December also used for October and November.
ICI = The three-month arithmetic average of the released
monthly values for the Industrial Commodities Index as set
forth in the "Producer Prices and Price Index" (Base Year
1982 = 100) as released by the Bureau of Labor Statistics,
U.S. Department of Labor values (expressed as a decimal
and rounded to the nearest tenth) for the months set forth
in the table below for the applicable Aircraft.
In determining the value of L, the ratio of ECI divided
by 130.1 will be expressed as a decimal rounded to the nearest
ten-thousandth and then multiplied by .65 with the resulting
value also expressed as a decimal and rounded to the nearest ten-
thousandth.
In determining the value of M, the ratio of ICI divided
by 123.6 will be expressed as a decimal rounded to the nearest
ten-thousandth and then multiplied by .35 with the resulting
value also expressed as a decimal and rounded to the nearest ten-
thousandth.
Month of Scheduled
Aircraft Delivery as Set Months to be Utilized
Forth in Article 2.1 of in Determining the Value
the Agreement ECI and ICI
- ------------------------ ------------------------
[*CONFIDENTIAL MATERIAL OMITTED [*CONFIDENTIAL MATERIAL
AND FILED SEPARATELY WITH THE OMITTED AND FILED SEPARATELY
SECURITIES AND EXCHANGE COMMISSION WITH THE SECURITIES AND EX-
PURSUANT TO A REQUEST FOR CONFIDENTIAL CHANGE COMMISSION PURSUANT
TREATMENT] TO A REQUEST FOR CONFIDENTIAL
TREATMENT]
2. If at the time of delivery of an Aircraft Boeing is unable
to determine the Airframe Price Adjustment because the applicable
values to be used to determine the ECI and ICI have not been
released by the Bureau of Labor Statistics, then:
P.A. No. 1670 D-1-2
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
2.1 The Airframe Price Adjustment, to be used at the
time of delivery of each of the Aircraft scheduled for delivery
after December 31, 1998, will be determined by utilizing the
escalation provisions set forth above. The values released by
the Bureau of Labor Statistics and available to Boeing 30 days
prior to scheduled Aircraft delivery will be used to determine
the ECI and ICI values for the applicable months (including those
noted as preliminary by the Bureau of Labor Statistics) to
calculate the Airframe Price Adjustment. If no values have been
released for an applicable month, the provisions set forth in
Paragraph 2.2 below will apply. If prior to delivery of an
Aircraft the U.S. Department of Labor changes the base year for
determination of the ECI or ICI values as defined above, such
rebased values will be incorporated in the Airframe Price
Adjustment calculation. The payment by Buyer to Boeing of the
amount of the Purchase Price for such Aircraft, as determined at
the time of Aircraft delivery, will be deemed to be the payment
for such Aircraft required at the delivery thereof.
2.2 If prior to delivery of an Aircraft the U.S.
Department of Labor substantially revises the methodology used
for the determination of the values to be used to determine the
ECI and ICI values (in contrast to benchmark adjustments or other
corrections of previously released values), or for any reason has
not released values needed to determine the applicable Aircraft
Airframe Price Adjustment, the parties will, prior to delivery of
any such Aircraft, select a substitute for such values from data
published by the Bureau of Labor Statistics or other similar data
reported by non-governmental United States organizations, such
substitute to lead in application to the same adjustment result,
insofar as possible, as would have been achieved by continuing
the use of the original values as they may have fluctuated during
the applicable time period. Appropriate revision of the formula
will be made as required to reflect any substitute values.
However, if within 24 months from delivery of the Aircraft the
Bureau of Labor Statistics should resume releasing values for the
months needed to determine the Airframe Price Adjustment, such
values will be used to determine any increase or decrease in the
Airframe Price Adjustment for the Aircraft from that determined
at the time of delivery of such Aircraft.
2.3 In the event escalation provisions are made non-
enforceable or otherwise rendered null and void by any agency of
the United States Government, the parties agree,
P.A. No. 1670 D-1-3
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
to the extent they may lawfully do so, to equitably adjust the
Purchase Price of any affected Aircraft to reflect an allowance
for increases or decreases in labor compensation and material
costs occurring since February, 1995, which is consistent with
the applicable provisions of paragraph 1 of this Exhibit D.
3. For the calculations herein, the values released by the
Bureau of Labor Statistics and available to Boeing 30 days prior
to scheduled Aircraft delivery will be used to determine the ECI
and ICI values for the applicable months (including those noted
as preliminary by the Bureau of Labor Statistics) to calculate
the Airframe Price Adjustment.
