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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File No. 1 - 6033
A. United Air Lines, Inc.
Ground Employees' 401(k) Retirement Savings Plan
------------------------------------------------
(Full title of the Plan)
United Air Lines, Inc.
----------------------
(Employer sponsoring the Plan)
B. UAL Corporation
---------------
(Issuer of the shares held pursuant to the Plan)
1200 Algonquin Road, Elk Grove Township, Illinois
Mailing Address: P.O. Box 66100, Chicago, Illinois 60666
--------------------------------------------------------
(Address of principal executive offices)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
________________________________________
To the Board of Directors
of United Air Lines, Inc.:
We have audited the accompanying statements of net assets available
for plan benefits of the United Air Lines, Inc. Ground Employees'
401(k) Retirement Savings Plan as of November 30, 1999 and 1998, and
the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's Management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the Plan's Management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the United Air Lines, Inc. Ground Employees' 401(k)
Retirement Savings Plan as of November 30, 1999 and 1998, and the
changes in its net assets available for plan benefits for the years then
ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 26, 2000
UNITED AIR LINES, INC.
________________________________________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
__________________________________________________
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
___________________________________________________
(In Thousands)
November 30
__________________
1999 1998
__________________
INVESTMENT IN MASTER TRUST
Magellan Fund $ 68,723 $ 47,883
Equity-Income Fund 21,861 23,853
Growth Company Fund 177,077 106,203
Government Securities Fund 2,170 2,797
OTC Portfolio 44,187 21,064
Overseas Fund 27,488 20,931
Balanced Fund 44,313 42,067
Asset Manager 6,787 6,490
Asset Manager: Growth 10,088 9,758
Asset Manager: Income 1,846 1,653
Retirement Money Market Portfolio 12,822 6,898
U. S. Bond Index Portfolio 2,933 2,305
U. S. Equity Index Portfolio 169,687 151,366
Stated Return Fund 2 2
Blended Income Fund 184,164 173,561
UAL Stock Fund 57,780 67,311
Participant Loan Fund 21,990 20,810
-------- -------
NET ASSETS AVAILABLE FOR $853,918 $704,952
FOR Plan Benefits -------- --------
________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1999
_________________________________________
EQUITY- GROWTH GOVERNMENT
MAGELLAN INCOME COMPANY SECURITIES
FUND FUND FUND FUND
____ ____ ____ ____
NET ASSETS AVAILABLE
FOR PLAN BENEFITS, $ 47,883 $ 23,853 $106,203 $ 2,797
beginning of year _________ ________ ________ ________
CONTRIBUTIONS 5,245 1,754 6,905 188
--------- -------- -------- --------
TRANSFERS
BETWEEN FUNDS 7,534 (3,812) 9,319 (521)
--------- --------- -------- ---------
TRANSFERS
BETWEEN PLANS (213) (21) (386) (22)
--------- --------- -------- --------
RESULTS OF INVESTMENT
ACTIVITY
Dividends 4,978 1,408 8,062 167
Interest 17 - - -
Net appreciation
(depreciation)
in value of investments 8,581 652 56,169 (213)
--------- --------- -------- ---------
13,576 2,060 64,231 (46)
--------- -------- -------- ---------
PAYMENTS TO PLAN
PARTICIPANTS (4,226) (1,697) (7,730) (202)
--------- -------- -------- ----------
PARTICIPANT LOANS (1,062) (269) (1,447) (24)
--------- --------- --------- ----------
ADMINISTRATIVE
EXPENSES (14) (7) (18) -
--------- --------- --------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 68,723 $ 21,861 $177,077 $ 2,170
--------- -------- -------- ---------
--------- -------- -------- ---------
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1999
_________________________________________
OTC OVERSEAS BALANCED ASSET
PORTFOLIO FUND FUND MANAGER
_________ ____ ____ _______
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 21,064 $ 20,931 $ 42,067 $ 6,490
________ ________ ________ _________
CONTRIBUTIONS 2,075 1,717 2,393 498
________ ________ ________ _________
TRANSFERS
BETWEEN FUNDS 8,013 (337) (600) (304)
________ ________ _________ ________
TRANSFERS
BETWEEN PLANS (32) (50) (62) (1)
________ ________ _________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 2,834 427 6,162 1,250
Interest 16 - - -
Net appreciation
(depreciation)
in value of investments 12,411 6,637 (1,863) (419)
________ ________ ________ ________
15,261 7,064 4,299 831
________ ________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS (1,745) (1,523) (3,395) (648)
________ ________ ________ ________
PARTICIPANT LOANS (445) (311) (381) (78)
________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (4) (3) (8) (1)
________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 44,187 $ 27,488 $ 44,313 $ 6,787
________ ________ ________ ________
________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
__________________________________________________
1999
___________________________________________________
RETIREMENT U.S. U.S.
