This description is for general information purposes only.  Participants should refer to their summary plan description for detailed benefit information.

General and Plan Participants

The United Air Lines, Inc. Flight Attendant Employees' 401 (k) Retirement Savings Plan (the "Plan") covers all employees of United Air Lines, Inc. ("United") classified as flight attendants and who are represented by the Association of Flight Attendants.  Employees are eligible to become participants on their date of hire.  The Plan is contributory and is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.

Effective December 1, 2001, the Plan changed the year end from November 30 to December 31.

Contributions and Vesting

Eligible employees may elect to contribute to the Plan, in multiples of 1%, any percentage of their covered earnings, up to 25% of each paycheck, subject to a maximum of $10,500 in 2001 and in 2000.  Lower limits may apply to certain highly compensated participants if the Plan does not pass certain nondiscrimination tests required by law.  Contributions and earnings are credited to separate accounts maintained for each participant.  The balance in a participant's account is fully vested and nonforfeitable at all times.  Section 415(c) of the Internal Revenue Code limits the total amount of contributions from all qualified defined contribution retirement plans to the lesser of 25% of annual taxable earnings or $35,000.  Contributions refundable on the statement of net assets is related to contributions payable to participants that reached the Section 415(c) limit.

Participants may elect to invest in one or a combination of the investment funds described in "Investment Options".  Additionally, they may subsequently change their contribution rate, redesignate the allocation of contributions or transfer existing balances among investment funds, subject to the limits set forth in the Plan.

Contributions include $19,753  for the month ended December 31, 2001 which were transferred from other qualified plans as rollovers under the Internal Revenue Code Sections 402(c) and 408(d).

Trustee and Record keeper

Fidelity Management Trust Company ("Fidelity") is the Plan trustee and Fidelity Institutional Retirement Services Company is the record keeper of the Plan.

Investment Options

Fidelity provides each participant with various investment options: Fidelity Magellan Fund; Fidelity Equity-Income Fund; Fidelity Growth Company Fund; Fidelity Government Securities Fund; Fidelity OTC Portfolio; Fidelity Overseas Fund; Fidelity Balanced Fund; Fidelity Asset Manager; Fidelity Asset Manager: Growth; Fidelity Asset Manager: Income; Fidelity Retirement Money Market Portfolio; Fidelity U.S. Bond Index Portfolio; Fidelity U.S. Equity Index Portfolio; Blended Income Fund and the UAL Stock Fund.  These funds are managed by Fidelity or Fidelity Investments (manager of Fidelity Mutual Funds).

The Master Trust's investments are stated at fair value except for the Blended Income Fund.  The Blended Income Fund includes investment contracts purchased by Fidelity from approved institutions that meet its stringent credit standards at the time of purchase.  The fund may also include other high quality, income-oriented investments.  The contracts held by the Blended Income Fund are fully benefit responsive and,  accordingly, have been included in the financial statements at contract value.  The fair value of the investment contracts in the Master Trust at December 31, 2001 and November 30, 2001 were $531,011 and $529,892 (in thousands), respectively.  The average yield for the year ended December 31, 2001 was approximately 6.26%.  The crediting interest rates as of December 31, 2001 was approximately 5.79%.

Quoted market prices are used to value investments.  Shares of mutual funds are valued at the net asset value of shares held by the Trust at year end.

Purchases and sales of securities are recorded on a trade-date basis.  Dividends are recorded on the ex-dividend date.

Withdrawals

Withdrawals from the Plan may be made as follows, as applicable to the participant's eligibility, amount requested, and existing balances:

If a participant's account has never exceeded $3,500, total distribution of the account will be made in a lump sum payment upon termination of employment or death.

Generally, withdrawals are allocated pro-rata to the balances of each of the investment funds in the participant's account.  Distributions from UAL Stock Fund may be made in cash, or in whole shares of UAL Corporation common stock, with fractional shares distributed in cash.  Certain restrictions on withdrawals may apply for participants domiciled in, or residents of, non-U.S. locations.

