Employee Equity etc Shares

UAUA

This page has a lot of information about the Equity Program and subsequent tax questions.

Scroll some ways down to see answers to your questions but most answers seem to be there .

ComputerShare's contact website with all contact info:

(1-800-919-7931 or 1-312-588-4267)
----------------------------
UAL Bankruptcy Contacts and Links go to: http://www.pd-ual.com/UALRestruct_CNL_Menu.html
------------------------------

Poorman-Douglas: 800-547-4407 They will take your address change if needed.

www.poorman-douglas.com/solutions/bankruptcy/overview.htm

UAL Corp. Approves Shareholder Payment of $2.15 Per Share, or About
$250 Million

December 7, 9:28 am ET http://tinyurl. com/ysyyg6

CHICAGO (AP) -- UAL Corp., the parent of United Airlines, said Friday
it approved a special $2.15 per share payment to shareholders,
totaling about $250 million.

The payment will be distributed on Jan. 23 to UAL Corp. shareholders
as of Jan. 9.

UAL also said Friday it paid down $500 million of a term loan under an
unspecified credit agreement.

Since exiting bankruptcy, United has reduced its total net debt by
$2.7 billion as of the third quarter's end.

Shares rose 86 cents, or 2.1 percent, to $41.49 in premarket
electronic trading. They closed at $40.63 on Thursday.

March 2007

Final Equity Distribution

* * * * * * *

FYI Aug 29, 2007

Looks like we may get some lunch money back.

Settlement was $5.25 million, minus court approved fees and costs.

http://www.hagens-berman.com/united_airlines_esop_lawsuit

Ben

Miscusi1@aol.com

Compilation of Tax Questions

March 2007

Courtesy Bob Falco and Pete Sofman

ComputerShare 1099 Information

Pilots who sold any UAUA shares they received in direct distributions throughout 2006 from ComputerShare accounts will receive a 1099 form. The MEC R & I Committee was informed that the mailing of 2006 ComputerShare 1099’s was delayed, and that they were sent to pilots’ homes on 2/15/07. Ordinarily, a 1099 Form is required to be mailed by January 31st of the following year, but ComputerShare obtained an extension to this requirement from the IRS. This form comes directly from ComputerShare, and is in addition to other tax forms you may have received from United covering the distribution itself.

If you did sell UAUA shares through ComputerShare in 2006, please review the 1099 carefully to ensure the information is accurate and complete. It has come to our attention that there are cases in which ComputerShare did "backup" withholding (which is required where a pilot does not have a W-9 on file), but the 1099 doesn't reflect the fact that taxes have been withheld. In such cases, you will need to insist on a corrected 1099 to be sure he gets credit for the taxes he has paid.

If you do not receive a 1099 form, or need a corrected one, contact ComputerShare at 1-800-919-7931 or at www.computerShare.com. If you experience any difficulties in obtaining or correcting a 1099, please send an email message to the MEC R & I Committee at ualmecri@alpa.org. Please indicate “Delayed ComputerShare 1099” in the subject line.

Please note: This message is not tax advice and we encourage you to discuss tax matters as applicable with your individual qualified tax professional.

* To correct your state of taxation, try to contact the Payroll Services Care Center immediately at 866-UAL- PAYS.
Below several opinions and info about all these complications.

FOR MORE INFORMATION with regards to Social Security Special Payments and how to
contact them:

From Bob Falco:

All and I mean ALL of the income we received through the various bankruptcy court settlements were considered DEFERRED COMPENSATION. In the case of the payout for the non-qualified benefits it goes back to the year you retired. Since your earnings were greater than the SS income cap for the year there was no additional SS tax due. There is no cap on the Medicare Tax though. However, since you paid the Medicare Tax on the total imputed lifetime benefits up front in the year of your retirement you are not required to pay it again on the settlement amount. That would amount to double taxation on the same benefits. It still leaves the thorny issue of recapturing the EXCESS Medicare Tax that we paid. Ultimately, in my opinion, after all court proceedings are exhausted by URPBPA, than that is the time to request such overpayment of the excess Medicare Tax. UAL did correctly separate the income amounts and did show the non-qualified payout correctly in box 11 of the issued W-2 forms.
All other income we received in 2006 from the bankruptcy being considered deferred compensation IS subjected to SS and Medicare Tax in the year of receipt of such income. I did not write the IRS code, SS regulations, or the bankruptcy legislation. All I am is telling it as it is and there will be no refund of those taxes that were withheld for SS and Medicare Tax in 2006.
When you sell the shares of the new UAUA stock we received through Computershare you also create a taxable event. Only one of three things can happen. You sell at the same price you received the stock for, you sell at a profit, or you sell at a loss. Depending on what category you fall into you will have to reconcile the sale transaction of the stock on your taxes in the year of the sale of such stock on a Schedule D.
Bob Falco

http://www.socialse curity.gov/ pubs/10063. html Happy New Year, Bob Falco

1/28/07

Hello Arvid,

Is anyone else disputing their 1099-R from the PBGC

for 2006?

My gross distribution in box-1 is almost $3,000.00

more then the total of my direct deposits into my

bank account. I questioned the PBGC and their

explanation was, "when we took over the accounts in

December of 2005 we made your January 2006, payment

on the 30th of December 2005." If I add the

December 2005 deposit then my 1099-R box-1 is the

same as the PBGC.

So what's wrong? If I check my 1099-R from the

Northern Trust Company for 2005, I discover they

also included the December 30th payment in their

calculations. This means I'm being double taxed on

the same amount.

After speaking with both the PBGC and the Northern

Trust Company I am the ping pong ball in the middle.

Each disputes the other and claims they are correct

and the other entity is wrong. I am only at the

lower supervisory level and will continue my battle.

I was curious if anyone else has a dispute.

Thanks,

Maury Rosenberg

JFK Retiree 2003

To All:

I took the Computershare United/UAL Corp "Retired
General Unsecured Distribution" Transaction Advice forms I received when I got the shares.
Under Sales Advice on the left side the Indicator
shows "NonQual" or "1114", It then shows "'Total Taxable Compensation:" I added all the amounts and assume it will equal the W-2 that United will send us.I received two sets of 1114 and two of NonQual distributions so far.
I would keep the paperwork if Social Security has a
question.

Doug Bielanski called also today and they told him
also that it shouldn't affect social security payments. The people above their age for qualifying for full Soc Security pension have no worries anyway. They can earn any amount and not have it
affect their social security.

Denny Fendelander

FYI - Last names have been withheld by me. Dale T

. . and please remember . . "Don't shoot the messenger"

Greetings Dale,

I recall reviewing the reasoning behind not being able to deduct the ESOP losses when I filed my taxes in 2003. As I understood it, the IRS believes that we should first show the income on our W2s before we can show a loss. Although our wages were reduced, we did not actually receive the income. Therefore we did not actually have lost income that we can reclaim, in the thinking of the IRS.

Yes, we were led to believe that we would receive a retirement benefit from the ESOP, but, just as we had our other retirement program disavowed, so it is with this program which was structured as a retirement program for tax purposes.

As unjust as it is, United received the tax benefit when they emerged from bankruptcy. United, in the eyes of the IRS, paid for the ESOP out of operating expenses just as they paid for our Pension Plans out of operating expenses.

Just as we pay taxes on our pension distributions as earned income only when we receive the money, the ESOP would have worked the same way--our income would have been when we received our retirement distribution.

I suspect that if people try to take the ESOP screwing as a loss on their income taxes that the IRS will audit them and maybe even penalize them. Of course, the IRS may be too understaffed to follow-up on any given amended return. That is a gamble someone may wish to take.

As for the CPA or tax advisor saying the loss could be taken, I suspect they do not understand that we did not receive the wages (and pay taxes on them) previously. Suffering reduced wages, even when imposed unilaterally or with voted consent, does not normally get much sympathy from the IRS.

I am not a CPA or a tax lawyer. Therefore you should consult your tax adviser for correct information.

These are only my personal observations.
John E

Dale:
Please excuse my lack of remembrance of this issue, but after reading this last collection of venting.. I state..

If we haven't already tried to legally get a clarification of our needs and wants on this issue, perhaps we could form a group to have an attorney start a class-action suit for all of us to recover our lost 'pay'.

I believe my loss is somewhere around $80,000. Could be more.. Never did pay attention. I just know I moved to graveyard hours to recover the lost 8.5% by getting the 10% shift premium. I still believe the squeakiest wheel gets all the attention..
Thanks for passing all the comments, etc. to every body out here..Ken, Sr.

Dale,
I found a Q&A I saved from "Newsreal" dated Thursday, July 3, 2003. Before these are issued, they are checked and double checked by the departments involved, specifically TAX and LEGAL. That's not to say an error could have been made but, equipped with this information, we can confirm with our own tax professionals.

