<PAGE> 1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended December 31, 1996
................................................................................
Commission file number 2-83192
................................................................................
The Equity Income Fund, First Exchange Series - AT&T Shares
................................................................................
(Exact name of registrant as specified in its charter)
New York 13-6824382
.............................. .............................
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
Merrill Lynch, Pierce, Fenner Prudential Securities
& Smith Incorporated Incorporated
P.O. Box 9051 One Seaport Plaza
Princeton, New Jersey 08543-9051 199 Water Street
New York, New York 10292
Dean Witter Reynolds, Inc. Smith Barney Inc.
Two World Trade Center 388 Greenwich Street
New York, New York 10048 New York, New York 10013
................................................................................
(Addresses of principal executive offices of Sponsors)
The Bank of New York, 101 Barclay Street, New York, N.Y. 10286
................................................................................
(Address of principal executive offices of Trustee)
(212) 815-2887
................................................................................
(Trustee's telephone number, including area code)
<PAGE> 2
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- -------------------
Units of Beneficial Interest American Stock
in The Equity Income Fund, Exchange, Inc.
First Exchange Series -
AT&T Shares Pacific Stock Exchange,
Incorporated
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
---- ----
The aggregate market value of units of beneficial interest held
of record on the books of the Trustee by non-affiliates of the registrant as of
February 28, 1997 was $1,382,170,642.86.
<PAGE> 3
PART I
ITEM 1. BUSINESS.
The Equity Income Fund, First Exchange Series - AT&T Shares (the
"Fund") was formed in 1983 as a unit investment trust under New York law and in
accordance with the Investment Company Act of 1940 by a trust indenture among
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Dean Witter Reynolds, Inc.,
Prudential Securities Incorporated and Smith Barney Inc. as Sponsors and The
Bank of New York as Trustee.
The Fund was formed for the purpose of permitting an investor in
common shares of the predivestiture American Telephone and Telegraph Company
("AT&T") to hold an investment in AT&T and the seven regional holding companies
created pursuant to the AT&T Plan of Reorganization in the form of units of
beneficial interest (the "Units") of the Fund, which consists solely of shares
of AT&T common stock and those securities which are distributed to holders of
such AT&T common stock pursuant to the reorganization. The Fund is not sponsored
by, or affiliated with, AT&T or any of the regional holding companies.
ITEM 2. PROPERTIES.
The Fund owns no physical properties.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET INFORMATION
The principal United States markets in which Units of the Fund are
traded are the American Stock Exchange, Inc. and the Pacific Stock Exchange,
Incorporated.
The following are the high and low sale prices of Units of the
Fund during each quarter for the last two fiscal years in which the Units were
traded on the American Stock Exchange, Inc., which was the principal exchange
market for the Units:
- 1 -
<PAGE> 4
<TABLE>
<CAPTION>
HIGH SALE LOW SALE
QUARTER ENDED PRICE PRICE
- ------------- ----- -----
<S> <C> <C>
March 31, 1995 68.500 62.875
June 30, 1995 71.125 66.625
September 30, 1995 82.000 70.125
December 31, 1995 87.875 80.500
March 31, 1996 93.375 79.625
June 30, 1996 84.500 78.750
September 30, 1996 83.000 73.250
December 31, 1996 85.875 75.625
</TABLE>
(B) HOLDERS
There were 5858 record holders of Units of the Fund on the books of the
Trustee on February 28, 1997. Eighty Three and Eighty-Five Hundredths of a
percent (83.85%) of such Units were held of record by Cede & Co., a nominee of
the Depository Trust Company, for certain of its participants on that date.
