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, 1996.
[ ] 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 33-32258
-----------------------
PLM EQUIPMENT GROWTH FUND V
(Exact name of registrant as specified in its charter)
California 94-3104548
(State or other jurisdiction 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 (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 V
(A Limited Partnership)
BALANCE SHEETS
(in thousands of dollars)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
-------------------------------------
<S> <C> <C>
Equipment held for operating leases $ 158,486 $ 159,314
Less accumulated depreciation (88,155) (85,564)
-------------------------------------
Net Equipment 70,331 73,750
Cash and cash equivalents 5,704 5,583
Restricted cash 223 223
Investments in unconsolidated special purpose entities 19,857 16,158
Accounts and note receivable, net of allowance for
doubtful accounts of $150 in 1996 and $54 in 1995 2,727 2,583
Investment in direct finance lease, net of
accumulated amortization of $9 in 1996 and $2 in 1995 2,554 2,637
Deferred charges, net of accumulated amortization of
$1,249 in 1996 and $1,202 in 1995 470 512
Prepaid expenses and other assets 87 193
-------------------------------------
Total assets $ 101,953 $ 101,639
=====================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 934 $ 890
Due to affiliates, net 1,117 1,116
Prepaid deposits and reserve for repairs 3,132 3,616
Short term note payable 5,610 --
Note payable 38,000 38,000
--------------------------------------
Total liabilities 48,793 43,622
Partners' capital:
Limited Partners (9,169,019 Depositary Units at March 31,
1996 and 9,175,944 at December 31, 1995) 53,160 58,017
General Partner -- --
--------------------------------------
Total partners' capital 53,160 58,017
--------------------------------------
Total liabilities and partners' capital $ 101,953 $ 101,639
======================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
STATEMENTS OF INCOME
(In thousands of dollars except per unit amounts)
<TABLE>
<CAPTION>
For the three months
ended March 31,
1996 1995
-----------------------------
<S> <C> <C>
Revenues:
Lease revenue $ 7,961 $ 8,695
Interest and other income 192 315
Net gain on disposition of equipment 52 2,385
-----------------------------
Total revenues 8,205 11,395
Expenses:
Depreciation and amortization 3,146 3,982
Management fees to affiliate 406 448
Repairs and maintenance 588 1,120
Interest expense 690 788
Marine equipment operating expenses 2,133 1,950
Insurance expense to affiliate 198 280
Other insurance expense 341 258
General and administrative
expenses to affiliates 149 120
Other general and administrative expenses 136 100
Bad debt expense 26 34
-----------------------------
Total expenses 7,813 9,080
-----------------------------
Equity in net loss of unconsolidated
special purpose entities (344) --
-----------------------------
Net income $ 48 $ 2,315
=============================
Partners' share of net income (loss):
Limited Partners $ (194) $ 2,072
General Partner 242 243
-----------------------------
Total $ 48 $ 2,315
=============================
Net income (loss) per Depositary Unit
(9,169,019 Units in 1996 and 9,178,030
in 1995) $ (0.02) $ 0.23
=============================
Cash distributions $ 4,829 $ 4,845
=============================
Cash distributions per Depositary Unit $ 0.50 $ 0.50
=============================
</TABLE>
See accompanying notes to financial
statements.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For
the period from December 31, 1994 to March 31, 1996
(in thousands)
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-----------------------------------------------------
<S> <C> <C> <C>
Partners' capital at December 31, 1994 $ 75,893 $ $ 75,893
--
Net income 1,077 968 2,045
Repurchase of Depositary Units (579) -- (579)
Cash distributions (18,374) (968) (19,342)
-------------------------------------------------------
Partners' capital at December 31, 1995 58,017 -- 58,017
Net income (loss) (194) 242 48
Repurchase of Depositary Units (76) -- (76)
Cash distributions (4,587) (242) (4,829)
-------------------------------------------------------
Partners' capital at March 31, 1996 $ 53,160 $ -- $ 53,160
=======================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the three months ended
March 31,
1996 1995
--------------------------------------
<S> <C> <C>
Operating activities:
Net income $ 48 $ 2,315
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 3,146 3,982
Net gain on disposition of equipment (52) (2,385 )
Cash distributions from unconsolidated special purpose entities
in excess of loss 1,911
Changes in operating assets and liabilities:
Accounts and note receivable, net (144) (42 )
Prepaid expenses and other assets 106 (63 )
Due to affiliates, net 1 403
Accounts payable and accrued expenses 47 310
Prepaid deposits and reserve for repairs (484) 72
--------------------------------------
Cash provided by operating activities 4,579 4,592
--------------------------------------
Investing activities:
Proceeds from disposition of equipment 435 8,128
Payments for purchase of equipment and capital
improvements (64) (4,069 )
Payments of acquisition-related fees to affiliate -- (220 )
Investment in equipment purchased and placed in
unconsolidated special purpose entities (5,610) --
Collection of investment in direct finance lease 76 --
--------------------------------------
--------------------------------------
