<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _____________________
_________________
For Quarter Ended September 30, 1997 Commission File No. 0-19134
American Income Partners V-C Limited Partnership
- ---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3077437
- ------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
88 Broad Street, Boston, MA 02110
- --------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 854-5800
---------------
- ------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court 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 No
-- --
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
INDEX
PAGE
---------
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Statement of Financial Position
at September 30, 1997 and December 31, 1996 3
Statement of Operations
for the three and nine months ended September 30, 1997 and 1996 4
Statement of Cash Flows
for the nine months ended September 30, 1997 and 1996 5
Notes to the Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II. OTHER INFORMATION:
Items 1-6 13
2
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
STATEMENT OF FINANCIAL POSITION
September 30, 1997 and December 31, 1996
(Unaudited)
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- -------------
ASSETS
- ------
Cash and cash equivalents $ 1,621,941 $ 1,584,360
Rents receivable, net of allowance for
doubtful accounts of $15,000 at
December 31, 1996 1,825 37,611
Accounts receivable-affiliate 187,430 76,774
Equipment at cost, net of accumulated
depreciation of $7,426,014 and
$7,893,295 at September 30, 1997 and
December 31, 1996, respectively 463,446 943,331
-------------- -------------
Total assets $ 2,274,642 2,642,076
-------------- -------------
-------------- -------------
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Notes payable $ -- $ 329,370
Accrued interest -- 2,609
Accrued liabilities 22,500 26,950
Accrued liabilities-affiliate 9,779 14,814
Deferred rental income 20,550 33,634
Cash distributions payable to partners 110,184 110,184
-------------- -------------
Total liabilities 163,013 517,561
-------------- -------------
Partners' capital (deficit):
General Partner (925,929) (925,284)
Limited Partnership Interests
(930,443 Units; initial purchase
price of $25 each) 3,037,558 3,049,799
-------------- -------------
Total partners' capital 2,111,629 2,124,515
-------------- -------------
Total liabilities and partners' capital $ 2,274,642 $ 2,642,076
-------------- -------------
-------------- -------------
The accompanying notes are an integral part
of these financial statements.
3
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
for the three and nine months ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------ ------------------------
1997 1996 1997 1996
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Income:
Lease revenue $ 240,513 $ 1,366,710 $ 818,458 $ 2,767,075
Interest income 20,418 47,046 58,532 86,032
Gain on sale of equipment 2,854 505,872 56,576 595,116
---------- ------------ ---------- ------------
Total income 263,785 1,919,628 933,566 3,448,223
---------- ------------ ---------- ------------
Expenses:
Depreciation 124,071 232,101 400,895 936,326
Interest expense -- 12,313 4,587 42,749
Equipment management fees
- affiliate 9,189 64,998 32,323 136,077
Operating expenses--affiliate 59,407 25,052 178,095 127,052
---------- ------------ ---------- ------------
Total expenses 192,667 334,464 615,900 1,242,204
---------- ------------ ---------- ------------
Net income $ 71,118 $ 1,585,164 $ 317,666 $ 2,206,019
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
Net income
per limited partnership unit $ 0.07 $ 1.62 $ 0.32 $ 2.25
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
Cash distributions declared
per limited partnership unit $ 0.11 $ 4.11 $ 0.34 $ 4.86
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
4
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
for the nine months ended September 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from (used in) operating activities:
Net income $ 317,666 $ 2,206,019
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 400,895 936,326
Gain on sale of equipment (56,576) (595,116)
Decrease in allowance for doubtful accounts (15,000) --
Changes in assets and liabilities
Decrease (increase) in:
rents receivable 50,786 116,615
accounts receivable--affiliate (110,656) (65,215)
Increase (decrease) in:
accrued interest (2,609) (2,721)
accrued liabilities (4,450) 8,872
accrued liabilities--affiliate (5,035) 1,957
deferred rental income 8,482 11,172
------------ ------------
Net cash from operating activities 583,503 2,617,909
------------ ------------
Cash flows from (used in) investing activities:
Purchase of equipment -- (65,700)
Proceeds from equipment sales 114,000 2,167,686
------------ ------------
Net cash from investing activities 114,000 2,101,986
------------ ------------
Cash flows used in financing activities:
Principal payments--notes payable (329,370) (276,981)
Distributions paid (330,552) (1,224,267)
------------ ------------
Net cash used in financing activities (659,922) (1,501,248)
------------ ------------
Net increase in cash and cash equivalents 37,581 3,218,647
Cash and cash equivalents at beginning of period 1,584,360 1,173,376
------------ ------------
Cash and cash equivalents at end of period $ 1,621,941 $ 4,392,023
------------ ------------
------------ ------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 7,196 $ 45,470
------------ ------------
------------ ------------
</TABLE>
Supplemental disclosure of non-cash activity:
The Partnership received $21,566 from a lessee prior to 1997,
representing an equipment purchase option. These funds were classified as
deferred rental income on the Statement of Financial Position at December 31,
1996. During the nine months ended September 30, 1997, the Partnership sold
the equipment and such funds were recognized as sales proceeds.