ASSET ASSET MONEY BOND EQUITY
MANAGER: MANAGER: MARKET INDEX INDEX
GROWTH INCOME PORTFOLIO PORTFOLIO PORTFOLIO
______ ______ _________ _________ _________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 9,758 $ 1,653 $ 6,898 $ 2,305 $ 151,366
________ ________ ________ ________ _________
CONTRIBUTIONS 1,069 166 704 218 6,050
________ ________ ________ ________ _________
TRANSFERS
BETWEEN FUNDS (1,067) 70 5,982 611 (5,315)
________ ________ ________ ________ ________
TRANSFERS
BETWEEN PLANS 9 3 (35) (7) (184)
________ ________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 1,415 156 495 185 -
Interest - - - 84 -
Net appreciation
(depreciation)
in value of investments (109) (54) - (192) 30,310
________ ________ ________ ________ ______
1,306 102 495 77 30,310
________ ________ ________ ________ ______
PAYMENTS TO PLAN
PARTICIPANTS (874) (122) (973) (259) (10,796)
________ ________ ________ ________ ________
PARTICIPANT LOANS (111) (26) (247) (12) (1,723)
________ ________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (2) - (2) - (21)
________ ________ ________ ________ _________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year
________ ________ ________ ________ ________
$ 10,088 $ 1,846 $ 12,822 $ 2,933 $169,687
________ ________ ________ ________ ________
________ ________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1999
_________________________________________
STATED BLENDED UAL PARTICIPANT
RETURN INCOME STOCK LOAN
FUND FUND FUND FUND TOTAL
____ ____ ____ ____ _____
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 2 $173,561 $ 67,311 $ 20,810 $704,952
CONTRIBUTIONS - 13,280 5,819 - 48,081
________ ________ _________ ________ ________
TRANSFERS
BETWEEN FUNDS - 6,771 (16,588) (9,756) -
________ ________ _________ ________ ________
TRANSFERS
BETWEEN PLANS - 547 (192) - (646)
________ ________ _________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - - 27,539
Interest - 10,763 - 1,623 12,503
Net appreciation
(depreciation)
in value of investments - - 6,792 - 118,702
________ ________ _________ ________ ________
- 10,763 6,792 1,623 158,744
________ ________ _________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS - (18,538) (4,202) (63) (56,993)
________ ________ _________ ________ ________
PARTICIPANT LOANS - (2,160) (1,080) 9,376 -
________ ________ _________ ________ ________
ADMINISTRATIVE
EXPENSES - (60) (80) - (220)
________ ________ _________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year
________ ________ _________ ________ ________
$ 2 $184,164 $ 57,780 $ 21,990 $853,918
________ ________ _________ ________ ________
________ ________ _________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1998
_________________________________________
EQUITY- GROWTH GOVERNMENT
MAGELLAN INCOME COMPANY SECURITIES
FUND FUND FUND FUND
____ ____ ____ ____
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $37,400 $24,586 $106,170 $ 1,100
________ ________ ________ ________
CONTRIBUTIONS 2,567 1,210 4,868 183
________ ________ ________ ________
TRANSFERS
BETWEEN FUNDS 3,793 (1,818) (11,329) 1,670
________ ________ ________ ________
TRANSFERS
BETWEEN PLANS (137) (120) (515) (2)
________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 2,874 1,446 10,927 104
Interest - - 43 -
Net appreciation
(depreciation)
in value of investments 5,808 1,289 6,121 61
________ ________ ________ _______
8,682 2,735 17,091 165
________ ________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS (3,687) (2,555) (8,686) (294)
________ ________ ________ ________
PARTICIPANT LOANS (724) (178) (1,377) (25)
________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (11) (7) (19) -
________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $47,883 $23,853 $106,203 $ 2,797
________ ________ ________ ________
________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1998
_________________________________________
OTC OVERSEAS BALANCED ASSET
PORTFOLIO FUND FUND MANAGER
_________ ____ ____ _______
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
Beginning of year $20,180 $23,468 $39,020 $6,454
