EXHIBIT 13

                               JetStream II, L.P.
                               1999 Annual Report
<PAGE>


--------------------------------------------------------------------------------
                               JETSTREAM II, L.P.
--------------------------------------------------------------------------------




   JetStream II, L.P. commenced operations in 1988 and was formed to acquire
   used commercial aircraft subject to triple net operating leases with
   commercial airlines. Since inception, limited partners have received cash
   distributions totaling approximately $18.93 per $20.00 Unit. The following
   table provides the quarterly cash distributions per Unit paid by the
   Partnership for the years ended December 31, 1999 and 1998.

<TABLE>
<CAPTION>
                     Quarter Declared        1999       1998
                     ---------------------------------------
                     <S>                    <C>        <C>
                     First Quarter          $.339      $.210
                     Second Quarter          .472       .219
                     Third Quarter           .154       .221
                     Fourth Quarter          .155       .222
                                           ------      -----
                     Total                 $1.120      $.872
                     =======================================
</TABLE>






                                    Contents

                   1  Message to Investors

                   3  Financial Statements

                   6  Notes to the Financial Statements

                  13  Report of Independent Public Accountants

<PAGE>


--------------------------------------------------------------------------------
                              MESSAGE TO INVESTORS
--------------------------------------------------------------------------------




Presented for your review is the 1999 Annual Report for JetStream II, L.P. (the
"Partnership"). This report includes an update on the status of the
Partnership's aircraft portfolio, including efforts to market the Partnership's
remaining planes, and highlights of the Partnership's financial results. Also
included are the Partnership's audited financial statements for the year ended
December 31, 1999.

Sales Update
As discussed in prior reports, in November 1999, the Partnership received the
required approval of more that 50% of the outstanding limited partner units to
proceed with the plan of liquidation and dissolution, pursuant to which the
remaining aircraft will be sold and the Partnership terminated (the "Liquidation
Plan"). In accordance with the Liquidation Plan, we began actively marketing the
aircraft for sale in January 2000. Bids have been received for several of the
planes, and we are pleased to report that two letters of intent were recently
signed, one for the sale of the Partnership's 737-200 advanced aircraft and the
second for the three DC-9-30 aircraft. Contracts are currently being negotiated
with the prospective purchasers, and it is anticipated that the planes will be
sold during the second quarter of this year. However, there can be no assurance
that the sales will close within this time frame or that the Partnership will be
able to obtain the aircrafts' appraised values in a sale. In addition, we are
continuing to market the remaining aircraft. Once the planes are sold, the
Partnership's liabilities will be paid, the sales proceeds will be distributed
to the Limited Partners, and the Partnership will be terminated.

Portfolio Update
Following is an update on the status of the Partnership's remaining aircraft:

MD-80 Series Aircraft - Continental Airlines ("Continental") has exercised its
option to renew the lease for the Partnership's MD-80 Series aircraft through
September 2000. The lease requires Continental to make monthly lease payments of
$180,000.

737-200 Advanced Aircraft - The lease with Delta Air Lines ("Delta") for the
Partnership's 737-200 advanced aircraft has been extended through September
2001. The lease requires Delta to make monthly payments of $65,000. Delta was
also required to hushkit the plane, which was completed prior to year-end 1999.

DC-9-30 Aircraft - The leases for the Partnership's three DC-9-30 aircraft with
Northwest Airlines ("Northwest") expire in January 2007. Northwest pays $35,000
monthly per aircraft. As part of the agreement to extend these leases, Northwest
agreed to hushkit each aircraft prior to year-end 1999. In exchange for funding
the cost to hushkit, Northwest will be entitled to 50% of the proceeds from the
eventual sale of the aircraft. The three planes were hushkitted by Northwest
prior to the end of 1999.

