UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995, Commission File Number 33-21220*
UNITED AIR LINES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 36-2675206
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 East Algonquin Road, Elk Grove Township, Illinois 60007
Mailing Address: P.O. Box 66100, Chicago, Illinois 60666
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (708) 952-4000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class April 30, 1995
Common Stock ($5 par value) 200
* Registrant is the wholly-owned subsidiary of UAL Corporation
(File 1-6033). Registrant became subject to filing periodic
reports under the Securities Exchange Act of 1934 as a result of
a public offering of securities which became effective June 3,
1988 (Registration Nos. 33-21220 and 22-18246).
United Air Lines, Inc. and Subsidiary Companies
Report on Form 10-Q
For the Quarter Ended March 31, 1995
Index
Part I. Financial Information Page No.
Item 1. Financial statements:
Condensed statement of consolidated 3
financial position - as of March 31, 1995
(unaudited) and December 31, 1994
Statement of consolidated operations 5
(unaudited) - for the three months
ended March 31, 1995 and 1994
Condensed statement of consolidated 6
cash flows (unaudited) - for the three
months ended March 31, 1995 and 1994
Notes to consolidated financial 7
statements (unaudited)
Item 2. Management's discussion and analysis 10
of financial condition and results of
operations
Part II. Other Information
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 18
Exhibit Index 19
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
United Air Lines, Inc. and Subsidiary Companies
Condensed Statement of Consolidated Financial Position
(In Millions)
<TABLE>
<CAPTION>
March 31,
1995 December 31,
Assets (Unaudited) 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 490 $ 444
Short-term investments 1,020 857
Receivables, net 970 887
Related party receivables - 77
Inventories, net 294 285
Deferred income taxes 156 155
Prepaid expenses and other 268 335
3,198 3,040
Operating property and equipment:
Owned 10,841 10,811
Accumulated depreciation and amortization (4,886) (4,775)
5,955 6,036
Capital leases 1,132 1,132
Accumulated amortization (460) (447)
672 685
6,627 6,721
Other assets:
Intangibles, net 754 762
Deferred income taxes 501 479
Related party receivables 564 570
Other 398 380
2,217 2,191
$12,042 $11,952
</TABLE>
See accompanying notes to consolidated financial statements.
United Air Lines, Inc. and Subsidiary Companies
Condensed Statement of Consolidated Financial Position
(In Millions)
<TABLE>
<CAPTION>
March 31,
1995 December 31,
Liabilities and Stockholder's Equity (Unaudited) 1994
<S> <C> <C>
Current liabilities:
Short-term borrowings $ 269 $ 269
Current portions of long-term debt
and capital lease obligations 211 439
Advance ticket sales 1,275 1,020
Accounts payable 612 657
Other 2,569 2,508
4,936 4,893
Long-term debt 2,854 2,849
Long-term obligations under capital leases 694 727
Other liabilities and deferred credits:
Deferred pension liability 574 520
Postretirement benefit liability 1,169 1,148
Deferred gains 1,340 1,363
Other 399 459
3,482 3,490
Minority interest 51 49
Stockholder's equity:
Common stock - -
Additional capital invested 6 -
ESOP capital 352 266
Retained earnings (deficit) (231) (214)
Unearned ESOP preferred stock (81) (83)
Other (21) (25)
25 (56)
Commitments and contingent liabilities
(See note)
$12,042 $11,952
</TABLE>
See accompanying notes to consolidated financial statements.
United Air Lines, Inc. and Subsidiary Companies
Statement of Consolidated Operations (Unaudited)
(In Millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31
1995 1994
<S> <C> <C>
Operating revenues:
Passenger $2,920 $2,771
Cargo 175 164
Other operating revenues 225 238
3,320 3,173
Operating expenses:
Salaries and related costs 1,113 1,202
ESOP compensation expense 89 -
Aircraft fuel 378 370
Commissions 342 334
Aircraft rent 249 226
Purchased services 239 218
Depreciation and amortization 163 178
Landing fees and other rent 171 154
Food services 119 91
Aircraft maintenance 107 109
Personnel expenses 63 59
Other operating expenses 249 276
3,282 3,217
Earnings (loss) from operations 38 (44)
Other income (expense):
Interest expense (94) (81)
Interest capitalized 12 10
Interest income 19 11
Equity in earnings of affiliates 14 6
Miscellaneous, net (18) (22)
(67) (76)
Loss before income taxes and
cumulative effect of accounting change (29) (120)
Provision (credit) for income taxes (12) (41)
Loss before cumulative effect
of accounting change (17) (79)
Cumulative effect of accounting change,
net of tax - (26)
Net loss $ (17) $ (105)
</TABLE>
See accompanying notes to consolidated financial statements.