Cash (used in) provided by investing activities (5,163) 3,839
--------------------------------------
Financing activities:
Proceeds from short term note payable 5,610 --
Cash distributions paid to an affiliate (242) (243 )
Cash distributions paid to the limited partners (4,587) (4,602 )
Repurchases of depositary units (76) (554 )
--------------------------------------
Cash provided by (used in) financing activities 705 (5,399 )
--------------------------------------
Net increase in cash and cash equivalents 121 3,032
Cash and cash equivalents at beginning of period 5,583 20,200
--------------------------------------
Cash and cash equivalents at end of period $ 5,704 $ 23,232
======================================
Supplemental information:
Interest paid $ 722 $ 692
======================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
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
V (the "Partnership") as of March 31, 1996, the statements of income and the
statements of cash flows for the three months ended March 31, 1996, and 1995,
and the statements of changes in partners' capital for the period December 31,
1994 to March 31, 1996. 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, 1995, on file at the
Securities and Exchange Commission.
2. Repurchase of Depositary Units
At December 31, 1995, the Partnership agreed to repurchase approximately 7,900
Depositary Units for an aggregate purchase price of $90,000. As of March 31,
1996, the Partnership repurchased 6,925 Depositary Units for $76,000 The General
Partner anticipates that the remaining Units will be repurchased during the next
three months.
3. Investments in Unconsolidated Special Purpose Entities
During the second half of 1995, the Partnership began to increase the level of
its participation in the ownership of large-ticket transportation assets to be
owned and operated jointly with affiliated programs. This trend has continued in
the first quarter of 1996.
Prior to 1996, the Partnership accounted for operating activities associated
with joint ownership of rental equipment as undivided interests, including its
proportionate share of each asset with similar wholly-owned assets in its
financial statements. Under generally accepted accounting principles, the
effects of such activities, if material, should be reported using the equity
method of accounting. Therefore, effective January 1, 1996, the Partnership
adopted the equity method to account for its investment in such jointly-held
assets.
The principle differences between the previous accounting method and the equity
method relate to the presentation of activities relating to these assets in the
statement of operations. Whereas, under equity accounting the Partnership's
proportionate share is presented as a single net amount, equity in net income
(loss) of unconsolidated special purpose entities, under the previous method,
the Partnership's statement of operations reflected its proportionate share of
each individual item of revenue and expense. Accordingly, the effect of adopting
the equity method of accounting has no cumulative effect on previously reported
partner's capital or on the Partnership's net income (loss) for the period of
adoption. Because the effects on previously issued financial statements of
applying the equity method of accounting to investments in jointly-owned assets
are not considered to be material to such financial statements taken as a whole,
previously issued financial statements have not been restated. However, certain
items have been reclassified in the previously issued balance sheet to conform
to the current period presentation.
During the three months ended March 31, 1996, the Partnership purchased a
partial beneficial interest in a trust of five commercial aircraft for $5.6
million and incurred acquisition and lease negotiation fees of $0.3 million to
PLM Transportation Equipment Corporation, an affiliate of the General Partner.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
3. Investments in Unconsolidated Special Purpose Entities (continues)
The net investments in unconsolidated special purpose entities include the
following jointly-owned equipment (and related assets and liabilities) (in
thousands):
<TABLE>
<CAPTION>
March 31, December 31,
% Ownership Equipment 1996 1995
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
50% Bulk carrier $ 3,672 $ 3,778
50% Product tanker 2,719 2,841
17% Two trusts consisting of three commercial aircraft, two
aircraft engines, and a portfolio of aircraft rotables 4,114 5,334
14% Trust that consists of seven commercial aircraft 3,891 4,205
20% Trust that consists of five commercial aircraft 5,461 --
----------------------------------
Net investments $ 19,857 $ 16,158
==================================
</TABLE>
4. Cash Distributions
Cash distributions are recorded when paid and totaled $4.8 million for the
three months ended March 31, 1996. Cash distributions to Unit holders in excess
of net income are considered to represent a return of capital using the
Generally Accepted Accounting Principle (GAAP) basis. Cash distributions to the
Limited Partners of $4.5 million and $2.5 million for three months ended March
31, 1996 and 1995, respectively, were deemed to be a return of capital. Cash
distributions related to the first quarter results of $3.2 million were paid or
are payable during April and May 1996, depending on whether the individual unit
holder elected to receive a monthly or quarterly distribution check.
