****UNITED STATES****SECURITIES AND EXCHANGECOMMISSION****Washington, D.C. 20549**
**FORM 10-Q**
**(**Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2005
OR
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHESECURITIES EXCHANGE ACT OF 1934For the transition period from __________ to __________
Commission file number 33-21220*
**UNITED AIR LINES, INC.**(Exact name of registrant as specified in its charter)
**Delaware****36-2675206**(Stateor other jurisdiction of(I.R.S. Employerincorporationor organization)Identification No.)  **Location:1200 East Algonquin Road, Elk Grove Township, Illinois               60007****MailingAddress:  P. O. Box 66100, Chicago, Illinois                                         60666**(Addressof principal executive offices)                                                              (Zip Code)  **(847) 700-4000****(Registrant's telephonenumber, including area code)**
    Indicateby check mark whether the Registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes    X      No
Indicate by check mark whether the Registrant is an acceleratedfiler (as defined in Rule 12b-2 of the Exchange Act.)   Yes          No   X
    Indicatethe number of shares outstanding of each of the issuer's classes of commonstock, as of the latest practicable date.  Outstanding atClassNovember 14, 2005Common Stock ($5 par value)205
*  Registrant is the whollyowned subsidiary of UAL Corporation (File 1-6033).  Registrant becamesubject to filing periodic reports under the Securities Exchange Act of1934 as a result of a public offering of securities which became effectiveJune 3, 1988 (Registration Nos. 33-21220 and 22-18246).  
United Air Lines, Inc. and Subsidiary Companies Report on Form 10-QFor the Quarter Ended September 30, 2005
Index PART I.FINANCIAL INFORMATIONPage No.  Item 1. Financial Statements  Condensed Statements of Consolidated FinancialPosition (Unaudited) - as of September 30, 2005 and December 31, 20043  Statements of Consolidated Operations (Unaudited)- for the three months and nine months ended September 30, 2005 and 20045  Condensed Statements of Consolidated
Cash Flows (Unaudited) - for the nine 
months ended September 30, 2005 and 20047  Notes to Consolidated Financial
Statements (Unaudited)8 Item 2. Management's Discussionand Analysis of Financial Condition and Results of Operations26  Item 3. Quantitative and QualitativeDisclosures About
Market Risk40    Item 4. Controls and Procedures41PART II.OTHER INFORMATION  Item 1. Legal Proceedings42    Item 6. Exhibits 42 Signatures43 Exhibit Index44   
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
United Air Lines, Inc. and Subsidiary Companies(Debtor and Debtor-in-Possession)Condensed Statements of Consolidated Financial Position (Unaudited)(In Millions)
    September 30December 31Assets20052004   Current assets:  Cash and cash equivalents$ 1,678 $ 1,203 Restricted cash926 856 Short-term investments75 77 Receivables, net1,098 941 Related party receivable219 222 Deferred income taxes139 117 Inventories, net228 234 Prepaid fuel expense388 187 Prepaid expenses and other570260 5,3214,097   Operating property and equipment:  Owned17,462 17,730 Accumulated depreciation and amortization(5,991)(5,623) 11,47112,107   Capital leases2,665 2,708 Accumulated amortization(717)(653) 1,9482,055 13,41914,162   Other assets:  Investments23 22 Intangibles, net376 380 Pension assets8 665 Aircraft lease deposits491 540 Prepaid rent69 71 Other, net546782 1,5132,460    $20,253$20,719   
See accompanying Notes to Consolidated Financial Statements.  
United Air Lines, Inc. and Subsidiary Companies(Debtor and Debtor-in-Possession)Condensed Statements of Consolidated Financial Position (Unaudited)(In Millions)
    September 30December 31Liabilities and Stockholders' Equity20052004   Current liabilities:  Current portions of long-term debt and  capital lease obligations$ 1,196 $ 903 Advance ticket sales1,860 1,361 Accrued salaries, wages and benefits8292,098 Accounts payable559 599 Related party payable473 461 Fuel purchase commitments388 187 Other1,3011,255 6,6066,864   Long-term debt and capital lease obligations253301   Other liabilities and deferred credits:  Deferred pension liability104 2,333 Postretirement benefit liability1,937 1,920 Deferred income taxes438 330 Other976938 3,4555,521   Liabilities subject to compromise20,27216,161   Commitments and contingent liabilities (Seenote)     Stockholders' equity:  Common stock at par- - Additional capital invested4,213 4,213 Retained deficit(11,897)(7,773)Accumulated other comprehensive loss(1,412)(3,331)Receivables from affiliates(1,237)(1,237) (10,333)(8,128)    $ 20,253$20,719   
See accompanying Notes to Consolidated Financial Statements.  
United Air Lines, Inc. and Subsidiary Companies(Debtor and Debtor-in-Possession)Statements of Consolidated Operations (Unaudited)(In Millions)
     Three Months Ended September 30 20052004Operating revenues:  Passenger - United Airlines$ 3,467 $ 3,309 Passenger - Regional Affiliates662 496 Cargo174 171 Other 345336 4,6484,312Operating expenses:  Salaries and related costs1,000 1,276 Aircraft fuel1,106 805 Regional affiliates722 576 Purchased services374 370 Landing fees and other rent235 237 Aircraft maintenance199 184 Depreciation and amortization205 213 Cost of sales182 207 Aircraft rent87 134 Commissions74 78 Other2862994,4704,379   Income/(loss) from operations178(67)   Other income (expense):  Interest expense(131)(103)Interest capitalized1 - Interest income8 4 Special non-operating items- 18 Reorganization items, net(1,709)(115)Miscellaneous, net12(2) (1,819)(198)   Loss before income taxes and equityin earnings of affiliates(1,641)(265)Credit for income taxes--Loss before equity in earningsof affiliates(1,641)(265)Equity in earnings of affiliates-2Net loss$(1,641)$ (263)     
See accompanying Notes to Consolidated Financial Statements.  
United Air Lines, Inc. and Subsidiary Companies(Debtor and Debtor-in-Possession)Statements of Consolidated Operations (Unaudited)(In Millions)
     Nine Months Ended September 30 20052004Operating revenues:  Passenger - United Airlines$ 9,684 $ 9,547 Passenger - Regional Affiliates1,818 1,441 Cargo526 486 Other 910947 12,93812,421Operating expenses:  Salaries and related costs3,081 3,731 Aircraft fuel2,866 2,101 Regional affiliates2,052 1,732 Purchased services1,116 1,092 Landing fees and other rent693 710 Aircraft maintenance645 562 Depreciation and amortization618 660 Cost of sales459 539 Aircraft rent318 407 Commissions227 240 Special operating items5 - Other895893 12,97512,667   Loss from operations(37)(246)   Other income (expense):  Interest expense(357)(347)Interest capitalized(4)1 Interest income17 19 Special non-operating items- 5 Reorganization items, net(3,825)(389)Miscellaneous, net788 (4,091)(703)   Loss before income taxes and equityin earnings  of affiliates(4,128)(949)Credit for income taxes--Loss before equity in earningsof affiliates(4,128)(949)Equity in earnings of affiliates4-Net loss$(4,124)$ (949)
See accompanying Notes to Consolidated Financial Statements.  
United Air Lines, Inc. and Subsidiary Companies(Debtor and Debtor-in-Possession)Condensed Statements of Consolidated Cash Flows (Unaudited)(In Millions)
 Nine Months Ended September 30 20052004Cash and cash equivalents at beginning   of period, excluding restrictedcash$ 1,203$ 1,625   Cash flows from operating activities776373   Cash flows from reorganizationactivities:  Reorganization items, net(3,825)(389)Pension curtailments and settlements1,045 - Increase in liabilities 2,683 289 Other(29)(13) (126)(113)   Cash flows from investingactivities:  Additions to propertyand equipment(251)(220)Proceeds on dispositionof property and equipment153 16 Increase in restrictedcash(70)(181)Decrease in short-terminvestments2 32 Other, net(64)(45) (230)(398)   Cash flows from financingactivities:  Proceeds from DIPFinancing310 513 Repayment of DIP Financing(11)(313)Repayment of long-termdebt(156)(125)Principal paymentsunder capital lease obligations(70)(214)Aircraft lease deposits,net- 160 Increase in deferredfinancing costs(26)(20)Other8(16) 55(15)   Increase (decrease)in cash and cash equivalents475(153)   Cash and cash equivalentsat end of period,  excluding restrictedcash$ 1,678$ 1,472   Cash paid during theperiod for:  Interest (net of amountscapitalized)$ 307 $ 333 Non-cash transactions:  Net unrealized gain/(loss)on investments$ 28 $ - Decrease in pensionintangible assets$ 657 $ - Increase in long-termdebt incurred for additions to  other assets$ 21 $ 172 
See accompanying Notes to Consolidated Financial Statements.  
United Air Lines, Inc. and Subsidiary CompaniesNotes to Consolidated Financial Statements (Unaudited)
The Company
        United Air Lines, Inc. ("United,""we," "our" or the "Company") is a wholly owned subsidiary of UAL Corporation("UAL").
Interim Financial Statements
        We prepared the unauditedconsolidated financial statements shown here as required by the Securitiesand Exchange Commission ("the SEC"). Some information and footnote disclosuresnormally included in financial statements that meet generally acceptedaccounting principles ("GAAP") have been condensed or omitted as permittedby the SEC. We believe that the disclosures presented here are not misleading.The financial statements include all adjustments (which include only normalrecurring adjustments, reorganization items and other special charges describedbelow) that are considered necessary for a fair presentation of our financialposition and operating results. These financial statements should be readtogether with the information included in our most recent Annual Reporton Form 10-K for the year 2004.
        Effective first quarter 2005,our financial statements reflect reclassifications associated with a corporatereorganization of the entities under common control. Prior periods havebeen reclassified to conform to the current year's presentation. For furtherdetails, see "Related Party Transactions" in the Notes to the ConsolidatedFinancial Statements.
         In the CondensedStatements of Consolidated Cash Flows, the classification of financingcosts primarily associated with our debtor-in-possession secured financing("DIP Financing") has been reclassified to a financing activity describedas "Increase in deferred financing costs". The Company presented such changesas an investing activity in prior filings. For the six months ended June30, 2005 and nine months ended September 30, 2004, this reclassificationresulted in a $10 million and $20 million decrease, respectively, to financingcash flows and a corresponding increase to investing cash flows from amountspreviously reported.
          Certain prioryear financial statement items have been reclassified to conform to thecurrent year's presentation.
Voluntary Reorganization Under Chapter 11
        *Bankruptcy Considerations.* On December 9, 2002 ("the Petition Date"), UAL, United and 26 direct andindirect wholly owned subsidiaries (collectively, the "Debtors") filedvoluntary petitions to reorganize their businesses under Chapter 11 ofthe United States Bankruptcy Code in the United States Bankruptcy Courtfor the Northern District of Illinois, Eastern Division (the "BankruptcyCourt"). The Bankruptcy Court is jointly administering these cases as "Inre UAL Corporation, et al., Case No. 02-B-48191." The consolidated financialstatements shown here include certain subsidiaries that did not file toreorganize under Chapter 11. The assets and liabilities of these subsidiariesare not considered material to the consolidated financial statements.
        As required by the BankruptcyCode, the United States Trustee for the Northern District of Illinois appointedon December 13, 2002 an official committee of unsecured creditors (the"Creditors' Committee"). The Creditors' Committee and its legal representativeshave a right to be heard on all matters that come before the BankruptcyCourt concerning our reorganization. There can be no assurance that theCreditors' Committee will support our positions or our Plan of Reorganization(defined below). Any disagreements between the Creditors' Committee andus could protract the Chapter 11 process, hinder our ability to operateduring the pendency of the Chapter 11 case, and delay our emergence frombankruptcy protection.
        On September 7, 2005, theCompany filed the Debtor's Joint Plan of Reorganization Pursuant to Chapter11 of the United States Bankruptcy Code and a related Disclosure Statementfor Reorganizing Debtors' Joint Plan of Reorganization Pursuant to Chapter11 of the United States Bankruptcy Code. Subsequently, the Company filedthe Debtors' First Amended Joint Plan of Reorganization Pursuant to Chapter11 of the United States Bankruptcy Code (the "Plan of Reorganization")and a related First Amended Disclosure Statement for Reorganizing Debtors'First Amended Joint Plan of Reorganization Pursuant to Chapter 11 of theUnited States Bankruptcy Code (the "Disclosure Statement"). On October21, 2005, the Bankruptcy Court approved the adequacy of information inthe Disclosure Statement and authorized us to send the Disclosure Statement,the Plan of Reorganization and ballots to creditors entitled to vote onthe Plan of Reorganization. The deadline for voting on the Plan of Reorganizationis December 19, 2005 and the hearing on confirmation of the Plan of Reorganizationis scheduled for January 18, 2006. Copies of the Disclosure Statement andthe Plan of Reorganization were attached as Exhibits 99.1 and 99.2 to ourCurrent Report on Form 8-K dated October 26, 2005. The information containedin the Disclosure Statement is subject to change, whether as a result ofamendments to the Plan of Reorganization, actions of third parties or otherwise.
