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 March 31, 1998
---------------------------
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 March 31, 1998 Commission File No. 0-18368
AIRFUND International Limited Partnership
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3037350
- ------------- ----------
(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
--- ---
AIRFUND International Limited Partnership
FORM 10-Q
INDEX
Page
----
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Statement of Financial Position
at March 31, 1998 and December 31, 1997 3
Statement of Operations
for the three months ended March 31, 1998 and 1997 4
Statement of Cash Flows
for the three months ended March 31, 1998 and 1997 5
Notes to the Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
PART II. OTHER INFORMATION:
Items 1 - 6 14
2
AIRFUND International Limited Partnership
STATEMENT OF FINANCIAL POSITION
March 31, 1998 and December 31, 1997
(Unaudited)
March 31, December 31,
1998 1997
------------ ------------
ASSETS
Cash and cash equivalents $ 2,785,700 $ 2,671,041
Rents receivable 106,223 121,626
Accounts receivable - affiliate 61,128 --
Equipment at cost, net of accumulated depreciation of
$11,543,276 and $10,923,789 at March 31, 1998
and December 31, 1997, respectively 16,452,259 17,071,746
------------ ------------
Total assets $ 19,405,310 $ 19,864,413
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Notes payable $ 8,305,463 $ 8,864,307
Accrued interest 106,971 98,052
Accrued liabilities 6,890 8,250
Accrued liabilities - affiliate 27,762 36,219
Deferred rental income 164,767 213,287
------------ ------------
Total liabilities 8,611,853 9,220,115
------------ ------------
Partners' capital (deficit):
General Partner (1,159,323) (1,166,781)
Limited Partnership Interests
(3,040,000 Units; initial purchase price of $25 each) 11,952,780 11,811,079
------------ ------------
Total partners' capital 10,793,457 10,644,298
------------ ------------
Total liabilities and partners' capital $ 19,405,310 $ 19,864,413
============ ============
The accompanying notes are an integral part
of these financial statements.
3
AIRFUND International Limited Partnership
STATEMENT OF OPERATIONS
for the three months ended March 31, 1998 and 1997
(Unaudited)
1998 1997
---------- ----------
Income:
Lease revenue $1,013,595 $ 836,298
Interest income 34,956 33,923
---------- ----------
Total income 1,048,551 870,221
---------- ----------
Expenses:
Depreciation 619,487 625,497
Interest expense 188,053 242,688
Equipment management fees - affiliate 50,680 41,815
Operating expenses - affiliate 41,172 66,214
---------- ----------
Total expenses 899,392 976,214
---------- ----------
Net income (loss) $ 149,159 $ (105,993)
========== ==========
Net income (loss)
per limited partnership unit $ 0.05 $ (0.03)
========== ==========
The accompanying notes are an integral part
of these financial statements.
4
AIRFUND International Limited Partnership
STATEMENT OF CASH FLOWS
for the three months ended March 31, 1998 and 1997
(Unaudited)
1998 1997
----------- -----------
Cash flows from (used in) operating activities:
Net income (loss) $ 149,159 $ (105,993)
Adjustments to reconcile net income (loss) to
net cash from (used in) operating activities:
Depreciation 619,487 625,497
Changes in assets and liabilities
Decrease (increase) in:
rents receivable 15,403 (43,601)
accounts receivable - affiliate (61,128) (18,286)
Increase (decrease) in:
accrued interest 8,919 45,019
accrued liabilities (1,360) (425,650)
accrued liabilities - affiliate (8,457) (38,923)
deferred rental income (48,520) (158,904)
----------- -----------
Net cash from (used in) operating activities 673,503 (120,841)
----------- -----------
Cash flows used in financing activities:
Principal payments - note payable (558,844) (436,123)
Distributions paid -- (1,000,000)
----------- -----------
Net cash used in financing activities (558,844) (1,436,123)
----------- -----------
Net increase (decrease) in cash and cash equivalents 114,659 (1,556,964)
Cash and cash equivalents at beginning of period 2,671,041 4,126,851
----------- -----------
Cash and cash equivalents at end of period $ 2,785,700 $ 2,569,887
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 179,134 $ 197,669
=========== ===========
The accompanying notes are an integral part
of these financial statements.
