<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, 1997
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
Morgan Stanley Dean Witter 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 __.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. __.
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, 1998 was $1,807,859,419.21.
The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant is not applicable.
<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, Morgan Stanley Dean Witter,
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.
- 1 -
<PAGE> 4
PART II
Item 5. Market For Registrant's Common Equity And Related Stockholder Matters.
(a)
(i) 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:
<TABLE>
<CAPTION>
HIGH SALE LOW SALE
QUARTER ENDED PRICE PRICE
- ------------- ---------- ---------
<S> <C> <C>
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
March 31, 1997 89.750 81.825
June 30, 1997 95.262 79.250
September 30, 1997 100.000 92.925
December 31, 1997 120.125 101.475
</TABLE>
(ii) Holders
There were 5279 record holders of Units of the Fund on the books of the
Trustee on February 28, 1998 Eighty-Five and Ninety-Five Hundredths of a percent
(85.95%) 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.
(iii) Dividends
The following are the cash distributions which were paid to holders of
Units of the Fund during the last two fiscal years:
- 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>
<TABLE>
<CAPTION>
DISTRIBUTION DATE 1997 RATE PER UNIT TOTAL DISTRIBUTION
- ---------------------- ------------- ------------------
<S> <C> <C>
January 1, 1997 $ .22900 $ 3,623,693.48
February 1, 1997 .23100 3,632,133.81
March 1, 1997 .23100 3,596,267.37
April 1, 1997 .23100 3,579,311.04
May 1, 1997 .23300 3,591,628.13
June 1, 1997 .23300 3,565,001.12
July 1, 1997 .23300 3,542,990.78
August 1, 1997 .23500 3,543,449.85
September 1, 1997 .23300 3,462,465.51
October 1, 1997 .23500 3,466,592.63
November 1, 1997 .23300 3,429,871.37
December 1, 1997 .23300 3,413,966.79
TOTALS $2.79000 $42,447,371.88
------- -------------
</TABLE>
(b) If required pursuant to Rule 463 of the Securities Act of 1933, furnish the
information required by Item 701(f) of Regulation S-K.
- Not Applicable.
- 3 -
<PAGE> 6
Item 6. Selected Financial Data.
SELECTED FINANCIAL DATA
(in thousands except for outstanding Units and Per Unit Data)
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net investment
income $ 50,352 $ 49,755 $ 46,316 $ 44,766 $ 41,961
Net realized and
unrealized gain
(loss) on invest- $ 113,727 $ (65,659) $ 406,598 $ (91,579) $ 542,775
ments
Net increase
(decrease) in net
assets resulting
from operations $ 164,078 $ (15,904) $ 452,914 $ (46,813) $ 584,736
Income distributions
to Unit holders $ 50,311 $ 49,743 $ 47,658 $ 45,241 $ 42,211
Net assets at end
of year $ 1,257,937 $ 1,138,226 $ 1,474,906 $ 1,306,794 $ 1,735,234
Units outstanding
at end of year 18,514,279 17,701,839 16,670,493 15,726,053 14,505,395
Per Unit Data:
Income distribu-
tions during year $ 2.66 $ 2.73 $ 2.77 $ 2.79 $ 2.79
Net asset value
at end of year $ 67.94 $ 64.30 $ 88.47 $ 83.10 $ 119.63
</TABLE>
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 $42.0 million and net realized
and unrealized gain on investments of $542.8 million for the year 1997 as
compared with net investment income of $44.8 million and net realized and
unrealized loss on investments of $91.6 million for the year 1996 and net
investment income of $46.3 million and net realized and unrealized gain on
investments of $406.6 million for the year 1995.
- 4 -
<PAGE> 7
The net gain in net assets resulting from operations for the year 1997
was $584.7 million as compared to a net decrease of $46.8 million for the year
1996 and a net increase of $452.9 million for the year 1995. The increase in net
assets resulting from operations of $584.7 million for the year 1997 was
substantially the result of realized and unrealized gain on investments. The net
decrease in net assets resulting from operations of $46.8 for the year 1996 was
the result of realized and unrealized loss on investments.
Cash distributions paid out per Unit during each year amounted to $2.79
for the year ending December 31, 1997 as compared to $2.79 for the year ending
December 31, 1996 and $2.77 for the year ending December 31, 1995.
Income distributions accrued per Unit during each year amounted to
$2.79 for the year ending December 31, 1997 as compared to $2.79 for the year
ending December 31, 1996. The income distribution per Unit for the year ending
December 31, 1995 was $2.77.
The per Unit net asset value was $119.63 at December 31, 1997, $83.10
at December 31, 1996 and $88.47 at December 31, 1995. The per Unit net asset
value increased $36.53 from 1996 to 1997 and decreased $5.37 from 1995 to 1996.