        With the exception of ournon-filing subsidiaries, we continue to operate our businesses as "debtor-in-possession"under the jurisdiction of the Bankruptcy Court and in accordance with theapplicable provisions of the Bankruptcy Code, the Federal Rules of BankruptcyProcedure and applicable court orders. In general, as debtor-in-possession,we are authorized under Chapter 11 to continue to operate as an ongoingbusiness, but may not engage in transactions outside the ordinary courseof business without the prior approval of the Bankruptcy Court.
        All vendors are being paidfor all goods furnished and services provided after the Petition Date inthe ordinary course of business. However, under Section 362 of the BankruptcyCode, actions to collect most of our pre-petition liabilities are automaticallystayed, except for liabilities relating to certain qualifying aircraft,aircraft engines and other aircraft-related equipment that are leased orsubject to a security interest or conditional sale contract. Under Section1110 of the Bankruptcy Code, actions to collect such aircraft-related pre-petitionliabilities are automatically stayed for 60 days after the Petition Date(the stay of such actions in our case ended on February 7, 2003), exceptunder two conditions: (a) the debtor may extend the 60-day period by agreementwith the relevant financier and with court approval; or (b) the debtormay agree to perform all of the obligations under the applicable leaseor financing and cure any defaults as required under the Bankruptcy Code.If neither of these conditions is met, the lessor or financier may demandthe return of the aircraft and enforce any of its contractual rights orremedies to sell, lease or otherwise retain or dispose of such property.
        We have negotiated with ouraircraft lessors and lenders to restructure existing financings to reduceaircraft ownership costs to better reflect current market rates, and wehave reached agreements in principle to restructure transactions with respectto a majority of our financed aircraft. However, the need for further costreductions due to difficult conditions in the airline industry with substantiallyhigher fuel prices has required us to re-examine some of these agreementsand to seek to renegotiate certain of them, most importantly the financingsassociated with approximately 119 aircraft controlled by a group of mostly-publicfinanciers (the "Public Debt Group").
        We have been in discussionswith the Public Debt Group seeking to renegotiate an agreement in principlereached in the summer of 2004 from which we subsequently withdrew. On August5, 2005, United entered into term sheets to restructure the financingsfor all of the aircraft in United's fleet that are controlled by the PublicDebt Group, other than the 14 aircraft financed under the Series 1997-1Enhanced Equipment Trust Certificates ("1997-1 EETC") and the 6 B767 aircraftthat will be purchased from the Public Debt Group.  On August 11,2005, the Company made a cash deposit toward the purchase of the B767 aircraftwith the intention to complete the purchase in the fourth quarter of 2005.These term sheets, which were approved by the Bankruptcy Court on September27, 2005, summarize the significant terms and conditions of proposed agreementsthat would secure United's long-term access to 105 aircraft and resolveany related administrative claims related to these aircraft or the other56 aircraft previously rejected, returned or repossessed.
        In August 2005, United providednotice to the trustee of its intention to purchase the Tranche A certificatesin the 1997-1 EETC transaction, which would permit it to secure long-termaccess to the 14 aircraft subject to that financing. United previouslyhad acquired the Tranche B and Tranche C certificates in a market transactionas a precursor to purchasing Tranche A. However, a dispute has arisen betweenUnited and the holders of the Tranche A certificates regarding the amountnecessary to pay the current certificate holders in full, and that matteris currently the subject of litigation.
        If we are unable to consummateour purchase of the 1997-1 EETC Tranche A certificates, our operationaland financial performance could be materially adversely affected.
        In addition to restructuringexisting financings to reduce ownership costs, we also have rejected orreturned certain surplus aircraft to adjust our fleet size and compositionto more closely match market demand, and are continuing this process toachieve an approximate fleet size of 455 aircraft in 2005. In addition,as part of ongoing negotiations with financiers, we have converted somelong-term financing arrangements into operating leases with shorter termsand, in several instances, re-acquired previously rejected or repossessedaircraft as circumstances warranted.
        Under Section 365 of theBankruptcy Code, we may assume, assume and assign, or reject certain executorycontracts and unexpired leases, including leases of real property, subjectto the approval of the Bankruptcy Court and certain other conditions. Byorder of the Bankruptcy Court dated September 21, 2005, our deadline underSection 365 to assume, assume and assign, or reject unexpired leases ofnon-residential real estate, except where otherwise mutually agreed bythe parties, is the date on which a plan of reorganization is confirmedby the Bankruptcy Court. Pursuant to that same order, we filed a motionseeking to assume, assume and assign, or reject a small number of United'sunexpired non-residential real estate leases on October 21, 2005, to beheard by the Bankruptcy Court by no later than November 18, 2005.
        In general, if we rejectan executory contract or unexpired lease, it is treated as a sanctionedpre-petition breach of the lease or contract in question which, subjectto certain exceptions, relieves us of performing any future obligations.However, unless otherwise waived or stipulated, such a rejection entitlesthe lessor or contract counterparty to a pre-petition general unsecuredclaim for damages caused by such deemed breach and accordingly, the counterpartymay file a claim against us for such damages. As a result, liabilitiessubject to compromise are likely to change in the future as a result ofdamage claims created by our rejection of various aircraft, executory contractsand unexpired leases. Generally, if we assume an aircraft financing agreement,executory contract or unexpired lease, we are required to cure existingdefaults under such contract or lease. We expect that the future assumptionof certain executory contracts and unexpired leases may convert liabilitiescurrently shown as subject to compromise to liabilities not subject tocompromise.
        To successfully emerge fromChapter 11, in addition to finalizing exit financing, the Bankruptcy Courtmust confirm a plan of reorganization. In accordance with the BankruptcyCode, the Plan of Reorganization divides claims against, and interestsin, each of the Debtors into classes according to their relative seniorityand other criteria and provides the same treatment for each claim or interestof a particular class unless the holder of a particular claim or interestagrees to a less favorable treatment. Among other things, the Plan of Reorganizationgenerally provides for full payment of all allowed administrative and priorityclaims, and the distribution of debt and equity securities issued by thereorganized UAL to unsecured creditors of the Debtors in satisfaction oftheir allowed claims.
        Until a plan of reorganizationis confirmed by the Bankruptcy Court, the ultimate recoveries of holdersof pre-petition claims will remain subject to the uncertain outcome oflitigation, negotiations and Bankruptcy Court decisions.
        The Disclosure Statementcontains detailed information about the Plan of Reorganization, our five-yearbusiness plan, financial estimates regarding our reorganized business enterprisevalue and events leading up to United's Chapter 11 case. Nothing containedin this Form 10-Q is intended to be, nor should it be construed as, a solicitationfor a vote on the Plan of Reorganization. The Plan of Reorganization willbecome effective only if it receives the requisite approval and is confirmedby the Bankruptcy Court. There can be no assurance that the BankruptcyCourt will confirm the Plan of Reorganization or that any such plan willbe implemented successfully.
    *   Financial Statement Presentation.*We have prepared the accompanyingconsolidated financial statements in accordance with American Instituteof Certified Public Accountants' Statement of Position 90-7 "*FinancialReporting by Entities in Reorganization Under the Bankruptcy Code*,"("SOP 90-7") and on a going-concern basis, which assumes continuity ofoperations, realization of assets and satisfaction of liabilities in theordinary course of business.
        SOP 90-7 requires that thefinancial statements for periods subsequent to a Chapter 11 filing separatetransactions and events that are directly associated with the reorganizationfrom the ongoing operations of the business. Accordingly, all transactions(including, but not limited to all professional fees, realized gains andlosses and provisions for losses) directly associated with the reorganizationand restructuring of the business are reported separately in the financialstatements. For the three-month and nine-month periods ending September30, 2005 and 2004, we recognized the following reorganization expensesin our financial statements:   (In millions)Three Months 
Ended September 30,Nine Months 
Ended September 30, 2005200420052004Aircraft rejection charges$1,689 $ 88 $2,156 $ 312 Pension-related charges- - 1,045 - Contract rejection charges34 - 543 - Professional fees 42 40 134 123Impairment on lease certificates3 - 3 - Aircraft refinance adjustments(59)- (59)- Other-(13)3(46) $ 1,709$ 115$ 3,825$ 389 
        Aircraft rejection chargesare non-cash costs that include our estimate of claims resulting from theCompany's rejection of certain aircraft leases and return of aircraft aspart of the bankruptcy process.
        As we restructure aircraftfinancings as permitted by Section 1110 of the Bankruptcy Code, our policyis to reflect the revised lease rates in aircraft rent once we have signeddefinitive term sheets for the financings and they have been approved bythe Bankruptcy Court.
        In the first and second quartersof 2005, the Company recognized non-cash pension curtailment charges of$433 million and $207 million, respectively, associated with actions takenby the Pension Benefit Guaranty Corporation ("PBGC") to involuntarily terminateUnited Air Lines, Inc. Ground Employees' Retirement Plan (the "Ground Plan"),United Airlines Flight Attendant Defined Benefit Pension Plan (the "FlightAttendant Plan") and United Airlines Management, Administrative and PublicContact Defined Benefit Pension Plan ("MAPC Plan"). In the second quarterof 2005, the PBGC was appointed statutory trustee for the Ground Plan,the Flight Attendant Plan and the MAPC Plan. Upon termination and settlementof these plans, the Company recognized a non-cash net settlement loss ofapproximately $395 million in accordance with SFAS No. 88, "*Employer'sAccounting for Settlements and Curtailments of Defined Benefit PensionPlans and for Termination Benefits" ("*SFAS 88"). In addition,during the second quarter of 2005 the Company recognized a non-cash settlementloss in the amount of $10 million for the termination of the non-qualifiedsupplemental retirement plan for management employees who had accrued benefitsunder the tax-qualified pension plan that cannot be paid due to InternalRevenue Code limits on compensation or benefits.
        Contract rejection chargesare non-cash costs that include our estimate of claims resulting from theCompany's rejection of certain contract obligations such as executory contracts,unexpired leases, municipal bond obligations and regional carrier contracts.These claim amounts remain subject to future adjustments arising from negotiatedsettlements, actions of the Bankruptcy Court, the determination as to thevalue of any collateral securing claims, proofs of claim or other events.
        In accordance with the termsheets reached with the Public Debt Group, the Company agreed to cancelcertain 1997-1 EETC certificates that were held by a related party. Accordingly,the Company recorded a non-cash charge in the amount of $3 million forprincipal and interest on such certificates. In addition, the Company recordedadjustments retroactively for aircraft rent and interest expense in theamount of $59 million to reflect the revised financing terms.
       The Condensed Statements ofConsolidated Financial Position distinguish pre-petition liabilitiessubject to compromise from both those pre-petition liabilities that arenot subject to compromise and from post-petition liabilities. Liabilitiessubject to compromise are reported at the amounts expected to be allowedby the Bankruptcy Court, even if they may be settled for lesser amounts.
        In addition, as a resultof the Chapter 11 filing, the realization of assets and satisfaction ofliabilities, without substantial adjustments and/or changes in ownership,are subject to uncertainty. While operating as debtor-in-possession underthe protection of Chapter 11 and subject to approval of the BankruptcyCourt and the terms of the applicable covenants of the DIP Financing, orotherwise as permitted in the ordinary course of business, we may sellor otherwise dispose of assets (including aircraft) and liquidate or settleliabilities for some amounts other than those reflected in the consolidatedfinancial statements. Further, the implementation of a plan of reorganizationand the adoption of fresh start accounting is expected to materially changethe amounts and classifications of certain assets and liabilities, as comparedto amounts and classifications shown in the historical consolidated financialstatements.
**       **Pursuant to the BankruptcyCode, we have filed schedules with the Bankruptcy Court identifying ourassets and liabilities as of the Petition Date, while our creditors havefiled proofs of claim with the Bankruptcy Court and we expect new claimsto be filed in the future. Approximately 14,000 proofs of claim (includinglate-filed claims) have been filed so far with the Bankruptcy Court requestingpayments from the Company. Through the claims resolution process we haveidentified many claims which we believe should be disallowed by the BankruptcyCourt, for a number of reasons such as our identification of claims thatare duplicative, have been amended or superseded by later filed claims,are without merit, or are otherwise overstated. We have filed omnibus objectionsto many of these claims and will continue to file additional objections.As of September 30, 2005, approximately 4,000 of the total claims haveeither been withdrawn by the claimants or disallowed by the BankruptcyCourt.