________ ________ ________ ________
CONTRIBUTIONS 1,345 1,451 1,572 301
________ ________ ________ ________
TRANSFERS
BETWEEN FUNDS (1,820) (4,033) (874) (398)
________ ________ ________ ________
TRANSFERS
BETWEEN PLANS (76) (92) (148) 33
________ ________ ________ _______
RESULTS OF INVESTMENT
ACTIVITY
Dividends 2,066 1,209 5,967 606
Interest - - - -
Net appreciation
(depreciation)
in value of investments 1,369 1,354 733 222
________ ________ ________ _______
3,435 2,563 6,700 828
________ ________ ________ _______
PAYMENTS TO PLAN
PARTICIPANTS (1,747) (2,085) (3,811) (649)
________ ________ ________ ________
PARTICIPANT LOANS (250) (337) (384) (78)
________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (3) (4) (8) (1)
________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS, $21,064 $20,931 $42,067 $ 6,490
end of year
________ ________ ________ ________
________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1998
_________________________________________
RETIREMENT U.S. U.S.
ASSET ASSET MONEY BOND EQUITY
MANAGER: MANAGER: MARKET INDEX INDEX
GROWTH INCOME PORTFOLIO PORTFOLIO PORTFOLIO
______ ______ _________ _________ _________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
Beginning of year $ 8,846 $ 1,639 $ 4,768 $ 1,033 $134,042
________ ________ ________ ________ _________
CONTRIBUTIONS 785 79 336 45 4,242
________ ________ ________ ________ _________
TRANSFERS
BETWEEN FUNDS (186) 170 2,376 1,169 (3,067)
________ ________ ________ ________ _________
TRANSFERS
BETWEEN PLANS (33) (4) (3) (1) (694)
________ ________ ________ ________ _________
RESULTS OF
INVESTMENT
ACTIVITY
Dividends 946 117 330 98 -
Interest - - - - 10
Net appreciation
(depreciation)
in value of investments 329 31 (42) 37 30,275
________ ________ ________ ________ __________
1,275 148 288 135 30,285
________ ________ ________ ________ __________
PAYMENTS TO PLAN
PARTICIPANTS (814) (364) (735) (64) (11,770)
________ ________ ________ ________ __________
PARTICIPANT LOANS (113) (15) (130) (12) (1,649)
________ ________ ________ ________ __________
ADMINISTRATIVE
EXPENSES (2) - (2) - (23)
________ ________ ________ ________ __________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 9,758 $ 1,653 $ 6,898 $ 2,305 $151,366
________ ________ ________ ________ _________
________ ________ ________ ________ _________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
______________________________________________________________
(In Thousands)
Year ended November 30
_________________________________________
1998
_________________________________________
STATED BLENDED UAL PARTICIPANT
RETURN INCOME STOCK LOAN
FUND FUND FUND FUND TOTAL
____ ____ ____ ____ _____
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year - $177,841 $62,544 $21,199 $670,290
________ ________ ________ ________ ________
CONTRIBUTIONS - 8,951 1,606 - 29,541
________ ________ ________ ________ ________
TRANSFERS
BETWEEN FUNDS - (2,991) 27,715 (10,377) -
________ ________ ________ ________ ________
TRANSFERS
BETWEEN PLANS 2 367 (183) - (1,606)
________ ________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - - 26,690
Interest - 11,490 1 1,679 13,223
Net appreciation
(depreciation)
in value of investments - - (17,507) - 30,080
________ ________ ________ ________ ________
- 11,490 (17,506) 1,679 69,993
________ ________ ________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS - (20,107) (5,647) (19) (63,034)
________ ________ ________ ________ ________
PARTICIPANT LOANS - (1,927) (1,129) 8,328 -
________ ________ ________ ________ ________
ADMINISTRATIVE
EXPENSES - (63) (89) - (232)
________ ________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 2 $173,561 $67,311 $20,810 $704,952
________ ________ ________ ________ ________
________ ________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
________________________________________________
NOTES TO FINANCIAL STATEMENTS
_____________________________
1. DESCRIPTION OF THE PLAN
_______________________
This description is for general information purposes only. Participants
should refer to their summary plan description for detailed benefit
information.
