UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
----------------------
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
----------------------
Commission File No. 2-91762
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POLARIS AIRCRAFT INCOME FUND I
State of Organization: California
IRS Employer Identification No. 94-2938977
201 Mission Street, 27th Floor, San Francisco, California 94105
Telephone - (415) 284-7400
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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes _X_ No ___
This document consists of 14 pages.
<PAGE>
POLARIS AIRCRAFT INCOME FUND I
FORM 10-Q - For the Quarterly Period Ended March 31, 1997
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
a) Balance Sheets - March 31, 1997 and
December 31, 1996.........................................3
b) Statements of Operations - Three Months Ended
March 31, 1997 and 1996...................................4
c) Statements of Changes in Partners' Capital
(Deficit) - Year Ended December 31, 1996
and Three Months Ended March 31, 1997.....................5
d) Statements of Cash Flows - Three Months
Ended March 31, 1997 and 1996.............................6
e) Notes to Financial Statements.............................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..........9
Part II. Other Information
Item 1. Legal Proceedings.....................................12
Item 6. Exhibits and Reports on Form 8-K......................13
Signature.......................................................14
2
<PAGE>
Part 1. Financial Information
Item 1. Financial Statements
POLARIS AIRCRAFT INCOME FUND I
BALANCE SHEETS
(Unaudited)
March 31, December 31,
1997 1996
------------ ------------
ASSETS:
CASH AND CASH EQUIVALENTS $ 10,552,840 $ 10,065,652
RENT AND OTHER RECEIVABLES, net of
allowance for credit losses of $233,913
in 1997 and 1996 15,853 18,816
NOTES RECEIVABLE, net of allowance for
credit losses of $177,537 in 1997 and 1996 392,326 418,145
AIRCRAFT, net of accumulated depreciation of
$8,219,719 in 1997 and $20,823,462 in 1996 1,941,250 3,751,387
OTHER ASSETS 20,115 --
------------ ------------
$ 12,922,384 $ 14,254,000
============ ============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT):
PAYABLE TO AFFILIATES $ 90,052 $ 77,676
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 488,616 464,603
LESSEE SECURITY DEPOSITS 70,925 70,925
MAINTENANCE RESERVES 2,340,832 3,217,368
------------ ------------
Total Liabilities 2,990,425 3,830,572
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General Partner (629,269) (624,341)
Limited Partners, 168,729 units
issued and outstanding 10,561,228 11,047,769
------------ ------------
Total Partners' Capital 9,931,959 10,423,428
------------ ------------
$ 12,922,384 $ 14,254,000
============ ============
The accompanying notes are an integral part of these statements.
3
<PAGE>
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
----------------------------
1997 1996
---------- ----------
REVENUES:
Rent from operating leases $ 90,000 $ 508,900
Gain on sale of aircraft inventory 86,418 153,720
Gain on sale of aircraft 781,504 --
Interest and other 147,711 124,793
---------- ----------
Total Revenues 1,105,633 787,413
---------- ----------
EXPENSES:
Depreciation 3,750 314,182
Management fees to general partner 4,500 10,500
Provision for credit losses -- 309,581
Operating 53,872 148,430
Administration and other 35,167 31,105
---------- ----------
Total Expenses 97,289 813,798
---------- ----------
NET INCOME (LOSS) $1,008,344 $ (26,385)
========== ==========
NET INCOME ALLOCATED
TO THE GENERAL PARTNER $ 145,053 $ 252,804
========== ==========
NET INCOME (LOSS) ALLOCATED TO
LIMITED PARTNERS $ 863,291 $ (279,189)
========== ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ 5.12 $ (1.65)
========== ==========
The accompanying notes are an integral part of these statements.
