-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V/gO9sUAWfOrmCBTNmkWxQxX0kRsQUJE8ZFpVQNA/U0CT7eeuOE0/7NuKQCMbYNM MUnOZkq+yDJ0R0u+/Jc66Q== /in/edgar/work/20000530/0000100517-00-000014/0000100517-00-000014.txt : 20000919 0000100517-00-000014.hdr.sgml : 20000919 ACCESSION NUMBER: 0000100517-00-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991130 FILED AS OF DATE: 20000530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UAL CORP /DE/ CENTRAL INDEX KEY: 0000100517 STANDARD INDUSTRIAL CLASSIFICATION: [4512 ] IRS NUMBER: 362675207 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-06033 FILM NUMBER: 645729 BUSINESS ADDRESS: STREET 1: 1200 ALGONQUIN ROAD CITY: ELK GROVE TOWNSHIP STATE: IL ZIP: 60007 BUSINESS PHONE: 8477004000 MAIL ADDRESS: STREET 1: 1200 ALGONQUIN ROAD CITY: ELK GROVE TOWNSHIP STATE: IL ZIP: 60007 FORMER COMPANY: FORMER CONFORMED NAME: ALLEGIS CORP DATE OF NAME CHANGE: 19880613 FORMER COMPANY: FORMER CONFORMED NAME: UAL INC DATE OF NAME CHANGE: 19870517 11-K 1 0001.txt 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 EX-23 2 0002.txt 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 -----END PRIVACY-ENHANCED MESSAGE-----