<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

[XX]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 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 September 30, 1998               Commission File No.  0-21396


                              AFG Investment Trust A
------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Delaware                                           04-3145953
-------------------------------                    ---------------------------
(State or other jurisdiction of                    (IRS Employer
 incorporation or organization)                    Identification No.)

88 Broad Street, Boston, MA                        02110
-------------------------------                    ---------------------------
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code     (617)854-5800
                                                   ---------------------------

______________________________________________________________________________
 (Former name, former address and former fiscal year, if changed since last
report.)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No______
                                             ---
                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes_____ No______


<PAGE>




                             AFG Investment Trust A

                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>

PART I.  FINANCIAL INFORMATION:

    Item 1.   Financial Statements

      Statement of Financial Position
        at September 30, 1998 and December 31, 1997                                      3

      Statement of Operations
        for the three and nine months ended September 30, 1998 and 1997                  4

      Statement of Changes in Participants' Capital
        For the nine months ended September 30, 1998                                     5

      Statement of Cash Flows
        for the nine months ended September 30, 1998 and 1997                            6

      Notes to the Financial Statements                                               7-14


    Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations                                    15-21


PART II.  OTHER INFORMATION:

    Items 1 - 6                                                                         22
</TABLE>


                                        2

<PAGE>

                                                 AFG Investment Trust A

                                             STATEMENT OF FINANCIAL POSITION
                                        September 30, 1998 and December 31, 1997
                                                       (Unaudited)

<TABLE>
<CAPTION>
                                                                                 September 30,            December 31,
                                                                                     1998                    1997
                                                                              ------------------       ----------------
<S>                                                                           <C>                      <C>
ASSETS

Cash and cash equivalents                                                      $       3,519,196       $      3,176,850
Restricted cash                                                                        1,328,653              2,606,496
Rents receivable                                                                          29,818                533,052
Accounts receivable - affiliate                                                          120,970                305,209
Note receivable - affiliate                                                              462,353                462,353
Investment securities - affiliate                                                         99,603                157,270
Equipment at cost, net of accumulated depreciation
  of $11,009,008 and $11,445,495 at September 30, 1998
  and December 31, 1997, respectively                                                  4,432,669              6,817,333
                                                                               -----------------    -------------------

         Total assets                                                          $       9,993,262       $     14,058,563
                                                                               -----------------    -------------------
                                                                               -----------------    -------------------


LIABILITIES AND PARTICIPANTS' CAPITAL

Notes payable                                                                  $       1,009,977      $       2,342,924
Accrued interest                                                                           3,653                 31,244
Accrued liabilities                                                                      153,000                 11,550
Accrued liabilities - affiliate                                                           16,234                 35,621
Deferred rental income                                                                    11,411                 79,776
Cash distributions payable to participants                                               180,701                195,306
                                                                               -----------------    -------------------

         Total liabilities                                                             1,374,976              2,696,421
                                                                               -----------------    -------------------

Participants' capital (deficit):
  Managing Trustee                                                                       (17,303)               (12,052)
  Special Beneficiary                                                                   (133,361)               (92,015)
  Class A Beneficiary Interests (482,016 and 483,816 Interests
    at September 30, 1998 and December 31, 1997, respectively,
    initial purchase price of $25 each)                                                7,764,636              8,357,529
  Class B Beneficiary Interests (826,072  Interests
    initial purchase price of $5 each)
  Treasury Interests (67,202 and 65,402 Interests                                      1,638,725              3,728,691
    at September 30, 1998 and December 31, 1997,
     respectively, at Cost)
                                                                                        (634,411)              (620,011)
                                                                               -----------------    -------------------
         Total participants' capital                                                   8,618,286             11,362,142
                                                                               -----------------    -------------------

         Total liabilities and participants' capital                           $       9,993,262      $      14,058,563
                                                                               -----------------    -------------------
                                                                               -----------------    -------------------
</TABLE>

                  The accompanying notes are an integral part
                         of these financial statements.


                                       3

<PAGE>

                             AFG Investment Trust A

                             STATEMENT OF OPERATIONS
         for the three and nine months ended September 30, 1998 and 1997

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months                               Nine Months
                                                        Ended September 30,                       Ended September 30,
                                                       1998              1997                     1998            1997
                                                 --------------    -------------           --------------    ---------------
<S>                                              <C>               <C>                     <C>               <C>
Income:

    Lease revenue                                $       435,108   $     1,010,273         $     1,716,643   $     3,577,408

    Interest income                                       68,606            69,609                 223,726           122,528

    Interest income - affiliate                           11,307                --                  34,582                --

    Gain (loss) on sale of equipment                    (115,694)           48,274                (194,432)           93,868

    Loss on exchange of equipment                             --                --                      --          (408,400)
                                                 ---------------   ---------------         ---------------   ---------------

      Total income                                       399,327         1,128,156               1,780,519         3,385,404
                                                 ---------------   ---------------         ---------------   ---------------


Expenses:

    Depreciation and amortization                        395,589           823,115               1,659,510         2,617,136

    Interest expense                                      19,587            48,066                  77,457           158,653

    Equipment management fees
      - affiliate                                         19,718            44,045                  76,945           138,430

    Operating expenses - affiliate                       100,309           130,518                 315,961           229,778
                                                 ---------------   ---------------         ---------------   ---------------

      Total expenses                                     535,203         1,045,744               2,129,873         3,143,997
                                                 ---------------   ---------------         ---------------   ---------------


Net income (loss)                                $      (135,876)  $        82,412         $      (349,354)  $       241,407
                                                 ---------------   ---------------         ---------------   ---------------
                                                 ---------------   ---------------         ---------------   ---------------


Net income (loss)
  per Class A Beneficiary Interest               $            --   $            --         $           --    $         0.26
                                                 ---------------   ---------------         ---------------   ---------------
                                                 ---------------   ---------------         ---------------   ---------------

  per Class B Beneficiary Interest               $        (0.16)   $            --         $        (0.49)   $           --
                                                 ---------------   ---------------         ---------------   ---------------
                                                 ---------------   ---------------         ---------------   ---------------

Cash distributions declared
  per Class A Beneficiary Interest               $         0.41    $         1.71          $         1.23    $         2.53
                                                 ---------------   ---------------         ---------------   ---------------
                                                 ---------------   ---------------         ---------------   ---------------

  per Class B Beneficiary Interest               $         1.65    $         0.13          $         1.98    $         0.13
                                                 ---------------   ---------------         ---------------   ---------------
                                                 ---------------   ---------------         ---------------   ---------------
</TABLE>

                  The accompanying notes are an integral part
                         of these financial statements.


