##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission 
File Number001-06033
001-11355
    
    Exact Name of Registrant as Specified in its Charter,
Principal Office Address and Telephone NumberUAL Corporation
United Air Lines, Inc.
77 W. Wacker Drive
Chicago, Illinois 60601
(312) 997-8000
    
    State of
IncorporationDelaware
Delaware
    
    I.R.S. Employer
Identification No36-2675207
36-2675206
  UAL Corporation
    
    Yes þ No oUnited Air Lines, Inc.
    
    Yes þ No o
 o o
  UAL Corporation
    
    Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller
reporting company)United Air Lines, Inc.
    
    Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller
reporting company)
  UAL Corporation
    
    Yes o No þUnited Air Lines, Inc.
    
    Yes o No þ
  UAL Corporation
    
    Yes þ No oUnited Air Lines, Inc.
    
    Yes þ No o
 OMISSION OF CERTAIN INFORMATION
   UAL Corporation
    
    144,761,948 shares of common stock ($0.01 par value)United Air Lines, Inc.
    
    205 (100% owned by UAL Corporation)There is no market for United Air Lines, Inc. common stock.




---



##### 



UAL Corporation and Subsidiary Companies and
United Air Lines, Inc. and Subsidiary Companies
 Report on Form 10-Q
 For the Quarter Ended June 30, 2009
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsUAL Corporation:Condensed Statements of Consolidated Operations (Unaudited)
    
    
    3Condensed Statements of Consolidated Financial Position (Unaudited)
    
    
    5Condensed Statements of Consolidated Cash Flows (Unaudited)
    
    
    7United Air Lines, Inc.:Condensed Statements of Consolidated Operations (Unaudited)
    
    
    8Condensed Statements of Consolidated Financial Position (Unaudited)
    
    
    10Condensed Statements of Consolidated Cash Flows (Unaudited)
    
    
    12Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
(UAL Corporation and United Air Lines, Inc.)
    
    
    13Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 4. Controls and Procedures
    
    
    48PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    48Item 1A. Risk Factors
    
    
    49Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 4. Submission of Matters to a Vote of Security Holders
    
    
    50Item 6. Exhibits
    
    
    50Signatures
    
    
    51Exhibit Index
    
    
    52Exhibit 10.1Exhibit 12.1Exhibit 12.2Exhibit 31.1Exhibit 31.2Exhibit 31.3Exhibit 31.4Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 UAL Corporation and Subsidiary Companies
 
 Condensed Statements of Consolidated Operations (Unaudited)
 (In millions, except per share amounts)
 Three Months EndedJune 30,2009
    
    
    2008(Adjusted)Operating revenues:Passenger  United Airlines
    
    $
    2,941
    
    
    $
    4,099Passenger  Regional Affiliates
    
    
    749
    
    
    
    797Cargo
    
    
    121
    
    
    
    237Other operating revenues
    
    
    207
    
    
    
    2384,018
    
    
    
    5,371Operating expenses:Salaries and related costs
    
    
    963
    
    
    
    1,179Regional Affiliates
    
    
    708
    
    
    
    847Aircraft fuel
    
    
    665
    
    
    
    1,848Purchased services
    
    
    286
    
    
    
    371Aircraft maintenance materials and outside repairs
    
    
    240
    
    
    
    295Landing fees and other rent
    
    
    229
    
    
    
    199Depreciation and amortization
    
    
    222
    
    
    
    216Distribution expenses
    
    
    139
    
    
    
    193Aircraft rent
    
    
    89
    
    
    
    100Cost of third party sales
    
    
    60
    
    
    
    65Goodwill impairment (Note 14)
    
    
    
    
    
    
    2,277Other impairments and special items (Note 14)
    
    
    88
    
    
    
    223Other operating expenses
    
    
    222
    
    
    
    2523,911
    
    
    
    8,065Earnings (loss) from operations
    
    
    107
    
    
    
    (2,694
    )Other income (expense):Interest expense
    
    
    (135
    )
    
    
    (137
    )Interest income
    
    
    5
    
    
    
    28Interest capitalized
    
    
    2
    
    
    
    5Miscellaneous, net
    
    
    35
    
    
    
    28(93
    )
    
    
    (76
    )Earnings (loss) before income taxes and equity in earnings of affiliates
    
    
    14
    
    
    
    (2,770
    )Income tax benefit
    
    
    (13
    )
    
    
    (29
    )Earnings (loss) before equity in earnings of affiliates
    
    
    27
    
    
    
    (2,741
    )Equity in earnings of affiliates, net of tax
    
    
    1
    
    
    
    1Net income (loss)
    
    $
    28
    
    
    $
    (2,740
    )Earnings (loss) per share, basic and diluted
    
    $
    0.19
    
    
    $
    (21.57
    )
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  3




---



##### Table of Contents



UAL Corporation and Subsidiary Companies  Condensed Statements of Consolidated Operations (Unaudited)  (In millions, except per share amounts)
 Six Months EndedJune 30,2009
    
    
    2008(Adjusted)Operating revenues:Passenger  United Airlines
    
    $
    5,642
    
    
    $
    7,644Passenger  Regional Affiliates
    
    
    1,408
    
    
    
    1,512Cargo
    
    
    245
    
    
    
    455Other operating revenues
    
    
    414
    
    
    
    4717,709
    
    
    
    10,082Operating expenses:Salaries and related costs
    
    
    1,884
    
    
    
    2,225Aircraft fuel
    
    
    1,464
    
    
    
    3,423Regional Affiliates
    
    
    1,379
    
    
    
    1,626Purchased services
    
    
    573
    
    
    
    720Aircraft maintenance materials and outside repairs
    
    
    465
    
    
    
    612Depreciation and amortization
    
    
    455
    
    
    
    436Landing fees and other rent
    
    
    450
    
    
    
    429Distribution expenses
    
    
    257
    
    
    
    377Aircraft rent
    
    
    177
    
    
    
    199Cost of third party sales
    
    
    113
    
    
    
    129Goodwill impairment (Note 14)
    
    
    
    
    
    
    2,277Other impairments and special items (Note 14)
    
    
    207
    
    
    
    223Other operating expenses
    
    
    460
    
    
    
    5417,884
    
    
    
    13,217Loss from operations
    
    
    (175
    )
    
    
    (3,135
    )Other income (expense):Interest expense
    
    
    (269
    )
    
    
    (284
    )Interest income
    
    
    12
    
    
    
    76Interest capitalized
    
    
    5
    
    
    
    10Miscellaneous, net
    
    
    29
    
    
    
    9(223
    )
    
    
    (189
    )Loss before income taxes and equity in earnings of affiliates
    
    
    (398
    )
    
    
    (3,324
    )Income tax benefit
    
    
    (42
    )
    
    
    (32
    )Loss before equity in earnings of affiliates
    
    
    (356
    )
    
    
    (3,292
    )Equity in earnings of affiliates, net of tax
    
    
    2
    
    
    
    3Net loss
    
    $
    (354
    )
    
    $
    (3,289
    )Loss per share, basic and diluted
    
    $
    (2.44
    )
    
    $
    (26.52
    )
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  4




---



##### Table of Contents



UAL Corporation and Subsidiary Companies
 
 Condensed Statements of Consolidated Financial Position (Unaudited)
 (In millions, except shares)
 June 30,
    
    
    December 31,2009
    
    
    2008(Adjusted)AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,566
    
    
    $
    2,039Restricted cash
    
    
    68
    
    
    
    54Receivables, less allowance for doubtful accounts (2009$18; 2008$24)
    
    
    921
    
    
    
    714Prepaid fuel
    
    
    311
    
    
    
    219Aircraft
fuel, spare parts and supplies, less obsolescence allowance(2009$64; 2008$48)
    
    
    228
    
    
    
    237Fuel hedge collateral deposits
    
    
    185
    
    
    
    953Deferred income taxes
    
    
    102
    
    
    
    268Prepaid expenses and other
    
    
    373
    
    
    
    3824,754
    
    
    
    4,866Operating property and equipment:OwnedFlight equipment
    
    
    8,539
    
    
    
    8,766Other property and equipment
    
    
    1,717
    
    
    
    1,75110,256
    
    
    
    10,517Lessaccumulated depreciation and amortization
    
    
    (1,817
    )
    
    
    (1,598
    )8,439
    
    
    
    8,919Capital leases:Flight equipment
    
    
    1,740
    
    
    
    1,578Other property and equipment
    
    
    43
    
    
    
    391,783
    
    
    
    1,617Lessaccumulated amortization
    
    
    (279
    )
    
    
    (224
    )1,504
    
    
    
    1,3939,943
    
    
    
    10,312Other assets:Intangibles, less accumulated amortization (2009$374; 2008$339)
    
    
    2,507
    
    
    
    2,693Aircraft lease deposits
    
    
    314
    
    
    
    297Restricted cash
    
    
    213
    
    
    
    218Investments
    
    
    79
    
    
    
    81Other, net
    
    
    996
    
    
    
    9984,109
    
    
    
    4,287$
    18,806
    
    
    $
    19,465
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  5




---



##### Table of Contents



UAL Corporation and Subsidiary Companies  Condensed Statements of Consolidated Financial Position (Unaudited)  (In millions, except shares)
 June 30,
    
    
    December 31,2009
    
    
    2008(Adjusted)Liabilities and Stockholders DeficitCurrent liabilities:Advance ticket sales
    
    $
    1,916
    
    
    $
    1,530Mileage Plus deferred revenue
    
    
    1,353
    
    
    
    1,414Long-term debt maturing within one year
    
    
    846
    
    
    
    782Accounts payable
    
    
    791
    
    
    
    833Accrued salaries, wages and benefits
    
    
    728
    
    
    
    756Fuel purchase commitments
    
    
    311
    
    
    
    219Fuel derivative instruments
    
    
    175
    
    
    
    718Current obligations under capital leases
    
    
    165
    
    
    
    168Accrued interest
    
    
    93
    
    
    
    112Other
    
    
    722
    
    
    
    7497,100
    
    
    
    7,281Long-term debt
    
    
    5,604
    
    
    
    5,862Long-term obligations under capital leases
    
    
    1,197
    
    
    
    1,192Other liabilities and deferred credits:Mileage Plus deferred revenue
    
    
    2,905
    
    
    
    2,768Postretirement benefit liability
    
    
    1,819
    
    
    
    1,812Advanced purchase of miles
    
    
    1,087
    
    
    
    1,087Deferred income taxes
    
    
    582
    
    
    
    804Other
    
    
    1,141
    
    
    
    9807,534
    
    
    
    7,451Commitments and contingent liabilities (Note 12)Stockholders deficit:Preferred stock
    
    
    
    
    
    
    Common stock at par, $0.01 par value;
authorized 1,000,000,000 shares; outstanding
144,773,623 and 140,037,928 shares at June
30, 2009 and December 31, 2008, respectively
    
    
    2
    
    
    
    1Additional capital invested
    
    
    2,970
    
    
    
    2,919Retained deficit
    
    
    (5,662
    )
    
    
    (5,308
    )Stock held in treasury, at cost
    
    
    (28
    )
    
    
    (26
    )Accumulated other comprehensive income
    
    
    89
    
    
    
    93(2,629
    )
    
    
    (2,321
    )$
    18,806
    
    
    $
    19,465
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  6




---



##### Table of Contents



UAL Corporation and Subsidiary Companies
 
 Condensed Statements of Consolidated Cash Flows (Unaudited)  (In millions)
 Six Months EndedJune 30,2009
    
    
    2008(Adjusted)Cash flows provided (used) by operating activities:Net loss
    
    $
    (354
    )
    
    $
    (3,289
    )Adjustments to reconcile to net cash provided (used) by operating activitiesGoodwill impairment
    
    
    
    
    
    
    2,277Other impairments and special items
    
    
    207
    
    
    
    223Depreciation and amortization
    
    
    455
    
    
    
    436Proceeds from lease amendment
    
    
    160
    
    
    
    Increase in Mileage Plus deferred revenue and advanced purchase of miles
    
    
    129
    
    
    
    74Increase in advance ticket sales
    
    
    386
    
    
    
