UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
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Commission File No. 2-91762
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POLARIS AIRCRAFT INCOME FUND I
State of Organization: California
IRS Employer Identification No. 94-2938977
201 High Ridge Road, Stamford, Connecticut 06927
Telephone - (203) 357-3776
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
This document consists of 18 pages.
POLARIS AIRCRAFT INCOME FUND I
FORM 10-Q - For the Quarterly Period Ended September 30, 2002
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
a) Balance Sheets - September 30, 2002 and
December 31, 2001...........................................3
b) Statements of Operations - Three and Nine Months
Ended September 30, 2002 and 2001...........................4
c) Statements of Changes in Partners' Capital
- Year Ended December 31, 2001
and Nine Months Ended September 30, 2002....................5
d) Statements of Cash Flows - Nine Months
Ended September 30, 2002 and 2001...........................6
e) Notes to Financial Statements...............................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..........10
Item 4. Controls and Procedures................................11
Part II. Other Information
Item 1. Legal Proceedings......................................12
Item 6. Exhibits and Reports on Form 8-K.......................13
Signature...........................................................14
Certifications Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.........................................................15
2
Part 1. Financial Information
-----------------------------
Item 1. Financial Statements
POLARIS AIRCRAFT INCOME FUND I
BALANCE SHEETS
September 30, December 31,
2002 2001
---- ----
(Unaudited)
-----------
ASSETS:
CASH AND CASH EQUIVALENTS $1,146,779 $2,445,482
---------- ----------
Total Assets $1,146,779 $2,445,482
========== ==========
LIABILITIES AND PARTNERS' CAPITAL:
PAYABLE TO AFFILIATES $ 21,930 $ 38,214
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 354,184 368,821
---------- ----------
Total Liabilities 376,114 407,035
---------- ----------
PARTNERS' CAPITAL:
General Partner 33,764 134,953
Limited Partners, 168,707 units (168,729 in
2001) issued and outstanding 736,901 1,903,494
---------- ----------
Total Partners' Capital 770,665 2,038,447
---------- ----------
Total Liabilities and Partners' Capital $1,146,779 $2,445,482
========== ==========
The accompanying notes are an integral part of these statements.
3
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
---- ---- ---- ----
REVENUES:
Gain on Sale of Aircraft
Engines $ -- $ 41,250 $ -- $ 41,250
Other income - Maintenance
reserves -- -- -- 631,316
Interest 4,911 19,389 16,663 60,008
Lessee settlements (Notes 5
& 6) 453 -- 453 85,667
--------- --------- --------- ---------
Total Revenues 5,364 60,639 17,116 818,241
--------- --------- --------- ---------
EXPENSES:
Operating expenses -- 1,600 -- 5,900
Administration and other 28,935 36,015 113,169 102,137
--------- --------- --------- ---------
Total Expenses 28,935 37,615 113,169 108,037
--------- --------- --------- ---------
NET INCOME (LOSS) $ (23,571) $ 23,024 $ (96,053) $ 710,204
========= ========= ========= =========
NET INCOME ALLOCATED
TO THE GENERAL PARTNER $ 5,075 $ 230 $ 15,984 $ 91,459
========= ========= ========= =========
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ (28,646) $ 22,794 $(112,037) $ 618,745
========= ========= ========= =========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $ (0.17) $ 0.14 $ (0.66) $ 3.67
========= ========= ========= =========
The accompanying notes are an integral part of these statements.
4
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
Year Ended December 31, 2001 and
Nine Months Ended September 30, 2002
------------------------------------
General Limited
Partner Partners Total
------- -------- -----
Balance, December 31, 2000 $ 137,474 $ 2,152,316 $ 2,289,790
Net income 91,217 594,824 686,041
Cash distributions to partners (93,738) (843,646) (937,384)
----------- ----------- -----------
Balance, December 31, 2001 134,953 1,903,494 2,038,447
Net income (loss) (Unaudited) 15,984 (112,037) (96,053)
Cash distribution to partners
(Unaudited) (117,173) (1,054,556) (1,171,729)
----------- ----------- -----------
Balance, September 30, 2002
(Unaudited) $ 33,764 $ 736,901 $ 770,665
=========== =========== ===========
The accompanying notes are an integral part of these statements.
