EXHIBIT 99
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 December 31, 1998
Employees' Stock Purchase Plan of UAL Corporation
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(Full title of the Plan)
UAL Corporation
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(Employer sponsoring the Plan, issuer of the
participations in the Plan and issuer of
the shares held pursuant to the Plan)
1200 Algonquin Road, Elk Grove Township, Illinois
Mailing Address:
UAL Corporation, P.O.Box 66919, Chicago, Illinois 60666
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(Address of principal executive offices)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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To UAL Corporation:
We have audited the accompanying statements of financial position
of the Employees' Stock Purchase Plan of UAL Corporation (the
"Plan") as of December 31, 1998 and 1997 and the related
statements of changes in participants' equity for each of the
three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Plan's
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's 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 financial position
of the Plan as of December 31, 1998 and 1997 and the changes in
its participants' equity for each of the three years in the
period ended December 31, 1998, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 15, 1999
Signature
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Pursuant to the requirements of the Securities Exchange Act of
1934, the sponsor and issuer of the participants of the Plan, UAL
Corporation has duly caused this Annual Report to be signed on
its behalf by the undersigned thereunto duly authorized.
UAL Corporation
Administrator
Dated March 12, 1999 By /s/ Douglas A. Hacker
Douglas A. Hacker
Senior Vice President and
Chief Financial Officer
EMPLOYEES' STOCK PURCHASE PLAN
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OF UAL CORPORATION
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STATEMENTS OF FINANCIAL POSITION
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(In Thousands, Except Number of Shares)
December 31
1998 1997
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ASSETS
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Participants' payroll deductions
receivable from UAL Corporation $ 369 $ 684
Investment in common stock of
UAL Corporation, at quoted market
value (1998 - 528,112 shares, cost
$21,208; 1997 - 506,971 shares, cost
$17,283). 31,522 46,895
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$ 31,891 $ 47,579
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LIABILITIES AND PARTICIPANTS' EQUITY
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Payable to terminating and partially
withdrawing participants, at
quoted market value (1998 - 6,172
shares, cost $ 368; 1997 - 170
shares, cost $ 16). $ 368 $ 16
Participants' equity 31,523 47,563
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$ 31,891 $ 47,579
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The accompanying notes to financial statements are an integral
part of these statements.
EMPLOYEES' STOCK PURCHASE PLAN
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OF UAL CORPORATION
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STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
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(In Thousands)
Year Ended December 31
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1998 1997 1996
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Balance at beginning of year $ 47,563 $ 32,247 $ 22,146
Increase (decrease) during year:
Participants' payroll deductions 5,810 5,576 3,849
Realized gain on stock distributed
to participants 150 3,682 1,312
Unrealized appreciation (depreciation)
in value of investment (19,298) 11,501 8,086
Stock and cash for fractional shares
distributed or amounts payable to
participants, at market value (2,702) (5,443) (3,146)
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(16,040) 15,316 10,101
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Balance at end of year $ 31,523 $ 47,563 $ 32,247
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The accompanying notes to financial statements are an integral
part of these statements.
EMPLOYEES' STOCK PURCHASE PLAN
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OF UAL CORPORATION
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NOTES TO FINANCIAL STATEMENTS
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(1) The Plan
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The Employees' Stock Purchase Plan of UAL Corporation (the
"Plan") is sponsored by UAL Corporation ("UAL"). UAL offers
participation in the Plan to eligible employees of UAL and its
subsidiaries.
(2) Purchase and Distribution of Stock
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Purchases are made by the Plan monthly, and the shares purchased
are credited to the accounts of each participant on the basis of
the ratio of the participant's contribution to total
participants' contributions for the month. The cost of common
stock purchased for the Plan includes all brokerage charges
involved in the purchase.
When shares of stock are distributed to the individual
participants pursuant to the terms of the Plan, the market value
of such shares is removed from the investment account of the
Plan.
Terminating participants receive a certificate for the full
number of shares, plus cash for the fractional shares, held for
their accounts. Partially withdrawing participants receive
certificates for the full number of shares withdrawn. There are
no forfeiture provisions under the Plan with respect to
participants' contributions.
(3) Investment in Common Stock of UAL
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The investment in common stock of UAL is valued at the year-end
published market prices as reported by the New York Stock
Exchange.
(4) Realized Gain on Stock Distributed to Participants
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Gains on stock distributed to participants are realized to the
extent of the difference between the weighted average cost of
shares distributed and the market value at the date of
distribution.
(5) Unrealized Appreciation (Depreciation) in Value of Investment
- ------------------------------------------------------------------
The unrealized appreciation (depreciation) in the value of
investment is the change from the prior year-end to the current
year-end in the difference between the market value and the cost
of the investment.
The following is a summary of unrealized appreciation
(depreciation):
1998 1997 1996
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(In Thousands)
Balance at beginning of year $ 29,612 $ 18,111 $ 10,025
Increase (decrease) during year (19,298) 11,501 8,086
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Balance at end of year $ 10,314 $ 29,612 $ 18,111
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(6) Administrative Expenses of the Plan
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All administrative expenses of the Plan are paid by UAL.
(7) Federal Income Tax
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Under existing federal income tax laws, the Plan is not subject
to federal income tax. Any dividend income is taxable to the
participants upon distribution and receipt. When any shares of
stock or rights acquired under the Plan are sold by or for a
participant, any gain or loss must be recognized by that
participant.
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation of our report included in Exhibit 99 of the UAL
Corporation Form 10-K for the year ended December 31, 1998, into
the Company's previously filed Post-Effective Amendment No. 1 to
Form S-8 (File No. 2-67368) and Post-Effective Amendment No. 2 to
Form S-8 (File No. 33-37613) for the Employees' Stock Purchase
Plan of UAL Corporation.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Chicago, Illinois
March 15, 1999