5. Equipment
Owned equipment held for operating leases is stated at cost. The components
of equipment are as follows (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------------------------------
<S> <C> <C>
Marine vessels $ 52,259 $ 52,259
Mobile offshore drilling units 25,204 25,204
Marine containers 27,451 28,278
Aircraft 32,903 32,903
Rail equipment 11,017 11,041
Trailers 9,652 9,629
------------------------------------
158,486 159,314
Less accumulated depreciation (88,155) (85,564)
------------------------------------
====================================
Net equipment $ 70,331 $ 73,750
====================================
</TABLE>
As of March 31, 1996, all of the Partnership's equipment was on lease or
operating in PLM-affiliated short-term trailer rental yards except for 27
railcars with a net book value of $0.4 million. As of December 31, 1995, all of
the Partnership's equipment was on lease or operating in PLM-affiliated
short-term trailer rental yards
During the three months ended March 31, 1996, the Partnership disposed of 242
marine containers and 3 railcars with an aggregate net book value of $383,000
for proceeds of $435,000. During the three months ended March 31, 1995, the
Partnership disposed of 230 marine containers with a net book value of $328,000
for proceeds of $378,000. The Partnership also sold 97 railcars, which were held
for sale as of December 31, 1994, with a net book value of $1,870,000 at the
date of sale for proceeds of $2,630,000 and one marine vessel, which was also
held for sale, with a net book value of $3,990,000 at the date of sale for
proceeds of $5,120,000. Included in the gain on sale of the marine vessels, is
the unused portion of accrued dry docking and commissions related to the sale, a
net of $445,000.
<PAGE>
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
6. Debt
The General Partner has entered into a joint $25 million credit facility (the
"Committed Bridge Facility") on behalf of the Partnership, PLM Equipment Growth
Fund II, PLM Equipment Growth Fund III, PLM Equipment Growth Fund IV, PLM
Equipment Growth Fund VI, PLM Equipment Growth & Income Fund VII and
Professional Lease Management Income Fund I ("Fund I"), all affiliated
investment programs, and TEC Acquisub, Inc. ("TECAI"), an indirect wholly-owned
subsidiary of the General Partner, which may be used to provide interim
financing of up to (i) 70% of the aggregate book value or 50% of the aggregate
net fair market value of eligible equipment owned by the Partnership or Fund I,
plus (ii) 50% of unrestricted cash held by the borrower. The Committed Bridge
Facility became available on December 20, 1993, and was amended and restated on
September 27, 1995 to expire on September 30, 1996. The Committed Bridge
Facility also provides for a $5 million Letter of Credit Facility for the
eligible borrowers. Outstanding borrowings by Fund I, TECAI or PLM Equipment
Growth Funds II through VII reduce the amount available to each other under the
Committed Bridge Facility. Individual borrowings may be outstanding for no more
than 179 days, with all advances due no later than September 30, 1996. The
Committed Bridge Facility prohibits the Partnership from incurring any
additional indebtedness. Interest accrues at either the prime rate or adjusted
LIBOR plus 2.5% at the borrowers option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by the General Partner. As
of March 31, 1996, the Partnership had $5,610,000 in outstanding borrowings
under the Committed Bridge Facility, PLM Equipment Growth Fund VI had
$11,220,000 and TECAI had $7,706,000 in outstanding borrowings. None of the
other programs had any outstanding borrowings.
<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, 1996 and 1995
(A) Revenues
Total revenues of $8.2 million for the quarter ended March 31, 1996, decreased
from $11.4 million for the same period in 1995. This decrease in 1996 revenues
was primarily attributable to a lower gain recorded on the sale of equipment and
lower lease revenues.