    868Net change in fuel derivative instruments and related pending settlements
    
    
    (809
    )
    
    
    (252
    )Decrease in fuel hedge collateral
    
    
    780
    
    
    
    Increase in receivables
    
    
    (52
    )
    
    
    (209
    )Other, net
    
    
    (80
    )
    
    
    9822
    
    
    
    137Cash flows provided (used) by investing activities:Net sales of short-term investments
    
    
    
    
    
    
    2,295Decrease in restricted cash
    
    
    20
    
    
    
    101Proceeds from asset sale-leaseback
    
    
    94
    
    
    
    Proceeds from litigation on advance deposits
    
    
    
    
    
    
    41Additions to property, equipment and deferred software
    
    
    (170
    )
    
    
    (267
    )Proceeds from disposition of property and equipment
    
    
    46
    
    
    
    14Other, net
    
    
    1
    
    
    
    13(9
    )
    
    
    2,197Cash flows provided (used) by financing activities:Proceeds from issuance of long-term debt
    
    
    134
    
    
    
    84Proceeds from issuance of common stock
    
    
    63
    
    
    
    Decrease in lease deposits
    
    
    22
    
    
    
    154Repayment of Credit Facility
    
    
    (9
    )
    
    
    (9
    )Repayment of other debt
    
    
    (386
    )
    
    
    (351
    )Special distribution to common shareholders
    
    
    
    
    
    
    (251
    )Principal payments under capital leases
    
    
    (103
    )
    
    
    (200
    )Increase in deferred financing costs
    
    
    (4
    )
    
    
    (111
    )Other, net
    
    
    (3
    )
    
    
    (10
    )(286
    )
    
    
    (694
    )Increase in cash and cash equivalents during the period
    
    
    527
    
    
    
    1,640Cash and cash equivalents at beginning of the period
    
    
    2,039
    
    
    
    1,259Cash and cash equivalents at end of the period
    
    $
    2,566
    
    
    $
    2,899
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited).
  7




---



##### Table of Contents



United Air Lines, Inc. and Subsidiary Companies  Condensed Statements of Consolidated Operations (Unaudited)  (In millions)
 Three Months EndedJune 30,2009
    
    
    2008(Adjusted)Operating revenues:Passenger  United Airlines
    
    $
    2,941
    
    
    $
    4,099Passenger  Regional Affiliates
    
    
    749
    
    
    
    797Cargo
    
    
    121
    
    
    
    237Other operating revenues
    
    
    209
    
    
    
    2384,020
    
    
    
    5,371Operating expenses:Salaries and related costs
    
    
    963
    
    
    
    1,180Regional Affiliates
    
    
    708
    
    
    
    847Aircraft fuel
    
    
    665
    
    
    
    1,848Purchased services
    
    
    286
    
    
    
    371Aircraft maintenance materials and outside repairs
    
    
    240
    
    
    
    295Landing fees and other rent
    
    
    229
    
    
    
    199Depreciation and amortization
    
    
    222
    
    
    
    216Distribution expenses
    
    
    139
    
    
    
    193Aircraft rent
    
    
    89
    
    
    
    100Cost of third party sales
    
    
    60
    
    
    
    64Goodwill impairment (Note 14)
    
    
    
    
    
    
    2,277Other impairments and special items (Note 14)
    
    
    88
    
    
    
    223Other operating expenses
    
    
    221
    
    
    
    2803,910
    
    
    
    8,093Earnings (loss) from operations
    
    
    110
    
    
    
    (2,722
    )Other income (expense):Interest expense
    
    
    (135
    )
    
    
    (137
    )Interest income
    
    
    5
    
    
    
    28Interest capitalized
    
    
    2
    
    
    
    5Miscellaneous, net
    
    
    35
    
    
    
    28(93
    )
    
    
    (76
    )Earnings (loss) before income taxes and equity in earnings of affiliates
    
    
    17
    
    
    
    (2,798
    )Income tax benefit
    
    
    (13
    )
    
    
    (29
    )Earning (loss) before equity in earnings of affiliates
    
    
    30
    
    
    
    (2,769
    )Equity in earnings of affiliates, net of tax
    
    
    1
    
    
    
    1Net income (loss)
    
    $
    31
    
    
    $
    (2,768
    )
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  8




---



##### Table of Contents



United Air Lines, Inc. and Subsidiary Companies
 
 Condensed Statements of Consolidated Operations (Unaudited)
 (In millions)
 Six Months EndedJune 30,2009
    
    
    2008(Adjusted)Operating revenues:Passenger  United Airlines
    
    $
    5,642
    
    
    $
    7,644Passenger  Regional Affiliates
    
    
    1,408
    
    
    
    1,512Cargo
    
    
    245
    
    
    
    455Other operating revenues
    
    
    419
    
    
    
    4717,714
    
    
    
    10,082Operating expenses:Salaries and related costs
    
    
    1,884
    
    
    
    2,226Aircraft fuel
    
    
    1,464
    
    
    
    3,423Regional Affiliates
    
    
    1,379
    
    
    
    1,626Purchased services
    
    
    573
    
    
    
    720Aircraft maintenance materials and outside repairs
    
    
    465
    
    
    
    612Depreciation and amortization
    
    
    455
    
    
    
    436Landing fees and other rent
    
    
    450
    
    
    
    429Distribution expenses
    
    
    257
    
    
    
    377Aircraft rent
    
    
    179
    
    
    
    200Cost of third party sales
    
    
    113
    
    
    
    128Goodwill impairment (Note 14)
    
    
    
    
    
    
    2,277Other impairments and special items (Note 14)
    
    
    207
    
    
    
    223Other operating expenses
    
    
    459
    
    
    
    5687,885
    
    
    
    13,245Loss from operations
    
    
    (171
    )
    
    
    (3,163
    )Other income (expense):Interest expense
    
    
    (269
    )
    
    
    (283
    )Interest income
    
    
    12
    
    
    
    76Interest capitalized
    
    
    5
    
    
    
    10Miscellaneous, net
    
    
    29
    
    
    
    8(223
    )
    
    
    (189
    )Loss before income taxes and equity in earnings of affiliates
    
    
    (394
    )
    
    
    (3,352
    )Income tax benefit
    
    
    (42
    )
    
    
    (33
    )Loss before equity in earnings of affiliates
    
    
    (352
    )
    
    
    (3,319
    )Equity in earnings of affiliates, net of tax
    
    
    2
    
    
    
    3Net loss
    
    $
    (350
    )
    
    $
    (3,316
    )
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  9




---



##### Table of Contents



United Air Lines, Inc. and Subsidiary Companies
 
 Condensed Statements of Consolidated Financial Position (Unaudited)
 (In millions, except shares)
 June 30,
    
    
    December 31,2009
    
    
    2008(Adjusted)AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,560
    
    
    $
    2,033Restricted cash
    
    
    68
    
    
    
    50Receivables, less allowance for doubtful accounts (2009  $18; 2008  $24)
    
    
    920
    
    
    
    704Prepaid fuel
    
    
    311
    
    
    
    219Aircraft fuel, spare parts and supplies, less obsolescence allowance(2009  $64; 2008  $48)
    
    
    228
    
    
    
    237Fuel hedge collateral deposits
    
    
    185
    
    
    
    953Deferred income taxes
    
    
    96
    
    
    
    265Receivables from related parties
    
    
    52
    
    
    
    214Prepaid expenses and other
    
    
    360
    
    
    
    3764,780
    
    
    
    5,051Operating property and equipment:Owned Flight equipment
    
    
    8,539
    
    
    
    8,766Other property and equipment
    
    
    1,717
    
    
    
    1,75110,256
    
    
    
    10,517Less  accumulated depreciation and amortization
    
    
    (1,817
    )
    
    
    (1,598
    )8,439
    
    
    
    8,919Capital leases:Flight equipment
    
    
    1,740
    
    
    
    1,578Other property and equipment
    
    
    43
    
    
    
    391,783
    
    
    
    1,617Less  accumulated amortization
    
    
    (279
    )
    
    
    (224
    )1,504
    
    
    
    1,3939,943
    
    
    
    10,312Other assets:Intangibles, less accumulated amortization (2009  $374; 2008  $339)
    
    
    2,507
    
    
    
    2,693Aircraft lease deposits
    
    
    314
    
    
    
    297Restricted cash
    
    
    212
    
    
    
    217Investments
    
    
    79
    
    
    
    81Other, net
    
    
    984
    
    
    
    9844,096
    
    
    
    4,272$
    18,819
    
    
    $
    19,635
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  10




---



##### Table of Contents



United Air Lines, Inc. and Subsidiary Companies  Condensed Statements of Consolidated Financial Position (Unaudited)  (In millions, except shares)
 June 30,
    
    
    December 31,2009
    
    
    2008(Adjusted)Liabilities and Stockholders DeficitCurrent liabilities:Advance ticket sales
    
    $
    1,916
    
    
    $
    1,530Mileage Plus deferred revenue
    
    
    1,353
    
    
    
    1,414Long-term debt maturing within one year
    
    
    846
    
    
    
    780Accounts payable
    
    
    792
    
    
    
    833Accrued salaries, wages and benefits
    
    
    728
    
    
    
    756Fuel derivative instruments
    
    
    175
    
    
    
    718Fuel purchase commitments
    
    
    311
    
    
    
    219Current obligations under capital leases
    
    
    165
    
    
    
    168Accrued interest
    
    
    93
    
    
    
    112Other
    
    
    811
    
    
    
    1,0167,190
    
    
    
    7,546Long-term debt
    
    
    5,604
    
    
    
    5,861Long-term obligations under capital leases
    
    
    1,197
    
    
    
    1,192Other liabilities and deferred credits:Mileage Plus deferred revenue
    
    
    2,905
    
    
    
    2,768Postretirement benefit liability
    
    
    1,819
    
    
    
    1,812Advanced purchase of miles
    
    
    1,087
    
    
    
    1,087Deferred income taxes
    
    
    499
    
    
    
    724Other
    
    
    1,141
    
    
    
    9817,451
    
    
    
    7,372Commitments and contingent liabilities (Note 12)Stockholders deficit:Common stock at par, $5 par value;
authorized 1,000 shares; outstanding 205 at
both June 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Additional capital invested
    
    
    2,898
    
    
    
    2,831Retained deficit
    
    
    (5,610
    )
    
    
    (5,260
    )Accumulated other comprehensive income
    
    
    89
    
    
    
    93(2,623
    )
    
    
    (2,336
    )$
    18,819
    
    
    $
    19,635
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  11




---



##### Table of Contents



United Air Lines, Inc. and Subsidiary Companies
 
 Condensed Statements of Consolidated Cash Flows (Unaudited)
 (In millions)
 Six Months EndedJune 30,2009
    
    
    2008(Adjusted)Cash flows provided (used) by operating activities:Net loss
    
    $
    (350
    )
    
    $
    (3,316
    )Adjustments to reconcile to net cash provided (used) by operating activitiesDepreciation and amortization
    
    
    455
    
    
    
    436Proceeds from lease amendment
    
    
    160
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    2,277Other impairments and special items
    
    
    207
    
    
    
    223Increase in Mileage Plus deferred revenue and advanced purchase of miles
    
    
    129
    
    
    
    74Increase in advance ticket sales
    
    
    386
    
    
    
    868Net change in fuel derivative instruments and related pending settlements
    
    
    (809
    )
    
    
    (252
    )Decrease in fuel hedge collateral
    
    
    780
    
    
    
    Increase in receivables
    
    
    (45
    )
    
    
    (207
    )Other, net
    
    
    (89
    )
    
    
    93824
    
    
    
    196Cash flows provided (used) by investing activities:Net sales of short-term investments
    
    
    
    
    
    
    2,259Proceeds from asset sale-leaseback
    
    
    94
    
    
    
    Decrease in restricted cash
    
    
    16
    
    
    
    72Additions to property, equipment and deferred software
    
    
    (170
    )
    
    
    (267
    )Proceeds from disposition of property and equipment
    
    
    46
    
    
    
    14Other, net
    
    
    
    
    
    
    13(14
    )
    