Question. Can employees take a tax-write-off for the loss they suffered from the fall in the price of United's stock since the company declared bankruptcy?

Answer: NO. Because employees were allocated stock as part of the Employee Stock Ownership Plan, a qualified retirement plan, they are not eligible for any tax benefit from the stock's decrease in value while it was held by the ESOP.
Barb.

(I could not find the above mentioned NewsReal through "Skynet to confirm. Dale T)
Dale --
For those who may be wondering about the ESOP "status of litigation" see: http://www.hbsslaw.com/united_airlines_esop_lawsuit
Hugh

Some Retiree 2006 W2 Forms from UAL contain errors

- Posted 2/7/2007

"Approximately 2,300 Retiree W2 forms for 2006 are in error and will need to be corrected.

W2’s were sent to retirees by United Airlines, as a result of United’s bankruptcy and the medical changes that affected you. The distribution you received was treated as wages and taxed accordingly.

Those retirees whose W2’s are most likely in error are those who received multiple distributions from Computer Share.

If you have retained your computer share distribution statements you may sum up the corresponding amounts from each of your statements and determine whether those amounts agree with the amounts they should represent on the W2 that you received from United.

If those amounts don’t agree with your W2 or you are unsure if your W2 is correct, you should contact United Payroll area at 1-866-825-7297 and explain your problem or ask them to advise you if you are effected or not. They will ask you for your six digit UAL file number. Please be prepared for an extensive wait.

If your W2 is one of those that is in error, United will be issuing you a corrected W2c form. The current estimate by Payroll is that it may take 4 to 5 weeks to get the corrected W2c.

If your W2 was effected you may want to consider delaying your taxes, or seeing your tax preparer until after you have received your corrected W2c".

Hugh Ornduff

Hi, all,

On Jan. 29 I wrote about my 2006 W-2 from UAL that had gross errors.
I talked with UAL payroll today (after being on hold for 55 minutes) and I have been told that the Payroll people are aware of the problem, and are in the process of issuing W-2 C's (corrected W-2's)
to "over 1000 pilots." She said they anticipate about 5 weeks for the job to be finished.

Regards,

Ron Weber

n a message dated 1/29/2007 9:48:23 A.M. Pacific Standard Time, atmcgooey@aol. com writes:

AND MORE:

Talked to Carla at payroll this morning. She informed me not to worry; theSSA will not be taking any benefits back. A letter has been sent by UAL to the SSA re: W2 compensation is not wages, etc. (See Bob Falco's explanation) . She also informed me that we will be copied the letter from UAL to SSA.

A corrected W2 was not discussed; after reading the Falco message of 1/29/07, I think my W2 is correct.
And with a letter from UAL to the SSA, we get to keep our SSA money. What a concept, huh?

Tom, Class of 2001

From: "Chuck Reynolds"
Well, folks the ongoing saga of the bankruptcy continues to provide more unpleasant news. The most recent issue is the "W2" forms from UAL "may" be incorrect. Please follow and I will attempt to break it down in a manner that you can understand.

1. If you DID NOT cash in any of your bankruptcy shares (these were the shares controlled by Computershare) in 2006, this message has NO impact on you.

2. For the rest of us (these would be the ones who DID cash in their UAL bankruptcy shares held by Computershare), you "MAY" have a W-2 problem. Please follow.

3. In 2006 I received from Computershare three checks reflecting my selling of my UAL bankruptcy shares. The end result is my account now shows $0.00. And that is the way I want it. I have just received (yesterday) a W-2 form from UAL, Inc, quoting in Box 1 my Wages, tips, other comp, and in Box 2 Federal income tax withholding. I have compared these W-2 numbers with the documents I received from Computershare, and THE NUMBERS DO NOT AGREE.

4. Today i just got off the phone with Computershare 1-800-919-7931, and they have indicated this W-2 form error is not their problem, call UAL.

5. So, I called UAL retiree center, and they transferred me to UAL payroll (1-866-825-7297). I explained my issue with the payroll department, and they acknowledged a W-2 error. They also indicated there were quite a number of W-2 errors sent out to the employees. YOU MAY BE ONE OF THOSE ERRORS.

6. That's the good news. UAL payroll advised me, we (those of us that had errors) will be receiving W-2c (corrected W-2 forms), that will correct this issue. Now the bad news. IT COULD TAKE 4-5 WEEKS TO GET THESE CORRECTED W-2c's. So, you may want to consider delaying doing your taxes, or reschedule your appointment with your tax man until you get the corrected W-2c's.

Sorry, to be the bearer of bad news, but "that's the way it is, January 25, 2007

On March 23rd 2006, I received the following comments from Frances DeBlasio, concerning our Computershare checks, (remember the checks with the wrong bank routing number?). She wrote

Mr. Harper,

I’m responding to an e-mail sent in by Mr. Gerald Stevens. His inquiry was as follows:

My question is still, why were Social Security and Medicare fees taken out of the check. I have no earned income and pay my Medicare fees thru my Social Security Check. The amounts in all cases appear to be excessive as even my 401k and IRA deductions on higher amounts don't amount to what was deducted.

Since so many people are interested in this, suggest you reply thru Dale Harper and he can spread the word.

Gerald R. Stevens

Retired.

Answer:

The Section 1114 distribution arose out of the employment relationship you had with United. Thus, the distribution is considered as taxable wages. Taxable wages are subject to both income and FICA tax. Only beneficiaries of deceased United Retirees are exempt from paying taxes on this distribution (as long as we have a Social Security number on file).

To calculate the amount of Social Security and Medicare deducted from your proceeds for an 1114 Claim, first take the Gross Proceeds (total shares sold multiplied by the price), next, deduct the SEC Fee, Transaction Fee (commission), and Check and Processing Fee. That should give you the Gross Proceeds Net of Fees. Taxes were based on the Gross Proceeds Net of Fees. Social Security is 6.2% of the Gross Proceeds Net of Fees and the Medicare is 1.45% of Gross Proceeds Net of Fees.

Frances DeBlasio

Director, Restructuring Office

United Airlines

To all: I just called the Social Security Administration 800 number based on the letter Bob Falco
sent out re: Losing SS benefits. See below.

I was told the following: I reach "full retirement age in 2007" Since I was born
in July, 1941, full retirement age requires age 65 + 8 months-that will be in tax year
2007. I received stock with a taxable value of approx $62,000 from the bankruptcy (as
shown on the statements issued by computer share after the distributions were made.) I
expect to receive a W-2 in that amount for the tax year 2006. The SS rep said that if I do
nothing they (SS) will send me a letter in late summer saying that I owe them all of the
Social Security benefits they paid me in 2006. The SS rep said I would have to provide a
LETTER from the company or the court stating you are the recipient of "Special Payments"
for the 2006 tax year as a result of the UAL bankruptcy. These "Special Payments" are
being considered "Deferred Income" and should not trigger adjustments to your Social
Security Benefits. The "Special Payments" are not for EARNED INCOME in 2006 but rather
for special payments being considered deferred compensation for benefits terminated by
the UAL bankruptcy.

The question is how or where do we get such a letter?

Larry Becker

PS: Bob Falco said it perfectly: "I really do hate them more and more each and every day
for complicating my life "

Here is the letter Bob sent:

Sent: Fri, 5 Jan 2007 3:50 PM
Subject: Social Security Benefits

To All Receiving Social Security Benefits,

The various payments and distributions that we have received from UAL over the last
year are going to bring about some complications with regards to your Social Security
benefits and WILL require action on your part. Many of the distributions we received are
going to be reported to the IRS and Social Security Administration on a W-2 form as
WAGES. In almost all cases the total amount of wages that will be reported will be ABOVE
the limit placed on earnings by the Social Security Administration. This will trigger the
Social Security Administration to adjust your monthly benefits because of wages being
reported on the $1 for $2 rule for those who are younger than their full retirement age
and on the $1 fir $3 rule for those who have reached their full retirement age in 2006. For
those of us who are above the full retirement age there will be no adjustment.
DO NOT PANIC!!! What you MUST do is contact the Social Security Administration
before you file your income tax for year 2006 and explain that you will be the recipient of
"Special Payments" for the 2006 tax year as a result of the UAL bankruptcy. These "Special
Payments" are being considered "Deferred Income" and should not trigger adjustments to
your Social Security Benefits. The "Special Payments" are not for EARNED INCOME in 2006
but rather for special payments being considered deferred compensation for benefits
terminated by the UAL bankruptcy.
I really do hate them more and more each and every day for complicating my life. I
want to be RID of them as much as they wanted to be RID of me. I really hope Tilton andhis band of thieves pay in some way for their actions.

I read the posting from Dick Hulsey. To all out there listen up. If you look closely at your computershare distributions statements you will notice that some are entitled "Employee Distribution", while others are entitled "Retiree General Unsecured Distribution". They are very, very different.