United Air Lines, Inc. and Subsidiary Companies
Condensed Statement of Consolidated Cash Flows (Unaudited)
(In Millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31
1995 1994
<S> <C> <C>
Cash and cash equivalents at beginning of
period $ 444 $ 285
Cash flows from operating activities 473 287
Cash flows from investing activities:
Additions to property and equipment (82) (66)
Proceeds on disposition of property and
equipment 14 93
Decrease (increase) in short-term
investments (163) 155
Decrease in related party receivable 82 -
Other, net - 22
(149) 204
Cash flows from financing activities:
Repayment of long-term debt (262) (9)
Principal payments under capital
lease obligations (40) (55)
Decrease in short-term borrowings - (46)
Other, net 24 -
(278) (110)
Increase in cash and cash equivalents 46 381
Cash and cash equivalents at end of period $ 490 $ 666
Cash paid during the period for:
Interest (net of amounts capitalized) $ 78 $ 84
Income taxes $ - $ 1
Non-cash transactions:
Long-term debt incurred in connection
with additions to equipment $ 4 $ 5
Unrealized loss on investments $ 2 $ 3
</TABLE>
See accompanying notes to consolidated financial statements.
United Air Lines, Inc. and Subsidiary Companies
Notes to Consolidated Financial Statements (Unaudited)
The Company
United Air Lines, Inc. ("United") is a wholly-owned subsidiary of
UAL Corporation ("UAL").
Interim Financial Statements
The consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to or as permitted by such rules and regulations, although
United believes that the disclosures are adequate to make the
information presented not misleading. In management's opinion, all
adjustments (which, except for the effects of the employee investment
transaction, include only normal recurring adjustments) necessary for a
fair presentation of the results of operations for the three month
periods have been made. These financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto included in United's Annual Report on Form 10-K for the year
1994.
ESOP Compensation Expense
"ESOP compensation expense" in the 1995 first quarter represents
the estimated average fair value of ESOP convertible preferred stock
committed to be released to employees for the period, net of amounts
used to satisfy dividend requirements for previously allocated ESOP
convertible preferred shares, under Employee Stock Ownership Plans which
were created as a part of the July 1994 employee investment transaction
and recapitalization.
Other Income (Expense) - Miscellaneous
Included in "Miscellaneous, net" in the first quarter of 1994 was
a charge of $19 million for costs incurred in connection with the
employee investment transaction. In addition, the 1995 and 1994 periods
included foreign exchange losses of $8 million and $1 million,
respectively.
Income Taxes
The provision for income taxes for the first quarter of 1995 is
based on the estimated annual effective tax rate, which differs from the
federal statutory rate of 35% principally due to state income taxes and
certain nondeductible expenses. The credit for income taxes for the
first quarter of 1994 was based on the actual effective tax rate for the
quarter, and includes the effects of nondeductible expenses related to
the employee investment transaction and recapitalization. Deferred tax
assets are recognized based upon United's history of operating earnings
and expectations for future taxable income.
Accounting Change
United adopted Statement of Financial Accounting Standards
("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits,"
effective January 1, 1994. The effect of adopting SFAS No. 112 was a
cumulative charge for recognition of the transition liability of $42
million, before tax benefits of $16 million.
Affiliates
United owns 38% of the Galileo International Partnership
("Galileo") through a wholly-owned subsidiary. United's investment in
Galileo, which owns the Apollo and Galileo computer reservations
systems, is carried on the equity basis. United also owns 77% of the
Apollo Travel Services Partnership and its accounts are consolidated.
Under operating agreements with Galileo, United purchases computer
reservation services from Galileo and provides marketing, sales and
communication services to Galileo. Revenues derived from the sale of
services to Galileo amounted to approximately $62 million in the 1995
first quarter and $59 million in the 1994 first quarter. The cost to
United of services purchased from Galileo amounted to approximately $25
million in the 1995 first quarter and $21 million in the 1994 first
quarter.
Long-term Debt
In addition to scheduled principal payments in the first quarter
of 1995, United repaid $150 million in principal amount of debentures
and $101 million in principal amount of secured notes, resulting in an
insignificant loss.