Financial Highlights
Provided below is a review of Partnership operations for the twelve months
ended December 31,

<TABLE>
<CAPTION>
                                                         1999         1998
      --------------------------------------------------------------------
      <S>                                          <C>          <C>
      Rental income                                $4,470,000   $4,920,000
      Total expenses                                3,621,938    3,740,075
      Net income                                    2,166,561    1,285,470
      Net cash provided by operating activities     4,101,087    4,255,925
      --------------------------------------------------------------------
</TABLE>

  o   The decrease in rental income is primarily attributable to the sale of the
      Partnership's 727-200 aircraft in the second quarter of 1999.

  o   Total expenses decreased slightly due to the suspension of depreciation in
      November 1999. However, general and administrative expenses increased
      approximately $269,000 primarily due to an increase in legal and other
      fees related to the Liquidation Plan.

                                                                              1
<PAGE>


  o   Net income in 1999 includes the $1,206,195 gain on the sale of the 727-200
      aircraft. Excluding this gain, the Partnership had net income of $960,366
      in 1999. The lower net income in 1999 is primarily due to the decline in
      rental income and the increase in general and administrative expenses.

Summary
We will update you on the status of our efforts to sell the Partnership's
aircraft in future correspondence. In the interim, questions regarding the
Partnership should be directed to your Financial Consultant or Partnership
Investor Services. All requests for a change of address should be submitted in
writing to the Partnership's administrative agent at P.O. Box 7090, Troy, MI
48007-7090. Partnership Investor Services can be reached at 617-342-4225, and
the Partnership's administrative agent can be reached at 248-637-7900.

Very truly yours,

Jet Aircraft Leasing Inc.                 CIS Aircraft Partners, Inc.
General Partner                           General Partner



Michael T. Marron                         Michael L. Rosen
President                                 President


March 31, 2000

                                                                              2

<PAGE>


JETSTREAM II, L.P.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
BALANCE SHEETS
                                                     At December 31,   At December 31,
                                                               1999              1998
-------------------------------------------------------------------------------------
<S>                                                    <C>               <C>
Assets
  Aircraft, at cost                                    $         --      $ 26,877,000
  Less accumulated depreciation                                  --       (18,937,193)
                                                       ------------------------------
                                                                 --         7,939,807
Aircraft held for sale                                    5,270,597                --
Cash and cash equivalents                                 1,333,331         1,781,869
Accounts receivable                                           2,226            45,000
-------------------------------------------------------------------------------------
      Total Assets                                     $  6,606,154      $  9,766,676
=====================================================================================
Liabilities and Partners' Capital
Liabilities:
  Accounts payable and accrued expenses (Note 6)       $    753,586      $    280,044
  Distribution payable                                      755,580         1,084,395
  Deferred revenue                                          145,833           153,333
                                                       ------------------------------
      Total Liabilities                                   1,654,999         1,517,772
                                                       ------------------------------
Partners' Capital (Deficit):
  General Partners                                          (4,474)          (868,684)
  Limited Partners (4,837,505 units outstanding)          4,955,629         9,117,588
                                                       ------------------------------
      Total Partners' Capital                             4,951,155         8,248,904
-------------------------------------------------------------------------------------
      Total Liabilities and Partners' Capital          $  6,606,154      $  9,766,676
=====================================================================================
</TABLE>


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
For the years ended December 31, 1999, 1998, and 1997
                                              General         Limited
                                             Partners        Partners           Total
-------------------------------------------------------------------------------------
<S>                                         <C>           <C>             <C>
Balance at December 31, 1996                $(805,273)    $15,395,262     $14,589,989
Net Income                                     11,961       1,184,179       1,196,140
Distributions                                 (45,668)     (4,521,102)     (4,566,770)
-------------------------------------------------------------------------------------
Balance at December 31, 1997                $(838,980)    $12,058,339     $11,219,359
Net Income                                     12,855       1,272,615       1,285,470
Distributions                                 (42,559)     (4,213,366)     (4,255,925)
-------------------------------------------------------------------------------------
Balance at December 31, 1998                $(868,684)    $ 9,117,588     $ 8,248,904
Net Income                                    910,670       1,255,891       2,166,561
Distributions                                 (46,460)     (5,417,850)     (5,464,310)
-------------------------------------------------------------------------------------
Balance at December 31, 1999                $  (4,474)    $ 4,955,629     $ 4,951,155
=====================================================================================
</TABLE>

