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 September 30, 2000
[-] 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 01-19203
_______________________
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 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 ____
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
BALANCE SHEETS
(in thousands of dollars, except unit amounts)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
----------------------------------
<S> <C> <C>
ASSETS
Equipment held for operating lease, at cost $ 92,021 $ 102,326
Less accumulated depreciation (71,874) (72,847)
----------------------------------
20,147 29,479
Equipment held for sale 3,400 --
----------------------------------
Net equipment 23,547 29,479
Cash and cash equivalents 1,618 4,188
Restricted cash 420 441
Accounts receivable, net of allowance for doubtful
accounts of $41 in 2000 and $47 in 1999 2,086 2,187
Investments in unconsolidated special-purpose entities 8,777 9,633
Deferred charges, net of accumulated amortization of
$198 in 2000 and $148 in 1999 52 101
Prepaid expenses and other assets 9 54
-----------------------------------
Total assets $ 36,509 $ 46,083
===================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 325 $ 501
Due to affiliates 316 304
Lessee deposits and reserve for repairs 2,815 2,788
Note payable 9,429 15,484
-----------------------------------
Total liabilities 12,885 19,077
-----------------------------------
Partners' capital:
Limited partners (9,065,911 limited partnership units as of
September 30, 2000 and 9,067,911 as of December 31, 1999) 23,624 27,006
General Partner -- --
-----------------------------------
Total partners' capital 23,624 27,006
-----------------------------------
Total liabilities and partners' capital $ 36,509 $ 46,083
===================================
</TABLE>
See accompanying notes to financial statements.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(in thousands of dollars, except weighted-average unit amounts)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Lease revenue $ 5,255 $ 5,102 $ 16,868 $ 15,297
Interest and other income 43 39 116 138
Net gain on disposition of equipment 1,096 67 1,193 173
--------------------------------------------------------------
Total revenues 6,394 5,208 18,177 15,608
--------------------------------------------------------------
EXPENSES
Depreciation and amortization 2,108 2,320 6,183 6,879
Repairs and maintenance 352 399 1,420 1,280
Equipment operating expenses 1,249 916 3,935 2,255
Insurance expense 117 269 243 483
Management fees to affiliate 258 267 826 773
Interest expense 280 311 820 992
General and administrative expenses
to affiliates 225 204 646 658
Other general and administrative expenses 237 163 699 453
Provision for bad debts 33 23 59 47
--------------------------------------------------------------
Total expenses 4,859 4,872 14,831 13,820
--------------------------------------------------------------
Equity in net income (loss) of unconsolidated
special-purpose entities 57 (536) 440 866
--------------------------------------------------------------
Net income (loss) $ 1,592 $ (200) $ 3,786 $ 2,654
==============================================================
Partners' share of net income (loss):
Limited partners $ 1,473 $ (319) $ 3,428 $ 2,295
General Partner 119 119 358 359
--------------------------------------------------------------
Total $ 1,592 $ (200) $ 3,786 $ 2,654
==============================================================
Limited partners' net income (loss) per
weighted-average limited partnership unit $ 0.17 $ (0.04) $ 0.38 $ 0.25
==============================================================
Cash distribution $ 2,386 $ 2,386 $ 7,158 $ 6,231
==============================================================
Cash distribution per weighted-average
limited partnership unit $ 0.25 $ 0.25 $ 0.75 $ 0.65
==============================================================
</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, 1998 to September 30, 2000
(in thousands of dollars)
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
-------------------------------------------------------
<S> <C> <C> <C>
Partners' capital as of December 31, 1998 $ 34,406 $ -- $ 34,406
Net income 824 478 1,302
Purchase of limited partnership units (85) -- (85)
Cash distribution (8,139) (478) (8,617)
-------------------------------------------------------
Partners' capital as of December 31, 1999 27,006 -- 27,006
Net income 3,428 358 3,786
Purchase of limited partnership units (10) -- (10)
Cash distribution (6,800) (358) (7,158)
-------------------------------------------------------
Partners' capital as of September 30, 2000 $ 23,624 $ -- $ 23,624
=======================================================
</TABLE>
See accompanying notes to financial statements.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(in thousands of dollars)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
2000 1999
----------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,786 $ 2,654
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 6,183 6,879
Net gain on disposition of equipment (1,193) (173)
Equity in net income from unconsolidated
special-purpose entities (440) (866)
Changes in operating assets and liabilities, net:
Restricted cash 21 (109)
Accounts receivable, net 93 732
Prepaid expenses and other assets 45 74
Accounts payable and accrued expenses (176) (138)
Due to affiliates 12 11
Lessee deposits and reserve for repairs 27 (42)
---------------------------
Net cash provided by operating activities 8,358 9,022
---------------------------
INVESTING ACTIVITIES
Payments for purchase of equipment and capitalized improvements (2,679) (1,255)
Distribution from liquidation of unconsolidated special-purpose entity -- 3,548
Distributions from unconsolidated special-purpose entities 1,296 659
Payments of acquisition fees to affiliate -- (56)
Payments of lease negotiation fees to affiliate -- (13)
Proceeds from disposition of equipment 3,678 591
---------------------------
Net cash provided by investing activities 2,295 3,474
---------------------------
FINANCING ACTIVITIES
Payments of note payable (6,055) (6,168)
Proceeds of short-term loan from affiliate 4,500 1,400
Payments of short-term loan from affiliate (4,500) (1,400)
Cash distributions paid to limited partners (6,800) (5,872)
Cash distributions paid to General Partner (358) (359)
Purchase of limited partnership units (10) (85)
---------------------------
Net cash used in financing activities (13,223) (12,484)
---------------------------
Net (decrease) increase in cash and cash equivalents (2,570) 12
Cash and cash equivalents at beginning of period 4,188 1,774
---------------------------
Cash and cash equivalents at end of period $ 1,618 $ 1,786
===========================
SUPPLEMENTAL INFORMATION
Interest paid $ 876 $ 1,047
===========================
</TABLE>
See accompanying notes to financial statements.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
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 V (the
Partnership) as of September 30, 2000 and December 31, 1999, the statements of
operations for the three months and nine months ended September 30, 2000 and
1999, the statements of changes in partners' capital for the period from
December 31, 1998 to September 30, 2000, and the statements of cash flows for
the nine months ended September 30, 2000 and 1999. Certain information and note
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/A for the year ended December 31, 1999,
on file at the Securities and Exchange Commission.