(1) The Partnership's lease revenue decreased to $8.0 million in the first
quarter 1996 from $8.7 million during the first quarter 1995. The following
table presents lease revenues earned by equipment type (in thousands):
<TABLE>
<CAPTION>
For the three months
ended March 31,
------------------------------
1996 1995
------------------------------
<S> <C> <C>
Marine vessels $ 4,044 $ 5,215
Mobile offshore drilling units 652 620
Marine containers 983 1,001
Aircraft 1,317 819
Rail equipment 596 686
Trailers 369 354
==============================
$ 7,961 $ 8,695
==============================
</TABLE>
Although net income was not affected by the change in accounting for investments
in unconsolidated special purpose entities (see note 3 to financial statements),
lease revenues attributable to unconsolidated special purpose entities totaled
$1.5 million in the first quarter of 1996, which included $0.7 million and $0.8
million in aircraft and marine vessels revenue, respectively, which represented
revenues for jointly-owned assets (refer to the "Equity in net loss of
unconsolidated special purpose entities" section below). The remaining changes
in 1996 lease revenues of owned equipment are explained below:
(a) an increase of $0.5 million in aircraft revenues is due primarily to
the acquisition and lease of six aircraft during the second quarter of 1995;
(b) an increase of $32,000 in revenues earned by the mobile offshore
drilling unit was due to a higher re-lease rate negotiated during the third
quarter of 1995;
(c) the net decline of $1.2 million in marine vessel revenues is due to a
number of factors:
(c-1) Revenues increased $0.8 million during the first quarter of
1996 due to one marine vessel which is operating under a voyage charter during
1996 compared to a time charter during the same period of 1995;
(c-2) Revenues increased $0.2 million due a marine vessel which
was off-hire for 20 days during the first quarter of 1995, compared to being on
hire the full first quarter of 1996;
(c-3) Revenues decreased $0.1 million during the first quarter of
1996 due to lower profit sharing earning of one marine vessel when compared to
the same quarter of 1995;
(c-4) Revenues declined $0.7 million during the first quarter of
1996 due to the sale of two marine vessels which were on lease during the same
period of 1995;
Voyage charters are short-term leases lasting the duration of specific voyages,
typically 30 to 45 days. Voyage charters have higher revenues associated with
them since the owner pays for costs, such as bunkers and port costs, normally
borne by the lessees under time or bare-boat charters. To position the
Partnership's marine vessel fleet for a potential upturn in the marine vessel
market, the Partnership has entered some of its marine vessels into voyage
charters and plans to enter into longer-term contracts as the market improves;
(d) a decrease of $18,000 in marine container revenues due primarily to the
disposal of 1,300 marine containers in service between the 1996 and 1995 periods
offset by higher utilization and rents earned by the remaining fleet during the
first quarter of 1996;
(e) declines of $0.1 million in rail equipment revenues were due primarily
to the sale of 97 railcars which were on lease for two months prior to the sale
in late February 1995.
(2) Interest and other income decreased $0.1 million when compared to the same
period of 1995 due primarily to lower cash balances available for investment.
(3) Net gain on disposition of equipment during the first quarter of 1996, was
realized on the disposal of 242 marine containers and 3 railcars with an
aggregate net book value of $383,000 for proceeds of $435,000. During the first
quarter 1995, the Partnership disposed of 230 marine containers, one marine
vessel, and 97 railcars with an aggregate net book value of $6.2 million for
proceeds of $8.1 million. Included in the gain on sale of the marine vessel, is
the unused portion of dry docking reserves and commissions in the net amount of
$0.4 million.
(B) Expenses
Total expenses of $7.8 million for the quarter ended March 31, 1996, decreased
from $9.1 million for the same period in 1995. The decrease in 1996 expenses was
attributable to lower depreciation expense, repairs and maintenance, and
interest expense partially offset by increases in marine operating expenses, and
administrative expenses. Although net income was not affected by the change in
accounting for investments in special purpose entities, expenses attributable to
unconsolidated special purpose entities totaled $2.1 million in the first
quarter of 1996, which included $1.1 million, $0.1 million, $0.4 million, and
$0.3 million in depreciation and amortization, management fees, marine
operating, and administrative and other expenses, respectively, which
represented expenses for jointly-owned assets (refer to the "Equity in net loss
of unconsolidated special purpose entities" section below). The remaining
changes in 1996 expenses of owned equipment are explained below:
(1) Direct operating expenses (defined as repairs and maintenance, insurance
expenses, and marine equipment operating expenses) decreased to $3.3 million in
the first quarter of 1996, from $3.6 million in the same period in 1995. This
change resulted from:
(a) an increase of $0.2 million in marine equipment operating expenses due
primarily to the following:
(a-1) Marine equipment operating expenses decreased $0.3 million
due to the sale of two marine vessels during the first quarter of 1995
which were in service during that period;
(a-2) These decreases in marine equipment operating expenses were
offset by an increase of $1.0 million due to one marine vessel which is
operating under a voyage charter during the first quarter of 1996 compared
to operating under a time charter during the first quarter of 1995;
(a-3) Additionally, marine equipment operating expenses increased
$0.1 million due to the off-hire status of one marine vessel for 20 days
during 1995. This same marine vessel was operational the full quarter of
1996 resulting in the increase;
(b) repairs and maintenance costs decreased $0.5 million during the first
quarter of 1996 due to the following:
(b-1) Marine vessel repairs and maintenance decreased $0.5 million
during the first quarter of 1996 due primarily to the sale of two marine vessels
during 1995 which required drydocking accruals of $0.4 million while in
service.;
(b-2) Railcar repairs and maintenance also decreased $43,000
during the first quarter of 1996 due the sale of 97 railcars during the
first quarter of 1995.
