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, 1997
Employees' Stock Purchase Plan of UAL Corporation
-------------------------------------------------
(Full title of the Plan)
UAL Corporation
---------------
(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
----------------------------------------
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, 1997 and 1996 and the related
statements of changes in participants' equity for each of the
three years in the period ended December 31, 1997. 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, 1997 and 1996 and the changes in
its participants' equity for each of the three years in the
period ended December 31, 1997, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 26, 1998
Signature
- ---------
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
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Administrator
Dated March 26, 1998 By /s/ Douglas A. Hacker
Douglas A. Hacker
Senior Vice President and
Chief Financial Officer
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
STATEMENTS OF FINANCIAL POSITION
--------------------------------
(In Thousands, Except Number of Shares)
<TABLE>
<CAPTION>
December 31
1997 1996
---- ----
<S> <C> <C>
ASSETS
- ------
Participants' payroll deductions
receivable from UAL Corporation $ 684 $ 145
Investment in common stock of
UAL Corporation, at quoted market
value (1997 - 506,971 shares, cost
$17,283; 1996 - 525,053 shares, cost
$14,803 - Note 8). 46,895 32,914
------ ------
$47,579 $33,059
====== ======
LIABILITIES AND PARTICIPANTS' EQUITY
- ------------------------------------
Payable to terminating and partially
withdrawing participants, at
quoted market value (1997 - 170
shares, cost $ 6; 1996 - 12,943
shares, cost $388 - Note 8). $ 16 $ 812
Participants' equity 47,563 32,247
------ ------
$47,579 $33,059
====== ======
The accompanying notes to financial statements are an integral
part of these statements.
</TABLE>
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
STATEMENTS OF CHANGES IN PARTICIPANTS' EQUITY
---------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
Year Ended December 31
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $32,247 $22,146 $11,089
------ ------ ------
Increase (decrease) during year:
Participants' payroll deductions 5,576 3,849 2,975
Realized gain on stock distributed
to participants 3,682 1,312 1,208
Unrealized appreciation (depreciation)
in value of investment 11,501 8,086 10,408
Stock and cash for fractional
shares distributed or amounts
payable to participants, at
market value (5,443) (3,146) (3,534)
------ ------ ------
15,316 10,101 11,057
------ ------ ------
Balance at end of year $47,563 $32,247 $22,146
====== ====== ======
The accompanying notes to financial statements are an integral
part of these statements.
</TABLE>
EMPLOYEES' STOCK PURCHASE PLAN
OF UAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
-----------------------------
(1) The Plan
- -------------
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
- ---------------------------------------
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
- --------------------------------------
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
- -------------------------------------------------------
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):
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
Balance at beginning of year $18,111 $10,025 $ (383)
Increase (decrease) during year 11,501 8,086 10,408
------ ------ ------
Balance at end of year $29,612 $18,111 $10,025
====== ====== ======
(6) Administrative Expenses of the Plan
- ----------------------------------------
All administrative expenses of the Plan are paid by UAL.
(7) Federal Income Tax
- -----------------------
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.
(8) Stock Split
- ----------------
In April 1996, the shareholders of UAL approved a four-for-one
split of the UAL's common stock in the form of a 300% dividend
effective at the close of business on May 6, 1996.
</TABLE>
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 December 31, 1997, into UAL Corporation'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
Arthur Andersen LLP
Chicago, Illinois
March 26, 1998
