UAUA » Topics » PART VI

These excerpts taken from the UAUA 10-K filed Mar 2, 2009.
PART I
 
ITEM 1.   BUSINESS.
 
UAL Corporation (together with its consolidated subsidiaries, “UAL”), a holding company whose principal subsidiary is United Air Lines, Inc. (together with its primary subsidiaries, “United”), was incorporated under the laws of the State of Delaware on December 30, 1968. We sometimes use the words “we,” “our,” “us,” and the “Company” in this Form 10-K for disclosures that relate to both UAL and United. Our world headquarters is located at 77 W. Wacker Drive, Chicago, Illinois 60601. The mailing address is P.O. Box 66919, Chicago, Illinois 60666 (telephone number (312) 997-8000).
 
This Annual Report on Form 10-K is a combined report of UAL and United. Unless otherwise noted, this information applies to both UAL and United. As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL. Most of UAL’s revenue and expenses in 2008 were from United’s airline operations. United transports people and cargo through its mainline operations, which utilize full-sized jet aircraft exceeding 70 seats in size, and its regional operations, which utilize smaller aircraft not exceeding 70 seats in size that are operated under contract by United Express® carriers.
 
The Company’s web address is www.united.com. The information contained on or connected to the Company’s web address is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report filed with the U.S. Securities and Exchange Commission (“SEC”). Through this website, the Company’s filings with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are accessible without charge as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
 
United Airlines operates nearly 3,000 flights a day on United and United Express to more than 200 U.S. domestic and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, D.C., based on its annual flight schedule as of January 1, 2009. With key global air rights in the Asia-Pacific region, Europe and Latin America, United is one of the largest international carriers based in the United States. United also is a founding member of Star Alliance, the world’s largest airline network, which provides connections for our customers to approximately 900 destinations in 159 countries worldwide. United offers a unique set of products and services to target distinct customer groups, which we believe allows us to generate a revenue premium. This strategy of market and product segmentation is intended to optimize margins and costs, and is focused on delivering an improved experience for all customers and a best-in-class experience for our premium customers. These services include:
 
  •  United Mainline, including United First®, United Business® and Economy Plus®, the last providing three to five inches of extra legroom on all United Mainline and explussm United Express flights;
 
  •  A new international premium travel experience featuring 180-degree, lie-flat beds in business class. As of December 31, 2008, the Company has completed first and business class equipment upgrades on 25 international aircraft that have been refitted with new premium seats, entertainment systems and other product enhancements. The Company expects to complete the refurbishment of a majority of the 66 remaining aircraft in 2009 and 2010, with the remaining aircraft upgrades to be completed in 2011;
 
  •  p.s.sm—a premium transcontinental service connecting New York with both Los Angeles and San Francisco; and
 
  •  United Express, with a total fleet of 280 aircraft operated by regional airline partners, including over 100 aircraft that offer explus, United’s premium regional service providing both first class and Economy Plus seating.


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The Company also generates revenue through its Mileage Plus® Frequent Flyer Program (“Mileage Plus”), United Cargo SM and United Services. Mileage Plus contributed approximately $700 million to passenger and other revenue in 2008 and helps the Company attract and retain high-value customers. United Cargo generated $854 million in freight and mail revenue in 2008. United Services generated $167 million in revenue in 2008 by utilizing downtime of otherwise under-utilized aircraft maintenance resources through third-party maintenance services.
 
This Form 10-K contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent the Company’s expectations and beliefs concerning future events, based on information available to the Company on the date of the filing of this Form 10-K, and are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from those referenced in the forward-looking statements are listed in Item 1A, Risk Factors and in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. The Company disclaims any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.
 
PART I


 















ITEM 1.  

BUSINESS.


 



UAL Corporation (together with its consolidated subsidiaries,
“UAL”), a holding company whose principal subsidiary
is United Air Lines, Inc. (together with its primary
subsidiaries, “United”), was incorporated under the
laws of the State of Delaware on December 30, 1968. We
sometimes use the words “we,” “our,”
“us,” and the “Company” in this
Form 10-K
for disclosures that relate to both UAL and United. Our world
headquarters is located at 77 W. Wacker Drive,
Chicago, Illinois 60601. The mailing address is
P.O. Box 66919, Chicago, Illinois 60666 (telephone
number
(312) 997-8000).


