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, 1995
Commission File No. 1-6033
United Air Lines, Inc.
Ground Employees' 401(k) Retirement Savings Plan
(Full title if 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. Ground Employees' 401(k) Retirement
Savings Plan as of November 30, 1995 and 1994, 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. Ground Employees' 401(k)
Retirement Savings Plan as of November 30, 1995 and
1994, and the changes in its net assets available
for plan benefits for the years then ended in
conformity with generally accepted accounting
principles.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 23, 1996
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 24, 1996 By /s/ Douglas A. Hacker
Douglas A. Hacker
Member, United Air
Lines, Inc. Pension
and Welfare Plans
Administration Committee
UNITED AIR LINES, INC.
GROUND EMPLOYEES' 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
(In Thousands)
November 30
1995 1994
INVESTMENT IN MASTER TRUST
Magellan Fund $ 22,021 $ -
Equity-Income Fund 4,421 -
Growth Company Fund 81,698 51,140
Government Securities Fund 629 -
OTC Portfolio 7,745 -
Overseas Fund 23,647 30,503
Balanced Fund 39,137 41,485
Asset Manager 3,192 -
Asset Manager: Growth 4,128 -
Asset Manager: Income 1,177 -
Retirement Money Market Portfolio 1,921 -
U.S. Bond Index Portfolio 471 -
U. S. Equity Index Portfolio 87,290 65,416
Blended Income Fund 188,516 156,636
Fixed Rate Investment Fund 55,160 94,088
UAL Stock Fund 9,877 3,017
Participant Loan Fund 19,552 18,582
NET ASSETS AVAILABLE FOR PLAN BENEFITS $550,582 $460,867
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
1995
EQUITY- GROWTH GOVERNMENT
MAGELLAN INCOME COMPANY SECURITIES
FUND FUND FUND FUND
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ - $ - $51,140 $ -
CONTRIBUTIONS 680 177 4,952 46
TRANSFERS
BETWEEN FUNDS 19,000 3,777 6,149 550
TRANSFERS
BETWEEN PLANS (23) - (107) -
RESULTS OF INVESTMENT
ACTIVITY
Dividends 31 48 1,892 22
Interest - - - -
Net appreciation
in value of investments 2,654 454 20,587 30
2,685 502 22,479 52
PAYMENTS TO PLAN
PARTICIPANTS (95) (11) (1,631) (12)
PARTICIPANT LOANS (223) (23) (1,268) (7)
ADMINISTRATIVE
EXPENSES (3) (1) (16) -
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $22,021 $ 4,421 $81,698 $ 629
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
1995
OTC OVERSEAS BALANCED ASSET
PORTFOLIO FUND FUND MANAGER
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ - $30,503 $41,485 $ -
CONTRIBUTIONS 229 3,149 3,247 233
TRANSFERS
BETWEEN FUNDS 6,626 (9,938) (8,526) 2,687
TRANSFERS
BETWEEN PLANS 10 (59) (52) 4
RESULTS OF INVESTMENT
ACTIVITY
Dividends 121 515 1,632 52
Interest - - - -
Net appreciation
in value of investments 804 939 3,448 387
925 1,454 5,080 439
PAYMENTS TO PLAN
PARTICIPANTS (13) (881) (1,678) (130)
PARTICIPANT LOANS (32) (574) (590) (40)
ADMINISTRATIVE
EXPENSES - (7) (9) (1)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 7,745 $23,647 $39,137 $ 3,192
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
1995
US
ASSET ASSET RETIREMENT US EQUITY
MANAGER: MANAGER: MONEY BOND INDEX
GROWTH INCOME MARKET INDEX PORTFOLIO
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ - $ - $ - $ - $65,416
CONTRIBUTIONS 490 62 336 45 3,739
TRANSFERS
BETWEEN FUNDS 3,235 1,018 1,622 384 (1,992)
TRANSFERS
BETWEEN PLANS (36) - - - (31)
RESULTS OF
INVESTMENT
ACTIVITY
Dividends - 29 72 21 -
Interest - - - - -
Net appreciation
in value of investments 604 91 - 25 24,380
604 120 72 46 24,380
PAYMENTS TO PLAN
PARTICIPANTS (95) (18) (78) - (2,883)
PARTICIPANT LOANS (69) (5) (31) (4) (1,321)
ADMINISTRATIVE
EXPENSES (1) - - - (18)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 4,128 $ 1,177 $ 1,921 $ 471 $87,290
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
1995
FIXED
BLENDED RATE UAL PARTICIPANT
INCOME INVESTMENT STOCK LOAN
FUND FUND FUND FUND TOTAL
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $156,636 $94,088 $ 3,017 $18,582 $460,867
CONTRIBUTIONS 12,150 (1,224) - - 28,491
TRANSFERS
BETWEEN FUNDS 20,368 (39,741) 3,150 (8,369) -
TRANSFERS
BETWEEN PLANS 339 27 1 - 73
RESULTS OF
INVESTMENT
ACTIVITY
Dividends - - - - 4,435
Interest 12,098 5,167 - 1,359 18,624
Net appreciation
in value of investments - - 3,969 - 58,372
12,098 5,167 3,969 1,359 81,431
PAYMENTS TO PLAN
PARTICIPANTS (10,076) (2,388) (149) - (20,138)
PARTICIPANT LOANS (2,923) (760) (110) 7,980 -
ADMINISTRATIVE
EXPENSES (76) (9) (1) - (142)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $188,516 $55,160 $ 9,877 $19,552 $550,582
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
1994
FIXED U.S. EQUITY
RATE INDEX UAL BLENDED
INVESTMENT COMMINGLED STOCK INCOME
FUND POOL FUND FUND
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $130,372 $66,016 $ 3,187 $111,542