                                       4
<PAGE>



                             AFG Investment Trust A

                 STATEMENT OF CHANGES IN PARTICIPANTS' CAPITAL
                  for the nine months ended September 30, 1998

                                   (Unaudited)

<TABLE>
<CAPTION>
                                     Managing          Special
                                      Trustee        Beneficiary           Class A Beneficiaries       
                                      Amount           Amount          Interests          Amount       
                                  --------------   --------------   --------------    ---------------  
<S>                               <C>              <C>              <C>               <C>              
Balance at December 31, 1997      $     (12,052)   $      (92,015)         483,816    $     8,357,529  

     Net income (loss)                    5,916            46,021               --                 --  

     Unrealized loss on investment
       securities - affiliate              (577)               --               --                 --  
                                  -------------    --------------   --------------    ---------------  
       

Comprehensive income (loss)               5,339            46,021               --                 --  
                                  -------------    --------------   --------------    ---------------  

Cash distributions declared             (10,590)          (87,367)              --           (592,893) 

Acquisition of Treasury Interests,
  at Cost                                    --                --           (1,800)                -- 
                                  -------------    --------------   --------------    ---------------  
Balance at September 30, 1998     $     (17,303)   $     (133,361)         482,016    $     7,764,636  
                                  -------------    --------------   --------------    ---------------  
                                  -------------    --------------   --------------    ---------------  
</TABLE>

<TABLE>
<CAPTION>

                                         Class B Beneficiaries           Treasury                      
                                     Interests         Amount            Interests          Total      
                                  --------------   ---------------    --------------   ----------------
<S>                               <C>              <C>                <C>              <C>
Balance at December 31, 1997             826,072   $     3,728,691    $     (620,011)  $    11,362,142 
                                                                                                       
     Net income (loss)                        --          (401,291)               --          (349,354)
                                                                                                       
     Unrealized loss on investment                                                                     
       securities - affiliate                 --           (57,090)               --           (57,667)
                                  --------------   ---------------    --------------   --------------- 
                                                                                                       
                                                                                                       
Comprehensive income (loss)                   --          (458,381)               --          (407,021)
                                  --------------   ---------------    --------------   --------------- 
                                                                                                       
Cash distributions declared                   --        (1,631,585)               --        (2,322,435)
                                                                                                       
Acquisition of Treasury Interests,                                                                     
  at Cost                                     --                --           (14,400)          (14,400)
                                  --------------   ---------------    --------------   --------------- 
Balance at September 30, 1998            826,072   $     1,638,725    $     (634,411)  $     8,618,286 
                                  --------------   ---------------    --------------   --------------- 
                                  --------------   ---------------    --------------   --------------- 
</TABLE>

                  The accompanying notes are an integral part
                         of these financial statements.


                                       5
<PAGE>


                             AFG Investment Trust A

                             STATEMENT OF CASH FLOWS
              for the nine months ended September 30, 1998 and 1997

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          1998                  1997
                                                                                    ---------------       ---------------
<S>                                                                                 <C>                   <C>       
Cash flows from (used in) operating activities:
Net income (loss)                                                                   $      (349,354)      $       241,407

Adjustments to reconcile net income (loss) to net cash from operating
    activities:
         Depreciation and amortization                                                    1,659,510             2,617,136
         (Gain) loss on sale of equipment                                                   194,432               (93,868)
         Loss on exchange of equipment                                                           --               408,400

Changes in assets and liabilities 
    Decrease (increase) in:
         rents receivable                                                                   503,234                86,660
         accounts receivable - affiliate                                                    184,239              (117,321)
    Increase (decrease) in:
         accrued interest                                                                   (27,591)              (27,370)
         accrued liabilities                                                                141,450                  (750)
         accrued liabilities - affiliate                                                    (19,387)                6,284
         deferred rental income                                                             (68,365)               (7,173)
                                                                                    ---------------       ---------------

            Net cash from operating activities                                            2,218,168             3,113,405
                                                                                    ---------------       ---------------

Cash flows from (used in) investing activities:
    Purchase of equipment                                                                   (15,246)                   --
    Proceeds from equipment sales                                                           545,968               175,332
                                                                                    ---------------       ---------------

            Net cash from investing activities                                              530,722               175,332
                                                                                    ---------------       ---------------

Cash flows from (used in) financing activities:
    Proceeds from capital contributions                                                          --             4,130,360
    Restricted cash                                                                       1,277,843                    --
    Purchase of Treasury Interests                                                          (14,400)                   --
    Payment of offering costs                                                                    --               (41,304)
    Principal payments - notes payable                                                   (1,332,947)           (1,492,989)
    Distributions paid                                                                   (2,337,040)           (1,624,086)
                                                                                    ---------------       ---------------

            Net cash from (used in) financing activities                                 (2,406,544)              971,981
                                                                                    ---------------       ---------------

Net increase in cash and cash equivalents                                                   342,346             4,260,718

Cash and cash equivalents at beginning of period                                          3,176,850             1,832,248
                                                                                    ---------------       ---------------

Cash and cash equivalents at end of period                                          $     3,519,196       $     6,092,966
                                                                                    ---------------       ---------------
                                                                                    ---------------       ---------------


Supplemental disclosure of cash flow information:
      Cash paid during the period for interest                                      $       105,048       $       186,023
                                                                                    ---------------       ---------------
                                                                                    ---------------       ---------------
</TABLE>

                  The accompanying notes are an integral part
                         of these financial statements.


                                       6
<PAGE>



                             AFG Investment Trust A

                        Notes to the Financial Statements
                               September 30, 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 September 30, 1998 and December 31, 1997 and results of operations
for the three and nine months ended September 30, 1998 and 1997 have been made
and are reflected.

     As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Trust's net income or participants' capital.
Statement 130 requires unrealized gains or losses on the Trust's
available-for-sale securities, which prior to adoption were reported separately
in participants' capital, to be included in comprehensive income or loss. During
the nine months ended September 30, 1998, total comprehensive loss amounted to
$407,021.


NOTE 2 - CASH

     At September 30, 1998, the Trust had $4,723,373 invested in federal agency
discount notes and reverse repurchase agreements secured by U.S. Treasury Bills
or interests in U.S. Government securities. Such cash includes $1,328,653 which
is classified as Restricted Cash and represents the remaining net proceeds
realized from the offering of the Class B Interests less ( i ) the portion
thereof used to pay a special distribution to the Class A Beneficiaries and to
redeem Class A Interests (see Notes 9 and 10) and ( ii ) the portion used to pay
a capital distribution to the Class B Beneficiaries (see Note 12). The remainder
is expected to be used according to terms negotiated in conjunction with
settling the Class Action Lawsuit described in Note 8.


NOTE 3 - REVENUE RECOGNITION

     Rents are payable to the Trust monthly, quarterly or semi-annually and no
significant amounts are calculated on factors other than the passage of time. In
certain instances, the Trust may enter primary-term, renewal or re-lease
agreements which expire beyond the Trust's anticipated dissolution date. This
circumstance is not expected to prevent the orderly wind-up of the Trust's
business activities as the Managing Trustee and the Advisor would seek to sell
the then-remaining equipment assets either to the lessee or to a third party,
taking into consideration the amount of future non-cancelable rental payments
associated with the attendant lease agreements. Future minimum rents of
$1,224,676 are due as follows:

<TABLE>
<CAPTION>
<S>                                                             <C>
              For the year ending September 30, 1999            $    543,280
                                                2000                 262,813
                                                2001                 193,008
                                                2002                 179,149
                                                2003                  46,426
                                                               -------------

                                                   Total        $  1,224,676
                                                               -------------
                                                               -------------
</TABLE>


                                       7
<PAGE>


                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 4 - EQUIPMENT

     The following is a summary of equipment owned by the Trust at September 30,
1998. Remaining Lease Term (Months), as used below, represents the number of
months remaining from September 30, 1998 under contracted lease terms and is
presented as a range when more than one lease agreement is contained in the
stated equipment category. A Remaining Lease Term equal to zero reflects
equipment either held for sale or re-lease or being leased on a month-to-month
basis. In the opinion of EFG, the acquisition cost of the equipment did not
exceed its fair market value.