2. SCHEDULE OF PARTNERSHIP PHASES
Beginning in the Partnership's seventh year of operations, which commenced on
January 1, 1999, the General Partner stopped purchasing additional equipment.
Surplus cash, less reasonable reserves, will be distributed to the partners.
Beginning in the Partnership's ninth year of operations, which commences on
January 1, 2001, the General Partner intends to begin an orderly liquidation of
the Partnership's assets. The Partnership will be terminated by December 31,
2010, unless terminated earlier upon sale of all equipment and by certain other
events.
3. PURCHASE OF LIMITED PARTNERSHIP UNITS
The Partnership agreed to purchase approximately 2,300 limited partnership units
in 2000 for an aggregate purchase price of up to $12,500. During the nine months
ended September 30, 2000, the Partnership purchased 2,000 limited partnership
units for $10,000. The General Partner may purchase the additional units in the
future.
4. CASH DISTRIBUTIONS
Cash distributions are recorded when paid and may include amounts in excess of
net income that are considered to represent a return of capital. For the three
months ended September 30, 2000 and 1999, cash distributions totaled $2.4
million. For the nine months ended September 30, 2000 and 1999, cash
distributions totaled $7.2 million and $6.2 million, respectively. Cash
distributions of $3.3 million and $3.6 million to the limited partners during
the nine months ended September 30, 2000 and 1999, respectively, were deemed to
be a return of capital.
Cash distributions related to the results from the third quarter of 2000 of $1.7
million, will be paid during the fourth quarter of 2000.
5. TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES
The balance due to affiliates as of September 30, 2000, included $0.2 million
due to FSI and its affiliates for management fees and data processing services,
and $0.1 million due to affiliated unconsolidated special-purpose entities
(USPEs). The balance due to affiliates as of December 31, 1999, included $0.2
million due to FSI and its affiliates for management fees and $0.1 million due
to affiliated USPEs.
During the nine months ended September 30, 2000, the Partnership borrowed $4.5
million from the General Partner for a short-term loan and repaid the loan to
the General Partner. The General Partner charged the Partnership $0.1 million in
interest using prevailing market interest rates at the time of the loans.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
5. TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)
The Partnership's proportional share of USPE-affiliated management fees of $0.1
million was payable as of September 30, 2000 and December 31, 1999.
The Partnership's proportional share of the affiliated expenses incurred by
USPEs during 2000 and 1999 is listed in the following table (in thousands of
dollars):
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Management fees $ 68 $ 57 $ 228 $ 197
Data processing and administrative
expenses 21 14 48 52
</TABLE>
6. EQUIPMENT
Owned equipment held for operating leases is stated at cost. Equipment held for
sale is stated at the lower of the equipment's depreciated cost or fair value,
less cost to sell, and is subject to a pending contract for sale. The components
of owned equipment were as follows (in thousands of dollars):
September 30, December 31,
2000 1999
---------------------------------
Aircraft 55,070 $ 52,402
Marine vessels 16,276 20,276
Railcars 11,309 11,328
Marine containers 7,121 9,075
Trailers 2,245 9,245
----------- -----------
92,021
Less accumulated depreciation (71,874) (72,847)
----------- -----------
20,147 29,479
Equipment held for sale 3,400 --
----------- -----------
Net equipment 23,547 $ 29,479
=========== ===========
As of September 30, 2000, all owned equipment in the Partnership's portfolio was
on lease except for a marine vessel with a net book value of $3.4 million that
was held for sale and three railcars with a net book value of $20,000. As of
December 31, 1999, all owned equipment in the Partnership's portfolio was either
on lease or operating in PLM-affiliated short-term trailer rental facilities.
During the nine months ended September 30, 2000, the Partnership purchased a
hush-kit for one of the Partnership's McDonnell Douglas DC-9 commercial aircraft
for $2.7 million. The Partnership was required to install the hush-kit per the
Partnership's lease agreement for this aircraft.