        As of September 30, 2005,approximately 10,000 proofs of claim totaling $34.1 billion remain on theofficial claims register in the Company's bankruptcy case. This remainingamount of the proofs of claim filed continues to far exceed our estimateof ultimate liability. Differences in amounts between claims filed by creditorsand liabilities shown in our records continue to be investigated and resolvedin connection with our claims resolution process. While we have made significantprogress to date, we expect this process to continue for some time, andto continue beyond the date of confirmation of a plan of reorganization.We believe that further resolution of claims is necessary for us to determinewith more precision the likely range of creditor distributions under theproposed Plan of Reorganization, although estimates of such distributionshave been made in the Plan of Reorganization and Disclosure Statement.We have recorded liability amounts for the claims that can be reasonablyestimated and which we believe are probable of being allowed by the BankruptcyCourt and we have classified these as liabilities subject to compromisein the attached Condensed Statements of Consolidated Financial Position.
        We will continue to evaluateexisting and new claims filed and will make adjustments, as appropriate.To date, such adjustments have been material and we anticipate that futureadjustments will be material as well.
***       **DIP Financing.*Inconnection with the Chapter 11 filings, the Company arranged DIP Financing.On July 15, 2005, the Bankruptcy Court approved an amendment to our agreementwith the DIP Financing lenders to increase the term loan from $800 millionto $1.1 billion which, when combined with a $200 million revolving creditand letter of credit facility, provides for a total facility of $1.3 billion(subject to a $100 million reserve for collateral maintenance and liquidationexpenses). The amendment also extended the maturity date and the effectivenessof financial covenants to December 30, 2005 and gave the Company the optionto further extend the maturity date until March 31, 2006 if certain conditionsare satisfied; reduced the interest rate to the prime rate plus 3.25% orLIBOR plus 4.25%; required the Company to maintain a minimum unrestrictedcash balance of at least $750 million; waived certain events of defaultrelated to certain technical matters; and provided for a new capital expenditurebasket for certain aircraft purchases, including a cash sublimit, whichrequired financing for the balance of the aggregate purchase price of suchaircraft.
**       **On August 18, 2005the Bankruptcy Court approved a further amendment with the DIP Financinglenders to provide for, among other things, a waiver of any event of defaultas a result of the Company acquiring the Tranche A, Tranche B and TrancheC certificates under the Series 1997-1 EETC financing covering 14 of ouraircraft. The amendment further provided for a new term loan of up to $350million (which matures at the same time as the remainder of the DIP Financing)to be used to refinance a majority of the purchase price of those certificates,available to be drawn through September 30, 2005 (subsequently extendedto December 15, 2005) subject to certain conditions. As a result of a disputebetween United and the holders of the Tranche A certificates regardingthe purchase price thereof, this matter is subject to continuing litigationand the Company has been unable to satisfy the conditions of the DIP agreementrequired to be met to draw on the new $350 million term loan.
**       **The terms of the DIPFinancing include covenants that require us to satisfy ongoing monthlyfinancial requirements, including thresholds for minimum earnings beforeinterest, income taxes, depreciation, amortization and aircraft rents ("EBITDAR"),limitations on capital expenditures and minimum unrestricted cash. Failureto comply with these covenants would constitute an event of default underthe DIP Financing and allow the lenders to accelerate the loan. The Companycomplied with the EBITDAR covenant in the third quarter of 2005.
**       **Borrowing availabilityis determined by a formula based on a percentage of eligible assets. Theeligible assets consist of certain previously unencumbered aircraft, spareengines, spare parts inventory, certain flight simulators, quick enginechange kits and certain route authorities. The underlying value of suchassets may fluctuate periodically due to prevailing market conditions andfluctuations in value may have an impact on the borrowing availabilityunder the DIP Financing. Availability may be further limited by additionalreserves imposed by the lending banks in their commercially reasonablediscretion.
**       **The DIP Financingis guaranteed by UAL and all other filing subsidiaries and is secured byfirst priority liens on all unencumbered present and future assets andby junior liens on all other assets, other than certain specified assets,including assets which are subject to financing agreements that are entitledto the benefits of Section 1110 and to the extent such financing agreementsprohibit such junior liens.
**       ** As of September 30,2005, we had outstanding borrowings of $1.2 billion at a rate of 8%. Inaddition, letters of credit were issued under the DIP Financing in an aggregateamount of $37 million.
New Accounting Pronouncements
        In December 2004, the FinancialAccounting Standards Board ("FASB") issued Statement of Financial AccountingStandards No. 123 (Revised 2004), "*Share-Based Payment*" ("SFAS 123R")which establishes standards for accounting for transactions in which anentity obtains employee services in exchange for stock options or share-basedpayments. SFAS 123R requires that the compensation cost (as measured bythe fair value of the equity or liability instruments issued) relatingto share-based payment transactions be recognized in financial statements.This statement replaces SFAS No. 123, "*Accounting for Stock-Based Compensation"*("SFAS123") and supersedes Accounting Principles Board Opinion No. 25, "*Accountingfor Stock Issued to Employees"*("APB 25"). Currently we account forstock options under APB 25 as permitted by SFAS 123. SFAS 123R is effectivefor the first interim or annual reporting period of the Company's firstfiscal year that begins after June 15, 2005. The Company will recognizecompensation expense for its participation in stock-based compensationplans for the portion of outstanding awards for which the employee servicehas not yet been rendered, based on the grant date fair value of thoseawards calculated under SFAS 123R. We anticipate the adoption of SFAS 123Rwill not have a material impact on our financial statements while we arein bankruptcy.
        In March 2005, the FASB issuedFASB Interpretation No. 47, "*Accounting for Conditional Asset RetirementObligations - An Interpretation of FASB Statement No. 143"* ("FIN47").FIN47 clarifies the term conditional asset retirement obligation as usedin SFAS No. 143, *"Accounting for Asset Retirement Obligations",*andaddresses the diverse accounting practices that have developed with respectto the timing of liability recognition for legal obligations associatedwith the retirement of a tangible long-lived asset when the timing and(or) method of settlement of the obligation are conditional on a futureevent. In addition, FIN47 clarifies that an entity is required to recognizea liability for the fair value of a conditional asset retirement obligationwhen incurred if the liability's fair value can be reasonably estimated.FIN47 is effective no later than the end of the fiscal year ending December31, 2005. Currently, we are evaluating the impact of FIN47 on our financialstatements.
        In May 2005, the FASB issuedSFAS No. 154, "*Accounting Changes and Error Corrections"*("SFAS154"). This statement, which replaces APB Opinion No. 20, "*AccountingChanges",* and FASB Statement No. 3, "*Reporting Accounting Changesin Interim Financial Statements",* requires that a voluntary changein accounting principle be applied retroactively to all prior period financialstatements presented, unless it is impractical to do so. SFAS 154 alsoprovides that a change in method of depreciating or amortizing a long-livednon-financial asset be accounted for as a change in estimate effected bya change in accounting principle, and also provides that correction oferrors in previously issued financial statements should be termed a "restatement".SFAS 154 is effective for fiscal years beginning after December 15, 2005.Currently, we are evaluating the impact of SFAS 154 on our financial statements.
        In accordance with SOP 90-7,we are required to adopt all new accounting pronouncements upon emergencefrom bankruptcy, if they have effective dates within one year of the dateof adoption of fresh-start reporting.
Stock Option Accounting
        At September 30, 2005, wehad certain stock-based employee compensation plans. We account for theseplans under APB 25 and related Interpretations. No stock-based employeecompensation cost for stock options is reflected in our financial statementsas provided under APB 25, as all options granted under the plans had anexercise price equal to the market value of the underlying common stockon the date of grant.
        If compensation cost forstock-based employee compensation plans had been determined using the fairvalue recognition provisions of SFAS 123 we would have reported our netloss as the pro forma amounts shown below: (In millions)Three MonthsNine Months Ended September 30,Ended September 30, 2005200420052004Net loss, as reported$ (1,641)$ (263)$ (4,124)$ (949)Less: Total compensation expensedetermined under    fair value method(1)(2)(3)(7)Net loss, pro forma$ (1,642)$ (265)$ (4,127)$ (956)     
Income Taxes
        Beginning in the third quarterof 2002, we established a valuation allowance against our net deferredtax asset. Thus, United has a zero percent effective tax rate for both2005 and 2004. As of September 30, 2005, our valuation allowance totaled$4.1 billion. Further, we have determined that it is more likely than notthat our gross deferred tax assets, net of valuation allowances at September30, 2005, will be realized through the reversals of existing deferred taxcredits.
Retirement and Postretirement Plans
        Our net periodic benefitcost included the following components for the three-month and nine-monthperiods ended September 30, 2005 and 2004: (In millions)Pension BenefitsOther Benefits Three Months Ended September 30,  20052004 20052004 Service cost$ 4 $ 62  $ 10 $ 7  Interest cost63 197  30 30  Expected return on plan assets(51)(175) (2)(2) Amortization of prior service      cost/(credit)2 20  (35)(37) Curtailment charge- - - - Settlement losses, net- -  - -  Recognized actuarial loss1323 2219 Net periodic benefit costs$ 31$ 127 $ 25$ 17    (In millions)Pension BenefitsOther Benefits Nine Months Ended September 30,  20052004 20052004 Service cost$ 65 $ 182  $ 32 $ 34  Interest cost458 592  95 122  Expected return on plan assets(379)(531) (7)(7) Amortization of prior service      cost/(credit)16 61  (107)(88) Curtailment charge640 - - - Settlement losses, net390 -  - -  Recognized actuarial loss9873 7070 Net periodic benefit costs$ 1,288$ 377 $ 83$ 131 
        Effective July 2004, theCompany ceased making contributions to its qualified defined benefit pensionplans.  On September 16, 2005, the Internal Revenue Service ("IRS")filed a claim in federal bankruptcy court for $114 million in excise taxes,including interest and penalties, allegedly due for missed contributionsto the Company's qualified defined benefit pension plans. United believesthe claim is without merit and will oppose it vigorously.
        With the termination of theCompany's defined benefit retirement plans, the Company has reached agreementswith all of its employee groups except the Association of Flight Attendants("AFA") to implement replacement plans, largely defined contribution plansunder section 401(a) of the Internal Revenue Code. Contributions underall defined contribution plans will be primarily based on employee compensation. In accordance with the agreements, the Company will not fund these accountsuntil its emergence from bankruptcy. Various employee groups, including,the Air Line Pilots Association ("ALPA"), the Aircraft Mechanics FraternalAssociation ("AMFA"), and the salaried and management employees accruedbenefits under these plans during the three and nine month periods endedSeptember 30, 2005 in the aggregate amount of $24 million and $29 million,respectively.
        Historically, the Companyhas maintained a non-qualified supplemental retirement plan for managementemployees who have benefits under the tax-qualified pension plan that cannotbe paid due to Internal Revenue Code limits on compensation or benefits.In June 2003, we terminated all participation and benefit payments underthe non-qualified plan for those participants who had terminated employmentwith the Company prior to December 9, 2002. Effective February 28, 2005,we terminated the non-qualified supplemental plan for all remaining participantsand, during the nine months ended September 30, 2005, recorded a smallnet settlement gain.
     In the first and second quarter of 2005, the Company recognizedpension curtailment charges of $433 million and $207 million, respectively,associated with actions taken by the PBGC to involuntarily terminate theCompany's defined benefit pension plans in March 2005 for the Ground Planand in June 2005 for the Flight Attendant Plan and the MAPC Plan. Thesepension plans were projected to have benefit obligations and plan assetsaggregating approximately $8.0 billion and $4.2 billion, respectively,as of December 31, 2004. In May 2005, the PBGC was appointed statutorytrustee for the Ground Plan and in June 2005, the PBGC was appointed statutorytrustee for the MAPC Plan and the Flight Attendant Plan. Upon terminationand settlement of these plans, the Company recognized a net settlementloss of approximately $395 million****in accordance with SFAS 88.
        SOP 90-7 requires that pre-petitionliabilities, including claims that become known after a petition is filed,be reported on the basis of the expected amount of the claim allowed ratherthan the amounts for which those claims might be settled. Management isnot able at this time to estimate the PBGC's claims to be allowed fromthe terminations of the Ground, MAPC or Flight Attendant Plans until aplan of reorganization is approved and associated litigation and objectionshave been resolved by the Bankruptcy Court. Historically, bankruptcy courtshave allowed pension termination claims based on either PBGC assumptionsor prudent investor assumptions. Management has estimated that the rangeof probable allowable claims may be as high as $7.2 billion using the PBGC'sstatutory assumptions (as defined by Employee Retirement Income SecurityAct regulations) for estimating the net pension obligation and may be aslow as $1.9 billion using the prudent investor assumptions. The prudentinvestor assumptions use a discount rate which is based upon the selectionof a set of investments by a prudent investor which would produce a returnachievable in the market as a whole. Management concluded that a prudentinvestor rate of 8.00% was appropriate for estimating the low end of therange of potential allowable claims.