Contingencies and Commitments
United has certain contingencies resulting from litigation and
claims (including environmental issues) incident to the ordinary course
of business. Management believes, after considering a number of
factors, including (but not limited to) the views of legal counsel, the
nature of contingencies to which United is subject and its prior
experience, that the ultimate disposition of these contingencies is not
expected to materially affect United's consolidated financial position
or results of operations.
At March 31, 1995, commitments for the purchase of property and
equipment, principally aircraft, approximated $3.9 billion, after
deducting advance payments. An estimated $1.2 billion will be spent
during the remainder of 1995, $0.7 billion in 1996, $1.3 billion in
1997, $0.4 billion in 1998 and $0.3 billion in 1999 and therafter. The
major commitments are for the purchase of thirty-four B777 aircraft
which are expected to be delivered between 1995 and 1999.
In addition to the B777 order, United has arrangements with Airbus
Industrie and International Aero Engines to lease an additional 24 A320
aircraft, which are scheduled for delivery through 1998. At March 31,
1995, United also had options for an additional 156 B737 aircraft, 36
B757 aircraft, 34 B777 aircraft, 44 B747 aircraft, 8 B767 aircraft and
48 A320 aircraft. These amounts reflect the recent cancellation of
certain options. Under the terms of certain of these remaining options
which are exercisable during 1996 and 1997, United would forfeit
significant deposits on such options it does not exercise. In April
1995, United confirmed options for two B747 aircraft and ordered four
B757 aircraft, agreeing to take delivery of the aircraft in 1996. The
four B757 orders replace options for two B767 aircraft. These orders
will increase United's capital expenditures in 1996 by approximately
$0.5 billion.
Related Party Transactions
In the first quarter of 1995, Air Wisconsin, Inc. repaid $76
million of its outstanding loan from United, leaving a balance of $10
million, which is expected to be repaid in the second quarter.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
United's total of cash and cash equivalents and short-term
investments was $1.510 billion at March 31, 1995, compared to $1.301
billion at December 31, 1994. Cash flows from operating activities
amounted to $473 million. Investing activities, excluding the increase
in short-term investments, resulted in cash flows of $14 million. Cash
received from related parties in payment of loans, including Air
Wisconsin, inc., amounted to $82 million. Financing activities included
principal payments under debt and capital lease obligations of $262
million and $40 million, respectively.
In the first quarter of 1995, United took delivery of five A320
aircraft under operating leases. Property additions, including aircraft
spare parts, amounted to $82 million.
At March 31, 1995, commitments for the purchase of property and
equipment, principally aircraft, approximated $3.9 billion, after
deducting advance payments. An estimated $1.2 billion will be spent
during the remainder of 1995, $0.7 billion in 1996, $1.3 billion in
1997, $0.4 billion in 1998 and $0.3 billion in 1999 and thereafter. The
major commitments are for the purchase of thirty-four B777 aircraft
which are expected to be delivered between 1995 and 1999.
In addition to aircraft orders, United has arrangements with
Airbus Industrie and International Aero Engines to lease 24 A320
aircraft, which are scheduled for delivery through 1998. At March 31,
1995, United also had options for an additional 156 B737 aircraft, 36
B757 aircraft, 34 B777 aircraft, 44 B747 aircraft, 8 B767 aircraft and
48 A320 aircraft. Under the terms of certain of these options which are
exercisable during 1996 and 1997, United would forfeit significant
deposits on such options it does not exercise.
In April 1995, United confirmed options for two B747 aircraft and
ordered four B757 aircraft, agreeing to take delivery of the aircraft in
1996. The four B757 orders replace options for two B767 aircraft.
These orders will increase United's capital expenditures in 1996 by
approximately $0.5 billion. Also in April 1995, United announced that,
under a revised fleet plan, it would use most of the new aircraft to be
delivered through 1997 to replace older aircraft in its fleet. As a
result, the number of aircraft in United's operating fleet is expected
to increase by 19 during that time, compared to an increase of 48
aircraft called for by United's previous fleet plan. Funds necessary to
finance aircraft acquisitions are expected to be obtained from
internally generated funds, irrevocable external financing arrangements
or other external sources.
At March 31, 1995, UAL and United had an effective shelf
registration statement on file with the Securities and Exchange
Commission to offer up to $1.035 billion of securities, including
secured and unsecured debt, equipment trust and pass through
certificates, equity or a combination thereof. United's ability to
issue equity securities is limited by its certificate of incorporation,
which was restated in connection with the recapitalization. In the
second quarter of 1995, United expects to issue pass through
certificates under the shelf registration statement to finance or
refinance certain aircraft under operating leases.