During the nine months ended September 30, 2000, the Partnership disposed of
marine containers, trailers, and railcars with an aggregate net book value of
$2.5 million, for $3.7 million. During the nine months ended September 30, 1999,
the Partnership disposed of marine containers, trailers, and railcars with an
aggregate net book value of $0.4 million, for $0.6 million.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
7. INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES
The net investments in USPEs include the following jointly-owned equipment (and
related assets and liabilities) (in thousands of dollars):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
----------------------------------
<S> <C> <C>
48% interest in an entity owning a product tanker $ 4,945 $ 5,885
25% interest in a trust owning two commercial aircraft on direct
finance lease 2,241 2,535
50% interest in an entity owning a product tanker 1,591 1,333
50% interest in an entity that owned a bulk carrier -- (120)
---------------------------------------------------------------------------------------- ------------
Net investments $ 8,777 $ 9,633
============ ============
</TABLE>
As of September 30, 2000 and December 31, 1999, all jointly-owned equipment in
the Partnership's USPE portfolio was on lease.
8. OPERATING SEGMENTS
The Partnership operates in five primary operating segments: aircraft leasing,
marine vessel leasing, railcar leasing, marine container leasing, and trailer
leasing. Each equipment leasing segment engages in short-term to mid-term
operating leases to a variety of customers.
The following tables present a summary of the operating segments (in thousands
of dollars):
<TABLE>
<CAPTION>
Marine Marine
For the quarter ended Aircraft Vessel Railcar Container Trailer
September 30, 2000 Leasing Leasing Leasing Leasing Leasing Other(1) Total
---------------------------------- --------- --------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Lease revenue $ 1,935 $ 2,008 $ 562 $ 112 $ 638 $ -- $ 5,255
Interest income and other 1 -- -- -- -- 42 43
Gain on disposition of equipment -- -- 16 30 1,050 -- 1,096
------------------------------------------------------------------------
Total revenues 1,936 2,008 578 142 1,688 42 6,394
COSTS AND EXPENSES
Operations support (40) 1,359 117 2 270 10 1,718
Depreciation and amortization 1,337 370 139 104 144 14 2,108
Interest expense -- -- -- -- -- 280 280
Management fees to affiliate 81 100 33 6 38 -- 258
General and administrative expenses 40 13 10 -- 155 244 462
Provision for bad debts 9 -- -- -- 24 -- 33
------------------------------------------------------------------------
Total costs and expenses 1,427 1,842 299 112 631 548 4,859
------------------------------------------------------------------------
Equity in net income (loss) of USPEs 82 (25) -- -- -- -- 57
------------------------------------------------------------------------
Net income (loss) $ 591 $ 141 $ 279 $ 30 $ 1,057 $ (506) $ 1,592
========================================================================
Total assets as of September 30, 2000 $ 17,319 $ 12,484 $ 3,078 $ 1,144 $ 806 $ 1,678 $ 36,509
========================================================================
</TABLE>
(1 Includes certain interest income and costs not identifiable to a particular
segment, such as interest expense, certain amortization, general and
administrative, and operations support expenses.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
8. OPERATING SEGMENTS (CONTINUED)
<TABLE>
<CAPTION>
Marine Marine
For the quarter ended Aircraft Vessel Railcar Container Trailer
September 30, 1999 Leasing Leasing Leasing Leasing Leasing Other(1) Total
---------------------------------- --------- --------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Lease revenue $ 2,094 $ 1,570 $ 613 $ 130 $ 695 $ -- $ 5,102
Interest income and other 7 4 -- 8 -- 20 39
Gain on disposition of equipment -- -- 18 49 -- -- 67
------------------------------------------------------------------------
Total revenues 2,101 1,574 631 187 695 20 5,208
COSTS AND EXPENSES
Operations support 17 1,205 100 1 247 14 1,584
Depreciation and amortization 1,339 466 153 154 167 41 2,320
Interest expense -- -- -- -- -- 311 311
Management fees to affiliate 96 79 44 7 41 -- 267
General and administrative expenses 12 10 11 -- 146 188 367
Provision for bad debts -- -- 19 -- 4 -- 23
------------------------------------------------------------------------
Total costs and expenses 1,464 1,760 327 162 605 554 4,872
------------------------------------------------------------------------
Equity in net income (loss) of USPEs 94 (630) -- -- -- -- (536)
------------------------------------------------------------------------
Net income (loss) $ 731 $ (816) $ 304 $ 25 $ 90 $ (534) $ (200)
========================================================================
Total assets as of September 30, 1999 $ 20,174 $ 19,380 $ 3,568 $ 2,157 $ 3,963 $ 2,135 $ 51,377
========================================================================
Marine Marine
For the nine months ended Aircraft Vessel Railcar Container Trailer
September 30, 2000 Leasing Leasing Leasing Leasing Leasing Other(1) Total
---------------------------------- --------- --------- --------- --------- --------- --------- -----------
REVENUES
Lease revenue $ 5,953 $ 6,990 $ 1,778 $ 306 $ 1,841 $ -- $ 16,868
Interest income and other 8 3 -- -- -- 105 116
Gain on disposition of equipment -- -- 35 104 1,054 -- 1,193
------------------------------------------------------------------------
Total revenues 5,961 6,993 1,813 410 2,895 105 18,177
COSTS AND EXPENSES
Operations support 199 4,291 394 5 681 28 5,598
Depreciation and amortization 3,834 1,112 419 344 432 42 6,183
Interest expense -- -- -- -- -- 820 820
Management fees to affiliate 226 349 124 15 112 -- 826
General and administrative expenses 151 43 37 -- 420 694 1,345
Provision for bad debts 9 -- 2 -- 48 -- 59
------------------------------------------------------------------------
Total costs and expenses 4,419 5,795 976 364 1,693 1,584 14,831
------------------------------------------------------------------------
Equity in net income of USPEs 304 136 -- -- -- -- 440
------------------------------------------------------------------------
Net income (loss) $ 1,846 $ 1,334 $ 837 $ 46 $ 1,202 $ (1,479) $ 3,786
========================================================================
Total assets as of September 30, 2000 $ 17,319 $ 12,484 $ 3,078 $ 1,144 $ 806 $ 1,678 $ 36,509
========================================================================
</TABLE>
(1) Includes certain interest income and costs not identifiable to a particular
segment, such as interest expense, certain amortization, general and
administrative and operations support expenses.
