UNITED STATES
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 March 31, 1998
[] 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 33-27746
-----------------------
PLM EQUIPMENT GROWTH FUND IV
(Exact name of registrant as specified in its charter)
California 94-3090127
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Indentification No.)
One Market, Steuart Street Tower,
Suite 800, 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 (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
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
BALANCE SHEETS
(in thousands of dollars, except unit amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------------------------------------
<S> <C> <C>
Assets
Equipment held for operating leases, at cost $ 85,631 $ 87,520
Less accumulated depreciation (56,808) (56,215)
----------------------------------------
28,823 31,305
Net equipment
Cash and cash equivalents 7,168 3,650
Restricted cash 147 247
Accounts receivable, less allowance for doubtful
accounts of $3,171 in 1998 and $3,332 in 1997 1,055 954
Investments in unconsolidated special-purpose entities 6,264 9,756
Deferred charges, less accumulated amortization
of $503 in 1998 and $486 in 1997 101 119
Prepaid expenses and other assets 42 58
----------------------------------------
Total assets $ 43,600 $ 46,089
========================================
Liabilities and partners' capital
Liabilities:
Accounts payable and accrued expenses $ 883 $ 1,511
Due to affiliates 275 256
Lessee deposits and reserve for repairs 1,968 2,095
Notes payable 21,000 21,000
----------------------------------------
Total liabilities 24,126 24,862
----------------------------------------
Partners' capital:
Limited partners (8,628,420 limited partnership units
as of March 31, 1998 and December 31, 1997) 19,474 21,227
General Partner -- --
----------------------------------------
Total partners' capital 19,474 21,227
----------------------------------------
Total liabilities and partners' capital $ 43,600 $ 46,089
========================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the three months ended March 31,
(in thousands of dollars, except weighted-average unit amounts)
<TABLE>
<CAPTION>
1998 1997
--------------------------------
<S> <C> <C>
Revenues
Lease revenue $ 3,074 $ 3,385
Interest and other income 74 100
Net gain (loss) on disposition of equipment (480) 2,340
--------------------------------
Total revenues 2,668 5,825
Expenses
Depreciation and amortization 1,512 1,782
Equipment operating expenses 236 308
Repairs and maintenance 933 248
Interest expense 512 713
Insurance expense to affiliate (6) 67
Other insurance expense 99 129
Management fees to affiliate 173 184
General and administrative expenses
to affiliates 150 235
Other general and administrative expenses 16 392
Provision for (recovery of) bad debt expense 98 (266)
--------------------------------
Total expenses 3,723 3,792
Equity in net income (loss) of unconsolidated
special-purpose entities 210 (111)
--------------------------------
Net income (loss) $ (845) $ 1,922
================================
Partners' share of net income (loss)
Limited partners $ (890) $ 1,831
General Partner 45 91
--------------------------------
Total $ (845) $ 1,922
================================
Net income (loss) per weighted-average limited
partnership unit (8,628,420 limited
partnership units as of March 31, 1998
and 1997, respectively) $ (0.10) $ 0.21
================================
Cash distribution $ 908 $ 1,817
================================
Cash distribution per weighted-average limited partnership unit $ 0.10 $ 0.20
================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the period from December 31, 1996 to March 31, 1998
(in thousands of dollars)
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
---------------------------------------------------------
<S> <C> <C> <C>
Partners' capital as of December 31, 1996 $ 24,909 $ -- $ 24,909
Net income 1,803 295 2,098
Cash distribution (5,485 ) (295 ) (5,780 )
Partners' capital as of December 31, 1997 21,227 -- 21,227
Net income (loss) (890 ) 45 (845 )
Cash distribution (863 ) (45 ) (908 )
---------------------------------------------------------
Partner's capital as of March 31, 1998 $ 19,474 $-- $ 19,474
=========================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the three months ended March 31,
(in thousands of dollars)
<TABLE>
<CAPTION>
1998 1997
------------------------------------
<S> <C> <C>
Operating activities
Net income (loss) $ (845) $ 1,922
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 1,512 1,782
Net (gain) loss on disposition of equipment 480 (2,340)
Equity in net (income) loss of unconsolidated special-
Purpose entities (210) 111
Changes in operating assets and liabilities:
Restricted cash 100 --
Accounts and notes receivable, net 130 (278)
Prepaid expenses and other assets 16 73
Accounts payable and accrued expenses (628) (279)
Due to affiliates 19 (156)
Lessee deposits and reserve for repairs (127) 253