(2) Indirect operating expenses (defined as depreciation and amortization
expense, management fees, interest expense, and general and administrative
expenses) decreased to $4.5 million in the first quarter of 1996 from $5.4
million in the first quarter of 1995. This change resulted primarily from:
(a) a decrease in depreciation and amortization expense of $0.8 million
from 1995 due to the Partnership's double-declining depreciation method and the
sale of two marine vessels during 1995, offset, in part, by the purchase of six
aircraft during the second quarter of 1995.;
(b) a decrease of $0.1 million in interest expenses due to a decrease in
the base rate of interest charged on the Partnership's debt. The decrease was
offset minimally by the end-of-the-quarter increase in Partnership debt;
(c) an increase of $0.1 million in administrative expenses was due to an
increase in data processing charges, and costs allocated from the PLM Rental
yards due to trailer purchases during 1995.
(C) Equity in net loss of unconsolidated special purpose entities
Equity in net loss of unconsolidated special purpose entities represents the net
loss generated from jointly owned assets now accounted for under the equity
method (see note 3 to financial statements).
At March 31 1996 and 1995, the Partnership's interest in two jointly owned
marine vessels were affected by this change. The revenues generated by this
equipment decreased $0.7 million when compared to the same period of 1995 due to
the off-hire status of one of these vessels for 22 days during 1996 compared to
being on lease the full quarter of 1995. Marine operating expenses also
decreased $0.1 million due to the off hire status of the one marine vessel.
As of March 31 1996, the Partnership had acquired a partial beneficial interest
in four trusts which is comprised of 15 commercial aircraft, 2 aircraft engines
and a portfolio of aircraft rotables. Revenues earned by these trusts of $0.7
million were offset by depreciation expense of $0.8 million.
(D) Net income
The Partnership's net income of $48,000 in the first quarter of 1996, decreased
from a net income of $2.3 million in the first quarter 1995. The Partnership's
ability to acquire, operate, or 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 quarter
of 1996, is not necessarily indicative of future periods. In the first quarter
of 1996, the Partnership distributed $4.6 million to the Limited Partners, or
$0.50 per Limited Partnership Unit.
(II) FINANCIAL CONDITION - CAPITAL RESOURCES, LIQUIDITY, DISTRIBUTIONS, AND
UNIT REDEMPTION PLAN
The Partnership purchased its initial equipment portfolio with capital raised
from its initial equity offering, short term debt of $5.6 million, and permanent
debt financing of $38 million. No further capital contributions from original
partners are permitted under the terms of the Partnership's Limited Partnership
Agreement. The Partnership's total outstanding debt, currently $43.6 million,
can only be increased by a maximum of $1.4 million subject to specific covenants
in the existing debt agreement. The Partnership relies on operating cash flow to
meet its operating obligations, make cash distributions to partners, and
increase the Partnership's equipment portfolio with any remaining available
surplus cash.