<TABLE>
<CAPTION>
                                            Remaining
                                           Lease Term                      Equipment
        Equipment Type                      (Months)                        at Cost
---------------------------------          -----------                 ----------------
<S>                                        <C>                         <C>
Aircraft                                        0-51                   $      6,814,840
Materials handling                              0-36                          2,475,720
Communications                                     3                          1,802,423
Retail store fixtures                            0-6                          1,260,855
Construction and mining                         0-51                          1,206,181
Computers and peripherals                          0                            859,761
Research and test                                  0                            459,282
Manufacturing                                      0                            442,590
Energy systems                                     0                            108,975
Photocopying                                      13                             11,050
                                                                       ----------------

                                Total equipment cost                         15,441,677

                            Accumulated depreciation                        (11,009,008)
                                                                       ----------------

          Equipment, net of accumulated depreciation                   $      4,432,669
                                                                       ----------------
                                                                       ----------------
</TABLE>

     At September 30, 1998, the Trust's equipment portfolio included equipment
having a proportionate original cost of $5,476,624, representing approximately
35% of total equipment cost.

     At September 30, 1998, the cost and net book value of equipment held for
sale or re-lease was approximately $6,250,000 and $2,332,000, respectively. This
equipment includes the Trust's proportionate interest in a McDonnell Douglas
MD-82 aircraft formerly leased to Alaska Airlines, Inc. with a cost and net book
value of $1,153,983 and $722,455, respectively, and a SAAB SF340A aircraft
formerly leased to Comair, Inc. with a cost and net book value of $4,421,116 and
$1,548,744, respectively. The Managing Trustee is currently holding discussions
with a potential lessee regarding the re-lease of the MD-82. Certain costs may
be required to prepare this aircraft for re-lease, a portion of which may be the
obligation of the former lessee. The remainder of such costs would be incurred
by the Trust and other affiliated equipment leasing programs in proportion to
their ownership interests in the aircraft. The Managing Trustee is actively
seeking the sale of the SAAB SF340A aircraft and the sale or re-lease of all
other equipment not on lease. In addition, the summary above includes equipment
being leased on a month-to-month basis.


NOTE 5 - INVESTMENT SECURITIES - AFFILIATE / NOTE RECEIVABLE - AFFILIATE

     On April 30, 1997, the vessel partnerships, in which the Trust and certain
affiliated investment programs are limited partners and through which the Trust
and the affiliated investment programs shared economic interests in three cargo
vessels (the "Vessels") leased by Gearbulk Shipowning Ltd (formerly Kristian
Gerhard Jebsen Skipsrederi A/S) (the "Lessee"), exchanged their ownership
interests in the Vessels for aggregate consideration of $11,565,375, consisting
of 1,987,000 newly issued shares (at $1.50 per share) of common stock in Semele


                                       8
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

Group, Inc. (formerly Banyan Strategic Land Fund II) ("Semele"), a purchase
money note of $8,219,500 (the "Note") and cash of $365,375. Semele is a Delaware
corporation organized on April 14, 1987 and has its common stock listed on
NASDAQ. At the date of the exchange transaction, the common stock of Semele had
a net book value of approximately $1.50 per share and closing market value of
$1.00 per share. Semele has one principal real estate asset consisting of an
undeveloped 274 acre parcel of land near Malibu, California ("Rancho Malibu").

     The exchange was organized through an intermediary company (Equis Exchange
LLC, 99% owned by Semele and 1% owned by EFG), which was established for the
sole purpose of facilitating the exchange. There were no fees paid to EFG by
Equis Exchange LLC or Semele or by any other party that otherwise would not have
been paid to EFG had the Trust sold its beneficial interest in the Vessels
directly to the Lessee. The Lessee prepaid all of its remaining contracted
rental obligations and purchased the Vessels in two closings occurring on May 6,
1997 and May 12, 1997. The Note was repaid with $3,800,000 of cash and delivery
of a $4,419,500 note from Semele (the "Semele Note").

     As a result of the exchange transaction and its original 33% beneficial
ownership interest in Hato Arrow, one of the three Vessels, the Trust received
$433,036 in cash, became the beneficial owner of 209,694 shares of Semele common
stock (valued at $314,541 ($1.50 per share) at the time of the exchange
transaction) and received a beneficial interest in the Semele Note of $462,353.
At June 30, 1998, Semele performed both a reverse stock split and a forward
stock split resulting in a change of the Trust's beneficial ownership in its
stock to 20,969 shares. The Semele Note bears an annual interest rate of 10% and
will be amortized over three years with mandatory principal reductions, if and
to the extent that net proceeds are received by Semele from the sale or
refinancing of Rancho Malibu. The Trust recognized interest income of $34,582
related to the Semele Note during the nine months ended September 30, 1998. The
Trust's interest in the Hato Arrow had an original cost and net book value of
$2,399,580 and $1,185,726, respectively. The proceeds realized by the Trust of
$777,326 resulted in a net loss, for financial statement purposes, of $408,400.
In addition, as this vessel was disposed of prior to the expiration of the
related lease term, the Trust received a prepayment of the remaining contracted
rent due under the vessel's lease agreement of $432,604.

     Pursuant to terms of the exchange, cash equal to the amount of the Semele
Note was placed in a segregated escrow account for the benefit of Semele pending
the outcome of certain shareholder proposals. Specifically, as part of the
exchange, Semele agreed to seek consent ("Consent") from its shareholders to:
(1) amend its certificate of incorporation and by-laws; (2) make additional
amendments to restrict the acquisition of its common stock in a way to protect
Semele's net operating loss carry-forwards, and (3) engage EFG to provide
administrative services to Semele, which services EFG will provide at cost. On
October 21, 1997, such Consent was obtained from Semele's shareholders. The
Consent also allowed for (i) the election of a new Board of Directors nominated
by EFG for terms of up to three years and an increase in the size of the Board
to as many as nine members, provided a majority of the Board shall consist of
members independent of Semele, EFG or any affiliate; and (ii) an amendment
extending Semele's life to perpetual and changing its name from Banyan Strategic
Land Fund II. Contemporaneously with the Consent being obtained, Semele declared
a $0.20 per share dividend to be paid on all shares, including those
beneficially owned by the Trust. A dividend of $41,939 was paid to the Trust on
November 17, 1997. This dividend represented a return of equity to the Trust,
which proportionately reduced the Trust's investment in Semele. Subsequent to
the exchange transaction, Gary D. Engle, President and Chief Executive Officer
of EFG, was elected to the Board of Directors and appointed Chief Executive
Officer of Semele and James A. Coyne, Executive Vice President of EFG was
appointed Semele's President and Chief Operating Officer, and elected to the
Board of Directors.