5
AIRFUND International Limited Partnership
Notes to the Financial Statements
March 31, 1998
(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 1997 Annual Report. Except as disclosed herein, there
has been no material change to the information presented in the footnotes to the
1997 Annual Report.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at March 31, 1998 and December 31, 1997 and results of operations for
the three month periods ended March 31, 1998 and 1997 have been made and are
reflected.
NOTE 2 - CASH
At March 31, 1998, the Partnership had $2,621,474 invested in federal agency
discount notes and 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 and quarterly and no significant
amounts are calculated on factors other than the passage of time. All leases are
accounted for as operating leases and are noncancellable. Rents received prior
to their due dates are deferred. Future minimum rents of $4,410,478 are due as
follows:
For the year ending March 31, 1999 $ 3,368,638
2000 1,041,840
-----------
Total $ 4,410,478
===========
NOTE 4 - EQUIPMENT
The following is a summary of equipment owned by the Partnership at March 31,
1998. Remaining Lease Term (Months), as used below, represents the number of
months remaining from March 31, 1998 under contracted lease terms. In the
opinion of Equis Financial Group Limited Partnership ("EFG") the acquisition
cost of the equipment did not exceed its fair market value.
6
AIRFUND International Limited Partnership
Notes to the Financial Statements
(Continued)
Remaining
Lease
Term Equipment
Equipment Type (Months) at Cost
-------------- -------- -------
Two McDonnell-Douglas MD-82 (Finnair) 13 $ 13,762,438
One Lockheed L-1011-50 (Aer Lease) 1 7,877,224
Three Boeing 737-2H4 (Southwest) 21 6,355,873
------------
Total equipment cost 27,995,535
Accumulated depreciation (11,543,276)
------------
Equipment, net of accumulated depreciation $ 16,452,259
============
The cost of each of the Partnership's aircraft represent proportionate
ownership interests. The remaining interests are owned by other affiliated
partnerships sponsored by EFG. All Partnerships individually report, in
proportion to their respective ownership interests, their respective shares of
assets, liabilities, revenues, and expenses associated with the aircraft.
See Note 8 regarding the sale of the Partnership's interest in the Lockheed
L-1011-50 aircraft subsequent to March 31, 1998.
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 three month
periods ended March 31, 1998 and 1997, which were paid or accrued by the
Partnership to EFG or its Affiliates, are as follows:
1998 1997
------- --------
Equipment management fees $50,680 $ 41,815
Administrative charges 13,251 7,095
Reimbursable operating expenses
due to third parties 27,921 59,119
------- --------
Total $91,852 $108,029
======= ========
All rents and the 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 March 31, 1998, the Partnership was owed $61,128 by EFG for such funds and
the interest thereon. These funds were remitted to the Partnership in April
1998.
7
AIRFUND International Limited Partnership
Notes to the Financial Statements
(Continued)
NOTE 6 - NOTES PAYABLE
Notes payable at March 31, 1998 consisted of installment notes payable to
banks of $8,305,463. All of the installment notes are non-recourse, with
interest rates ranging between 8.65% and 8.89% and are collateralized by the
equipment and assignment of the related lease payments. The installment notes
related to the aircraft on lease to Southwest Airlines, Inc. will be fully
amortized by noncancellable rents. The Partnership has a balloon payment
obligation at the expiration of the primary lease term related to the aircraft
on lease to Finnair OY of $4,671,150. The carrying amount of notes payable
approximates fair value at March 31, 1998.
The annual maturities of the installment notes payable are as follows:
For the year ending March 31, 1999 $ 2,828,770
2000 5,476,693
-----------
Total $ 8,305,463
===========
NOTE 7 - LEGAL PROCEEDINGS
On or about January 15, 1998, certain plaintiffs (the "Plaintiffs") filed a
class and derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the United States District Court
for the Southern District of Florida (the "Court") on behalf of a proposed class
of investors in 28 equipment leasing programs sponsored by EFG, including the
Partnership (collectively, the "Nominal Defendants"), against EFG and a number
of its affiliates, including the General Partner, as defendants (collectively,
the "Defendants"). Certain of the Plaintiffs, on or about June 24, 1997, had
filed an earlier derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the Superior Court of the
Commonwealth of Massachusetts on behalf of the Nominal Defendants against the
Defendants. Both actions are referred to herein collectively as the "Class
Action Lawsuit."