Plan Termination Provisions

Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA.  If the Plan is terminated, all amounts credited to a participant's account at the time of termination shall be retained in the Trust and will be distributed in accordance with the normal distribution rules of the Plan.

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements are presented on the accrual basis.

Investments

Assets of United Air Lines, Inc. 401(k) Plans Master Trust are owned by all participating United plans consisting of the Management and Salaried Employees' 401(k) Retirement Savings Plan, the Ground Employees' 401(k) Retirement Savings Plan, the Flight Attendant Employees' 401(k) Retirement Savings Plan, and the Mileage Plus, Inc. Investment Plus Plan (for the Blended Income Fund).
 
 

Net appreciation (depreciation) in value of investments includes realized and unrealized gains and losses.  Realized and unrealized gains and losses are calculated as the difference between fair value at December 1, or date of purchase if subsequent to December 1, and fair value at date of sale or the current year end.  The unrealized gain or loss on investments represents the Plan's allocable share of the difference between fair value at December 1, or date of purchase, and the fair value at the date of sale or the current year end plus, where applicable, the change in the exchange rate between the U.S. dollar and the foreign currency in which the assets are denominated from December 1, or the date of purchase, to the date of sale or the current year end.

The Plan provides for investments in mutual funds that, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risks.  Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.
 

During December 2001,  the Master Trust depreciated in value by $1,279 as follows (in thousands)

Administrative expenses, which are paid by the Plan, represent administrative and investment manager fees charged by Fidelity, accountant fees, recordkeeping fees charged by Fidelity Institutional Retirement Services Co. and some administrative fees charged by United. Brokerage and other investment fees are included in the cost of the related security. United performs certain reporting and supervisory functions for the Plan without charge.

Transfers between Plans

Transfers between plans reflect the change in employee coverage and transfer of any related balances between this Plan and other defined contribution plans sponsored by United, including the United Air Lines, Inc. Ground Employees' 401(k) Retirement Savings Plan and the United Air Lines, Inc. Management and Salaried Employees' 401(k) Retirement Savings Plan.

Participant Loans

Participants may borrow up to fifty percent of their account balance, not to exceed $50,000.  The minimum that may be borrowed is $1,000.  Loans are charged against each investment fund in the ratio of the value of the employee's interest in each fund to the total value of the employee's interest in all funds and are held in the Loan Fund.  The loan is repaid through payroll deductions on an after-tax basis for the term of the loan, which is a minimum of six months to a maximum of sixty months and is subject to a reasonable rate of interest (interest rates ranged from 6.50% to 10.00% for the year ended December 31, 2001).  The amount paid is reinvested in the participant's account based on the investment allocations at the time of repayment.  Prepayment of the full balance of the loan is allowed after six months from the date of the loan without penalty.  Participants are able to take out another loan after twelve months from the date the old loan is retired.  Upon the employee's termination of employment, a loan not paid in full within 60 days becomes a taxable distribution.  Loans in default may be declared due and payable in full immediately, and the Plan administrator may charge the participant's account balances at any time thereafter for the amount of the default.  An administrative fee of $90 is charged to each participant taking a loan and is automatically deducted from the participant's account.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of net assets available for plan benefits and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets available for plan benefits during the reporting period.  Actual results could differ from those estimates.

Payment of Benefits

Benefits are recorded when paid.
 

3.    TAX STATUS

The Internal Revenue Service has determined and informed the Company by letter dated August 23, 1996, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code.  The Plan was amended, restated, and submitted to the IRS on February 28, 2002 for a determination letter.  The Plan administrator and the Plan's counsel believe that the Plan is designed and is currently being operated in compliance with the applicable provisions of the Internal Revenue Code.
 

4.   RELATED-PARTY TRANSACTIONS

       The Plan invests in shares of mutual funds managed by Fidelity.  Fidelity acts as trustee for only those investments as defined by the Plan.  Transactions in such investments  qualify as party-in-interest transactions which are exempt from the prohibited transaction rules.

      Effective January 1, 2002, the name of the plan changed to United Airlines Flight Attendant 401(k) Plan.

      Effective April 1, 2002, the 401(k) plan contribution limit increased from 25% to 30% of compensation, as defined.