The Employee Distribution is related to the individuals share of the concessions that ALPA negotiated for the final bankruptcy contract. These distributions were to be paid in 3 separate lots. They are considered wages for income tax reporting purposes and Federal, State, FICA, and Medicare taxes are being withheld at the appropriate rates. The recipient of these distributions will get a W-2 form for 2006 for such distributions and it will have to be claimed as wages on your income taxes for 2006. These taxes are not only legal but mandated to be withheld by the IRS.

The Retiree General Unsecured Distribution Computershare statement is for the settlement of the pilots Non-Qualified plan or Pilots Supplemental plan through the bankruptcy court. This distribution was calculated by the amount of claim that you are on file for in the bankruptcy court for the total of your anticipated imputed lifetime benefits that were terminated as a result of the bankrupcy. The anticipated payout was estimated to be .04-.08 cents on a dollar. The actual payout looks to be in the neighborhood of .12 cents on a dollar. The pilots Non-Qualified or Supplemental plan was for pension credits earned which exceeded the ERISA limits that defined high compensated employees.

Those limits were defined and established by the US Government with the passage of ERISA legislation. The portion of ones pension attributed to the Non-Qualified plan was to be paid by UAL and those pension credits are not insured by the PBGC. Only the pension credits earned up to the ERISA limits, or our terminated Defined Benefit Plan amounts, are supposedly insured - HA by the PBGC. In essence the pilots Non-Qualified plan was a deferred compensation plan which UAL claimed they could not afford to pay any longer in the bankruptcy court. Henceforth the great judge Wedoff terminated that portion of our pensions as well and created the payout initially under the 2-D-2 category and for those of us that objected to the amount on file subsequently to the 2-E-2 category which is paid out in stock in the new UAUA.

This termination of the Non-Qualified portion of our pension is still being contested by URPBPA. These distributions will also be considered wages for income tax reporting purposes although they will be designated on a W-2 form as non-qualified payments. The payout goes back to your year of retirement and because you exceeded the FICA limits in that year no additional FICA tax is due. However, there is no limit for the amount of Medicare tax that is due on income that is considered wages whether earned or deferred. The reason why there is no Medicare tax withheld is because in theory you paid the Medicare tax in full in your retirement year for the total anticipated imputed lifetime benefits from the Non-Qualified plan.

I know that all the above sounds like a bunch of double talk but it is the only way I can explain the differences between the Computershare distributions. We will have to wait and see how it all plays itself out with the various appeals before we can take any action for reclaiming excess Medicare tax paid and to evaluate whether or not there are other losses that can be claimed on our individual income taxes.

Bob Falco

Just read the discussions on the Computershare info about UAL
distributions. My distributions have had taxes of all kinds deducted
from them as follows:

03/08/06 $3,928.19 41.888 Shares at $35.07315/share
sold to pay taxes. Federal, State, SS, and Medicare taxes withheld
$1469.14

04/04/06 $906.94 8.976 Shares at $37.789/share
sold to pay taxes. Federal, State, SS, and Medicare taxes withheld
$339.19

09/22/06 $302.72 3.5915 Shares at $27.52/share
sold to pay taxes, Federal, (no State taxes), SS and Medicare taxes
withheld $98.84

I would like to know if these deductions are legal and has anybody
else payed them.

If the taxes are not legal we need to get an action started to get
them refunded.

The cost basis should be on each and every computershare statement you received for the various stock distributions. ( In my case the 08/01/06 was $27.39 and the 09/22/06 was $27.52) You will use that number times the number of shares to determine your cost. When you sell the gross proceeds, which you will get a 1099-B for, will determine whether you have a capital gain or loss. Less than 1 year from date of issue will be short term, over 1 year will be long term.

You will also get a W-2 form for the total amount of taxable compensation which also will be the same number as the basis from the computershare statement. This amount will be claimed as WAGES and appropriate federal and state taxes have already been withheld. There is no SS or Medicare tax withheld. No SS because it is considered a deferred compensation plan and no Medicare because in theory we already paid Medicare tax on our total imputed anticipated lifetime benefit.

----------------------------------------------------
Third Employee Equity Distribution Completed on Sept. 22
----------------------------------------------------
A third distribution of United stock was distributed to eligible employees on Friday, Sept. 22.

* These equity distributions reflect the economic contributions that employees throughout United made during the restructuring.

* As you may remember from the equity distributions earlier this year, some shares of United stock from the initial distribution were reserved to cover outstanding claims in the company's bankruptcy case. The shares being distributed now became available after additional Chapter 11 claims were resolved.

* To the extent possible under IRS regulations, the shares from this third distribution were deposited directly into employees' accounts under the United Airlines 401(k) Plan at Fidelity Investments or, for pilots, into Pilot Directed Account Plan (PDAP) accounts.

* All eligible employees will be receiving a letter and detailed, personalized statement from United over the next several days with more information on the distribution. Information is also available on the "Employee Equity" section of SkyNet.

* In addition, general information about this equity distribution is available from the United Employee Equity Distribution Hotline at 866-686-8682 or 310-412-2220 (for callers from outside the U.S.).

* For specific information on distributions to 401(k) accounts only, please contact Fidelity Investments at www.401k.com or 1-800-245-9034.

* Information on distributions to Pilot Directed Account Plan (PDAP) accounts is available TO PILOTS ONLY at 1-866-OUR-PDAP or http://resources.hewitt.com/pdap/.

Hey Anyone! Do you have an answer to his question. Did we get the stock for "0" cost so thatwe now paid taxes for gains of the entire amount: 0 to 27.39?

No. You pay capital gain/loss on the difference between issue price ($27.39) and sale price. You already paid tax on the issue price.

Arvid,
I noticed the question with regards to the stock that we received from the bankruptcy court for the settlement of our Non-qualified plan.

Individuals who received the Retiree General Unsecured Distribution will get a W-2 form for the total taxable compensation. Such W-2 form amount will be claimed on the individuals 2006 Federal and State income taxes as deferred compensation. In all probability on line 7 of IRS Form 1040.

With the receipt of the stock we have 3 choces: hold it, sell it, or transfer it. When you sell the stock you will get a 1099-B for the sale indicating gross proceeds of the sale. The cost or basis of the stock sold looks like it will be computed at $27.39/sh. There may be some who might have a slightly different basis as depicted on the Computershare statement received. Then depending on the length of time held, the sale will either be a short or long term capital gain or loss.

I would advise all to hold onto or gather all paperwork with regards to the claim that was on file for your non-qualified plan claim in the bankruptcy court. Also, retain all copies of W-2 forms for non-qualified (UU3) annual payments along with the W-2 form for your retirement year. In addition, if you have the original letter from UAL for the payment of Medicare tax on the imputed anticipated lifetime non-qualified payments hold onto that letter as well.
More on these subjects when the final decisions are rendered by the appeals court and no further appeals are in process.

Bob Falco

Date: Sun, 10 Sep 2006
Former furloughed retired UAL pilots (Approx. 650 pilots):

Your initial PBGC Benefit Statement Letter and Work Sheet dated 5/16/06 was not properly calculated by the PBGC. In their original calculation the PBGC did not properly credit you with the 1/3 furlough credit that was originally agreed to in the 1991 UAL-ALPA labor agreement. Some how, this bit of information was over looked by the PBGC actuaries. This important detail was first discovered a the LAX PBGC Road Show held in April of 2006.

Your monthly retirement check will now increase by the stated amount in your September 5, 2006 revised PBGC Benefit Statement. This monthly increase in benefits is due to the addition of 1/3 of your furlough time which is added to your years of participation. As stated in this revision letter, your bump in benefits will occur on October 1, 2006.

The PBGC now owes you seven months of underpayment of benefits for the months between March - September of 2006. The PBGC has made a policy decision to not issue you a retro check for this difference. They have chosen to suspend this amount and later offset it against the PBGC's ultimate recoupement which will be determined in your final determination letter at some time in the future. Normally the PBGC final determination letters are issued to plan participants approximately three years after the PBGC assumes control of a defined benefit plan.