Note: Any rounding of a number, as required under this
Exhibit D-1 with respect to escalation of the airframe
price, will be accomplished as follows: if the first digit
of the portion to be dropped from the number to be rounded
is five or greater, the preceding digit will be raised to
the next higher number.
P.A. No. 1670 D-1-4
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
-----------------------------------------
(1995 BASE PRICE)
-----------------
(a) The Aircraft Basic Price of each Aircraft scheduled for
delivery [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT] as set forth in Article 3.1.3 of this
Agreement, includes an aggregate price for PW4056 engines and all
accessories, equipment and parts therefor provided by the engine
manufacturer (collectively in this Exhibit D-1 called "Engines")
of [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. The adjustment in Engine price
applicable to each such Aircraft ("Engine Price Adjustment"
herein) will be determined at the time of Aircraft delivery in
accordance with the following formula:
Pa = (P) (AA + BB + CC) - P
(b) The following definitions will apply herein:
Pa = Engine Price Adjustment
P = Aggregate Engine Base Price as set forth in
paragraph (a) above.
AA = .60 x L
---
$17.80
BB = .30 x M
---
130.6
CC = .10 x E
---
76.6
In determining the value of AA, BB and CC, the ratio of L divided
by $17.80, M divided by 130.6 and E divided by 76.6 will be
expressed as a decimal and rounded to the nearest ten-thousandth
but the decimal value resulting from multiplying such ratios by
the respective constants (.60, .30 and .10) will not be rounded.
The value of the sum of AA + BB + CC will also be rounded to the
nearest ten-thousandth.
L = Labor Index, which is the "Hourly Earnings of
Aircraft Engines and Engine Parts Production Workers, SIC
3724" published by the Bureau of Labor Statistics, U.S.
Department of Labor,
P.A. No. 1670 D-1-5
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
for the seventh month preceding the month of
scheduled Aircraft delivery.
$17.80 = Published Labor Index (SIC 3724) for December, 1994.
M = Material Index, which is the "Producer Price Index
- Code 10, Metals and Metal Products," (Base Year 1982 =
100) published by the Bureau of Labor Statistics, U.S.
Department of Labor, for the seventh month preceding the
month of scheduled Aircraft delivery.
130.6 = Published Material Index (Code 10) for December, 1994.
E = Fuel Index, which is the "Producer Price Index -
Code 5, Fuels and Related Products and Power" (Base Year
1982 = 100) published for the Bureau of Labor Statistics,
U.S. Department of Labor, for the seventh month preceding
the month of scheduled Aircraft delivery.
76.6 = Published Fuel Index (Code 5) for December, 1994.
The Engine Price Adjustment will not be made if it would result
in a decrease in the aggregate Engine base price.
(c) The value of the Labor, Material and Fuel Index used in
determining the Engine Price Adjustment will be those published
by the Bureau of Labor Statistics, U.S. Department of Labor as of
a date 30 days prior to the scheduled Aircraft delivery to Buyer.
Such Index values will be considered final and no revision to the
Engine Price Adjustment will be made after Aircraft delivery for
any subsequent changes in published Index values.
(d) If the Bureau of Labor Statistics, U. S. Department of
Labor, (i) substantially revises the methodology (in contrast to
benchmark adjustments or other corrections of previously
published data), or (ii) discontinues publication of any of the
data referred to above or (iii) temporarily discontinues
publication of any of the data referred to above, Pratt & Whitney
Aircraft (P&WA) agrees to meet jointly with Boeing and Buyer and
jointly select a substitute for the revised or discontinued data, such
P.A. No. 1670 D-1-6
PA/NEXD-1
Attachment 3 to
Supplemental Agreement No. 10 to
Purchase Agreement No. 1670
substitute data to lead in application to the same adjustment
result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated
had it not been revised or discontinued. Appropriate revision of
the Engine Price Adjustment provisions set forth above will be
made to accomplish this result for affected Engines.
In the event the Engine Price Adjustment escalation provisions of
this Agreement are made non-enforceable or otherwise rendered
null and void by any agency of the United States Government, P&WA
agrees to meet jointly with Boeing and Buyer and jointly agree,
to the extent that they may lawfully do so, to adjust equitably
the purchase price of the Engine(s) to reflect an allowance for
increases in labor, material and fuel costs that occurred from
December, 1994 to the seventh month preceding the month of
scheduled delivery of the applicable Aircraft.