------------------------------------
Net cash provided by operating activities 447 1,088
------------------------------------
Investing activities
Payments for capital repairs (7) (1)
Liquidation proceeds from unconsolidated
special-purpose entities 3,470 --
Proceeds from disposition of equipment 284 6,947
Distribution from unconsolidated special-purpose entities 232 132
------------------------------------
Net cash provided by investing activities 3,979 7,078
------------------------------------
Financing activities
Cash distribution paid to limited partners (863) (1,726)
Cash distribution paid to General Partner (45) (91)
------------------------------------
Net cash used in financing activities (908) (1,817)
------------------------------------
Net increase in cash and cash equivalents 3,518 6,349
Cash and cash equivalents at beginning of year 3,650 2,142
------------------------------------
Cash and cash equivalents at end of year $ 7,168 $ 8,491
====================================
Supplemental information
Interest paid $ 512 $ 713
====================================
Sale proceeds included in accounts receivable $ 231 $ --
====================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
1. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc. (FSI or
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 IV (the Partnership) as of March 31, 1998 and December 31, 1997, the
statements of operations for the three months ended March 31, 1998 and
1997, the statements of changes in partners' capital for the period from
December 31, 1996 to March 31, 1998, and the statements of cash flows for
the three months ended March 31, 1998 and 1997. 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, 1997, on file with the Securities and
Exchange Commission.
2. Cash Distributions
Cash distributions are recorded when paid and totaled $0.9 million and $1.8
million for the three months ended March 31, 1998 and 1997, respectively.
Cash distributions to limited partners in excess of net income are deemed
to be a return of capital. Cash distributions to limited partners of $0.9
million and $0 for the three months ended March 31, 1998 and 1997,
respectively, were deemed to be a return of capital. Cash distributions
related to the results from the first quarter of 1998, of $0.7 million,
were paid during the second quarter of 1998.
Transactions with General Partner and Affiliates
The balance due to affiliates as of March 31, 1998 and December 31, 1997,
includes $0.1 million due to FSI and its affiliate for management fees and
$0.2 million due to affiliated unconsolidated special-purpose entities
(USPEs). The Partnership's proportional share of management fees with
USPE's of $9,000 and $11,000 were payable as of March 31, 1998 and December
31, 1997, respectively. The Partnership's proportional share of the
affiliated expenses incurred by the USPEs during 1998 and 1997 is listed in
the following table (in thousands of dollars):
For the Three Months
Ended March 31,
1998 1997
------------------------------
Management fees $ 20 $ 20
Data processing and administrative
expenses 5 8
Insurance expense 2 31
Transportation Equipment Indemnity Company, Ltd. (TEI), an affiliate of the
General Partner, provided certain marine insurance coverage for Partnership
equipment and other insurance brokerage services during 1998 and 1997. TEI
did not provide the same insurance coverage during 1998 as had been
provided during 1997. These services were provided by an unaffiliated third
party.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
4. Equipment
The components of owned equipment held for operating lease are as follows
(in thousands of dollars):
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------------------------------------------
<S> <C> <C>
Aircraft $ 42,734 $ 42,734
Rail equipment 14,780 14,828
Marine containers 12,979 13,384
Marine vessels 9,719 9,719
Trailers 5,419 6,855
-------------------------------------------
85,631 87,520
Less accumulated depreciation (56,808) (56,215)
-------------------------------------------
Net equipment $ 28,823 $ 31,305
===========================================
</TABLE>
As of March 31, 1998, all equipment was either on lease or operating in
PLM-affiliated short-term trailer rental facilities, except for aircraft,
railcars, and marine containers. The net book value of off-lease equipment
was $5.8 million as of March 31, 1998. As of December 31, 1997, an
aircraft, railcars, and marine containers were off lease, with a net book
value of $3.2 million.
During the three months ended March 31, 1998, the Partnership sold or
disposed of marine containers, railcars, and trailers with an aggregate net
book value of $1.0 million, for aggregate proceeds of $0.5 million. During
the three months ended March 31, 1997, the Partnership sold or disposed of
marine containers, trailers, and a marine vessel with an aggregate net book
value of $5.6 million, and unused drydock reserves of $1.0 million, for
aggregate proceeds of $6.9 million.