(C) DIVIDENDS
The following are the cash distributions which were paid to holders of
Units of the Fund during the last two fiscal years:
<TABLE>
<CAPTION>
DISTRIBUTION DATE 1995 RATE PER UNIT TOTAL DISTRIBUTION
- ---------------------- ------------- ------------------
<S> <C> <C>
January 1, 1995 $ .22837 $ 4,057,511.16
February 1, 1995 .22968 4,060,016.32
March 1, 1995 .22968 4,059,788.06
April 1, 1995 .22968 4,021,566.86
May 1, 1995 .23126 4,027,849.47
June 1, 1995 .23127 4,016,297.55
July 1, 1995 .23125 3,958,393.03
August 1, 1995 .23126 3,950,909.41
September 1, 1995 .23126 3,932,362.17
October 1, 1995 .23114 3,911,052.00
November 1, 1995 .23261 3,914,291.31
December 1, 1995 .23261 3,914,134.30
TOTALS $2.77007 $47,824,171.64
======== ==============
</TABLE>
- 2 -
<PAGE> 5
<TABLE>
<CAPTION>
DISTRIBUTION DATE 1996 RATE PER UNIT TOTAL DISTRIBUTION
- ---------------------- ------------- ------------------
<S> <C> <C>
January 1, 1996 $ .23261 $ 3,891,651.38
February 1, 1996 .23400 3,900,889.53
March 1, 1996 .23400 3,899,869.99
April 1, 1996 .23400 3,876,301.26
May 1, 1996 .23600 3,892,235.43
June 1, 1996 .23600 3,885,453.97
July 1, 1996 .23600 3,868,576.19
August 1, 1996 .22600 3,676,777.28
September 1, 1996 .22600 3,665,052.85
October 1, 1996 .22600 3,641,477.88
November 1, 1996 .22900 3,667,699.27
December 1, 1996 .22900 3,643,278.48
TOTALS $2.77861 $45,509,263.51
======== ==============
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA.
SELECTED FINANCIAL DATA
(in thousands except for outstanding Units and Per Unit Data)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net investment
income $ 50,842 $ 50,352 $ 49,755 $ 46,316 $ 44,766
Net realized and
unrealized gain
(loss) on invest- $ 115,280 $ 113,727 $ (65,659) $ 406,598 $ (91,579)
ments
Net increase
(decrease) in net
assets resulting
from operations $ 166,122 $ 164,078 $ (15,904) $ 452,914 $ (46,813)
Income distributions
to Unit holders $ 50,712 $ 50,311 $ 49,743 $ 47,658 $ 45,241
Net assets at end
of year $1,170,224 $1,257,937 $1,138,226 $1,474,906 $1,306,794
Units outstanding
at end of year 18,893,010 18,514,279 17,701,839 16,670,493 15,726,053
Per Unit Data:
Income distribu-
tions during year $2.65 $2.66 $2.73 $2.77 $2.79
Net asset value
at end of year $61.94 $67.94 $64.30 $88.47 $83.10
</TABLE>
- 3 -
<PAGE> 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Fund, as a non-managed unit investment trust, has no officers or
directors. The Trustees and Sponsors of the Fund are named in Item 1.
The Fund had net investment income of $44.8 million and net realized
and unrealized loss on investments of $91.6 million for the year 1996 as
compared with net investment income of $46.3 million and net realized and
unrealized gain on investments of $406.6 million for the year 1995 and net
investment income of $49.8 million and net realized and unrealized loss on
investments of $65.7 million for the year 1994.
The net decrease in net assets resulting from operations for the year
1996 was $46.8 million as compared to a net increase of $452.9 million for the
year 1995 and a net decrease of $15.9 million for the year 1994. The decrease in
net assets resulting from operations of $46.8 million for the year 1996 was
substantially the result of realized and unrealized loss on investments. The net
increase in net assets resulting from operations of $452.9 million for the year
1995 was the result of realized and unrealized gain on investments.
Cash distributions paid out per Unit during each year amounted to $2.79
for the year ending December 31, 1996 as compared to $2.77 for the year ending
December 31, 1995 and $2.73 for the year ending December 31, 1994.
Income distributions accrued per Unit during each year amounted to
$2.79 for the year ending December 31, 1996 as compared to $2.77 for the year
ending December 31, 1995. The income distribution per Unit for the year ending
December 31, 1994 was $2.73.
