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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 31, 1998
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(Date of earliest event reported)
UAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-6033 36-2675207
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1200 Algonquin Road, Elk Grove Township, Illinois 60007
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 700-4000
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Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
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UAL Corporation (the "Company") is filing herewith a press
release issued today by the Company as Exhibit 99.1, which is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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Exhibit No. Description
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99.1 Press Release
SIGNATURES
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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 hereunto duly authorized.
UAL CORPORATION
By: /s/ Francesca M. Maher
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Name: Francesca M. Maher
Title: Senior Vice President,
General Counsel and Secretary
Dated: December 16, 1998
UAL SETS GOAL FOR RECORD 1999 FULLY DISTRIBUTED EPS
AND 2 PERCENT UNIT COST GROWTH IN 2000
United Airlines sets goal of $11.00 for fully distributed
earnings per share in 1999
Unit costs in 2000 targeted to grow just 2 percent over
1999 level
CHICAGO, December 16, 1998 - UAL Corporation (NYSE:UAL)
the holding company whose primary subsidiary is United
Airlines, has set a goal for record fully distributed**
earnings per share in 1999, the company said it will tell
analysts today. United also said it is seeking to limit fully
distributed unit cost growth to 2 percent in the year 2000
compared with 1999. This compares favorably to historic
industry cost growth rates, the company said.
In a presentation to the Society of Airline Analysts in
New York, United Airlines' President and Chief Operating
Officer James E. Goodwin will review the company's
expectations for 1999 and United's financial strategies.
The company said that consistent with its long-term
financial goal, it planned to produce another record year of
fully distributed earnings per share in 1999. In order to
achieve this, the company said it would need to maintain its
steady focus on cost control which would ensure that growth
in its fully distributed unit costs does not exceed one
percent for 1999.
United said its goal was to produce record fully
distributed earnings per share of $11.00 for 1999. However,
it noted that this estimate was subject to a number of
external factors affecting the industry and this may result
in fully distributed earnings per share in the range of
$10.00 to $12.00.
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Analysts will also hear how United Airlines plans to
continue controlling its costs effectively for the year
2000, when the ESOP share distribution period ends. In its
preview of expenses for the year 2000, the company said it
believed employees should receive compensation competitive
with peers, which would result in a material increase in
wage rates as new labor contracts are put in place.
However, the company has anticipated this by working on
several strategic cost containment initiatives. Based on
these initiatives, and assuming new labor contracts provide
for industry competitive compensation to employees, the
company expects fully distributed unit cost in the year 2000
to be only 2 percent above 1999's planned fully distributed
unit cost.
United Airlines Chairman and Chief Executive Officer
Gerald Greenwald said: "The company's continued efforts to
build an unrivaled global route network and unwavering
commitment to performance and service improvements are
helping United build a strong record of financial success.
While 1999 will continue to present United and its employees
with economic and competitive challenges, I am confident
that we will all work successfully together to achieve
financial and performance goals."
Safe Harbor Statement: Some of the information included in
this news release is forward-looking and involves risks and
uncertainties that could result in actual results differing
materially from expected results. It is not reasonably
possible to itemize all of the many factors and specific
events that could affect the outlook of an airline operating
in the global economy. Some factors that could
significantly impact expected fully distributed unit costs,
wage rates and fully distributed earnings per share include:
the success of the Company's cost-control efforts, Year 2000
readiness, wage rates of employee peer groups at the
company's competitors, compensation levels in the industry,
the status of the Company's relationships with the union
groups, the outcome of negotiations on new contracts with
the union groups, industry capacity decisions, the airline
pricing environment, the economic environment of the airline
industry, fuel prices, actions of the U.S., foreign and
local governments, the price of UAL common stock, the Asian
economic environment and travel patterns, foreign currency
exchange rate fluctuations and the general economic
environment.
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**Notes on accounting basis
While UAL Corporation reports its earnings under GAAP -
Generally Accepted Accounting Principles - a more complete
understanding of UAL Corporation's performance may be gained
by viewing the results on a pro-forma, fully distributed
basis. This presentation considers all ESOP shares that will
be issued to employees over the course of the ESOP period to
be immediately outstanding, thus "fully distributed."
Consistent with this presentation, the "ESOP compensation
expense" - which reflects the commitment of stock to
employees - is excluded from the full distributed expenses
and ESOP convertible preferred stock dividends are not
deducted from earnings attributable to common stockholders.
No adjustments are made to fully distributed earnings to
reflect future salary increases.