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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.
Management and Salaried 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. Management and Salaried
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. Management and Salaried
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.
______________________
MANAGEMENT AND SALARIED 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 $118,669 $80,978
Equity-Income Fund 40,633 43,815
Growth Company Fund 272,051 161,627
Government Securities Fund 4,905 6,622
OTC Portfolio 71,085 34,787
Overseas Fund 48,481 36,897
Balanced Fund 73,801 69,386
Asset Manager 14,251 13,385
Asset Manager: Growth 22,350 20,191
Asset Manager: Income 2,999 3,307
Retirement Money Market Portfolio 17,123 12,680
U. S. Bond Index Portfolio 5,373 5,597
U. S. Equity Index Portfolio 271,009 236,757
Stated Return Fund 193 191
Blended Income Fund 209,245 200,372
UAL Stock Fund 40,445 48,816
Participant Loan Fund 21,366 18,016
_________ _________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $1,233,979 $993,424
_________ _________
_________ _________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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,
beginning of year $ 80,978 $ 43,815 $161,627 $ 6,622
________ ________ ________ _______
CONTRIBUTIONS
EMPLOYER 54 20 30 2
EMPLOYEE 8,093 3,256 10,827 460
________ ________ ________ _______
8,147 3,276 10,857 462
TRANSFERS
BETWEEN FUNDS 13,610 (7,705) 12,642 (1,484)
________ ________ ________ ________
TRANSFERS
BETWEEN PLANS 48 10 60 (2)
________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 8,269 2,563 12,348 352
Interest 1 - 9 -
Net appreciation
(depreciation)
in value of investments 14,551 1,470 86,713 (446)
________ ________ ________ _______
22,821 4,033 99,070 (94)
________ ________ ________ _______
PAYMENTS TO PLAN
PARTICIPANTS (5,572) (2,449) (10,542) (569)
________ ________ ________ _______
PARTICIPANT LOANS (1,343) (336) (1,642) (29)
________ ________ ________ _______
ADMINISTRATIVE
EXPENSES (20) (11) (21) (1)
________ ________ ________ _______
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $118,669 $ 40,633 $272,051 $ 4,905
________ ________ ________ _______
________ ________ ________ _______
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 $ 34,787 $ 36,897 $ 69,386 $13,385
________ ________ ________ ________
CONTRIBUTIONS
EMPLOYER 15 8 7 9
EMPLOYEE 3,572 2,772 3,333 907
________ ________ ________ ________
3,587 2,780 3,340 916
-------- -------- -------- --------
TRANSFERS
BETWEEN FUNDS 11,089 (25) (779) (875)
________ ________ ________ ________
TRANSFERS
BETWEEN PLANS (13) 1 2 4
________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 4,505 729 10,125 2,548
Interest - - - -
Net appreciation
(depreciation)
in value of investments 20,101 10,476 (3,057) (840)
________ ________ ________ ________
24,606 11,205 7,068 1,708
-------- -------- -------- --------
PAYMENTS TO PLAN
PARTICIPANTS (2,494) (2,028) (4,770) (790)
________ ________ ________ ________
PARTICIPANT LOANS (472) (346) (435) (95)
________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (5) (3) (11) (2)
________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 71,085 $ 48,481 $ 73,801 $ 14,251
________ ________ ________ ________
________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 $ 20,191 $ 3,307 $ 12,680 $ 5,597 $236,757
CONTRIBUTIONS
EMPLOYER 16 2 10 3 28
EMPLOYEE 2,043 274 943 396 9,663
________ ________ ________ ________ ________
2,059 276 953 399 9,691
-------- -------- -------- -------- --------
TRANSFERS
BETWEEN FUNDS (1,652) (487) 6,204 (248) (8,023)
________ ________ ________ ________ ________
TRANSFERS
BETWEEN PLANS (2) (4) 8 1 (19)
________ ________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends 2,949 289 739 385 -
Interest - - - - -
Net appreciation
(depreciation)
in value of investments (214) (92) - (392) 48,314
________ ________ ________ ________ _______
2,735 197 739 (7) 48,314
________ ________ ________ ________ _______
PAYMENTS TO PLAN
PARTICIPANTS (773) (273) (3,272) (319) (13,238)
________ ________ ________ ________ _______
PARTICIPANT LOANS (204) (17) (185) (49) (2,443)
