<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X X ] 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. 33-35148
American Income Fund I-A, a Massachusetts Limited Partnership
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3097216
- --------------------------------------- --------------------
(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 FUND I-A,
a Massachusetts Limited Partnership
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
---------
<S> <C>
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
</TABLE>
2
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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.................. $1,730,711 $1,721,388
Rents receivable........................... 18,182 27,902
Accounts receivable--affiliate............. 73,198 61,144
Equipment at cost, net of accumulated
depreciation of $3,776,226 and $3,836,846
at September 30, 1997 and December 31,
1996, respectively....................... 309,661 530,926
------------ -------------
Total assets........................... $2,131,752 $2,341,360
------------ -------------
------------ -------------
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Accrued liabilities........................ $ 22,500 $ 30,870
Accrued liabilities--affiliate............. 7,728 22,945
Deferred rental income..................... 6,445 6,445
Cash distributions payable to partners..... 75,335 75,335
------------ -------------
Total liabilities...................... 112,008 135,595
------------ -------------
Partners' capital (deficit):
General Partner........................ (215,898) (206,597)
Limited Partnership Interests
(286,274 Units; initial purchase price
of $25 each)........................... 2,235,642 2,412,362
------------ -------------
Total partners' capital.............. 2,019,744 2,205,765
------------ -------------
Total liabilities and partners'
capital........................... $2,131,752 $2,341,360
------------ -------------
------------ -------------
The accompanying notes are an integral part
of these financial statements.
3
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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................................................. $ 142,835 $ 215,916 $ 394,812 $ 492,135
Interest income............................................... 20,539 20,550 60,802 59,687
Gain on sale of equipment..................................... -- 45,985 10,578 67,229
---------- ---------- ---------- ----------
Total income............................................... 163,374 282,451 466,192 619,051
---------- ---------- ---------- ----------
Expenses:
Depreciation.................................................. 68,134 79,029 210,467 254,156
Equipment management fees--affiliate.......................... 6,969 10,515 19,449 26,077
Operating expenses--affiliate................................. 53,607 6,923 196,292 150,481
---------- ---------- ---------- ----------
Total expenses............................................. 128,710 96,467 426,208 430,714
---------- ---------- ---------- ----------
Net income....................................................... $ 34,664 $ 185,984 $ 39,984 $ 188,337
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per limited partnership unit.......................... $ 0.12 $ 0.62 $ 0.13 $ 0.63
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Cash distributions declared per limited partnership unit......... $ 0.25 $ 0.38 $ 0.75 $ 1.13
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
4
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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........................................................................... $ 39,984 $ 188,337
Adjustments to reconcile net income to net cash from operating activities:
Depreciation...................................................................... 210,467 254,156
Gain on sale of equipment......................................................... (10,578) (67,229)
Changes in assets and liabilities
Decrease (increase) in:
rents receivable............................................................... 9,720 45,076
accounts receivable--affiliate................................................. (12,054) (58,600)
Increase (decrease) in:
accrued interest............................................................... -- (135)
accrued liabilities............................................................ (8,370) 14,962
accrued liabilities--affiliate................................................. (15,217) (3,543)
deferred rental income......................................................... -- 5,845
------------ ------------
Net cash from operating activities.......................................... 213,952 378,869
------------ ------------
Cash flows from (used in) investing activities:
Purchase of equipment.............................................................. -- (127,020)
Proceeds from equipment sales...................................................... 21,376 193,960
------------ ------------
Net cash from investing activities........................................... 21,376 66,940
------------ ------------
Cash flows used in financing activities:
Principal payments--notes payable.................................................. -- (5,186)
Distributions paid................................................................. (226,005) (339,009)
------------ ------------
Net cash used in financing activities........................................ (226,005) (344,195)
------------ ------------
Net increase in cash and cash equivalents............................................. 9,323 101,614
Cash and cash equivalents at beginning of period...................................... 1,721,388 1,595,008
------------ ------------
Cash and cash equivalents at end of period............................................ $ 1,730,711 $ 1,696,622
------------ ------------
------------ ------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest........................................... $ -- $ 135
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
5
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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 $1,625,000 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
$292,805 are due as follows:
For the year ending September 30, 1998......... $ 258,276
1999......... 34,529
-----------
Total........ $ 292,805
-----------
-----------
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 $9,280 per month for 8 months
and $8,120 per month for 10 months, effective April 30, 1997.
6
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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 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
- ----------------- ----------- ------------
Aircraft....................... 0-16 $ 2,288,254
Materials handling............. 0-17 1,215,497
Communications................. 0 383,676
Computers & peripherals........ 0-15 137,424
Tractors & heavy duty trucks... 0 61,036
------------
Total equipment cost 4,085,887
Accumulated depreciation (3,776,226)
------------
Equipment, net of accumulated depreciation $ 309,661
------------
------------
At September 30, 1997, the Partnership's equipment portfolio included
equipment having a proportionate original cost of $2,415,273, representing
approximately 59% of total equipment cost.