CONTRIBUTIONS - 7,947 636 24,280
TRANSFERS
BETWEEN FUNDS (38,017) (4,559) (300) 24,579
TRANSFERS
BETWEEN PLANS 5 (25) (2) 7
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - -
Interest 8,108 - - 8,347
Net appreciation
(depreciation)
in value of investments - 708 (340) -
8,108 708 (340) 8,347
PAYMENTS TO PLAN
PARTICIPANTS (4,603) (3,106) (82) (9,225)
PARTICIPANT LOANS (1,750) (1,540) (81) (2,781)
ADMINISTRATIVE
EXPENSES (27) (25) (1) (113)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 94,088 $65,416 $ 3,017 $156,636
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
1994
GROWTH PARTICIPANT
COMPANY OVERSEAS BALANCED LOAN
FUND FUND FUND FUND TOTAL
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $36,624 $14,513 $32,779 $15,372 $408,405
CONTRIBUTIONS 9,601 5,214 7,028 - 54,706
TRANSFERS
BETWEEN FUNDS 8,754 10,617 5,454 (6,528) -
TRANSFERS
BETWEEN PLANS (18) (27) 7 - (53)
RESULTS OF
INVESTMENT
ACTIVITY
Dividends 3,604 248 1,779 - 5,631
Interest - - - 1,127 17,582
Net appreciation
(depreciation)
in value of investments (3,445) 1,012 (3,437) - (5,502)
159 1,260 (1,658) 1,127 17,711
PAYMENTS TO PLAN
PARTICIPANTS (853) (407) (1,418) - (19,694)
PARTICIPANT LOANS (1,109) (656) (694) 8,611 -
ADMINISTRATIVE
EXPENSES (18) (11) (13) - (208)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $51,140 $30,503 $41,485 $18,582 $460,867
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 and individual employee
benefit statement 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 members of the International Association of
Machinists and Aerospace Workers ("IAM"), have completed one year of
service and are at least 21 years of age. 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 $9,240 in 1995 and $9,500 in 1996. 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.
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 $136,107 and $44,465 for 1995 and 1994,
respectively, which were transferred from other qualified plans
as rollovers under Internal Revenue 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 Fixed Rate Investment Fund is invested under various group
annuity contracts with the following insurance companies:
(In Thousands)
Investment Balance as of
Annual November 30
Insurance Interest Contract
Company Rate Through 1995 1994
Massachusetts 8.58% 1994 $ - $36,993
Prudential 8.89% 1995 55,160 57,095
$55,160 $94,088
The Plan's fixed rate investments are stated at fair value and
represent amounts on deposit with the insurance companies plus net
investment earnings. Interest rates on the contracts are guaranteed
fixed rates through the end of the contracts. No further contributions
can be made to this fund.
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 Manger:
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 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 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.
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 stated at
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 with any maturity. 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.
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 and from January 12, 1995 to
March 15, 1995. On May 20, 1996 (with a May 6, 1996 record date),
UAL Common Stock underwent a 4 for 1 stock split. Shares held in
the UAL Stock Fund were adjusted accordingly.
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 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 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, layoff, or approved leave
of absence, and 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.
In the case that 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.
Alternatively, the participant may specify which fund(s) that
distribution is made from. 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
If the Plan is terminated, all amounts credited to a participant's
account at the time of termination shall be retained in the Trust
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.
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
Actively employed participants may borrow up to fifty percent of
their fund 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 (9.25% as of April 30, 1996). 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.
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 a revised determination letter
has been requested from the Internal Revenue Service.
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, 1995, 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) and Form
S-8 Registration Statement (File No. 333-03041) for the United Air
Lines, Inc. Ground Employees' 401(k) Retirement Savings Plan.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
May 24, 1996