Convertible Notes Update: 401(k)/PDAP Distributions Have Begun
----------------------------------------------------
For many employees, the distribution of proceeds from the sale of convertible notes has begun.
* These proceeds have been deposited into 401(k) accounts at Fidelity Investments - or for pilots, into PDAP accounts - to the extent permitted by law for those employee groups who elected this type of distribution. Income taxes are deferred on these distributions and FICA (Social Security and Medicare) taxes are not paid on funds deposited into these accounts.
* Proceeds that are not eligible to be distributed to 401(k) or PDAP accounts - because of federally mandated annual contribution limits or other reasons - will be paid directly to employees in cash over the next few days. [In addition, some employee groups have agreed to postpone a portion of each employee's distribution in excess of 2006 401(k) limits until a contribution can be made in 2007, in order to defer or further minimize taxes.]
* AMFA-represented employees have elected to receive all of their proceeds directly in cash, instead of into 401(k) accounts. These funds will be paid over the next few days.
* Checks for any direct cash payments will be issued through the United payroll process, including through direct deposit into employee accounts where appropriate. These funds are typically subject to federal and local income taxes and FICA tax withholding, unless the employee is retired or other circumstances apply.
* Deposits into IAM-represented employees' accounts are briefly deferred to next week to allow additional time to ensure the accuracy of the distributions. We will provide an update on SkyNet when more information becomes available.
* A detailed, personalized statement explaining the distribution will be mailed to each recipient's home address over the next few days. This statement will show how much the eligible employee received and how the funds were distributed.
* In the meantime, general information about notes is available on the "Employee Notes" section of SkyNet and through a special Employee Convertible Notes Telephone Hotline at 800-572-0986. Employees outside the U.S. should call 310-677-2994.
* For questions or additional details about distributions to 401(k) accounts ONLY, please contact Fidelity Investments online at www.401k.com or by phone at 800-245-9034 or call collect from outside the U.S. at 508-787-9902.
* For pilots, additional PDAP information is available on the PDAP website at http://resources.hewitt.com/pdap or through the PDAP Service Center at 866-OUR-PDAP (866-687-7327).

" In order to transfer your shares you will need to speak to a
participant service representative and provide them with the number
of shares you wish to transfer." (They only transfer whole shares so
any fraction remains with them)

It takes about 3 business days to set up your account for your
broker to go into your account electronically, via the DRS Profile
System (?). Computershare will then electronically transfer shares
to your broker.

After the three days YOU need to initatite the transfer with your
broker. He needs:
1. Your Computershare acct #
2. The number of shares you wish to transfer
3. Computershare' s participant number
4. Your Tax identification number.

You need to get this information on your call to the participant service representative.
This information was provided in a letter from Computershare when an
employeee recieved any UAL Stock.

** Some employees elected cash and did not dispute amount and have
received monies.

** Some pilots recieved a small distribution of stock from a
reorganization and an ALPA agreement and therefore have a
Computershare Account established. You may set up electronic access
to this account but still need to call to transfer.

** Some elected stock and have received nothing from "Debtor's
Claims" and it appears will now receive a distribution at the end of
July ?? (It was previously estimated at 4%-6% of the Company/Court' s
estimate as I recall. Don't know what price will be used to convert
to stock but it will be taxed.) It's my understanding this is what
Poorman - Douglas does, then forwards shares to Computershare who
will then establish an account if you do not already have one.

In otherwords they will give us what they think we need and withold
tax as they please, then dump it into a Trust Company that handles
these kind of things, let us figure it out and wash their hands of
us pesky Retirees.

Late this afternoon, without calling Computershare, I got into my account with the file number and password described in the letter from Computershare that arrived yesterday.

I was then asked to create a new password, which I did and which I've tested successfully.

I was then advised that I didn't have a W-9 form on file with Computershare, so they allowed me to file it online, which means I can now place a sale order request, without taxes being withheld on sales proceeds at the backup withholding rate (whatever that is!).

I wonder if everyone is now going to rush to sell their UAUA stock, thus further depressing the price.

I had no luck with the Computershare Website on the first attempt. The
Holder Account Number (my UAL file #) and last 5 of my SS# did not
work as instructed by both of the letters that I received.

I called 800-919-7931 and had a go around with the automated voice. By
dialing the number zero a thousand time I was able to get the computer
to give up and let me talk to a human.

The wait time was short and the people that I dealt with were most
pleasant and helpful. In short order the DRS account was initiated and
I had the information necessary for transfer of shares to my brokerage
account. I also had a new PIN # to use on the website.

When I then went back to the website, the 5 digit UAL File number and
the new PIN# got me onto the Website (
https://www-us.computershare.com/Employee/Login/CompanyIntroduction.asp )
and I was able to complete the information for the W9 Tax Form.

I am no expert on this however I'll put my two cents in based I my
contact with Computershare...

You need to call Computershare (1-800-919-7931 or 1 312-588-4267) to
transfer shares to your Brokerage Account.

After the three days YOU need to initatite the transfer with your
broker. He needs 1. Your Computershare acct # 2. The number of
shares you wish to transfer 3. Computershare's participant number
4. Your Tax identification number. You need to get this information
on your call to the participant service representative.This
information was provided in a letter from Computershare when an
employeee recieved any UAL Stock.

** Some employees elected cash and did not dispute amount and have
received monies.

** Some elected stock and have received nothing from "Debtor's
Claims" and it appears will now receive a distribution at the end of
July ?? (It was previously estimated at 4%-6% of the Company/Court's
estimate as I recall. Don't know what price will be used to convert
to stock but it will be taxed.) It's my understanding this is what
Poorman - Douglas does, then forwards shares to Computershare who
will then establish an account if you do not already have one.

From: iam141@aol.com
To: IAM141@aol.com
Sent: Mon, 3 Jul 2006 20:31:49 -0400
Subject: Weekly report

Anyone looking to the federal courts for support in recovering their losses suffered when the ESOP stock value bottomed out was sorely disappointed this past week. The Court of Appeals dismissed an appeal of an earlier court
decision, protecting State Street Bank from liability regarding the failure to sell UAL stock when the price was dropping like a rock, just before United declared bankruptcy in December, 2002. This case has been heard in several
different courts over the past few years and each hearing has ended with a dismissal. In this latest appeal, State Street was not only looking for a dismissal of the claim against them but also a reversal of the previously settled issue of a partial settlement from the ESOP Committee. The 3 judge panel that heard this recent case agreed not to hold State Street liable for any additional payments to United employees but did not overturn the previous settlement. The law firm representing the employees had reached an agreement with the ESOP Committee last year to accept $5.2 million as a partial settlement of claims.
Of course, as lawyers often do, the first claim they settled was their own legal fees. Other money from the settlement has been used by the lawyers to file and present claims against State Street Bank. The Hagens Berman law firm has said they will review this latest court decision to determine if an appeal to the U.S. Supreme Court is possible. If no further appeals are made then whatever amount of money remains of the settlement with the ESOP Committee will be distributed among all the employees and retirees considered eligible by the court. The latest estimate of payment to individuals is between $20.00 and $50.00 as a total settlement.

United wasted no time in adjusting to the loss of domestic mail handling. Immediate announcements of manpower reductions and realignments of work assignments were made and some changes were implemented on July 1st. The idea that perhaps the Postal Service would request United continue to handle mail and reconsider their decision to take the contract away from United was also quickly decided when it was announced this past week that UPS had reached an agreement with the P.O. to deliver domestic mail. UPS anticipates about $100 million in annual revenue as a result of this new contract and hopes it puts them in a position to take over the entire mail handling contract in the future valued at over $1 billion.

The City of Chicago offered $4.4 million in special tax relief to United last week. The reduced tax benefit would be given to United if they promise to keep their headquarters in Chicago and maintain at least 350 jobs in the new offices for at least 10 years. United continues to look for a new location for the upper management offices and has not committed to any city.

While company officialshave reviewed several specific buildings in Chicago, they continue discussions

The following might be the definitive word on withholding taxes for distribution of stock shares.

Al Black is a member of the retired pilots 1114 committee.
-------------------------------------------------------------------
from Al Black:

Rebecca O. Fruchtman, an attorney for United, has written to Catherine L.Steege, who is the attorney for the Salaried and Management 1114 Committee. Morton Wax, who is a member of that committee has asked me to forward the contents of that letter to you for publication as follows:

It has come to United's attention that individual retired pilot bloggers are using the RUPA website to disseminate inaccurate information regarding the sale of shares to cover taxes. As you can see from the link attached, the implication is that having a Form W-9 on file with Computershare will give claimants the unilateral discretion to determine how much should be deducted from their share distribution to cover applicable taxes. This is simply not true: the Form W-9 has nothing to do with how much in taxes should be
deducted. Also, the deduction for taxes is not at the discretion of individual claimants.

For those retirees who were active pilots and met certain "windows" as far as their employment is
concerned, United issued new UAL stock certificates per the appropriate ALPA agreement and the provisions
of the bankruptcy process. If one was issued stock; there have been at least two disbursements for my
group (May, 2004 retiree), an appropriate number of shares were sold to pay the appropriate federal taxes
at approximately a 38% withholding rate. The remaining shares went into an "employee" account at Computershare.

If the retiree leaves them in their newly established Computershare account, nothing is required to be done
and your shares are held, in your name, by Computershare.

IF you want to sell them or transfer them to your own brokerage, it is advisable to complete a W-9 form to
avoid the possibility of backup withholdings. The form is available on Computershare's website, takes about
45 seconds to complete and can be mailed or faxed to them. The W-9 Form ONLY applies to shares liquidated
or transfered from your Computershare account. The W-9 Form and the taxes withheld by UAL are two completely
separate matters.