________ ________ ________ ________ _______
ADMINISTRATIVE
EXPENSES (4) - (4) (1) (30)
________ ________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 22,350 $ 2,999 $ 17,123 $ 5,373 $271,009
________ ________ ________ ________ ________
________ ________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 $ 191 $200,372 $ 48,816 $ 18,016 $993,424
CONTRIBUTIONS
EMPLOYER - 517 44 - 765
EMPLOYEE - 12,684 3,217 - 62,440
________ ________ ________ ________ ________
- 13,201 3,261 - 63,205
TRANSFERS
BETWEEN FUNDS (13) (658) (12,986) (8,610) -
________ ________ ________ ________ ________
TRANSFERS
BETWEEN PLANS 1 422 91 - 608
________ ________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - - 45,801
Interest 14 12,208 - 1,484 13,716
Net appreciation
(depreciation)
in value of investments - - 4,397 - 180,981
________ ________ ________ ________ ________
14 12,208 4,397 1,484 240,498
________ ________ ________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS - (13,974) (2,352) (93) (63,508)
________ ________ ________ ________ ________
PARTICIPANT LOANS - (2,246) (727) 10,569 -
________ ________ ________ ________ ________
ADMINISTRATIVE
EXPENSES - (80) (55) - (248)
________ ________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 193 $209,245 $ 40,445 $ 21,366 $1,233,979
________ ________ ________ ________ ________
________ ________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 $56,760 $39,851 $147,023 $ 2,205
________ ________ ________ _______
CONTRIBUTIONS
Employer 57 24 39 2
Employee 6,245 3,533 10,577 288
________ ________ ________ _______
6,302 3,557 10,616 290
________ ________ ________ _______
TRANSFERS
BETWEEN FUNDS 8,452 (1,313) (10,743) 4,129
________ ________ ________ ______
TRANSFERS
BETWEEN PLANS (247) 135 (154) (22)
________ ________ ________ _______
RESULTS OF INVESTMENT
ACTIVITY
Dividends 4,346 2,402 15,383 238
Interest - 54 - -
Net appreciation
(depreciation)
in value of investments 9,473 2,108 9,182 116
________ ________ ________ _______
13,819 4,564 24,565 354
PAYMENTS TO PLAN
PARTICIPANTS (3,264) (2,651) (8,207) (318)
________ ________ ________ _______
PARTICIPANT LOANS (830) (317) (1,454) (16)
________ ________ ________ _______
ADMINISTRATIVE
EXPENSES (14) (11) (19) -
________ ________ ________ _______
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $80,978 $43,815 $161,627 $ 6,622
________ ________ ________ _______
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 $ 29,254 $ 36,567 $ 58,457 $ 11,747
________ ________ ________ _______
CONTRIBUTIONS
Employer 19 12 8 10
Employee 3,342 3,193 3,654 808
________ ________ ________ _______
3,361 3,205 3,662 818
________ ________ ________ _______
TRANSFERS
BETWEEN FUNDS (1,054) (4,389) 1,217 26
________ ________ ________ _______
TRANSFERS
BETWEEN PLANS (31) (76) 41 (56)
________ ________ ________ _______
RESULTS OF INVESTMENT
ACTIVITY
Dividends 3,187 1,838 9,319 1,102
Interest - - - -
Net appreciation
(depreciation)
in value of investments 2,149 1,930 1,076 451
________ ________ ________ _______
5,336 3,768 10,395 1,553
________ ________ ________ _______
PAYMENTS TO PLAN
PARTICIPANTS (1,754) (1,816) (3,892) (590)
________ ________ ________ _______
PARTICIPANT LOANS (321) (358) (483) (111)
________ ________ ________ _______
ADMINISTRATIVE
EXPENSES (4) (4) (11) (2)
________ ________ ________ _______
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 34,787 $ 36,897 $ 69,386 $ 13,385
________ ________ ________ _______
________ ________ ________ _______
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 $ 16,971 $ 2,521 $ 7,565 $ 2,458 $194,677
________ ________ ________ ________ ________
CONTRIBUTIONS
Employer 23 2 10 3 27
Employee 2,119 226 1,031 400 9,813
________ ________ ________ ________ ________
2,142 228 1,041 403 9,840
________ ________ ________ ________ ________
TRANSFERS
BETWEEN FUNDS (286) 632 5,264 2,853 (582)
________ ________ ________ ________ _______
TRANSFERS
BETWEEN PLANS (134) (8) (15) (2) 116
________ ________ ________ ________ _______
RESULTS OF INVESTMENT
ACTIVITY
Dividends 1,851 196 532 249 -
Interest 16 - 48 26 -
Net appreciation