The Partnership sold its interest in a vessel on September 30, 1996. The
Partnership received net sale proceeds of $944,213, a portion of which was used
to repay the outstanding principal balance of notes payable related to this
vessel of $102,818. The remainder, $841,395, was deposited into an escrow
account and transferred to the Partnership on October 3, 1996.
See also Results of Operations.
The accompanying notes are an integral part
of these financial statements.
5
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
Notes to the Financial Statements
September 30, 1997
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The financial statements presented herein are prepared in conformity with
generally accepted accounting principles and the instructions for preparing
Form 10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and are unaudited. As such, these financial statements do not
include all information and footnote disclosures required under generally
accepted accounting principles for complete financial statements and,
accordingly, the accompanying financial statements should be read in
conjunction with the footnotes presented in the 1996 Annual Report. Except as
disclosed herein, there has been no material change to the information
presented in the footnotes to the 1996 Annual Report.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at September 30, 1997 and December 31, 1996 and results of
operations for the three and nine month periods ended September 30, 1997 and
1996 have been made and are reflected.
NOTE 2 - CASH
- -------------
At September 30, 1997, the Partnership had $1,515,000 invested in reverse
repurchase agreements secured by U.S. Treasury Bills or interests in U.S.
Government securities.
NOTE 3 - REVENUE RECOGNITION
- ----------------------------
Rents are payable to the Partnership monthly or quarterly and no
significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable.
Rents received prior to their due dates are deferred. Future minimum rents of
$577,091 are due as follows:
For the year ending September 30, 1998 $ 453,296
1999 76,323
2000 31,648
2001 15,824
---------
Total $ 577,091
---------
---------
The Partnership entered into a new 18-month lease agreement with
Transmeridian Airlines for its proportionate interest in a Boeing 727 Aircraft
at a base rent to the Partnership of $4,800 per month for 8 months and $4,200
per month for 10 months, effective April 30, 1997.
6
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
Notes to the Financial Statements
(Continued)
NOTE 4 - EQUIPMENT
- ------------------
The following is a summary of equipment owned by the Partnership at
September 30, 1997. In the opinion of the Equis Financial Group Limited
Partnership ("EFG"), the acquisition cost of the equipment did not exceed its
fair market value.
REMAINING
LEASE TERM EQUIPMENT
EQUIPMENT TYPE (MONTHS) AT COST
- ---------------- ------------- ------------
Construction & mining 0-39 $ 2,399,164
Aircraft 0-16 2,132,292
Communications 8 1,278,350
Retail store fixtures 3-15 1,144,958
Materials handling 0-18 717,124
Motor vehicles 17 212,027
Computers and peripherals -- 5,545
--------------
Total equipment cost 7,889,460
Accumulated depreciation (7,426,014)
--------------
Equipment, net of accumulated depreciation $ 463,446
--------------
--------------
At September 30, 1997, the Partnership's equipment portfolio included
equipment having a proportionate original cost of $2,132,292, representing
approximately 27% of total equipment cost.