     In accordance with Financial Accounting Standards Board Statement No. 115,
Accounting for Certain Investments in Debt and Equity Securities, marketable
equity securities classified as available-for-sale are required to be carried at
fair value. On June 30, 1998, Semele effected a 1-for-300 reverse stock split
followed by a 30-for-1 forward stock split resulting in a reduction of the
number of shares of Semele common stock owned by the Trust to 20,969 shares.
During the nine months ended September 30, 1998, the Trust decreased the
carrying value of its investment in Semele common stock to $4.75 per share (the
quoted price of the Semele stock on 


                                       9
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NASDAQ at September 30, 1998) resulting in an unrealized loss in 1998 of
$57,667. This loss was reported as a component of comprehensive loss, included
in participants' capital. The split-adjusted market price of Semele's stock was
$7.50 per share at December 31, 1997.


NOTE 6 - RELATED PARTY TRANSACTIONS

     All operating expenses incurred by the Trust are paid by EFG on behalf of
the Trust and EFG is reimbursed at its actual cost for such expenditures. Fees
and other costs incurred during the nine month periods ended September 30, 1998
and 1997, which were paid or accrued by the Trust to EFG or its Affiliates, are
as follows:

<TABLE>
<CAPTION>
                                                            1998               1997
                                                         -----------       -----------
<S>                                                     <C>                 <C>
     Reimbursement of offering costs                    $         --      $      41,304
     Equipment management fees                                76,945            138,430
     Administrative charges                                   51,210             51,736
     Reimbursable operating expenses
         due to third parties                                264,751            178,042
                                                        ------------      -------------

                                     Total              $    392,906      $     409,512
                                                        ------------      -------------
                                                        ------------      -------------
</TABLE>

     All rents and proceeds from the sale of equipment are paid directly to
either EFG or to a lender. EFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Trust. At
September 30, 1998, the Trust was owed $120,970 by EFG for such funds and the
interest thereon. These funds were remitted to the Trust in October 1998.

     Refer to Note 9 regarding the purchase of Class B Interests by an
affiliate, Equis II Corporation and a change in ownership of the Managing
Trustee.


NOTE 7 - NOTES PAYABLE

     Notes payable at September 30, 1998 consisted of installment notes of
$1,009,977 payable to banks and institutional lenders. The notes bear interest
rates ranging between 5.7% and 8%, except for one note which bears a fluctuating
interest rate based on LIBOR (5.59% at September 30, 1998) plus a margin. All of
the installment notes are non-recourse and are collateralized by the equipment
and assignment of the related lease payments. Generally, the installment notes
will be fully amortized by noncancellable rents. However, the Trust has a
balloon payment obligation of $282,421 at the expiration of the primary lease
term related to its interest in an aircraft leased to Reno Air, Inc. The
carrying amount of notes payable approximates fair value at September 30, 1998.

     The annual maturities of the notes payable are as follows:

<TABLE>
<CAPTION>
<S>                                        <C>        <C>
     For the year ending September 30,     1999       $     332,617
                                           2000             116,162
                                           2001             125,623
                                           2002             135,855
                                           2003             299,720
                                                      -------------

                                           Total      $   1,009,977
                                                      -------------
                                                      -------------
</TABLE>


                                       10
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 8 - 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
Trust (collectively, the "Nominal Defendants"), against EFG and a number of its
affiliates, including the Managing Trustee, 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 July 16, 1998, counsel for the Defendants and the Plaintiffs executed a
Stipulation of Settlement 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 Stipulation of Settlement was based upon and supersedes a
Memorandum of Understanding between the parties dated March 9, 1998 which
outlined the terms of a possible settlement. The Stipulation of Settlement was
filed with the Court on July 23, 1998. On August 20, 1998, the Court issued its
"Order Preliminarily Approving Settlement, Conditionally Certifying Settlement
Class and Providing for Notice of, and Hearing on, the Proposed Settlement".

     The Stipulation of Settlement prescribes certain conditions necessary to
effecting the settlement and contemplates various changes that, if effected,
would alter the future operations of the Nominal Defendants (see Note 11). The
Stipulation of Settlement is subject to change pending a final ruling by the
Court that will be preceded by a hearing open to all interested parties. The
Court has scheduled a hearing date for December 11, 1998. Currently, it is
anticipated that a request for extension will be filed with the Court to permit,
among other things, sufficient time to complete certain regulatory review
requirements. Class members will be notified of the final hearing date in
advance. To the extent that the Court issues a final order with respect to the
Stipulation of Settlement, the complete terms thereof will be communicated to
all of the beneficiaries (or partners) of the Nominal Defendants.

     There can be no assurance that the Court will issue a final order approving
the Stipulation of Settlement. However, the Managing Trustee and its affiliates,
in consultation with counsel, concur that there is a reasonable basis to believe
that a final settlement will be achieved. However, in the absence of a final
settlement approved by the Court, the Defendants intend to defend vigorously
against the claims asserted in the Class Action Lawsuit. The Managing Trustee
and its affiliates cannot predict with any degree of certainty the ultimate
outcome of such litigation.

     On July 27, 1995, EFG, on behalf of the Trust and other EFG-sponsored
investment programs, filed an action in the Commonwealth of Massachusetts
Superior Court Department of the Trial Court in and for the County of Suffolk,
for damages and declaratory relief against a lessee of the Trust, National Steel
Corporation ("National Steel"), under a certain Master Lease Agreement ("MLA")
for the lease of certain equipment. EFG is seeking the reimbursement by National
Steel of certain sales and/or use taxes paid to the State of Illinois and other
remedies provided by the MLA. On August 30, 1995, National Steel filed a Notice
of Removal which removed the case to the United States District Court, District
of Massachusetts. On September 7, 1995, National Steel filed its Answer to EFG's
Complaint along with Affirmative Defenses and Counterclaims, seeking declaratory
relief and alleging breach of contract, implied covenant of good faith and fair
dealing and specific performance. EFG filed its Answer 



                                       11
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

to these counterclaims on September 29, 1995. Though the parties discussed
settlement with respect to this matter for some time, the negotiations were
unsuccessful. Notwithstanding these discussions, EFG recently filed an Amended
and Supplemental Complaint alleging further default under the MLA and EFG
recently filed a motion for Summary Judgment on all claims and counterclaims.
The Court held a hearing on EFG's motion in December 1997 and the Court recently
entered a decision dismissing certain of National Steel's counterclaims and
finding in favor of EFG on certain issues and in favor of National Steel on
other issues. The parties have since resumed settlement discussions. The Trust
does not anticipate that it will experience any material losses as a result of
this action.


NOTE 9 - ISSUANCE OF CLASS B INTERESTS

      On October 26, 1996, the Trust filed a Solicitation Statement with the
United States Securities and Exchange Commission (the "SEC") which subsequently
was sent to the Beneficiaries pursuant to Regulation 14A of Section 14 of the
Securities Exchange Act. The Solicitation Statement sought the consent of the
Beneficiaries to a proposed amendment (the "Amendment") to the Amended and
Restated Declaration of Trust (the "Amended Trust Agreement") which would (i)
amend the provisions of the Amended Trust Agreement governing the redemption of
Beneficiary Interests to permit the Trust to offer to redeem outstanding
Beneficiary Interests at such times, in such amounts, in such manner and at such
prices as the Managing Trustee might determine from time to time, in accordance
with applicable law; and (ii) add a provision to the Amended Trust Agreement
that would permit the Trust to issue, at the discretion of the Managing Trustee
and without further consent or approval of the Beneficiaries, an additional
class of security with such designations, preferences and relative,
participating, optional or other special rights, powers and duties as the
Managing Trustee might affix. The funds obtained through the issuance of such a
security were intended to be used by the Trust to (a) expand redemption
opportunities for Beneficiaries without using Trust funds which might otherwise
be available for cash distributions; and (b) make a special one-time cash
distribution to the Class A Beneficiaries.