4
<PAGE>
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Year Ended December 31, 1996 and
Three Months Ended March 31, 1997
---------------------------------
General Limited
Partner Partners Total
------- -------- -----
Balance, December 31, 1995 $ (590,280) $ 14,417,273 $ 13,826,993
Net income (loss) 247,154 (838,569) (591,415)
Cash distributions to partners (281,215) (2,530,935) (2,812,150)
------------ ------------ ------------
Balance, December 31, 1996 (624,341) 11,047,769 10,423,428
Net income 145,053 863,291 1,008,344
Cash distributions to partners (149,981) (1,349,832) (1,499,813)
------------ ------------ ------------
Balance, March 31, 1997 $ (629,269) $ 10,561,228 $ 9,931,959
============ ============ ============
The accompanying notes are an integral part of these statements
5
<PAGE>
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
----------------------------
1997 1996
------------ ------------
OPERATING ACTIVITIES:
Net income (loss) $ 1,008,344 $ (26,385)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation 3,750 314,182
Gain on sale of aircraft inventory (86,418) (153,720)
Gain on sale of aircraft (781,504) --
Provision for credit losses -- 309,581
Changes in operating assets and liabilities:
Decrease (increase) in rent and other
receivable 2,963 (334,769)
Increase in other assets (20,115) --
Increase (decrease) in payable to affiliates 12,376 (2,889)
Increase in accounts payable and accrued
liabilities 24,013 96,348
Increase (decrease) in maintenance reserves (876,536) 206,062
------------ ------------
Net cash provided by (used in)
operating activities (713,127) 408,410
------------ ------------
INVESTING ACTIVITIES:
Principal payments on note receivable 25,819 37,653
Net proceeds from sale of aircraft inventory 86,418 153,720
Net proceeds from sale of aircraft 2,587,891 --
------------ ------------
Net cash provided by investing
activities 2,700,128 191,373
------------ ------------
FINANCING ACTIVITIES:
Cash distributions to partners (1,499,813) (2,812,150)
------------ ------------
Net cash used in financing
activities (1,499,813) (2,812,150)
------------ ------------
CHANGES IN CASH AND CASH
EQUIVALENTS 487,188 (2,212,367)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 10,065,652 9,807,315
------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 10,552,840 $ 7,594,948
============ ============
The accompanying notes are an integral part of these statements.
6
<PAGE>
POLARIS AIRCRAFT INCOME FUND I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Principles and Policies
In the opinion of management, the financial statements presented herein include
all adjustments, consisting only of normal recurring items, necessary to
summarize fairly Polaris Aircraft Income Fund I's (the Partnership's) financial
position and results of operations. The financial statements have been prepared
in accordance with the instructions of the Quarterly Report to the Securities
and Exchange Commission (SEC) Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto for the years ended December 31, 1996, 1995, and
1994 included in the Partnership's 1996 Annual Report to the SEC on Form 10-K
(Form 10-K).
2. Sale of two Boeing 737-200s
In January 1997, the Partnership received a deposit of $162,000 toward the sales
price of $1,620,000 for the sale of two Boeing 737-200s and two spare engines
formerly leased to Viscount Air Services, Inc. (Viscount). The Partnership
received the remaining $1,458,000 in March 1997. In addition, the Partnership
retained certain maintenance reserves and deposits received from the former
lessee of these aircraft aggregating approximately $968,000 that had been held
by the Partnership to offset potential future maintenance expenses for these
aircraft. As a result, the Partnership recognized a net gain of $781,504 on the
sale of these aircraft during the first quarter of 1997.
3. Related Parties
Under the Limited Partnership Agreement, the Partnership paid or agreed to pay
the following amounts for the current quarter to the general partner, Polaris
Investment Management Corporation, in connection with services rendered or
payments made on behalf of the Partnership:
Payments for
Three Months Ended Payable at
March 31, 1997 March 31, 1997
-------------- --------------
Aircraft Management Fees $ 5,059 $ 382
Out-of-Pocket Administrative Expense
Reimbursement 67,035 65,157
Out-of-Pocket Operating and
Remarketing Expense Reimbursement 37,592 24,513
---------- ----------
$ 109,686 $ 90,052
========== ==========
4. Nations Air Default and Litigation
On or about December 20, 1996, First Security Bank, National Association (FSB),
as trustee for the Partnership, filed an action against Nations Air Express,
Inc. (Nations Air) in the United States District Court for the Northern District
of California. This action involves aircraft owned by FSB, as trustee for the
Partnership which were leased to Viscount Air Services, Inc. (Viscount), and
subleased by Viscount to Nations Air as well as aircraft owned by Polaris
Holding Company (PHC). The claims arise out of the possession and use of the
7
<PAGE>
aircraft by Nations Air following the commencement of Viscount's bankruptcy
proceedings. The Partnership's aircraft was returned in February 1997. In this
action, FSB, on behalf of the Partnership, is seeking to recover damages for
legal costs, unpaid rent and maintenance, and interest on such unpaid amounts,
in the amount of approximately $1,248,000.