 



This Annual Report on
Form 10-K
is a combined report of UAL and United. Unless otherwise noted,
this information applies to both UAL and United. As UAL
consolidates United for financial statement purposes,
disclosures that relate to activities of United also apply to
UAL. Most of UAL’s revenue and expenses in 2008 were from
United’s airline operations. United transports people and
cargo through its mainline operations, which utilize full-sized
jet aircraft exceeding 70 seats in size, and its regional
operations, which utilize smaller aircraft not exceeding
70 seats in size that are operated under contract by United
Express®

carriers.


 



The Company’s web address is www.united.com. The
information contained on or connected to the Company’s web
address is not incorporated by reference into this Annual Report
on
Form 10-K
and should not be considered part of this or any other report
filed with the U.S. Securities and Exchange Commission
(“SEC”). Through this website, the Company’s
filings with the SEC, including annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
and all amendments to those reports, are accessible without
charge as soon as reasonably practicable after such material is
electronically filed with or furnished to the SEC.


 



United Airlines operates nearly 3,000 flights a day on United
and United Express to more than 200 U.S. domestic and
international destinations from its hubs in Los Angeles,
San Francisco, Denver, Chicago and Washington, D.C.,
based on its annual flight schedule as of January 1, 2009.
With key global air rights in the Asia-Pacific region, Europe
and Latin America, United is one of the largest international
carriers based in the United States. United also is a founding
member of Star Alliance, the world’s largest airline
network, which provides connections for our customers to
approximately 900 destinations in 159 countries worldwide.
United offers a unique set of products and services to target
distinct customer groups, which we believe allows us to generate
a revenue premium. This strategy of market and product
segmentation is intended to optimize margins and costs, and is
focused on delivering an improved experience for all customers
and a
best-in-class
experience for our premium customers. These services include:


 














































  • 

United Mainline, including United
First®,

United
Business®

and Economy
Plus®,

the last providing three to five inches of extra legroom on all
United Mainline and
explussm

United Express flights;
 
  • 

A new international premium travel experience featuring
180-degree,
lie-flat beds in business class. As of December 31, 2008,
the Company has completed first and business class equipment
upgrades on 25 international aircraft that have been refitted
with new premium seats, entertainment systems and other product
enhancements. The Company expects to complete the refurbishment
of a majority of the 66 remaining aircraft in 2009 and 2010,
with the remaining aircraft upgrades to be completed in 2011;
 
  • 

p.s.sm—a

premium transcontinental service connecting New York with both
Los Angeles and San Francisco; and
 
  • 

United Express, with a total fleet of 280 aircraft operated by
regional airline partners, including over 100 aircraft that
offer explus, United’s premium regional service providing
both first class and Economy Plus seating.





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Table of Contents





 



The Company also generates revenue through its Mileage
Plus®

Frequent Flyer Program (“Mileage Plus”), United Cargo
SM and

United Services. Mileage Plus contributed approximately
$700 million to passenger and other revenue in 2008 and
helps the Company attract and retain high-value customers.
United Cargo generated $854 million in freight and mail
revenue in 2008. United Services generated $167 million in
revenue in 2008 by utilizing downtime of otherwise
under-utilized aircraft maintenance resources through
third-party maintenance services.


 



This
Form 10-K
contains various “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements represent the
Company’s expectations and beliefs concerning future
events, based on information available to the Company on the
date of the filing of this
Form 10-K,
and are subject to various risks and uncertainties. Factors that
could cause actual results to differ materially from those
referenced in the forward-looking statements are listed in
Item 1A, Risk Factors and in Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of
Operations. The Company disclaims any intent or obligation to
update or revise any of the forward-looking statements, whether
in response to new information, unforeseen events, changed
circumstances or otherwise.



 




PART IV
 
ITEM 15.  EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES.
 
     
(a)(1)   Financial Statements. The financial statements required by this item are listed in Item 8, Financial Statements and Supplementary Data herein.
     