I guess that I've been fortunate. My dealings with Computershare have been without difficulty and all of
my UAL shares have been transfered to my own brokerageaccount.

RETIRED IN JULY OF 2002 AND UNTIL THE 13TH OF APRIL, HAD HEARD NOTHING
FROM COMPUTER SHARE, POORMAN-DOUGLAS OR UAL RE: THE SECTION 114 SETTLEMENT
(IF YOU WERE STILL ON UAL'S MEDICAL COVERAGE-WHICH I WAS NOT) FOR EITHER
CASH OR NEW UAL STOCK.

SO AFTER THE DUST HAD SETTLED SOMEWHAT, FIRST CALLED POORMAN-DOUGLAS AND
SPOKE WITH HAROLD...

GAVE HIM MY CREDITOR AND CLAIM NUMBER AND HE FOUND OUT AND STATED THAT MY
ORIGINAL "AWARD" FROM UAL OF $308 K WHICH I HAD INCREASED BY 11.7% PER
URPBPA'S GUIDANCE, WELL, EVIDENTLY THE 11.7 PERCENT INCREASE, HAD BEEN
APPROVED BY <I WILL PRESUME-UAL> WHOOPTDOO..

SO CALLED COMPUTERSHARE AND INQUIRED WHEN I MIGHT GET A CHECK.. SOME GUY
EVIDENTLY FROM NEW DELHI SAID COMPUTERSHARE HAD NO RECORD OF ME USING BOTH
FILE NUMBER AND SOCIAL SECURITY NUMBER. THANK YOU VERY MUCH.

CALLED UAL PERSONNEL DEPARTMENT AND SPOKE WITH A VERY PLEASANT LADY,
DELPHINE BARBER WHO, UNFORTUNATELY DIDN'T KNOW "BO DIDDLEY" AND SAID I
SHOULD CONTACT A KEVIN WHOSE DEPARTMENT WAS HANDLING ALL THE RETIREES
"STUFF."

BUT SHE SAID SHE COULDN'T GIVE ME "KEVIN'S" LAST NAME OR E-MAIL ADDRESS
AND IF I WERE TO SEND AN E-MAIL TO HER, SHE WOULD PASS IT ON TO "KEVIN."

NOW THE 18TH AND NO JOY FROM KEVIN OR ANYONE ELSE-- AND IT TOOK NEARLY 45
MINUTES TO GET TO TALK TO MS. BARBER!!

SO, TO SUMMARIZE, THERE SEEMS TO BE NO RHYME OR REASON TO WHAT IS NOT
HAPPENING-HAPPENING..

SOME HAVE REPORTED GETTING TWO CHECKS AND WILL PRESUME THE FIRST WAS 4 TO
8 CENTS ON THE DOLLAR FOR THE AMOUNT UAL SAID EACH OF OUR NON-QUAL AMOUNT
WAS BEFORE CONTESTED.

AND IF WHAT I HEARD FROM HAROLD AT POORMAN-DOUGLAS (AN ACCOUNTING
INTERMEDIARY FIRM) IS TRUE, THEN MAYBE THE SECOND CHECKS SOME HAVE
REPORTED TO HAVE RECEIVED IS FOR THE ADDITIONAL "CONTESTED" AMOUNT
SUGGESTED BY URPBPA (BUT ONLY 4-8 CENTS ON THE DOLLAR AND WITH THE TAXES
TAKEN OUT!!!)

WOULD START WITH POORMAN-DOUGLAS AND GIVE THEM YOUR CREDITOR AND CLAIM
NUMBER AND SEE IF YOU ARE ON THEIR LIST AND THEN CONTACT UAL PERSONNEL-PAY
DEPARTMENT AND FIND OUT WHEN THEY ARE GOING TO SEND YOUR PARTICULAR
INFORMATION TO EITHER-OR, OR BOTH POORMAN-DOUGLAS AND COMPUTERSHARE.

KNOW THIS APPEARS TO BE GOBBLEDEYGOOK, BUT THE ABOVE IS THE BEST INFO I
CAN PROVIDE YOU BASED ON RECENT TELEPHONE CALL EXPERIENCES..

Mr. Harper,

Regarding the Computershare checks, they must be cashed within 6 months of the issuance date of the check, otherwise they are void. Was that your question, or are you asking how far out into the future we will issue a check if for some reason someone who should have had a claim didn’t receive a claim and therefore didn’t receive a Computershare check?

Poorman gave a pretty good description of the 1114 claim. Here’s a bit more on eligibility for an 1114 claim that may be helpful:

The population affected by the Section 1114 negotiations includes any current retiree or surviving spouse of a retiree who retired prior to July 1, 2003 and was enrolled in one of the retiree medical options, offered by United Airlines, as of July 1, 2004. This population was offered enrollment in the negotiated retiree medical plans through United’s open enrollment process effective October 1, 2004.

Frances DeBlasio
Director, Restructuring Office
United Airlines

I have just hung up the phone after an independent safari to find out how my own lost medical benefit check was calculated. After bouncing between Poorman-Douglas, Computershare, and United payroll, I have been told that United is still working on a description of how the amount was calculated for an individual's case and will have the information "soon" and will make an announcement when it has it available.

I did find out that while the statement I got shows the date of the sale of my stock as 3-8-06 when NASDAQ reports the price per share that day was between $37.000 and $37.540, I only got $35.0731 per share. The reason given by Computershare was that the stock was actually sold over 21 days and the average price was $35.071.

I note that in the example you show in your last message indicates that the Section 1114 claim everyone received is pegged at the difference in the present value of the potential benefits before and after the negotiated change. The amount of each person's claim was not received but was listed on the ballot together with an explanation that only about 4%-8% of the claim would be realized from the sale of the stock.

In my case, I got 16% of my claim----which I calculated by dividing the "Gross Proceeds" from the stock by the amount of the claim on my ballot.

Be careful! This envelope is NOT junk mail. It probably contains a check covering the reduced medical portion pay-off.

Checks from proceeds of stock sales have had problems with bad numbers and other annoying features.

Pilots have mostly received checks for the changed retiree medical benefits shortfall. Much of the "unqualified retirement distributions are still held pending various court rulings. AVN

The answer to your question about the W-2s is ?yes?. Retired employees will be receiving W-2s and beneficiaries of deceased retired employees will be receiving 1099s in early 2007. Note that those who are receiving shares will likely have multiple distributions in 2006, so the W-2/1099 will reflect the sum of all of the 2006 distributions. Those who stayed within the convenience class and received cash in the form of a check will have one distribution and the W-2/1099 will reflect that distribution. While it should state it on the check stubs and statements retirees are receiving, please advise those who receive your newsletter to retain those check stubs and statements for tax reporting purposes.

I hope this clarifies matters. Let me know if you have additional questions.

From; "Skynet - Department News"

Update on Retiree Equity Distributions - March 22, 2006

Within the past week, many retirees received a check from Computershare - an outside vendor for United - with the proceeds from their claim in United's bankruptcy case. Due to a clerical error at Computershare, the ABA routing number on these checks contains an extra digit and, as a result, many banks are rejecting the checks. (The ABA routing number is a nine-digit number at the bottom of all checks. These checks erroneously includes a ten-digit routing number.)

Any retiree who has not already deposited his or her check and has an account with Alliant Credit Union can deposit the check there. Alliant will honor these checks and there will be no delay in receiving payment. Retirees who do not have an account with Alliant Credit Union or do not want to deposit the check into an Alliant account - and who have not already deposited their check - should call Computershare toll-free at 800-919-7931 or 312-588-4267 and request that a replacement check be issued.

For retirees who have deposited the check and have not been notified by their bank that it was rejected, it is possible that the check cleared the system without issue. Should an issue arise, retirees should call Computershare toll-free at 800-919-7931 or 312-588-4267.

Finally, retirees whose banks have already rejected their checks should call Computershare toll-free at 800-919-7931 or 312-588-4267 to have a replacement check issued. A Computershare Participant Service Representative will be able to provide information on obtaining reimbursements for any bank fees incurred as a result of the check being rejected.

Two things are happening:
1. Retiree Life Insurance is being canceled. People began getting letters two weeks ago. I did not get mine until this past Friday.
There are people who still have not gotten the letter. Yesterday, I was told the deadline for conversion has been extended to May 28th. A
$10,000 conversion policy is offered. It is expensive. If you need to replace the UAL insurance, I suggest that you shop around first.

2. People began receiving mailings from Computershare last week. In some instances a letter of explanation and then a mailing with a check
or information regarding an account holding stock. Some only received one mailing. In one instance, the mailing and check were almost thrown away because first impression was that it was junk mail. Many of us (including yours truly) have received nothing and need to be alert to the mail received. These distributions of cash or stock are compensation for the reduced Health Insurance and loss of Non-Qual
income as was outlined on the first page of the UAL Reorganization Ballot we received in November.

