SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal quarter ended September 30, 1994.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number 0-15436
_______________________
PLM EQUIPMENT GROWTH FUND
(Exact name of registrant as specified in its charter)
California 94-2998816
(State or other jurisiction of (I.R.S. Employer
incorporation or organization Identification No.)
One Market, Steuart Street Tower
Suite 900, San Francisco, CA 94105-1301
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code (415) 974-1399
_______________________
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 (ro
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 [ ]
Indicate the number of units outstanding of each of the
issuer's classes of partnership units, as of the last practicable
date:
Class Outstanding at
November 11, 1994
Limited Partnership Depositary Unit 5,848,297
General Partnership Units 1
<PAGE>
<TABLE>
PLM EQUIPMENT GROWTH FUND
(A Limited Partnership)
BALANCE SHEETS
(thousands of dollars)
ASSETS
<CAPTION>
September 30, December 31,
1994 1993
<S> <C> <C>
Equipment held for operating leases $ 119,149 $ 129,371
Less accumulated depreciation (66,282) (68,273)
52,867 61,098
Equipment held for sale 76 1,316
Net equipment 52,943 62,414
Cash and cash equivalents 3,719 3,556
Restricted cash 2,326 2,188
Accounts receivable, less allowance for
doubtful accounts of $203 in 1994
and $212 in 1993 1,623 1,852
Due from affiliates 72 74
Prepaid expenses and other assets 163 196
Deferred charges, net of accumulated
amortization of $909 in 1994 and
$812 in 1993 79 202
Total assets $ 60,925 $ 70,482
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 2,281 $ 1,852
Security deposits 591 808
Prepaid deposits and reserve for repairs 2,022 2,086
Note payable 28,000 28,000
Total liabilities 32,894 32,746
Partners' capital (deficit):
Limited Partners (5,848,997 Depositary Units
at September 30, 1994, and 5,859,897
Depositary Units at December 31, 1993) 28,342 38,047
General Partner (311) (311)
Total partners' capital 28,031 37,736
Total liabilities and partners' capital $ 60,925 $ 70,482
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
PLM EQUIPMENT GROWTH FUND
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(thousands of dollars, except per unit amounts)
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues:
Lease revenue $ 5,374 $ 5,329 $ 16,926 $ 17,992
Interest and other income 241 85 344 171
Net gain on disposition
of equipment 562 72 372 629
Total revenues 6,177 5,486 17,642 18,792
Expenses:
Depreciation and amortization 2,606 2,872 7,742 8,797
Management fees to affiliate 502 333 1,158 1,308
Repairs and maintenance 856 1,372 2,245 2,866
Interest expense 441 321 1,133 997
Insurance expense to affiliate 39 19 57 150
Other insurance expense 134 171 304 384
Marine equipment operating
expenses 717 563 1,340 844
General and administrative
expenses to affiliates 160 78 461 417
Other general and administrative
expenses 211 313 730 629
Loss on revaluation of
equipment -- 800 960 871
Loss on legal settlement 900 -- 900 --
Total expenses 6,566 6,842 17,030 17,263
Net (loss) income $ (389)$ (1,356) $ 612 $ 1,529
Partners' share of net (loss)
income
Limited Partners $ (423)$ (1,410) $ 528 $ 1,418
General Partner 34 54 84 111
Total $ (389)$ (1,356) $ 612 $ 1,529
Net (loss) income per Depositary
Unit (5,848,997 Units at September
30, 1994; 5,878,100 Units
at September 30, 1993) $ (0.07)$ (0.23) $ 0.09 $ 0.24
Cash distributions $ 3,398 $ 3,430 $ 10,183 $ 10,328
Cash distributions per
Depositary Unit $ 0.58 $ 0.58 $ 1.73 $ 1.73
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
PLM EQUIPMENT GROWTH FUND
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(thousands of dollars)
<CAPTION>
For the nine months ended
September 30,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 612 $ 1,529
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,742 8,797
Net gain on disposition of equipment (372) (629)
Loss on revaluation of equipment 960 871
Change in operating assets and liabilities:
Accounts receivable, net 229 (163)
Due from affiliates 2 152
Prepaid expenses and other assets 33 (78)
Restricted cash 232 (261)
Due to affiliates -- 95
Accounts payable and accrued expenses 429 614
Security deposits (217) 26
Prepaid deposits and reserve for repairs (64) 1,069
Net cash provided by operating activities 9,586 12,022
Cash flows from investing activities:
Payments for purchase of equipment (908) (4,414)
Decrease in equipment acquisition deposits -- 2,800
Proceeds from disposition of equipment 2,172 3,387