        In accordance with SFAS No.5, "*Accounting for Contingencies",* and FASB Interpretation No. 14,"*Reasonable Estimation of the Amount of Loss"*, if management canestimate the range of the probable allowable claim, but no specific valuewithin the range is more probable than any other, the lowest value in therange of the probable loss should be recorded. As such, a $1.9 billionallowable claim for the PBGC was recorded in the second quarter of 2005and classified as liabilities subject to compromise on the CondensedStatements of Consolidated Financial Position. The Company has a contractualobligation to support the PBGC's claim that was calculated with statutoryassumptions. The Creditors' Committee has filed an objection to the PBGC'sclaim and the Company cannot predict the amount of the claim the BankruptcyCourt will ultimately allow.
        On October 26, 2005, theBankruptcy Court issued a written opinion ruling that the PBGC had satisfiedits burden for a judicial decree that the United Airlines Pilot DefinedBenefit Pension Plan (the "Pilot Plan") should be terminated. A prior writtensummary judgment ruling had established the effective date of the terminationas December 30, 2004. The Bankruptcy Court also ruled that the PBGC wasappointed statutory trustee of the Pilot Plan; accordingly, the Companyhas no further responsibility or obligations regarding such plan. The Companybelieves the termination of the Pilot Plan also ends the Company's obligationsregarding non-qualified benefits that were earned under the plan. As aresult, the Company has stopped payment of these benefits (which were approximately$6 million per month).
Restricted Cash
        At September 30, 2005, Unitedhad $926 million in restricted cash, primarily representing security forworkers' compensation obligations, security deposits for airport leasesand reserves with institutions that process our credit card ticket sales.There can be no assurance that these institutions will not require additionallevels of security deposits or reserve holdbacks.
Liabilities Subject to Compromise
        Liabilitiessubject to compromise refers to both secured and unsecured obligationswhich will be accounted for under a plan of reorganization, including claimsincurred prior to the Petition Date. They represent the estimated amountexpected to be allowed on known or potential claims to be resolved throughthe Chapter 11 process, and remain subject to future adjustments arisingfrom negotiated settlements, actions of the Bankruptcy Court, rejectionof executory contracts and unexpired leases, the determination as to thevalue of any collateral securing claims, proofs of claim or other events.To date, such adjustments, as reflected in reorganization expense, havebeen material and we anticipate that future adjustments will be materialas well.
        Differences between liabilityamounts we have estimated and claims filed by our creditors are being investigatedand the Bankruptcy Court will make a final determination of the allowableclaims. The determination of how these liabilities will ultimately be treatedwill not be known until the Bankruptcy Court approves a plan of reorganizationand the claims resolution process is complete, which may occur well afterconfirmation of a plan of reorganization. We will continue to evaluatethe amounts of these liabilities through the remainder of the Chapter 11process. To the extent that we identify additional amounts subject to compromise,we will recognize them accordingly.
        At September 30, 2005, wehad liabilities subject to compromise of $20.3 billion consisting of thefollowing:  (In millions) Long-term debt, including accruedinterest$ 7,046 Defined benefit pension plans4,445 Aircraft-related accruals anddeferred gains5,263 Capital lease obligations, includingaccrued interest1,667 Accounts payable291 Related party214 Early termination fees162 Other 1,184  $20,272  
Segment Information
        We have five reportable segmentsthat reflect the management of our business: North America, the Pacific,the Atlantic, Latin America and UAL Loyalty Services, LLC ("ULS"). Forinternal management and decision-making purposes, we have allocated expensesand revenues (as incorporated in our consolidated financial statements)to these segments as follows: (In millions)Three Months Ended September 30, 2005 United Air Lines, Inc.Inter-United North  Latin segmentConsolidated AmericaPacificAtlanticAmericaULSEliminationTotalRevenue$ 2,928 $ 820 $ 567 $ 106 $ 227 $ - $ 4,648Intersegment revenue72 26 18 3 13 (132)-Net income/(loss) before       reorganization items(52)1226(10)92 - 68   (In millions)Three Months Ended September 30, 2004 United Air Lines, Inc.Inter-United North  Latin segmentConsolidated AmericaPacificAtlanticAmericaULSEliminationTotalRevenue$ 2,750 $ 729 $ 544 $ 93 $ 196 $ - $ 4,312 Intersegment revenue71 19 14 3 13 (120)- Net income/(loss) before       special items and        reorganization items(269)13 18 (3)75 - (166)  (In millions)Nine Months Ended September 30, 2005 United Air Lines, Inc.Inter-United North  Latin segmentConsolidated AmericaPacificAtlanticAmericaULSEliminationTotalRevenue$ 8,070 $ 2,282 $ 1,563 $ 347 $ 676 - $12,938 Intersegment revenue221 81 52 12 46 (412)- Net income/(loss) before       special items and       reorganization items(467)(49)(5)(46)273 - (294)  (In millions)Nine Months Ended September 30, 2004 United Air Lines, Inc.Inter-United North  Latin segmentConsolidated AmericaPacificAtlanticAmericaULSEliminationTotalRevenue$ 8,068 $ 1,975 $ 1,484 $ 306 $ 588 - $ 12,421 Intersegment revenue199 52 39 9 39 (338)- Net income/(loss) before       special items and       reorganization items(791)17 15 (16)210 - (565)
        A reconciliation of the totalamounts reported by reportable segments to the applicable amounts in theconsolidated financial statements follows:   Three Months EndedNine Months Ended September 30,September 30,(In millions)2005200420052004Total income/(loss) for reportablesegments$ 68 $ (166)$ (294)$ (565)Special items- 18 (5)5 Reorganization items, net(1,709)(115)(3,825)(389)Net loss $(1,641)$ (263)$(4,124)$ (949)
        The Company's dedicated revenue-producingassets (primarily aircraft) generally can be deployed in any of its reportablesegments. ULS had $1.5 billion in total assets as of September 30, 2005.
        As of September 30, 2005,the Company identified and corrected misclassifications of operating revenues,intersegment revenues and net income/(loss) before special items and reorganizationitems as previously reported for the first and second quarters of 2005and 2004.
Comprehensive Loss
        We include in other comprehensiveloss changes in minimum pension liabilities and changes in the fair valueof derivative financial instruments that qualify for hedge accounting.For the three months ended September 30, 2005 and 2004, total comprehensiveloss amounted to $(1,630) million and $(221) million, respectively. Forthe nine months ended September 30, 2005 and 2004, total comprehensiveloss amounted to $(2,205) million and $(907) million, respectively. Totalcomprehensive loss for the nine months ended September 30, 2005 includeda $1.9 billion net adjustment relating to the termination of various pensionplans, as discussed in Pension and Postretirement Plans.
Special Items
        During the second quarterof 2005, we recognized a charge of $5 million for aircraft impairmentsrelated to the planned accelerated retirement of certain aircraft thenoperated by Air Wisconsin Airlines Corporation ("AWAC").
        During the third quarterof 2004, Air Canada successfully emerged from protection under the Companies'Creditors Arrangement Act of the Canada Business Corporation Act. We hadfiled a pre-petition claim against Air Canada based on our equity interestin three Airbus A330 aircraft leased to Air Canada. As part of its planof reorganization, Air Canada offered its unsecured creditors the opportunityto participate in their initial public offering. We subscribed to 986,986shares in the reorganized company in August 2004 and sold them in October2004 for a nominal gain. Separately, we sold our pre-petition claim andrecorded a non-operating special gain of $18 million during the third quarterof 2004.
        During the first quarterof 2004, we incurred a $13 million charge in non-operating expense forthe write-down of certain non-operating B767 aircraft.
Aircraft Fuel Hedges
        Aircraft fuel represented25% and 22%, respectively, of our total operating expenses for the threemonths and nine months ended September 30, 2005. In addition, mainlineaircraft fuel was our largest operating expense during the three monthsended September 30, 2005.
        Our strategy to hedge a portionof our price risk related to projected jet fuel requirements primarilyinvolves using collar options. The collars (only some of which were designatedas cash flow hedges) involve the purchase of fuel call options with thesimultaneous sale of fuel put options with identical expiration dates.Those contracts designated as hedges are recorded at fair value, with thechanges in intrinsic value recorded in other comprehensive loss until theunderlying hedged fuel is consumed. To the extent that the designated hedgesare ineffective, gain or loss is recognized currently. The fair value ofeach designated hedge is determined by the use of standard option valuemodels using commodity-related assumptions derived from prices observedin underlying markets. For those contracts not designated as hedges, therelated gain or loss is recognized currently as an element of non-operatingincome. In the three months ending September 30, 2005, the Company recognizeda gain of $10 million (which included a loss of $1 million relating tothe options' time-value and a gain of $11 million as a result of ineffectivehedges) in non-operating income. In the nine months ending September 30,2005, the Company recognized income of $50 million (which included incomeof $4 million relating to the options' time-value) in non-operating incomemainly due to non-designated hedges.
        We have hedged approximately9%of our remaining 2005 projected fuel requirements at an average price of$1.25 per gallon, excluding taxes. These contracts will expire throughDecember 31, 2005. The current fair value of our designated hedge positionis approximately $32 million as of September 30, 2005 and is included inother comprehensive loss. We expect that this entire amount will be recognizedinto earnings during the fourth quarter as a reduction to fuel expense.We plan to continue to hedge future fuel purchases as circumstances andmarket conditions allow.
Commitments and Contingencies
        In addition to common commerciallease transactions, we have entered into numerous long-term agreementsto lease certain airport and maintenance facilities that are financed throughtax-exempt special facility revenue bonds ("municipal bonds") that areissued by various local municipalities to build or improve airport andmaintenance facilities.
        During 2003, we filed fourcomplaints for declaratory judgment and corresponding motions for temporaryrestraining orders concerning United's municipal bond obligations for facilitiesat Denver International Airport ("DEN"), John F. Kennedy InternationalAirport ("JFK"), San Francisco International Airport ("SFO"), and Los AngelesInternational Airport ("LAX"). In each case, we sought clarification ofour obligations to pay principal and interest under the applicable municipalbonds, and the protection of our rights concerning related airport leaseagreements at the applicable airports.
        On March 30, 2004, the BankruptcyCourt granted our motions for summary judgment with respect to the JFK,SFO and LAX municipal bonds, holding that our payment obligations relatedto municipal bonds financing airport improvements at these sites whichwere not obligations arising under "leases" pursuant to Section 365 ofthe Bankruptcy Code. Based on this ruling, the outstanding $248 millionin principal in connection with these municipal bonds was considered pre-petitiondebt and the applicable accrued rent has been classified as liabilitiessubject to compromise.
        In our adversary proceedinginvolving DEN, however, the Bankruptcy Court did not grant our motion forsummary judgment. Rather, the Bankruptcy Court found that our payment obligationsfor the municipal bonds financing airport improvements at DEN (which representsapproximately $261 million in principal) were obligations arising undera true lease. We have appealed the adverse ruling of the DEN proceeding,but in accordance with the Bankruptcy Court's order, we have paid $45 millioninto escrow for the semi-annual interest payments due for the DEN municipalbonds.
        The defendants in the JFK,SFO and LAX adversary proceedings also appealed the Bankruptcy Court'sruling in the U.S. District Court for the Northern District of Illinois("District Court"). In November 2004, the District Court reversed the BankruptcyCourt's ruling and held in favor of the defendants in the SFO adversaryproceeding. In January 2005, the District Court affirmed the BankruptcyCourt's ruling with respect to the DEN adversary proceeding and reversedthe Bankruptcy Court's ruling with respect to the LAX adversary proceeding.On February 18, 2005, the District Court affirmed the Bankruptcy Court'sruling in the Company's favor in the JFK adversary proceeding.