a. General and Plan Participants
_____________________________
The United Air Lines, Inc. Ground Employees'401(k) Retirement Savings
Plan (the "Plan") covers all employees of United Air Lines, Inc.
("United") who are represented by the International Association of
Machinists and Aerospace Workers ("IAM"), (with the exception of the
public contact employees who participate in the Management and Salaried
Employees 401(k) Retirement Savings Plan). Eligible employees are
eligible to become participants on their date of hire. The Plan is
contributory and is subject to the Employee Retirement Income Security
Act of 1974, as amended.
b. Contributions and Vesting
_________________________
Eligible employees may elect to contribute to the Plan, in multiples
of 1%, any percentage of their covered pretax earnings, up to 15%,
subject to a maximum of $10,000 in 1998 and in 1999. Lower limits
may apply to certain highly compensated participants if the Plan does
not pass certain nondiscrimination tests required by law. Contributions
and earnings are credited to separate accounts maintained for each
participant. The balance in a participant's account is fully vested
and nonforfeitable at all times. Section 415(c) of the Internal
Revenue Code limits the total amount of contributions from all
qualified defined contribution retirement plans to the lesser of 25% of
annual taxable earnings or $30,000.
Participants may elect to invest in one or a combination of the
investment funds described in note (1)(d). Additionally, they may
subsequently change their contribution rate, redesignate the
allocation of contributions or transfer existing balances among
investment funds, subject to the limits set forth in the Plan.
Contributions include $2,039,582 and $1,347,836 for 1999
and 1998, respectively, which were transferred from other
qualified plans as rollovers under Internal Revenue Code
Sections 402(c) and 408(d).
c. Trustee and Recordkeeper
________________________
Fidelity Management Trust Company ("Fidelity") is the Plan Trustee and
Fidelity Institutional Retirement Services Company is the recordkeeper
of the Plan.
d. Master Trust Funds
__________________
Fidelity provides each participant with fifteen investment options:
Fidelity Magellan Fund; Fidelity Equity-Income Fund; Fidelity Growth
Company Fund; Fidelity Government Securities Fund; Fidelity OTC
Portfolio; Fidelity Overseas Fund; Fidelity Balanced Fund; Fidelity
Asset Manager; Fidelity Asset Manager:Growth; Fidelity Asset Manager:
Income; Fidelity Retirement Money Market Portfolio; Fidelity U.S. Bond
Index Portfolio; Fidelity U.S. Equity Index Portfolio; Blended Income
Fund and the UAL Stock Fund. These funds are managed by Fidelity or
Fidelity Investments (manager of Fidelity Mutual Funds). The
investments represent the Plan's allocable share of the funds.
The Stated Return Fund is invested in Connecticut General's general
portfolio. The investment and interest earned on the Stated Return
Fund are guaranteed against loss by Connecticut General. Interest is
credited monthly to the participant's account and is net of
administrative expenses. The rate of interest for any period of time
is determined by Connecticut General and may be changed from time to
time. Any such change will be declared in advance and will become
effective as of the first day of the month immediately following the
date the notice is given. However, no further contributions can be
made to this fund.