      Pursuant to the Amended Trust Agreement, the adoption of the Amendment
required the consent of the Beneficiaries holding more than 50% in the aggregate
of the Class A Interests held by all Class A Beneficiaries. A majority of Class
A Interests, representing 286,868 Interests or 52.2% of all Class A Interests,
voted in favor of the Amendment; 49,019 Interests or 8.9% of all Class A
Interests voted against the Amendment; and 16,104 Interests or 2.9% of all Class
A Interests abstained. Approximately 64% of all Class A Interests participated
in the vote. Accordingly, the Amendment was adopted.

      On February 12, 1997, the Trust filed a Registration Statement on Form S-1
with the SEC, which became effective June 10, 1997. The Registration Statement
covered the issuance and sale of a new class of beneficiary interests in the
Trust (the "Class B Interests"). The characteristics of the Class B Interests,
associated risk factors and other matters of importance to the Beneficiaries and
purchasers of the Class B Interests were set forth in a Prospectus sent to the
Beneficiaries. On July 17, 1997, the offering closed and on July 18, 1997 the
Trust issued 826,072 Class B Interests at $5.00 per interest, thereby generating
$4,130,360 in aggregate Class B capital contributions. Class A Beneficiaries
purchased 3,209 Class B Interests, generating $16,045 of such aggregate capital
contributions, and the Special Beneficiary, EFG, purchased 822,863 Class B
Interests, generating $4,114,315 of such aggregate capital contributions. The
Trust incurred offering costs in the amount of $41,304 and professional service
costs of $54,186 in connection with this offering.

      Subsequently, EFG transferred its Class B Interests to a special-purpose
company, Equis II Corporation, a Delaware corporation. EFG also transferred its
ownership of AFG ASIT Corporation, the Managing Trustee of the Trust, to Equis
II Corporation. As a result, Equis II Corporation has voting control of the
Trust through its ownership of the majority of all of the Trust's outstanding
voting interests, as well as its ownership of AFG ASIT Corporation. Equis II
Corporation is controlled by EFG's President and Chief Executive Officer, Gary
D. Engle. Accordingly, control of the Managing Trustee did not change as a
result of the foregoing transactions.


                                       12
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

     As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee used a portion of the net cash proceeds realized from the
offering of the Class B Interests to pay a one-time special cash distribution of
approximately $1.47 per Class A Interest to the Class A Beneficiaries of the
Trust. The Managing Trustee declared and paid this special cash distribution,
aggregating $808,363, to Class A Beneficiaries on August 15, 1997. See Note 10
regarding the redemption of Class A Interests.


NOTE 10 - REDEMPTION OF CLASS A INTERESTS

     On August 7, 1997, the Trust commenced an offer to purchase up to 45% of
the outstanding Class A Beneficiary Interests of the Trust by filing a Form
13E-4, Issuer Tender Offer Statement, with the SEC and distributing to the Class
A Beneficiaries information concerning the offer. On October 10, 1997, the Trust
used $620,011 of the net proceeds realized from the issuance of the Class B
Interests to purchase 65,402 of the Class A Interests tendered as a result of
the offer. The Tender Documents described, among other things, the terms of the
offer and the purchase price per Class A Interest being offered by the Trust. On
April 28, 1998, the Trust used an additional $14,400 of such proceeds to
purchase 1,800 of the remaining Class A Interests.


NOTE 11 - SOLICITATION STATEMENT

     On May 5, 1998, the Trust filed a definitive Solicitation Statement with
the United States Securities and Exchange Commission in connection with the
solicitation by the Trust of the consent of the Beneficiaries to a proposed
amendment (the "Amendment") to the Second Amended and Restated Declaration of
Trust (the "Trust Agreement"). The Solicitation Statement and Consent of
Beneficiary were mailed to all of the Beneficiaries of the Trust on May 6, 1998.
The Beneficiaries were requested to use the Consent of Beneficiary to vote on
seven proposals and return their votes on or before June 5, 1998. Equis II
Corporation, which has voting control of the Trust, agreed to vote all of its
Class B Interests in the same manner in which the majority of the Class A
Interests were actually voted. Accordingly, the Amendment would be adopted or
rejected based upon the voting results of the majority of Class A Interests that
were actually voted (including 1,702 Class A Interests owned by affiliates of
EFG), regardless of how few Class A Interests were actually voted.

     The results of the voting reflect that a majority of Class A Interests
voted in favor of each of the proposals. Therefore, the Trust Agreement was
amended to (i) broaden the Trust's stated investment policies and objectives and
permit the Trust to invest in assets other than leased equipment and (ii) modify
the Trust's financing provisions to eliminate any cap on the amount of aggregate
Trust indebtedness and permit the Trust to use cross-collateralized and other
recourse debt structures.

     In addition, subject to attaining a settlement in the Class Action Lawsuit
described in Note 8 herein, the Trust Agreement will be modified in the
following principal respects: (i) the Trust will pay a Special Cash Distribution
to the Class A Beneficiaries of record as of September 1, 1997, or to their
successors or assigns, totaling $413,247 (or approximately $0.75 per Class A
Beneficiary Interest) using a portion of the Class B capital contributions that
otherwise would be distributed as a Class B Capital Distribution to Equis II
Corporation, the parent company of the Managing Trustee and an affiliate of EFG;
(ii) Equis II Corporation will be required to reduce its prospective Class B
Capital Distributions by $929,806 and treat such amount as a long-term equity
investment in the Trust; (iii) certain voting restrictions will be placed upon
the Class B Interests owned by Equis II Corporation; (iv) the Trust's
reinvestment period, which originally expired on May 29, 1996, will be
reinstated until December 31, 2001; and (v) acquisition fees paid to EFG in
connection with reinvestment assets acquired after the Amendment date will be
reduced from a maximum of 3% to 1% and management fees earned in connection with
such assets will be reduced from a maximum of 5% to 2%.


                                       13
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 12 - CLASS B CAPITAL DISTRIBUTION

     The Managing Trustee and certain of its affiliates were named as defendants
in the Class Action Lawsuit discussed in Note 8 herein. In connection with this
litigation and subject to a settlement being effected, the Managing Trustee has
agreed to adopt certain modifications to the Trust Agreement as described in the
Solicitation Statement referred to in Note 11 herein. One aspect of the proposed
settlement would result in using of a portion of Equis II Corporation's Class B
Capital Contribution to the Trust to (i) pay a second special cash distribution
to Class A Beneficiaries totaling $413,247, approximately $.75 per Class A
Beneficiary Interest, and (ii) invest $929,806 in the Trust's long-term business
activities. The remainder of the Class B Capital Contributions (not otherwise
used to repurchase Class A Interests in the Tender Offer closed on October 10,
1997 or to pay for offering and related costs associated with the Class B
Interests or to pay the first special cash distribution), $1,263,443 in total,
was returned to Equis II Corporation and the other third-party Class B capital
contributors on July 6, 1998.


                                       14
<PAGE>

                             AFG Investment Trust A

                                    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 AFG Investment Trust A (the
"Trust") 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 8 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 to
successfully remarket the Trust's equipment, upon the expiration of such leases.