See accompanying notes to the financial statements.                           3
<PAGE>


JETSTREAM II, L.P.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the years ended December 31,
                                                 1999            1998            1997
-------------------------------------------------------------------------------------
<S>                                        <C>             <C>             <C>
Income
Rental                                     $4,470,000      $4,920,000      $4,795,000
Interest                                      106,314          97,191         111,683
Other                                           5,990           8,354           9,530
                                           ------------------------------------------
      Total Income                          4,582,304       5,025,545       4,916,213
-------------------------------------------------------------------------------------
Expenses
Depreciation                                2,669,210       3,019,230       3,019,228
Management fees (Note 6)                      407,557         444,005         432,958
General and administrative                    544,370         275,515         267,887
Operating                                         801           1,325              --
                                           ------------------------------------------
      Total Expenses                        3,621,938       3,740,075       3,720,073
      Net income before gain on
        sale of aircraft                      960,366       1,285,470       1,196,140
Gain on sale of aircraft (Note 4)           1,206,195              --              --
-------------------------------------------------------------------------------------
      Net Income                           $2,166,561      $1,285,470      $1,196,140
=====================================================================================
Net Income Allocated:
To the General Partners                    $  910,670      $   12,855      $   11,961
To the Limited Partners                     1,255,891       1,272,615       1,184,179
-------------------------------------------------------------------------------------
                                           $2,166,561      $1,285,470      $1,196,140
=====================================================================================
Per limited partnership unit
(4,837,505 outstanding)                         $0.26           $0.26           $0.24
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to the financial statements.                           4
<PAGE>


JETSTREAM II, L.P.


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
For the years ended December 31,
                                                 1999            1998            1997
-------------------------------------------------------------------------------------
<S>                                       <C>             <C>             <C>
Cash Flows From Operating Activities
Net Income                                $ 2,166,561     $ 1,285,470     $ 1,196,140
Adjustments to reconcile net income to
net cash provided by operating activities:
  Restricted cash                                  --              --         297,475
  Gain on sale of aircraft                 (1,206,195)             --              --
  Depreciation                              2,669,210       3,019,230       3,019,228
  Increase (decrease) in cash arising
  from changes in operating assets and
  liabilities:
    Accounts receivable                        42,774              --         (45,000)
    Interest receivable                            --              --             368
    Accounts payable and accrued expenses     436,237         (48,775)        (24,180)
    Deferred revenue                           (7,500)             --              --
                                          -------------------------------------------
Net cash provided by operating activities   4,101,087       4,255,925       4,444,031
-------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Cash received from sale of aircraft         1,243,500              --              --
Loan receivable                                    --              --         108,403
                                          -------------------------------------------
Net cash provided by investing activities   1,243,500              --         108,403
-------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Cash distributions                         (5,793,125)     (4,284,899)     (4,533,017)
                                          -------------------------------------------
Net cash used for financing activities     (5,793,125)     (4,284,899)     (4,533,017)
-------------------------------------------------------------------------------------
Net (decrease) increase in cash and
cash equivalents                             (448,538)        (28,974)         19,417
Cash and cash equivalents, beginning
of year                                     1,781,869       1,810,843       1,791,426
-------------------------------------------------------------------------------------
Cash and cash equivalents, end of year    $ 1,333,331     $ 1,781,869     $ 1,810,843
=====================================================================================
Supplemental Disclosure of Noncash Operating Activities In connection with the
sale of the aircraft, accrued resale fees in the amount of $37,305 have
decreased the gain on the sale of the aircraft.
-------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to the financial statements.                           5
<PAGE>


JETSTREAM II, L.P.


NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999, 1998 and 1997

1.  Organization
JetStream II, L.P. ("the Partnership"), a Delaware limited partnership, was
formed on October 15, 1987, for the purpose of acquiring and leasing used
commercial aircraft.  The Managing General Partner of the Partnership is CIS
Aircraft Partners, Inc. ("CAP"), a third-tier, wholly owned subsidiary of
Continental Information Systems Corporation.  The Administrative General
Partner is Jet Aircraft Leasing Inc. ("JAL"), formerly Hutton Aircraft
Leasing, Inc., an affiliate of Lehman Brothers Inc.