Increase in restricted cash (370) (3,343)
Net cash provided by (used in) investing
activities 894 (1,570)
Cash flows from financing activities:
Cash distributions paid to partners (10,183) (10,328)
Repurchase of Depositary Units (134) (976)
Net cash used in financing activities (10,317) (11,304)
Net increase (decrease) in cash
and cash equivalents 163 (852)
Cash and cash equivalents at beginning of period 3,556 5,044
Cash and cash equivalents at end of period $ 3,719 $ 4,192
Supplemental information:
Interest paid $ 1,111 $ 1,013
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND
A Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1994
1. Opinion of Management
In the opinion of the management of PLM Financial
Services, Inc., the General Partner, the accompanying
unaudited financial statements contain all
adjustments necessary, consisting primarily of normal
recurring accruals, to present fairly the financial
position of PLM Equipment Growth Fund (the
"Partnership") as of September 30, 1994, the
statements of operations for the three and nine
months ended September 30, 1994 and 1993, and the
statements of cash flows for the nine months ended
September 30, 1994 and 1993. Certain information and
footnote disclosures normally included in financial
statements prepared in accordance with generally
accepted accounting principles have been condensed or
omitted from the accompanying financial statements.
For further information, reference should be made to
the financial statements and notes thereto included
in the Partnership's Annual Report on Form 10-K for
the year ended December 31, 1993, on file at the
Securities and Exchange Commission.
2. Reclassification
Certain amounts in the 1993 financial statements have
been reclassified to conform with the 1994
presentation. Transportation equipment held for
operating leases at September 30, 1994, and December
31, 1993, includes equipment previously reported as
held for sale.
3. Cash Distributions
Cash distributions are recorded when paid and totaled
$3.4 million and $10.2 million for the three and nine
months ended September 30, 1994, respectively. Cash
distributions to unitholders in excess of net income
are considered to represent a return of capital.
Cash distributions to unitholders of $9.6 million and
$8.8 million for the nine months ended September 30,
1994,and 1993, respectively, were deemed to be a
return of capital.
Cash distributions of $3.4 million ($0.575 per
Depositary Unit) were declared on September 14, 1994,
and are to be paid on November 15, 1994, to the
unitholders of record as of September 30, 1994.
4. Equipment
Equipment held for operating leases is stated at
cost. At September 30, 1994, the General Partner
reclassified assets shown as held for sale at
December 31, 1993, to equipment held for operating
leases, unless the particular asset is subject to a
pending contract for sale.
<PAGE>
PLM EQUIPMENT GROWTH FUND
A Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1994
4. Equipment (continued)
The components of equipment are as follows (in
thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
<S> <C> <C>
Equipment held for
operating leases:
Rail equipment $ 26,079 $ 26,948
Marine containers 10,659 12,236
Marine vessels 22,277 22,696
Aircraft and aircraft engines 34,329 42,258
Trailers 11,268 10,696
Mobile offshore drilling units 14,537 14,537
119,149 129,371
Less accumulated depreciation (66,282) (68,273)
52,867 61,098
Equipment held for sale 76 1,316
Net equipment $ 52,943 $ 62,414
</TABLE>
As of September 30, 1994, all equipment in the Partnership
portfolio was either on lease or operating in PLM-
affiliated short-term trailer rental facilities, except for
88 marine containers off lease with an aggregate net book
value of $0.3 million. As of September 30, 1993, the
Partnership had 125 marine containers and one aircraft off
lease with an aggregate net book value of $2.7 million.
During the nine months ended September 30, 1994, the
Partnership reduced the carrying value of one commercial
aircraft by $1.0 million to its estimated net realizable
value, and the aircraft was sold in the second quarter.
During the nine months ended September 30, 1993, the
Partnership reduced the carrying value of 50 pulpwood
railcars by $0.1 million to their estimated net realizable
value, and the railcars were subsequently sold.
Additionally in 1993, the Partnership reduced the carrying
value of the Partnership's 50% interest in one marine
vessel by $0.8 million to its estimated net realizable
value of $4.5 million.