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
8. OPERATING SEGMENTS (CONTINUED)
<TABLE>
<CAPTION>
Marine Marine
For the nine months ended Aircraft Vessel Railcar Container Trailer
September 30, 1999 Leasing Leasing Leasing Leasing Leasing Other(1) Total
---------------------------------- --------- --------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Lease revenue $ 6,338 $ 4,611 $ 1,821 $ 577 $ 1,950 $ -- $ 15,297
Interest income and other 23 6 -- 13 -- 96 138
Gain (loss) on disposition of -- -- 18 173 (18) -- 173
equipment
------------------------------------------------------------------------
Total revenues 6,361 4,617 1,839 763 1,932 96 15,608
COSTS AND EXPENSES
Operations support 49 2,966 335 3 625 40 4,018
Depreciation and amortization 3,928 1,398 461 474 500 118 6,879
Interest expense -- -- -- -- -- 992 992
Management fees to affiliate 271 231 120 29 122 -- 773
General and administrative expenses 25 30 33 -- 446 577 1,111
Provision for (recovery of) bad -- -- 35 (4) 16 -- 47
debts
------------------------------------------------------------------------
Total costs and expenses 4,273 4,625 984 502 1,709 1,727 13,820
------------------------------------------------------------------------
Equity in net income (loss) of USPEs 1,764 (898) -- -- -- -- 866
------------------------------------------------------------------------
Net income (loss) $ 3,852 $ (906) $ 855 $ 261 $ 223 $ (1,631) $ 2,654
========================================================================
Total assets as of September 30, 1999 $ 20,174 $ 19,380 $ 3,568 $ 2,157 $ 3,963 $ 2,135 $ 51,377
========================================================================
</TABLE>
(1) Includes certain interest income and costs not identifiable to a particular
segment, such as interest expense, certain amortization, general and
administrative and operations support expenses.
9. DEBT
The Partnership made the regularly scheduled installment payments of $5.7
million to the lenders of the note payable during the nine months ended
September 30, 2000, and accrued or paid the quarterly interest payment at a rate
of LIBOR plus 1.2% per annum (7.88% at September 30, 2000 and 7.30% December 31,
1999). The Partnership also paid the lenders of the senior note an additional
$0.4 million from equipment sales proceeds, as required by the loan agreement.
During August 2000, the existing senior loan agreement was amended and restated
to change the quarterly principal payment date from the 45th day of each quarter
to the last business day of each quarter.
10. NET INCOME (LOSS) PER WEIGHTED-AVERAGE PARTNERSHIP UNIT
Net income (loss) per weighted-average Partnership unit was computed by dividing
net income (loss) attributable to limited partners by the weighted-average
number of Partnership units deemed outstanding during the period. The
weighted-average number of Partnership units deemed outstanding during the three
and nine months ended September 30, 2000, was 9,065,911 and 9,066,552,
respectively. The weighted-average number of Partnership units deemed
outstanding during the three and nine months ended September 30, 1999, was
9,067,911 and 9,073,283, respectively.
11. CONTINGENCIES
PLM International (the Company) and various of its wholly owned subsidiaries are
defendants in a class action lawsuit filed in January 1997 and which is pending
in the United States District Court for the Southern District of Alabama,
Southern Division (Civil Action No. 97-0177-BH-C) (the court). The named
plaintiffs are six individuals who invested in PLM Equipment Growth Fund IV
(Fund IV), PLM Equipment Growth Fund V (Fund V), PLM Equipment Growth Fund VI
(Fund VI), and PLM Equipment Growth & Income Fund VII (Fund VII) (the Funds),
each a California limited partnership for which the Company's
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
11. CONTINGENCIES (CONTINUED)
wholly-owned subsidiary, FSI, acts as the General Partner. The complaint asserts
causes of action against all defendants for fraud and deceit, suppression,
negligent misrepresentation, negligent and intentional breaches of fiduciary
duty, unjust enrichment, conversion, and conspiracy. Plaintiffs allege that each
defendant owed plaintiffs and the class certain duties due to their status as
fiduciaries, financial advisors, agents, and control persons. Based on these
duties, plaintiffs assert liability against defendants for improper sales and
marketing practices, mismanagement of the Funds, and concealing such
mismanagement from investors in the Funds. Plaintiffs seek unspecified
compensatory damages, as well as punitive damages.