Upon formation of the Partnership, the General Partners each contributed $500
and the initial Limited Partner contributed $100 for five limited partner units.
An additional 4,837,500 limited partnership depositary units were then sold at a
price of $20.00 per unit. The Partnership had an interim closing on January 14,
1988 and a final closing on February 24, 1988 and received gross offering
proceeds of $96,750,000.

The General Partners are implementing, and the Limited Partners have approved, a
plan to sell the Partnership's remaining aircraft and subsequently terminate the
Partnership pursuant to a Plan of Liquidation and Dissolution dated as of
November 20, 1999 (the "Liquidation Plan"). The Liquidation Plan consists of:
(1) the sale of all of the Partnership's assets and the dissolution of the
Partnership pursuant to the proposed Plan of Liquidation and Dissolution; (2)
the amendment of the Partnership Agreement to permit the engagement of the
General Partners to market and sell the assets of the Partnership for a fee
pursuant to the terms of the Joint Marketing Agreement, dated July 13, 1999,
among each of the General Partners and the Partnership and (3) the grant of
authority to the General Partners to take any action necessary or incidental and
consistent with the Partnership Agreement, the Plan of Liquidation and
Dissolution and the Joint Marketing Agreement to complete the foregoing. The
Liquidation Plan required the approval of more than 50% of the limited partner
units entitled to vote. A consent solicitation statement requesting such
approval was forwarded to investors on October 15, 1999. On November 19, 1999,
the Partnership received the required approval from the unitholders. As a result
of this vote, the General Partners have begun to implement the Liquidation Plan
by actively marketing the aircraft for sale during the first quarter of 2000, on
the terms described in the consent solicitation statement. Once the aircraft are
sold and the Partnership's actual and contingent liabilities have been paid or
reserved for, the sales proceeds will be distributed to the Limited Partners and
the Partnership will be terminated. If the unitholders had not approved the
Liquidation Plan, according to the Partnership's Limited Partnership Agreement
dated November 10, 1987, the Partnership would be required to dissolve and
distribute all of its assets no later than December 31, 2027.

As a result of the approval of the Liquidation Plan, the Partnership has
designated its aircraft as assets held-for-sale. In accordance with Statement of
Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment
of Long-Lived Assets and Assets to be Disposed Of, all of the Partnership's
aircraft are reported at the lower of carrying amount or fair value less costs
to sell. No charge was recorded as a result of the designation of the aircraft
as assets held-for-sale. In addition, the Partnership has ceased to record
depreciation expense related to those assets as of November 19, 1999.

Title to the aircraft owned by the Partnership is held by nonaffiliated trusts,
of which the Partnership is the beneficiary. The purpose of this method of
holding title is to satisfy certain registration requirements of the Federal
Aviation Administration.

2.  Significant Accounting Policies

Basis of Accounting The accompanying financial statements have been prepared on
the accrual basis of accounting in accordance with generally accepted accounting
principles. Revenues are recognized as earned and expenses are recorded as
obligations are incurred.

                                                                              6
<PAGE>


JETSTREAM II, L.P.


Aircraft and Depreciation  The aircraft were recorded at cost, which includes
acquisition costs. Through December 31, 1993, depreciation to an estimated
salvage value of 10% was computed using the straight-line method over an
estimated average economic life of 12 years for all aircraft owned by the
Partnership. Beginning in 1994, depreciation was computed using the
straight-line method over an estimated remaining economic life of two to six
years for all aircraft owned by the Partnership.

Effective January 1, 1997, depreciation of the unamortized balance at December
31, 1996 for each Northwest aircraft will be depreciated on a straight line
basis over a 10-year period, due to the lease agreement signed in the third
quarter of 1996 extending the lease and the life of each aircraft for a term of
10 years. (See Note 4).

Improvements to aircraft required to comply with regulatory requirements will be
capitalized when incurred and depreciated over the useful life of the
improvement.

In accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and Assets to be Disposed Of, the Partnership has ceased to record
depreciation related to those assets as of November 19, 1999.

Accounting for Impairment  It is the Partnership's policy to review the carrying
value of its long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying value of such assets may not be
recoverable. For long-lived assets used in operations, measurement of impairment
loss is based on undiscounted cash flows. For assets held for sale, measurement
of the impairment loss is based on the fair value of the asset. Generally fair
value will be determined through independent appraisals of such assets. No
impairment adjustments have been made as a result of this review process during
1999 and 1998.

Cash Equivalents  Cash equivalents consist of short-term highly liquid
investments with original maturities of three months or less from the date of
issuance. The carrying amount approximates fair value because of the short
maturity of these instruments.

Concentration of Credit Risk  Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash in
excess of the financial institutions' insurance limits. The Partnership invests
available cash with high credit quality financial institutions.

Operating Leases  The aircraft leases are accounted for as operating leases.
Lease revenues are recognized over the terms of the related leases. Some of the
Partnership's operating leases require rental payments to be paid in advance.
Rental payments received in advance are deferred and then recognized as income
when earned.

Income Taxes  No provision for income taxes has been made in the financial
statements since such taxes are the responsibility of the individual partners
rather than that of the Partnership.

Use of Estimates  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

                                                                              7
<PAGE>


JETSTREAM II, L.P.


3.  Partnership Allocations
The Limited Partnership Agreement ("Agreement") substantially provides for the
following:

Cash Distributions  Cash flow from operations as defined in the Agreement, at
the discretion of the General Partners, will be distributed on a quarterly
basis, with 99% to the Limited Partners and 1% to the General Partners.
Distributable proceeds from sales of aircraft in liquidation of the Partnership
will be distributed in accordance with the partners' capital accounts after all
allocations of income and losses.

Allocation of Income and Losses  Generally, income and losses for any year are
allocated 99% to the Limited Partners and 1% to the General Partners. Gains on
sales of aircraft shall first be allocated to the General Partners until they
have been allocated an amount of gain equal to the lesser of their respective
deficit account balances or 1.01% of all capital contributions by Limited
Partners. Any additional gain recognized by the Partnership upon the sale of
aircraft shall be allocated 99% to the Limited Partners and 1% to the General
Partners.

Dissolution of Partnership  If, upon dissolution of the Partnership, the General
Partners have a negative capital account, they shall contribute capital equal to
the lesser of their respective capital deficit account balances or 1.01% of all
capital contributed by the Limited Partners.

4.  Aircraft under Operating Leases
Certain of the Partnerships' aircraft leases are triple net operating leases,
requiring the lessees to pay substantially all expenses associated with the
aircraft during the term of the leases, as described below:

727-200 Non-Advanced Aircraft  On January 15, 1988, the Partnership acquired
three Boeing 727-200 non-advanced aircraft for a total purchase price of
$16,353,693. These aircraft were subject to operating leases with Trans World
Airlines, Inc. ("TWA"). The leases expired on October 31, 1994, December 19,
1994 (these two aircraft were sold in 1995) and October 30, 1997 (this aircraft
was leased to Boeing Capital Corporation, as discussed below.)

On November 1, 1997, the Partnership entered into an operating lease agreement
with Boeing Capital Corporation ("BCC") to lease one of the aircraft formerly
leased to TWA. BCC subleased the aircraft to SportHawk International, Inc. BCC
paid the Partnership a monthly lease rate of $45,000 through the primary term of
the lease, which was to expire on October 31, 1999. Pursuant to the terms of the
lease, on April 30, 1999 SportHawk exercised its option to purchase the aircraft
for a selling price of approximately $1,243,500 and the Partnership recognized a
gain of $1,206,195.

DC-9-30 Aircraft During 1988, the Partnership acquired three McDonnell Douglas
DC-9-30 aircraft for a total purchase price of $21,691,381. These aircraft are
subject to operating leases with Northwest Airlines, Inc. ("Northwest"). Lease
extensions were executed with Northwest in December 1993 for these aircraft.
Under the lease extensions, which were scheduled to expire in January 1995 for
two aircraft and April 1995 for the third, Northwest made monthly lease payments
to the Partnership of $35,000 per aircraft. These leases were subsequently
extended twice at the same monthly lease rate. Each extension was for one
additional year from the previous expiration dates, with the remaining terms of
the lease unchanged.