5
POLARIS AIRCRAFT INCOME FUND I
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
-------------------------------
2002 2001
---- ----
OPERATING ACTIVITIES:
Net income (Loss) $ (96,053) $ 710,204
Adjustments to reconcile net income (loss) to
net cash (used in) provided by operating
activities:
Gain on Sale of Aircraft Engines -- (41,250)
Changes in operating assets and liabilities:
Decrease in other assets -- 6,297
Decrease in payable to affiliates (16,284) (44,175)
Increase (decrease) in accounts payable
and accrued liabilities (14,637) 3,973
Decrease in maintenance reserves -- (631,316)
----------- -----------
Net cash (used in) provided by
operating activities (126,974) 3,733
----------- -----------
INVESTING ACTIVITIES:
Proceeds from Sale of Aircraft Engines -- 900,000
----------- -----------
Net cash provided by investing
activities -- 900,000
----------- -----------
FINANCING ACTIVITIES:
Cash distributions to partners (1,171,729) (937,383)
----------- -----------
Net cash used in financing activities (1,171,729) (937,383)
----------- -----------
CHANGES IN CASH AND CASH
EQUIVALENTS (1,298,703) (33,650)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 2,445,482 2,469,034
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,146,779 $ 2,435,384
=========== ===========
The accompanying notes are an integral part of these statements.
6
POLARIS AIRCRAFT INCOME FUND I
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Organization and the Partnership
Polaris Aircraft Income Fund I (the "Partnership") was formed on June 27, 1984
for the purpose of acquiring and leasing aircraft. It will terminate no later
than December 2010. Upon organization, both the General Partner and the initial
Limited Partner contributed $500. The offering of Limited Partnership units
terminated on December 31, 1985, at which time the Partnership had sold 168,729
units of $500, representing $84,364,500. All unit holders were admitted to the
Partnership on or before January 1, 1986. During the nine months ended September
30, 2002, 22 units were abandoned. At September 30, 2002, there were 168,707
units outstanding.
Polaris Investment Management Corporation ("PIMC"), the sole General Partner of
the Partnership (the "General Partner"), supervises the day-to-day operations of
the Partnership. PIMC is a wholly-owned subsidiary of Polaris Aircraft Leasing
Corporation ("PALC"). Polaris Holding Company ("PHC") is the parent company of
PALC. General Electric Capital Corporation ("GE Capital"), an affiliate of
General Electric Company, owns 100% of PHC's outstanding common stock. PIMC has
entered into a services agreement dated as of July 1, 1994 with GE Capital
Aviation Services, Inc. ("GECAS"). Amounts paid and allocations to related
parties are described in Notes 3 & 4.
At September 30, 2002, the Partnership owned certain inventoried aircraft parts,
which includes one engine, out of its original portfolio of eleven aircraft. The
remaining inventory of spare parts, including one engine, has been made
available for sale such that the Partnership plans to liquidate all its assets
in an orderly manner, make a final distribution, and terminate the Partnership
thereafter; however, it is uncertain when this liquidation will occur because
the General Partner is unable to predict when all of the Partnership's remaining
assets will be sold. These spare parts are carried at a book value of zero as of
September 30, 2002.
2. Accounting Principles and Policies
In the opinion of management, the financial statements presented herein include
all adjustments, consisting only of normal recurring items, necessary to
summarize fairly the Partnership's balance sheets, results of operations, and
cash flows. The financial statements have been prepared in accordance with the
instructions of the Quarterly Report to the Securities and Exchange Commission
("SEC") Form 10-Q and do not include all of the information and note disclosures
required by accounting principles generally accepted in the United States
("GAAP"). These statements should be read in conjunction with the financial
statements and notes thereto for the years ended December 31, 2001, 2000, and
1999 included in the Partnership's 2001 Annual Report to the SEC on Form 10-K.
3. Related Parties
Under the Limited Partnership Agreement, the Partnership paid or agreed to pay
the following amounts for the current quarter to the General Partner, PIMC, in
connection with services rendered or payments made on behalf of the Partnership:
7
Payments made during the
Three Months Ended Payable at
September 30, 2002 September 30, 2002
------------------ ------------------
Out-of-Pocket Operating Expense
Reimbursement $10,448 $ --
Out-of-Pocket Administrative Expense
Reimbursement 20,331 21,930
------- -------
$30,779 $21,930
======= =======
4. Partners' Capital
The Partnership Agreement (the "Agreement") stipulates different methods by
which revenue, income and loss from operations and gain or loss on the sale of
aircraft are to be allocated to the General Partner and the limited partners.