In June 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 Fund V, and filed the complaint
on her own behalf and on behalf of all class members similarly situated who
invested in the Funds. The complaint alleges the same facts and the same causes
of action as in the Koch action, plus additional causes of action against all of
the defendants, including alleged unfair and deceptive practices and violations
of state securities law. In July 1997, defendants filed a petition (the
petition) in federal district court under the Federal Arbitration Act seeking to
compel arbitration of plaintiff's claims. In October 1997, the district court
denied the Company's petition, but in November 1997, agreed to hear the
Company's motion for reconsideration. Prior to reconsidering its order, the
district court dismissed the petition pending settlement of the Romei action, as
discussed below. The state court action continues to be stayed pending such
resolution.
In February 1999 the parties to the Koch and Romei actions agreed to settle the
lawsuits, with no admission of liability by any defendant, and filed a
Stipulation of Settlement with the court. The settlement is divided into two
parts, a monetary settlement and an equitable settlement. The monetary
settlement provides for a settlement and release of all claims against
defendants in exchange for payment for the benefit of the class of up to $6.6
million. The final settlement amount will depend on the number of claims filed
by class members, the amount of the administrative costs incurred in connection
with the settlement, and the amount of attorneys' fees awarded by the court to
plaintiffs' attorneys. The Company will pay up to $0.3 million of the monetary
settlement, with the remainder being funded by an insurance policy. For
settlement purposes, the monetary settlement class consists of all investors,
limited partners, assignees, or unit holders who purchased or received by way of
transfer or assignment any units in the Funds between May 23, 1989 and August
30, 2000. The monetary settlement, if approved, will go forward regardless of
whether the equitable settlement is approved or not.
The equitable settlement provides, among other things, for: (a) the extension
(until January 1, 2007) of the date by which FSI must complete liquidation of
the Funds' equipment, (b) the extension (until December 31, 2004) of the period
during which FSI can reinvest the Funds' funds in additional equipment, (c) an
increase of up to 20% in the amount of front-end fees (including acquisition and
lease negotiation fees) that FSI is entitled to earn in excess of the
compensatory limitations set forth in the North American Securities
Administrator's Association's Statement of Policy; (d) a one-time repurchase by
each of Funds V, VI and VII of up to 10% of that fund's outstanding units for
80% of net asset value per unit; and (e) the deferral of a portion of the
management fees paid to an affiliate of FSI until, if ever, certain performance
thresholds have been met by the Funds. Subject to final court approval, these
proposed changes would be made as amendments to each Fund's limited partnership
agreement if less than 50% of the limited partners of each Fund vote against
such amendments. The equitable settlement also provides for payment of
additional attorneys' fees to the plaintiffs' attorneys from the Funds funds in
the event, if ever, that certain performance thresholds have been met by the
Funds. The equitable settlement class consists of all investors, limited
partners, assignees or unit holders who on August 30, 2000 held any units in
Funds V, VI, and VII, and their assigns and successors in interest.
The court preliminarily approved the monetary and equitable settlements in
August 2000, and information regarding each of the settlements was sent to class
members in September 2000. The
PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
11. CONTINGENCIES (CONTINUED)
monetary settlement remains subject to certain conditions, including final
approval by the court following a final fairness hearing. The equitable
settlement remains subject to certain conditions, including disapproval of the
proposed amendments to the fund partnership agreements by less than 50% of the
limited partners in one or more of Funds V, VI, and VII, judicial approval of
the proposed amendments and final approval of the equitable settlement by the
court following a final fairness hearing. A final fairness hearing has been
scheduled for November 29, 2000. The Company continues to believe that the
allegations of the Koch and Romei actions are completely without merit and
intends to continue to defend this matter vigorously if the monetary settlement
is not consummated.
The Company is involved as plaintiff or defendant in various other legal actions
incidental to its business. Management does not believe that any of these
actions will be material to the financial condition of the Company.
12. SUBSEQUENT EVENT
During October 2000, the Partnership received proceeds of $3.4 million from the
disposition of a marine vessel that was held for sale at September 30, 2000. The
proceeds approximated the marine vessel's net book value.
(This space intentionally left blank)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(I) RESULTS OF OPERATIONS
Comparison of PLM Equipment Growth Fund V's (the Partnership's) Operating
Results for the Three Months Ended September 30, 2000 and 1999
(A) Owned Equipment Operations
Lease revenues less direct expenses (defined as repairs and maintenance,
equipment operating, and asset-specific insurance expenses) on owned equipment
increased during the three months ended September 30, 2000, when compared to the
same period of 1999. Gains or losses from the sale of equipment, interest and
other income, and certain expenses such as depreciation and amortization and
general and administrative expenses relating to the operating segments (see Note
8 to the financial statements), are not included in the owned equipment
operation discussion because they are indirect in nature and not a result of
operations, but the result of owning a portfolio of equipment. The following
table presents lease revenues less direct expenses by segment (in thousands of
dollars):
For the Three Months
Ended September 30,
2000 1999
----------------------------
Aircraft $ 1,975 $ 2,077
Marine vessels 649 365
Railcars 445 513
Trailers 368 448
Marine containers 110 129
Aircraft: Aircraft lease revenues and direct expenses were $1.9 million and
($40,000), respectively, for the three months ended September 30, 2000, compared
to $2.1 million and $17,000, respectively, during the same period of 1999. The
decrease in aircraft lease revenues of $0.2 million was due to one aircraft
being on-lease for one month during the quarter ended September 30, 2000,
compared to the same period of 1999, when this aircraft was on-lease for three
months. Direct expenses decreased $0.1 million during the third quarter of 2000
due to the receipt of $0.1 million from the lessee to pay the Partnership for
certain repairs. A similar event did not occur in 1999.