On March 31, 1997, Nations Air Express, Inc. (Nations Air) entered into a
comprehensive Settlement Agreement with First Security Bank, National
Association (FSB), PHC, the Partnership, Polaris Aircraft Income Fund II,
Polaris Investment Management Corporation (General Partner) and GE Capital
Aviation Services (GECAS) (collectively, the "GECAS Parties"). Pursuant to the
Settlement Agreement, Nations Air filed a Stipulated Judgment whereby Nations
Air agreed to return of the aircraft owned by FSB as trustee for PHC (the "PHC
Aircraft"), to pay approximately $1.88 million and to dismiss its counterclaims.
In lieu of enforcement of the Stipulated Judgment, under the Settlement
Agreement Nations Air agreed to (i) purchase the PHC Aircraft for $3.3 million
payable no later than May 30, 1997; (ii) allow the GECAS Parties to retain all
Maintenance Reserves paid by Nations Air in respect of the PHC Aircraft and the
aircraft owned beneficially by the Partnership; (iii) grant FSB a security
interest in all of Nations Air's assets in order to secure Nations Air's
obligations under the Settlement Agreement; (iv) withdraw its motion to set
aside the dismissal with prejudice of its lawsuit against the GECAS Parties in
the Superior Court of Cobb County Georgia; and (v) release the GECAS Parties
from any Nations Air claims related to any transactions between the GECAS
Parties and Nations Air. Thus, contingent on Nations Air performing its
obligations under the Settlement Agreement, FSB agreed to execute a Satisfaction
of Judgment in this action, and the GECAS Parties agreed to release Nations Air
from any claims related to any transactions between the GECAS Parties and
Nations Air. Thus, Nations Air must either perform each of its obligations under
the Settlement Agreement or the GECAS Parties will proceed with enforcement of
the Stipulated Judgement. The GECAS Parties have not yet been able to determine
what portion of the approximately $1.88 million payment, if it is made, or
alternatively what portion of the $3.3 million portion, if it is made, together
with the amounts previously paid by Nations Air will be allocated to the
Partnership. The Partnership will recognize as revenue, its allocated portion of
the settlement payment from Nations Air when payment is received.
5. Subsequent Event
Engine Note Receivable - On April 25, 1997 the Partnership received $408,496 as
payment in full, of the outstanding engine finance sale note receivable,
including accrued interest, due from Rock-It Cargo USA, Inc. (Rock-It Cargo) and
Riverhorse Investments, Inc. (Riverhorse Investments).
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
At March 31, 1997, Polaris Aircraft Income Fund I (the Partnership) owns one
used Boeing 737-200 commercial jet aircraft, three spare engines and certain
inventoried aircraft parts out of its original portfolio of eleven aircraft. The
Partnership's one remaining Boeing 737-200 aircraft formerly leased to Viscount
Air Services, Inc. (Viscount) and subleased to Nations Air Express, Inc.
(Nations Air), was returned to the Partnership in February 1997. Three spare
engines are leased to CanAir Cargo Ltd. (CanAir). In addition, the Partnership
transferred four aircraft to aircraft inventory during 1992 and 1993. These
aircraft have been disassembled for sale of their component parts. Two engines
formerly leased to Viscount, were returned to the Partnership in May and October
1996 and were sold in March 1997. One additional engine from these aircraft was
sold to Viscount during 1995. Viscount's affiliates, Rock-It Cargo USA, Inc.
(Rock-It Cargo) and Riverhorse Investments, Inc. (Riverhorse Investments)
assumed the note for this engine sale in October 1996. The Partnership has sold
five aircraft and one airframe from its original aircraft portfolio: a Boeing
737-200 Convertible Freighter in 1990, a McDonnell Douglas DC-9-10 in 1992, a
Boeing 737-200 in 1993 and the airframe from a Boeing 737-200 aircraft in April
1995 and two Boeing 737-200 aircraft in March 1997.