- 4 -
<PAGE> 7
The per Unit net asset value was $83.10 at December 31, 1996, $88.47 at
December 31, 1995 and $64.30 at December 31, 1994. The per Unit net asset value
decreased $5.37 from 1995 to 1996 and increased $24.17 from 1994 to 1995.
There were 15,726,053 Units outstanding as of December 31, 1996,
16,670,493 Units outstanding as of December 31, 1995 and 17,701,839 Units
outstanding as of December 31, 1994. There was a decrease of 944,440 Units
during fiscal year 1996, a decrease of 1,031,346 Units during fiscal year 1995
and decrease of 812,440 Units during fiscal year 1994 as a result of
redemptions.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See following pages 6 through 13.
- 5 -
<PAGE> 8
INDEPENDENT ACCOUNTANTS' REPORT
The Sponsors, Trustee and Holders
of The Equity Income Fund,
First Exchange Series - AT&T Shares:
We have audited the accompanying statements of condition of The Equity Income
Fund, First Exchange Series - AT&T Shares as of December 31, 1996 and 1995 and
the related statements of operations and of changes in net assets for the years
ended December 31, 1996, 1995 and 1994. These financial statements are the
responsibility of the Trustee. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
December 31, 1996 and 1995 were confirmed to us by The Bank of New York, the
Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Equity Income Fund, First
Exchange Series - AT&T Shares at December 31, 1996 and 1995 and the results of
its operations and changes in its net assets for the above-stated years in
conformity with generally accepted accounting principles.
March 13, 1997
- 6 -
<PAGE> 9
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at market value
(Notes 1 and 2):
1995 cost - $348,494,818 .......................... $1,471,293,175
1996 cost - $325,845,273 .......................... $1,303,763,692
Dividends receivable ................................ 4,105,785 4,740,110
Cash ................................................ 2,545,404 2,808,808
Receivable from securities sold ..................... 44,557
-------------- --------------
Total ..................................... 1,310,459,438 1,478,842,093
-------------- --------------
LESS LIABILITIES:
Distribution payable (Note 3) ....................... 3,623,693 3,891,651
Other ............................................... 44,441
Accrued expenses .................................... 14,171
Redemptions payable ................................. 27,279
-------------- --------------
Total ..................................... 3,665,143 3,936,092
-------------- --------------
TOTAL TRUST PROPERTY .................................. $1,306,794,295 $1,474,906,001
============== ==============
NET ASSETS, REPRESENTED BY:
Units of fractional undivided interest outstanding:
1995 - 16,670,493 (Note 6) ........................ $1,471,271,038
1996 - 15,726,053 (Note 6) ........................ $1,303,763,825
Undistributed net investment income ................. 3,030,470 3,634,963
-------------- --------------
NET ASSETS ............................................ $1,306,794,295 $1,474,906,001
============== ==============
UNIT VALUE:
1995 - $1,474,906,001/16,670,493 units .............. $88.47
======
1996 - $1,306,794,295/15,726,053 units .............. $83.10
======
</TABLE>
See Notes to Financial Statements.
- 7 -
<PAGE> 10
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1996 1995 1994
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income .......................... $ 45,286,433 $ 46,877,031 $ 50,297,823
Trustee's fees and expenses .............. (465,437) (505,957) (479,720)
Sponsors' fees ........................... (54,909) (55,227) (62,676)
------------ ------------ ------------
Net investment income .................... 44,766,087 46,315,847 49,755,427
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold ......... 53,301,227 46,437,769 36,968,354
Unrealized appreciation (depreciation) of
investments ............................ (144,879,937) 360,160,015 (102,628,199)
------------ ------------ ------------
Net realized and unrealized gain (loss) on
investments ............................ (91,578,710) 406,597,784 (65,659,845)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................ $(46,812,623) $452,913,631 $(15,904,418)
============ ============ ============
</TABLE>
See Notes to Financial Statements.