*********
ALERT
********
There have been problems with the checks. Please read the items below and take the action necessary as it applies to your situation. ABOVE
ALL please note the information in the messages about reimbursement for any bounced check fees.

1] About a week ago I received a statement from Computer associates detailing how many shares of stock they sold to pay my taxes, S.S. and
medicare but there was no check. I too almost threw the mailing in the trash without opening it. Now you guys have got me worried that I may have thrown the checks away. Someone wrote a post with a web siteand phone number for the Computer group. Can you repost it?
----------------
2] Dave Smith (President, Oregon Dew-ers) I have just spoken at some length to Computershare.

Many of us have received a check from Computershare within the last couple of days. There is a problem with the checks that have been
sent out. The checks were printed incorrectly from the manufacturer.

The routing number,(the middle series of numbers), has ten digits, rather than the normal nine. This may cause the checks to be rejected
when they are electronically processed. It is possible that some banks can manually process the checks, but it is assumed that many banks
won't have the resources to do that by hand.

It is recommended, by the management of Computershare, that each check holder contact them by phone ( 1 800 919-7931) to arrange a
stop-payment on the existing check, and have another check issued in place of the original one. This process will take approximately ten
to fourteen days from the time of contact. This may be an inconvenience, however, it will eliminate any overdrafts, or other
complications with your bank.

I was advised to tell anyone who has already cashed their check and it is later returned unpaid, with a fee attached by their bank, that
they can be reimbursed for the fee by contacting Computershare.

Computershare representatives apologized for the error, and hope this information will resolve the problem with the least amount of
inconvenience.
Dave
---------------------
3] My wife (retired F/A) got the following info from the AFA newsletter. We are hanging onto her check as well as mine until we
get the replacements.

Our AFA-CWA LAX Retired Members Chapter at LAX discovered a problem with the Computershare distribution checks today after several Members were unable to cash their distribution check. The LAX Chapter Officers contacted Portman Douglas (1-877-752-5527) who is handling the distribution for United. Portman Douglas was aware of the problem with the checks and advised the LAX Officers that they will be placing a stop payment on the current checks and reissuing another check within 3 to 5 business days. Portman Douglas will address individual issues for retirees who may have been able to cash the check.

The distribution agent also noted that any taxes withheld (i.e. SocialSecurity or Medicare) were due to IRS regulations.

One final note about Portman Douglas. We have been told that the agency has redirected retirees to AFA for questions about their
distribution. This is incorrect and we have advised the agency that AFA has nothing to do with the distribution for retirees, nor do we have information about individual retiree distributions. Do not allow the agency to redirect your distribution questions to AFA.
--------------------------
4] Emailed Computershare about my Medicare Withholding since I was unsuccessfull in getting "recognized" on their sign in web site --
i.e., they didn't like my file # or whatever -- this is Computershare's reply.

Dear Shareholder;
For questions regarding why you have received the distribution, the amount that you were entitled to as part of the distribution, and/or
the taxes withheld on the distribution, please call the United Share Distribution Hotline at 877.752.5527 (Poorman-Douglas).
---------------------------
5] Hi Dale -

I got my check in the mail yesterday and then starting reading all of the E-Mails that you have forwarded out. The one from the PDX people
was the best information.

I called the 800 number at Computershare this morning at 8:40AM EST and got right through. They apologized profusely about the error and
said it was their fault and NOT UAL. If you have 2 zeros at the beginning of the routing number - as shown on the check 0071915580 -
that is the invalid routing number. There should be only one zero at the beginning.

The gentleman at Computershare put a stop payment on my check and they will mail a corrected one ASAP. So that's the "skinny" today....

Also, the gentleman I talked to at Computershare (Steve Davidoff) said if a person had deposited their check already and it bounces that
Computershare will pay the "bounced fees". He said that they would require no documentation for the fee and just take the person's word
for it.

6] I just got off the phone with computershare after being on hold for 55 min before I could talk to a Rep. He knew about the bad
checks - took my info and put me on hold for 10 more minutes and then said he was sending out replacement checks. Wait time 10-14 days. He said they were swamped with calls and was sorry for the wait.
(Roger Anderson)

----------------------------------------------------
Additional Shares of United Stock Distributed to Eligible Employees
----------------------------------------------------
A second distribution of United stock was provided to most eligible employees as of this morning, March
15. These shares became available after a number of outstanding claims in our Chapter 11 case were resolved.

At the request of the Air Line Pilots Association (ALPA), the distribution to nearly all pilots has been postponed slightly, due to the fact that there will be a special ALPA Master Executive Council (MEC) meeting on March 21, to discuss all issues surrounding pilots' stock allocations. The distribution to pilots will be made sometime after the March 21 meeting. Both the company and ALPA will communicate directly with affected pilots once these decisions are made.

This distribution overall is significantly smaller than the first distribution of equity that employees received after United exited from bankruptcy. There may be additional distributions of equity in the coming months as outstanding claims in the Chapter 11 case are resolved.

SHARES DEPOSITED IN TAX-DEFERRED ACCOUNTS, WHERE POSSIBLE

To the extent possible under IRS regulations, the shares from this second distribution were deposited directly into employees' tax-deferred accounts, either into the United Airlines 401(k) Plan at Fidelity Investments or into the Pilot Directed Account Plan (PDAP) as appropriate. Depositing the shares into 401(k) and PDAP accounts provides employees with tax benefits. The same approach was used for the first distribution of equity.

IN CERTAIN CIRCUMSTANCES, EMPLOYEES MAY RECEIVE SHARES DIRECTLY, NOT ON A TAX-DEFERRED BASIS

A relatively small number of employees have reached the maximum annual deferred compensation limit allowable under U.S. tax laws and, as a result, were not able to accept the entire distribution on a tax- deferred basis. Any part of this stock distribution that could not be deposited into these accounts is being distributed directly to the participants through accounts set up with Computershare, an outside vendor for United. These direct distributions, however, are considered wages and are subject to withholding taxes. In these cases, United is converting a sufficient number of shares to cash to cover all withholding taxes, and will be depositing the net shares into the Computershare accounts set up on behalf of employees.

MORE INFORMATION BEING SENT TO EMLPOYEES' HOMES

United is mailing a personalized statement to all equity recipients within the next few days detailing exactly how many shares were received and to which accounts these shares were distributed. If you received any of your shares through a direct distribution (via Computershare), this will be noted in the statement from United. Direct distribution recipients will also receive a separate mailing from Computershare confirming their net deposit of shares.

FOR OTHER QUESTIONS

For general questions about your stock allocation, please contact the United Share Distribution Hotline at 866-686-8682 or 310-412-2220 (for employees calling from outside the United States.) Updated information is also available on the "Employee Equity" section of SkyNet. These are your primary sources for information about equity distributions. Both also include information on the methods used to determine the size of individual equity allocations (as determined by each union's leaders for represented employees and by United senior leadership for salaried and management (SAM) employees.)

For information specifically about shares distributed to 401(k) accounts, please contact Fidelity Investments at www.401k.com or by phone at 800-245-9034.

Questions specifically about direct distributions should go to Computershare at 800-919-7931 or 312-
588-4267 or www-us.computershare.com/employee.

From RUAEA Web Site; http://www.ruaea.org/

UAUA Stock Distribution

Through the efforts of our Corporate Relations Representative, Ed Tolle, we have received the following from the company concerning distribution of UAUA Stock and/or the cash proceeds derived from their sale:

I'm forwarding the response I just received about UAUA stock. On appearances it’s confusing but does make sense when you remember there are really 3 answers in the following paragraph it will just depend on which of the 3 groups you, or others inquiring of you, fall into.

Essentially, retirees fall into three main buckets:
1) those with disputed claims. Most of these creditors increased the amount of their claim when they filled out their ballot. They are still disputed.

2) those with undisputed claims that remained in the convenience class. The shares allocated to these claims are in the process of being monetized. After the monetization, applicable taxes will be deducted from the proceeds, as well as commissions and other fees. A check with the net proceeds should be sent out by mid-March, so they should be received no later than the last week in March.

3) those with undisputed claims that opted for shares. Only a handful of these distributions were not subject to taxes (I believe it was beneficiaries of section 1114 (Medical Plan) claimants), so they have received their shares and advices in the mail. The remaining are subject to taxes, so shares are being monetized now to cover the taxes. The net shares should be available to these retirees by mid-March. Note that this group may be entitled to future distributions of stock. An advice will be sent out each time they have received a new issuance of shares.

One other note, all retirees who receive either stock or proceeds from the sale of stock in 2006 will get a W-2 from the Company in early 2007, beneficiaries will receive 1099s.