The Fidelity U.S. Equity Index Portfolio primarily invests in the
common stocks of the companies that make up the S&P 500 Index.
Assets are valued at market prices as quoted on the New York Stock
Exchange ("NYSE").
Assets in the UAL Stock Fund are invested in UAL Corporation common
stock and are valued at market prices as quoted on the NYSE.
Participants may invest in the UAL Stock Fund through direct salary
deferrals.
The Blended Income Fund includes investment contracts purchased by
Fidelity from approved institutions that meet its stringent credit
standards at the time of purchase. The fund may also include other
high quality, income-oriented investments. The contracts held by the
Blended Income Fund are fully benefit responsive, and accordingly,
have been included in the financial statements at contract value. There
are no reserves against contract value for credit risk of the contract
issuers or otherwise. The fair value of the investment contracts at
November 30, 1999 and 1998 were $179,396 and $179,856 (in thousands),
respectively. The average yield for the years ending November 30, 1999
and 1998 was approximately 6.2%. The crediting interest rates as of
November 30, 1999 and 1998 were approximately 5.9% and 5.7%,
respectively. At November 30, 1999 and 1998, the contract value of the
investment contracts approximated the fair value.
The remaining investment options are public mutual funds traded on the
NYSE. Portfolio securities and other assets are valued primarily on
the basis of market quotations or, if quotations are not readily
available, by a method which each fund's Board of Trustees believes
accurately reflects fair value. Foreign securities are valued based
on quotations from the primary market in which they are traded and are
translated from the local currency into U.S. dollars using current
exchange rates.
The Fidelity Magellan Fund invests primarily in securities of domestic,
foreign, and multinational issuers in the form of common stocks,
securities convertible into common stocks, and, occasionally, debt
securities.
The Fidelity Equity-Income Fund invests primarily in income-producing
equity securities, both domestic and foreign. It seeks to achieve
income greater than that of the S&P 500.
The Fidelity Growth Company Fund invests in common stocks, securities
convertible into common stocks, and, occasionally, debt obligations
from companies viewed as having unusual opportunities to grow.
The Fidelity Government Securities Fund invests primarily in fully
guaranteed U.S. government bonds. The average maturity is
approximately two to five years.
The Fidelity OTC Portfolio primarily invests in stocks traded in the
"over-the-counter" market, which involves the investment in securities
of smaller, lesser-known companies.
The Fidelity Overseas Fund normally invests at least 65% of its total
assets in common stock, securities convertible to common stock and debt
instruments of foreign businesses and governments. Fidelity Investments
expects to invest most of the assets in developed countries in these
general geographic areas; the Americas (other than the United States),
the Far East and Pacific Basin, and Western Europe.
The Fidelity Balanced Fund maintains a balance of high-yielding
securities, including foreign and domestic stocks and bonds. At least
25% of the assets are invested in fixed-income senior securities.
All bonds in the Fund's portfolio are rated BBB or better by Standard
& Poor's Corporation, or Baa or better by Moody's Investors Service,
Inc.
The Fidelity Asset Manager invests in stocks, bonds and short-term
instruments in both domestic and foreign markets to achieve high total
returns in the long run. The allocation between these three types of
investments is generally 40%, 40%, and 20%, respectively, however it
may vary between the following ranges: stocks - 10% to 60%; bonds - 20%
to 60%; and short-term instruments - 0% to 70%.
The Fidelity Asset Manager: Growth: invests in stocks, bonds and
short-term instruments in both domestic and foreign markets to
achieve long term maximum total investment return. The allocation
between these three types of investments is generally 65%, 30%, and 5%,
respectively, however it may vary between the following ranges: stocks
- 0% to 100%; bonds - 0% to 100%; and short-term instruments - 0% to
100%.
The Fidelity Asset Manager: Income: invests in stocks, bonds and
short-term instruments in both domestic and foreign markets to
achieve a high level of current income, and capital appreciation.