    
    2,091Cash flows provided (used) by financing activities:Proceeds from issuance of long-term debt
    
    
    134
    
    
    
    84Capital contribution from parent
    
    
    62
    
    
    
    Decrease in lease deposits
    
    
    22
    
    
    
    154Dividend to parent
    
    
    
    
    
    
    (258
    )Repayment of Credit Facility
    
    
    (9
    )
    
    
    (9
    )Repayment of other debt
    
    
    (385
    )
    
    
    (350
    )Principal payments under capital leases
    
    
    (103
    )
    
    
    (200
    )Increase in deferred financing costs
    
    
    (4
    )
    
    
    (111
    )(283
    )
    
    
    (690
    )Increase in cash and cash equivalents during the period
    
    
    527
    
    
    
    1,597Cash and cash equivalents at beginning of the period
    
    
    2,033
    
    
    
    1,239Cash and cash equivalents at end of the period
    
    $
    2,560
    
    
    $
    2,836
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
  12




---



##### Table of Contents



UAL Corporation and Subsidiary Companies and
United Air Lines, Inc. and Subsidiary Companies
 
 Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
 (1) Basis of Presentation
  Combined Notes to Condensed Consolidated Financial Statements (Unaudited)
 Interim Financial Statements. .
 Restricted Cash.
 (2) New Accounting Pronouncements
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 Accounting
for Transfers of Financial Assets, an amendment of FASB Statement No. 140 Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities  a replacement of FASB Statement
No. 125
  13




---



##### Table of Contents



Amendments
to FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities
 Adoption of FSP APB 14-1. Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement)
  UAL
    
    
    UnitedAs
    
    
    As
    
    
    Effect
    
    
    As
    
    
    As
    
    
    Effect(In millions, except per share)
    
    Reported
    
    
    Adjusted
    
    
    of Change
    
    
    Reported
    
    
    Adjusted
    
    
    of ChangeStatement of Consolidated Operations (Unaudited)Three Months Ended June 30, 2008Interest expense
    
    $
    (126
    )
    
    $
    (137
    )
    
    $
    (11
    )
    
    $
    (126
    )
    
    $
    (137
    )
    
    $
    (11
    )Nonoperating expense
    
    
    (65
    )
    
    
    (76
    )
    
    
    (11
    )
    
    
    (65
    )
    
    
    (76
    )
    
    
    (11
    )Loss before income taxes and equity earnings in affiliates
    
    
    (2,759
    )
    
    
    (2,770
    )
    
    
    (11
    )
    
    
    (2,787
    )
    
    
    (2,798
    )
    
    
    (11
    )Net loss
    
    
    (2,729
    )
    
    
    (2,740
    )
    
    
    (11
    )
    
    
    (2,757
    )
    
    
    (2,768
    )
    
    
    (11
    )Loss per share, basic and diluted
    
    
    (21.47
    )
    
    
    (21.57
    )
    
    
    (0.10
    )
    
    NA
    
    
    NA
    
    
    NATotal comprehensive loss
    
    
    (2,744
    )
    
    
    (2,755
    )
    
    
    (11
    )
    
    
    (2,772
    )
    
    
    (2,783
    )
    
    
    (11
    )Six Months Ended June 30, 2008Interest expense
    
    $
    (261
    )
    
    $
    (284
    )
    
    $
    (23
    )
    
    $
    (260
    )
    
    $
    (283
    )
    
    $
    (23
    )Nonoperating expense
    
    
    (166
    )
    
    
    (189
    )
    
    
    (23
    )
    
    
    (166
    )
    
    
    (189
    )
    
    
    (23
    )Loss before income taxes and equity earnings in affiliates
    
    
    (3,301
    )
    
    
    (3,324
    )
    
    
    (23
    )
    
    
    (3,329
    )
    
    
    (3,352
    )
    
    
    (23
    )Net loss
    
    
    (3,266
    )
    
    
    (3,289
    )
    
    
    (23
    )
    
    
    (3,293
    )
    
    
    (3,316
    )
    
    
    (23
    )Loss per share, basic and diluted
    
    
    (26.33
    )
    
    
    (26.52
    )
    
    
    (0.19
    )
    
    NA
    
    
    NA
    
    
    NATotal comprehensive loss
    
    
    (3,293
    )
    
    
    (3,316
    )
    
    
    (23
    )
    
    
    (3,320
    )
    
    
    (3,343
    )
    
    
    (23
    )Statement of Consolidated Financial Position (Unaudited) (a)As of December 31, 2008Long-term debt
    
    $
    6,007
    
    
    $
    5,862
    
    
    $
    (145
    )
    
    $
    6,007
    
    
    $
    5,861
    
    
    $
    (146
    )Additional capital invested
    
    
    2,666
    
    
    
    2,919
    
    
    
    253
    
    
    
    2,578
    
    
    
    2,831
    
    
    
    253Retained deficit
    
    
    (5,199
    )
    
    
    (5,308
    )
    
    
    (109
    )
    
    
    (5,151
    )
    
    
    (5,260
    )
    
    
    (109
    )
 
 (a)
    
    The adoption of APB 14-1, also had minor impacts on Other assets and Deferred income
taxes as reported in the Companys Financial Statements. The adoption required an increase to the Companys deferred tax liability and
a decrease to its additional paid in capital. However, these impacts were substantially
offset by a corresponding decrease in the valuation allowance for deferred tax assets and
increase to additional paid in capital in accordance with applicable GAAP.
  14




---



##### Table of Contents



June 30, 2009
    
    
    December 31, 2008$726
    
    
    $150
    
    
    $726
    
    
    $150million
    
    
    million
    
    
    million
    
    
    million($ and shares in millions, except conversion prices)
    
    notes
    
    
    notes
    
    
    notes
    
    
    notesCarrying amount of the equity component
    
    $
    216
    
    
    $
    38
    
    
    $
    216
    
    
    $
    38Principal amount of the liability component
    
    
    726
    
    
    
    150
    
    
    
    726
    
    
    
    150Unamortized discount of liability component
    
    
    104
    
    
    
    16
    
    
    
    126
    
    
    
    20Net carrying amount of liability component
    
    
    622
    
    
    
    134
    
    
    
    600
    
    
    
    130Remaining amortization period of discount
    
    24 months
    
    
    19 months
    
    
    
    (a)
    
    
    
    (a)Conversion price
    
    $
    32.64
    
    
    $
    43.90
    
    
    
    (a)
    
    
    
    (a)Number of shares to be issued upon conversion
    
    
    22.2
    
    
    
    3.4
    
    
    
    (a)
    
    
    
    (a)Effective interest rate on liability component
    
    
    12.8
    %
    
    
    12.1
    %
    
    
    (a)
    
    
    
    (a)
  (a)
    
    Not required to be disclosed.  $726 million notes
    
    
    $150 million notesThree Months Ended
    
    
    Six Months Ended
    
    
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Non-cash interest cost recognized (a)
    
    $
    11
    
    
    $
    9
    
    
    $
    22
    
    
    $
    19
    
    
    $
    2
    
    
    $
    2
    
    
    $
    4
    
    
    $
    4Cash interest cost recognized
    
    
    8
    
    
    
    8
    
    
    
    16
    
    
    
    16
    
    
    
    2
    
    
    
    2
    
    
    
    4
    
    
    
    4
  (a)
    
    Amounts represent the impact of adoption of APB 14-1 on interest expense for the three and
six months ended June 30, 2009 and 2008. The related negative impact of adoption on earnings
(loss) per share for the three and six months ended June 30, 2009 is $0.09 and $0.18,
respectively. Adoption of FSP EITF 03-6-1. Determining Whether
Instruments Granted in Share-Based Payment Transactions are Participating Securities
 Other Standards Adopted. Disclosures about Derivative Instruments and
Hedging Activities-an amendment of FASB Statement No. 133 Fair Value
Measurements Effective Date of FASB Statement No. 157. Interim Disclosures about Fair Value of Financial
Instruments Recognition and Presentation of
Other-Than-Temporary Impairments
  15




---



##### Table of Contents



(3) Company Operational Plans
  (In millions)
 Reserve Activity
    
    Severance
    
    
    Leased AircraftBalance at December 31, 2008
    
    $
    81
    
    
    $
    16Payments
    
    
    (29
    )
    
    
    (7
    )Accruals
    
    
    1
    
    
    
    19Balance at June 30, 2009
    
    $
    53
    
    
    $
    28
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,Expense Recognized
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Severance
    
    $
    6
    
    
    $
    82
    
    
    $
    1
    
    
    $
    82Leased aircraft
    
    
    13
    
    
    
    
    
    
    
    24
    
    
    
    
    B737s (Mainline)
    
    
    All Other Mainline
    
    
    Total
    
    
    RegionalOwned
    
    
    Leased
    
    
    Total
    
    
    Owned
    
    
    Leased
    
    
    Total
    
    
    Mainline
    
    
    Affiliates
    
    
    TotalAircraft at December 31, 2008
    
    
    18
    
    
    
    28
    
    
    
    46
    
    
    
    191
    
    
    
    172
    
    
    
    363
    
    
    
    409
    
    
    
    280
    
    
    
    689Added to (removed from) operating fleet
    
    
    (13
    )
    
    
    (9
    )
    
    
    (22
    )
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    (23
    )
    
    
    16
    
    
    
    (7
    )Transferred from leased to owned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transferred from owned to leased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Aircraft at June 30, 2009
    
    
    5
    
    
    
    19
    
    
    
    24
    
    
    
    182
    
    
    
    180
    
    
    
    362
    
    
    
    386
    
    
    
    296
    
    
    
    682Nonoperating at December 31, 2008 (a)
    
    
    24
    
    
    
    12
    
    
    
    36
    
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    39
    
    
    
    
    
    
    
    39Removed from operating fleet
    
    
    13
    
    
    
    9
    
    
    
    22
    
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    23
    
    
    
    
    
    
    
    23Returned to lessors
    
    
    
    
    
    
    (9
    )
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    (9
    )Nonoperating at June 30, 2009 (a)
    
    
    37
    
    
    
    12
    
    
    
    49
    
    
    
    4
    
    
    
    
    
    
    
    4
    
    
    
    53
    
    
    
    
    
    
    
    53
 
 (a)
    
    At December 31, 2008 and June 30, 2009, United had one less owned and one more leased
nonoperating B737 aircraft as compared to the UAL amounts shown in this table.   16




---



##### Table of Contents



Other Costs.
 (4) Common Stockholders Deficit
   (5) Per Share Amounts (UAL Only)
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(Adjusted)
    
    
    
    
    
    
    (Adjusted)Basic earnings (loss) per share:Net income (loss)
    
    $
    28
    
    
    $
    (2,740
    )
    
    $
    (354
    )
    
    $
    (3,289
    )Preferred stock dividend requirements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Earnings (loss) available to common stockholders (a)
    
    $
    28
    
    
    $
    (2,740
    )
    
    $
    (354
    )
    
    $
    (3,291
    )Basic weighted average shares outstanding
    
    
    145.1
    
    
    
    127.1
    
    
    
    144.9
    
    
    
    124.1Earnings (loss) per basic share
    
    $
    0.19
    
    
    $
    (21.57
    )
    
    $
    (2.44
    )
    
    $
    (26.52
    )Diluted earnings (loss) per share:Earnings (loss) available to common stockholders
    
    $
    28
    
    
    $
    (2,740
    )
    
    $
    (354
    )
    
    $
    (3,291
    )Diluted weighted average shares outstanding
    
    
    145.1
    
    
    
    127.1
    
    
    
    144.9
    
    
    
    124.1Earnings (loss) per share, diluted
    
    $
    0.19
    
    
    $
    (21.57
    )
    
    $
    (2.44
    )
    
    $
    (26.52
    )Potentially dilutive shares excluded from diluted per share amounts:Stock options
    
    
    6.7
    
    
    
    4.3
    
    
    
    6.7
    
    
    
    4.3Restricted shares (a)
    
    
    
    
    
    
    1.4
    
    
    
    0.9
    
    
    
    1.42% preferred securities
    
    
    
    
    
    
    2.2
    
    
    