During the third quarter of 1996, the Partnership signed new lease agreements
with Northwest extending the leases through January 2007. Northwest will
continue to pay the Partnership a monthly lease rate of $35,000 per aircraft. In
accordance with the lease extensions, each of the aircraft was hushkitted, which
entails upgrading the current engines to comply with Stage 3 noise requirements.
This enabled the aircraft to continue to fly in the United States beyond
December 31, 1999, the phase-out date for all Stage 2 commercial aircraft.
Northwest funded the cost of the hushkitting and, in turn, will be entitled to
fifty percent (50%) of the proceeds from the eventual sale of the aircraft.

                                                                              8
<PAGE>


JETSTREAM II, L.P.


737-200 Advanced Aircraft  On February 25, 1988, the Partnership acquired a
Boeing 737-200 advanced aircraft for a total purchase price of $14,380,390. This
aircraft is subject to an operating lease with Delta Air Lines, Inc. ("Delta").
In September 1992, the General Partners and Delta agreed to amend the original
lease. The amendment provided for rent of $95,000 per month through the
expiration date in December 1994. In May 1994, Delta exercised its option to
extend the lease for a term of two years from the previous expiration date. The
remaining terms of the lease were unchanged. In November 1995, an agreement was
reached with Delta to amend and extend the current lease until September 1999 at
a monthly lease rate of $80,000. In September 1999, the lease was extended until
September 2001 at a monthly lease rate of $65,000. In accordance with the lease
extension, Delta hushkitted the aircraft, which entailed upgrading the current
engines to comply with Stage 3 noise requirements.

MD-80 Series Aircraft  On January 26, 1988, the Partnership acquired a McDonnell
Douglas MD-80 Series aircraft for a total purchase price of $27,313,020. This
aircraft was subject to an operating lease with Continental Airlines, Inc.
("Continental"), the term of which expired on April 28, 1993. Subsequent to this
expiration date, Continental returned the aircraft to the Partnership. On
February 9, 1994, the Partnership entered into a new lease agreement with
Continental. The agreement provided for Continental to lease the plane for a
term of four years and pay $180,000 per month in advance effective March 15,
1994. The Partnership agreed to provide up to $600,000 of financing to
Continental to perform modification work on the aircraft, including advanced
avionics, interior furnishings and exterior paint.

The modification financing was repayable over the life of the lease at an
interest rate of 8% per annum for advances made before February 1, 1996. On June
7, 1994, the Partnership made its only advance to Continental in the amount of
$302,525. The notes were prepaid in full in September 1997. Having made all of
the modifications permitted under the Participation Agreements, Continental no
longer can borrow any funds and the Partnership has been released from its
obligation to lend.

The lease with Continental Airlines for the Partnership's MD-80 Series aircraft
was previously scheduled to expire in March 1998. Continental extended its lease
to March 1999 and, in October 1998, exercised its second option to renew this
lease through September 2000, with the remaining terms of the lease unchanged.

Revenues from each of the airlines as a percentage of the Partnership's total
rental revenues are as follows:

<TABLE>
<CAPTION>
                                       Percent of Rental Revenues
               Airline                 1999       1998       1997
               --------------------------------------------------
               <S>                     <C>        <C>        <C>
               Northwest               28.2%      25.6%      26.3%
               Delta                   20.5       19.5       20.0
               Continental             48.3       43.9       45.0
               Boeing Capital           3.0       11.0        1.9
               TWA                       --         --        6.8
</TABLE>

The following is a schedule, by year, of future minimum rental income under the
leases as of December 31, 1999.

<TABLE>
<CAPTION>
               Year                                        Amount
               --------------------------------------------------
               <S>                                    <C>
               2000                                   $ 3,660,000
               2001                                     1,845,000
               2002                                     1,260,000
               2003                                     1,260,000
               2004                                     1,260,000
               Thereafter                               2,730,000
               --------------------------------------------------
               Total                                  $12,015,000
               ==================================================
</TABLE>

                                                                              9
<PAGE>


JETSTREAM II, L.P.