The Plaintiffs have asserted, among other things, claims against the
Defendants on behalf of the Nominal Defendants for violations of the Securities
Exchange Act of 1934, common law fraud, breach of contract, breach of fiduciary
duty, and violations of the partnership or trust agreements that govern each of
the Nominal Defendants. The Defendants have denied, and continue to deny, that
any of them have committed or threatened to commit any violations of law or
breached any fiduciary duties to the Plaintiffs or the Nominal Defendants.
On March 9, 1998, counsel for the Defendants and the Plaintiffs entered into
a Memorandum of Understanding setting forth the terms pursuant to which a
settlement of the Class Action Lawsuit is intended to be achieved and which,
among other things, is expected to reduce the burdens and expenses attendant to
continuing litigation. The Memorandum of Understanding represents a preliminary
step towards a comprehensive Stipulation of Settlement between the parties that
must be presented to and approved by the Court as a condition precedent to
effecting a settlement. The Memorandum of Understanding (i) prescribes a number
of conditions necessary to achieving a settlement, including providing the
partners (or beneficiaries, as applicable) of the Nominal Defendants with the
opportunity to vote on any settlement and (ii) contemplates various changes
that, if effected, would alter the future operations of the Nominal Defendants.
With respect to the Partnership and 10 affiliated partnerships (hereafter
referred to as the "Exchange Partnerships"), the Memorandum of Understanding
provides for the restructuring of their respective business operations into a
single successor company whose securities would be listed and traded on a
national stock exchange. The partners of the Exchange Partnerships would receive
both common stock in the new company and a cash distribution in exchange for
their existing partnership interests. Such a transaction would, among other
things, allow for the consolidation of the Partnership's operating expenses with
other similarly-organized equipment leasing programs. To the extent that the
parties agree upon a Stipulation of Settlement that is approved by the Court,
the complete terms thereof will be communicated to all of the partners (or
beneficiaries) of the Nominal Defendants to enable them to vote thereon.
8
AIRFUND International Limited Partnership
Notes to the Financial Statements
(Continued)
There can be no assurance that the parties will agree upon a Stipulation of
Settlement, or that it will be approved by the Court, or that the outcome of the
voting by the partners (or beneficiaries) of the Nominal Defendants, including
the Partnership, will result in a settlement finally being effected or in the
Partnership being included in any such settlement. The General Partner and its
affiliates, in consultation with counsel, concur that there is a reasonable
basis to believe that a Stipulation of Settlement will be agreed upon by the
parties and approved by the Court. In the absence of a Stipulation of Settlement
approved by the Court, the Defendants intend to defend vigorously against the
claims asserted in the Class Action Lawsuit. The General Partner and its
affiliates cannot predict with any degree of certainty the ultimate outcome of
such litigation.
NOTE 8 - SUBSEQUENT EVENT
On April 29, 1998, at the expiration of the aircraft's lease term, the
Partnership sold its proportional interest in a Lockheed L-1011-50 aircraft,
previously leased to Aer Lease Limited, to the lessee for net proceeds of
$846,300. The Partnership's interest in the aircraft had a net book of $657,843
at March 31, 1998.
9
AIRFUND International 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 of AIRFUND International Limited
Partnership (the "Partnership") 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
outcome of the Class Action Lawsuit described in Note 7 to the accompanying
financial statements, and the ability of Equis Financial Group Limited
Partnership (formerly American Finance Group) ("EFG") to collect all rents due
under the attendant lease agreements and successfully remarket the Partnership's
equipment upon the expiration of such leases.
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. The computer
programs of EFG were designed and written using four digits to define the
applicable year. As a result, EFG does not anticipate system failure or
miscalculations causing disruptions of operations. Based on recent assessments,
EFG determined that minimal modification of software is required so that its
network operating system will function properly with respect to dates in the
year 2000 and thereafter. EFG believes that with these modifications to the
existing operating system, the Year 2000 Issue will not pose significant
operational problems for its computer systems. EFG will utilize internal
resources to upgrade software for Year 2000 modifications and anticipates
completing the Year 2000 project by December 31, 1998, which is prior to any
anticipated impact on its operating system. The total cost of the Year 2000
project is expected to be insignificant and have no effect on the results of
operations of the Partnership.