The allocation between these three types of investments is generally
20%, 30%, and 50%, respectively, however it may vary between the
following ranges: stocks - 0% to 35%; bonds- 20% to 45%; and short-term
instruments - 20% to 80%.
The Fidelity Money Market Trust: Retirement Money Market Portfolio:
invests in high quality, low risk domestic and foreign money market
instruments, primarily short-term instruments with maturities of
three months or less.
The Fidelity U.S. Bond Index Portfolio primarily invests in securities
included in the Lehman Brothers Aggregate Bond Index in order to
achieve comparable investment results.
Fidelity is authorized to engage in the lending of certain Plan
assets. Securities lending is an investment management enhancement
that utilizes the existing securities of the Funds to earn additional
income. It involves the loan of securities to various approved brokers.
In return for loaned securities, Fidelity receives collateral in the
form of cash and U.S. government securities as a safeguard against
possible default of any borrower on return of the loan. Each loan
is collateralized to the extent of 100 percent of the market value of
securities on loan. The collateral is marked-to-market on a daily
basis to maintain the margin requirement.
e. Withdrawals
___________
Withdrawals from the Plan may be made as follows, as applicable to the
participant's eligibility, amount requested, and existing balances:
Participants who have separated from service (for reasons other than
death) may elect payment in the form of a lump sum, periodic
distributions, irregular partial distributions, or through the
purchase of an annuity. Distributions may also be directly rolled
over into an IRA or qualified plan. Participants who have
terminated employment are able to defer the distribution of the
account until April 1 of the next calendar year after reaching age
70-1/2.
Distributions of accounts due to the death of a participant may be
taken by the participant's beneficiary in the form of a lump sum
payment or through the purchase of an annuity, subject to the
limitations of Internal Revenue Code 401(a)(9). The participant's
surviving spouse, if any, is automatically the beneficiary of the
account, unless the spouse waives this right.
In-service withdrawals for participants who are actively employed
or are absent due to reasons of illness, or approved leave of
absence who maintain an employer-employee relationship with United
Air Lines, Inc. are permitted as follows:
- Hardship withdrawals from 401(k) account, subject to restrictions
described in the Plan
- After reaching age 59-1/2, subject to certain requirements
specified in the Plan, all or a portion of the participant's
401(k) account may be withdrawn
- Upon reaching age 70-1/2, minimum distributions required under
Internal Revenue Code 401(a)(9) must be taken no later than April
1 following the calendar year that the participant has reached
age 70-1/2. Effective January 1, 1997, active participants that
have reached age 70-1/2 may choose to defer distribution.
If a participant's account has never exceeded $3,500, total
distribution of the account will be made in a lump sum payment
upon termination of employment or death.
Generally, withdrawals are allocated pro-rata to the balances of
each of the investment funds in the participant's account.
Distributions from UAL Stock Fund, may be made in cash, or in whole
shares of UAL Corporation common stock, with fractional shares
distributed in cash.
f. Plan Termination Provisions
___________________________
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions
of ERISA. If the Plan is terminated, all amounts credited to a
participant's account at the time of termination shall be retained in
the Trust and will be distributed in accordance with the normal
distribution rules of the Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
_______________________________
a. Basis of Accounting
___________________
The financial statements are presented on the accrual basis.
b. Investments
___________
Assets of United's 401(k) Plans Master Trust are owned by all
participating United plans consisting of the Management and
Salaried Employees's 401(k) Retirement Savings Plan, Ground
Employees' 401(k) Retirement Savings Plan, and the Flight
Attendant Employees' 401(k) Retirement Savings Plan.