    
    
    
    
    5.24.5% senior limited-subordination convertible notes
    
    
    22.2
    
    
    
    22.2
    
    
    
    22.2
    
    
    
    22.25% convertible notes
    
    
    3.4
    
    
    
    3.4
    
    
    
    3.4
    
    
    
    3.432.3
    
    
    
    33.5
    
    
    
    33.2
    
    
    
    36.5
  (a)
    
    Net income available to participating securities (unvested restricted shares) was not
material for the second quarter of 2009. Losses are not allocated to participating securities
in the computation of earnings (loss) per common share.  17




---



##### Table of Contents



(6) Share-Based Compensation Plans
   OptionsOutstanding at beginning of period
    
    
    4,353,672Granted
    
    
    2,487,200Canceled
    
    
    (164,566
    )Outstanding at end of period
    
    
    6,676,306Exercisable (vested) at end of period
    
    
    2,908,837
  Restricted Stock Units
    
    
    Restricted StockNonvested at beginning of period
    
    
    
    
    
    
    1,430,675Granted
    
    
    1,795,600
    
    
    
    42,400Vested
    
    
    
    
    
    
    (597,616
    )Terminated
    
    
    (18,600
    )
    
    
    (24,788
    )Nonvested at end of period
    
    
    1,777,000
    
    
    
    850,671
 (7) Income Taxes
     18




---



##### Table of Contents



(8) Retirement and Postretirement Plans
   Pension Benefits
    
    
    Other Benefits(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Three Months Ended June 30,Service cost
    
    $
    1
    
    
    $
    1
    
    
    $
    7
    
    
    $
    8Interest cost
    
    
    2
    
    
    
    2
    
    
    
    28
    
    
    
    30Expected return on plan assets
    
    
    (1
    )
    
    
    (3
    )
    
    
    
    
    
    
    (1
    )Gain due to curtailment
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    Amortization of unrecognized gain and prior service cost
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    (4
    )Net periodic benefit costs
    
    $
    2
    
    
    $
    
    
    
    $
    29
    
    
    $
    33Six Months Ended June 30,Service cost
    
    $
    3
    
    
    $
    3
    
    
    $
    14
    
    
    $
    16Interest cost
    
    
    4
    
    
    
    5
    
    
    
    57
    
    
    
    60Expected return on plan assets
    
    
    (3
    )
    
    
    (6
    )
    
    
    (1
    )
    
    
    (2
    )Gain due to curtailment
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    Amortization of unrecognized gain and prior service cost
    
    
    
    
    
    
    (1
    )
    
    
    (10
    )
    
    
    (8
    )Net periodic benefit costs
    
    $
    4
    
    
    $
    1
    
    
    $
    53
    
    
    $
    66
  19




---



##### Table of Contents



(9) Segment Information
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(Adjusted)
    
    
    
    
    
    
    (Adjusted)UAL segment informationRevenue:Mainline
    
    $
    3,269
    
    
    $
    4,574
    
    
    $
    6,301
    
    
    $
    8,570Regional Affiliates
    
    
    749
    
    
    
    797
    
    
    
    1,408
    
    
    
    1,512Total
    
    $
    4,018
    
    
    $
    5,371
    
    
    $
    7,709
    
    
    $
    10,082Segment earnings (loss):Mainline
    
    $
    62
    
    
    $
    (219
    )
    
    $
    (218
    )
    
    $
    (707
    )Regional Affiliates
    
    
    41
    
    
    
    (50
    )
    
    
    29
    
    
    
    (114
    )Goodwill impairment
    
    
    
    
    
    
    (2,277
    )
    
    
    
    
    
    
    (2,277
    )Other impairments and special items (a)
    
    
    (88
    )
    
    
    (223
    )
    
    
    (207
    )
    
    
    (223
    )Less: equity earnings (b)
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )Consolidated earnings (loss) before
income taxes and equity in earnings
of affiliates
    
    $
    14
    
    
    $
    (2,770
    )
    
    $
    (398
    )
    
    $
    (3,324
    )United segment informationRevenue:Mainline
    
    $
    3,271
    
    
    $
    4,574
    
    
    $
    6,306
    
    
    $
    8,570Regional Affiliates
    
    
    749
    
    
    
    797
    
    
    
    1,408
    
    
    
    1,512Total
    
    $
    4,020
    
    
    $
    5,371
    
    
    $
    7,714
    
    
    $
    10,082Segment earnings (loss):Mainline
    
    $
    65
    
    
    $
    (247
    )
    
    $
    (214
    )
    
    $
    (735
    )Regional Affiliates
    
    
    41
    
    
    
    (50
    )
    
    
    29
    
    
    
    (114
    )Goodwill impairment
    
    
    
    
    
    
    (2,277
    )
    
    
    
    
    
    
    (2,277
    )Asset impairment and special items (a)
    
    
    (88
    )
    
    
    (223
    )
    
    
    (207
    )
    
    
    (223
    )Less: equity earnings (b)
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    (3
    )Consolidated earnings (loss)
before income taxes and equity in
earnings of affiliates
    
    $
    17
    
    
    $
    (2,798
    )
    
    $
    (394
    )
    
    $
    (3,352
    )
 
 (a)
    
    Asset impairment and special items are only applicable to the Mainline segment.(b)
    
    Equity earnings are part of the Mainline segment. (10) Comprehensive Income (Loss)
   20




---



##### Table of Contents



(11) Fair Value Measurements and Derivative Instruments
 Fair Value Information.
 Level 1
    
    Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities.
 Level 2
    
    Observable inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets and liabilities in active markets; quoted prices for identical
or similar assets and liabilities in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data.
 Level 3
    
    Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  Fair Value Measurements at Reporting Date UsingQuoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significant
    
    
    Totalfor
    
    
    Observable
    
    
    Unobservable
    
    
    Gains/Identical Assets
    
    
    Inputs
    
    
    Inputs
    
    
    (Losses)(In millions)
    
    June 30, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Level 3)Assets and Liabilities Measured at Fair
Value on a Recurring Basis:Financial assets:Noncurrent EETC available-for-sale securities
    
    $
    44
    
    
    $
    
    
    
    $
    
    
    
    $
    44
    
    
    $
    Current fuel derivative instruments
    
    
    165
    
    
    
    
    
    
    
    165
    
    
    
    
    
    
    
    Fuel derivative instrument receivables (a)
    
    
    16
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    Total financial assets
    
    $
    225
    
    
    $
    
    
    
    $
    181
    
    
    $
    44
    
    
    $
    Financial liabilities:Current fuel derivative instruments
    
    $
    175
    
    
    $
    
    
    
    $
    175
    
    
    $
    
    
    
    $
    Noncurrent fuel derivative instruments
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    Fuel derivative instrument payables (a)
    
    
    61
    
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    Total financial liabilities
    
    $
    239
    
    
    $
    
    
    
    $
    239
    
    
    $
    
    
    
    $
    
 
 (a)
    
    Fuel derivative instrument receivables and payables represent pending settlements of contract
premiums and expired contracts.
 ,
 Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    
    June 30,
    
    
    Balance Sheet
    
    
    June 30,(In millions)
    
    Location
    
    2009
    
    

Location
    
    2009Derivatives not receiving hedge accounting treatment:Fuel contracts due within one year
    
    Receivables
    
    $
    165
    
    
    Fuel derivative instruments
    
    $
    175Fuel contracts due after one year
    
    
    
    
    
    
    
    
    
    Other Liabilities
    
    
    3Total derivatives
    
    
    
    
    
    $
    165
    
    
    
    
    
    
    $
    178
  21




---



##### Table of Contents



Level 3 Financial Assets and Liabilities
 Available-for-Sale SecuritiesThree Months Ended
    
    
    Six Months Ended(In millions)
    
    June 30, 2009
    
    
    June 30, 2009Balance at beginning of period
    
    $
    42
    
    
    $
    46Unrealized gains relating to instruments held at reporting date
    
    
    2
    
    
    
    Return of principal
    
    
    
    
    
    
    (2
    )Balance at end of period
    
    $
    44
    
    
    $
    44
 .
  June 30, 2009Carrying
    
    
    Fair(In millions)
    
    Amount
    
    
    ValueLong-tem debt (including current portion)
    
    $
    6,450
    
    
    $
    4,381Lease deposits
    
    
    319
    
    
    
    340
  Description
    
    Fair Value MethodologyCash, Cash Equivalents,
Restricted Cash, Accounts
Receivable, Fuel Hedge
Collateral Deposits,
Accounts Payable and Other
Accrued Liabilities
    
    The carrying amounts approximate fair value because of the short-term
maturity of these investments.Enhanced Equipment
Trust Certificates
    
    The EETCs are not actively traded on an exchange. Fair value is based on
the trading prices of Uniteds EETCs or similar EETC instruments issued
by other airlines. The Company uses internal models and observable and
unobservable inputs to corroborate third party quotes. Because certain
inputs are unobservable, the Company categorized inputs to the EETC fair
value valuation as Level 3. Significant inputs to the valuation models
include contractual terms, risk-free interest rates and credit spreads.Fuel Derivative Instruments
    
    Derivative contracts are privately negotiated contracts and are not
exchange traded. Fair value measurements are estimated with option
pricing models that employ observable and unobservable inputs. Inputs to
the valuation models include contractual terms, market prices, yield
curves, fuel price curves and measures of volatility, among others.Foreign Currency 
Derivative Instruments
    
    Fair value is determined with a formula utilizing observable inputs.
Significant inputs to the valuation models include contractual terms,
risk-free interest rates and forward exchange rates.Long-Term Debt
    
    The fair value is based on the quoted market prices for the same or
similar issues, discounted cash flow models using appropriate market
rates and the Black-Scholes model to value conversion rights in UALs
convertible debt instruments. The Companys credit risk was considered in
estimating fair value.
  22




---



##### Table of Contents



Derivative Credit Risk and Fair Value
  .
 .
  Derivative Instruments
  Aircraft Fuel Hedges.
  NonoperatingMainline Fuel
    
    
    Income (Expense)
    
    
    TotalThree Months Ended
    
    
    Three Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Fuel hedges (a):Cash
net gains (losses) on settled contracts
    
    $
    (157
    )
    
    $
    51
    
    
    $
    (95
    )
    
    $
    1
    
    
    $
    (252
    )
    
    $
    52Non-cash net
mark-to-market gains
    
    
    305
    
    
    
    187
    
    
    
    135
    
    
    
    21
    
    
    
    440
    
    
    
    208Total
    
    $
    148
    
    
    $
    238
    
    
    $
    40
    
    
    $
    22
    
    
    $
    188
    
    
    $
    260
  23




---



##### Table of Contents



NonoperatingMainline Fuel
    
    
    Income (Expense)
    
    
    TotalSix Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Fuel hedges (a):Cash
net gains (losses) on settled contracts
    
    $
    (399
    )
    
    $
    63
    
    
    $
    (176
    )
    
    $
    1
    
    
    $
    (575
    )
    
    $
    64Non-cash net
mark-to-market gains
    
    
    496
    
    
    
    216
    
    
    
    207
    
    
    
    21
    
    
    
    703
    
    
    
    237Total
    
    $
    97
    
    
    $
    279
    
    
    $
    31
    
    
    $
    22
    
    
    $
    128
    
    
    $
    301
 
 (a)
    
    Fuel hedge gains (losses) are not allocated to Regional Affiliates expense.  Barrels hedged (in 000s)
    
    
    Weighted-average crude equivalent price per barrel (c)Percentage ofProjectedFuel
    
    
    
    
    
    
    
    
    
    
    Swaps/
    
    
    
    
    
    
    Payment
    
    
    Payment
    
    
    Hedge
    
    
    HedgeRequirements
    
    
    Purchased
    
    
    Sold
    
    
    Purchased
    
    
    Sold
    
    
    Obligation
    
    
    Obligation
    
    
    Protection
    
    
    ProtectionHedged
    
    
    Puts
    
    
    Puts
    
    
    Calls
    
    
    Calls
    
    
    Ends
    
    
    Begins
    
    
    Begins
    
    
    Ends%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    $
    
    
    $
    
    
    $Third Quarter 2009:Calls
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    3,900
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    61
    (a)
    