Three months ended March 31, 1998 compared to the three months ended March 31,
1997:
Overview
As an equipment leasing partnership, the Partnership was organized to acquire
and lease a portfolio of commercial jet aircraft subject to lease agreements
with third parties. Upon its inception in 1989, the Partnership purchased three
used commercial jet aircraft and a proportionate interest in a fourth aircraft
which were leased by major carriers engaged in passenger transportation.
Initially, each aircraft generated rental revenues pursuant to primary-term
lease agreements. In 1991, one of the Partnership's original aircraft was sold
to a third party and a portion of the sale proceeds was reinvested in a
proportionate interest in another aircraft. Subsequently, all of the aircraft in
the Partnership's original portfolio have been re-leased, renewed, exchanged for
other aircraft or sold. At March 31, 1998, the Partnership owned a proportionate
interest in six aircraft, all of which were on lease. Upon expiration of the
lease agreements, each aircraft will be re-leased or sold depending on
prevailing market conditions and the assessment of such conditions by EFG to
obtain the most advantageous economic benefit. Presently, the Partnership is a
Nominal Defendant in a Class Action Lawsuit. The outcome of the Class Action
Lawsuit could alter the nature of the Partnership's organization and its future
business operations. See Note 7 to the accompanying financial statements.
Results of Operations
For the three months ended March 31, 1998, the Partnership recognized lease
revenue of $1,013,595 compared to $836,298 for the same period in 1997. The
increase in lease revenue from 1997 to 1998 resulted primarily from a 1-year
lease agreement which the Partnership entered into with Aer Lease Limited ("Aer
Lease") related to its interest in a Lockheed L-1011-50 aircraft. The lease
agreement provided for a base rent to the Partnership of $60,450 per month
beginning April 27, 1997. During the first quarter of 1997, this aircraft was
undergoing heavy maintenance and was not on lease. See Note 8 to the
accompanying financial statements regarding the sale of the Partnership's
interest in this aircraft subsequent to March 31, 1998.
The three Boeing 737-2H4 aircraft in which the Partnership holds a
proportionate interest are currently on lease to Southwest Airlines, Inc. These
leases are scheduled to expire on December 31, 1999 and provide lease
10
AIRFUND International Limited Partnership
FORM 10-Q
PART I. FINANCIAL INFORMATION
revenue of $104,184 per month to the Partnership. Additionally, the two
McDonnell-Douglas MD-82 aircraft, in which the Partnership holds a proportionate
interest, are currently on lease to Finnair OY. These leases are scheduled to
expire on April 28, 1999 and provide lease revenue of $529,608 per quarter to
the Partnership. In the future, lease revenue is scheduled to decline due to the
sale of the Aer Lease aircraft and the expiration of the lease terms related to
the Partnership's remaining aircraft.
At March 31, 1998, the Partnership held a proportionate ownership interest in
the Aer Lease, Southwest and Finnair aircraft (see Note 4 to the financial
statements). The remaining interests are owned by other affiliated partnerships
sponsored by EFG. All partnerships individually report, in proportion to their
respective ownership interests, their respective shares of assets, liabilities,
revenues and expenses associated with the aircraft.
The ultimate realization of residual value for aircraft is dependent upon
many factors, including EFG's ability to sell and re-lease the aircraft.
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 the airline industry in order to
identify opportunities which may be advantageous to the Partnership and which
will maximize total cash returns for each aircraft.
The total economic value realized upon final disposition of each aircraft is
comprised of all primary lease term revenue generated from that aircraft,
together with its residual value. The latter consists of cash proceeds realized
upon the aircraft's sale in addition to all other cash receipts obtained from
renting the aircraft on a re-lease, renewal or month-to-month basis.
Consequently, the amount of any future gain or loss reported in the financial
statements will not necessarily be indicative of the total residual value the
Partnership achieved from leasing the aircraft.
Interest income for the three month period ending March 31, 1998 was $34,956
compared to $33,923 for the same period in 1997. Interest income is typically
generated from temporary investments of rental receipts and equipment sale
proceeds in short-term instruments.
