SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended November 30, 1994
Commission File No. 1-6033
United Air Lines, Inc.
Flight Attendant Employees' 401(k) Retirement Savings Plan
(Full title of the Plan)
United Air Lines, Inc.
(Employer sponsoring the Plan)
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 statement of net assets
available for plan benefits of the United Air Lines, Inc.
Flight Attendant Employees' 401(k) Retirement Savings Plan as
of November 30, 1994 and 1993, and the related statement of
changes in net assets available for plan benefits for the
years then ended. These financial statements are the
responsibility of the Plan Administrator. 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
Administrator, 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.
Flight Attendant Employees' 401(k) Retirement Savings Plan as
of November 30, 1994 and 1993, and the changes in its net
assets for the years then ended in conformity with generally
accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 26, 1995
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.
Flight Attendant Employees'
401(k) Retirement Savings Plan
Dated May 26, 1995 By /s/ Douglas A. Hacker
Douglas A. Hacker
Member, United Air
Lines, Inc. Pension
and Welfare Plans
Administration Committee
UNITED AIR LINES, INC.
FLIGHT ATTENDANT EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
November 30
1994 1993
INVESTMENT IN MASTER TRUST
Stated Return Fund $150,149 $150,418
U.S. Equity Index Commingled Pool 48,083 48,933
UAL Stock Fund 1,487 2,344
Blended Income Fund 27,881 16,743
Growth Company Fund 37,475 25,567
Overseas Fund 26,223 12,098
Balanced Fund 24,310 18,424
NET ASSETS AVAILABLE FOR PLAN BENEFITS $315,608 $274,527
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
FLIGHT ATTENDANT EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
Year ended November 30
1994
U.S. EQUITY
STATED INDEX UAL BLENDED
RETURN COMMINGLED STOCK INCOME
FUND POOL FUND FUND
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $150,418 $ 48,933 $ 2,344 $ 16,743
CONTRIBUTIONS - 3,014 925 7,964
TRANSFERS
BETWEEN FUNDS (7,850) (3,790) (1,512) 2,323
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - -
Interest 9,502 - - 1,313
Net appreciation
(depreciation)
in value of
investments - 549 (237) -
9,502 549 (237) 1,313
PAYMENTS TO PLAN
PARTICIPANTS (1,913) (623) (33) (404)
ADMINISTRATIVE
EXPENSES (8) - - (58)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $150,149 $ 48,083 $ 1,487 $ 27,881
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
FLIGHT ATTENDANT EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
Year ended November 30
1994
GROWTH
COMPANY OVERSEAS BALANCED
FUND FUND FUND TOTAL
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 25,567 $ 12,098 $ 18,424 $ 274,527
CONTRIBUTIONS 9,513 5,851 6,753 34,020
TRANSFERS BETWEEN FUNDS 2,715 7,601 513 -
RESULTS OF INVESTMENT
ACTIVITY
Dividends 2,592 205 950 3,747
Interest - - - 10,815
Net appreciation
(depreciation)
in value of
investments (2,428) 677 (1,814) (3,253)
164 882 (864) 11,309
PAYMENTS TO PLAN
PARTICIPANTS (481) (208) (510) (4,172)
ADMINISTRATIVE EXPENSES (3) (1) (6) (76)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 37,475 $ 26,223 $ 24,310 $ 315,608
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
FLIGHT ATTENDANT EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
Year ended November 30
1993
U.S. EQUITY
STATED INDEX UAL BLENDED
RETURN COMMINGLED STOCK INCOME
FUND POOL FUND FUND
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $149,895 $ 45,801 $ 1,046 $ 9,616
CONTRIBUTIONS - 3,283 1,004 7,703
TRANSFERS BETWEEN FUNDS (9,236) (4,381) (41) (1,181)
TRANSFERS BETWEEN PLANS - 2 1 2
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - -
Interest 11,381 - - 803
Net appreciation in
value of investments - 4,733 370 -
11,381 4,733 370 803
PAYMENTS TO PLAN
PARTICIPANTS (1,603) (500) (36) (159)
ADMINISTRATIVE EXPENSES (19) (5) - (41)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $150,418 $ 48,933 $ 2,344 $ 16,743
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
FLIGHT ATTENDANT EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
Year ended November 30 1993
GROWTH
COMPANY OVERSEAS BALANCED
FUND FUND FUND TOTAL
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 9,222 $ 3,620 $ 7,008 $ 226,208
CONTRIBUTIONS 7,594 3,180 5,712 28,476
TRANSFERS BETWEEN FUNDS 6,784 3,869 4,186 -
TRANSFERS BETWEEN PLANS 1 - 1 7
RESULTS OF INVESTMENT
ACTIVITY
Dividends 442 425 1,152 2,019
Interest - - - 12,184
Net appreciation in
value of investments 1,704 1,110 491 8,408
2,146 1,535 1,643 22,611
PAYMENTS TO PLAN
PARTICIPANTS (176) (105) (121) (2,700)
ADMINISTRATIVE EXPENSES (4) (1) (5) (75)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 25,567 $ 12,098 $ 18,424 $ 274,527
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
FLIGHT ATTENDANT 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 and
individual employee benefit statement for detailed benefit information.
a. General and Plan Participants
The United Air Lines, Inc. Flight Attendant Employees' 401 (k)
Retirement Savings Plan ("Plan") covers all employees of United
classified as flight attendants and who are members of the
Association of Flight Attendants. The Plan is contributory and is
subject to the Employee Retirement Income Security Act of 1974.
b. Contributions and Vesting
Eligible employees may elect to contribute to the Plan, in
multiples of 1%, any percentage of their covered earnings, up to
25%, subject to a maximum of $9,240 in 1994 and in 1995. 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. Participants are immediately
vested in their employee contributions.