    NASwaps
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    3,500
    
    
    
    
    
    
    NA
    
    
    
    68
    
    
    
    68
    
    
    NACollars
    
    
    2
    
    
    
    
    
    
    
    375
    
    
    
    225
    
    
    
    
    
    
    NA
    
    
    
    113
    
    
    
    133
    
    
    NA3-way collars
    
    
    18
    
    
    
    
    
    
    
    3,075
    
    
    
    2,625
    
    
    
    2,625
    
    
    NA
    
    
    
    100
    
    
    
    115
    
    
    
    1484-way collars
    
    
    2
    
    
    
    225
    
    
    
    225
    
    
    
    225
    
    
    
    225
    
    
    
    63
    
    
    
    78
    
    
    
    95
    
    
    
    135Total
    
    
    73
    
    
    
    225
    
    
    
    3,675
    
    
    
    10,475
    
    
    
    2,850Purchased puts
    
    
    14
    
    
    
    1,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    50
    
    
    NALast Six Months of 2009:Calls
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    7,750
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    64
    (b)
    
    NASwaps
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    5,300
    
    
    
    
    
    
    NA
    
    
    
    66
    
    
    
    66
    
    
    NACollars
    
    
    2
    
    
    
    
    
    
    
    675
    
    
    
    375
    
    
    
    
    
    
    NA
    
    
    
    113
    
    
    
    135
    
    
    NA3-way collars
    
    
    13
    
    
    
    
    
    
    
    4,500
    
    
    
    3,675
    
    
    
    3,675
    
    
    NA
    
    
    
    100
    
    
    
    117
    
    
    
    1514-way collars
    
    
    2
    
    
    
    450
    
    
    
    450
    
    
    
    450
    
    
    
    450
    
    
    
    63
    
    
    
    78
    
    
    
    95
    
    
    
    135Total
    
    
    64
    
    
    
    450
    
    
    
    5,625
    
    
    
    17,550
    
    
    
    4,125Purchased puts
    
    
    13
    
    
    
    3,525
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    51
    
    
    NA
 
 (a)
    
    Call position average
includes the following two groupings of positions: 25% of consumption
with protection beginning at $56 per barrel and 3% of consumption
beginning at $106 per barrel.(b)
    
    Call position average
includes the following two groupings of positions: 26% of consumption
with protection beginning at $60 per barrel and 2% of consumption beginning at $106 per
barrel.(c)
    
    Instruments in heating oil and jet fuel are converted to crude oil price equivalents.   24




---



##### Table of Contents



Foreign Exchange. Financial Statements.
 Fair Value of Nonfinancial Assets
  Fair Value Measurements during 2009Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significant
    
    
    Totalfor
    
    
    Observable
    
    
    Unobservable
    
    
    Gains/Identical Assets
    
    
    Inputs
    
    
    Inputs
    
    
    (Losses)(In millions)
    
    June 30, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Level 3)Nonfinancial Assets
Measured at Fair
Value on a
Recurring Basis:Tradenames
    
    $
    420
    
    
    $
    
    
    
    $
    
    
    
    $
    420
    
    
    $
    (150
    )
  (12) Commitments, Contingent Liabilities and Uncertainties
 General Guarantees and Indemnifications.
 Labor Negotiations.
 Bankruptcy Contingencies.
  25




---



##### Table of Contents



(In millions)Balance at December 31, 2008
    
    $
    96Payments
    
    
    (33
    )Accruals
    
    
    26Balance at June 30, 2009
    
    $
    89
 Legal and Environmental.
     26




---



##### Table of Contents



Contingent Senior Unsecured Notes.
 Commitments.
 Municipal Bond Guarantee.
 (13) Debt Obligations and Other Financing Transactions
   27




---



##### Table of Contents



Amended Credit Facility and Letters of Credit
  Financing Arrangements
     Credit Card Processing Agreements
    (14) Asset Impairments and Special Items
 Impairment
Testing.
  28




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Goodwill impairment
    
    $
    
    
    
    $
    2,277
    
    
    $
    
    
    
    $
    2,277Indefinite-lived intangible assets:Codeshare agreements
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Tradenames
    
    
    40
    
    
    
    20
    
    
    
    150
    
    
    
    20Intangible asset impairments
    
    
    40
    
    
    
    80
    
    
    
    150
    
    
    
    80Tangible assets:Pre-delivery advance deposits including related capitalized interest
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    105B737 aircraft, B737 spare parts and other
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    38Aircraft and related deposit impairments
    
    
    
    
    
    
    143
    
    
    
    
    
    
    
    143Total impairments
    
    $
    40
    
    
    $
    2,500
    
    
    $
    150
    
    
    $
    2,500
  29




---



##### Table of Contents



Special items.
 (15) Related Party Transactions
  (16) Subsequent Events
    30




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Overview
 ®
 ®
 Combined Notes to Condensed Consolidated Financial
Statements (Unaudited)
 Company Operational Plans.
 Recent Developments.
 
    
    During the second quarter of 2009, the Company initiated a fleet modernization review
with a request for proposal that has the potential to result in a large order of
next-generation wide body and narrow body aircraft to replace its older fleet types. This
process could present a unique opportunity for the Company to improve its cost structure
and fleet strategy.
 
    
    The Company has completed the upgrade of its entire fleet of international B767
aircraft with new first and business class premium seats, entertainment systems and other
product enhancements. This new international premium travel product features, among other
improvements, 180-degree, lie flat beds in business class. In addition, the Company has
upgraded 18 of 24 aircraft in its B747 fleet with expected completion in October 2009. In
addition, the reconfiguration of its international B777 fleet will commence in early 2010.
 
    
    The Company is taking appropriate actions to respond to the current economic
environment as indicated by its significant capacity reductions. However, consolidated
passenger revenue per available seat mile was also down 17.2% and 14.4% in the
second quarter and first six months of 2009, respectively, as compared to the year-ago
comparable periods as a result of the severe global recession.
 
    
    In July 2009, the Company announced plans to reduce its international capacity by an
additional 7% during the last four months of 2009. The Company continues to monitor its
capacity levels and will make additional reductions, as appropriate.
  31




---



##### Table of Contents




    
    During the second quarter and first six months of 2009, the Company maintained its
momentum on cost control with a Mainline unit cost per available seat mile decrease of
50.2% and 36.2%, respectively, compared to the second quarter and the first half of 2008,
reflecting the impact of lower fuel prices year-over-year and the Companys cost savings
initiatives. The Companys consolidated fuel expense decreased $1.4 billion and $2.3
billion, or 62% and 56%, respectively, compared to the second quarter and the first half
of 2008, respectively, including hedge impacts.
 
    
    Since January 1, 2009,
the Company has raised more than $650 million in new liquidity through various
activities, including aircraft and engine financings, the July 2009 spare parts financing
discussed below, airport facility relocations, equity issuances and asset sales. The
Company had an unrestricted cash balance of $2.6 billion as of June 30, 2009.
 Continental Alliance.
 Summary of Financial Results.
  Three months ended June 30,
    
    
    Six months ended June 30,Favorable (unfavorable)
    
    
    
    
    
    
    
    
    
    
    Favorable (unfavorable)(In millions)
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % Change(Adjusted (a))
    
    
    
    
    
    
    
    
    
    
    
    (Adjusted (a))UAL InformationTotal revenues
    
    $
    4,018
    
    
    $
    5,371
    
    
    $
    (1,353
    )
    
    
    (25.2
    )
    
    $
    7,709
    
    
    $
    10,082
    
    
    $
    (2,373
    )
    
    
    (23.5
    )Mainline fuel purchase cost
    
    
    813
    
    
    
    2,086
    
    
    
    1,273
    
    
    
    61.0
    
    
    
    1,561
    
    
    
    3,702
    
    
    
    2,141
    
    
    
    57.8Operating
non-cash fuel hedge gains (b)
    
    
    (305
    )
    
    
    (187
    )
    
    
    118
    
    
    
    63.1
    
    
    
    (496
    )
    
    
    (216
    )
    
    
    280
    
    
    
    129.6Operating
cash fuel hedge (gains) losses (b)
    
    
    157
    
    
    
    (51
    )
    
    
    (208
    )
    
    
    
    
    
    
    399
    
    
    
    (63
    )
    
    
    (462
    )
    
    
    Regional Affiliate fuel expense (c)
    
    
    178
    
    
    
    355
    
    
    
    177
    
    
    
    49.9
    
    
    
    342
    
    
    
    633
    
    
    
    291
    
    
    
    46.0Asset impairment and special charges (see below)
    
    
    88
    
    
    
    2,500
    
    
    
    2,412
    
    
    
    96.5
    
    
    
    207
    
    
    
    2,500
    
    
    
    2,293
    
    
    
    91.7Severance and other charges (see below)
    
    
    15
    
    
    
    109
    
    
    
    94
    
    
    
    86.2
    
    
    
    
    
    
    
    115
    
    
    
    115
    
    
    
    100.0Other operating expenses
    
    
    2,965
    
    
    
    3,253
    
    
    
    288
    
    
    
    8.9
    
    
    
    5,871
    
    
    
    6,546
    
    
    
    675
    
    
    
    10.3Nonoperating
non-cash fuel hedge gains (b)
    
    
    (135
    )
    
    
    (21
    )
    
    
    114
    
    
    NM
    
    
    
    (207
    )
    
    
    (21
    )
    
    
    186
    
    
    NMNonoperating
cash fuel hedge (gains) losses (b)
    
    
    95
    
    
    
    (1
    )
    
    
    (96
    )
    
    
    
    
    
    
    176
    
    
    
    (1
    )
    
    
    (177
    )
    
    
    Other nonoperating expense (d)
    
    
    132
    
    
    
    97
    
    
    
    (35
    )
    
    
    (36.1
    )
    
    
    252
    
    
    
    208
    
    
    
    (44
    )
    
    
    (21.2
    )Income tax benefit
    
    
    (13
    )
    
    
    (29
    )
    
    
    (16
    )
    
    
    (55.2
    )
    
    
    (42
    )
    
    
    (32
    )
    
    
    10
    
    
    
    31.3Net income (loss)
    
    $
    28
    
    
    $
    (2,740
    )
    
    $
    2,768
    
    
    
    
    
    
    $
    (354
    )
    
    $
    (3,289
    )
    
    $
    2,935
    
    
    
    89.2United net income (loss)
    
    $
    31
    
    
    $
    (2,768
    )
    
    $
    2,799
    
    
    
    
    
    
    $
    (350
    )
    
    $
    (3,316
    )
    
    $
    2,966
    
    
    
    89.4
 
 (a)
    
    As discussed in Note 2, New Accounting Pronouncements, in the Footnotes,certain amounts have been adjusted from the
Companys historical results due to the retrospective adoption of a new accounting standard related to accounting for
certain of the Companys convertible debt instruments.(b)
    
    See the table below for additional information related to fuel hedge adjustments.(c)
    
    Regional Affiliates fuel expense is classified as part of Regional Affiliates expense in the Companys Financial Statements.(d)
    
    Includes equity in earnings of affiliates.  32




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    Income statement classificationGoodwill impairment
    
    $
    
    
    
    $
    2,277
    
    
    $
    
    
    
    $
    2,277
    
    
    Goodwill impairmentIntangible asset impairments
    
    
    40
    
    
    
    80
    
    
    
    150
    
    
    
    80Aircraft and related deposit impairments
    
    
    
    
    
    
    143
    
    
    
    
    
    
    
    143LAX municipal bond secured interest
    
    
    27
    
    
    
    
    
    
    
    27
    
    
    
    Lease termination and other special items
    
    
    21
    
    
    
    
    
    
    
    30
    
    
    
    Other impairments and special items
    
    
    88
    
    
    
    223
    
    
    
    207
    
    
    
    223
    
    
    Other impairments and special itemsTotal asset impairments and special items
    
    
    88
    
    
    
    2,500
    
    
    
    207
    
    
    
    2,500Severance
    
    
    6
    
    
    
    82
    
    
    
    1
    
    
    