RESULTS OF OPERATIONS
United's results of operations for interim periods are not
necessarily indicative of those for an entire year, as a result of
seasonal factors to which United is subject. First and fourth quarter
results are normally affected by reduced travel demand in the fall and
winter and United's operations, particularly at its Chicago and Denver
hubs, are adversely affected by winter weather on occasion.
The results of operations in the airline business historically
fluctuate significantly in response to general economic conditions.
This is because small fluctuations in yield (passenger revenue per
revenue passenger mile) and cost per available seat mile can have a
significant effect on operating results. United anticipates
industrywide fare levels, increasing low-cost competition, general
economic conditions, fuel costs, international governmental policies and
other factors will continue to affect its operating results.
The July 1994 employee investment transaction and recapitalization
resulted in wage and benefit reductions and work-rule changes which were
designed to reduce cash operating expenses. These cash expense
reductions are offset by non-cash compensation charges for stock
periodically committed to be released to employees under the ESOPs and
additional interest expense on the debentures issued at the time of the
recapitalization.
As a result of the recapitalization, United's capital structure
became more highly leveraged. With the increase in debt and reduction
in equity resulting from the recapitalization, United's exposure to
certain industry risks could be greater than might have been the case
prior to the recapitalization. In addition, the transaction resulted in
new labor agreements for certain employee groups and a new corporate
governance structure for UAL, which was designed to achieve balance
between the various employee-owner groups and public stockholders. The
new labor agreements and governance structure could inhibit management's
ability to alter strategy in a volatile, competitive industry by
restricting certain operating and financing activities, including the
sale of assets and the issuance of equity securities and the ability to
furlough employees. United's ability to react to competition may be
hampered further by the fixed long-term nature of these various
agreements. The success of the recapitalization is dependent upon a
number of factors, including the state of the competitive environment in
the airline industry, competitive responses to United's efforts,
United's ability to achieve enduring cost savings through productivity
improvements and the renegotiation of labor agreements at the end of the
investment period.
In the first quarter of 1995, United implemented a new travel
agency commission payment plan that offers a maximum of $50 for
round-trip domestic tickets and a maximum of $25 for one-way domestic
tickets. The new commission plan resulted in a slight reduction of
United's commission expense in the first quarter of 1995; however, it is
expected to have a more significant impact in future quarters.
Litigation challenging this payment plan is pending.
Summary of Results
United's earnings from operations were $38 million in the first
quarter of 1995, an improvement of $82 million from an operating loss of
$44 million in the first quarter of 1994. United's net loss in the
first quarter of 1995 was $17 million, compared to a net loss of $105
million in the first quarter of 1994. The 1994 loss includes a $26
million after tax charge for the cumulative effect of adopting Statement
of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits," which United adopted effective January 1, 1994.
Specific factors affecting United's consolidated operations for
the first quarter of 1995 are described below.
First Quarter 1995 Compared with First Quarter 1994.
Operating revenues increased $147 million (5%). However, United's
revenue per available seat mile decreased 1% to 8.83 cents. Passenger
revenues increased $149 million (5%) due principally to an 8% increase
in revenue passenger miles, partially offset by a 2% decrease in yield
to 11.56 cents. Domestic revenue passenger miles increased 10%, Pacific
increased 8% and Latin America increased 3%. Atlantic revenue passenger
miles decreased 4%. Available seat miles increased 6% systemwide, as
increases of 16% and 4% on Pacific and Domestic routes, respectively,
were partially offset by a 4% decrease in the Atlantic. As a result,
United's system passenger load factor increased 1.6 points to 67.0%.
Cargo revenues increased $11 million (7%), as both freight and
mail revenues increased due to higher cargo volumes. Other operating
revenues decreased $13 million (5%) due to a decrease in fuel sales.
Operating expenses increased $65 million (2%); however, United's
cost per available seat mile decreased 3% from 9.04 cents to 8.73 cents,
including ESOP compensation expense. Without the ESOP compensation
expense, United's 1995 first quarter cost per available seat mile would
have been 8.49 cents. ESOP compensation expense of $89 million in the
1995 first quarter represents the estimated average fair value of ESOP
stock committed to be released to employees for the quarter, net of
amounts used to satisfy dividend requirements for previously allocated
ESOP convertible preferred shares. Food services increased $28 million
(31%) due to the new catering arrangements resulting from the 1994 sale
of flight kitchens and increased passenger volumes. Aircraft rent
increased $23 million (10%) as a result of new aircraft acquired on
operating leases. Purchased services increased $21 million (10%) due
principally to volume-related increases in computer reservations fees
and credit card discounts. Landing fees and other rent increased $17
million (11%) due to increased facilities rent, partially due to new
facilities at Denver, and increased landing fees as the number of
departures increased 10%. Aircraft fuel expense increased $8 million
(2%) as a 5% increase in consumption was partially offset by a 3%
decrease in the average price per gallon of fuel to 56.8 cents. Other
operating expenses decreased $27 million (10%) due mainly to lower fuel
sales.