Mort Wax, Executive Vice-President

From: Rotondo, Randall [WHQHR]
To: Edward Tolle ; MARLINLADE@aol.com
Sent: Wednesday, February 15, 2006 7:37 PM
Subject: RE: Distribution of UAUA Stock

Gentlemen ? I?m forwarding the response I just received about UAUA stock. On appearances it?s confusing but does make sense when you remember there are really 3 answers in the following paragraph ? it will just depend on which of the 3 groups you, or others inquiring of you, fall into. We?ll! talk more when I see Ed in the next week but I did want to make sure you had this much right away.

Essentially, retirees fall into three main buckets: 1) those with disputed claims. Most of these creditors increased the amount of their claim when they filled out their ballot. They are still disputed. 2) those with undisputed claims that remained in the convenience class. The shares allocated to these claims are in the process of being monetized. After the monetization, applicable taxes will be deducted from the proceeds, as well as commissions and other fees. A check with the net proceeds should be sent out by mid-March, so they should be received no later! than the last week in March. 3) those with undisputed claims that opted for shares. Only a handful of these distributions were not subject to taxes (I believe it was beneficiaries of section 1114 claimants), so they have received their shares and advices in the mail. The remaining are subject to taxes, so shares are being monetized now to cover the taxes. The net shares should be available to these retirees by mid-March. Note that this group may be entitled to future distributions of stock. An advice will be sent out each time they have received a new issuance of shares.

One other note, all retirees who receive either stock or proceeds from the sale of stock in 2006 will get a W-2 from the Company in early 2007, beneficiaries will receive 1099s.

Randy

Shares of new United stock -- as outlined in the company's Plan of Reorganization -- were distributed to all eligible employees as of today.

To the extent possible under Internal Revenue Service (IRS) regulations, this equity was deposited directly into 401(k) retirement accounts set up for employees with Fidelity Investments, or in the case of pilots, into their Pilot Directed Account Plan (PDAP). This approach provides employees with both tax and retirement planning benefits.

The formula used to determine the size of individual allocations for union-represented employees was determined by each union's leadership. The allocation for Salaried and Management (SAM) employees was determined by United's senior leadership. SAM employees in job grades J and above who participate in the Management Equity Incentive Plan (MEIP) -- including officers -- are NOT eligible for these equity distributions.

Within the equity distributions, a relatively small number of employees reached the maximum annual deferred compensation limit allowable under law and, as a result, were not able to accept the entire distribution into their 401(k) or PDAP account. In these cases, any part of the stock distribution that could not be deposited into these accounts is being distributed directly to the participants through accounts set up with Computershare, an outside vendor for United.

United is mailing a letter to all equity recipients within the next few days detailing exactly how many shares they received and to which accounts these shares are being distributed. In the meantime, general information about this equity is available on SkyNet.

Information about accessing your shares or your account can be obtained from the following:

* 401(k) Plan Distributions (All eligible employees except pilots) Fidelity Investments, www.401k.com Fidelity Service Center, 1-800-245-9034

* PDAP Distributions (pilots) http://resources.hewitt.com/pdap or call 866-OUR- PDAP (866-687-7327)

For account security reasons, the Fidelity Service Center and PDAP Call Center can only accept calls from individual plan participants.

If you received a direct distribution of shares, Computershare will be contacting you directly with information about accessing your account. Computershare information is available online at www.computershare.com.

The shares of new stock -- which trade under the ticker symbol UAUA on the NASDAQ stock market -- are now under your control. They can either be held in your 401(k), PDAP or Computershare account or they can be sold and the funds used for different investments. If you choose to sell the stock and initiate a hardship withdrawal of the proceeds from your 401(k) or PDAP account prior to retirement, these proceeds will be subject to certain taxes and penalties, in accordance with IRS rules and regulations. In this type of withdrawal, however, the shares will not be subject to Social Security taxes.

United employees helped contribute to the success of the restructuring, in part by agreeing to new work rules along with significant changes to wages and benefits as part of the Section 1113 process of our Chapter 11 restructuring. In recognition of this fact, United's Plan of Reorganization provides equity in the new company to nearly every employee who participated in this part of the process.

The distribution for each employee group is in direct proportion to the labor savings that each group provided during the Section 1113 proceedings.

Eligibility requirements for union-represented employees were determined by each union's leadership. As a result, different unions have different eligibility requirements. Decisions on whether or not represented retirees and furloughees were eligible for equity distributions were made by each union's leadership as well.

Salaried and Management (SAM) employees employed by United as of Dec. 31, 2005 -- excluding those in job grades J and above who participate in the Management Employee Incentive Plan (MEIP) - are eligible for the equity distribution. SAM employees in job grades J and above who participate in the MEIP (including officers) are NOT eligible for these equity distributions.

In addition, equity distributions do not apply to most non-U.S. employees, since these employees did not participate in the Chapter 11 labor cost savings on which the overall equity allocations were based.

DO I NEED TO TAKE ANY ACTION NOW TO SET UP A NEW ACCOUNT FOR THIS EQUITY DISTRIBUTION?

No, accounts have been set up for all employees who did not have them and need them. There is no need to take any additional action at this time.

HOW DOES DISTRIBUTING THE SHARES TO 401(K)/PDAP ACCOUNTS PROVIDE EMPLOYEES WITH TAX BENEFITS?

Contributions (by both employees and employers) to defined contribution plans such as employees' 401(k)/PDAP accounts are tax deferred, meaning that participants don't have to pay taxes on these funds until they are withdrawn after retirement, when most people have a lower tax rate. This helps an employee build up his or her retirement account now.

In addition, as an employer contribution to a qualified retirement plan, neither the individual nor the company is required to pay Social Security taxes on this amount. For most employees, these taxes would equal 7.65 percent of the total distribution - a tax that is avoided entirely by taking the stock into a 401(k) plan or PDAP.

As part of United's Plan of Reorganization, eligible employees have received shares of new United stock. These distributions reflect the economic contributions that employees in every part of United made during the restructuring.

This page features links to the most current information on employee equity and an expanded set of frequently asked questions. Additional information -- including a letter confirming the number of shares you received in this initial distribution -- is being sent to the homes of all eligible employees.

For additional information, please call the United Share Distribution Hotline at 866-686-8682 or 310-412-2220 (international callers.)

For other questions about employee equity, please call the United Share Distribution Hotline at 866-686-8682 or 310-412-2220 (international callers).

Why are employees receiving stock in the new United?
United employees helped contribute to the success of the restructuring, in part by agreeing to new work rules along with significant changes to wages and benefits as part of the Section 1113 process of our Chapter 11 restructuring. In recognition of this fact, United's Plan of Reorganization provides equity in the new company to nearly every employee who participated in this part of the process.

The distribution for each employee group is in direct proportion to the labor savings that each group provided during the Section 1113 proceedings.

Who is eligible for these equity distributions?
Eligibility requirements for union-represented employees were determined by each union's leadership. As a result, different unions have different eligibility requirements. Decisions on whether or not represented retirees and furloughed union members were eligible for equity distributions were made by each union's leadership as well.

Salaried & Management (SAM) employees employed by United as of December 31, 2005 – excluding employees in job grades J and above who participate in the Management Employee Incentive Plan (MEIP) – are eligible for the equity distribution. SAM employees in job grades J and above who participate in the MEIP (including officers) are not eligible for these equity distributions.

In addition, equity distributions do not apply to most non-U.S. employees, since these employees did not participate in the Section 1113 labor cost savings on which the overall equity allocations were based.

How do I find out how many shares I received?
United will be sending a letter within days to all eligible participants that details exactly how many shares each individual received and to which accounts these shares were distributed.

In the meantime, information on equity distributions to 401(k) plans (which includes all eligible employees except for pilots) is available at the website of the plan's provider – Fidelity Investments – www.401k.com or by calling the Fidelity Service Center at 1-800-245-9034.

Information on distributions to the Pilot Directed Account Plan (PDAP) is available by phone at 1-866-OUR-PDAP or online at http://resources.hewitt.com/pdap.

With these distributions, a relatively small number of employees will reach the maximum annual deferred compensation limit allowable under law and, as a result, will not be able to accept the entire distribution into their 401(k) or PDAP account. In these cases, any part of the stock distribution that cannot be deposited into these accounts will be distributed directly to the participant through an account set up with Computershare, an outside vendor for United.

If you received a “direct distribution” of shares, the letter you receive from United (mentioned above) will confirm this. You will also receive a letter directly from Computershare confirming the net number of shares deposited into your account and providing the information you will need to access this account. Computershare is available at www-us.computershare.com/employee or 1-800-919-7931 or 312-588-4267.

How much are these shares worth?
The price of United shares is set by the market and will vary day to day.