    82
    
    
    Salaries and related costsEmployee benefit obligation adjustment
    
    
    (1
    )
    
    
    28
    
    
    
    (33
    )
    
    
    34
    
    
    Salaries and related costsLitigation-related settlement gain
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    (29
    )
    
    Other operating expensesCharges related to terminated/deferred projects
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    26
    
    
    Purchased servicesAccelerated depreciation related to aircraft groundings
    
    
    10
    
    
    
    2
    
    
    
    32
    
    
    
    2
    
    
    Depreciation and amortizationSeverance and other charges
    
    
    15
    
    
    
    109
    
    
    
    
    
    
    
    115Total asset impairments, special items and other charges
    
    
    103
    
    
    
    2,609
    
    
    
    207
    
    
    
    2,615Net
operating non-cash fuel hedge gains
    
    
    (305
    )
    
    
    (187
    )
    
    
    (496
    )
    
    
    (216
    )
    
    Aircraft fuelNet
nonoperating non-cash fuel hedge gains
    
    
    (135
    )
    
    
    (21
    )
    
    
    (207
    )
    
    
    (21
    )
    
    Miscellaneous, netTotal
non-cash fuel hedge gains
    
    
    (440
    )
    
    
    (208
    )
    
    
    (703
    )
    
    
    (237
    )Income tax benefit on impairments and other charges
    
    
    (14
    )
    
    
    (29
    )
    
    
    (52
    )
    
    
    (29
    )
    
    Income tax benefitImpairments and other charges (net of tax) and non-cash
fuel hedge gains
    
    $
    (351
    )
    
    $
    2,372
    
    
    $
    (548
    )
    
    $
    2,349
 Liquidity.
 As of
    
    
    As ofJune 30,
    
    
    December 31,(In millions)
    
    2009
    
    
    2008Cash and cash equivalents
    
    $
    2,566
    
    
    $
    2,039Restricted cash
    
    
    281
    
    
    
    272Total cash
    
    $
    2,847
    
    
    $
    2,311
 Six Months EndedJune 30,2009
    
    
    2008Net cash provided by operating activities
    
    $
    822
    
    
    $
    137Net cash provided (used) by investing activities
    
    
    (9
    )
    
    
    2,197Net cash used by financing activities
    
    
    (286
    )
    
    
    (694
    )
 Results
of Operations Item 3. Quantitative and Qualitative
Disclosures about Market Risk
  33




---



##### Table of Contents



Liquidity and Capital Resources Item
3. Quantitative and Qualitative Disclosures about Market Risk
 Capital Commitments.
 Contingencies.
 Labor Negotiations.
 Bankruptcy Matters.
 Municipal Bond Obligations & Off-Balance Sheet Financing.
 Legal and Environmental.
    34




---



##### Table of Contents



Results of Operations
  Second Quarter 2009 Compared to Second Quarter 2008
 Overview
 Operating Revenues.
 Three Months EndedJune 30,
    
    
    $
    
    
    %(In millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    ChangePassengerUnited Airlines
    
    $
    2,941
    
    
    $
    4,099
    
    
    $
    (1,158
    )
    
    
    (28.3
    )PassengerRegional Affiliates
    
    
    749
    
    
    
    797
    
    
    
    (48
    )
    
    
    (6.0
    )Cargo
    
    
    121
    
    
    
    237
    
    
    
    (116
    )
    
    
    (48.9
    )Other operating revenues
    
    
    207
    
    
    
    238
    
    
    
    (31
    )
    
    
    (13.0
    )UAL total
    
    $
    4,018
    
    
    $
    5,371
    
    
    $
    (1,353
    )
    
    
    (25.2
    )United total
    
    $
    4,020
    
    
    $
    5,371
    
    
    $
    (1,351
    )
    
    
    (25.2
    )
  35




---



##### Table of Contents



RegionalDomestic
    
    
    Pacific
    
    
    Atlantic
    
    
    Latin
    
    
    Mainline
    
    
    Affiliates
    
    
    ConsolidatedIncrease (decrease) from 2008:Passenger revenues (in millions)
    
    $
    (627
    )
    
    $
    (312
    )
    
    $
    (159
    )
    
    $
    (60
    )
    
    $
    (1,158
    )
    
    $
    (48
    )
    
    $
    (1,206
    )Passenger revenues
    
    
    (26.0
    )%
    
    
    (37.7
    )%
    
    
    (22.0
    )%
    
    
    (45.4
    )%
    
    
    (28.3
    )%
    
    
    (6.0
    )%
    
    
    (24.6
    )%Available seat miles (ASMs) (a)
    
    
    (13.2
    )%
    
    
    (12.4
    )%
    
    
    0.6
    %
    
    
    (17.2
    )%
    
    
    (10.8
    )%
    
    
    7.1
    %
    
    
    (9.0
    )%Revenue passenger miles (RPMs) (b)
    
    
    (12.2
    )%
    
    
    (16.0
    )%
    
    
    (1.2
    )%
    
    
    (25.4
    )%
    
    
    (11.6
    )%
    
    
    10.7
    %
    
    
    (9.5
    )%Passenger revenues per ASM (PRASM)
    
    
    (14.7
    )%
    
    
    (28.9
    )%
    
    
    (22.5
    )%
    
    
    (34.1
    )%
    
    
    (19.5
    )%
    
    
    (12.2
    )%
    
    
    (17.2
    )%Yield (c)
    
    
    (18.6
    )%
    
    
    (21.3
    )%
    
    
    (17.2
    )%
    
    
    (20.2
    )%
    
    
    (18.9
    )%
    
    
    (15.1
    )%
    
    
    (16.8
    )%Passenger load
factor (points) (d)
    
    
    1.0
    pts.
    
    
    (3.3
    ) pts.
    
    
    (1.5
    ) pts.
    
    
    (8.0
    ) pts.
    
    
    (0.7
    ) pts.
    
    
    2.6
    pts.
    
    
    (0.4
    ) pts.
 
 a)
    
    ASMs are the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.b)
    
    RPMs are the number of scheduled miles flown by revenue passengers.c)
    
    Yield is a measure of average price paid per passenger mile, which is calculated by dividing passenger revenues by
RPMs. Yields for geographic regions exclude charter revenue and RPMs.d)
    
    Passenger load factor is derived by dividing RPMs by ASMs.        36




---



##### Table of Contents



Operating Expenses. Operating Revenues
 Three Months EndedJune 30,
    
    
    $
    
    
    %(In millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    ChangeSalaries and related costs
    
    $
    963
    
    
    $
    1,179
    
    
    $
    (216
    )
    
    
    (18.3
    )Regional Affiliates
    
    
    708
    
    
    
    847
    
    
    
    (139
    )
    
    
    (16.4
    )Aircraft fuel
    
    
    665
    
    
    
    1,848
    
    
    
    (1,183
    )
    
    
    (64.0
    )Purchased services
    
    
    286
    
    
    
    371
    
    
    
    (85
    )
    
    
    (22.9
    )Aircraft maintenance materials and outside repairs
    
    
    240
    
    
    
    295
    
    
    
    (55
    )
    
    
    (18.6
    )Landing fees and other rent
    
    
    229
    
    
    
    199
    
    
    
    30
    
    
    
    15.1Depreciation and amortization
    
    
    222
    
    
    
    216
    
    
    
    6
    
    
    
    2.8Distribution expenses
    
    
    139
    
    
    
    193
    
    
    
    (54
    )
    
    
    (28.0
    )Aircraft rent
    
    
    89
    
    
    
    100
    
    
    
    (11
    )
    
    
    (11.0
    )Cost of third party sales
    
    
    60
    
    
    
    65
    
    
    
    (5
    )
    
    
    (7.7
    )Goodwill impairment
    
    
    
    
    
    
    2,277
    
    
    
    (2,277
    )
    
    
    (100.0
    )Other impairments and special items
    
    
    88
    
    
    
    223
    
    
    
    (135
    )
    
    
    (60.5
    )Other operating expenses
    
    
    222
    
    
    
    252
    
    
    
    (30
    )
    
    
    (11.9
    )UAL total (a)
    
    $
    3,911
    
    
    $
    8,065
    
    
    $
    (4,154
    )
    
    
    (51.5
    )United total (a)
    
    $
    3,910
    
    
    $
    8,093
    
    
    $
    (4,183
    )
    
    
    (51.7
    )
 
 (a)
    
    The difference between UAL and United operating expenses in the 2008 period is primarily due
to a $29 million gain recorded at UAL for a litigation settlement resulting in reduced other
operating expenses.     37




---



##### Table of Contents



Three Months Ended June 30,Average price per gallon (in cents)%
    
    
    
    
    
    
    
    
    
    
    %(In millions, except per gallon)
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    ChangeMainline fuel purchase cost
    
    $
    813
    
    
    $
    2,086
    
    
    
    (61.0
    )
    
    
    162.9
    
    
    
    365.3
    
    
    
    (55.4
    )Non-cash fuel hedge gains in Mainline fuel (a)
    
    
    (305
    )
    
    
    (187
    )
    
    
    63.1
    
    
    
    (61.1
    )
    
    
    (32.8
    )
    
    
    86.3Cash fuel hedge (gains) losses in Mainline fuel (a)
    
    
    157
    
    
    
    (51
    )
    
    
    
    
    
    
    31.5
    
    
    
    (8.9
    )
    
    
    Total Mainline fuel expense
    
    
    665
    
    
    
    1,848
    
    
    
    (64.0
    )
    
    
    133.3
    
    
    
    323.6
    
    
    
    (58.8
    )Regional Affiliates fuel expense (b)
    
    
    178
    
    
    
    355
    
    
    
    (49.9
    )
    
    
    183.5
    
    
    
    377.7
    
    
    
    (51.4
    )UAL system operating fuel expense
    
    $
    843
    
    
    $
    2,203
    
    
    
    (61.7
    )
    
    
    141.4
    
    
    
    331.3
    
    
    
    (57.3
    )Mainline fuel consumption (gallons)
    
    
    499
    
    
    
    571
    
    
    
    (12.6
    )Regional Affiliates fuel consumption (gallons)
    
    
    97
    
    
    
    94
    
    
    
    3.2Total fuel consumption (gallons)
    
    
    596
    
    
    
    665
    
    
    
    (10.4
    )
 
 (a)
    
    The Company incurred additional fuel hedge gains (losses) which are classified in
nonoperating expense as described below.(b)
    
    Regional Affiliate fuel costs are classified as part of Regional Affiliate expense.      Impairments and Special Charges. .
 Three Months EndedJune 30,(In millions)
    
    2009
    
    
    2008Goodwill impairment
    
    $
    
    
    
    $
    2,277Indefinite-lived intangible assets:Codeshare agreements
    
    
    
    
    
    
    60Tradenames
    
    
    40
    
    
    
    20Intangible asset impairments
    
    
    40
    
    
    
    80Tangible assets:Pre-delivery advance deposits including related capitalized interest
    
    
    
    
    
    
    105B737 aircraft, B737 spare parts and other
    
    
    
    
    
    
    38Aircraft and related deposit impairments
    
    
    
    
    
    
    143Total impairments
    
    $
    40
    
    
    $
    2,500
  38




---



##### Table of Contents



Other income (expense).
 Three Months Ended
    
    
    Favorable/(Unfavorable)June 30,
    
    
    Change(In millions)
    
    2009
    
    
    2008
    
    
    $
    
    
    %(Adjusted)Interest expense
    
    $
    (135
    )
    
    $
    (137
    )
    
    $
    2
    
    
    
    1.5Interest income
    
    
    5
    
    
    
    28
    
    
    
    (23
    )
    
    
    (82.1
    )Interest capitalized
    
    
    2
    
    
    
    5
    
    
    
    (3
    )
    
    
    (60.0
    )Miscellaneous, net:Non-cash
fuel hedge gains
    
    
    135
    
    
    
    21
    
    
    
    114
    
    
    NMCash fuel
hedge gains (losses)
    
    
    (95
    )
    
    
    1
    
    
    
    (96
    )
    
    
    Other miscellaneous, net
    
    
    (5
    )
    
    
    6
    
    
    