Remarketing Update
Engine Note Receivable - On April 25, 1997 the Partnership received $408,496 as
payment in full, of the outstanding engine finance sale note receivable,
including accrued interest, due from Rock-It Cargo and Riverhorse Investments.
Nations Air Sub-lease of Boeing 737-200 - Viscount entered into a sub-lease
agreement for one of the Partnership's Boeing 737-200 aircraft with Nations Air
for a term of one year through February 1996. The sublease had been extended
through February 1998. Rent and maintenance reserve payments due to Viscount
from Nations Air were paid directly to the Partnership and were applied against
payments due the Partnership from Viscount. The last payment received by the
Partnership from Nations Air was in September 1996. This aircraft was returned
by Nations Air in February 1997 as further discussed in the Liquidity and Legal
Proceedings sections.
Sale of two Boeing 737-200s - In January 1997, the Partnership received a
deposit of $162,000 toward the sales price of $1,620,000 for the sale of two
Boeing 737-200s and two spare engines formerly leased to Viscount. The
Partnership received the remaining $1,458,000 in March 1997. In addition, the
Partnership retained certain maintenance reserves and deposits received from the
former lessee of these aircraft aggregating approximately $968,000 that had been
held by the Partnership to offset potential future maintenance expenses for
these aircraft. As a result, the Partnership recognized a net gain of $781,504
on the sale of these aircraft during the first quarter of 1997.
Partnership Operations
The Partnership recorded net income of $1,008,344, or $5.12 per limited
partnership unit, for the three months ended March 31, 1997, compared to a net
loss of $26,385, or $1.65 per unit for the same period in 1996. The improvement
in operating results during the first quarter of 1997, as compared to the same
period in 1996, is the result of the Partnership's remaining aircraft having
been depreciated down to their estimated residual values in 1996 and a gain on
the sale of aircraft in 1997.
During the first quarter of 1997, the Partnership sold two Boeing 737-200s and
two spare engines formerly leased to Viscount to Solair, Inc. for cash proceeds
of $1,620,000. In addition, the Partnership retained certain maintenance
reserves and deposits received from the former lessee of these aircraft
aggregating approximately $968,000 that had been held by the Partnership to
9
<PAGE>
offset potential future maintenance expenses for these aircraft. As a result,
the Partnership recognized a net gain of $781,504 on the sale of these aircraft
during the first quarter of 1997.
The net loss during the first quarter of 1996 was the result of a provision for
credit losses for certain rent and interest receivables from Viscount combined
with legal expenses incurred during the first quarter of 1996 related to the
Viscount default and Chapter 11 bankruptcy filing as previously discussed in the
Partnership's 1996 Annual Report to the SEC on Form 10-K (Form 10-K). The
aggregate allowance for credit losses of $309,581 for these obligations is
reflected as a provision for credit losses in the Partnership's statement of
operations for the three months ended March 31, 1996. In addition, the
Partnership recognized legal expenses of approximately $52,000 and $146,000
related to the Nations Air default and the Viscount default and Chapter 11
bankruptcy filing during the three months ended March 31, 1997 and 1996,
respectively. These legal costs are included in operating expense in the
Partnership's statement of operations.
Administration and other expenses increased during the three months ended March
31, 1997 as compared to the same period in 1996, due to increases in printing
and postage costs combined with an increase in outside services.
Liquidity and Cash Distributions
Liquidity - The Partnership receives maintenance reserve payments from CanAir
that may be reimbursed to the lessee or applied against certain costs incurred
by the Partnership for maintenance work performed on the Partnership's aircraft
or engines, as specified in the leases. Maintenance reserve balances remaining
at the termination of the lease, if any, may be used by the Partnership to
offset future maintenance expenses or recognized as revenue. The net maintenance
reserves balances aggregate $2,340,832 as of March 31, 1997.
The Partnership received payments of approximately $86,000 and $154,000 during
the first three months of 1997 and 1996, respectively, from the sale of parts
from the four disassembled aircraft.