In September 1994, the Partnership entered into a binding
purchase agreement to acquire a 55% interest in a top-drive
for the mobile offshore drilling unit, for $1.2 million in
the fourth quarter of 1994. The remaining interest will be
owned by an affiliated partnership.
During the nine months ended September 30, 1994, the
Partnership purchased 40 refrigerated trailers for $0.9
million. During the nine months ended September 30, 1993,
the Partnership purchased a jet engine for $2.8 million and
166 over-the-road trailers for $1.6 million.
During the nine months ended September 30, 1994, the
Partnership sold or disposed of two commercial aircraft,
two barges, 410 marine containers, 55 railcars, and 31
trailers with an aggregate net book value of $1.8 million
for proceeds of $2.2 million. During the nine months ended
September 30, 1993, the Partnership sold or disposed of one
marine vessel, 366 marine containers, 224 railcars, and 93
trailers, with a carrying value of $2.8 million for $3.4
million.
<PAGE>
PLM EQUIPMENT GROWTH FUND
A Limited Partnership
NOTES TO FINANCIAL STATEMENTS
September 30, 1994
4. Equipment (continued)
Equipment held for sale at September 30, 1994, consisted of
three barges subject to a pending contract for sale with an
estimated aggregate net book value of $0.1 million.
5. Legal Proceedings
During the nine months ended September 30, 1994, the
Partnership recorded a $0.9 million loss on a legal
settlement involving a dispute with one of the
Partnership's marine vessel charterers over the ability of
the marine vessel to trade to Cuba on charterer's
instructions.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
(A) Sources
The Partnership's primary source of liquidity is operating
cash flow. Proceeds realized from the sale or disposal of
equipment may be used for the repayment of outstanding debt or
for distributions to Partners. The Partnership's sources of
capital include proceeds from its public offering of limited
partnership units, debt financing, and, during the just
concluded reinvestment phase of the Partnership, excess net cash
flow from operations remaining after a certain level of
distributions had been made to the Limited Partners. At
September 30, 1994, the Partnership had an outstanding note
payable in the amount of $28.0 million, which matures in
September of 1995. The Partnership intends and believes it will
be able to refinance the debt prior to maturity.
(B) Asset Sales and Purchases
Proceeds realized from the sale or disposal of equipment may
be used for the repayment of outstanding debt, or for
distributions to Partners. Lessees can either exercise fair
market value purchase options provided for in certain leases, or
pay stipulated loss values on equipment lost or disposed of
during the time it is subject to certain lease agreements.
During the nine months ended September 30, 1994, the Partnership
purchased 40 refrigerated trailers for $0.9 million, and sold or
disposed of two commercial aircraft, two barges, 309 marine
containers, 55 railcars, and 31 trailers for $2.2 million.
Pursuant to the terms of the Partnership's $28.0 million loan
agreement, proceeds from equipment sales or payment of
stipulated loss values must be deposited in a joint escrow
account and used either to purchase additional equipment, until
the just concluded reinvestment phase of the Partnership, or to
reduce, on a pro-rata basis, the outstanding debt.
The General Partner intends to sell equipment when it
believes that the market prices for this equipment exceed
inherent equipment values or expected benefits from continued
ownership of that equipment. The General Partner's evaluation
of such sales will require careful consideration of many
factors, such as the cyclical nature of the equipment markets
and the regulatory environment, which may be highly time
specific in nature. In such a dynamic environment, it may be
difficult to forecast the appropriate time to sell equipment.
Similarly, disposal of equipment from the wear and tear and
general risk of normal operations is unpredictable.
The General Partner has not planned expenditures, nor is it
aware of any contingencies, that would require capital resources
other than those provided by operating cash flow.
(C) Depositary Unit Repurchase Plan
The Partnership has engaged in a program to repurchase up to
250,000 Depositary Units. During the nine months ended
September 30, 1994, the Partnership had repurchased 10,600
Depositary Units at a cost of $134,000, for a cumulative total
of 135,703 Depositary Units repurchased at a cost of $2.0
million.