At September 30, 1997, the Partnership was not holding any equipment not
subject to a lease and no equipment was held for sale or re-lease. The summary
above includes equipment being leased on a month-to-month basis.
NOTE 5 - RELATED PARTY TRANSACTIONS
- -----------------------------------
All operating expenses incurred by the Partnership are paid by EFG on behalf
of the Partnership and EFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the nine month
periods ended September 30, 1997 and 1996, which were paid or accrued by the
Partnership to EFG or its Affiliates, are as follows:
1997 1996
---------- --------
Equipment management fees $ 32,323 $ 136,077
Administrative charges 39,003 15,750
Reimbursable operating expenses
due to third parties 139,092 111,302
--------- -------
Total $ 210,418 $ 263,129
---------- ----------
---------- ----------
7
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
Notes to the Financial Statements
(Continued)
All rents and proceeds from the sale of equipment are paid directly to
either EFG or to a lender. EFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the
Partnership. At September 30, 1997, the Partnership was owed $187,430 by EFG
for such funds and the interest thereon. These funds were remitted to the
Partnership in October 1997.
NOTE 6 - LEGAL PROCEEDINGS
- --------------------------
On June 24, 1997, four plaintiffs (the "Plaintiffs") owning limited
partner units or beneficiary interests in eight investment programs sponsored
by EFG filed a lawsuit, as a derivative action, on behalf of the Partnership
and 27 other investment programs (collectively, the "Nominal Defendants") in
the Superior Court of the Commonwealth of Massachusetts for the County of
Suffolk against EFG and certain of EFG's affiliates, including the General
Partner of the Partnership and four other wholly-owned subsidiaries of EFG
which are general partner or managing trustee of one or more of the
investment programs, (collectively, the "Managing Defendants"), and certain
other entities and individuals that have control of the Managing Defendants
and the Nominal Defendants (the "Controlling Defendants"). The Plaintiffs
assert claims of breach of fiduciary duty, breach of contract, unjust
enrichment, and equitable relief and seek various remedies, including
compensatory and punitive damages to be determined at trial.
The General Partner and EFG are in the early stages of evaluating the
nature and extent of the claims asserted in this lawsuit and cannot predict
its outcome with any degree of certainty. However, based upon all of the
facts presently being considered by management, the General Partner and EFG
do not believe that any likely outcome will have a material adverse effect on
the Partnership. The General Partner, EFG and their affiliates intend to
vigorously defend against the lawsuit.
8
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ---------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
------------------------------------
Certain statements in this quarterly report that are not historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to a variety of
risks and uncertainties. There are a number of important factors that could
cause actual results to differ materially from those expressed in any
forward-looking statements made herein. These factors include, but are not
limited to, the ability of EFG to collect all rents due under the attendant
lease agreements and successfully remarket the Partnership's equipment upon
the expiration of such leases.
Three and nine months ended September 30, 1997 compared to the three and
- ------------------------------------------------------------------------
nine months ended September 30, 1996:
- -------------------------------------
OVERVIEW
- --------
The Partnership was organized in 1990 as a direct-participation equipment
leasing program to acquire a diversified portfolio of capital equipment
subject to lease agreements with third parties. The Partnership's stated
investment objectives and policies contemplated that the Partnership would
wind-up its operations within approximately seven years of its inception.
Accordingly, the General Partner is pursuing the remarketing of all of the
Partnership's remaining equipment. Currently, the General Partner anticipates
that it will wind-up the operations of the Partnership and make a liquidating
distribution to the Partners, net of any cash reserves which the General
Partner may consider appropriate, possibly by December 31, 1998.
RESULTS OF OPERATIONS
- ---------------------
For the three and nine months ended September 30, 1997, the Partnership
recognized lease revenue of $240,513 and $818,458, respectively, compared to
$1,366,710 and $2,767,075 for the same periods in 1996. The decrease in lease
revenue from 1996 to 1997 was expected and resulted principally from renewal
lease term expirations and the sale of equipment. Lease revenue during the
three and nine months ended September 30, 1996 included the receipt of
$872,305 of lease termination rents received in connection with the sale of
the Partnership's interest in two Boeing 727-Advanced aircraft in July 1996
(see discussion below). The Partnership also earns interest income from
temporary investments of rental receipts and equipment sales proceeds in
short-term instruments.