Allocations of the net assets, at market value, of the Master Trust to
participating plans as of November 30, 1999 and 1998, are as follows:
(in thousands) 1999 1998
--------------- ----------------
Amount Percent Amount Percent
-------- ------- ------ -------
Management and Salaried Employees'
401(k) Retirement Savings Plan $1,233,979 39.24% $993,424 39.83%
Ground Employees'
401(k) Retirement Savings Plan 853,918 27.15% 704,952 28.27%
Flight Attendant Employees'
401(k) Retirement Savings Plan 1,057,121 33.61% 795,542 31.90%
---------- ------- -------- -------
$3,145,018 100.00% $2,493,918 100.00%
---------- ------- ---------- -------
---------- ------- ---------- -------
c. Net Appreciation (Depreciation) in Value of Investments
_______________________________________________________
Net appreciation (depreciation) in value of investments includes
realized and unrealized gains and losses. Realized and unrealized
gains and losses are calculated as the difference between fair
value at December 1, or date of purchase if subsequent to December
1, and fair value at date of sale or the current year-end. The
unrealized gain or loss on investments represents the Plan's
allocable share of the difference between fair value at December 1,
or date of purchase, and the fair value at the date of sale or the
current year-end plus, where applicable, the change in the exchange
rate between the U.S. dollar and the foreign currency in which the
assets are denominated from December 1, or the date of purchase, to
the date of sale or the current year-end.
d. Plan Expenses
_____________
Administrative expenses represent administrative and investment
manager fees charged by Fidelity, accountant fees, recordkeeping
fees charged by Fidelity Institutional Retirement Services Co. and
some administrative fees charged by United. Brokerage and other
investment fees are included in the cost of the related security.
United performs certain reporting and supervisory functions for the
Plan without charge.
e. Transfers between Plans
_______________________
Transfers between plans reflects the change in employee coverage and
transfer of any related balances between this Plan and other defined
contribution plans sponsored by United, including the United Air Lines,
Inc. Management and Salaried Employees' 401(k) Retirement Savings Plan
and the United Air Lines, Inc. Flight Attendant Employees' 401(k)
Retirement Savings Plan.
f. Participant Loans
_________________
Participants may borrow up to fifty percent of their account balance,
not to exceed $50,000. The minimum that may be borrowed is $1,000.
Loans are charged against each investment fund in the ratio of the
value of the employee's interest in each fund to the total value of the
employee's interest in all funds and are held in the Loan Fund.
The loan is repaid through payroll deductions on an after-tax basis
for the term of the loan, which is a minimum of six months to a
maximum of sixty months and is subject to a reasonable rate of interest
(9.5% as of December 31, 1999). The amount paid is reinvested in the
participant's account based on the investment allocations at the time
of repayment. Prepayment of the full balance of the loan is allowed
after six months from the date of the loan without penalty.
Participants are able to take out another loan after twelve months
from the date the old loan is retired. Upon the employee's termination
of employment, a loan not paid in full within 60 days becomes a taxable
distribution. Loans in default may be declared due and payable in full
immediately, and the Plan administrator may charge the participant's
account balances at any time thereafter for the amount of the default.
An administrative fee of $90 is charged to each participant taking a
loan and is automatically deducted from the participant's account.
g. Use of Estimates
________________
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of net assets
available for plan benefits and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of changes in net assets available for plan benefits during
the reporting period. Actual results could differ from those estimates.
3. TAX STATUS
__________
The Internal Revenue Service has determined and informed the Company by
letter dated June 18, 1996, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable provisions of the IRC.
Signature
_________
Pursuant to the requirements of the Securities Exchange Act of 1934, the
United Air Lines, Inc. Pension and Welfare Plans Administration Committee has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
United Air Lines, Inc.
Ground Employees' 401(k)
Retirement Savings Plan
_______________________
Dated May 30, 2000 By /s/ Frederic F. Brace
________________________
Frederic F. Brace
Member, United Air
Lines, Inc. Pension
and Welfare Plans
Administration Committee
Exhibit 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K for the year ended November 30, 1999,
into UAL's previously filed Form S-8 and Post Effective Amendment No.1 to Form
S-8 Registration Statement (File No. 33-44552), Form S-8 Registration Statement
(File No. 33-57331), Form S-8 Registration Statement (File No. 333-03041), and
Form S-8 Registration Statement (File No. 333-63181) for the United Air Lines,
Inc. Ground Employees' 401(k) Retirement Savings Plan.
Arthur Andersen LLP
Chicago, Illinois
May 30, 2000