There were 14,505,395 Units outstanding as of December 31, 1997,
15,726,053 Units outstanding as of December 31, 1996 and 16,670,493 Units
outstanding as of December 31, 1995. There was a decrease of 1,220,658 Units
during fiscal year 1997, a decrease of 944,440 Units during fiscal year 1996 and
decrease of 1,031,346 Units during fiscal year 1995 as a result of redemptions.
Item 7A. Quantitative And Qualitative Disclosures About Market
Risk.
- Not Applicable
Item 8. Financial Statements And Supplementary Data.
See following pages 6 through 13.
Item 9. Changes In And Disagreements On Accounting And Financial
Disclosure.
None.
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<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, 1997 and 1996 and
the related statements of operations and of changes in net assets for the years
ended December 31, 1997, 1996 and 1995. 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, 1997 and 1996 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, 1997 and 1996 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 9, 1998
- 6 -
<PAGE> 9
EXHIBIT a.1.1
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
December 31,
1997 1996
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at market value
(Notes 1 and 2):
1996 cost - $325,845,273 ............................. $1,303,763,692
1997 cost - $298,343,900 ............................. $1,732,776,714
Dividends receivable ................................... 3,286,297 4,105,785
Cash ................................................... 2,564,043 2,545,404
Receivable from securities sold ........................ 44,557
-------------- --------------
Total ........................................ 1,738,627,054 1,310,459,438
-------------- --------------
LESS LIABILITIES:
Distribution payable (Note 3) .......................... 3,387,399 3,623,693
Accrued expenses ....................................... 5,561 14,171
Redemptions payable .................................... 27,279
-------------- --------------
Total ........................................ 3,392,960 3,665,143
-------------- --------------
TOTAL TRUST PROPERTY ..................................... $1,735,234,094 $1,306,794,295
============== ==============
NET ASSETS, REPRESENTED BY:
Units of fractional undivided interest outstanding:
1996 - 15,726,053 (Note 6) ........................... $1,303,763,825
1997 - 14,505,395 (Note 6) ........................... $1,732,733,426
Undistributed net investment income .................... 2,500,668 3,030,470
-------------- --------------
NET ASSETS ............................................... $1,735,234,094 $1,306,794,295
============== ==============
UNIT VALUE:
1996 - $1,306,794,295/15,726,053 units ................. $83.10
======
1997 - $1,735,234,094/14,505,395 units ................. $119.63
=======
</TABLE>
See Notes to Financial Statements.
- 7 -
<PAGE> 10
EXHIBIT a.1.2
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income ........................... $ 42,399,400 $ 45,286,433 $ 46,877,031
Trustee's fees and expenses ............... (386,416) (465,437) (505,957)
Sponsors' fees ............................ (52,443) (54,909) (55,227)
------------ ------------ ------------
Net investment income ..................... 41,960,541 44,766,087 46,315,847
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold .......... 86,260,735 53,301,227 46,437,769
Unrealized appreciation (depreciation) of
investments ............................. 456,514,395 (144,879,937) 360,160,015
------------ ------------ ------------
Net realized and unrealized gain (loss) on
investments ............................. 542,775,130 (91,578,710) 406,597,784
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................. $584,735,671 $(46,812,623) $452,913,631
============ ============ ============
</TABLE>
See Notes to Financial Statements.
- 8 -
<PAGE> 11
EXHIBIT a.1.3
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................... $ 41,960,541 $ 44,766,087 $ 46,315,847
Realized gain on securities sold .......... 86,260,735 53,301,227 46,437,769
Unrealized appreciation (depreciation) of
investments ............................. 456,514,395 (144,879,937) 360,160,015
-------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ............... 584,735,671 (46,812,623) 452,913,631
INCOME DISTRIBUTIONS TO HOLDERS (Note 3) .... (42,211,078) (45,241,306) (47,658,313)
CAPITAL SHARE TRANSACTIONS:
Redemptions of 1,220,658, 944,440 and
1,031,346 units, respectively (Note 5) . (114,084,794) (76,057,777) (68,615,789)
-------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS ....... 428,439,799 (168,111,706) 336,639,529
NET ASSETS AT BEGINNING OF YEAR ............. 1,306,794,295 1,474,906,001 1,138,266,472
-------------- -------------- --------------
NET ASSETS AT END OF YEAR ................... $1,735,234,094 $1,306,794,295 $1,474,906,001
============== ============== ==============
PER UNIT:
Income distributions during year .......... $2.79 $2.79 $2.77
===== ===== =====
Net asset value at end of year ............ $119.63 $83.10 $88.47
======= ====== ======
UNITS OUTSTANDING AT END OF YEAR ............ 14,505,395 15,726,053 16,670,493
========== ========== ==========
</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, 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. 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>