Marine vessels: Marine vessel lease revenues and direct expenses were $2.0
million and $1.4 million, respectively, for the three months ended September 30,
2000, compared to $1.6 million and $1.2 million, respectively, during the same
period of 1999.
The increase in marine vessel lease revenues of $0.4 million during the quarter
ended September 30, 2000 was due to one marine vessel that earned $1.1 million
in additional voyage lease revenues due to higher lease rates compared to the
same period of 1999, offset in part, by a decrease of $0.6 million caused by
another marine vessel that was off-lease during the three months ended September
30, 2000 compared to the same period of 1999, when it was on-lease.
As a result of the additional voyage lease revenues, direct expenses increased
$0.2 million during the quarter ended September 30, 2000 when compared to the
same period of 1999.
Railcars: Railcar lease revenues and direct expenses were $0.6 million and $0.1
million, respectively, for the three months ended September 30, 2000 and 1999.
Trailers: Trailer lease revenues and direct expenses were $0.6 million and $0.3
million, respectively, for the three months ended September 30, 2000, compared
to $0.7 million and $0.2 million, respectively, during the same period of 1999.
The decrease in trailer contribution was due to lower lease revenues of $0.1
million resulting from lower utilization on short-term rental trailers and
higher repair costs of $23,000 during the three months ended September 30, 2000
compared to the same period of 1999.
Marine containers: Marine container lease revenues and direct expenses were $0.1
million and $2,000, respectively, for the three months ended September 30, 2000,
compared to $0.1 million and $1,000, respectively, during the same period of
1999. The number of marine containers owned by the Partnership has been
declining due to dispositions during 2000 and 1999 resulting in a decrease in
marine container contribution.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $3.1 million for the quarter ended September 30, 2000
decreased from $3.3 million for the same period in 1999. Significant variances
are explained as follows:
(i) A $0.2 million decrease in depreciation and amortization expenses from
1999 levels was caused primarily by the double-declining balance method of
depreciation which results in greater depreciation in the first years an asset
is owned.
(ii) A $31,000 decrease in interest expense was due to a lower average
outstanding debt balance in the third quarter of 2000 when compared to the same
period of 1999.
(iii) A $0.1 million increase in general and administrative expenses was
primarily due to additional costs associated with the re-lease of a commercial
aircraft during 2000 compared to the same period of 1999.
(C) Net Gain on Disposition of Owned Equipment
The net gain on the disposition of equipment for the third quarter of 2000
totaled $1.1 million, which resulted from the sale of marine containers,
trailers, and a railcar with a net book value of $2.2 million, for proceeds of
$3.3 million. The net gain on the disposition of equipment for the third quarter
of 1999 totaled $0.1 million, which resulted from the sale of marine containers
railcars, and a trailer with an aggregate net book value of $0.1 million, for
proceeds of $0.2 million.
(D) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
(USPEs)
Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity method of accounting is shown in the following table by
equipment type (in thousands of dollars):
For the Three Months
Ended September 30,
2000 1999
----------------------------
Aircraft $ 82 $ 94
Marine vessels (25) (630)
----------------------------
Equity in net income (loss) of USPEs $ 57 $ (536)
============================
Aircraft: As of September 30, 2000 and 1999, the Partnership had an interest in
an entity owning two commercial aircraft on a direct finance lease. During the
three months ended September 30, 2000, revenues of $0.1 million were offset by
amortization expense, direct expenses, and administrative expenses of $12,000.
During the same period of 1999, revenues of $0.1 million were offset by
amortization expense, direct expenses, and administrative expenses of $10,000.
Marine vessels: As of September 30, 2000, the Partnership owned an interest in
two entities owning a total of two marine vessels. As of September 30, 1999, the
Partnership owned an interest in three entities owning a total of three marine
vessels. During the third quarter of 2000, lease revenues of $1.3 million were
offset by depreciation expense, direct expenses, and administrative expenses of
$1.3 million. During the same period of 1999, lease revenues of $1.2 million
were offset by depreciation expense, direct expenses, and administrative
expenses of $1.8 million.
Lease revenues increased $0.1 million during the three months ended September
30, 2000 when compared to the same period of 1999. The increase in lease
revenues is due to the following:
(i) One marine vessel that was on voyage charter during the quarters ended
September 30, 2000 and 1999, earned $0.4 million in higher lease revenues due to
an increase in voyage lease rates compared to the same period of 1999.
(ii) The other marine vessel, while on time charter during the quarters
ended September 30, 2000 and 1999, also earned a higher lease rate which caused
lease revenues to increase $0.1 million during the quarter ended September 30,
2000 compared to the same period of 1999.
(iii) The sale of the Partnership's interest in a marine vessel during the
fourth quarter of 1999 caused lease revenues to decrease $0.3 million during the
three months ended September 30, 2000 compared to the same period of 1999.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.5 million during the three months ended September 30, 2000 compared to the
same period of 1999. The decrease in direct expenses is due to the following:
(i) Depreciation expense decreased $0.1 million during the three months
ended September 30, 2000 due to the double-declining balance method of
depreciation which results in greater depreciation in the first years an asset
is owned.
(ii) Direct expenses also decreased $0.1 million during the three months
ended September 30, 2000 due to lower operating expenses compared to the same
period of 1999.