5. Investments in Unconsolidated Special-Purpose Entities
The net investments in USPEs included the following jointly-owned equipment
(and related assets and liabilities) (in thousands of dollars):
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------------------------------------
<S> <C> <C>
35% interest in two commercial aircraft on a direct
finance lease $ 4,017 $ 4,008
50% interest in an entity owning a bulk-carrier 2,247 2,264
17% interest in a trust from a sold commercial aircraft -- 3,484
---------------------------------------
Net investments $ 6,264 $ 9,756
=======================================
</TABLE>
During January 1998, the Partnership received liquidating proceeds of $3.5
million from the sale of its 17% interest in a trust that owned a commercial
aircraft, which was sold in 1997.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
6. Contingencies
PLM International, Inc. (the Company) and various of its affiliates are named
as defendants in a lawsuit filed as a class action on January 22, 1997 in the
Circuit Court of Mobile County, Mobile, Alabama, Case No. CV-97-251 (the Koch
action). The plaintiffs, who filed the complaint on their own and on behalf of
all class members similarly situated, are six individuals who allegedly invested
in certain California limited partnerships for which FSI acts as the General
Partner, including the Partnership, PLM Equipment Growth Fund V, PLM Equipment
Growth Fund VI, and PLM Equipment Growth & Income Fund VII (the Growth Funds).
The complaint asserts eight causes of action against all defendants, as follows:
fraud and deceit, suppression, negligent misrepresentation and suppression,
intentional breach of fiduciary duty, negligent breach of fiduciary duty, unjust
enrichment, conversion, and conspiracy. Additionally, plaintiffs allege a cause
of action against PLM Securities Corp. for breach of third-party beneficiary
contracts in violation of the National Association of Securities Dealers rules
of fair practice. Plaintiffs allege that each defendant owed plaintiffs and the
class certain duties due to their status as fiduciaries, financial advisors,
agents, general partner, and control persons. Based on these duties, plaintiffs
assert liability against the defendants for improper sales and marketing
practices, mismanagement of the Growth Funds, and concealing such mismanagement
from investors in the Growth Funds. Plaintiffs seek unspecified compensatory and
recissory damages, as well as punitive damages, and have offered to tender their
limited partnership units back to the defendants.
On March 6, 1997, the defendants removed the Koch action from the state court
to the United States District Court for the Southern District of Alabama,
Southern Division (Civil Action No. 97-0177-BH-C) based on the district court's
diversity jurisdiction, following which plaintiffs filed a motion to remand the
action to the state court. On September 24, 1997, the district court denied
plaintiffs' motion and dismissed without prejudice the individual claims of the
California class representative, reasoning that he had been fraudulently joined
as a plaintiff. On October 3, 1997, plaintiffs filed a motion requesting that
the district court reconsider its ruling or, in the alternative, that the court
modify its order dismissing the California plaintiff's claims so that it is a
final appealable order, as well as certify for an immediate appeal to the
Eleventh Circuit Court of Appeals that part of its order denying plaintiffs'
motion to remand. On October 7, 1997, the district court denied each of these
motions. In responses to such denial, plaintiffs filed a petition for writ of
mandamus with the Eleventh Circuit, which was denied on November 18, 1997. On
November 24, 1997, plaintiffs filed with the Eleventh Circuit a petition for
rehearing and consideration by the full court of the order denying the petition
for a writ of mandamus, which petition was supplemented by plaintiffs on January
27, 1998.
On October 10, 1997, defendants filed a motion to compel arbitration of
plaintiffs' claims, based on an agreement to arbitrate contained in the limited
partnership agreement of each Growth Fund, and to stay further proceedings
pending the outcome of such arbitration. Notwithstanding plaintiffs' opposition,
the district court granted the motion on December 8, 1997. On December 15, 1997,
plaintiffs filed with the Eleventh Circuit a notice of appeal from the district
court's order granting defendants' motion to compel arbitration and to stay the
proceedings, and of the district court's September 24, 1997 order denying
plaintiffs' motion to remand and dismissing the claims of the California
plaintiff. Plaintiffs filed an amended notice of appeal on December 31, 1997.