NOTES: Any rounding of a number, as required under this
Exhibit D-1 with respect to escalation of the Engine
price, will be accomplished as follows: if the first
digit of the portion to be dropped from the number to be
rounded is five or greater, the preceding digit will be
raised to the next higher number.
Exhibit 10.2
Supplemental Agreement No. 11
to
Purchase Agreement No. 1670
between
THE BOEING COMPANY
and
UNITED AIR LINES, INC.
Relating to Boeing Model 747-422 Aircraft
THIS SUPPLEMENTAL AGREEMENT, entered into as of the 11th
day of April 1997, by and between THE BOEING COMPANY, a Delaware
corporation (hereinafter called Boeing), and UNITED AIR LINES,
INC., a Delaware corporation (hereinafter called Buyer);
W I T N E S S E T H:
-------------------
WHEREAS, the parties entered into that certain Purchase
Agreement No. 1670, dated as of December 18, 1990, relating to
the purchase and sale of Boeing Model 747-422 aircraft
(hereinafter referred to as "The Aircraft", or the "Firm
Aircraft", [*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT] or the "Option Aircraft", as such
capitalized terms, and any other capitalized terms used herein,
unless otherwise specifically defined herein, are defined in the
"Purchase Agreement" (as such term is defined below)), which
agreement, as amended and supplemented, together with all
exhibits, specifications and letter agreements related or
attached thereto, is hereinafter called the "Purchase Agreement"
and;
WHEREAS, Buyer wishes to purchase three (3) 747-422
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]
NOW THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree to amend the Purchase
Agreement as follows:
1. The following Letter Agreement is executed contemporaneously
with this Supplemental Agreement and is attached hereto.
Agreement No. Subject
------------ -------
6-1162-DLJ-891R5 [*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
2. Article 2, entitled Delivery of Aircraft; Title and Risk of
Loss, paragraph 2.1 is hereby deleted in its entirety and
replaced with the new paragraph 2.1 contained in Attachment 1
hereto, which adds [*CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT].
3. Article 5, entitled Payment, paragraph 5.1, entitled Advance
Payment Base Price, is hereby deleted and replaced with the new
paragraph 5.1 contained in Attachment 2 hereto, which includes
the Advance Payment Base Prices for the [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
4. The following "Months to be Utilized in Determining the
Value of H & W" are hereby added to the table on page 3 of
Exhibit D-1, entitled Price Adjustment due to Economic
Fluctuations.
Month of Scheduled
Aircraft Delivery as Set Months to be Utilized
Forth in Article 2.1 of Determining the Value
the Agreement of H&W
------------------------ ---------------------
[*CONFIDENTIAL MATERIAL [*CONFIDENTIAL MATERIAL
OMITTED AND FILED OMITTED AND FILED
SEPARATELY WITH THE SEPARATELY WITH THE
SECURITIES AND EXCHANGE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO COMMISSION PURSUANT TO
A REQUEST FOR CONFIDENTIAL A REQUEST FOR CONFIDENTIAL
TREATMENT] TREATMENT]
5. This Supplemental Agreement is subject to the confidentiality
provisions of Letter Agreement 6-1162-DLJ-886.
6. The Purchase Agreement shall be deemed amended to the extent
herein provided and as amended shall continue in full force and effect.
EXECUTED IN DUPLICATE as of the day and year first above written.
THE BOEING COMPANY UNITED AIR LINES, INC.
By: /s/ M. D. Hurt By: Douglas A. Hacker
-------------- -----------------
Its: Attorney In Fact Its: Senior Vice President and
---------------- Chief Financial Officer
-----------------------
P.A. No. 1670 SA 9-2
K/UAL/CONT/SA11-1670.doc
Attachment 1 to
Supplemental Agreement No. 11
ARTICLE 2. Delivery of Aircraft; Title and Risk of Loss.
--------------------------------------------
2.1 Time of Delivery. Each Aircraft shall be delivered
to Buyer assembled and ready for flight, and Buyer shall accept delivery
of such Aircraft, during or, if mutually agreed, before the months set
forth in the following schedule:
Exhibit 10.3
6-1162-DLJ-891R5
April 11, 1997
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Subject: Letter Agreement No. 6-1162-DLJ-891R5
to Purchase Agreement No. 1670 -
[*CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
Gentlemen:
Reference is made to Purchase Agreement No. 1670 dated as of December 18,
1990 (the Purchase Agreement) between The Boeing Company (Boeing), and
United Air Lines, Inc. (Buyer), relating to the sale by Boeing and the
purchase by Buyer of forty-two (42) Model 747-422 aircraft (hereinafter
referred to as the Aircraft).