Year 2000 Issue

     The Year 2000 Issue generally refers to the capacity of computer
programming logic to correctly identify the calendar year. Many companies
utilize computer programs or hardware with date sensitive software or embedded
chips that could interpret dates ending in "00" as the year 1900 rather than the
year 2000. In certain cases, such errors could result in system failures or
miscalculations that disrupt the operations of the affected businesses. The
Trust uses information systems provided by EFG and has no information systems of
its own. EFG has adopted a plan to address the Year 2000 Issue that consists of
four phases: assessment, remediation, testing, and implementation and has
elected to utilize principally internal resources to perform all phases.
Presently, EFG anticipates completing its Year 2000 project by December 31, 1998
at a di minimus cost to the Trust. Aggregate costs for the entire project are
anticipated to be less than $50,000, all of which will have been expensed as
incurred.

     EFG's primary information software was coded by IBM at the point of
original design to use a four-digit field to identify calendar year. All of the
Trust's lease billings, cash receipts and equipment remarketing processes are
performed using this proprietary software. In addition, EFG has gathered
information about the Year 2000 readiness of significant vendors and third party
servicers and continues to monitor developments in this area. All of EFG's
peripheral computer technologies, such as its network operating system and
third-party software applications, including payroll, depreciation processing,
and electronic banking, have been evaluated for potential programming changes
and are expected to require only minor modifications to function properly with
respect to dates in the year 2000 and thereafter. Moreover, EFG understands that
each of its and the Trust's significant vendors and third-party servicers are in
the process, or have completed the process, of making their systems Year 2000
compliant. Substantially all parties queried have indicated that their systems
will be Year 2000 compliant by the end of 1998. Presently, EFG is not aware of
any outside customer with a Year 2000 Issue that would have a material effect on
the Trust's results of operations, liquidity, or financial position. However,
non-compliance on the part of a lessee could, under a worse case scenario,
result in lost revenues to the Trust.

     EFG believes that its Year 2000 compliance plan will be effective in
resolving all material Year 2000 risks in a timely manner and that the Year 2000
Issue will not pose significant operational problems with respect to its
computer systems or result in a system failure or disruption of its or the
Trust's business operations. However, EFG has no means of ensuring that all
customers, vendors and third-party servicers will conform ultimately to Year
2000 standards. The effect of this risk to the Trust is not determinable.


                                       15
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

Three and nine months ended September 30, 1998 compared to the three and nine
months ended September 30, 1997:

Overview

     As an equipment leasing trust, the Trust was organized to acquire a
diversified portfolio of capital equipment subject to lease agreements with
third parties. The Trust was designed to progress through three principal
phases: acquisitions, operations, and liquidation. During the operations phase,
a period of approximately six years, all equipment in the Trust's portfolio will
progress through various stages. Initially, all equipment will generate rental
revenues under primary term lease agreements. During the life of the Trust,
these agreements will expire on an intermittent basis and equipment held
pursuant to the related leases will be renewed, re-leased or sold, depending on
prevailing market conditions and the assessment of such conditions by EFG to
obtain the most advantageous economic benefit. Over time, a greater portion of
the Trust's original equipment portfolio will become available for remarketing
and cash generated from operations and from sales or refinancings will
fluctuate. Presently, the Trust is a Nominal Defendant in a Class Action
Lawsuit. The outcome of the Class Action Lawsuit could alter the future business
operations of the Trust. See Note 8 to the accompanying financial statements.
The Trust's operations commenced in 1992.


Results of Operations

     For the three and nine months ended September 30, 1998, the Trust
recognized lease revenue of $435,108 and $1,716,643, respectively, compared to
$1,010,273 and $3,577,408 for the same periods in 1997. The decrease in lease
revenue from 1997 to 1998 resulted principally from the exchange, in the second
quarter of 1997, of the Trust's interest in a vessel, as described in Note 5 to
the accompanying financial statements. During the nine months ended September
30, 1997, the Trust recognized lease revenue of $565,318 related to this vessel.
Other reductions in lease revenue from 1997 to 1998 occurred from primary lease
term expirations and the sale of equipment. The level of lease revenue to be
recognized by the Trust in the future may be impacted by the Amendment to the
Trust Agreement described in Note 9 to the accompanying financial statements;
however, the extent of such impact cannot be determined at this time.

     The Trust's equipment portfolio includes certain assets in which the Trust
holds a proportionate ownership interest. In such cases, the remaining interests
are owned by EFG or an affiliated equipment leasing program sponsored by EFG.
Proportionate equipment ownership enables the Trust to further diversify its
equipment portfolio by participating in the ownership of selected assets,
thereby reducing the general levels of risk which could result from a
concentration in any single equipment type, industry or lessee. The Trust and
each affiliate individually report, in proportion to their respective ownership
interests, their respective shares of assets, liabilities, revenues, and
expenses associated with the equipment.

     For the three and nine months ended September 30, 1998, the Trust earned
interest income of $79,913 and $258,308, respectively, compared to $69,609 and
$122,528 for the same periods in 1997. Interest income is typically generated
from temporary investment of rental receipts and equipment sales proceeds in
short-term instruments. Interest income during the three and nine months ended
September 30, 1998 included $11,307 and $34,582, respectively earned on the note
receivable from Semele Group, Inc. ("Semele") and interest earned on unexpended
proceeds from the issuance of Class B Interests (see below). The amount of
future interest income is expected to fluctuate in relation to prevailing
interest rates, the collection of lease revenue, and the proceeds from equipment
sales.

     During the three and nine months ended September 30, 1998, the Trust sold
equipment having a net book value of $216,620 and $740,400, respectively, to
existing lessees and third parties. These sales resulted in a net loss, for
financial statement purposes, of $115,694 and $194,432, respectively, compared
with a net gain for the same periods in 1997 of $48,274 and $93,868 on equipment
having a net book value of $11,526 and $81,464, 


                                       16
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

respectively. During the nine months ended September 30 1997, the Trust also
exchanged its interest in a vessel with an original cost and net book value of
$2,399,580 and $1,185,726, respectively (see Note 5 to the accompanying
financial statements). In connection with this exchange, the Trust realized
proceeds of $777,326, which resulted in a net loss, for financial statement
purposes, of $408,400. In addition, as this vessel was disposed of prior to the
expiration of the related lease term, the Trust received prepayment of the
remaining contracted rent due under the vessel's lease agreement in the amount
of $432,604.

     It cannot be determined whether future sales of equipment will result in a
net gain or a net loss to the Trust, as such transactions will be dependent upon
the condition and type of equipment being sold and its marketability at the time
of sale. In addition, the amount of gain or loss reported for financial
statement purposes is partly a function of the amount of accumulated
depreciation associated with the equipment being sold.

     The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Trust and which will maximize
total cash returns for each asset.

     The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Trust classifies such
residual rental payments as lease revenue. Consequently, the amount of gain or
loss reported in the financial statements is not necessarily indicative of the
total residual value the Trust achieved from leasing the equipment.