(iii) The sale of the Partnership's interest in a marine vessel during the
fourth quarter of 1999 caused depreciation expense, direct expenses, and
administrative expenses to decrease $0.3 million during the three months ended
September 30, 2000 compared to the same period of 1999.
(E) Net Income (Loss)
As a result of the foregoing, the Partnership's net income for the three months
ended September 30, 2000 was $1.6 million, compared to net loss of $0.2 million
during the same period in 1999. The Partnership's ability to operate assets,
liquidate assets, secure leases, and re-lease those assets whose leases expire
is subject to many factors, and the Partnership's performance in the third
quarter of 2000 is not necessarily indicative of future periods. In the third
quarter of 2000, the Partnership distributed $2.3 million to the limited
partners, or $0.25 per weighted-average limited partnership unit.
Comparison of the Partnership's Operating Results for the Nine Months Ended
September 30, 2000 and 1999
(A) Owned Equipment Operations
Lease revenues less direct expenses on owned equipment decreased during the nine
months ended September 30, 2000, compared to the same period of 1999. The
following table presents lease revenues less direct expenses by segment (in
thousands of dollars):
For the Nine Months
Ended September 30,
2000 1999
----------------------------
Aircraft $ 5,754 $ 6,289
Marine vessels 2,699 1,645
Railcars 1,384 1,486
Trailers 1,160 1,325
Marine containers 301 574
Aircraft: Aircraft lease revenues and direct expenses were $6.0 million and $0.2
million, respectively, for the nine months ended September 30, 2000, compared to
$6.3 million and $49,000, respectively, during the same period of 1999. A
decrease in aircraft lease revenues of $0.4 million was due to a commercial
aircraft being off-lease for four months during the nine months ended September
30, 2000 that was on-lease for nine months during the same period of 1999.
Direct expenses increased $0.2 million during the nine months ended September
30, 2000 due to required repairs to the off-lease commercial aircraft. A similar
expense was not required during the same period of 1999.
Marine vessels: Marine vessel lease revenues and direct expenses were $7.0
million and $4.3 million, respectively, for the nine months ended September 30,
2000, compared to $4.6 million and $3.0 million, respectively, during the same
period of 1999.
The increase in marine vessel lease revenues of $2.4 million during the nine
months ended September 30, 2000 was due to one marine vessel that earned $3.6
million in additional voyage lease revenues due to an increase in voyage lease
rates compared to the same period of 1999, offset in part, by a decrease of $1.2
million caused by another marine vessel that was off-lease for six months during
the nine months ended September 30, 2000, compared to the same period of 1999,
when it was on-lease nine months.
As a result of the additional voyages, direct expenses increased $1.3 million
during the nine months ended September 30, 2000 when compared to the same period
of 1999.
Railcars: Railcar lease revenues and direct expenses were $1.8 million and $0.4
million, respectively, for the nine months ended September 30, 2000, compared to
$1.8 million and $0.3 million, respectively, during the same period of 1999. The
decrease in railcar contribution was due a decrease in railcar lease revenues of
$43,000 primarily due to lower re-lease rates earned on railcars whose leases
expired during 2000 and to an increase of $49,000 in repairs to certain railcars
in 2000 that were not needed during the same period of 1999.
Trailers: Trailer lease revenues and direct expenses were $1.8 million and $0.7
million, respectively, for the nine months ended September 30, 2000, compared to
$2.0 million and $0.6 million, respectively, during the same period of 1999.
Trailer contribution decreased $0.2 million during the nine months ended
September 30, 2000 due to lower lease revenues of $0.1 million resulting from
lower utilization on the trailers in the short-term rental facilities and higher
repair costs of $0.1 million when compared to the same period of 1999.
Marine containers: Marine container lease revenues and direct expenses were $0.3
million and $5,000, respectively, for the nine months ended September 30, 2000,
compared to $0.6 million and $3,000, respectively, during the same period of
1999. The number of marine containers owned by the Partnership has been
declining due to dispositions during 2000 and 1999 resulting in a decrease to
marine container contribution.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $9.2 million for the nine months ended September 30,
2000 decreased from $9.8 million for the same period in 1999. Significant
variances are explained as follows:
(i) A $0.7 million decrease in depreciation and amortization expenses from
1999 levels was caused by the double-declining balance method of depreciation
which results in greater depreciation in the first years an asset is owned.
(ii) A $0.2 million decrease in interest expense was due to a lower average
outstanding debt balance during the nine months ended September 30, 2000
compared to the same period of 1999.
(iii) A $0.1 million increase in management fees to affiliate was due to
increased lease revenues during the nine months ended September 30, 2000
compared to the same period of 1999.
(iv) A $0.2 million increase in general and administrative expenses was
primarily due to additional costs associated with the re-lease of a commercial
aircraft during 2000 compared to the same period of 1999.
(C) Net Gain on Disposition of Owned Equipment
The net gain on the disposition of equipment for the nine months ended September
30, 2000 totaled $1.2 million, which resulted from the sale of marine
containers, railcars, and trailers with a net book value of $2.5 million, for
proceeds of $3.7 million. The net gain on the disposition of equipment for the
nine months ended September 30, 1999 totaled $0.2 million, which resulted from
the sale of marine containers, railcars, and trailers with an aggregate net book
value of $0.4 million, for proceeds of $0.6 million.