Participants may elect to invest in one or a combination of the
investment funds described in note (1)(e). 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 $8,084 and $47,268 for 1994 and 1993,
respectively, which were transferred from other qualified plans as
rollovers under IRS Code Sections 401(a) and 401(k).
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
The Stated Return Fund is invested in Connecticut General's general
portfolio. The investment in 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. The net rate
for 1994 and 1993 were 6.47% and 7.83%, respectively. However, no
further contributions can be made to this fund.
Fidelity provides each participant with six investment options:
Fidelity U.S. Equity Index Commingled Pool; UAL Stock Fund; Blended
Income Fund; Fidelity Growth Company Fund; Fidelity Overseas Fund;
and the Fidelity Balanced 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 Fidelity U.S. Equity Index Commingled Pool primarily invests in
the common stocks of the companies that make up the S&P 500 Index.
Assets are valued at market prices 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 quoted on the NYSE.
Participants may invest in the UAL Stock Fund through direct
earnings deferrals. Transfers into the UAL Stock Fund from other
funds are permitted except from the Blended Income Fund.
On July 12, 1994, UAL Corporation underwent a recapitalization
under Section 368(a)(1)(E) of the Internal Revenue Code of 1986,
pursuant to which the shareholders engaged in a recapitalization
exchange with UAL Corporation. Each share of Old Common Stock was
exchanged for a package consisting of one half of a share of New
Common Stock and $84.81 in cash. The cash consideration received
by the Trustee on behalf of Plan participants was used to purchase
additional shares of New Common Stock or, at the direction of Plan
participants, was transferred to other investment funds. Pursuant
to the terms of the recapitalization, participants' direct earnings
deferrals and fund transfers into the UAL Stock Fund were
temporarily suspended from July 12, 1994 to August 4, 1994.
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. Assets are valued at
contract 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 accurately believes 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 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 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.
Fidelity is authorized to engage in the lending of certain Plan
assets from the Balanced Fund and the U.S. Equity Index Commingled
Pool. 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 and Forfeitures
Withdrawals from the 401(k) Plan may be made as follows:
Termination of employment due to retirement or attainment of age
59-1/2 allows a participant to elect to withdraw a portion or
all of his account balance. Full distribution results in either
a lump sum payment or the purchase of an annuity. For the UAL
Stock Fund, distribution will be made in a combination of a
certificate for the whole shares with the remainder paid in cash
or all cash. Participants under age 70-1/2 may also elect to
have periodic withdrawals payable monthly, quarterly,
semi-annually or annually. Periodic withdrawals are made pro
rata from all funds and the UAL Stock Fund portion is paid in
cash. In the case of a retirement, the participant can leave his
account balance in the Plan until April 1 of the year following
the year he reaches age 70-1/2.
Termination of employment due to death results in either a lump
sum payment, the purchase of an annuity, or a combination of a
partial payment in cash and use of the balance to purchase an
annuity.
Termination of employment (for reasons other than retirement or
death) allows a participant to elect either a partial, periodic
lump sum payment, or the purchase of an annuity or combination.
For the UAL Stock Fund, distribution will be made in a
combination of a certificate for the whole shares with the
remainder paid in cash or all cash.
Withdrawals are permitted in certain hardship cases as described
in the Plan.
Withdrawal of the balance of a participant must be made by the
April 1 of the calendar year following the year he reaches age
70-1/2. Any account balance resulting from contributions or
earnings thereafter must be withdrawn at the end of each
subsequent calendar year.
In service withdrawal may be made from his employee after-tax
account only and will be made pro rata from all funds. The UAL
Stock portion will be paid in cash or shares. A certificate
will be issued for the whole shares with the remainder paid in
cash.
f. Plan Termination Provisions
If the 401(k) Plan is terminated, all amounts credited to a
participant's account at the time of termination shall be
retained in the Trust until the participant's termination of
employment and will then be distributed by one or a combination
of the following methods:
- by payment in a lump sum; or
- by purchase of a non-transferable annuity providing a
benefit in either a fixed or variable form of payment to
the extent offered by the insurance company.
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 & Salaried
Employees' 401(k) Retirement Savings Plan, Ground Employees' 401(k)
Retirement Savings Plan, and the Flight Attendant Employees' 401(k)
Retirement Savings Plan.
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 in the Overseas Fund
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 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.
3. TAX STATUS
The Plan obtained its latest determination letter on August 8, 1986.
The Internal Revenue Service stated that the Plan, as written, was in
compliance with the requirements of the Internal Revenue Code and that
the trust was tax exempt. The Plan has been amended since receiving
the determination letter and is currently in the process of being amended
to comply with the Tax Reform Act of 1986 and subsequent legislation and
final regulations thereunder. The Company will timely apply for a
determination letter from the Internal Revenue Service as to the
continued tax exemption of the trust and will make such amendments as
reasonably required by the IRS to obtain a favorable determination
letter.
4. SUBSEQUENT EVENT
In January 1995, Fidelity added nine investment options to the Plan.
They are Fidelity Asset Manager-Income, Fidelity Asset Manager,
Fidelity Asset Manager-Growth, Fidelity Retirement Money Market
Portfolio, Fidelity Government Securities Fund, Fidelity U.S. Bond
Index Portfolio, Fidelity Equity-Income Fund, Fidelity Magellan Fund,
and Fidelity OTC Portfolio.
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, 1994, into the Company's previously
filed Post Effective Amendment No. 1 to Form S-8 Registration
Statement (File No. 33-44553) for the United Air Lines, Inc.
Flight Attendant Employees' 401(k) Retirement Savings Plan.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
May 26, 1995