Further reference is made to Letter Agreement 1670-5 dated as of even date
herewith to the Purchase Agreement relating to the granting of options to
purchase eleven (11) Model 747-422 option aircraft (the Option Aircraft).
This letter, when accepted by Buyer contemporaneously with the execution of
the Purchase Agreement, will become part of the Purchase Agreement and will
evidence our further agreement with respect to the matters set forth below.
All terms used herein and in the Purchase Agreement, and not defined
herein, shall have the same meaning as in the Purchase Agreement.
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 2
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
In consideration of Buyer's purchase of thirty-four (34) Model
777 aircraft under Purchase Agreement 1663, [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
In consideration of Buyer's purchase of thirty-four (34) Model
777 under Purchase Agreement 1663 [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT]
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
2. Escalation of Credit Memoranda.
------------------------------
The actual amount of the credit memoranda to be provided pursuant
to paragraph 1 above shall be determined by escalating the base amount of
such credit by application of the airframe escalation provisions described
in Exhibit D of the Purchase Agreement and Attachment A to Letter Agreement
1670-5 or such Airframe escalation provisions as are applicable to the
Option Aircraft, as such credits are applicable to the Firm Aircraft or
Option Aircraft for which such respective credit is issued.
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 3
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 4
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
is paid in full at a fluctuating rate per annum equal to one percent (1%)
plus the rate of interest announced publicly by Citibank, N.A., New York as
its base rate, from time to time, as such bank's base rate may change, each
change in such fluctuating rate to take place simultaneously with the
corresponding change in such base rate, calculated on the basis of a year
of 365/366 days for the actual number of days elapsed. If Boeing elects
option (ii) above, Buyer shall pay to Boeing [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] and interest due thereon,
on the date of delivery of each Aircraft to which [*CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Boeing shall issue a
credit memorandum to Buyer in the amount equal to the accrued interest on
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
7. Program Changes.
---------------
Article 7.2 entitled Program Changes of the Purchase Agreement
is hereby deleted in its entirety.
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
9. Changes to Performance Guarantees.
---------------------------------
Boeing may adjust, change or modify performance guarantees
set forth in Letter Agreement 6-1162-DLJ-860 without Buyer's consent with
respect to the Aircraft referred to in Article 2, as specifically permitted
by Letter Agreement 6-1162-DLJ-860 and by Article 7.2 as modified by
paragraph 7 of this Letter Agreement; [*CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 5
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
P.A. No. 1670 SA-11
K/UAL
United Air Lines, Inc.
6-1162-DLJ-891R5 Page 6
[*CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
11. Non-Disclosure.
--------------
The parties understand that certain commercial and financial
information contained in this letter agreement is considered as privileged
and confidential. The parties agree that they will treat such information
as privileged and confidential and will not, without prior written consent
of the other party, disclose such information to any other person except as
may be required by (i) applicable law or governmental regulations, or (ii)
for financing the Aircraft in accordance with the provisions of Article
11.2 of the Purchase Agreement. In connection with any such disclosure or
filing of such information pursuant to any applicable law or governmental
regulations; Buyer shall request and use its best reasonable efforts to
obtain confidential treatment of such information. Boeing agrees to
cooperate with Buyer in making and supporting its request for confidential
treatment. In fulfilling its obligations under this paragraph 11, the
parties shall only be required to use the same degree of care to prevent
unauthorized disclosure and use of the information contained in this Letter
Agreement as they would use to prevent the disclosure and use of its own
commercial and financial information of the same or similar nature and
which it considers proprietary or confidential.
If the foregoing correctly sets forth your understanding of our agreement
with respect to the matters treated above, please indicate your acceptance
and approval below.
Very truly yours,
THE BOEING COMPANY
By /s/M.D. Hurt
------------
Its Attorney In Fact
----------------
ACCEPTED AND AGREED TO this
Date: April 11, 1997
--------------
UNITED AIR LINES, INC.
By /s/ Douglas A. Hacker
---------------------
Its Senior Vice President and
Chief Financial Officer
-----------------------
P.A. No. 1670 SA-11
K/UAL