The above schedule of future minimum rental income is based on the existing
terms of the leases and does not include the rental income that may result from
the renewal of existing leases or the re-leasing of the aircraft, if any.

5.  Distributions
Distributions declared aggregated $5,464,310 (approximately $1.12 per Unit),
$4,255,925 (approximately $0.87 per Unit) and $4,566,770 (approximately $0.94
per Unit) for the years ended December 31, 1999, 1998 and 1997, respectively. As
of December 31, 1999, the Partnership had declared a distribution of $755,580,
of which $748,024 (approximately $.16 per Unit) was paid to the Limited Partners
and $7,556 was paid to the General Partners on March 1, 2000.

6.  Transactions with Affiliates

Base Management Fee  The General Partners receive a quarterly fee, subordinated
to the Limited Partners receiving their Preferred Return, as defined in the
Agreement, in an amount generally equal to 1.5% of gross aircraft rentals. Of
this amount, 1.0% is payable to CAP and .5% is payable to JAL.

Incentive Management Fee  CAP receives a quarterly fee of 4.5% of quarterly cash
flow, subordinated to the Limited Partners receiving their Preferred Return.

Re-lease Fee  The General Partners receive a quarterly fee, subordinated to the
Limited Partners receiving their Preferred Return, for re-leasing aircraft or
renewing a lease in an amount equal to 3.5% of the gross rentals from such
re-lease or renewal for each quarter for which such payment is made. Of this
amount, 2.5% is payable to CAP and 1.0% is payable to JAL.

Resale Fee  CAP receives a subordinated fee with respect to each aircraft sold
by the Partnership in an amount equal to the lesser of (i) 3% of the contract
sales price of the aircraft or (ii) an amount that is competitive with fees
charged by nonaffiliates rendering comparable services. Such fee will be reduced
(but not below zero) for any resale fees or commissions payable to third
parties. The resale fee is subordinate to the Limited Partners receiving a
priority return equal to their original capital contribution plus their
preferred return. No resale fees were paid during 1997, 1998 or 1999.

Non-Subordinated Aircraft Marketing and Sale Fee  Pursuant to the Liquidation
Plan, an Amendment to the Agreement and the Joint Marketing Agreement, CAP will
receive a fee of 2% and JAL will receive a fee of 1% on the contract sales price
of each aircraft.

During 1999, the unitholders did not receive their preferred returns. Therefore,
these management fees have not been paid. The following is a summary of amounts
earned by the General Partners and their affiliates during the years ended
December 31, 1999, 1998 and 1997.

<TABLE>
<CAPTION>
                                 Unpaid at               Earned
                               December 31,  ------------------------------
                                      1999       1999       1998       1997
     ----------------------------------------------------------------------
     <S>                          <C>        <C>        <C>        <C>
     Base Management Fee          $ 83,050   $ 65,246   $ 71,217   $ 68,756
     Incentive Management Fee      233,937    184,549    200,588    197,952
     Re-lease Fee                  200,813    157,762    172,200    166,250
     Resale fee                     99,735     37,305         --         --
     ----------------------------------------------------------------------
                                  $617,535   $444,862   $444,005   $432,958
                                  =========================================
</TABLE>

                                                                              10
<PAGE>


JETSTREAM II, L.P.