Such allocations are made using income or loss calculated under GAAP for book
purposes, which varies from income or loss calculated for tax purposes.
Cash available for distributions, including the proceeds from the sale of
aircraft, is distributed 10% to the General Partner and 90% to the limited
partners.
The different methods of allocating items of income, loss and cash available for
distribution combined with the calculation of items of income and loss for book
and tax purposes result in book basis capital accounts that may vary
significantly from tax basis capital accounts. The ultimate liquidation and
distribution of remaining cash will be based on the tax basis capital accounts
following liquidation, in accordance with the Agreement.
5. CanAir Bankruptcy Settlement
On June 27, 2001, the Partnership received $8,897 in connection with the CanAir
Bankruptcy Settlement, which is comprised of amounts received for rents,
maintenance reserve obligations and accrued interest. Final payments relating to
this matter amounting to $453 were received during the quarter ended September
30, 2002.
6. Braniff Bankruptcy Settlement
On January 16, 2001, Braniff's bankrupt estate made a $110,890 payment in
respect of the unsecured claims of the Partnership and other affiliates of PIMC,
of which $76,770 was allocated to the Partnership based on its pro rata share of
the total claims.
7. Engine Lease Expiration
The lease for the three JT8D-9A engines to Royal Aviation, Inc. and Royal Cargo,
Inc. (collectively, "Royal Aviation") expired on August 31, 2000. The engines
were returned on September 7, 2000 and a security deposit of $45,000 was
refunded to Royal Aviation on November 21, 2000. The Partnership ceased
8
depreciating these assets and reported these assets at the lower of carrying
amount or fair value less cost to sell as of December 31, 2000. Due to the fact
that the Partnership decided to sell the engines in an as-is-where-is condition
in June 2001, the net maintenance reserve balance of $631,316 was taken into
income during the quarter ended June 30, 2001. The Partnership subsequently sold
the engines to Aeroturbine, Inc. on an as-is-where-is basis in July 2001, as
discussed below.
8. Sale of Engines
On July 19, 2001 the Partnership sold the three remaining JT8D-9A engines to
Aeroturbine, Inc., on an as-is-where-is basis for $900,000. The Partnership
received the proceeds for these engines in the third quarter of 2001. This sale
resulted in a gain of $41,250.
9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Business Overview
At September 30, 2002, Polaris Aircraft Income Fund I (the "Partnership") owned
certain inventoried aircraft parts, which includes one engine, out of its
original portfolio of eleven aircraft. The remaining inventory of spare parts,
including one engine, has been made available for sale such that the Partnership
plans to liquidate all its assets in an orderly manner, make a final
distribution, and terminate the Partnership thereafter; however, it is uncertain
when this liquidation will occur because the General Partner is unable to
predict when all of the Partnership's remaining assets will be sold. These spare
parts are carried at a book value of zero as of September 30, 2002.
Partnership Operations
The Partnership recorded net loss of $23,571, or $0.17 per limited partnership
unit, for the three months ended September 30, 2002, compared to net income of
$23,024, or $0.14 per limited partnership unit, for the same period in 2001. The
Partnership recorded net loss of $96,053, or $0.66 per limited partnership unit,
for the nine months ended September 30, 2002, compared to net income of
$710,204, or $3.67 per limited partnership unit, for the same period in 2001.
For the nine months ended September 30, 2002 the decline in operating results
was primarily due to the winding down of operations for the Partnership, as the
remaining spare parts as of December 31, 2001 have not been sold as of September
30, 2002.
During the third quarter of 2001, the Partnership sold three engines and
recognized a gain of $41,250. There were no sales of aircraft engines recognized
during 2002.
Other income decreased for the nine months ended September 30, 2002 as compared
to the same period in 2001 primarily due to maintenance reserves that were
recognized as income during the second quarter of 2001. During the second
quarter of 2001, the Partnership held engines that were marketed for sale on an
as-is-where-is basis and there was no further need to hold the maintenance
reserves. As a result, the maintenance reserves as of that time were recognized
as income during the second quarter of 2001. There was no similar income in
2002.
Interest income decreased during the three and nine months ended September 30,
2002, as compared to the same periods in 2001 primarily due to lower interest
rates and a decrease in the average cash balances, primarily due to
distributions.