The General Partner has entered into a joint $25 million credit facility (the
"Committed Bridge Facility") on behalf of the Partnership, PLM Equipment Growth
Fund II, PLM Equipment Growth Fund III, PLM Equipment Growth Fund IV, PLM
Equipment Growth Fund VI, PLM Equipment Growth & Income Fund VII and
Professional Lease Management Income Fund I ("Fund I"), all affiliated
investment programs, and TEC Acquisub, Inc. ("TECAI"), an indirect wholly-owned
subsidiary of the General Partner, which may be used to provide interim
financing of up to (i) 70% of the aggregate book value or 50% of the aggregate
net fair market value of eligible equipment owned by the Partnership or Fund I,
plus (ii) 50% of unrestricted cash held by the borrower. The Committed Bridge
Facility became available on December 20, 1993, and was amended and restated on
September 27, 1995, to expire on September 30, 1996. The Committed Bridge
Facility also provides for a $5 million Letter of Credit Facility for the
eligible borrowers. Outstanding borrowings by Fund I, TECAI or PLM Equipment
Growth Funds II through VII reduce the amount available to each other under the
Committed Bridge Facility. Individual borrowings may be outstanding for no more
than 179 days, with all advances due no later than September 30, 1996. The
Committed Bridge Facility prohibits the Partnership from incurring any
additional indebtedness. Interest accrues at either the prime rate or adjusted
LIBOR plus 2.5% at the borrowers option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by the General Partner. As
of March 31, 1996, the Partnership had $5,610,000 in outstanding borrowings
under the Committed Bridge Facility, PLM Equipment Growth Fund VI had
$11,220,000 and TECAI had $7,706,000 in outstanding borrowings. None of the
other programs had any outstanding borrowings. The General Partner is in
negotiation to renew the Committed Bridge Facility and believes it will
successfully negotiate an extension of the Committed Bridge Facility prior to
expiration on terms, at least, as favorable as those in the current Committed
Bridge Facility.
For the three months ended March 31, 1996, the Partnership generated sufficient
operating cash to meet its operating obligations, and maintain the current level
of distributions (total for three months ending March 31, 1996 of approximately
$4.8 million) to the partners, but used undistributed available cash from prior
periods of $0.2 million. During the three months ended March 31, 1996, the
General Partner sold equipment for $0.4 million while reinvesting approximately
$5.7 million (including capital improvements and fees).
Beginning January 1, 1994, the Partnership became obligated, under certain
conditions, to redeem up to 2% of the outstanding Depositary Units each year.
The purchase price to be offered for such outstanding Units will be equal to
110% of the unrecovered principal attributed to the Units - where unrecovered
principal is defined as the excess of the capital contribution attributable to a
Unit over the distributions from any source paid with respect to that Unit. At
December 31, 1995, the Partnership agreed to purchase approximately 7,900 Units
for an aggregate price of approximately $90,000. At March 31, 1996, the
Partnership repurchased 6,925 Depositary Units for $76,000. The General Partner
anticipates that the remaining Units will be repurchased during the next three
months with funds generated from operations.
(III) TRENDS
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. Throughout 1995, and the first part of 1996, market
conditions, supply and demand equilibrium, and other factors varied in several
markets. In the container and refrigerated over-the-road trailer markets,
oversupply conditions, industry consolidations, and other factors resulted in
falling rates and lower returns. In the dry over-the-road trailer markets,
strong demand and a backlog of new equipment deliveries produced high
utilization and returns. The marine vessel, rail, and mobile offshore drilling
unit markets could be generally categorized by increasing rates as the demand
for equipment is increasing faster than new additions net of retirements.
Finally, demand for narrowbody Stage II aircraft, such as those owned by the
Partnership, has increased as expected savings from newer narrowbody aircraft
have not materialized and deliveries of the newer aircraft have slowed down.
These trends are expected to continue for the near term. These different markets
have had individual effects on the performance of Partnership equipment in some
cases resulting in declining performance, and in others, in improved
performance.
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,
governmental or other regulations, and others. 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 continuously monitors both
the equipment markets and the performance of the Partnership's equipment in
these markets. The General Partner may make an evaluation to reduce the
Partnership's exposure to 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 excess cash flow, if any, after payment of
expenses, loan principal, and cash distributions to acquire additional equipment
during the first seven years of Partnership operations. The General Partner
believes these acquisitions may cause the Partnership to generate additional
earnings and cash flow for the Partnership..
(this space intentionally left blank)
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
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 V
By: PLM Financial Services, Inc.
General Partner
Date: May 14, 1996 By: /s/ David J. Davis
------------------
David J. Davis
Vice President and
Corporate Controller
-14-
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,704
<SECURITIES> 0
<RECEIVABLES> 2,727
<ALLOWANCES> 150
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 158,486
<DEPRECIATION> (88,155)
<TOTAL-ASSETS> 101,953
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 53,160
<TOTAL-LIABILITY-AND-EQUITY> 101,953
<SALES> 0
<TOTAL-REVENUES> 8,205
<CGS> 0
<TOTAL-COSTS> 7,123
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 690
<INCOME-PRETAX> 48
<INCOME-TAX> 0
<INCOME-CONTINUING> 48
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