     Depreciation and amortization expense was $395,589 and $1,659,510 for the
three and nine months ended September 30, 1998, respectively, compared to
$823,115 and $2,617,136 for the same periods in 1997. For financial reporting
purposes, to the extent that an asset is held on primary lease term, the Trust
depreciates the difference between (i) the cost of the asset and (ii) the
estimated residual value of the asset on a straight-line basis over such term.
For purposes of this policy, estimated residual values represent estimates of
equipment values at the date of primary lease expiration. To the extent that an
asset is held beyond its primary lease term, the Trust continues to depreciate
the remaining net book value of the asset on a straight-line basis over the
asset's remaining economic life.

     Interest expense was $19,587 and $77,457 or 4.5% of lease revenue for each
of the three and nine months ended September 30, 1998, compared to $48,066 and
$158,653 or 4.8% and 4.4% of lease revenue for the same periods in 1997.
Interest expense is expected to decrease as the principal balance of notes
payable is reduced through the application of rent receipts to outstanding debt.

     Management fees were 4.5% of lease revenue for each of the three and nine
month periods ended September 30, 1998, compared to 4.4% and 3.9% of lease
revenue for each of the same periods in 1997. Management fees are based on 5% of
gross lease revenue generated by operating leases and 2% of gross lease revenue
generated by full payout leases.

     Operating expenses consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as printing,
distribution and remarketing expenses. Operating expenses were $100,309 and
$315,961 for the three and nine months ended September 30, 1998, respectively,
compared to $130,518 and $229,778 for the same periods in 1997. During the three
months ended September 30, 1998, the Trust accrued $108,000 for certain legal
expenses related to the Class Action Lawsuit described in Note 8 to the
financial statements. Additionally, operating expenses increased from 1997 to
1998 due to professional service costs incurred in connection with the
Solicitation Statement described in Note 11 to the accompanying financial


                                       17
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

statements. 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 trust.


Liquidity and Capital Resources and Discussion of Cash Flows

     The Trust 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 Trust's principal operating activities derive from asset rental
transactions. Accordingly, the Trust'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 net cash
inflows of $2,218,168 and $3,113,405 for the nine months ended September 30,
1998 and 1997, respectively. Future renewal, re-lease and equipment sale
activities will cause a decline in the Trust's primary-term lease revenue and
corresponding sources of operating cash. Overall, expenses associated with
rental activities, such as management fees, and net cash flow from operating
activities will also decline as the Trust experiences a higher frequency of
remarketing events.

     The Trust's equipment is leased by a number of creditworthy,
investment-grade companies and, to date, the Trust has not experienced any
material collection problems and has not considered it necessary to provide an
allowance for doubtful accounts. Notwithstanding a positive collection history,
there is no assurance that all future contracted rents will be collected or that
the credit quality of the Trust's lessees will be maintained. Collection risk
could increase in the future, particularly as the Trust remarkets its equipment
and enters re-lease agreements with different lessees. The Managing Trustee will
continue to evaluate and monitor the Trust's experience in collecting accounts
receivable to determine whether a future allowance for doubtful accounts may
become appropriate.

     Ultimately, the Trust will dispose of all assets under lease. This will
occur principally through sale transactions whereby each asset will be sold to
the existing lessee or to a third party. Generally, this will occur upon
expiration of each asset's primary or renewal/re-lease term. In certain
instances, casualty or early termination events may result in the disposal of an
asset. Such circumstances are infrequent and usually result in the collection of
stipulated cash settlements pursuant to terms and conditions contained in the
underlying lease agreements.

     Cash expended for asset acquisitions and cash realized from asset disposal
transactions are reported under investing activities on the accompanying
Statement of Cash Flows. The Trust expended $15,246 to acquire equipment during
the nine months ended September 30, 1998, pursuant to the reinvestment
provisions of the Trust Agreement (see Note 11). There were no equipment
acquisitions during the same period in 1997. During the nine months ended
September 30, 1998, the Trust realized net cash proceeds of $545,968, compared
to $175,332, for the same period in 1997. Future inflows of cash from asset
disposals will vary in timing and amount and will be influenced by many factors
including, but not limited to, the frequency and timing of lease expirations,
the type of equipment being sold, its condition and age, and future market
conditions.

     As a result of the vessel exchange (see Results of Operations), the Trust
became the beneficial owner of 209,694 shares of Semele common stock (valued at
$314,541 ($1.50 per share) at the time of the exchange transaction). The Trust
also received a beneficial interest in the Semele Note of $462,353 in connection
with the exchange.

     In accordance with Financial Accounting Standards Board Statement No. 115,
Accounting for Certain Investments in Debt and Equity Securities, marketable
equity securities classified as available-for-sale are required to be carried at
fair value. On June 30, 1998, Semele effected a 1-for-300 reverse stock split
followed by a 30-for-1 forward stock split resulting in a reduction of the
number of shares of Semele common stock owned by the Trust to 20,969 shares.
During the nine months ended September 30, 1998, the Trust decreased the
carrying 


                                       18
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

value of its investment in Semele common stock to $4.75 per share (the quoted
price of the Semele stock on NASDAQ at September 30, 1998) resulting in an
unrealized loss in 1998 of $57,667. This loss was reported as a component of
comprehensive loss, included in participants' capital. The Managing Trustee
believes that the underlying tangible assets of Semele, particularly the Rancho
Malibu property, can be sold or developed on a tax free basis due to Semele's
net operating loss carryforwards and can provide an attractive economic return
to the Trust.

     The Trust obtained long-term financing in connection with certain equipment
leases. The repayments of principal related to such indebtedness are reported as
a component of financing activities. Each note payable is recourse only to the
specific equipment financed and to the minimum rental payments contracted to be
received during the debt amortization period (which period generally coincides
with the lease rental term). As rental payments are collected, a portion or all
of the rental payment is used to repay the associated indebtedness. In future
periods, the amount of cash used to repay debt obligations will decline as the
principal balance of notes payable is reduced through the collection and
application of rents. However, the Trust has a balloon payment obligation of
$282,421 at the expiration of the primary lease term related to its interest in
an aircraft leased to Reno Air, Inc.

     For financial reporting purposes, the Managing Trustee and the Special
Beneficiary each has accumulated a capital deficit at September 30, 1998. This
is the result of aggregate cash distributions to these Participants being in
excess of their aggregate capital contributions ($1,000 each) and their
respective allocations of financial statement net income or loss. Ultimately,
the existence of a capital deficit for the Managing Trustee or the Special
Beneficiary for financial reporting purposes is not indicative of any further
capital obligations to the Trust by either the Managing Trustee or the Special
Beneficiary. However, for income tax purposes, the Trust Agreement requires that
income be allocated first to those Participants having negative tax capital
account balances so as to eliminate any such balances. In accordance with the
Trust Agreement, upon the dissolution of the Trust, the Managing Trustee will be
required to contribute to the Trust an amount equal to any negative balance
which may exist in the Managing Trustee's tax capital account. At December 31,
1997, the Managing Trustee had a positive tax capital account balance. No such
requirement exists with respect to the Special Beneficiary.