Salaries and related costs decreased $89 million (7%) primarily
due to savings resulting from ESOP related wage and benefit concessions.
Depreciation and amortization expense decreased $15 million (8%), as
certain assets, principally B727 aircraft, are now fully depreciated.
Other expense amounted to $67 million in the first quarter of 1995
compared to $76 million in the first quarter of 1994. Interest expense
increased $13 million (16%) due primarily to interest on the debentures
issued in connection with the recapitalization. Included in
"Miscellaneous, net" in the first quarter of 1994 was a charge of $19
million for costs incurred in connection with the employee investment
transaction. In addition, the 1995 and 1994 periods included foreign
exchange losses of $8 million and $1 million, respectively.
Part II
Other Information
Item 1. Legal Proceedings.
In Re Airline Travel Agency Commission Litigation. On
February 13, l995 and dates thereafter United Air Lines, Inc.
("United") and six other airlines were sued in various courts
around the nation by travel agents and the American Society of
Travel Agents claiming as a class action that the carriers acted
collusively in violation of federal antitrust laws when they
imposed a cap on ticket sales commissions payable to travel
agencies by the carriers. Most of the suits are now consolidated
before the federal court in Minneapolis. A discovery and motion
filing schedule has been established by this court, which provides
for a hearing on July 7, 1995 on plaintiffs' motion for a
preliminary injunction and the carriers' motion for summary
judgment. A multi-district panel will decide on May 19 whether all
the cases should be consolidated in Minneapolis or, as requested
by some plaintiffs, in Philadelphia. As relief, the plaintiffs
seek an order declaring the carriers commission cap action to be
illegal and the recovery of damages (trebled) to the agencies
resulting from that action.
Summers et al. v. State Street Bank and Trust Company et al.
On April 14, 1995, plaintiffs filed a class action complaint
against State Street Bank and Trust Company ("State Street"), the
UAL Corporation Employee Stock Ownership Plan and the UAL
Corporation Supplemental Employee Stock Ownership Plan (together,
the "Plans") in the United States District Court for the Northern
District of Illinois. The complaint is brought on behalf of a
putative class of all persons who are, or were as of July 12,
1994, participants or beneficiaries of the Plans. Plaintiffs
allege that State Street breached various fiduciary duties under
the Employee Retirement Income Security Act of 1974 ("ERISA") in
connection with the 1994 purchase of UAL Corporation ("UAL")
preferred stock by the Plans. The Plans are nominal defendants;
no relief is sought from them. The complaint seeks a declaration
that State Street violated ERISA, restoration to the Plans by
State Street of the amount of an alleged "overpayment" for the
stock, and other relief. United is obligated to indemnify State
Street for part or all of an adverse judgment and State Street's
defense costs.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 10.1 - Letter Agreement Amendment No. 6-1162-MMF-
077 dated April 3, 1995 to the Agreement dated December
18, 1990 between The Boeing Company and United (and
United Worldwide Corporation) for acquisition of 777-200
aircraft (as previously amended and supplemented, the
"777-200 Purchase Agreement" (filed as Exhibit 10.7 to
UAL's annual report on Form 10-K for the year ended
December 31, 1990, and supplements thereto filed as (i)
Exhibits 10.1, 10.2 and 10.22 to UAL's quarterly report
on Form 10-Q for the quarter ended June 30, 1993, (ii)
Exhibit 10.2 to UAL's annual report on Form 10-K for the
year ended December 31, 1993, (iii) Exhibit 10.14 to
UAL's quarterly report on Form 10-Q for the quarter
ended June 30, 1994, and (iv) Exhibits 10.27 and 10.28
to UAL's annual report on Form 10-K for the year ended
December 31, 1994)). (Exhibit 10.1 hereto is filed as
Exhibit 10.2 to UAL's quarterly report on Form 10-Q for
the quarter ended March 31, 1995, and is incorporated
herein by reference with a request for confidential
treatment of certain portions.)