   (2)
  Financial Statement Schedules. The financial statement schedule required by this item is listed below and included in this report after the signature page hereto.
     
    Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2008 and 2007, the month ended January 31, 2006 and the eleven month period ended December 31, 2006.
     
    All other schedules are omitted because they are not applicable, not required or the required information is shown in the consolidated financial statements or notes thereto.
     
(b)
  Exhibits. The exhibits required by this item are listed in the Exhibit Index which immediately precedes the exhibits filed with this Form 10-K and is incorporated herein by this reference. Each management contract or compensatory plan or arrangement is denoted with a “†” in the Exhibit Index.


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Table of Contents

PART IV


 















ITEM 15. 

EXHIBITS,
FINANCIAL STATEMENTS AND SCHEDULES.



 























































     

(a)(1)

 

Financial Statements. The financial statements required
by this item are listed in Item 8, Financial Statements and
Supplementary Data
herein.

 

 

 


   (2)


 

Financial Statement Schedules. The financial statement
schedule required by this item is listed below and included in
this report after the signature page hereto.

 

 

 

 

 

Schedule II—Valuation and Qualifying Accounts for the years
ended December 31, 2008 and 2007, the month ended January 31,
2006 and the eleven month period ended December 31, 2006.

 

 

 

 

 

All other schedules are omitted because they are not applicable,
not required or the required information is shown in the
consolidated financial statements or notes thereto.

 

 

 


(b)


 

Exhibits. The exhibits required by this item are listed
in the Exhibit Index which immediately precedes the exhibits
filed with this Form 10-K and is incorporated herein by this
reference. Each management contract or compensatory plan or
arrangement is denoted with a “†” in the Exhibit
Index.









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Table of Contents







This excerpt taken from the UAUA 8-K filed Feb 1, 2006.

PART VI

 

General Provisions

 

Section 1.               No Preemptive Rights, Etc.  Except as otherwise provided herein, no holder of stock of the Corporation of any class shall have any preemptive, preferential or other right to purchase or subscribe for any shares of stock, whether now or hereafter authorized, of the Corporation of any class, or any obligations convertible into, or any options or warrants to purchase, any shares of stock, whether now or hereafter authorized, of the Corporation of any class, other than such, if any, as the Board of Directors may from time to time determine, and at such price as the Board of Directors may from time to time fix; and any shares of stock or any obligations, options or warrants which the Board of Directors may determine to offer for subscription to holders of any shares of stock of the Corporation may, as the Board of Directors shall determine, be offered to holders of shares of stock of the Corporation of any class or classes or series, and if offered to holders of shares of stock of more than one class or series, in such proportions as between such classes and series as the Board of Directors may determine.

 

Section 2.               Non-Citizen Voting Limitation.  All (x) capital stock of, or other equity interests in, the Corporation, (y) securities convertible into or exchangeable for shares of capital stock, voting securities or other equity interests in the Corporation, and (z) options, warrants or other rights to acquire the securities described in clauses (x) and (y), whether fixed or contingent, matured or unmatured, contractual, legal, equitable or otherwise (collectively, “Equity Securities”) shall be subject to the following limitations:

 

(a)           Non-Citizen Voting Limitation.  In no event shall the total number of shares of Equity Securities held by all persons who fail to qualify as a “citizen of the United States,” as the term is used in Section 40102(a)(15) of Title 49 of the United States Code, in any similar legislation of the United States enacted in substitution or replacement therefor, and as interpreted by the Department of Transportation, be entitled to be more than 24.9% (or such other maximum percentage as such Section or substitute or replacement legislation shall hereafter provide) of the aggregate votes of all outstanding Equity Securities of the Corporation (the “Cap Amount”).

 

(b)           Allocation of Cap Amounts.  The restrictions imposed by the Cap Amount shall be applied pro rata among the holders of Equity Securities who fail to qualify as “citizens of the United States” based on the number of votes the underlying securities are entitled to.

 

Each certificate or other representative document for Equity Securities (including each such certificate or representative document for Equity Securities issued upon any permitted transfer of Equity Securities) shall contain a legend in substantially the following form:

 

“The

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