Lessee settlements decreased during the nine months ended September 30, 2002, as
compared to the same period in 2001, primarily due to the receipt of $76,770 on
January 16, 2001 related to the Braniff bankruptcy and $8,897 on June 27, 2001
related to the CanAir bankruptcy. During the period ended September 30, 2002,
$453 was received related to the CanAir bankruptcy.
Operating expenses decreased during the three and nine months ended September
30, 2002 as compared to the same periods in 2001, primarily due to expenses
incurred in the second quarter of 2001 in connection with marketing the engines
for sale.
Administrative and other expenses decreased during the three months ended
September 30, 2002, as compared to the same period in 2001, primarily due to a
decrease in tax accounting fees and a decrease in printing and postage expenses.
10
Administrative and other expenses increased during the nine months ended
September 30, 2002, as compared to the same period in 2001, primarily due to an
increase in legal fees during 2002 primarily incurred to comply with an SEC
prompted court order related to transfers of units to entities owned by an
investor.
Liquidity and Cash Distributions
Liquidity - PIMC, the General Partner, has decided that the Partnership should
maintain cash reserves as a prudent measure to ensure that the Partnership has
available funds for winding up the affairs of the Partnership and for other
contingencies. The Partnership's cash reserves will be monitored and may be
revised from time to time as further information becomes available in the
future.
Cash Distributions - Cash distributions to limited partners during the nine
months ended September 30, 2002 and 2001 were $1,054,556 and $843,646,
respectively. Cash distributions per Limited Partnership unit for the nine
months ended September 30, 2002 and 2001 were $6.25, and $5.00 respectively. The
timing and amount of the final cash distribution to partners is not yet known
and will depend upon the Partnership's future cash requirements and the timing
of the sale and amount of proceeds from the sale of its remaining inventory of
spare parts including one engine.
Item 4. Controls and Procedures
PIMC management, including the Chief Executive Officer and Chief Financial
Officer, have conducted an evaluation of the effectiveness of disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the disclosure controls and procedures are effective in ensuring that all
material information required to be filed in this quarterly report has been made
known to them in a timely fashion. There have been no significant changes in
internal controls, or in factors that could significantly affect internal
controls, subsequent to the date the Chief Executive Officer and Chief Financial
Officer completed their evaluation.
11
Part II. Other Information
--------------------------
Item 1. Legal Proceedings
As discussed in Item 3 of Part I of Polaris Aircraft Income Fund I's (the
"Partnership") 2001 Annual Report to the Securities and Exchange Commission
("SEC") on Form 10-K ("Form 10-K") and in Item 1 of Part II of the Partnership's
Quarterly Report to the SEC on Form 10-Q ("Form 10-Q") for the period ended June
30, 2002, there are several pending legal actions or proceedings involving the
Partnership. Except as described below, there have been no material developments
with respect to any such actions or proceedings during the period covered by
this report.
CanAir Cargo Ltd. ("CanAir") Order under the Companies' Creditors Arrangement
Act of Canada - On March 20, 2002, the receiver appointed by the Ontario Court
of Justice on behalf of CanAir's creditors issued a check for 3,250 Canadian
Dollars (approximately $2,053 U.S. Dollars) to the GECAS Parties (GE Capital
Aviation Services, Inc., as agent for Polaris Holding Company, General Electric
Capital Leasing Canada, Inc. and the Partnership), and of this amount, 277
Canadian Dollars (approximately $174 U.S. Dollars) was paid to the Partnership
on September 26, 2002. Additionally, the GECAS Parties received a final payment
from the receiver on May 7, 2002 in the amount of 5,188 Canadian Dollars
(approximately $3,278 U.S. Dollars), and of this amount, 442 Canadian Dollars
(approximately $279 U.S. Dollars) was paid to the Partnership on September 26,
2002.
Other Proceedings - Item 10 of Part III of the Partnership's 2001 Form 10-K and
Item 1 of Part II of the Partnership's Quarterly Reports to the SEC on Form 10-Q
for the period ended June 30, 2002 discuss certain actions which have been filed
against Polaris Investment Management Corporation and others in connection with
the sale of interests in the Partnership and the management of the Partnership.
The Partnership is not a party to these actions. Except as described in the last
sentence below, there have been no material developments with respect to any
such actions or proceedings during the period covered by this report.