- 10 -
<PAGE> 13
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
MARKETABLE SECURITIES, AT DECEMBER 31, 1997:
<TABLE>
<CAPTION>
Total Market
Name Of Issuer Shares Cost Value
<S> <C> <C> <C>
AT&T 4,762,732 $ 58,829,554 $ 291,717,335
Airtouch Communications 1,905,120 10,737,194 79,181,550
Ameritech Corp. 2,857,659 31,359,314 230,041,549
Bell Atlantic Corporation 3,368,236 61,851,410 306,509,476
BellSouth Corporation 4,286,460 34,504,478 241,381,279
Lucent Technologies 1,543,554 25,524,130 123,291,376
NCR Corp. 297,713 3,179,421 8,280,143
SBC Communications Inc. 4,251,128 45,168,484 311,395,126
U.S. West Incorporated 1,905,120 16,263,966 85,968,540
U.S. West Media Group 1,905,120 10,925,949 55,010,340
------------ --------------
$298,343,900 $1,732,776,714
============ ==============
</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, 1996 and 1997 to
holders of record at December 15, 1996 and December 15, 1997 was at the
rate of $.229 and $.233 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, Morgan Stanley Dean Witter, 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,
1997 1996
<S> <C> <C>
Cost at dates of deposit, including
subsequent reinvested distributions,
of remaining units outstanding....... $ 308,157,703 $ 334,239,562
Less sales charge...................... 4,622,362 5,013,589
-------------- --------------
Net amount applicable to Holders....... 303,535,341 329,225,973
Redemptions of units - net cost
of units redeemed less redemption
amounts.............................. (550,927,021) (462,812,124)
Realized gain on securities sold....... 545,692,292 459,431,557
Unrealized appreciation of
investments.......................... 1,434,432,814 977,918,419
-------------- --------------
Net capital applicable to Holders...... $1,732,733,426 $1,303,763,825
============== ==============
</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 1997 and 1996 quarterly results of operations, in
thousands of dollars, is as follows:
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>
- 12 -
<PAGE> 15
THE EQUITY INCOME FUND,
FIRST EXCHANGE SERIES - AT&T SHARES
NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1997
<TABLE>
<CAPTION>
For the Quarter Ended
1997
March 31 June 30 September 30 December 31 Total
<S> <C> <C> <C> <C> <C>
Net investment
income $12,165 $ 8,819 $ 10,536 $ 10,441 $ 41,961
Net realized
and unrealized
gain (loss) on
investments (19,417) 185,607 92,210 284,375 542,775
-------- -------- -------- -------- --------
Net increase
(decrease)
in net assets
resulting from
operations $(7,252) $194,426 $102,746 $294,816 $584,736
======== ======== ======== ======== ========
</TABLE>
- 13 -
<PAGE> 16
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.
- 14 -
<PAGE> 17
PART IV
Item 14. Exhibits, Financial Statement Schedules And Reports
On Form 8-K.
Page
a. 1.1 - Statements of Condition as of December
31, 1996 and 1997 ....................................... 7
1.2 - Statements of Operations for the years
ended December 31, 1995, December 31,
1996 and December 31, 1997 .............................. 8
1.3 - Statements of Changes in Net Assets for
the years ended December 31, 1995,
December 31, 1996 and December 31, 1997 ................. 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 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, 1996, incorporated
by reference to 1933 Act File No. 2-83192.
- 15 -
<PAGE> 18
13.2 - Form 10-Q, for the quarter ended June 30, 1996, incorporated by
reference to 1933 Act File No. 2-83192.
13.3 - Form 10-Q, for the quarter ended September 30, 1996,
incorporated by reference to 1933 Act File No. 2-83192.
13.4 - Form 10-K for the fiscal year ended December 31, 1996,
incorporated by reference to 1933 Act File No. 2-83192.
13.5 - Form 10-Q for the quarter ended March 31, 1997, incorporated by
reference to 1933 Act File No. 2-83192.
13.6 - Form 10-Q for the quarter ended June 30, 1997, incorporated by
reference to 1933 Act File No. 2-83192.
13.7 - Form 10-Q for the quarter ended September 30, 1997, incorporated
by reference to 1933 Act File No. 2-83192.
18. - None.
21. - None.
22. - None.
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 __, 1998 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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 298,343,900
<INVESTMENTS-AT-VALUE> 1,732,776,714
<RECEIVABLES> 3,286,297
<ASSETS-OTHER> 2,564,043
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,738,627,054
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 3,392,960
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 298,300,612
<SHARES-COMMON-STOCK> 14,505,395
<SHARES-COMMON-PRIOR> 15,726,053
<ACCUMULATED-NII-CURRENT> 2,500,668
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,434,432,814
<NET-ASSETS> 1,735,234,094
<DIVIDEND-INCOME> 42,399,400
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (438,859)
<NET-INVESTMENT-INCOME> 41,960,541
<REALIZED-GAINS-CURRENT> 86,260,735
<APPREC-INCREASE-CURRENT> 456,514,395
<NET-CHANGE-FROM-OPS> 584,735,671
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (42,211,078)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 1,220,658
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 428,439,799
<ACCUMULATED-NII-PRIOR> 3,030,470
<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>