(D) Market Values
At least annually, the General Partner prepares an evaluation
of the net realizable value and fair market value of the
Partnership's equipment portfolio, using, among other sources,
independent third-party appraisals, values reported in trade
publications, and comparative values from arms-length
transactions for similar equipment. Concurrently, the General
Partner evaluates whether the current fair market value of
equipment represents the effects of current market conditions or
permanent impairment of value (e.g., technological obsolescence,
regulatory changes, etc.). Equipment whose carrying value is
determined to be permanently impaired, without possibility of
being leased at an acceptable rate, has its book value adjusted
to the estimated net realizable value. During the second
quarter of 1994, the Partnership reduced the carrying value of
one commercial aircraft by $1.0 million to its estimated net
realizable value of $0.3 million.
Comparison of the Partnership's Operating Results for the Three
Months Ended September 30, 1994, and 1993
(A) Revenues
Total revenues of $6.2 million for the quarter ended
September 30, 1994 increased from $5.5 million for the same
period in 1993.
(1) Lease revenues increased to $5.4 million for the quarter
ended September 30, 1994, from $5.3 million for the same period
in 1993. The following table lists lease revenues by equipment
type:
<TABLE>
<CAPTION>
For the three months ended
September 30,
1994 1993
<S> <C> <C>
Rail equipment $ 1,760 $ 1,730
Marine vessels 1,391 1,051
Aircraft 1,026 948
Trailers 353 810
Marine containers 429 303
Mobile offshore drilling unit 415 487
$ 5,374 $ 5,329
</TABLE>
The increase in 1994 revenues was primarily attributable to:
(a) an increase of $0.3 million in marine vessel revenue was
due to one of the Partnership's marine vessels transferring from
bare-boat charter into a marine vessel pool which earns higher
daily rates but also assumes all operational costs;
(b) an increase of $0.1 million in marine container lease
revenue resulting from higher utilization rates;
(c) an increase of $0.1 million in aircraft lease revenue
resulting from higher utilization rates;
(d) a decrease of $0.5 million in trailer lease revenue due
to lower utilization rates, and due to a correction of an error
for over-accrued revenues in prior periods.
(2) Interest and other income of $0.2 million for the third
quarter of 1994 increased $0.2 million from the same period in
1993 due to a $0.2 million settlement of a damage claim
involving one of the Partnership's marine vessels in the third
quarter of 1994.
(3) In the third quarter of 1994, the Partnership had a $0.6
million net gain from the disposition of equipment which
resulted from the sale or disposal of two barges, two railcars,
298 marine containers, and 23 trailers which had an aggregate
net book value of $0.2 million for proceeds of $0.8 million. In
the third quarter of 1993, the Partnership had a $0.1 million
net gain on the disposition of equipment which resulted from
the sale or disposal of 97 marine containers and 37 trailers
which had an aggregate net book value of $0.2 million for
proceeds of $0.3 million.
(B) Expenses
Total expenses of $6.6 million for the three months ended
September 30, 1994 decreased from $6.8 million for the same
period in 1993. The decrease in 1994 was primarily attributable
to lower repairs and maintenance, depreciation and amortization,
and loss on revaluation of equipment, partially offset by higher
marine equipment operating expenses, management fees, loss on
legal settlement, and interest expenses.
(1) Direct operating expenses (defined as repairs and
maintenance, insurance expenses, and marine equipment operating
expenses) were $1.7 million and $2.1 million in the third
quarters of 1994 and 1993, respectively. The decrease resulted
from:
(a) a decrease of $0.5 million in repairs and maintenance
expenses resulting from the sale of one marine vessel in 1993,
and 55 railcars and two aircraft in 1994;
(b) an increase of $0.2 million in marine equipment
operating expenses due to one of the Partnership's marine
vessels transferring from bare-boat charter, where the lessee is
responsible for most operating expenses, into a marine vessel
pool where the Partnership is responsible for all operating
costs and is allocated, on a pro-rata basis, expenses of the
pool.
(2) Indirect operating expenses (defined as depreciation and
amortization expense, management fees, interest expense, and
general and administrative expenses) were $3.9 million in the
third quarters of both 1994 and 1993. The significant
variations in indirect operating expenses were:
(a) an increase of $0.2 million in management fees to
affiliate resulting from decreased cash expenditures.