     At September 30, 1998, the Trust had aggregate future minimum lease
payments of $1,224,676 from contractual lease agreements (see Note 3 to the
financial statements), a portion of which will be used to amortize the principal
balance of notes payable of $1,009,977 (see Note 7 to the financial statements).
Additional cash inflows will be realized from future remarketing activities,
such as lease renewals and equipment sales, the timing and extent of which
cannot be predicted with certainty. This is because the timing and extent of
equipment sales is often dependent upon the needs and interests of the existing
lessees. Some lessees may choose to renew their lease contracts, while others
may elect to return the equipment. In the latter instances, the equipment could
be re-leased to another lessee or sold to a third party. Accordingly, as the
Trust matures and a greater level of its equipment assets becomes available for
remarketing, the cash flows of the Trust will become less predictable. In
addition, the Trust will have cash outflows to satisfy interest on indebtedness
and to pay management fees and operating expenses. Ultimately, the Trust is
expected to meet its future disbursement obligations and to distribute any
excess of cash inflows over cash outflows to the Participants in accordance with
the Trust Agreement. However, several factors, including month-to-month lease
extensions, lessee defaults, equipment casualty events, and early lease
terminations could alter the Trust's anticipated cash flows as described herein
and in the accompanying financial statements and result in fluctuations to the
Trust's periodic cash distribution payments.

     On July 18, 1997, the Trust issued 826,072 Class B Interests at $5.00 per
interest, thereby generating $4,130,360 in aggregate Class B capital
contributions. Class A Beneficiaries purchased 3,209 Class B Interests,
generating $16,045 of such aggregate capital contributions, and the Special
Beneficiary, EFG, purchased 822,863 Class B Interests, generating $4,114,315 of
such aggregate capital contributions. The Trust incurred offering costs in the
amount of $41,304 and professional service costs of $54,186 in connection with
this offering. Subsequently, EFG transferred its Class B Interests to a
special-purpose company, Equis II Corporation, a Delaware corporation. EFG also
transferred its ownership of AFG ASIT Corporation, the Managing Trustee of the


                                       19
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

Trust, to Equis II Corporation. As a result, Equis II Corporation has voting
control of the Trust through its ownership of the majority of all of the Trust's
outstanding voting interests, as well as its ownership of AFG ASIT Corporation.
Equis II Corporation is controlled by EFG's President and Chief Executive
Officer, Gary D. Engle. Accordingly, control of the Managing Trustee did not
change as a result of the foregoing transactions (see also Note 9 to the
accompanying financial statements).

     As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee used a portion of the net cash proceeds realized from the
offering of the Class B Interests to pay a one-time special cash distribution to
the Class A Beneficiaries of the Trust. The Managing Trustee declared and paid
this special cash distribution of approximately $1.47 per Class A Interest,
aggregating $808,363, to Class A Beneficiaries on August 15, 1997.

     On August 7, 1997, the Trust commenced an offer to purchase up to 45% of
the outstanding Class A Beneficiary Interests of the Trust. On October 10, 1997,
the Trust used $620,011 of the net proceeds realized from issuance of the Class
B Interests to purchase 65,402 of the Class A Interests tendered as a result of
the offer. On April 28, 1998, the Trust used an additional $14,400 of such
proceeds to purchase 1,800 of the remaining Class A Interests. On July 6, 1998,
the Trust used $1,263,443 of such proceeds to pay a capital distribution to the
Class B Beneficiaries. The remaining net proceeds from the Class B offering of
$1,328,653 will be used according to terms negotiated in connection with
settling the Class Action Lawsuit described in Note 8 (see also Notes 10, 11 and
12 to the accompanying financial statements).

     Cash distributions paid to the Participants consist of both a return of and
a return on capital. Cash distributions do not represent and are not indicative
of yield on investment. Actual yield on investment cannot be determined with any
certainty until conclusion of the Trust and will be dependent upon the
collection of all future contracted rents, the generation of renewal and/or
re-lease rents, and the residual value realized for each asset at its disposal
date. Future market conditions, technological changes, the ability of EFG to
manage and remarket the assets, and many other events and circumstances, could
enhance or detract from individual asset yields and the collective performance
of the Trust's equipment portfolio.

     It is the intention of the Managing Trustee to maintain a cash distribution
level that is consistent with the operating cash flows of the Trust and to
optimize the long-term value of the Trust. A distribution level that is higher
than the Trust's operating cash flows could compromise the Trust's working
capital position, as well as its ability to refurbish or upgrade equipment in
response to lessee requirements or other market circumstances. Accordingly, in
order to better align monthly cash distributions with the Trust's operating cash
flows, the Managing Trustee reduced the level of monthly cash distributions from
an annualized rate of $2.52 per Class A Interest (the rate established and paid
from the Trust's inception through September 1995) to an annualized rate of
$1.26 per Class A Interest commencing in October 1995. In October 1996, the
Managing Trustee increased the annualized distribution rate to $1.64 per Class A
Interest and has sustained this distribution rate throughout 1997 and the nine
months ended September 30, 1998. For the Class B Beneficiaries, the Managing
Trustee established and paid, from the Trust, an annualized distribution of
$0.66 per Class B Interest commencing July 18, 1997. Future distributions with
respect to Class B Interests, will be subordinate to certain distributions with
respect to Class A Interests.

     Cash distributions to the Managing Trustee, the Special Beneficiary and the
Beneficiaries are declared and generally paid within 45 days following the end
of each calendar month. The payment of such distributions is presented as a
component of financing activities. For the nine months ended September 30, 1998,
the Trust declared total cash distributions of $2,322,435. Of the total
distributions, the Beneficiaries were allocated $2,224,478 ($592,893 for Class A
Beneficiaries and $1,631,585 for Class B Beneficiaries); the Special Beneficiary
was allocated $87,367, and the Managing Trustee was allocated $10,590.

                                       20
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

     The nature of the Trust's principal cash flows gradually will shift from
rental receipts to equipment sale proceeds as the Trust matures. As this occurs,
the Trust's cash flows will become more volatile in that certain of the Trust's
equipment leases will be renewed and certain of its assets will be sold. In some
cases, the Trust may be required to expend funds to refurbish or otherwise
improve the equipment being remarketed in order to make it more desirable to a
potential lessee or purchaser. The Trust's Advisor, EFG, and the Managing
Trustee will attempt to monitor and manage these events to maximize the residual
value of the Trust's equipment and will consider these factors, in addition to
the collection of contractual rents, the retirement of scheduled indebtedness
and the Trust's future working capital and equipment requirements, in
establishing future cash distribution rates. Ultimately, the Beneficiaries
should expect that cash distribution rates will fluctuate over the long term as
a result of future remarketing activities.


                                       21
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                           PART II. OTHER INFORMATION

        Item 1.           Legal Proceedings
                          Response:

                          Refer to Note 8 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



                                       22
<PAGE>


                                 SIGNATURE PAGE



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.



                                                 AFG Investment Trust A


                               By:      AFG ASIT Corporation, a Massachusetts
                                        corporation and the Managing Trustee of
                                        the Registrant.


                               By:      /s/  Michael J. Butterfield
                                   -----------------------------------------
                                        Michael J. Butterfield
                                        Treasurer AFG ASIT Corporation
                                        (Duly Authorized Officer and
                                        Principal Accounting Officer)


                               Date:    November 13, 1998
                                   -----------------------------------------


                               By:      /s/  Gary Romano
                                   -----------------------------------------
                                        Gary M. Romano
                                        Clerk of AFG ASIT Corporation
                                        (Duly Authorized Officer and
                                        Principal Financial Officer)


                               Date:    November 13, 1998
                                   -----------------------------------------


                                       23