Appellate briefs have not yet been filed in this matter. The Company believes
that the allegations of the Koch action are completely without merit and intends
to continue to defend this matter vigorously.
<PAGE>
PLM EQUIPMENT GROWTH FUND IV
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
6. Contingencies (continued)
On June 5, 1997, the Company and the affiliates who are also defendants in
the Koch action were named as defendants in another purported class action filed
in the San Francisco Superior Court, San Francisco, California, Case No. 987062
(the Romei action). The plaintiff is an investor in PLM Equipment Growth Fund V,
and filed the complaint on her own behalf and on behalf of all class members
similarly situated who invested in certain California limited partnerships for
which FSI acts as the General Partner, including the Growth Funds. The complaint
alleges the same facts and the same nine causes of action as in the Koch action,
plus five additional causes of action against all of the defendants, as follows:
violations of California Business and Professions Code Sections 17200, et seq.
for alleged unfair and deceptive practices, constructive fraud, unjust
enrichment, violations of California Corporations Code Section 1507, and a claim
for treble damages under California Civil Code Section 3345.
On July 31, 1997, the defendants filed with the district court for the Northern
District of California (Case No. C-97-2847 WHO) a petition under the Federal
Arbitration Act seeking to compel arbitration of plaintiff's claims and for an
order staying the state court proceedings pending the outcome of the
arbitration. In connection with this motion, plaintiff agreed to a stay of the
state court action pending the district court's decision on the petition to
compel arbitration. By memorandum and order dated October 23, 1997, the district
court denied the Company's petition to compel arbitration. On November 5, 1997,
the Company filed an expedited motion for leave to file a motion for
reconsideration of this order, which motion was granted on November 14, 1997.
The parties have agreed to have oral argument on the reconsideration motion set
for July 22, 1998. The state court action has been stayed pending the district
court's decision on this motion.
In connection with her opposition to the Company's petition to compel
arbitration, on August 22, 1997 the plaintiff filed an amended complaint with
the state court alleging two new causes of action for violations of the
California Securities Law of 1968 (California Corporations Code Sections 25400
and 25500), and for violation of California Civil Code Sections 1709 and 1710.
Plaintiff has also served certain discovery requests on defendants. Because of
the stay, no response to the amended complaint or to the discovery is currently
required. The Company believes that the allegations of the amended complaint in
the Romei action are completely without merit and intends to defend this matter
vigorously.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(I) RESULTS OF OPERATIONS
Comparison of the Partnership's Operating Results for the Three Months Ended
March 31, 1998 and 1997
(A) Owned Equipment Operations
Lease revenues less direct expenses (defined as repair and maintenance,
equipment operating expenses, and asset-specific insurance expenses) on owned
equipment decreased during the first quarter of 1998 compared to the same period
of 1997. The following table presents lease revenues less direct expenses by
owned equipment type (in thousands of dollars):
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1998 1997
-------------------------------
<S> <C> <C>
Rail equipment $ 735 $ 809
Marine containers 330 403
Trailers 337 405
Aircraft 281 1,119
Marine vessels 136 (94 )
</TABLE>
Rail equipment: Railcar lease revenues and direct expenses were $0.9 million and
$0.2 million, respectively, for the first quarter of 1998, compared to $0.9
million and $0.1 million, respectively, during the same period in 1997. The
decrease in railcar contribution in the first quarter of 1998 was due to an
increase in repairs required during 1998 when compared to 1997.
Marine containers: Marine container lease revenues and direct expenses were $0.3
million and $2,000, respectively, for the first quarter of 1998, compared to
$0.4 million and $3,000, respectively, during the same period of 1997. Marine
container contributions decreased due to the disposition of containers over the
past 12 months.
Trailers: Trailer lease revenues and direct expenses were $0.5 million and $0.1
million, respectively, for the first quarter of 1998 and 1997. Trailer
contributions remained approximately the same due to the relative stability of
the trailer fleet.
Aircraft: Aircraft lease revenues and direct expenses were $0.9 million and $0.6
million, respectively, for the first quarter of 1998, compared to $1.1 million
and $0, respectively, during the same period of 1997. The decrease in lease
revenues in the first quarter of 1998 was due to the off-lease status of an
aircraft, when compared to the same period in 1997 when the aircraft was on
lease for the entire quarter. Direct expenses increased due to costs incurred
for repairs on this off-lease aircraft in the first quarter of 1998, which were
not required for the same period of 1997.