Management fees are calculated as the greater of 10% of the
Partnership's operating cash flow, or 1/12 of 1/2% of the book
value of the equipment in the Partnership's equipment portfolio,
as defined in the Limited Partnership Agreement;
(b) an increase in interest expense of $0.1 million due to
an increase in the LIBOR rate of interest on the Partnership's
debt;
(c) a decrease in depreciation and amortization expense of
$0.3 million from 1993 levels reflecting the Partnership's use
of the double-declining depreciation method and the sale of
certain assets during 1993 and 1994.
(3) In the third quarter of 1994, the Partnership had no loss
on revaluation of equipment. In the third quarter of 1993, the
Partnership recorded a loss on revaluation of equipment of $0.8
million resulting from the reduction in carrying value in the
Partnership's 50% interest in one marine vessel to its estimated
net realizable value.
(4) In the third quarter of 1994, the Partnership recorded a
$0.9 million loss on a legal settlement involving a dispute with
one of the Partnership's marine vessel charterers over the
ability of the marine vessel to trade to Cuba on charterer's
instructions.
(C) Net Loss
As a result of the foregoing, the Partnership's net loss was
$0.4 million in the third quarter of 1994, compared to net loss
of $1.4 million in the third quarter of 1993. The Partnership's
ability to operate and liquidate assets, secure leases, and re-
lease those assets whose leases expire during the duration of
the Partnership is subject to many factors; therefore, the
Partnership's performance in the third quarter 1994, is not
necessarily indicative of future periods. In the third quarter
1994, the Partnership distributed $3.4 million to the
Unitholders, or $.58 per Depositary Unit.
<PAGE>
Comparison of the Partnership's Operating Results for the Nine
Months Ended September 30, 1994, and 1993
(A) Revenues
Total revenues of $17.6 million for the nine months ended
September 30, 1994 declined from $18.8 million for the same
period in 1993.
(1) Lease revenues declined to $16.9 million for the nine
months ended September 30, 1994, from $18.0 million for the same
period in 1993. The following table lists lease revenues earned
by equipment type:
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1994 1993
<S> <C> <C>
Rail equipment $ 5,274 $ 5,642
Marine vessels 4,151 4,114
Aircraft 3,124 3,107
Trailers 1,578 1,783
Marine containers 1,447 1,768
Mobile offshore drilling units 1,352 1,578
$ 16,926 $ 17,992
</TABLE>
The decrease in 1994 revenues was primarily attributable to:
(a) a decrease of $0.4 million in railcar lease revenue
resulting from the sale of 224 railcars at the end of the first
quarter of 1993, and 55 railcars throughout 1994;
(b) a decrease of $0.3 million in marine container lease
revenue resulting from marine container dispositions and lower
utilization rates;
(c) a decrease of $0.2 million in mobile offshore drilling
unit lease revenue resulting from reduced lease rates on the
Partnership's drilling unit;
(d) a decrease of $0.2 million in trailer lease revenue
resulting from a correction of an error for over-accrued
revenues in prior periods.
(2) Interest and other income of $0.3 million for the nine
months ended September 30, 1994 increased $0.2 million from the
same period in 1993 due to a $0.2 million settlement of a damage
claim involving one of the Partnership's marine vessels in 1994.
(3) In the first nine months of 1994, the Partnership had a
$0.4 million net gain on the disposition of equipment which
resulted from the sale or disposition of two commercial
aircraft, two barges, 410 marine containers, 55 railcars, and 31
trailers which had an aggregate net book value of $1.8 million
for proceeds of $2.2 million.
In the first nine months of 1993, the Partnership had a $0.6
million net gain on the disposition of equipment which resulted
from the sale or disposition of one marine vessel, 366 marine
containers, 224 railcars, and 93 trailers with an aggregate net
book value of $2.8 million for proceeds of $3.4 million.
(B) Expenses
Total expenses of $17.0 million for the nine months ended
September 30, 1994 decreased from $17.3 million for the same
period in 1993. The decrease in 1994 was primarily attributable
to lower depreciation and amortization, management fees, repairs
and maintenance, and insurance expense, partially offset by
higher marine equipment operating, interest, general and
administrative expense, loss on legal settlement, and loss on
revaluation of equipment.