    (11
    )
    
    
    UAL total
    
    $
    (93
    )
    
    $
    (76
    )
    
    $
    (17
    )
    
    
    (22.4
    )United total
    
    $
    (93
    )
    
    $
    (76
    )
    
    $
    (17
    )
    
    
    (22.4
    )
   Income Taxes.
 First Six Months of 2009 Compared to First Six Months of 2008
 Overview
 Operating Revenues.
 Six Months EndedJune 30,
    
    
    $
    
    
    %(In millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    ChangePassengerUnited Airlines
    
    $
    5,642
    
    
    $
    7,644
    
    
    $
    (2,002
    )
    
    
    (26.2
    )PassengerRegional Affiliates
    
    
    1,408
    
    
    
    1,512
    
    
    
    (104
    )
    
    
    (6.9
    )Cargo
    
    
    245
    
    
    
    455
    
    
    
    (210
    )
    
    
    (46.2
    )Other operating revenues
    
    
    414
    
    
    
    471
    
    
    
    (57
    )
    
    
    (12.1
    )UAL total
    
    $
    7,709
    
    
    $
    10,082
    
    
    $
    (2,373
    )
    
    
    (23.5
    )United total
    
    $
    7,714
    
    
    $
    10,082
    
    
    $
    (2,368
    )
    
    
    (23.5
    )
  39




---



##### Table of Contents



RegionalDomestic
    
    
    Pacific
    
    
    Atlantic
    
    
    Latin
    
    
    Mainline
    
    
    Affiliates
    
    
    ConsolidatedIncrease (decrease) from 2008:Passenger revenues (in millions)
    
    $
    (1,073
    )
    
    $
    (545
    )
    
    $
    (272
    )
    
    $
    (112
    )
    
    $
    (2,002
    )
    
    $
    (104
    )
    
    $
    (2,106
    )Passenger revenues
    
    
    (23.9
    )%
    
    
    (34.0
    )%
    
    
    (21.4
    )%
    
    
    (38.7
    )%
    
    
    (26.2
    )%
    
    
    (6.9
    )%
    
    
    (23.0
    )%Available seat miles (ASMs)
    
    
    (13.0
    )%
    
    
    (14.4
    )%
    
    
    (3.7
    )%
    
    
    (16.9
    )%
    
    
    (12.0
    )%
    
    
    6.1
    %
    
    
    (10.1
    )%Revenue passenger miles (RPMs)
    
    
    (12.2
    )%
    
    
    (18.9
    )%
    
    
    (6.9
    )%
    
    
    (22.9
    )%
    
    
    (13.3
    )%
    
    
    7.8
    %
    
    
    (11.2
    )%Passenger revenues per ASM (PRASM)
    
    
    (12.5
    )%
    
    
    (22.9
    )%
    
    
    (18.4
    )%
    
    
    (26.3
    )%
    
    
    (16.1
    )%
    
    
    (12.2
    )%
    
    
    (14.4
    )%Yield
    
    
    (16.6
    )%
    
    
    (13.5
    )%
    
    
    (11.5
    )%
    
    
    (14.0
    )%
    
    
    (14.9
    )%
    
    
    (13.6
    )%
    
    
    (13.3
    )%Passenger load
factor (points)
    
    
    0.7
    pts.
    
    
    (4.1
    ) pts.
    
    
    (2.6
    ) pts.
    
    
    (5.8
    ) pts.
    
    
    (1.2
    ) pts.
    
    
    1.1
    pts.
    
    
    (1.0
    ) pts.
 Second Quarter 2009 Compared to Second Quarter 2008
  Second Quarter 2009 Compared to Second
Quarter 2008
 Operating Expenses. Operating Revenues
 Six Months EndedJune 30,
    
    
    $
    
    
    %(In millions)
    
    2009
    
    
    2008
    
    
    Change
    
    
    ChangeSalaries and related costs
    
    $
    1,884
    
    
    $
    2,225
    
    
    $
    (341
    )
    
    
    (15.3
    )Aircraft fuel
    
    
    1,464
    
    
    
    3,423
    
    
    
    (1,959
    )
    
    
    (57.2
    )Regional Affiliates
    
    
    1,379
    
    
    
    1,626
    
    
    
    (247
    )
    
    
    (15.2
    )Purchased services
    
    
    573
    
    
    
    720
    
    
    
    (147
    )
    
    
    (20.4
    )Aircraft maintenance materials and outside repairs
    
    
    465
    
    
    
    612
    
    
    
    (147
    )
    
    
    (24.0
    )Depreciation and amortization
    
    
    455
    
    
    
    436
    
    
    
    19
    
    
    
    4.4Landing fees and other rent
    
    
    450
    
    
    
    429
    
    
    
    21
    
    
    
    4.9Distribution expenses
    
    
    257
    
    
    
    377
    
    
    
    (120
    )
    
    
    (31.8
    )Aircraft rent
    
    
    177
    
    
    
    199
    
    
    
    (22
    )
    
    
    (11.1
    )Cost of third party sales
    
    
    113
    
    
    
    129
    
    
    
    (16
    )
    
    
    (12.4
    )Goodwill impairment
    
    
    
    
    
    
    2,277
    
    
    
    (2,277
    )
    
    
    (100.0
    )Other impairments and special items
    
    
    207
    
    
    
    223
    
    
    
    (16
    )
    
    
    (7.2
    )Other operating expenses
    
    
    460
    
    
    
    541
    
    
    
    (81
    )
    
    
    (15.0
    )UAL total (a)
    
    $
    7,884
    
    
    $
    13,217
    
    
    $
    (5,333
    )
    
    
    (40.3
    )United total (a)
    
    $
    7,885
    
    
    $
    13,245
    
    
    $
    (5,360
    )
    
    
    (40.5
    )
 
 (a)
    
    The difference between UAL and United operating expenses in the 2008 period is
primarily due to a $29 million gain recorded at UAL for a litigation settlement resulting
in reduced Other operating expenses.  40




---



##### Table of Contents



Second
Quarter 2009 Compared to Second Quarter 2008
  Six Months Ended June 30,Average price per gallon (in cents)(In millions, except per gallon)
    
    2009
    
    
    2008
    
    
    %Change
    
    
    2009
    
    
    2008
    
    
    %ChangeMainline fuel purchase cost
    
    $
    1,561
    
    
    $
    3,702
    
    
    
    (57.8
    )
    
    
    161.1
    
    
    
    328.5
    
    
    
    (51.0
    )Non-cash fuel hedge gains in Mainline fuel (a)
    
    
    (496
    )
    
    
    (216
    )
    
    
    129.6
    
    
    
    (51.2
    )
    
    
    (19.2
    )
    
    
    166.7Cash fuel hedge (gains) losses in Mainline fuel (a)
    
    
    399
    
    
    
    (63
    )
    
    
    
    
    
    
    41.2
    
    
    
    (5.6
    )
    
    
    Total Mainline fuel expense
    
    
    1,464
    
    
    
    3,423
    
    
    
    (57.2
    )
    
    
    151.1
    
    
    
    303.7
    
    
    
    (50.2
    )Regional Affiliates fuel expense (b)
    
    
    342
    
    
    
    633
    
    
    
    (46.0
    )
    
    
    181.0
    
    
    
    340.3
    
    
    
    (46.8
    )UAL system operating fuel expense
    
    $
    1,806
    
    
    $
    4,056
    
    
    
    (55.5
    )
    
    
    156.0
    
    
    
    308.9
    
    
    
    (49.5
    )Mainline fuel consumption (gallons)
    
    
    969
    
    
    
    1,127
    
    
    
    (14.0
    )Regional Affiliates fuel consumption (gallons)
    
    
    189
    
    
    
    186
    
    
    
    1.6Total fuel consumption (gallons)
    
    
    1,158
    
    
    
    1,313
    
    
    
    (11.8
    )
 
 (a)
    
    The Company incurred fuel hedge gains (losses) which are classified in nonoperating expense
as described below.(b)
    
    Regional Affiliate fuel costs are classified as part of Regional Affiliate expense.       41




---



##### Table of Contents



Second Quarter
2009 Compared to Second Quarter 2008
  Other income (expense).
 Six Months Ended
    
    
    Favorable/(Unfavorable)June 30,
    
    
    Change(In millions)
    
    2009
    
    
    2008
    
    
    $
    
    
    %(Adjusted)Interest expense
    
    $
    (269
    )
    
    $
    (284
    )
    
    $
    15
    
    
    
    5.3Interest income
    
    
    12
    
    
    
    76
    
    
    
    (64
    )
    
    
    (84.2
    )Interest capitalized
    
    
    5
    
    
    
    10
    
    
    
    (5
    )
    
    
    (50.0
    )Miscellaneous, net:Non-cash
fuel hedge gains
    
    
    207
    
    
    
    21
    
    
    
    186
    
    
    NMCash fuel
hedge gains (losses)
    
    
    (176
    )
    
    
    1
    
    
    
    (177
    )
    
    
    Other miscellaneous, net
    
    
    (2
    )
    
    
    (13
    )
    
    
    11
    
    
    
    84.6UAL total
    
    $
    (223
    )
    
    $
    (189
    )
    
    $
    (34
    )
    
    
    (18.0
    )United total
    
    $
    (223
    )
    
    $
    (189
    )
    
    $
    (34
    )
    
    
    (18.0
    )
   Income Taxes.
 Liquidity and Capital Resources
  
    
    Higher jet fuel prices and the cost and effectiveness of hedging jet fuel prices
may require the use of significant liquidity in future periods. In 2008, certain of the
Companys hedges against future price increases included collar strategies. The Company
has and may in the future be required to make significant payments at the settlement
dates of these contracts if the settlement price is below the floor price of these
collars. Furthermore, the Company has been and may in the future be further required to
provide counterparties with additional cash collateral prior to such settlement dates. In
addition, the Company purchased put options in 2008 to partially mitigate unfavorable
settlements related to certain of these positions due to lower fuel prices. Substantially all of the
  42




---



##### Table of Contents



Companys collars entered into in 2008
settle by the end of 2009. During 2009, the Companys has utilized a mix of purchased call
options and fixed price swaps to hedge future consumption rather than collar structures.
While the Companys results of operations benefit from lower fuel prices on its unhedged
fuel consumption, in the near term, the Company may not realize the full benefit of lower
fuel prices due to unfavorable fuel hedge cash settlements. See Note 11, Fair Value
Measurements and Derivative Instruments, in the Footnotes, as well as Item 3. Quantitative
and Qualitative Disclosures Above Market Risk,for further information regarding the
Companys fuel derivative instruments.
 
    
    Poor general economic conditions have had and may in the future continue to have a
significant adverse impact on travel demand, which has resulted in decreased revenues and
may result in decreases to revenues in future periods. In addition, the Companys current
operational plans to address the severe weakness of the global economy may not be
successful in improving its results of operations and liquidity.
 
    
    Our level of indebtedness, our non-investment grade credit rating, the current poor
credit market conditions and, to a lesser extent, the nature of the Companys remaining
assets available as collateral for loans are factors that, in the aggregate, may limit
the Companys ability to raise capital to meet liquidity needs and/or may increase its
cost of borrowing.
 
    
    A significant increase in future
cash reserve requirements by the Companys credit card processors
could materially reduce the Companys liquidity.
 
    
    Due to the factors above, and other factors, we may be unable to comply with our
Amended Credit Facility covenant that currently requires the Company to maintain an
unrestricted cash balance of $1.0 billion and also requires the Company to maintain a
minimum ratio of EBITDAR to fixed charges. If the Company does not comply with these
covenants, the lenders may accelerate repayment of these debt obligations, which would
have a material adverse impact on the Companys financial position and liquidity.
 
    
    If a default occurs under our Amended Credit Facility or other debt obligations,
the cost to cure any such default may materially and adversely impact our financial
position and liquidity, and no assurance can be provided that such a default will be
mitigated or cured.
  
    
    The Company received proceeds of more than $650 million in 2009 from the July 2009
financing of certain spare parts and other financing agreements, UAL common stock sales,
asset sales and other transactions, as described below.
 