Exhibit 10.2 - Letter Agreement Amendment No. 6-1162-RCN-
837 dated February 17, 1995 to the 777-200 Purchase
Agreement. (Exhibit 10.2 hereto is filed as Exhibit
10.3 to UAL's quarterly report on Form 10-Q for the
quarter ended March 31, 1995, and is incorporated herein
by reference with a request for confidential treatment
of certain portions.)
Exhibit 10.3 - Supplemental Agreement No. 6 dated as of
April 13, 1995 to the Agreement dated December 18, 1990
between The Boeing Company and United (and United
Worldwide Corporation) for acquisition of 747-400
aircraft (as previously amended and supplemented, the
"747-400 Purchase Agreement" (filed as Exhibit 10.8 to
UAL's annual report on Form 10-K for the year ended
December 31, 1990, and supplements thereto filed as (i)
Exhibits 10.4 and 10.5 to UAL's annual report on Form 10-
K for the year ended December 31, 1991, (ii) Exhibits
10.3, 10.4, 10.5, 10.6 and 10.22 to UAL's quarterly
report on Form 10-Q for the quarter ended June 30, 1993,
(iii) Exhibit 10.3 to UAL's annual report on Form 10-K
for the year ended December 31, 1993, (iv) Exhibit 10.14
to UAL's quarterly report on Form 10-Q for the quarter
ended June 30, 1994, and (v) Exhibits 10.29 and 10.30 to
UAL's annual report on Form 10-K for the year ended
December 31, 1994)). (Exhibit 10.3 hereto is filed as
Exhibit 10.4 to UAL's quarterly report on Form 10-Q for
the quarter ended March 31, 1995, and is incorporated
herein by reference with a request for confidential
treatment of certain portions.)
Exhibit 10.4 - Letter Agreement Amendment 6-1162-DLJ-
891R2 dated April 13, 1995 to the 747-400 Purchase
Agreement. (Exhibit 10.4 hereto is filed as Exhibit
10.5 to UAL's quarterly report on Form 10-Q for the
quarter ended March 31, 1995, and is incorporated herein
by reference with a request for confidential treatment
of certain portions.)
Exhibit 10.5 - Letter Agreement Amendment 6-1162-MMF-084
dated April 13, 1995 to the 747-400 Purchase Agreement.
(Exhibit 10.5 hereto is filed as Exhibit 10.6 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
Exhibit 10.6 - Letter Agreement Amendment 6-1162-RCN-870
dated April 13, 1995 to the 747-400 Purchase Agreement.
(Exhibit 10.6 hereto is filed as Exhibit 10.7 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
Exhibit 10.7 - Change Order No. 1 dated April 13, 1995
to the 747-400 Purchase Agreement. (Exhibit 10.7 hereto
is filed as Exhibit 10.8 to UAL's quarterly report on
Form 10-Q for the quarter ended March 31, 1995, and is
incorporated herein by reference with a request for
confidential treatment of certain portions.)
Exhibit 10.8 - Supplemental Agreement No. 5 dated as of
April 13, 1995 to the Agreement dated April 26, 1989
between The Boeing Company and United for acquisition of
757-200 and 737 aircraft (as relates solely to the 757-
200 aircraft and as previously amended and supplemented,
the "757-200 Purchase Agreement" (filed as Exhibit 10(K)
to UAL's Form 10-K for the year ended December 31, 1989,
and supplements thereto filed as (i) Exhibits 10.14,
10.15, 10.16, 10.17, 10.18, 10.19, and 10.22 to UAL's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1993, and (ii) Exhibit 10.14 to UAL's quarterly
report on Form 10-Q for the quarter ended June 30,
1994)). (Exhibit 10.8 hereto is filed as Exhibit 10.9
to UAL's quarterly report on Form 10-Q for the quarter
ended March 31, 1995, and is incorporated herein by
reference with a request for confidential treatment of
certain portions.)
Exhibit 10.9 - Supplemental Agreement No. 11 dated as of
April 13, 1995 to the Agreement dated March 1, 1990
between The Boeing Company and United for acquisition of
767-300ER aircraft (as previously amended and
supplemented, the "767-300ER Purchase Agreement" (filed
as Exhibit 10(L) to UAL's Form 10-K for the year ended
December 31, 1989, and supplements thereto filed as (i)
Exhibits 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, 10.13
and 10.22 to UAL's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993, and (ii) Exhibit 10.14 to
UAL's quarterly report on Form 10-Q for the quarter
ended June 30, 1994)). (Exhibit 10.9 hereto is filed as
Exhibit 10.10 to UAL's quarterly report on Form 10-Q for
the quarter ended March 31, 1995, and is incorporated
herein by reference with a request for confidential
treatment of certain portions.)