The Partnership's equipment portfolio includes certain assets in which
the Partnership holds a proportionate ownership interest. In such cases, the
remaining interests are owned by an affiliated equipment leasing program
sponsored by EFG. Proportionate equipment ownership enables the Partnership
to further diversify its equipment portfolio by participating in the
ownership of selected assets, thereby reducing the general levels of risk
which could result from a concentration in any single equipment type,
industry or lessee. The Partnership and each affiliate individually report,
in proportion to their respective ownership interests, their respective
shares of assets, liabilities, revenues, and expenses associated with the
equipment.
For the three and nine months ended September 30, 1997, the Partnership
sold equipment having net book values of $146 and $78,990, respectively, to
existing lessees and third parties. These sales resulted in net gains, for
financial statement purposes, of $2,854 and $56,576, respectively.
For the three and nine months ended September 30, 1996, the Partnership
sold equipment having a net book value of $2,478,497 and $2,516,783,
respectively, to existing lessees and third parties. These sales resulted in
net gains for financial statement purposes of $505,872 and $595,116,
respectively. These equipment sales
9
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
included the sale of the Partnership's interest in two Boeing 727-Advanced
jet aircraft with an original cost and net book value of $7,779,992 and
$1,238,414, respectively, which the Partnership sold to the existing lessee
in July 1996. In connection with this aircraft sale, the Partnership realized
sale proceeds of $2,019,055, which resulted in a net gain, for financial
statement purposes, of $780,641. This equipment was sold prior to the
expiration of the related lease term, resulting in the receipt by the
Partnership of lease termination rents, described above. In addition,
equipment sales in 1996 included the Partnership's interest in a vessel with
an original cost and net book value of $2,782,137 and $1,230,287,
respectively, which the Partnership sold to a third party in September 1996.
In connection with this sale, the Partnership realized net sale proceeds of
$944,213, which resulted in a net loss, for financial statement purposes, of
$286,074. This equipment was sold prior to the expiration of the related
lease term. This sale was effected in connection with a joint remarketing
effort involving 15 individual leasing programs sponsored by EFG, consisting
of the Partnership and 14 affiliates.
It cannot be determined whether future sales of equipment will result in a
net gain or a net loss to the Partnership, as such transactions will be
dependent upon the condition and type of equipment being sold and its
marketability at the time of sale. In addition, the amount of gain or loss
reported for financial statement purposes is partly a function of the amount of
accumulated depreciation associated with the equipment being sold.
The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological
advances, and many other events can converge to enhance or detract from asset
values at any given time. EFG attempts to monitor these changes in order to
identify opportunities which may be advantageous to the Partnership and which
will maximize total cash returns for each asset.
The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset,
together with its residual value. The latter consists of cash proceeds
realized upon the asset's sale in addition to all other cash receipts
obtained from renting the asset on a re-lease, renewal or month-to-month
basis. The Partnership classifies such residual rental payments as lease
revenue. Consequently, the amount of gain or loss reported in the financial
statements is not necessarily indicative of the total residual value the
Partnership achieved from leasing the equipment.
Depreciation expense for the three and nine months ended September 30,
1997 was $124,071 and $400,895, respectively, compared to $232,101 and
$936,326 for the same periods in 1996. For financial reporting purposes, to
the extent that an asset is held on primary lease term, the Partnership
depreciates the difference between (i) the cost of the asset and (ii) the
estimated residual value of the asset on a straight-line basis over such
term. For purposes of this policy, estimated residual values represent
estimates of equipment values at the date of primary lease expiration. To the
extent that an asset is held beyond its primary lease term, the Partnership
continues to depreciate the remaining net book value of the asset on a
straight-line basis over the asset's remaining economic life.