On what stock exchange do United shares trade? What is the new United ticker symbol?
United stock trades on the NASDAQ exchange under the symbol UAUA.

Are the distributions to union-represented employees tied to the new labor agreements?
Yes, equity for represented employees was negotiated with union leaders and ratified by union members as part of the most recent collective bargaining agreements (CBA).

What happens if an eligible employee leaves United after the company has emerged from bankruptcy but before the shares have been distributed?
Once an employee is deemed eligible to receive shares under the formula set for his or her employee group, he or she will receive his or her shares.

Are senior executives eligible for both the equity that is being distributed to employees and the Management Equity Incentive Plan?
No, employees who are eligible to participate in United's Management Employee Incentive Plan (MEIP) are not eligible for these equity distributions.

What went into determining how many shares each eligible employee received?
How many shares employees and other eligible participants are receiving depends largely on two separate factors:

* How many shares were allocated to individual unions and to the non-represented SAM group based on the value of wage, work rule and benefit changes agreed to by each during the restructuring; and

* The allocation method applied to each employee group – determined by each union's leadership for represented employees and by United senior leadership for Salaried & Management (SAM) employees.

Note: Considered Earnings, on which some of the allocation methods below are based, is the same definition used for United's Success Sharing program.

* AFA – AFA shares are being allocated in two groups. One-third of the AFA shares are being distributed on a per capita basis. The remaining two-thirds are being distributed on a Considered Earnings basis. These shares are being distributed based on each eligible employee's Considered Earnings for the period May 1, 2003 through December 30, 2005 in proportion to the total for all flight attendants for the period.

* ALPA – For eligible pilots, approximately 5% of the ALPA shares are being allocated to pilots on furlough status with the remainder allocated to active pilots on a seniority-based formula.

* AMFA – AMFA shares were distributed in two groups. Approximately 85 percent of the AMFA shares were allocated among eligible AMFA-represented employees based on that employee's Considered Earnings, excluding overtime, for the period from May 1, 2003 through December 31, 2005 in proportion to the total for all AMFA-represented employees over the period. Approximately 15 percent of AMFA shares were distributed according to a similar ratio based on Considered Earnings, excluding overtime, for the period January 1, 2005 through December 31, 2005.

* IAM – IAM shares are being distributed based on each eligible employee's Considered Earnings for the period from May 1, 2003 through December 31, 2005 in proportion to the total for all IAM-represented employees for the period.

* PAFCA – PAFCA shares are being distributed based on each eligible individual employee's Considered Earnings for the period from May 1, 2003 through December 31, 2005 in proportion to the total for all dispatchers over this period.

* SAM – The allocation for each eligible SAM employee is based on that individual's Considered Earnings, plus Success Sharing awards, for the 2005 in proportion to the total Considered Earnings, plus Success Sharing awards, for all eligible SAM employees for this period.

* TWU – TWU shares are being distributed based on each eligible employee's Considered Earnings, excluding overtime, for the period from May 1, 2003 through December 31, 2005 in proportion to the total for all meteorologists over the period.

Why are a certain percentage of shares being held back?
The total number of shares available to employees (and other general unsecured creditors) won't be known until all disputed claims against United are resolved by the Bankruptcy Court. Given this uncertainty, not all of the equity is being distributed now.

While this process continues, the company needs to hold back a certain number of shares to satisfy these claims should the Court require us to do so. If the Court deems these claims invalid, then employees and other unsecured creditors with valid claims will receive the shares that were held back. If available, these supplementary shares will be distributed periodically. United will keep you informed as more information becomes available.

How are these shares different from ESOP stock?
These shares of new stock are under an individual's control once received, unlike the shares in United's Employee Stock Ownership Plan (ESOP). This approach allows employees to maintain control over whether to hold or sell the stock. These shares can either be held as UAL stock in a 401(k)/PDAP account or they can be sold and the funds used for different investments – such as mutual funds – within the 401(k)/PDAP account, without taxes or penalties.

Should an individual qualify for and choose to initiate a hardship withdrawal of the proceeds from his or her 401(k) or PDAP prior to age 59 1/2, these proceeds would be subject to taxes and penalties, in accordance with Internal Revenue Service (IRS) rules and regulations. These proceeds would not be subject to Social Security taxes.

Do I need to purchase these shares?
No. There is no need to purchase these shares. They were provided to employees in recognition of the economic contributions made during the restructuring.

Can I take the value of the shares in cash instead?
Not directly. These shares can either be held as United stock in a 401(k)/PDAP account or they can be sold and the funds used for different investments – such as mutual funds – within the 401(k)/PDAP account, without taxes or penalties.

Do I need to take any action now to set up a 401(k) account?
No, 401(k) accounts have been set up for all employees who did not have them and need them. There is no need to take any additional action at this time.

Where can I get more information on my 401(k) or PDAP account?
Information on the United 401(k) plan is available at Fidelity's website www.401k.com or by calling the Fidelity Service Center at 1-800-245-9034.

Information on the Pilot Directed Account Plan (PDAP) is available by phone at 1-866-OUR-PDAP or online at http://resources.hewitt.com/pdap/

How does distributing the shares to 401(k)/PDAP accounts provide employees with tax benefits?
Contributions (by both employees and employers) to defined contribution plans such as employees' 401(k)/PDAP accounts are tax deferred, meaning that participants don't have to pay taxes on these funds until they are withdrawn after retirement, when most people have a lower tax rate. This helps an employee build up his or her retirement account now.

In addition, as an employer contribution to a qualified retirement plan, neither the individual nor the company is required to pay Social Security taxes on this amount. For most employees, these taxes would equal 7.65% of the total distribution – a tax that is avoided entirely by taking the stock into a 401(k) plan or PDAP.

So, employees don't have to pay taxes now on shares distributed to 401(k)/PDAP retirement accounts?
Correct. Again, one of the main benefits of these plans is that contributions to them are tax deferred. Individuals don't have to pay income tax on these funds until they retire and withdraw the funds, when most will have a lower tax rate. Of course, if an individual were to sell the stock and initiate a hardship withdrawal of the proceeds from his or her 401(k) or PDAP account prior to retirement, these proceeds would be subject to taxes and penalties, in accordance with IRS rules and regulations.

With these distributions, a relatively small number of employees will reach the maximum annual deferred compensation limit allowable under law and, as a result, may not be able to accept the entire distribution into their 401(k) or PDAP account. Any part of the stock distribution that cannot be deposited into these accounts will be distributed directly to the participant through accounts set up with Computershare, an outside vendor for United. These direct distributions are considered wages and will be subject to taxes. In these cases, the company will hold back a sufficient number of shares to cover the employee's federal, state and local withholding taxes. The net shares will be deposited into the Computershare account.

What is the maximum amount that can be contributed to a 401(k) plan in a year?
Two, separate limits are factored into these calculations – 1) deferrals by an individual employee and 2) total contributions to a qualified plan.

* Federal regulations permit individual employees to defer up to $15,000 of their earnings into their 401(k) account for 2006. Individuals age 50 and above are permitted to make up to $5,000 in additional “catch up” contributions to their account and instead have a $20,000 yearly deferral maximum.

* The total yearly contribution limit for a qualified defined contribution plan includes both employee deferrals and company contributions.

o For 2006, the total yearly contribution limit is $44,000 or 100% of pay (whichever is less.) This limit includes both employee deferrals (maximum: $15,000 as explained above) and employer contributions. It does not, however, include employee “catch up” contributions.
o The $5,000 “catch up” contribution provision allows employees age 50 or older to defer up to $20,000 individually, bringing the total yearly contribution limit to $49,000.

Won't the equity distribution – by itself or in combination with other employer contributions – cause some people to exceed the annual deferral limit? How will the company handle these situations when they arise?
With these distributions, a relatively small number of employees will reach the maximum annual deferred compensation limit allowable under law and, as a result, will not be able to accept the entire distribution into their 401(k) or PDAP account. Any part of the stock distribution that cannot be deposited into these accounts will be distributed directly to the participant through accounts set up with Computershare, an outside vendor for United. These direct distributions are considered wages and will be subject to taxes. In these cases, the company will hold back a sufficient number of shares to cover the employee's federal, state and local withholding taxes. The net shares will be deposited into the Computershare account.

United and Computershare will notify any employees receiving a direct distribution of shares. More information on these direct distributions is available at www-us.computershare.com/employee or via phone at 1-800-919-7931 or 1-312-588-4267.

What basis did the company use to determine if the value of allocated shares exceeded the maximum annual deferral limits for 401(k) and PDAP accounts?
The closing price on the first day of trading in new United stock was used to determine if any stock could not be distributed into an individual's 401(k) or PDAP account. The actual value of United stock in your account will vary on a daily basis.

For other questions about employee equity, please call the United Share Distribution Hotline at 866-686-8682 or 310-412-2220 (international callers).