(1) Direct operating expenses (defined as repairs and
maintenance, insurance expenses, and marine equipment operating
expenses) decreased to $3.9 million in the first nine months of
1994 from $4.2 million in the same period in 1993. The decrease
resulted from:
(a) a decrease of $0.6 million in repairs and maintenance
expenses resulting primarily from a decrease in marine vessel
repairs due to the sale of one marine vessel in the second
quarter of 1993, and the sale of 55 railcars throughout 1994;
(b) a decrease of $0.2 million in insurance expense
resulting from the sale of one of the Partnership's marine
vessels in the second quarter of 1993 and a refund of $0.1
million from an insurance pool which the Partnership's marine
vessels participate in due to lower than estimated claims in the
pool;
(c) an increase of $0.5 million in marine equipment
operating expenses due to one of the Partnership's marine
vessels transferring from bare-boat charter, where the lessee is
responsible for most operating costs, into a marine vessel pool
where the Partnership is responsible for all operating costs and
is allocated, on a pro-rata basis, expenses of the pool.
(2) Indirect operating expenses (defined as depreciation and
amortization expense, management fees, interest expense, and
general and administrative expenses ) were $11.2 million and
$12.1 million in the nine months ended 1994 and 1993,
respectively. The decrease resulted from:
(a) a decrease in depreciation and amortization expense of
$1.1 million from 1993 levels reflecting the Partnership's use
of the double-declining depreciation method, and the sale of
certain assets during 1993, and 1994;
(b) a decrease of $0.2 million in management fees to
affiliate resulting from reduced cash flow. Management fees are
calculated as the greater of 10% of the Partnership's operating
cash flow, or 1/12 of 1/2% of the book value of the equipment in
the Partnership's equipment portfolio, as defined in the Limited
Partnership Agreement;
(c) an increase in general and administrative expense of
$0.1 million due to increased bad debt expense and increased
administrative costs at the rental yard facilities due to the
increase in the number of trailers at these facilities;
(d) an increase of $0.1 million in interest expense
resulting from an increase in the LIBOR rate of interest on the
Partnership's debt.
(3) During the nine months ended September 30, 1994, the
Partnership recorded a $1.0 million loss on revaluation of
equipment resulting from the reduction in carrying value of one
commercial aircraft to its estimated net realizable value. For
the nine months ended September 30, 1993, the Partnership
recorded a $0.9 million loss on revaluation of equipment
resulting from the $0.1 and $0.8 million reductions in carrying
values of 50 pulpwood cars and the Partnership's 50% interest in
one marine vessel, respectively, to their estimated net
realizable values.
(4) During the nine months ended September 30, 1994, the
Partnership recorded a $0.9 million loss on a legal settlement
involving a dispute with one of the Partnership's marine vessel
charterers over the ability of the marine vessel to trade to
Cuba on charterer's instructions.
(C) Net Income
As a result of the foregoing, the Partnership's net income
was $0.6 million in the first nine months of 1994, compared to
$1.5 million during the same period in 1993. The Partnership's
ability to operate and liquidate assets, secure leases, and re-
lease those assets whose leases expire during the duration of
the Partnership is subject to many factors and the Partnership's
performance in the first nine months of 1994, is not necessarily
indicative of future periods. In the first nine months of 1994,
the Partnership distributed $10.1 million to the unitholders, or
$1.73 per Depositary Unit.
<PAGE>
Trends
Due in part to extended worldwide recessionary conditions
experienced over the past several quarters, the markets for
certain types of transportation equipment, primarily aircraft
and marine vessels, are currently depressed and performing below
historical norms. This market condition of generally weak demand
and excess supply has resulted in lower lease rates and reduced
asset values.
The return of lease rates on certain types of equipment to
their historical levels may be dependent on a number of factors
including improved international economic conditions, the
absence of technological obsolescence, new government
regulations, increased-industry specific demand, and the
increased availability of financing.
The Partnership intends to use excess cash flow, if any, for
payment of loan principal, operating reserves, and distributions
to investors.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
See Note 5 of Notes to Financial Statements.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PLM EQUIPMENT GROWTH
FUND
By: PLM Financial Services,
Inc.
General Partner
Date: November 11, 1994 By: /s/ David J. Davis
David J. Davis
Vice President and
Corporate Controller
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
PLM EQUIPMENT GROWTH FUND
By:PLM Financial Services, Inc.
General Partner
Date: November 11, 1994 By:
David J. Davis
Vice President and
Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the third
quarter 10-Q and is qualified in its entirety by reference to such 10-Q.
</LEGEND>
<S> <C>
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0
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