Interest expense was $4,587 or less than 1% of lease revenue for the nine
months ended September 30, 1997, compared to $12,313 and $42,749, or 1% and
1.5% of lease revenue for the three and nine months ended September 30, 1996,
respectively. The Partnership's notes payable were fully amortized during the
first quarter of 1997.
Management fees were 3.8% and 3.9% of lease revenue for the three and nine
month periods ended September 30, 1997, respectively, compared to 4.8% and 4.9%
of lease revenue for the same periods in 1996. Management fees during the nine
months ended September 30, 1996 included $7,731, resulting from an underaccrual
in 1995. Management fees are based on 5% of gross lease revenue generated by
operating leases and 2% of gross lease revenue generated by full payout leases.
10
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Operating expenses consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as
printing, distribution and remarketing expenses. In certain cases, equipment
storage or repairs and maintenance costs may be incurred in connection with
equipment being remarketed. Significant operating expenses were incurred
during the nine months ended September 30, 1997 and 1996 due to heavy
maintenance and airframe overhaul costs incurred or accrued in connection
with the Partnership's interests in two Boeing 727 aircraft. Certain of the
costs incurred in the first quarter of 1996 were subsequently reimbursed by
the former lessee of the related aircraft during the third quarter of 1996.
In 1996, the Partnership entered into a new 36-month lease agreement with
Sunworld International Airlines, Inc. to re-lease one of the aircraft. The
second aircraft was re-leased to Transmeridian Airlines beginning April 1997
at a base rent to the Partnership of $4,800 per month for 8 months and $4,200
per month for 10 months. The amount of future operating expenses cannot be
predicted with certainty; however, such expenses are usually higher during
the acquisition and liquidation phases of a partnership. Other fluctuations
typically occur in relation to the volume and timing of remarketing
activities.
LIQUIDITY AND CAPITAL RESOURCES AND DISCUSSION OF CASH FLOW
- -----------------------------------------------------------
The Partnership by its nature is a limited life entity which was
established for specific purposes described in the preceding "Overview". As
an equipment leasing program, the Partnership's principal operating
activities derive from asset rental transactions. Accordingly, the
Partnership's principal source of cash from operations is generally provided
by the collection of periodic rents. These cash inflows are used to satisfy
debt service obligations associated with leveraged leases, and to pay
management fees and operating costs. Operating activities generated net cash
inflows of $583,503 and $2,617,909 for the nine months ended September 30,
1997 and 1996, respectively. Net cash from operating activities in 1996
included lease termination rents of $872,305 received in connection with the
aircraft sale discussed above. Future renewal, re-lease and equipment sale
activities will cause a decline in the Partnership's lease revenue and
corresponding sources of operating cash. Overall, expenses associated with
rental activities, such as management fees, and net cash flow from operating
activities will also continue to decline as the Partnership experiences a
higher frequency of remarketing events.
Ultimately, the Partnership will dispose of all assets under lease. This
will occur principally through sale transactions whereby each asset will be
sold to the existing lessee or to a third party. Generally, this will occur
upon expiration of each asset's primary or renewal/re-lease term. In certain
instances, casualty or early termination events may result in the disposal of
an asset. Such circumstances are infrequent and usually result in the
collection of stipulated cash settlements pursuant to terms and conditions
contained in the underlying lease agreements.
Cash expended for equipment acquisitions and cash realized from asset
disposal transactions are reported under investing activities on the
accompanying Statement of Cash Flows. During the nine months ended September
30, 1997, the Partnership realized $114,000 in equipment sale proceeds
compared to $2,167,686 for the same period in 1996. In addition, the
Partnership received $21,566 from a lessee prior to 1997 representing an
equipment purchase option. These funds were classified as deferred rental
income on the Statement of Financial Position at December 31, 1996. During
the nine months ended September 30, 1997, the Partnership sold the equipment
and such funds were recognized as equipment sale proceeds. At September 30,
1996, cash in the amount of $841,395, representing the net sales proceeds
resulting from the Partnership's sale of its interest in a vessel less an
associated debt repayment, were escrowed and transferred to the Partnership
on October 3, 1996. Future inflows of cash from asset disposals will vary in
timing and amount and will be influenced by many factors including, but not
limited to, the frequency and timing of lease expirations, the type of
equipment being sold, its condition and age, and future market conditions.