Sara J. Bishop, et al. v. Kidder, Peabody & Co., et al., Superior Court of
California, County of Sacramento; Wilson et al. v. Polaris Holding Company et
al., Superior Court of California, County of Sacramento, and ten other
California Actions(1) - In the California actions filed in 1996, approximately
4000 plaintiffs who purchased limited partnership units in Polaris Aircraft
Income Funds I through VI and other limited partnerships sold by Kidder, Peabody
named Kidder, Peabody, KP Realty Advisors, Inc., Polaris Holding Company,
Polaris Aircraft Leasing Corporation, Polaris Investment Management Corporation,
Polaris Securities Corporation, Polaris Jet Leasing, Inc., Polaris Technical
Services, Inc., General Electric Company, General Electric Financial Services,
Inc., General Electric Capital Corporation, and General Electric Credit
Corporation and Does 1-100 as defendants. The Partnership was not named as a
defendant in these actions. The complaints all allege violations of state common
law, including fraud, negligent misrepresentation, breach of fiduciary duty, and
violations of the rules of the National Association of Securities Dealers. The
- --------
1 The ten other actions are Abrams, et al. v. Polaris Holding Company, et al.,
Elphick, et al. v. Kidder Peabody & Co., et al., Johnson, et al. v. Polaris
Holding Company, et al., Kuntz, et al. v. Polaris Holding Company, et al.,
McDevitt, et al. v. Polaris Holding Company, et al., Ouellette, et al. v. Kidder
Peabody & Co., et al., Rolph, et al. v. Polaris Holding Company, et al., Self,
et al. v. Polaris Holding Company, et al., Tarrer, et al. v. Kidder Peabody &
Co., et al., Zicos, et al. v. Polaris Holding Company, et al., all filed in
Superior Court of California, County of Sacramento.
12
complaints seek to recover compensatory damages and punitive damages in an
unspecified amount, interest, and rescission with respect to Polaris Aircraft
Income Funds III-VI and all other limited partnerships alleged to have been sold
by Kidder Peabody to the plaintiffs. The California actions have been settled.
An additional settlement was entered into with certain plaintiffs who had
refused to participate in the first settlement. Plaintiffs' counsel advised the
Court that they would withdraw from representing the remaining plaintiffs --
approximately 330 -- who refused to participate in either of the settlements. In
July, 2000, plaintiffs' counsel submitted to the Court motions to withdraw as
counsel of record for all of the actions. The Court indicated that it would
grant such motions and thereafter would consider dismissing each of the actions
if no plaintiff came forward to prosecute. On August 2, 2001, the Court
conducted a series of status conferences in connection with each of the twelve
California actions and at the conferences dismissed most of the remaining
plaintiffs in those actions. On November 9, 2001, defendants moved for summary
judgment against most of the remaining plaintiffs based upon a settlement and
bar order entered in a multi-district litigation in 1997. On March 1, 2002 the
judge granted the defendants' summary judgment motions. On August 15, 2002, the
judge entered a judgment of dismissal in each of the California actions.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
99.1 Certification of President.
99.2 Certification of Chief Financial Officer.
b) Reports on Form 8-K
As described in greater detail in Item 4 of the Current Report on Form
8-K dated August 1, 2002 and first filed by the Partnership on or about
August 2, 2002, the Partnership adopted a resolution dismissing Arthur
Andersen LLP ("Andersen") as the Partnership's auditors and appointed
Ernst & Young LLP to replace Andersen.
13
SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
POLARIS AIRCRAFT INCOME FUND I
(Registrant)
By: Polaris Investment
Management Corporation,
General Partner
November 12, 2002 By: /S/Stephen E. Yost
--------------------- ----------------------------------------
Stephen E. Yost, Chief Financial Officer
14
POLARIS AIRCRAFT INCOME FUND I
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
- -------------
I, William R. Carpenter, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income
Fund I;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us by
others, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
15
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 12, 2002
By: Polaris Investment Management Corporation,
General Partner
/s/ William R. Carpenter
- ------------------------
William R. Carpenter
President
16
CERTIFICATION
- -------------
I, Stephen E. Yost, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Polaris Aircraft Income
Fund I;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us by
others, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
17
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 12, 2002
By: Polaris Investment Management Corporation,
General Partner
/s/ Stephen E. Yost
- -------------------
Stephen E. Yost
Chief Financial Officer
18