Exhibit 10.10 - Letter Agreement Amendment 6-1162-DLJ-
472R2 dated April 13, 1995 to the 767-300ER Purchase
Agreement. (Exhibit 10.10 hereto is filed as Exhibit
10.11 to UAL's quarterly report on Form 10-Q for the
quarter ended March 31, 1995, and is incorporated herein
by reference with a request for confidential treatment
of certain portions.)
Exhibit 12.1 - Computation of Ratio of
Earnings To Fixed Charges.
Exhibit 27 - Financial Data Schedule.
(b) No reports on Form 8-K have been filed
during the first quarter of 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
UNITED AIR LINES, INC.
By: /s/ Gerald Greenwald
Gerald Greenwald
Chairman and Chief
Executive Officer
By: /s/ Douglas A. Hacker
Douglas A. Hacker
Senior Vice President - Finance
(Principal Financial
Officer)
By: /s/ Frederic F. Brace
Frederic F. Brace
Vice President - Financial
Analysis and Controller
(Principal Accounting
Officer)
Dated: May 1, 1995
Exhibit Index
Exhibit No. Description
10.1 Letter Agreement Amendment No. 6-1162-MMF-077 dated
April 3, 1995 to the Agreement dated December 18, 1990
between The Boeing Company and United (and United
Worldwide Corporation) for acquisition of 777-200
aircraft (as previously amended and supplemented, the
"777-200 Purchase Agreement" (filed as Exhibit 10.7 to
UAL's annual report on Form 10-K for the year ended
December 31, 1990, and supplements thereto filed as (i)
Exhibits 10.1, 10.2 and 10.22 to UAL's quarterly report
on Form 10-Q for the quarter ended June 30, 1993, (ii)
Exhibit 10.2 to UAL's annual report on Form 10-K for the
year ended December 31, 1993, (iii) Exhibit 10.14 to
UAL's quarterly report on Form 10-Q for the quarter
ended June 30, 1994, and (iv) Exhibits 10.27 and 10.28
to UAL's annual report on Form 10-K for the year ended
December 31, 1994)). (Exhibit 10.1 hereto is filed as
Exhibit 10.2 to UAL's quarterly report on Form 10-Q for
the quarter ended March 31, 1995, and is incorporated
herein by reference with a request for confidential
treatment of certain portions.)
10.2 Letter Agreement Amendment No. 6-1162-RCN-837 dated
February 17, 1995 to the 777-200 Purchase Agreement.
(Exhibit 10.2 hereto is filed as Exhibit 10.3 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
10.3 Supplemental Agreement No. 6 dated as of April 13,
1995 to the Agreement dated December 18, 1990 between
The Boeing Company and United (and United Worldwide
Corporation) for acquisition of 747-400 aircraft (as
previously amended and supplemented, the "747-400
Purchase Agreement" (filed as Exhibit 10.8 to UAL's
annual report on Form 10-K for the year ended December
31, 1990, and supplements thereto filed as (i) Exhibits
10.4 and 10.5 to UAL's annual report on Form 10-K for
the year ended December 31, 1991, (ii) Exhibits 10.3,
10.4, 10.5, 10.6 and 10.22 to UAL's quarterly report on
Form 10-Q for the quarter ended June 30, 1993, (iii)
Exhibit 10.3 to UAL's annual report on Form 10-K for the
year ended December 31, 1993, (iv) Exhibit 10.14 to
UAL's quarterly report on Form 10-Q for the quarter
ended June 30, 1994, and (v) Exhibits 10.29 and 10.30 to
UAL's annual report on Form 10-K for the year ended
December 31, 1994)). (Exhibit 10.3 hereto is filed as
Exhibit 10.4 to UAL's quarterly report on Form 10-Q for
the quarter ended March 31, 1995, and is incorporated
herein by reference with a request for confidential
treatment of certain portions.)
10.4 Letter Agreement Amendment 6-1162-DLJ-891R2 dated
April 13, 1995 to the 747-400 Purchase Agreement.
(Exhibit 10.4 hereto is filed as Exhibit 10.5 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
10.5 Letter Agreement Amendment 6-1162-MMF-084 dated
April 13, 1995 to the 747-400 Purchase Agreement.
(Exhibit 10.5 hereto is filed as Exhibit 10.6 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
10.6 Letter Agreement Amendment 6-1162-RCN-870 dated
April 13, 1995 to the 747-400 Purchase Agreement.