    
    After the impact of the July 2009 financing of certain spare parts, described
below, the Company has approximately $1.1 billion of unencumbered aircraft and other
assets that may be sold or otherwise used as collateral to obtain additional financing.
 
    
    The Company is taking aggressive actions to right-size its business including
significant capacity reductions, disposition of underperforming assets and a large
workforce reduction, among others.
  Cash
Position.
  43




---



##### Table of Contents



Six Months EndedJune 30,(In millions)
    
    2009
    
    
    2008Net cash provided by operating activities
    
    $
    822
    
    
    $
    137Net cash provided (used) by investing activities
    
    
    (9
    )
    
    
    2,197Net cash used by financing activities
    
    
    (286
    )
    
    
    (694
    )
 As of
    
    
    As ofJune 30,
    
    
    December 31,2009
    
    
    2008Cash and cash equivalents
    
    $
    2,566
    
    
    $
    2,039Restricted cash
    
    
    281
    
    
    
    272Total cash
    
    $
    2,847
    
    
    $
    2,311
 Operating Activities.
 Investing Activities.
 Financing Activities.
     Other Investing and Financing Matters.
  44




---



##### Table of Contents



Credit Ratings.
 Amended Credit Facility Covenants.
   Credit Card Processing Agreements.
    45




---



##### Table of Contents



Critical Accounting Policies
 Managements Discussion and Analysis of Financial
Condition and Results of Operation
 Forward-Looking Information
 Managements Discussion and Analysis of Financial Condition and
Results of Operations
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 Item 7A. Quantitative
and Qualitative Disclosures About Market Risk
 Cash and Cash Equivalents
 Commodity Price Risk (Jet Fuel)
  46




---



##### Table of Contents



Percentage ofProjected
    
    
    Barrels hedged (in 000s)
    
    
    Weighted-average crude equivalent price per barrel (c)Fuel
    
    
    
    
    
    
    
    
    
    
    Swaps/
    
    
    
    
    
    
    Payment
    
    
    Payment
    
    
    Hedge
    
    
    HedgeRequirements
    
    
    Purchased
    
    
    Sold
    
    
    Purchased
    
    
    Sold
    
    
    Obligation
    
    
    Obligation
    
    
    Protection
    
    
    ProtectionHedged
    
    
    Puts
    
    
    Puts
    
    
    Calls
    
    
    Calls
    
    
    Ends
    
    
    Begins
    
    
    Begins
    
    
    Ends%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    $
    
    
    $
    
    
    $Third Quarter 2009:Calls
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    3,900
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    61
    (a)
    
    NASwaps
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    3,500
    
    
    
    
    
    
    NA
    
    
    
    68
    
    
    
    68
    
    
    NACollars
    
    
    2
    
    
    
    
    
    
    
    375
    
    
    
    225
    
    
    
    
    
    
    NA
    
    
    
    113
    
    
    
    133
    
    
    NA3-way collars
    
    
    18
    
    
    
    
    
    
    
    3,075
    
    
    
    2,625
    
    
    
    2,625
    
    
    NA
    
    
    
    100
    
    
    
    115
    
    
    
    1484-way collars
    
    
    2
    
    
    
    225
    
    
    
    225
    
    
    
    225
    
    
    
    225
    
    
    
    63
    
    
    
    78
    
    
    
    95
    
    
    
    135Total
    
    
    73
    
    
    
    225
    
    
    
    3,675
    
    
    
    10,475
    
    
    
    2,850Purchased puts
    
    
    14
    
    
    
    1,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    50
    
    
    NALast Six Months of 2009:Calls
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    7,750
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    64
    (b)
    
    NASwaps
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    5,300
    
    
    
    
    
    
    NA
    
    
    
    66
    
    
    
    66
    
    
    NACollars
    
    
    2
    
    
    
    
    
    
    
    675
    
    
    
    375
    
    
    
    
    
    
    NA
    
    
    
    113
    
    
    
    135
    
    
    NA3-way collars
    
    
    13
    
    
    
    
    
    
    
    4,500
    
    
    
    3,675
    
    
    
    3,675
    
    
    NA
    
    
    
    100
    
    
    
    117
    
    
    
    1514-way collars
    
    
    2
    
    
    
    450
    
    
    
    450
    
    
    
    450
    
    
    
    450
    
    
    
    63
    
    
    
    78
    
    
    
    95
    
    
    
    135Total
    
    
    64
    
    
    
    450
    
    
    
    5,625
    
    
    
    17,550
    
    
    
    4,125Purchased puts
    
    
    13
    
    
    
    3,525
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NA
    
    
    NA
    
    
    
    51
    
    
    NA
 
 (a)
    
    Call position average
includes the following two groupings of positions: 25% of consumption
with protection beginning at $56 per barrel and 3% of consumption
beginning at $106 per
barrel.(b)
    
    Call position average
includes the following two groupings of positions: 26% of consumption
with protection beginning at $60 per barrel and 2% of consumption beginning at $106 per
barrel.(c)
    
    Instruments in heating oil and jet fuel are converted to crude oil price equivalents.   Approximate Change in Cash Collateral for eachPrice of Crude Oil, in Dollars per Barrel
    
    $5 per Barrel Change in the Price of Crude OilAbove $120
    
    No collateral requiredAbove $90,
but Less than or Equal to $120
    
    $10 millionAbove $60, but Less than or Equal to $90
    
    $21 millionAbove $35,
but Less than or Equal to $60
    
    $54 millionLess than or
equal to $35
    
    $29 million
    47




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES.
   
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  In re: UAL Corporation, et. al.
    United Injunction Against ALPA and Four Individual Defendants for Unlawful Slowdown Activity under
the Railway Labor Act
   48




---



##### Table of Contents



EEOC Claim Under the Americans with Disabilities Act
  
 ITEM 1A. RISK FACTORS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  Total number ofshares purchased
    
    
    Maximum number ofas
    
    
    shares (or approximatepart of publicly
    
    
    dollar value) of sharesTotal number
    
    
    Average price
    
    
    announced
    
    
    that may yet beof shares
    
    
    paid
    
    
    plans
    
    
    purchased under thePeriod
    
    purchased(a)
    
    
    per share
    
    
    or programs
    
    
    plans or programs04/01/09  04/30/09
    
    
    144
    
    
    $
    6.19
    
    
    
    
    
    
    (b)05/01/09  05/31/09
    
    
    
    
    
    
    
    
    
    
    
    
    
    (b)06/01/09  06/30/09
    
    
    958
    
    
    
    4.25
    
    
    
    
    
    
    (b)Total
    
    
    1,102
    
    
    
    4.50
    
    
    
    
    
    
    (b)
 
 (a)
    
    Shares withheld from employees to satisfy certain tax obligations due upon the vesting of restricted stock.(b)
    
    The UAL Corporation 2008 Incentive Compensation Plan provides for the withholding of shares to satisfy tax
obligations due upon the vesting of restricted stock or restricted stock units. However, this plan does
not specify a maximum number of shares that may be repurchased.  49




---



##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Directors Elected by Holders of Common Stock:
 Nominee
    
    Votes For
    
    
    Votes WithheldRichard J. Almeida
    
    
    82,493,972
    
    
    
    45,698,617Mary K. Bush
    
    
    103,126,166
    
    
    
    25,066,423W. James Farrell
    
    
    82,451,340
    
    
    
    45,741,249Walter Isaacson
    
    
    103,767,751
    
    
    
    24,424,838Robert D. Krebs
    
    
    103,768,306
    
    
    
    24,424,283Robert S. Miller
    
    
    103,244,994
    
    
    
    24,947,595James J. OConnor
    
    
    82,170,195
    
    
    
    46,022,394Glenn F. Tilton
    
    
    100,687,135
    
    
    
    27,505,454David J. Vitale
    
    
    82,307,747
    
    
    
    45,884,842John H. Walker
    
    
    82,415,427
    
    
    
    45,777,162
 Director Elected by Class Pilot MEC Junior Preferred Stock:
 Nominee
    
    Votes For
    
    
    Votes WithheldStephen A. Wallach
    
    
    1
    
    
    
    0
 Director Elected by Class IAM Junior Preferred Stock:
 Nominee
    
    Votes For
    
    
    Votes WithheldStephen R. Canale
    
    
    1
    
    
    
    0
  Votes For
    
    Votes Against
    
    
    Abstentions120,924,656
    
    
    5,257,081
    
    
    
    2,010,852
 
 ITEM 6. EXHIBITS.
   50




---



##### Table of Contents



SIGNATURES
  UAL CORPORATION
(Registrant)Date: July 22, 2009
    By:
    /s/ Kathryn A. MikellsKathryn A. MikellsSenior Vice President and Chief Financial Officer
(principal financial and accounting officer)UNITED AIR LINES, INC.
(Registrant)Date: July 22, 2009
    By:
    /s/ Kathryn A. MikellsKathryn A. MikellsSenior Vice President and Chief Financial Officer
(principal financial officer)Date: July 22, 2009
    By:
    /s/ David M. WingDavid M. WingVice President and Controller
(principal accounting officer)  51




---



##### Table of Contents



EXHIBIT INDEX
  *4.1
    
    Indenture, dated as of July 2, 2009, among United Air Lines, Inc.,
as Issuer, Wells Fargo Bank Northwest, N.A., as Trustee, and Wells
Fargo Bank Northwest, N.A., as Collateral Agent, providing for
issuance of 12.75% Senior Secured Notes due 2012 (filed as Exhibit
4.15 to UALs Form 8-K dated July 2, 2009, Commission file number
1-6033, and incorporated herein by reference)*4.2
    
    A Mortgage and Security Agreement, dated July 2, 2009, between
United Air Lines, Inc. and Wells Fargo Bank Northwest, N.A., the
Collateral Agent (filed as Exhibit 4.16 to UALs Form 8-K dated July
2, 2009, Commission file number 1-6033, and incorporated herein by
reference)*4.3
    
    B Mortgage and Security Agreement, dated July 2, 2009, between
United Air Lines, Inc. and Wells Fargo Bank Northwest, N.A., the
Collateral Agent (filed as Exhibit 4.17 to UALs Form 8-K dated July
2, 2009, Commission file number 1-6033, and incorporated herein by
reference)*4.4
    
    C Mortgage and Security Agreement, dated July 2, 2009, between
United Air Lines, Inc. and Wells Fargo Bank Northwest, N.A., the
Collateral Agent (filed as Exhibit 4.18 to UALs Form 8-K dated July
2, 2009, Commission file number 1-6033, and incorporated herein by
reference)*4.5
    
    Form of Note representing all 12.75% Senior Secured Notes due 2012
(filed as Exhibit 4.19 to UALs Form 8-K dated July 2, 2009,
Commission file number 1-6033, and incorporated herein by reference)*4.6
    
    Guarantee, dated as of July 2, 2009 from UAL Corporation of 12.75%
Senior Secured Notes due 2012 (filed as Exhibit 4.8 to UALs Form
8-K dated July 2, 2009, Commission file number 1-6033, and
incorporated herein by reference)
    10.1
    
    Summary of Director Compensation12.1
    
    UAL Corporation Computation of Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Fixed Charges and Preferred Stock Dividend
Requirements12.2
    
    United Air Lines, Inc. Computation of Ratio of Earnings to Fixed
Charges and Ratio of Earnings to Fixed Charges and Preferred Stock
Dividend Requirements31.1
    
    Certification of the Principal Executive Officer of UAL Pursuant to
15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of
2002)31.2
    
    Certification of the Principal Financial Officer of UAL Pursuant to
15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act of
2002)31.3
    
    Certification of the Principal Executive Officer of United Pursuant
to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act
of 2002)31.4
    
    Certification of the Principal Financial Officer of United Pursuant
to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-Oxley Act
of 2002)32.1
    
    Certification of the Chief Executive Officer and Chief Financial
Officer of UAL Pursuant to 18 U.S.C. 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002)32.2
    
    Certification of the Chief Executive Officer and Chief Financial
Officer of United Pursuant to 18 U.S.C. 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002)
 *
    
    Previously filed
    
    Indicates management contract or compensatory plan or arrangement  52