Marine vessels: Marine vessel lease revenues and direct expenses were $0.5
million and $0.4 million, respectively, for the first quarter of 1998, compared
to $0.4 million and $0.5 million, respectively, during the same period of 1997.
Lease revenue increased in the first quarter of 1998, compared to the same
period in 1997, due to higher re-lease rates. Marine operating expenses
decreased due to the sale of a marine vessel in 1997.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $2.5 million for the first quarter of 1998 decreased
from $3.0 million for the same period in 1997. Significant variances are
explained as follows:
(1) A $0.5 million decrease in administrative expenses from 1997 levels
resulted from reduced legal fees to collect outstanding receivables due from
aircraft lessees.
(2) A $0.3 million decrease in depreciation and amortization expenses from
1997 levels reflects the sale of certain assets during 1998 and 1997 and the use
of the double-declining balance depreciation method.
(3) A $0.2 million decrease in interest expense was due to lower average
borrowings outstanding during the quarter ended March 31, 1998, compared to the
same period in 1997. In July 1997, the Partnership paid the first annual
principal payment of $8.3 million of the outstanding debt.
(4) The $0.4 million increase in bad debt expenses was due to the
following: During the first quarter of 1997, a net of $0.6 million from cash
receipts and the application of security deposits were used against unpaid
invoices that were previously reserved for as bad debts, offset by a decrease of
$0.2 million in bad debt expense due to the General Partner's evaluation of the
collectibility of receivables due from certain lessees.
(C) Net Gain (Loss) on Disposition of Owned Equipment
The net loss on disposition of equipment for the first quarter of 1998 totaled
$0.5 million, which resulted from the sale of trailers with a net book value of
$0.9 million, for proceeds of $0.4 million. In addition, the the Partnership
sold or disposed of marine containers, and railcars with an aggregate net book
value of $0.1 million, for aggregate proceeds of $0.1 million. For the first
quarter of 1997, the $2.3 million net gain on disposition of equipment resulted
from the sale or disposal of marine containers, trailers, and a marine vessel,
with an aggregate net book value of $5.6 million and unused drydock reserves of
$1.0 million, for aggregate proceeds of $6.9 million.
Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity method is shown in the following table by equipment type
(in thousands of dollars):
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1998 1997
-------------------------------
<S> <C> <C>
Aircraft $ 229 $ 180
Marine vessel (19) (291 )
Equity in Net Income (Loss) of USPEs $ 210 $ (111 )
===============================
</TABLE>
Aircraft: As of March 31, 1998, the Partnership had an interest in a trust that
owns two commercial aircraft on direct finance lease. As of March 31, 1997, the
Partnership owned an interest in a trust that owns six commercial aircraft and
had an interest in a trust that owns two commercial aircraft on direct finance
lease. Aircraft revenues and expenses were $0.2 million and $0, respectively,
for the first quarter of 1998, compared to $0.4 million and $0.2 million,
respectively, during the same period in 1997. The decrease in lease revenues
during the first quarter of 1998 was due to the sale of the Partnership's
interest in a trust during the fourth quarter of 1997. Depreciation and
administrative expenses also decreased as a direct result of this sale during
1998.
Marine vessel: As of March 31, 1998 and 1997, the Partnership had an interest in
an entity owning a marine vessel. Marine vessel revenues and expenses were $0.3
million and $0.3 million, respectively, for the first quarter of 1998, compared
to $0.2 million and $0.5 million, respectively, during the same period in 1997.
Lease revenue increased in the quarter ended March 31, 1998. Direct expenses
decreased in the quarter ended March 31, 1998 due to decreased survey, and
repairs and maintenance expense.
(E) Net Income (Loss)
As a result of the foregoing, the Partnership's net loss was $0.8 million for
the first quarter of 1998, compared to net income of $1.9 million during the
same period of 1997. The Partnership's ability to operate and liquidate assets,
secure leases, and re-lease those assets whose leases expire is subject to many
factors, and the Partnership's performance in the quarter ended March 31, 1998
is not necessarily indicative of future periods. In the first quarter of 1998,
the Partnership distributed $0.9 million to the limited partners, or $0.10 per
weighted-average limited partnership unit.