        The Company appealed theDistrict Court's ruling with respect to the SFO, LAX and DEN adversaryproceedings to the United States Court of Appeals for the Seventh Circuit,and the defendants appealed the ruling in the Company's favor in the JFKmatter. On July 26, 2005, the Court of Appeals reversed the District Court'sruling with respect to the SFO adversary proceeding; the defendants petitionedfor a rehearing that was denied by the Court of Appeals on August 23, 2005.On August 19, 2005, the Court of Appeals affirmed the District Court'sruling with respect to the JFK adversary proceedings and set a briefingschedule for the DEN and LAX proceedings. The defendants in the JFK matterfiled a petition for rehearing with the Court of Appeals on September 6,2005, which was denied by the Court of Appeals on September 12, 2005. Thedefendants in both the SFO and JFK proceedings may still petition the U.S. Supreme Court for a writ of certiorari. The outcome of remaining LAXand DEN appeals remains uncertain and, therefore, the ultimate treatmentof these municipal bond obligations in reorganization is uncertain. Inaccordance with the Bankruptcy Court's order, we have paid $10 millionand $22 million into escrow for the interest payments due for the LAX andSFO municipal bonds, respectively.
        Similarly, in September 2003,we filed a complaint for declaratory judgment for all seven municipal bondissues (which represent approximately $601 million in principal) relatingto our facilities at Chicago O'Hare International Airport ("O'Hare"), seeking,among other things, a declaration that a certain cross-default provisionin the O'Hare airport lease is unenforceable. On February 15, 2005, theBankruptcy Court approved an agreement ("O'Hare Settlement Agreement")resolving the disputes between United, the trustees and the bondholdersthat in effect reduced the Company's indebtedness related to these bondissues from approximately $601 million to approximately $150 million. TheCity of Chicago, a party to these adversary proceedings, is not a partyto the O'Hare Settlement Agreement.
        The O'Hare Settlement Agreementrequires the indenture trustees and certain designated bondholders to waiveany existing defaults with respect to the bonds, and not to seek any furtherpayment on account of the bonds beyond the consideration set forth in theO'Hare Settlement Agreement. It requires the Company, in connection withthe confirmation of its plan of reorganization, to relinquish any claimsto certain unused construction fund monies (which currently total approximately$65 million) and to issue convertible debt to the counterparties in theO'Hare Settlement Agreement, upon emergence from bankruptcy of the reorganizedUAL Corporation, having a par value of $150 million.
        As of September 30, 2005,the Company had paid into escrow cash payments totaling approximately $22million related to interest due on three of the seven O'Hare municipalbonds for semi-annual interest payments that were purported to have comedue during the pendency of the Chapter 11 reorganization. As part of theO'Hare Settlement Agreement, these escrow funds, less the legal fees ofthe trustees and certain holders, will be remitted back to the Company.
        On August 7, 2005, the Companyannounced that it had reached an agreement in principle with the City ofChicago, with respect to all unresolved disputes relating to our facilitiesat O'Hare. However, the parties were unable to reach a definitive agreementfinalizing the terms of the agreement in principle.
       On October 5, 2005, a trial washeld before the Bankruptcy Court to determine whether the cross-defaultprovision of our Airport Use Agreement at O'Hare can be enforced to denyour access to our exclusive use premises at the airport. The City of Chicagois seeking to change the Company's facilities access to preferential use,as opposed to exclusive use. The parties filed post-trial briefs simultaneouslyon October 26, 2005, and replies to those briefs were filed on November4, 2005. The Bankruptcy Court has not set a timetable for ruling on thismatter.
 United has certain contingencies resulting from litigation andclaims (including environmental issues) incident to the ordinary courseof business. Management believes, after considering a number of factors,including (but not limited to) the views of legal counsel, the nature ofcontingencies to which we are subject and prior experience, that the ultimatedisposition of these contingencies will not materially affect the Company'sconsolidated financial position or results of operations.
        We record liabilities forlegal and environmental claims against us in accordance with GAAP. Theseamounts are recorded based on our assessments of the likelihood of theireventual settlements. The amounts of these liabilities could increase ordecrease in the near term, based on revisions to estimates relating tothe various claims. In addition, as a result of the bankruptcy filing,as of the Petition Date, virtually all pending litigation is stayed, andabsent further order of the Bankruptcy Court, no party, subject to certainexceptions, may take any action, again subject to certain exceptions, torecover on pre-petition claims against us. Accordingly, we have classifiedcertain of these liabilities as liabilities subject to compromise.
        The Company anticipates thatif found liable, its damages from claims arising from the events of September11, 2001 would be significant; however, we believe that, under the AirTransportation Safety and System Stabilization Act of 2001, our liabilitywill be limited to our insurance coverage.
        At September30, 2005, commitments for the purchase of property and equipment, principallyaircraft, approximated $1.9 billion, after deducting advance payments.Since September 11, 2001, we have reached agreements with the aircraftmanufacturers enabling us to delay or cancel delivery of future orders.Since resetting our fleet plan is critical to our overall restructuring,we continue to hold discussions regarding these deliveries. Our currentcommitments would require payments of an estimated $0.2 billion for theremainder of 2005, $0.1 billion in 2006, $0.5 billion in both 2007 and2008 and $0.6 billion in 2009 and thereafter primarily for the purchaseof A319 and A320 aircraft**.** It is likely that the amount and timingof these obligations will change, and could potentially be eliminated intheir entirety. Additionally, the disposition of advance payments relatedto A319 and A320 aircraft of $116 million is subject to the ultimate outcomeof these discussions.
Related Party Transactions
        In 2005, the Bankruptcy Courtapproved a corporate restructuring that (a) moved Ameniti Travel Clubs,Inc (formerly known as Confetti, Inc.) as a subsidiary of ULS to a subsidiaryof MyPoints.com, Inc. ("MyPoints"), (b) moved MyPoints as a subsidiaryof ULS to a subsidiary of UAL, and (c) moved ULS as a subsidiary of UALto a subsidiary of United. This change in ownership was accounted for asa restructuring of entities under common control and all assets and liabilitiestransferred have been stated at net book values and all prior periods presentedhave been reclassified. This restructuring was completed on March 21, 2005and resulted in decreased net losses of $74 million and $234 million, respectively,for the three and nine months ended September 30, 2004. In addition, therestructuring resulted in a change in classification of certain operatingrevenues that are associated with our Mileage Plus program as follows:   Increase/(decrease)Three Months EndedNine Months Ended September 30, 2004September 30, 2004(In millions)  Operating revenues:  Passenger - United Airlines$ 12 $ 44 Other(12)(44)Total operating revenues $ -$ -
       As of result of the bankruptcyfiling, we reclassified all pre-petition intercompany accounts receivableto equity and all pre-petition intercompany accounts payable to liabilitiessubject to compromise.
        As of June 30, 2005, theCompany identified and corrected several misclassifications resulting fromthe change in ownership of ULS for the three month periods ended December31, 2004 and March 31, 2005. These misclassifications had resulted in anoverstatement in cash and cash equivalents and an understatement of short-terminvestments of $45 and $33 million respectively; an overstatement of otherliabilities and an understatement of additional capital invested of $61million for deferred revenue not eliminated in the three months ended March31, 2005; and a misclassification of related party payables which resultedin a corresponding overstatement of other liabilities for $253 millionfor the three months ended March 31, 2005, and therefore had no impacton total current liabilities.  
Item 2.  Management's Discussion and Analysis of FinancialCondition and Results of Operations
Chapter 11 Restructuring Efforts
        The following sections describedetails of restructuring efforts underway by the Company in the areas oflabor agreements, defined benefit pension plans, aircraft financings, futureoperating fleet redeployment and reductions, municipal bond obligations,and the ongoing bankruptcy claims resolution process. See "Voluntary ReorganizationUnder Chapter 11" in the Notes to Consolidated Financial Statementsfor further information on the reorganization process.
        In the summer of 2004, weidentified a further $2 billion in required future annual cash savings(to be fully realized by fiscal year 2007) that we believed were necessaryto attract exit financing and to emerge from reorganization. We expectto realize over $650 million in annual savings through full implementationof our structured program of Business Improvement Initiatives. Additionally,we have amended our collective bargaining agreements ("CBAs") and reducedour non-represented salaried and management employees' compensation andbenefits to achieve approximately $700 million in average annual laborsavings toward the $2 billion goal. Finally, the termination and replacementof our defined benefit pension plans is expected to realize over $600 millionin average annual cash savings over the 2005 to 2010 time frame.
***       **Labor Restructuring. * Effective January 1, 2005, the Company reduced the compensation of itsnon-represented salaried and management employees and announced changesto benefits and productivity for this group. The Company has also achievedsignificant changes to all of its CBAs by negotiating consensual amendedagreements (all of which were subsequently ratified) with each of its laborunions. On January 31, 2005, the Bankruptcy Court approved amended CBAsbetween the Company and the AFA, the ALPA, the Professional Airline FlightControl Association ("PAFCA"), and the Transport Workers Union ("TWU").On May 31, 2005, the Bankruptcy Court approved an amended CBA between theCompany and the AMFA and subsequently,****on July 22, 2005, approvedan amended CBA between the Company and the International Association ofMachinists and Aerospace Workers ("IAM"). All represented groups, otherthan the AFA, have also agreed to eliminate any requirements in their respectiveCBAs to maintain, and not to oppose efforts by the Company to terminate,each of their respective defined benefit pension plans.
     The Company has also agreed to provide each employee groupa portion of the equity, securities or other consideration to be providedto general unsecured creditors under any plan of reorganization proposedor supported by the Company. Each employee group is to receive an amountbased upon a portion of the value of cost savings provided by that group.The Company currently estimates that no more than $7.5 billion will beused to determine the prorata distribution to employees of equity, securitiesor other consideration to be provided, but the actual value of a distributionwill ultimately be determined by the Bankruptcy Court and could, in partor in whole, be the subject of objections of creditors. The Company expectsthat the allowed amount, if any, would be treated in a manner similar toan allowed claim in determining the amount of equity to be provided toemployees upon confirmation of the Plan of Reorganization.  Althoughthe approval of a distribution to employees is reasonably possible, theCompany is unable to estimate a final distribution value until the BankruptcyCourt has confirmed the final plan of reorganization and any objectionsfrom the Creditors' Committee or other parties are resolved.
        The Company has agreed toprovide to employees represented by ALPA, PAFCA, TWU, AMFA and IAM as wellas its salaried and management employees, approximately $706 million inconvertible notes upon the emergence of the Company from bankruptcy. Thesenotes were promised in recognition, that, among other things, each of theseemployee groups' defined benefit pension plans were to be terminated andreplaced.
        Each of the amended CBAsalso contain provisions whereby they can be terminated at the option ofthe respective union under certain conditions, including if the Companyfails to achieve a specifically defined level of cost savings from allof its other employee groups, including its non-represented salaried andmanagement employees. On April 8, 2005 the AFA served notice to the Companyof its intention to exercise this termination provision. Although the Companydoes not believe that the AFA has any cause to terminate the agreement,the parties have agreed to resolve the matter through expedited arbitration,which is ongoing.
        *Pensions.* The Companydetermined that to obtain exit financing and successfully reorganize andemerge from Chapter 11 bankruptcy proceedings, it was necessary to terminateand replace all of its defined benefit pension plans. To this end, on April22, 2005, United and the PBGC entered into a global settlement agreementwhich provides for the settlement and compromise of various disputes andcontroversies with respect to four defined benefit pension plans of United,including the Pilot Plan, the Flight Attendant Plan, the Ground Plan andthe MAPC Plan (collectively, the "Pension Plans"). On May 10, 2005, theBankruptcy Court approved the settlement agreement, including modificationsrequested by certain creditors. The AFA and several other parties havefiled legal challenges to the approval of the PBGC agreement by the BankruptcyCourt. To date, no such challenges have been successful, although the AFAhas continued to pursue its appeal.
        The PBGC assumed responsibilityfor the Ground Plan effective May 23, 2005 and the Flight Attendant andthe MAPC Plans effective June 30, 2005. The AFA has filed a legal challengeto the PBGC's right to involuntarily terminate the Flight Attendant Planin the Federal District Court in Washington D.C. The PBGC and the Companyhave executed termination and trusteeship agreements with respect to theGround Plan, the Flight Attendant Plan and the MAPC Plan. The Company thushas no further duties or rights with respect to these plans.
        On October 26, 2005, theBankruptcy Court issued a written opinion ruling that the PBGC had satisfiedits burden for a judicial decree that the Pilot Plan should be terminated.A prior written summary judgment ruling had established the effective dateof the termination as December 30, 2004. The Bankruptcy Court also ruledthat the PBGC was appointed statutory trustee of the Pilot Plan; accordingly,the Company has no further responsibility or obligations regarding suchplan. The Company believes the termination of the Pilot Plan also endsthe Company's obligations regarding non-qualified benefits that were earnedunder the plan. As a result, the Company has stopped payment of these benefits(which were approximately $6 million per month).
        Under the global settlementagreement, the Company has agreed to propose a plan of reorganization thatprovides for the distribution of the following consideration to the PBGC:- $500 million in principal amount of 6% senior unsecured notes to be issuedto the PBGC no later than the bankruptcy exit date; maturing 25 years fromissuance date; with interest payable in kind (notes or common stock) through2011 (and thereafter in cash) in semi-annual installments; and being callableat any time at 100% of par value.