During the nine months ended September 30, 1996, the
11
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Partnership expended $65,700 to replace certain aircraft engines to
facilitate the re-lease of an aircraft to Transmeridian Airlines, discussed
above. There were no equipment acquisitions during the same period in 1997.
The Partnership obtained long-term financing in connection with certain
equipment leases. The repayments of principal related to such indebtedness are
reported as a component of financing activities. The Partnership's notes payable
were fully amortized during the first quarter of 1997.
Cash distributions to the General Partner and Recognized Owners are
declared and generally paid within fifteen days following the end of each
calendar quarter. The payment of such distributions is presented as a
component of financing activities. For the nine months ended September 30,
1997, the Partnership declared total cash distributions of Distributable Cash
From Operations and Distributable Cash From Sales and Refinancings of
$330,552. In accordance with the Amended and Restated Agreement and
Certificate of Limited Partnership, the Recognized Owners were allocated 95%
of these distributions, or $314,024, and the General Partner was allocated
5%, or $16,528. The third quarter 1997 cash distribution was paid on October
14, 1997.
Cash distributions paid to the Recognized Owners consist of both a return
of and a return on capital. Cash distributions do not represent and are not
indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Partnership and will be
dependent upon the collection of all future contracted rents, the generation
of renewal and/or re-lease rents, and the residual value realized for each
asset at its disposal date. Future market conditions, technological changes,
the ability of EFG to manage and remarket the assets, and many other events
and circumstances, could enhance or detract from individual asset yields and
the collective performance of the Partnership's equipment portfolio.
The future liquidity of the Partnership will be influenced by the
foregoing and will be greatly dependent upon the collection of contractual
rents and the outcome of residual activities. The General Partner anticipates
that cash proceeds resulting from these sources will satisfy the
Partnership's future expense obligations. However, the amount of cash
available for distribution in future periods will fluctuate. Equipment lease
expirations and asset disposals will cause the Partnership's net cash from
operating activities to diminish over time; and equipment sale proceeds will
vary in amount and period of realization. In addition, the Partnership may be
required to incur asset refurbishment or upgrade costs in connection with
future remarketing activities. Accordingly, fluctuations in the level of
future quarterly cash distributions are anticipated.
12
<PAGE>
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Response: Refer to Note
6 to the financial statements herein.
Item 2. Changes in Securities Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of
Security Holders Response: None
Item 5. Other Information Response: None
Item 6(a). Exhibits Response: None
Item 6(b). Reports on Form 8-K Response: None
13
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on behalf of the registrant and in the
capacity and on the date indicated.
AMERICAN INCOME PARTNERS V-C LIMITED PARTNERSHIP
By: AFG Leasing IV Incorporated, a Massachusetts
corporation and the General Partner of the
Registrant.
By: /s/ Michael J. Butterfield
---------------------------
Michael J. Butterfield
Treasurer of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Accounting Officer)
Date: November 14, 1997
---------------------------
By: /s/ Gary M. Romano
---------------------------
Gary M. Romano
Clerk of AFG Leasing IV Incorporated
(Duly Authorized Officer and
Principal Financial Officer)
Date: November 14, 1997
---------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,621,941
<SECURITIES> 0
<RECEIVABLES> 189,255
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,811,196
<PP&E> 7,889,460
<DEPRECIATION> 7,426,014
<TOTAL-ASSETS> 2,274,642
<CURRENT-LIABILITIES> 163,013
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,111,629
<TOTAL-LIABILITY-AND-EQUITY> 2,274,642
<SALES> 0
<TOTAL-REVENUES> 933,566
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 611,313
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,587
<INCOME-PRETAX> 317,666
<INCOME-TAX> 0
<INCOME-CONTINUING> 317,666
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 317,666
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