- 8 -
<PAGE> 11
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1996 1995 1994
<S> <C> <C> <C>
OPERATIONS:
Net investment income ................... $ 44,766,087 $ 46,315,847 $ 49,755,427
Realized gain on securities sold ........ 53,301,227 46,437,769 36,968,354
Unrealized appreciation (depreciation) of
investments ........................... (144,879,937) 360,160,015 (102,628,199)
-------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ............. (46,812,623) 452,913,631 (15,904,418)
INCOME DISTRIBUTIONS TO HOLDERS (Note 3) .. (45,241,306) (47,658,313) (49,742,556)
CAPITAL SHARE TRANSACTIONS:
Redemptions of 944,440, 1,031,346 and
812,440 units, respectively (Note 5) .. (76,057,777) (68,615,789) (54,064,009)
-------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS ..... (168,111,706) 336,639,529 (119,710,983)
NET ASSETS AT BEGINNING OF YEAR ........... 1,474,906,001 1,138,266,472 1,257,937,455
-------------- -------------- --------------
NET ASSETS AT END OF YEAR ................. $1,306,794,295 $1,474,906,001 $1,138,226,472
============== ============== ==============
PER UNIT:
Income distributions during year ........ $2.79 $2.77 $2.73
============== ============== ==============
Net asset value at end of year .......... $83.10 $88.47 $64.30
============== ============== ==============
UNITS OUTSTANDING AT END OF YEAR .......... 15,726,053 16,670,493 17,701,839
============== ============== ==============
</TABLE>
See Notes to Financial Statements.
- 9 -
<PAGE> 12
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. A summary of the significant accounting policies, which
are in conformity with generally accepted accounting principles, followed
by the Fund in the preparation of its financial statements since July 7,
1983, its initial date of deposit, is as follows:
(a) Securities are stated at market value based on the last sales price
reported at the close of business on the New York Stock Exchange.
Substantially all of the aggregate cost of securities represents the
market value of the shares of common stock of American Telephone and
Telegraph Company (AT&T) on the days the shares were exchanged for
units of the Fund; such aggregate cost was subsequently allocated
among the portfolio holdings in shares of AT&T and the seven regional
holding companies following their divestiture by AT&T in accordance
with its Plan of Reorganization. Realized gains or losses on sales of
securities are determined using the identified cost basis.
(b) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Dividend income has been recognized on the ex-dividend date.
2. MARKETABLE SECURITIES, AT DECEMBER 31, 1995:
<TABLE>
<CAPTION>
TOTAL MARKET
NAME OF ISSUER SHARES COST VALUE
<S> <C> <C> <C>
AT&T 5,473,541 $ 99,432,993 $ 354,411,780
Airtouch Communications 2,189,442 12,339,723 61,851,737
Ameritech Corp. 3,284,098 36,039,118 193,761,782
Bell Atlantic Corporation 2,189,442 36,598,654 146,418,934
BellSouth Corporation 4,926,216 46,764,934 214,290,396
NYNEX Corporation 2,189,442 34,330,554 118,229,868
Pacific Telesis Group 2,189,442 18,641,294 73,619,987
SBC Communications Inc.
(formerly Southwestern
Bell Corporation) 3,284,143 33,109,333 188,838,223
U.S. West Incorporated 2,189,442 18,686,389 78,272,552
U.S. West Media Group 2,189,364 12,551,826 41,597,916
------------ --------------
$348,494,818 $1,471,293,175
============ ==============
</TABLE>
- 10 -
<PAGE> 13
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
MARKETABLE SECURITIES, AT DECEMBER 31, 1996:
<TABLE>
<CAPTION>
TOTAL MARKET
NAME OF ISSUER SHARES COST VALUE
<S> <C> <C> <C>
AT&T 5,163,363 $ 66,979,418 $ 224,606,290
Airtouch Communications 2,065,367 11,640,367 52,150,517
Ameritech Corp. 3,098,036 33,996,969 187,818,433
Bell Atlantic Corporation 2,065,367 34,524,884 133,732,513
BellSouth Corporation 4,647,029 41,414,519 187,623,796
Lucent Technologies 1,673,372 26,613,902 77,393,455
NYNEX Corporation 2,065,367 32,385,225 99,395,787
Pacific Telesis Group 2,065,367 17,584,928 75,902,237
SBC Communications Inc.