- 5,000,000 shares of 2% convertible preferred stock to be issued to thePBGC no later than the bankruptcy exit date, at a liquidation value of$100 per share, convertible at any time following the second anniversaryof the issuance date into common stock of the reorganized Company at aconversion price equal to 125% of the average closing price of the commonstock during the first 60 days following exit from bankruptcy; with dividendspayable in kind semi-annually; the preferred stock will rank pari passuwith all current and future UAL or United preferred stock; and be redeemableat any time at $100 par value at the option of the issuer; and being non-transferableuntil two years after the issuance date.
- $500 million in principal amount of 8% senior unsecured notes contingentlyissuable to the PBGC in up to eight equal tranches of $62.5 million (withno more than two tranches issued on a single date), beginning with thefiscal year ending December 31, 2009 and ending with the fiscal year endingDecember 31, 2017 in which there is an issuance trigger date. Issuanceis triggered when, among other things, the Company's EBITDAR exceeds $3.5billion over the prior twelve months, provided that issuance would notcause a default under any other securities then existing. Each issued tranchewould mature 15 years from its respective issuance date; with interestpayable in cash in semi-annual installments; and being callable at anytime at 100% of par value.
        For more information on theterms of the settlement agreement, please see the Company's Current Reporton Form 8-K filed with the SEC on April 28, 2005.
       Thedistribution of these securities to the PBGC is subject to a "safety valve"provision that allows for modifications to the terms of the securitiesto the extent that such terms are materially impairing, hindering or delayingthe Company's ability to obtain the necessary financing to exit bankruptcy.
        The PBGC agreed to waiveits pension restoration rights, provided that the Company obtains the PBGC'sconsent with respect to any defined contribution plan proposed to be providedby the Company to its employees following termination of the Pension Plans.The Company could elect to implement a defined contribution plan withoutthe PBGC's consent, but under those circumstances, the PBGC would retainits restoration rights.
        Additionally, the Companyhas proposed a plan of reorganization that provides the PBGC with a singlepre-petition general unsecured unfunded liability claim arising from thetermination of the Pension Plans. At the Company's option, the PBGC willassign 45% of the distribution it receives from this claim as directedby the Company; provided that the Company's direction of this assignmentmust be (1) consistent with the best interests of general unsecured creditors,(2) subject to at least 10 business days prior notice to the Creditors'Committee and after consultation with the Committee, and (3) subject toBankruptcy Court approval under the best interest of creditors' test ina de novo review. If the Company does not comply with the above, the distributionwill be directed to the unsecured creditors.
       OnNovember 30, 2004, Independent Fiduciary Services, Inc. ("IFS"), the independentfiduciary appointed by the Company, filed a motion in the Bankruptcy Courtrequesting the allowance of a $288 million to $993 million administrativeclaim against the Company for unpaid minimum funding contributions. OnMarch 18, 2005, the Bankruptcy Court ruled that only those contributionsarising from pension benefits associated with service performed by participantsin the post-petition period would be considered an administrative claim.IFS is appealing this decision. Because the global settlement agreementshall be deemed to have settled and released any claims by the PBGC onits own behalf or on behalf of the Pension Plans arising from or relatedto any minimum funding obligations (subject to certain terms and conditions),it also provides for United to terminate the IFS agreement, and for thePBGC to support the Company's actions in certain circumstances. On May27, 2005, the Company provided notice to IFS of its intent to terminatethe Fiduciary Services Agreement between the Company and IFS with respectto each of the Company's Pension Plans effective on the later of: (a) July27, 2005 or (b) the date upon which the PBGC becomes statutory trusteefor each such plan, respectively.  Thus, IFS was no longer the independentfiduciary for the Flight Attendant Plan, Ground Plan and the MAPC Planas of July 27, 2005 and the Pilot Plan as of October 26, 2005.
        The AFA has stated that theymay engage in self-help in response to the PBGC's involuntarily terminationof the Flight Attendant Plan. Such self-help could take the form of intermittentdisruptions to United's operations, which could adversely affect futurebookings on United. The Company has communicated to the AFA that it believesthat any disruption to the airline's operations would be illegal and thatit intends to vigorously prosecute parties taking such actions.
        *Postretirement Benefits.*In2004, the Company reached agreement with representatives of our retireesto modify medical and life insurance benefits for individuals who had retiredfrom United prior to July of 2003 under Section 1114 of the BankruptcyCode ("retiree medical benefit claims"). As a result of these agreements,each of the representatives of the Company's employee groups (other thanAMFA) filed retiree medical benefit claims on behalf of its former membersin the Bankruptcy Court. In addition, some eligible individuals have filedretiree medical benefit claims on their own behalf. However, the Companyhas proposed, as part of the Plan of Reorganization, a process which wouldprovide a general unsecured claim for retiree medical benefits to eachof the affected individuals. This approach is subject to objection as tothe validity or amount by representatives of the Company's employee groups,creditors in general as well as the affected retirees. As such, the Companyis not able at this time to estimate the aggregate amount of retiree medicalbenefit claims to be allowed by the Bankruptcy Court from these agreements,until a plan of reorganization is approved and associated litigation andobjections have been resolved.
        *Section 1110 AircraftRestructuring.** ***We have negotiated with our aircraft lessorsand lenders to restructure existing financings to reduce aircraft ownershipcosts to better reflect current market rates, and we have reached agreementsin principle to restructure transactions with respect to a majority ofour financed aircraft. However, the need for further cost reductions dueto difficult conditions in the airline industry with substantially higherfuel prices has required us to re-examine some of these agreements andto seek to renegotiate certain of them, most importantly the financingsassociated with approximately 119 aircraft controlled by the Public DebtGroup.
        We have been in discussionswith the Public Debt Group seeking to renegotiate an agreement in principlereached in the summer of 2004 from which we subsequently withdrew. On August5, 2005, United entered into term sheets to restructure the financingsfor all of the aircraft in United's fleet that are controlled by the PublicDebt Group, other than the 14 aircraft financed under the Series 1997-1EETC and the 6 B767 aircraft that will be purchased from the Public DebtGroup.  On August 11, 2005, the Company made a cash deposit towardthe purchase of the B767 aircraft with the intention to complete the purchasein the fourth quarter of 2005. These term sheets, which were approved bythe Bankruptcy Court on September 27, 2005, summarize the significant termsand conditions of proposed agreements that would secure United's long-termaccess to 105 aircraft and resolve any related administrative claims relatedto these aircraft or the other 56 aircraft previously rejected, returnedor repossessed. The proposed agreements will also produce savings to Unitedof approximately $300 million annually and, together with all other aircraftrestructurings and our strategic fleet reductions (discussed below), reduceour average annual aircraft costs by approximately $850 million betweenyears 2003 and 2008.
        In August 2005, United providednotice to the trustee of its intention to purchase the Tranche A certificatesin the 1997-1 EETC transaction, which would permit it to secure long-termaccess to the 14 aircraft subject to that financing. United previouslyhad acquired the Tranche B and Tranche C certificates in a market transactionas a precursor to purchasing Tranche A. However, a dispute has arisen betweenUnited and the holders of the Tranche A certificates regarding the amountnecessary to pay the current certificate holders in full, and that matteris currently the subject of litigation.
        If we are unable to consummateour purchase of the 1997-1 EETC Tranche A certificates, our operationaland financial performance could be materially adversely affected.
        *Redeployment and Reductionof Fleet.*  On October 6, 2004, the Company announced a plan toexpand its international route network and reduce the overall size of itsmainline fleet. These actions are part of the Company's ongoing strategyto adjust fleet size and route mix in light of current market conditions,which continue to be intensely competitive. In the first nine months of2005, we reduced our mainline operating fleet by 39 aircraft as comparedto December 31, 2004.
        In addition, on April 22,2005, the Bankruptcy Court approved an agreement to transition to otherregional carriers all flying operations then performed for the Companyby United Express carrier Air Wisconsin Airlines Corporation ("AWAC").This transition will be completed by early 2006. The Company does not anticipatethat this change will adversely affect its United Express operations. Underthis transition agreement, AWAC refunded to the Company on April 22, 2005approximately $22 million of previously incurred costs, which was recognizedas a reduction to regional carrier expense. As a result of the transitionagreement, the Company also recognized a charge of $5 million for aircraftimpairments relating to planned accelerated retirement of certain aircraftcurrently operated by AWAC.
        Effective in May 2005, weamended our capacity purchase agreement with Mesa Air Group to give themthe right to place into service up to 30 leased 50-seat regional jet aircraftto be branded as United Express and operated within the United Expresssystem. The Company expects to receive $30 million in cash before the endof 2005 for agreeing to this amendment, of which $10 million was receivedduring the second quarter of 2005; these payments will be recognized asa reduction to regional carrier expense over the contract term.
        *Municipal Bond Obligations.*As a result of our bankruptcy filing, we are not permitted to make paymentson unsecured pre-petition debt. We have been advised that our municipalbonds may be unsecured (or in certain instances, partially secured) pre-petitiondebt. At September 30, 2005, we had approximately $1.7 billion outstandingin municipal bonds that were issued on behalf of United to finance theconstruction of improvements at airport-related facilities. For furtherdetails, see "Commitments and Contingencies" in the Notes to the ConsolidatedFinancial Statements.
        *Claims Resolution Process.*As permitted under the bankruptcy process, our creditors have filed proofsof claim with the Bankruptcy Court and we expect new claims to be filedin the future. Through the claims resolution process, we have identifiedmany claims which we believe should be disallowed by the Bankruptcy Courtfor a number of reasons, such as our identification of claims that areduplicative, have been amended or superseded by later filed claims, arewithout merit, or are otherwise overstated. We have filed omnibus objectionsto many of these claims and will continue to file additional objections.For further details, see "Voluntary Reorganization Under Chapter 11 - FinancialStatement Presentation" in the Notes to the Consolidated Financial Statements.
        *Plan of Reorganization.*Tosuccessfully emerge from Chapter 11, in addition to finalizing exit financing,the Bankruptcy Court must confirm a plan of reorganization. In late October,after obtaining Bankruptcy Court approval, we began sending our Plan ofReorganization, the related Disclosure Statement and ballots to creditorsentitled to vote on the Plan of Reorganization. The deadline for votingon the Plan of Reorganization is December 19, 2005 and the hearing on confirmationof the Plan of Reorganization is scheduled for January 18, 2006. Amongother things, the Plan of Reorganization generally provides for full paymentof all allowed administrative and priority claims, and the distributionof debt and equity securities issued by the reorganized UAL to unsecuredcreditors of the Debtors in satisfaction of their allowed claims, whichdistribution is estimated to have a value based on certain assumptionsdescribed in the Disclosure Statement. Generally, under the BankruptcyCode most of a debtor's liabilities must be satisfied in full before theholders of a debtor's equity securities can receive any distribution onaccount of such securities. Accordingly, our existing equity security holdersare not entitled to any distribution under the Plan of Reorganization.For further details, see "Voluntary Reorganization Under Chapter 11 - FinancialStatement Presentation" in the Notes to the Consolidated Financial Statements.
Results of Operations
        Over the past several years,the Company and the airline industry have been faced with severe businesschallenges and fundamental changes in the airline industry which have producedmaterial adverse impacts on our results of operations, financial positionand liquidity. During the three-month periods ended September 30, 2005and 2004, we reported income/(loss) from operations of $178 million and$(67) million, respectively, and we reported net losses of $(1,641) millionand $(263) million for the same respective periods. During the nine-monthperiods ended September 30, 2005 and 2004, we reported losses from operationsof $(37) million and $(246) million, respectively, and we reported netlosses of $(4,124) million and $(949) million for the same respective periods.
        Operating revenues for theairline industry in general, as well as for the Company, have been adverselyimpacted by a variety of factors in the last few years. Such factors haveincluded from time to time unfavorable general economic conditions; theterrorist attacks of September 11, 2001 and fears of further terroristactivities; enhanced airport security measures which have increased airportinconvenience and produced some negative customer reaction; the enactmentof federal taxes on ticket sales to fund those new security measures; theoutbreak of Severe Acute Respiratory Syndrome in early 2003 and subsequentfears of other outbreaks of communicable diseases; and the growth of low-costcarriers in the United States placing further downward pressures on revenuesby forcing us to compete with discounted fares offered by low-cost airlinesin a growing percentage of the markets we serve. These and other adversefactors, such as excess industry seat capacity, caused United mainlinepassenger revenue per revenue passenger mile ("yield") to decline from13.3 cents in 2000 (the last year we reported an operating profit) to 10.8cents in 2004.