Cash Distributions - Cash distributions to limited partners were $1,349,832, or
$8.00 per limited partnership unit, and $2,530,935, or $15.00 per limited
partnership unit for the first quarters of 1997 and 1996, respectively. The
timing and amount of future cash distributions to partners are not yet known and
will depend upon the Partnership's future cash requirements, including the legal
costs relating to the Nations Air litigation, the costs that may be incurred to
remarket the remaining aircraft and the receipt of engine rental payments from
CanAir.
Nations Air Default and Litigation
On or about December 20, 1996, First Security Bank, National Association (FSB),
as trustee for the Partnership, filed an action against Nations Air Express,
Inc. (Nations Air) in the United States District Court for the Northern District
of California. This action involves aircraft owned by FSB, as trustee for the
Partnership which were leased to Viscount Air Services, Inc. (Viscount), and
subleased by Viscount to Nations Air, as well as aircraft owned by Polaris
Holding Company (PHC). The claims arise out of the possession and use of the
aircraft by Nations Air following the commencement of Viscount's bankruptcy
proceedings. The Partnership's aircraft was returned in February 1997. In this
action, FSB, on behalf of the Partnership, is seeking to recover damages for
legal costs, unpaid rent and maintenance, and interest on such unpaid amounts,
in the amount of approximately $1,248,000.
On March 31, 1997, Nations Air Express, Inc. (Nations Air) entered into a
comprehensive Settlement Agreement with First Security Bank, National
Association (FSB), PHC, the Partnership, Polaris Aircraft Income Fund II,
Polaris Investment Management Corporation (General Partner) and GE Capital
10
<PAGE>
Aviation Services (GECAS) (collectively, the "GECAS Parties"). Pursuant to the
Settlement Agreement, Nations Air filed a Stipulated Judgment whereby Nations
Air agreed to return of the aircraft owned by FSB as trustee for PHC (the "PHC
Aircraft"), to pay approximately $1.88 million and to dismiss its counterclaims.
In lieu of enforcement of the Stipulated Judgment, under the Settlement
Agreement Nations Air agreed to (i) purchase the PHC Aircraft for $3.3 million
payable no later than May 30, 1997; (ii) allow the GECAS Parties to retain all
Maintenance Reserves paid by Nations Air in respect of the PHC Aircraft and the
aircraft owned beneficially by the Partnership; (iii) grant FSB a security
interest in all of Nations Air's assets in order to secure Nations Air's
obligations under the Settlement Agreement; (iv) withdraw its motion to set
aside the dismissal with prejudice of its lawsuit against the GECAS Parties in
the Superior Court of Cobb County Georgia; and (v) release the GECAS Parties
from any Nations Air claims related to any transactions between the GECAS
Parties and Nations Air. Thus, contingent on Nations Air performing its
obligations under the Settlement Agreement, FSB agreed to execute a Satisfaction
of Judgment in this action, and the GECAS Parties agreed to release Nations Air
from any claims related to any transactions between the GECAS Parties and
Nations Air. Thus, Nations Air must either perform each of its obligations under
the Settlement Agreement or the GECAS Parties will proceed with enforcement of
the Stipulated Judgement. The GECAS Parties have not yet been able to determine
what portion of the approximately $1.88 million payment, if it is made, or
alternatively what portion of the $3.3 million portion, if it is made, together
with the amounts previously paid by Nations Air will be allocated to the
Partnership. The Partnership will recognize as revenue, its allocated portion of
the settlement payment from Nations Air when the payment is received.
11
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
As discussed in Item 3 of Part I of Polaris Aircraft Income Fund I's (the
Partnership) 1996 Annual Report to the Securities and Exchange Commission (SEC)
on Form 10-K (Form 10-K), there are a number of pending legal actions or
proceedings involving the Partnership. Except as described below, there have
been no material developments with respect to any such actions or proceedings
during the period covered by this report.
Nations Air Express, Inc. v. First Security Bank, National Association, et al. -
As previously reported, this action was dismissed with prejudice on February 10,
1997. Nations Air Express, Inc. moved to set aside the dismissal, but
subsequently withdrew its motion pursuant to a comprehensive Settlement
Agreement dated as of March 31, 1997 (discussed below) which was entered into by
Nations Air Express, Inc., First Security Bank, National Association, Polaris
Holding Company, the Partnership, Polaris Aircraft Income Fund II, Polaris
Investment Management Corporation and GE Capital Aviation Services.