(II) FINANCIAL CONDITION -- CAPITAL RESOURCES AND LIQUIDITY
For the three months ended March 31, 1998, the Partnership generated $0.7
million in operating cash (net cash provided by operating activities plus
distributions from USPEs) to meet its operating obligations and maintain the
current level of distributions (total for the three months ended March 31, 1998
of approximately $0.9 million) to the partners, but also used undistributed
available cash from prior periods of approximately $0.2 million.
During the three months ended March 31, 1998, the Partnership sold or disposed
of marine containers, railcars, and trailers with an aggregate net book value of
$1.0 million, for aggregate proceeds of $0.5 million of which $0.3 million were
received during the first quarter of 1998.
(III) YEAR 2000 COMPLIANCE
The General Partner is currently addressing the year 2000 computer software
issueand is creating a timetable for carrying out any program modifications that
may be required. The General Partner does not anticipate that the cost of those
modifications allocatable to the Partnership will be material.
(IV) ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued two new
statements: SFAS No. 130, "Reporting Comprehensive Income," which requires
enterprises to report, by major component and in total, all changes in equity
from nonowner sources; and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes annual and interim
reporting standards for a public company's operating segments and related
disclosures about its products, services, geographic areas, and major customers.
Both statements are effective for the Partnership's fiscal year ended December
31, 1998, with earlier application permitted. The effect of adoption of these
statements will be limited to the form and content of the Partnership's
disclosures and will not impact the Partnership's results of operations, cash
flow, or financial position.
(V) OUTLOOK FOR THE FUTURE
Since the Partnership is in its holding or passive liquidation phase, the
General Partner will be seeking to selectively re-lease or sell assets as the
existing leases expire. Sale decisions will cause the operating performance of
the Partnership to decline over the remainder of its life. The General Partner
anticipates that the liquidation of Partnership assets will be completed by the
scheduled termination of the Partnership at the end of the year 2000.
Several factors may affect the Partnership's operating performance in 1998 and
beyond, including changes in the markets for the Partnership's equipment and
changes in the regulatory environment in which that equipment operates.
The Partnership's operation of a diversified equipment portfolio in a broad base
of markets is intended to reduce its exposure to volatility in individual
equipment sectors.
The ability of the Partnership to realize acceptable lease rates on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and government or other regulations. The unpredictability of some of these
factors, or of their occurrence, makes it difficult for the General Partner to
clearly define trends or influences that may impact the performance of the
Partnership's equipment. The General Partner continually monitors both the
equipment markets and the performance of the Partnership's equipment in these
markets. The General Partner may decide to reduce the Partnership's exposure to
those equipment markets in which it determines that it cannot operate equipment
and achieve acceptable rates of return. Alternatively, the General Partner may
make a determination to enter equipment markets in which it perceives
opportunities to profit from supply/demand instabilities or other market
imperfections.
The Partnership intends to use cash flow from operations to satisfy its
operating requirements, maintain working capital reserves, pay loan principal on
debt, and pay cash distributions to the investors.
(VI) FORWARD-LOOKING INFORMATION
Except for the historical information contained herein, the discussion in this
Form 10-Q contains forward-looking statements that contain risks and
uncertainties, such as statements of the Partnership's plans, objectives,
expectations, and intentions. The cautionary statements made in this Form 10-Q
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-Q. The Partnership's actual results could
differ materially from those discussed here.
(This space intentionally left blank.)
<PAGE>
PART II -- OTHER INFORMATION
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 IV
By: PLM Financial Services, Inc.
General Partner
Date: May 12, 1998 By: /s/ Richard K Brock
---------------------
Richard K Brock
Vice President and
Corporate Controller
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,315
<SECURITIES> 0
<RECEIVABLES> 4,226
<ALLOWANCES> 3,171
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 85,631
<DEPRECIATION> 56,808
<TOTAL-ASSETS> 43,600
<CURRENT-LIABILITIES> 0
<BONDS> 21,000
0
0
<COMMON> 0
<OTHER-SE> 19,474
<TOTAL-LIABILITY-AND-EQUITY> 43,600
<SALES> 0
<TOTAL-REVENUES> 2,668
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,113
<LOSS-PROVISION> 98
<INTEREST-EXPENSE> 512
<INCOME-PRETAX> (845)
<INCOME-TAX> 0
<INCOME-CONTINUING> (845)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (845)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