        In the first nine monthsof 2005, yield was 11.2 cents, or 3% higher than it was in the first ninemonths of 2004. Passenger load factor improved from 79.9% in the firstnine months of 2004 to 81.9% in the same period of 2005. These resultsreflect a 4% reduction in system capacity between periods. As announcedin the fourth quarter of 2004, the Company has shifted capacity from domesticto international markets and it believes that its actions to address overcapacitydomestically are producing unit revenue improvements.
        Our operating expenses havefluctuated as we have sought to restructure our obligations in bankruptcy,adjust our mainline and regional carrier operating capacity to match marketplacedemand, and cope with historically high jet fuel prices throughout recentyears. United mainline operating cost, excluding regional costs, per availableseat mile ("CASM") increased from 10.6 cents in 2000 to 12.0 cents in 2001,and then declined to 10.2 cents by 2004. In spite of significant accomplishmentsin restructuring our operating expenses, including significant contributionsfrom employees and creditors through the bankruptcy process, high fuelcosts have had a significant adverse affect on unit operating costs, particularlyin more recent periods. In the first nine months of 2005, mainline CASMwas 10.4 cents, or 4% higher than it was in the first nine months of 2004.The increase in fuel prices between periods added approximately eight tenthsof a cent to the first nine months of 2005 mainline CASM, as compared tothe same period in 2004.
*        Summary of Results*.The air travel business is subject to seasonal fluctuations. Our operationscan be impacted by adverse weather and our first- and fourth-quarter resultsnormally reflect reduced travel demand. Historically, results of operationsare better in the second and third quarters.
        *Third Quarter 2005Compared with Third Quarter 2004.*  Operating revenues increased$336 million (8%). Passenger mainline revenues increased $158 million (5%)due to a 9% increase in yield partially offset by a 3% decrease in revenuepassenger miles ("traffic"). The following analysis by market is basedon information reported to the U.S. Department of Transportation: 2005SystemDomesticPacificAtlanticLatinPassenger revenues (in millions)3,4672,15371050797      Increase (decrease) from 2004:     Passenger revenues(in millions)15821913115Passenger revenues (percent)4.8%1.0% 14.7%6.5%18.3%  Available seat miles (percent)(5.3%)(12.5%)12.7%0.1%15.1%  Passenger load factor (points)1.8pt2.9pt(0.3)pt(0.5)pt0.9pt  Traffic (percent)(3.3%)(9.4%)12.3%(0.5%)16.3%  Yield (percent)8.5%12.3%1.5%8.4%0.4%
        Cargo revenues were relativelyunchanged year-over-year. Other operating revenues increased $9 million(3%) primarily due to increases in third-party maintenance revenues andMileage Plus mileage sales, partially offset by a decrease in UAFC fuelsales to third parties.
Operating expenses increased $91 million (2%) and mainline CASM increased5%. (In millions)
Operating expenses:Increase/(Decrease) from 2004Percentage Change Salaries and related costs(276)(21.6%)(a)Aircraft fuel301 37.4%(b)Regional affiliates146 25.3%(c)Purchased services4 1.1% Landing fees and other rent(2)(0.8%) Aircraft maintenance15 8.2% Depreciation and amortization(8)(3.8%) Cost of sales (25)(12.1%)(d)Aircraft rent(47)(35.1%)(e)Commissions(4)(5.1%) Other(13)(4.3%) Total912.1% 
(a) Decreased primarily due to cost savings associated with lower salaryand benefit rates and lower full-time equivalent employees.
(b) Increased primarily as a result of a 46% increase in the averagecost of fuel (including tax and hedge impact) partially offset by a decreasein consumption.
(c) Increased primarily as a result of increased fuel costs and volumesof United Express regional carrier flying partially offset by new contractsavings.
(d) Decreased primarily due to lower third-party fuel sales by UAFCpartially offset by higher third-party maintenance activity.
(e) Decreased primarily due to restructured aircraft lease obligationsand fleet reductions.
        Other non-operating expenseamounted to $110 million in the third quarter of 2005, compared to $101million in the third quarter of 2004, excluding special non-operating andreorganization items. In the third quarter of 2005, the Company recognizeda non-operating gain of****$10****million in miscellaneous, netto record the impact of non-designated and ineffective fuel hedges. Inclusiveof special non-operating and reorganization items, other non-operatingexpense amounted to $1.8****billion in the third quarter of 2005, comparedto $198 million in the third quarter of 2004. For details on special itemsand reorganization items, see "Special Items" and "Reorganization Items"in the Notes to Consolidated Financial Statements.
        *First Nine Months of2005 Compared with First Nine Months of 2004.*  Operating revenuesincreased $517 million (4%). Passenger mainline revenues increased $137million (1%) due to a 3% increase in yield partially offset by a 1% decreasein traffic. In the first quarter of 2004, passenger revenues included a$60 million out-of-period favorable adjustment. The following analysisby market is based on information reported to the U.S. Department of Transportation:   2005SystemDomesticPacificAtlanticLatinPassenger revenues (in millions)9,6845,9831,9861,396319      Increase (decrease) from 2004:     Passenger revenues (in millions)137(286)2869146Passenger revenues (percent)1.4% (4.6%)16.8%7.0%16.8%Available seat miles (percent)(3.5%)(11.3%)16.0%2.4%18.1%Passenger load factor (points)2.0pt 3.9pt (2.8)pt(0.2)pt0.6pt Traffic (percent)(1.1%)(6.9%)12.1% 2.2% 18.9% Yield (percent)2.7% 2.8% 4.3% 6.2% (3.4%)
        Cargo revenues increased$40 million (8%) largely due to 5% higher yield and 4% higher volumes.Other operating revenues decreased $37 million (4%) primarily due to decreasesin UAFC fuel sales to third parties and intercompany revenues, partiallyoffset by increases in third party maintenance revenues and Mileage Plusmileage sales.
Operating expenses increased $308 million (2%) and mainline CASM increased4%. (In millions)
Operating expenses:Increase/(Decrease) from 2004Percentage Change Salaries and related costs(650)(17.4%)(a)Aircraft fuel76536.4% (b)Regional affiliates32018.5% (c)Purchased services242.2%  Landing fees and other rent(17)(2.4%) Aircraft maintenance8314.8% (d)Depreciation and amortization(42)(6.4%) Cost of sales(80)(14.8%)(e)Aircraft rent(89)(21.9%)(f)Commissions(13)(5.4%) Special operating items5 - (g)Other20.2%     Total3082.4%  
(a) Decreased primarily due to cost savings associated with lower salaryand benefit rates and lower full-time equivalent employees.
(b) Increased primarily as a result of a 43% increase in the averagecost of fuel (including tax and hedge impact) partially offset by a decreasein consumption.
(c) Increased primarily as a result of increased fuel costs and volumesof United Express regional carrier flying, partially offset by new contractsavings.
(d) Increased primarily due to higher levels of purchased maintenanceactivity. This increase is offset by productivity and labor rate improvements,the effects of which are included in (a) above.
(e) Decreased primarily due to lower third-party fuel sales by UAFCpartially offset by higher third-party maintenance activity.
(f) Decreased due to restructured aircraft lease obligations and fleetreductions.
(g) See "Special Items" in the Notes to Consolidated Financial Statementsfor details.
        Other non-operating expenseamounted to $266 million in the first nine months of 2005, compared to$319 million in the first nine months of 2004, excluding special non-operatingand reorganization items. In the first nine months of 2005, the Companyrecognized a non-operating gain of $50 million in miscellaneous, net torecord the impact of non-designated and ineffective fuel hedges. Inclusiveof special non-operating and reorganization items, other non-operatingexpense amounted to $4.1 billion in the first nine months of 2005, comparedto $703 million in the first nine months of 2004. For details on specialitems and reorganization items, see "Special Items" and "ReorganizationItems" in the Notes to Consolidated Financial Statements.
Liquidity and Capital Resources
        The matters described in"Liquidity and Capital Resources," to the extent that they relate to futureevents or expectations, may be significantly affected by the Chapter 11reorganization process. Those proceedings involve, or may result in, variousrestrictions on the Company's activities, limitations on financing, andmay require Bankruptcy Court and Creditors' Committee approval for variousmatters, and may create uncertainty as to ongoing relationships with vendors,suppliers, customers and others with whom we may conduct or seek to conductbusiness.
        Generally, under the BankruptcyCode most of a debtor's liabilities must be satisfied in full before thedebtor's stockholders can receive any distribution on account of such shares.The rights and satisfaction of claims of our various creditors and securityholders will be determined by the confirmed plan of reorganization. Itis likely that pre-petition unsecured claims against the Company will besubstantially impaired in connection with our reorganization.
        United's total of cash, cashequivalents and short-term investments, including restricted cash, was$2.7 billion at September 30, 2005, as compared to $2.1 billion at December31, 2004.
        As of September 30, 2005,we had $926 million in restricted cash, an increase of $70 million as comparedto December 31, 2004. Restricted cash primarily represents cash collateralto secure workers' compensation obligations, security deposits for airportleases and reserves with institutions that process our credit card ticketsales. Prior to 2003, we met many of these obligations (which were smallerin amount) through surety bonds or secured letters of credit; however,such facilities are currently largely unavailable to us. As a result, wemay be required to post significant additional cash collateral to meetsuch obligations in the future.
        In October 2005, we enteredinto a new processing agreement for MasterCard and Visa credit card paymentswith JPMorgan Chase Bank, N.A. and Paymentech, L.P. The agreement replacesour current processing agreement with National Processing Company (whichexpires on January 15, 2006) and will provide credit card processing servicesfor transactions on and after January 16, 2006. The processing agreementrequires us to establish a restricted cash reserve to secure the potentialobligations to card holders of the new credit card processors in the eventthe Company does not provide the ticketed transportation services. Theamount of this reserve is determined by applying a reserve percentage tothe Company's aggregate then-outstanding bank card air traffic liability.Until we emerge from bankruptcy, the reserve percentage is subject to change,depending on the date we exit from bankruptcy and our ability to complywith the unrestricted cash covenant under our DIP Financing. After emergencefrom bankruptcy, the reserve percentage will vary between zero and seventy-fivepercent based upon our credit rating and our ability to comply with thefixed charge ratio and unrestricted cash covenants under our exit financing.The processing agreement expires on December 31, 2012.
        Concurrently with enteringinto the processing agreement, we entered into an amendment to our agreementwith Chase Bank USA N.A. ("Chase") regarding the Mileage Plus Visa cardunder which Chase pays for miles accrued by Mileage Plus members for makingpurchases using the Mileage Plus Visa card. In addition to extending theagreement until 2012 and making certain other adjustments in the relationship,the agreement provides for an advance purchase of miles approximately equalto the expected initial amount of the reserve account under the processingagreement. As a result, we anticipate that the reserve account provisionsof the processing agreement initially will not have a significant effecton our liquidity. Any significant future increase in the reserve percentageunder the processing agreement could have an adverse effect on our liquidity.
        Both of these agreementswere approved by the Bankruptcy Court on October 21, 2005.
         In the CondensedStatements of Consolidated Cash Flows, the classification of financingcosts primarily associated with our DIP Financing has been reclassifiedto a financing activity described as "Increase in deferred financing costs".The Company presented such changes as an investing activity in prior filings.For the six months ended June 30, 2005 and nine months ended September30, 2004, this reclassification resulted in a $10 million and $20 milliondecrease, respectively, to financing cash flows and a corresponding increaseto investing cash flows from amounts previously reported.
       *OperatingActivities.* For the first nine months of 2005, we generated cash flowfrom operations of $776 million, a $403 million increase as compared to$373 million in operating cash flows generated in the first nine monthsof 2004.
        We contributed $127 milliontowards our pension funding obligations in 2004, but made no cash contributionsin 2005. Detailed information regarding our pension plans is included in"Retirement and Postretirement Plans" in the Notes to Consolidated FinancialStatements.
        *Investing Activities.*Cash used from investing activities was $230 million in the nine-monthsended September 30, 2005, as compared to $398 million in the nine-monthsended September 30, 2004. The change from 2004 to 2005 primarily reflectsreduced restricted cash increases in 2005 as compared to 2004, and increasedproceeds from the disposition of property and equipment. In the first ninemonths of 2005, the Company sold ten B727, five B737 and seven B767 aircraftand rejected or returned to the lessor 29 B737 aircraft, ten B767 aircraftand one B747 aircraft under Section 1110 of the Bankruptcy Code. The Companyreacquired five B767 aircraft of which four were purchased by the Companyfrom the Public Debt Group and subsequently sold to a third party and simultaneouslyleased back and the fifth aircraft was acquired directly by a third partyfrom the Public Debt Group and subsequently leased to the Company.