The summary above includes equipment held for sale or re-lease which had
been fully depreciated with a cost of approximately $1,700 at September 30,
1997. The General Partner is actively seeking the sale or re-lease of all
equipment not on lease. In addition, the summary above also 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:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Equipment management fees.............................. $ 19,449 $ 26,077
Administrative charges................................. 39,633 9,414
Reimbursable operating expenses due to third parties... 156,659 141,067
---------- ----------
Total......................................... $ 215,741 $ 176,558
---------- ----------
---------- ----------
</TABLE>
7
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts 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 $73,198 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 FUND I-A,
a Massachusetts 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. The
value of the Partnership's equipment portfolio decreases over time due to
depreciation resulting from age and usage of the equipment, as well as
technological changes and other market factors. In addition, the Partnership
does not replace equipment as it is sold; therefore, its aggregate investment
value in equipment declines from asset disposals occurring in the normal
course of business. As a result of the Partnership's age and a declining
equipment portfolio, the General Partner is evaluating a variety of
transactions that will reduce the Partnership's prospective costs to operate
as a publicly registered limited partnership and, therefore, enhance overall
cash distributions to the limited partners. Such a transaction may involve
the sale of the Partnership's remaining equipment or a transaction that would
allow for the consolidation of the Partnership's expenses with other
similarly-organized equipment leasing programs.
RESULTS OF OPERATIONS
- ---------------------
For the three and nine months ended September 30, 1997, the Partnership
recognized lease revenue of $142,835 and $394,812, respectively, compared to
$215,916 and $492,135 for the same periods in 1996. The decrease in lease
revenue from 1996 to 1997 was expected and resulted principally from lease
term expirations and the sale of equipment. Lease revenue during the three
and nine months ended September 30, 1996 included the receipt of $64,140 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
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 EFG or 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.
9
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts Limited Partnership
FORM 10-Q
PART I. FINANCIAL INFORMATION
For the nine months ended September 30, 1997, the Partnership sold
equipment having a net book value of $10,798 to existing lessees and third
parties. These sales resulted in a net gain, for financial statement
purposes, of $10,578. There were no equipment sales during the three months
ended September 30, 1997.
For the three and nine months ended September 30, 1996, the Partnership
sold equipment having a net book value of $111,250 and $126,731,
respectively, to existing lessees and third parties. These sales resulted in
net gains for financial statement purposes of $45,985 and $67,229,
respectively. These equipment sales included the sale of the Partnership's
interest in two Boeing 727-Advanced jet aircraft with an original cost and
net book value of $557,072 and $106,544, respectively, which the Partnership
sold to the existing lessee in July 1996. In connection with these sales, the
Partnership realized sale proceeds of $148,460, which resulted in a net gain,
for financial statement purposes, of $41,916. 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.
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 $68,134 and $210,467, respectively, compared to $79,029 and $254,156
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.
Management fees were approximately 4.9% of lease revenue for each of the
three and nine months ended September 30, 1997, respectively, compared to
4.9% and 5.3% of lease revenue for the same periods in 1996. Management fees
during the nine months ended September 30, 1996 included $2,088 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.
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
10
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts Limited Partnership
FORM 10-Q
PART I. FINANCIAL INFORMATION
repairs and maintenance costs may be incurred in connection with equipment
being remarketed. Significant operating expenses were incurred in 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 at a base rent to the Partnership of $7,540 per month. In April
1997, the Partnership entered into a new 18-month lease agreement with
Transmeridian Airlines to re-lease the second aircraft at a base rent to the
Partnership of $9,280 per month for 8 months and $8,120 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 partnership. Other fluctuations typically occur in
relation to the volume and timing of remarketing activities.
LIQUIDITY AND CAPITAL RESOURCES AND DISCUSSION OF CASH FLOWS
- ------------------------------------------------------------
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 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. For the nine months ended September 30, 1997,
operating activities generated net cash inflows of $213,952 compared to
$378,869 for the same period in 1996. Net cash from operating activities in
1996 included lease termination rents of $64,140 received in connection with
the aircraft sale discussed above. Future renewal, re-lease and equipment
sale activities will continue to 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 $21,376 in equipment sale proceeds
compared to $193,960 for the same period in 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 Partnership expended $127,020 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 1996.
11
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts Limited Partnership
FORM 10-Q
PART I. FINANCIAL INFORMATION
Cash distributions to the General and Limited Partners 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 $226,005. In
accordance with the Amended and Restated Agreement and Certificate of Limited
Partnership, the Limited Partners were allocated 95% of these distributions,
or $214,705, and the General Partner was allocated 5%, or $11,300. The third
quarter 1997 cash distribution was paid on October 14, 1997.
Cash distributions paid to the Limited Partners 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 contracted
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
quarterly cash distributions will occur during the life of the Partnership.
12
<PAGE>
AMERICAN INCOME FUND I-A,
a Massachusetts Limited Partnership
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Response:
Refer to Note 6 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 FUND I-A, A Massachusetts Limited Partnership
By: AFG Leasing VI Incorporated, a Massachusetts
corporation and the General Partner of the
Registrant.
By: /s/ Michael J. Butterfield
--------------------------------------------
Michael J. Butterfield
Treasurer of AFG Leasing VI Incorporated
(Duly Authorized Officer and
Principal Accounting Officer)
Date: November 14, 1997
--------------------------------------------
By: /s/ Gary M. Romano
--------------------------------------------
Gary M. Romano
Clerk of AFG Leasing VI Incorporated
(Duly Authorized Officer and
Principal Financial Officer)
Date: November 14, 1997
--------------------------------------------
14
<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> 1,730,711
<SECURITIES> 0
<RECEIVABLES> 91,380
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,822,091
<PP&E> 4,085,887
<DEPRECIATION> 3,776,226
<TOTAL-ASSETS> 2,131,752
<CURRENT-LIABILITIES> 112,008
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,019,744
<TOTAL-LIABILITY-AND-EQUITY> 2,131,752
<SALES> 0
<TOTAL-REVENUES> 466,192
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 426,208
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 39,984
<INCOME-TAX> 0
<INCOME-CONTINUING> 39,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,984
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