(formerly Southwestern
Bell Corporation) 3,098,036 31,233,252 160,323,362
U.S. West Incorporated 2,065,367 17,629,271 66,608,086
U.S. West Media Group 2,065,363 11,842,538 38,209,216
------------ --------------
$325,845,273 $1,303,763,692
============ ==============
</TABLE>
3. DISTRIBUTIONS
Any monthly distributions to Holders, who have not elected to participate
in the Fund's Reinvestment Plan, are made on or about the first day of each
month. The income distribution payable at December 31, 1995 and 1996 to
holders of record at December 15, 1995 and December 15, 1996 was at the
rate of $.23261 and $.229 per unit, respectively.
4. REINVESTMENT PLAN
Holders could reinvest any distributions in the Fund prior to April 1,
1984, or in certain subsequent series of The Equity Income Fund after March
31, 1984, by executing an appropriate notice of election to participate in
the Fund's Reinvestment Plan. The Sponsors (Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Dean Witter Reynolds, Inc., Prudential Securities
Incorporated and Smith Barney Inc.) may, in their sole discretion, cancel
the Fund's Reinvestment Plan at any time.
5. REDEMPTIONS
Holders may request redemptions of units by presentation thereof to the
Trustee, The Bank of New York. Redemptions of units are made in kind by the
Trustee; fractional undivided interests are redeemed in cash. Under certain
circumstances, Holders may request redemptions of units in cash. Units of
the Fund are listed and traded on the American and Pacific Stock Exchanges.
- 11 -
<PAGE> 14
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
6. NET CAPITAL
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
<S> <C> <C>
Cost at dates of deposit, including
subsequent reinvested distributions,
of remaining units outstanding ..... $ 334,239,562 $ 354,153,806
Less sales charge .................... 5,013,589 5,312,303
-------------- --------------
Net amount applicable to Holders ..... 329,225,973 348,841,503
Redemptions of units - net cost
of units redeemed less redemption
amounts ............................ (462,812,124) (406,499,152)
Realized gain on securities sold ..... 459,431,557 406,130,330
Unrealized appreciation of
investments ........................ 977,918,419 1,122,798,357
-------------- --------------
Net capital applicable to Holders .... $1,303,763,825 $1,471,271,038
============== ==============
</TABLE>
7. INCOME TAXES
All Fund items of income received, expenses paid, and realized gains and
losses on securities sold are attributable to the Holders, on a pro rata
basis, for Federal income tax purposes in accordance with the grantor trust
rules of the United States Internal Revenue Code.
8. QUARTERLY RESULTS OF OPERATIONS - UNAUDITED
A summary of the Fund's 1995 and 1996 quarterly results of operations, in
thousands of dollars, is as follows:
Year Ended December 31, 1995
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED 1995
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
<S> <C> <C> <C> <C> <C>
Net investment
income $10,834 $11,966 $ 10,503 $ 13,013 $ 46,316
Net realized and
unrealized gain
on investments 55,352 53,198 194,760 103,288 406,598
------- ------- -------- -------- --------
Net increase
in net assets
resulting from
operations $66,186 $65,164 $205,263 $116,301 $452,914
======= ======= ======== ======== ========
</TABLE>
- 12 -
<PAGE> 15
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1996
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED 1996
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
<S> <C> <C> <C> <C> <C>
Net investment
income $ 10,498 $11,667 $ 11,022 $ 11,579 $ 44,766
Net realized
and unrealized
gain (loss) on
investments (112,348) 34,916 (128,649) 114,502 (91,579)
--------- ------- --------- -------- --------
Net increase
(decrease)
in net assets
resulting from
operations $(101,850) $46,583 $(117,627) $126,081 $(46,813)
========= ======= ========= ======== ========
</TABLE>
- 13 -
<PAGE> 16
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
None.
ITEM 11. EXECUTIVE COMPENSATION.