First Security Bank, National Association, as Owner Trustee v. Nations Air
Express, Inc. - On March 31, 1997, Nations Air Express, Inc. (Nations Air)
entered into a comprehensive Settlement Agreement with First Security Bank,
National Association (FSB), Polaris Holding Company (PHC), the Partnership,
Polaris Aircraft Income Fund II, Polaris Investment Management Corporation
(General Partner) and GE Capital Aviation Services (GECAS) (collectively, the
"GECAS Parties"). Pursuant to the Settlement Agreement, Nations Air filed a
Stipulated Judgment whereby Nations Air agreed to return of the aircraft owned
by FSB as trustee for PHC (the "PHC Aircraft"), to pay approximately $1.88
million and to dismiss its counterclaims. In lieu of enforcement of the
Stipulated Judgment, under the Settlement Agreement Nations Air may (i) purchase
the PHC Aircraft for $3.3 million payable no later than May 30, 1997; (ii) allow
the GECAS Parties to retain all Maintenance Reserves paid by Nations Air in
respect of the PHC Aircraft and the aircraft owned beneficially by the
Partnership; (iii) grant FSB a security interest in all of Nations Air's assets
in order to secure Nations Air's obligations under the Settlement Agreement;
(iv) withdraw its motion to set aside the dismissal with prejudice of its
lawsuit against the GECAS Parties in the Superior Court of Cobb County Georgia;
and (v) release the GECAS Parties from any Nations Air claims related to any
transactions between the GECAS Parties and Nations Air. Thus, contingent on
Nations Air performing its obligations under the Settlement Agreement, FSB
agreed to execute a Satisfaction of Judgment in this action, and the GECAS
Parties agreed to release Nations Air from any claims related to any
transactions between the GECAS Parties and Nations Air. Thus, Nations Air must
either perform each of its obligations under the Settlement Agreement or the
GECAS Parties will proceed with enforcement of the Stipulated Judgement. The
GECAS Parties have not yet been able to determine what portion of the
approximately $1.88 million payment, if it is made, or alternatively what
portion of the $3.3 million portion, if it is made, will be allocated to the
Partnership.
Other Proceedings - Item 10 in Part III of the Partnership's 1996 Form 10-K
discusses certain actions which have been filed against Polaris Investment
Management Corporation and others in connection with the sale of interests in
the Partnership and the management of the Partnership. With the exception of
Novak, et al v. Polaris Holding Company, et al, (which has been dismissed, as
discussed in the Partnership's 1996 Form 10-K) where the Partnership was named
as a defendant for procedural purposes, the Partnership is not a party to these
actions. There have been no material developments with respect to any of the
actions described therein during the period covered by this report except:
In Re Prudential Securities Inc. Limited Partnership Litigation - On April 22,
1997, the Polaris defendants entered into a settlement agreement with plaintiffs
pursuant to which, among other things, the Polaris defendants agreed to pay
$22.5 million to a class of unitholders previously certified by the Court.
12
<PAGE>
On April 29, 1997, Judge Pollack signed an order preliminarily approving the
settlement. Under the terms of the order, (i) lead class counsel is required to
mail a notice to all class members on or before May 13, 1997 describing the
terms of the settlement; (ii) requests for exclusion from the class must be
mailed to the Claims Administrator no later than June 27, 1997; and (iii) a
hearing on the fairness of the settlement and other matters is scheduled to be
held before Judge Pollack on August 1, 1997.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
27. Financial Data Schedule.
b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
for which this report is filed.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
POLARIS AIRCRAFT INCOME FUND I
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner
May 8, 1997 By: /S/Marc A. Meiches
- ------------------------------ ---------------------------
Marc A. Meiches
Chief Financial Officer
(principal financial officer and
principal accounting officer of
Polaris Investment Management
Corporation, General Partner of
the Registrant)
14
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 10552840
<SECURITIES> 0
<RECEIVABLES> 819629
<ALLOWANCES> 411450
<INVENTORY> 0
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<PP&E> 10160969
<DEPRECIATION> 8219719
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<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9931959
<TOTAL-LIABILITY-AND-EQUITY> 12922384
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<TOTAL-REVENUES> 1105633
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<LOSS-PROVISION> 0
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