        *Financing Activities.*Cash flows provided by financing activities were $55 million in the nine-monthsended September 30, 2005 compared to cash flows used of $15 million inthe nine-months ended September 30, 2004. In the first nine months of 2005,we made principal payments under debt and capital lease obligations of$156 million and $70 million, respectively. The decrease in principal paymentson capital lease obligations was related to aircraft rejections under Section1110. In addition, we made $11 million in principal payments on the DIPFinancing and received $310 million in proceeds from an expanded term loanapproved by the Bankruptcy Court on July 15, 2005.
        The Company has committedto spend an estimated $0.2 billion for the remainder of 2005 for the purchaseof property and equipment. At September 30, 2005, commitments for the futurepurchase of property and equipment, principally aircraft, approximated$1.9billion, after deducting advance payments and deposits. For further details,see "Commitments and Contingencies" in the Notes to the ConsolidatedFinancial Statements.
        At September 30, 2005, wehad a total of $1.2 billion in debt outstanding under the DIP Financingand $37 million in outstanding letters of credit. We believe that the DIPFinancing, together with other sources of cash, such as from operations,will be adequate to provide for our projected future liquidity needs throughour emergence from bankruptcy. On July 15, 2005 the Bankruptcy Court approvedan agreement with the DIP financing lenders to increase the term loan to$1.1 billion, thereby providing a total facility of $1.3 billion. Thisagreement also provides for a new capital expenditure basket for certainaircraft purchases, including a cash sublimit, but requires financing forthe balance of the aggregate purchase price of such aircraft.
        On August 18, 2005 the BankruptcyCourt approved a further amendment with the DIP Financing lenders to providefor, among other things, a waiver of any event of default as a result ofthe Company acquiring the Tranche A, Tranche B and Tranche C certificatesunder the Series 1997-1 EETC financing covering 14 of our aircraft. Theamendment further provided for a new term loan of up to $350 million (whichmatures at the same time as the remainder of the DIP Financing) to be usedto refinance a majority of the purchase price of those certificates, availableto be drawn through September 30, 2005 (subsequently extended to December15, 2005) subject to certain conditions. As a result of a dispute betweenUnited and the holders of the Tranche A certificates regarding the purchaseprice thereof, this matter is subject to continuing litigation and theCompany has been unable to satisfy the conditions of the DIP agreementrequired to be met to draw on the new $350 million term loan.
        *Exit Financing*. OnOctober 6, 2005, we entered into a joint commitment letter with JPMorganChase Bank, N.A., J.P. Morgan Securities Inc., Citicorp USA, Inc. and CitigroupGlobal Markets Inc. with respect to a $3 billion all-senior debt exit financingarrangement comprised of a $300 million revolving credit facility and a$2.7 billion term loan. Under the terms of the commitment letter, the exitfinancing will bear interest at LIBOR plus 4.5% or JPMorgan's alternativebase rate plus 3.5%, and mature six years after the closing date. The termloan would amortize at a rate that would result in an annual reductionof 1% of the original principal amount. The lenders' respective commitmentspursuant to the joint commitment letter are subject to, among other things,negotiation, execution and delivery of definitive documentation; BankruptcyCourt approval; substantial consummation of a plan of reorganization; andsatisfaction of certain other conditions on or before March 31, 2006. Availabilityof the initial extension of credit would also be subject to our eligiblecollateral having a specified market value. The terms of the commitmentletter require (and the definitive documentation will require) that wecomply with certain financial and other covenants, including a fixed chargecoverage ratio (the definition of which must be mutually agreed upon) andcovenants related to maintenance of specified levels of unrestricted cashand cash equivalents and loan-to-value of eligible collateral.
     If consummated, we expect that the exit financing arrangementcontemplated by the commitment letter will allow us to repay amounts outstandingunder our DIP Financing and make certain payments required upon exit fromthe bankruptcy process and, together with other available cash and cashflows from future operations, provide us with adequate levels of liquiditynecessary for our ongoing operations and to service our restructured obligations.As described above, however, the lenders' commitment to provide exit financingis subject to various conditions, some of which are beyond our control.We cannot guarantee that this financing will be finalized, or that a planof reorganization will be confirmed or implemented successfully.
Outlook
        The Company expects fourth-quartersystem mainline capacity to be down about 3% year-over-year.  Systemmainline capacity for 2005 is expected to be about 3% lower than 2004.
        The Company has entered intohedge agreements for heating oil for the equivalent of 9% of its expectedfuel consumption for the fourth quarter at an average of $1.32 per gallon,including taxes. To the extent the jet fuel crack spread is higher thanthe heating oil crack spread, the company's jet fuel expense could be negativelyimpacted.
        The Gulf Coast hurricanes,Katrina and Rita, resulted in a temporary shutdown to approximately 25%of U.S. crude oil refining capacity. United's fuel supply has not beendisrupted due to procurement practices which store a large amount of ourfuel inventory near our hub airports.
        However, the temporary reductionin refining capacity has caused the crack spread (the cost to convert crudeoil to jet fuel) to increase to unprecedented highs. United believes thatthe crack spread has been dropping and the Company expects it to revertback to more normal levels as soon as refining capacity is repaired andproduct imports rise.
Forward-Looking Information
        Certain statements throughoutManagement'sDiscussion and Analysis of Financial Condition and Results of Operationsand elsewhere in this report are forward-looking and thus reflect our currentexpectations and beliefs with respect to certain current and future eventsand financial performance. Such forward-looking statements are and willbe subject to many risks and uncertainties relating to our operations andbusiness environment that may cause actual results to differ materiallyfrom any future results expressed or implied in such forward-looking statements.Words such as "expect," "plans," "anticipates," "indicates," "believes,""forecast," "guidance," "outlook" and similar expressions are intendedto identify forward-looking statements. Additionally, forward-looking statementsinclude statements which do not relate solely to historical facts, suchas statements which identify uncertainties or trends, discuss the possiblefuture effects of current known trends or uncertainties or which indicatethat the future effects of known trends or uncertainties cannot be predicted,guaranteed or assured. All forward-looking statements in this report arebased upon information available to us on the date of this report. We undertakeno obligation to publicly update or revise any forward-looking statement,whether as a result of new information, future events, changed circumstancesor otherwise.
        Our actual results coulddiffer materially from these forward-looking statements due to numerousfactors including, without limitation, the following: our ability to continueas a going concern; our ability to comply with the terms of the DIP Financingor negotiate modifications or amendments thereto as necessary; our abilityto successfully renegotiate aircraft financings under Section 1110 of theBankruptcy Code; our ability to obtain court approval with respect to motionsin the Chapter 11 proceeding prosecuted by us from time to time; our abilityto develop, prosecute, confirm and consummate one or more plans of reorganizationwith respect to the Chapter 11 cases; risks associated with third partiesseeking and obtaining court approval to terminate or shorten our exclusiveperiod to propose and confirm one or more plans of reorganization; thepotential adverse impact of the Chapter 11 cases on our liquidity or resultsof operations; the appointment of a Chapter 11 trustee or conversion ofthe cases to Chapter 7; the costs and availability of financing; our abilityto execute our business plan; our ability to utilize our net operatinglosses; our ability to attract, motivate and/or retain key employees; ourability to attract and retain customers; demand for transportation in themarkets in which we operate; general economic conditions (including interestrates, foreign currency exchange rates, crude oil prices and refining capacityin relevant markets); the effects of any hostilities or act of war or anyterrorist attack; the ability of other air carriers with whom we have alliancesor partnerships to provide the services contemplated by the respectivearrangements with such carriers; the costs and availability of aircraftinsurance; the costs of aviation fuel and our ability to cost-effectivelyhedge against increases in the price of aviation fuel; the costs associatedwith security measures and practices; labor costs; competitive pressureson pricing (particularly from lower-cost competitors) and on demand; capacitydecisions of our competitors, U.S. or foreign governmental legislation,regulation and other actions; our ability of the Company to maintain satisfactorylabor relations;any disruptionsto operations due to any potential actions by our labor groups; weatherconditions; and other risks and uncertainties set forth from time to timein the reports we file with United States Securities and Exchange Commission.Consequently, the forward-looking statements should not be regarded asrepresentations or warranties by the Company that such matters will berealized. We disclaim any intent or obligation to update or revise anyof the forward-looking statements, whether in response to new information,unforeseen events, changed circumstances or otherwise.  
Item 3.Quantitative and Qualitative Disclosures About MarketRisk
        For information regardingour exposure to certain market risks, see Item 7A. Quantitative andQualitative Disclosures About Market Risk in United's Annual Reporton Form 10-K for the year 2004.
Interest Rate Risk - (In millions, except averagecontract rates)NotionalAverageEstimated AmountContract RateFair Value   (Pay)/Receive*Interest rate swap$ 1307.56%$ (29) 
Price Risk (Aircraft Fuel) - When market conditions indicate risk reductionis achievable, the Company enters into fuel option contracts to reduceits price risk exposure to jet fuel. The option contracts are designedto provide protection against increases in the price of aircraft fuel.As market conditions change, so may the Company's hedging program.   September 30, 2005 (In millions, except averagecontract rates)NotionalAverageEstimated AmountContract RateFair Value   (Pay)/Receive*Purchased call options - Heatingoil$ 68 $ 1.25/gal$ 48 Sold put options - Heating oil(63)1.06/gal- 
*Estimated fair values represent the amount the Companywould pay/receive on September 30, 2005 to terminate the contracts.    
Item 4.  Controls and Procedures
         An evaluation was carriedout under the supervision and with the participation of the Company's management,including the Chief Executive Officer ("CEO") and Chief Financial Officer("CFO"), of the effectiveness of the Company's disclosure controls andprocedures as of September 30, 2005.  Based on that evaluation, theCompany's management, including the CEO and CFO, has concluded that theCompany's disclosure controls and procedures are effective. During thethird quarter of 2005, there was no change in the Company's internal controlover financial reporting that has materially affected, or is reasonablylikely to materially affect, the Company's internal control over financialreporting.  
PART II.  OTHER INFORMATION
Item 1.  Legal Proceedings.
        The information set forthin the Notes to the Unaudited Consolidated Financial Statements under thecaption "Voluntary Reorganization Under Chapter 11" and Management's Discussionand Analysis of Financial Condition and Results of Operations under thecaption "Chapter 11 Restructuring Efforts" is incorporated by referenceinto Part II, Item 1 of this Form 10-Q.
Item 6.  ExhibitsA list of exhibits included as part of this Form 10-Q is set forthin an Exhibit Index that immediately precedes the exhibits.SIGNATURESPursuant to the requirements of the Securities Exchange Act of 1934,the Registrant has duly caused this quarterly report on Form 10-Q for thequarter ended September 30, 2005 to be signed on its behalf by the undersignedthereunto duly authorized on the 14th day of November 2005.  UNITED AIR LINES, INC. By:  /s/ Frederic F.BraceFrederic F. BraceExecutive Vice President andChief Financial Officer(principal financial officer)  By:  /s/ David M. WingDavid M. WingVice President and Controller(principal accounting officer)   Exhibit Index Exhibit No.Description  10.1Waiver, Consent and Twelfth Amendment, datedas of July 19, 2005, to the Revolving Credit, Term Loan and Guaranty Agreement,dated as of December 24, 2002, among United Air Lines, Inc., UAL Corporation,all of the direct and indirect subsidiaries of United Air Lines, Inc. andUAL Corporation, JPMorgan Chase Bank, Citicorp USA, Inc. and each of theother financial institutions from time to time party thereto (as filedas Exhibit 99.1 to UAL's Current Report on Form 8-K dated July 20, 2005and incorporated herein by reference).10.2Waiver, Consent and Thirteenth Amendment, datedas of August 11, 2005, to the Revolving Credit, Term Loan and GuarantyAgreement, dated as of December 24, 2002, among United Air Lines, Inc.,UAL Corporation, all of the direct and indirect subsidiaries of UnitedAir Lines, Inc. and UAL Corporation, JPMorgan Chase Bank, Citicorp USA,Inc. and each of the other financial institutions from time to time partythereto (as filed as Exhibit 99.1 to UAL's Current Report on Form 8-K datedAugust 30, 2005 and incorporated herein by reference).   12.1Computation of Ratio of Earnings to Fixed Charges   31.1Certification of the Principal Executive OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-OxleyAct of 2002)   31.2Certification of the Principal Financial OfficerPursuant to 15 U.S.C. 78m(a) or 78o(d) (Section 302 of the Sarbanes-OxleyAct of 2002)   32.1Certification of the Chief Executive OfficerPursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)   32.2Certification of the Chief Financial OfficerPursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)         

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