7.  Reconciliation of Difference between Net Income in the Financial Statements
    (Accrual Basis--Generally Accepted Accounting Principles) and Net Income in
    the Partnership's Tax Return
<TABLE>
<CAPTION>
                                                 1999            1998            1997
-------------------------------------------------------------------------------------

<S>                                       <C>             <C>             <C>
Net income, as reported                   $ 2,166,561      $ 1,285,470    $ 1,196,140
Adjustments--
  Depreciation differential between the
    Modified Accelerated Cost Recovery
    System and depreciation for
    financial reporting purposes            2,669,210        3,019,230      2,115,533
  Deferred revenue                             (7,500)              --             --
  Excess of tax gain over book gain            37,305               --             --
                                          -------------------------------------------
Net income, per the Partnership's tax
  return                                  $ 4,865,576      $ 4,304,700    $ 3,311,673
-------------------------------------------------------------------------------------

The net income determined on the income tax basis is allocated to the partners
as follows:

  Limited partners (4,837,505 units)      $ 3,997,005      $ 4,261,653    $ 3,278,556
  General partners                            868,571           43,047         33,117
                                          -------------------------------------------
                                          $ 4,865,576      $ 4,304,700    $ 3,311,673

Taxable income (loss) per limited
  partner unit                            $      0.83      $      0.88    $      0.68
-------------------------------------------------------------------------------------
</TABLE>

As of December 31, 1999, the tax basis of total assets and total liabilities was
$12,146,304 and $1,424,430, respectively.

8.  Contingencies

There may be costs associated with the process of marketing and selling the
remaining aircraft owned by the Partnership and winding up the Partnership. In
negotiating the sale of the aircraft now owned by the Partnership, the
Partnership may be required to bear some or all of the costs of compliance with
future Airworthiness Directives ("AD's") or AD's that have been issued but which
did not mandate action during the previous lessee's lease term, or in respect of
which the previous lessee failed to comply. AD's are Federal Aviation
Administration mandates requiring the airline to perform a specific maintenance
task within a specified period of time. The aggregate effect on the Partnership
of compliance with these standards is not determinable at this time and will
depend upon a variety of factors, including, but not limited to, the state of
the commercial aircraft market, the extent of the AD, the availability of
capable repair facilities and the effect, if any, that such compliance may have
on the service lives of the affected aircraft. As described above, the cost to
the Partnership of such compliance may be reduced to the extent that current or
future lessees of the Partnership's aircraft effect such modifications under the
terms of the current or future operating leases.

Also, as part of the August 1996 agreement with Northwest to extend certain
leases as described in Note 4, the lessee agreed to hushkit each aircraft. In
exchange for this agreement, the lessee will be entitled to 50% of the proceeds
from the eventual sale of the associated aircraft. These amounts have not been
recognized as a liability in the accompanying financial statements as of
December 31, 1999 but are estimated to be approximately $3.2 million, based on
independent appraisals as of December 31, 1999.

                                                                              11
<PAGE>


JETSTREAM II, L.P.


9.  Subsequent Event

In accordance with the Partnership's Liquidation Plan, the General Partners
began marketing the aircraft for sale during the first quarter of 2000. Bids
were received for several of the planes and on February 28, 2000, the Managing
General Partner signed two letters of intent, one for the sale of the
Partnership's 737-200 advanced aircraft and another for the three DC-9-30
aircraft. Contracts are currently being negotiated with the prospective
purchasers and it is anticipated that these four planes will be sold during the
second quarter of this year. However, there can be no assurance that the sales
will close within this timeframe. In addition, the General Partners continue to
market the remaining aircraft. Once the aircraft are sold and the Partnership's
actual and contingent liabilities have been paid or reserved for, the sales
proceeds will be distributed to the Limited Partners and the Partnership will be
terminated.

                                                                              12
<PAGE>


--------------------------------------------------------------------------------
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------




To the Partners of JetStream II, L.P.:

We have audited the accompanying balance sheets of JetStream II, L.P. (a
Delaware limited partnership) as of December 31, 1999 and 1998 and the related
statements of income, partners' capital (deficit) and cash flows for each of the
three years in the period ended December 31, 1999. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As described in Note 1 to the
financial statements, a qualifying majority of the limited partner units have
voted to approve a plan to liquidate the Partnership. As a result, the General
Partners commenced implementation of the plan to sell the Partnership's
remaining aircraft and subsequently terminate the Partnership.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of JetStream II, L.P. as of
December 31, 1999 and 1998 and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with generally accepted accounting principles.


                                         ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 18, 2000, except with respect
  to the matters discussed in Note 9, as
  to which the date is February 28, 2000

                                                                             13