(Exhibit 10.6 hereto is filed as Exhibit 10.7 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
10.7 Change Order No. 1 dated April 13, 1995 to the 747-
400 Purchase Agreement. (Exhibit 10.7 hereto is filed
as Exhibit 10.8 to UAL's quarterly report on Form 10-Q
for the quarter ended March 31, 1995, and is
incorporated herein by reference with a request for
confidential treatment of certain portions.)
10.8 Supplemental Agreement No. 5 dated as of April 13,
1995 to the Agreement dated April 26, 1989 between The
Boeing Company and United for acquisition of 757-200 and
737 aircraft (as relates solely to the 757-200 aircraft
and as previously amended and supplemented, the "757-200
Purchase Agreement" (filed as Exhibit 10(K) to UAL's
Form 10-K for the year ended December 31, 1989, and
supplements thereto filed as (i) Exhibits 10.14, 10.15,
10.16, 10.17, 10.18, 10.19, and 10.22 to UAL's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1993,
and (ii) Exhibit 10.14 to UAL's quarterly report on Form
10-Q for the quarter ended June 30, 1994)). (Exhibit
10.8 hereto is filed as Exhibit 10.9 to UAL's quarterly
report on Form 10-Q for the quarter ended March 31,
1995, and is incorporated herein by reference with a
request for confidential treatment of certain portions.)
10.9 Supplemental Agreement No. 11 dated as of April 13,
1995 to the Agreement dated March 1, 1990 between The
Boeing Company and United for acquisition of 767-300ER
aircraft (as previously amended and supplemented, the
"767-300ER Purchase Agreement" (filed as Exhibit 10(L)
to UAL's Form 10-K for the year ended December 31, 1989,
and supplements thereto filed as (i) Exhibits 10.7,
10.8, 10.9, 10.10, 10.11, 10.12, 10.13 and 10.22 to
UAL's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1993, and (ii) Exhibit 10.14 to UAL's
quarterly report on Form 10-Q for the quarter ended June
30, 1994)). (Exhibit 10.9 hereto is filed as Exhibit
10.10 to UAL's quarterly report on Form 10-Q for the
quarter ended March 31, 1995, and is incorporated herein
by reference with a request for confidential treatment
of certain portions.)
10.10 Letter Agreement Amendment 6-1162-DLJ-472R2 dated
April 13, 1995 to the 767-300ER Purchase Agreement.
(Exhibit 10.10 hereto is filed as Exhibit 10.11 to UAL's
quarterly report on Form 10-Q for the quarter ended
March 31, 1995, and is incorporated herein by reference
with a request for confidential treatment of certain
portions.)
12.1 Computation of Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
<TABLE>
<CAPTION>
Exhibit 12.1
United Air Lines, Inc. and Subsidiary Companies
Computation of Ratio of Earnings to Fixed Charges
Three Months Ended
March 31
1994 1993
(In Millions)
<S> <C> <C>
Earnings:
Loss before income taxes $ (29) $ (120)
Fixed charges, from below 275 254
Undistributed earnings of affiliates (14) -
Interest capitalized (12) (10)
Earnings $ 220 $ 124
Fixed charges:
Interest expense $ 94 $ 81
Portion of rental expense
representative of the
interest factor 181 173
Fixed charges $ 275 $ 254
Ratio of earnings to fixed charges (a) (a)
(a) Earnings were inadequate to cover fixed charges by $55 million in the
first quarter of 1995 and $130 million in the first quarter of 1994.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNITED
AIR LINES, INC.'S STATEMENT OF CONSOLIDATED OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1995 AND CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL
POSITION AS OF MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<PERIOD-TYPE> 3-MOS
<CASH> 490
<SECURITIES> 1,020
<RECEIVABLES> 970
<ALLOWANCES> 0
<INVENTORY> 294
<CURRENT-ASSETS> 3,198
<PP&E> 11,973
<DEPRECIATION> 5,346
<TOTAL-ASSETS> 12,042
<CURRENT-LIABILITIES> 4,936
<BONDS> 3,548
0
0
<COMMON> 0
<OTHER-SE> 25
<TOTAL-LIABILITY-AND-EQUITY> 12,042
<SALES> 0
<TOTAL-REVENUES> 3,320
<CGS> 0
<TOTAL-COSTS> 3,282
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 94
<INCOME-PRETAX> (29)
<INCOME-TAX> (12)
<INCOME-CONTINUING> (17)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