For the three months ending March 31, 1998 and 1997, the Partnership incurred
interest expense of $188,053 and $242,688, respectively. Interest expense in
future periods is expected to continue to decline as the principal balance of
notes payable is reduced through the application of rent receipts to outstanding
debt.
Management fees were 5% of lease revenue during each of the periods ended
March 31, 1998 and 1997, and will not change as a percentage of lease revenue in
future periods.
Operating expenses consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as insurance,
printing, distribution and remarketing expenses. Collectively, operating
expenses represented 4.1% of lease revenue during the three months ended March
31, 1998, compared to 7.9% for the same period in 1997. The decrease in
operating expenses from 1997 to 1998 reflects expenses incurred in 1997 in
connection with the refurbishment on the Partnership's interest in the L-1011-50
aircraft to meet the needs of Aer Lease. 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 will occur in relation to the volume and timing of aircraft
remarketing activities. Depreciation expense was $619,487 for the three months
ended March 31, 1998, compared to $625,497 for the same period in 1997.
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
11
AIRFUND International Limited Partnership
FORM 10-Q
PART I. FINANCIAL INFORMATION
from aircraft 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. Operating
activities generated a net cash inflow of $673,503 for the three months ended
March 31, 1998 compared to a net cash outflow of $120,841 for the same period in
1997. The cash outflow in 1997 reflected the expiration of the lease related to
the Partnership's interest in the L-1011-50 aircraft and related remarketing
costs. Overall, expenses associated with rental activities, such as management
fees, and net cash flow from operating activities decline as the Partnership
remarkets its aircraft. Conversely, the Partnership may incur increased costs to
insure the successful remarketing of these aircraft. Ultimately, the Partnership
will dispose of all aircraft under lease. This will occur principally through
sale transactions whereby each aircraft will be sold to the existing lessee or
to a third party. Generally, this will occur upon expiration of each aircraft's
primary or renewal/re-lease term.
The Partnership obtained long-term financing in connection with like-kind
exchange transactions involving the acquisition of the Southwest Aircraft and
the Finnair Aircraft. The corresponding note agreements are recourse only to the
specific equipment financed and to the minimum rental payments contracted to be
received during the debt amortization period. As rental payments are collected,
a portion or all of the rental payment will be used to repay principal and
interest. The Partnership also has a balloon payment obligation at the
expiration of the primary lease term related to the Finnair Aircraft of
$4,671,150.
Cash distributions paid to the Recognized Owners consist of both a return of
and a return on capital. To the extent that cash distributions consist of Cash
From Sales or Refinancings, substantially all of such cash distributions should
be viewed as a return of 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 aircraft
at its disposal date. Future market conditions, technological changes, the
ability of EFG to manage and remarket the aircraft, and many other events and
circumstances, could enhance or detract from individual asset yields and the
collective performance of the Partnership's aircraft portfolio.
Overall, the future liquidity of the Partnership will be greatly dependent
upon the collection of contractual rents and the outcome of residual activities,
as well as the outcome of the Class Action Lawsuit described in Note 7 to the
accompanying financial statements. The General Partner anticipates that cash
proceeds resulting from the collection of contractual rents and the outcome of
residual activities will satisfy the Partnership's future expense obligations.
However, the amount of cash available for distribution in future periods is
expected to fluctuate widely as the General Partner attempts to remarket the
Partnership's aircraft and possibly upgrade certain aircraft to meet the
standards of potential successor lessees. Accordingly, the General Partner
expects to suspend the declaration of quarterly cash distributions between the
periods corresponding to major remarketing events.
12
AIRFUND International Limited Partnership
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Response:
Refer to Note 7 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
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.
AIRFUND International Limited Partnership
By: AFG Aircraft Management Corporation, a
Massachusetts corporation and the General Partner of
the Registrant.
By: /s/ Michael J. Butterfield
-------------------------------------------
Michael J. Butterfield
Treasurer of AFG Aircraft Management Corporation
(Duly Authorized Officer and
Principal Accounting Officer)
Date: May 15, 1998
-------------------------------------------
By: /s/ Gary Romano
-------------------------------------------
Gary M. Romano
Clerk of AFG Aircraft Management Corporation
(Duly Authorized Officer and
Principal Financial Officer)
Date: May 15, 1998
-------------------------------------------
14