None.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
a. 1.1 - Statements of Condition as of December
31, 1995 and 1996 ............................................... 7
1.2 - Statements of Operations for the years
ended December 31, 1994, December 31,
1995 and December 31, 1996 ...................................... 8
1.3 - Statements of Changes in Net Assets for
the years ended December 31, 1994,
December 31, 1995 and December 31, 1996 ......................... 9
2 - Financial schedules are not filed because of the absence of
conditions under which they are required or because the required
information, where material, is included in the financial
statements or the footnotes thereto.
b. None.
c. 4.1 - Form of Trust Indenture (incorporated by reference to
Exhibit 1.1 to the Registration Statement of The Equity
</TABLE>
- 14 -
<PAGE> 17
Income Fund, First Exchange Series - AT&T Shares, 1933 Act File
No. 2-83192)
4.1.1 - Form of Certificate of Amendment to Trust Indenture dated
August 8, 1983 (incorporated by reference to Registration
Statement on Form 8-A of The Equity Income Fund, First Exchange
Series - AT&T Shares, 1934 Act File No. 1-8642)
4.1.2 - Form of Standard Terms and Conditions of Trust effective
January 1, 1983 (incorporated by reference to Exhibit 1.1.1 to
the Registration Statement of The Equity Income Fund, First
Exchange Series - AT&T Shares, 1933 Act File No. 2-83192)
9. - None.
11 - Computation of per Unit earnings (See Statement of Changes
in Net Assets, Item 1.3, above)
13.1 - Form 10-Q, for the quarter ended March 31, 1995,
incorporated by reference to 1933 Act File No. 2-83192.
13.2 - Form 10-Q, for the quarter ended June 30, 1995,
incorporated by reference to 1933 Act File No. 2-83192.
13.3 - Form 10-Q, for the quarter ended September 30, 1995,
incorporated by reference to 1933 Act File No. 2-83192.
13.4 - Form 10-K for the fiscal year ended December 31, 1995,
incorporated by reference to 1933 Act File No. 2-83192.
13.5 - Form 10-Q for the quarter ended March 31, 1996,
incorporated by reference to 1933 Act File No. 2-83192.
13.6 - Form 10-Q for the quarter ended June 30, 1996,
incorporated by reference to 1933 Act File No. 2-83192.
13.7 - Form 10-Q for the quarter ended September 30, 1996,
incorporated by reference to 1933 Act File No. 2-83192.
18. - None.
21. - None.
22. - None.
- 15 -
<PAGE> 18
23 - Consents (incorporated by reference to Registration
Statement of The Equity Income Fund, First Exchange Series - AT&T
Shares, 1933 Act File No. 2-83192).
27. - Financial Data Schedule.
d. None.
- 16 -
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Trustee of the Fund has duly caused this report to be signed on behalf
of the Fund by the undersigned, thereunto duly authorized.
The Equity Income Fund, First
Exchange Series - AT&T Shares
The Bank of New York,
as Trustee
Date: March __, 1997 By: ________________________
Name: Jeffrey Cohen
Title: Vice President
- 17 -
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AT&T - FIRST
EXCHANGE SERIES IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 325,845,273
<INVESTMENTS-AT-VALUE> 1,303,763,692
<RECEIVABLES> 4,150,342
<ASSETS-OTHER> 2,545,404
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,310,459,438
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,665,143
<TOTAL-LIABILITIES> 3,665,143
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 325,845,406
<SHARES-COMMON-STOCK> 15,726,053
<SHARES-COMMON-PRIOR> 16,670,493
<ACCUMULATED-NII-CURRENT> 3,030,470
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 977,918,419
<NET-ASSETS> 1,306,794,295
<DIVIDEND-INCOME> 45,286,433
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 520,346
<NET-INVESTMENT-INCOME> 44,766,087
<REALIZED-GAINS-CURRENT> 53,301,227
<APPREC-INCREASE-CURRENT> (144,879,937)
<NET-CHANGE-FROM-OPS> (46,812,623)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 45,241,306
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 944,440
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (168,111,706)
<ACCUMULATED-NII-PRIOR> 3,634,963
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