(depreciation)
in value of investments 662 70 - 109 45,689
________ ________ ________ ________ _______
2,529 266 580 384 45,689
PAYMENTS TO PLAN
PARTICIPANTS (877) (312) (1,534) (486) (10,814)
________ ________ ________ ________ ________
PARTICIPANT LOANS (150) (20) (217) (13) (2,140)
________ ________ ________ ________ ________
ADMINISTRATIVE
EXPENSES (4) - (4) - (29)
________ ________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 20,191 $ 3,307 $ 12,680 $ 5,597 $236,757
________ ________ ________ ________ _______
________ ________ ________ ________ _______
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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 - $194,639 $ 51,976 $ 15,902 $868,393
________ ________ ________ ________ ________
CONTRIBUTIONS
Employer - 673 62 - 971
Employee - 12,156 3,816 - 61,201
________ ________ ________ ________ ________
- 12,829 3,878 - 62,172
________ ________ ________ ________ ________
TRANSFERS
BETWEEN FUNDS (55) (6,439) 10,645 (8,357) -
________ ________ ________ ________ ________
TRANSFERS
BETWEEN PLANS 237 39 (122) - (299)
________ ________ ________ ________ ________
RESULTS OF INVESTMENT
ACTIVITY
Dividends - - - - 40,643
Interest 9 12,587 67 1,334 14,141
Net appreciation
(depreciation)
in value of
investments - - (13,959) - 59,056
________ ________ ________ ________ ________
9 12,587 (13,892) 1,334 113,840
________ ________ ________ ________ ________
PAYMENTS TO PLAN
PARTICIPANTS - (11,257) (2,635) (19) (50,426)
________ ________ ________ ________ ________
PARTICIPANT LOANS - (1,944) (782) 9,156 -
________ ________ ________ ________ ________
ADMINISTRATIVE
EXPENSES - (82) (72) - (256)
________ ________ ________ ________ ________
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 191 $200,372 $ 48,816 $ 18,016 $993,424
________ ________ ________ ________ ________
________ ________ ________ ________ ________
The accompanying notes to financial statements are an integral
part of these statements.
UNITED AIR LINES, INC.
______________________
MANAGEMENT AND SALARIED 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. Management and Salaried Employees' 401(k)
Retirement Savings Plan (the "Plan") covers Management, Administrative
and Public Contact Employees and Meteorologists of United Air Lines,
Inc. ("United"). 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 $2,902,771 and $2,129,843 for 1999 and 1998,
respectively, which were transferred from other qualified plans as
rollovers under Internal Revenue Code Sections 402(c) and 408(d).
Effective January 1, 1999, the Administrative employees hired
on or after February 1, 1994, no longer receive the two percent
contribution to the 401(k) plan. Effective June 1, 1999, Public Contact
employees also no longer receive the two percent contribution to the
401(k) plan.
Contributions on the Statement of Changes in Net Assets Available for
Plan Benefits for the years ended November 30, 1999 and 1998, have been
reduced by an accrual for the returns of excess annual additions of
$2,117 and $2,399,052, for the respective plan years,
as required under Internal Revenue Code Section 415(c).
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 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 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 values of the investment contracts at November
30, 1999 and 1998 were $203,828 and $200,758 (in thousands),
respectively. The average yield for the year 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 market-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' 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 Company 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. Ground 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 amount 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 July 16, 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.
Management and Salaried
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. 33-38613), and Form S-8 Registration Statement
(File No.333-63185) for the United Air Lines, Inc. Management and Salaried
Employees' 401(k) Retirement Savings Plan.
Arthur Andersen LLP
Chicago, Illinois
May 30, 2000