(D) 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 of accounting is shown in the following table by
equipment type (in thousands of dollars):
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
2000 1999
----------------------------
<S> <C> <C>
Aircraft, rotable components, and aircraft engines $ 304 $ 1,764
Marine vessels 136 (898)
----------------------------
Equity in net income of USPEs $ 440 $ 866
============================
</TABLE>
Aircraft, rotable components, and aircraft engines: As of September 30, 2000 and
1999, the Partnership had an interest in an entity owning two commercial
aircraft on a direct finance lease. During the nine months ended September 30,
2000, revenues of $0.3 were offset by direct expenses and administrative
expenses of ($13,000). During the same period of 1999, revenues of $0.3 million
and the gain from the sale of the Partnership's interest in two trusts that
owned a total of three commercial aircraft, two aircraft engines, and a
portfolio of aircraft rotables of $1.6 million were offset by depreciation
expense, direct expenses, and administrative expenses of $0.1 million. Direct
expenses and administrative expenses decreased $0.1 million during the nine
months ended September 30, 2000 due to the sale of the Partnership's interest in
two trusts and the recovery of a $48,000 accounts receivable in 2000 that had
previously been reserved as a bad debt. A similar recovery did not occur during
the same period of 1999.
Marine vessels: As of September 30, 2000, the Partnership owned an interest in
two entities owning a total of two marine vessels. As of September 30, 1999, the
Partnership owned an interest in three entities owning a total of three marine
vessels. During the nine months ended September 30, 2000, lease revenues of $4.5
million were offset by depreciation expense, direct expenses, and administrative
expenses of $4.4 million. During the same period of 1999, lease revenues of $4.0
million were offset by depreciation expense, direct expenses, and administrative
expenses of $4.9 million.
Lease revenues increased $0.5 million during the nine months ended September 30,
2000 compared to the same period of 1999. The increase in lease revenues is due
to the following:
(i) One marine vessel that was on voyage charter during the nine months
ended September 30, 2000 and 1999, earned $1.3 million in higher lease revenues
due to an increase in voyage lease rates when compared to the same period of
1999.
(ii) The other marine vessel, while on time charter during the nine months
ended September 30, 2000 and 1999, earned a lower lease rate which caused lease
revenues to decrease $0.1 million during the quarter ended September 30, 2000
compared to the same period of 1999.
(iii) The sale of the Partnership's interest in a marine vessel during the
fourth quarter of 1999 caused lease revenues to also decrease $0.7 million
during the nine months ended September 30, 2000 compared to the same period of
1999.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.5 million during the nine months ended September 30, 2000 when compared to
the same period of 1999. The sale of the Partnership's interest in a marine
vessel during the fourth quarter of 1999, caused depreciation expense, direct
expenses, and administrative expenses to decrease $1.0 million during the nine
months ended September 30, 2000. This decrease was offset, in part, by an
increase of $0.4 million in certain direct expenses due to increased usage of a
marine vessel during the nine months ended September 30, 2000 when compared to
the same period of 1999.
(E) Net Income
As a result of the foregoing, the Partnership's net income for the nine months
ended September 30, 2000 was $3.8 million, compared to net income of $2.7
million during the same period in 1999. The Partnership's ability to operate
assets, liquidate assets, secure leases, and re-lease those assets whose leases
expire is subject to many factors, and the Partnership's performance in the nine
months ended September 30, 2000 is not necessarily indicative of future periods.
In the nine months ended September 30, 2000, the Partnership distributed $6.8
million to the limited partners, or $0.75 per weighted-average limited
partnership unit.
(II) FINANCIAL CONDITION - CAPITAL RESOURCES, LIQUIDITY, AND DISTRIBUTIONS
For the nine months ended September 30, 2000, the Partnership generated $9.7
million in operating cash (net cash provided by operating activities plus
non-liquidating distributions from USPEs) to meet its operating obligations and
pay cash distributions (total for the nine months ended September 30, 2000 of
$7.2 million) to the partners.
During the nine months ended September 30, 2000, the Partnership sold owned
equipment and received aggregate proceeds of $3.7 million.
During the nine months ended September 30, 2000, the Partnership purchased a
hush-kit for one of the Partnership's McDonnell Douglas DC-9 commercial aircraft
for $2.7 million. The Partnership was required to install the hush-kit per the
Partnership's lease agreement for this aircraft.
Accounts receivable decreased $0.1 million during the nine months ended
September 30, 2000 due to the timing of cash receipts.
Investments in USPEs decreased $0.9 million due to cash distributions of $1.3
million to the Partnership from the USPEs offset in part, by $0.4 million of
income that was recorded by the Partnership's from the USPEs during the nine
months ended September 30, 2000.
Accounts payable decreased $0.2 million during the nine months ended September
30, 2000 due to the timing of payments to vendors.
During the nine months ended September 30, 2000, the Partnership borrowed $4.5
million from the General Partner for a short-term loan and fully repaid the loan
to the General Partner. The General Partner charged the Partnership $0.1 million
in interest using prevailing market interest rates at the time of the loans.
During the nine months ended September 30, 2000, the Partnership made the
regularly scheduled installment payment of $5.7 million to the lenders of the
note payable. The Partnership also made an additional principal payment of $0.4
million from the proceeds of equipment sales. The Partnership is scheduled to
make an installment payment of $4.0 million under its notes payable agreement on
December 29, 2000. The Partnership is also scheduled to make quarterly
installment payments through the year 2001 and, in some instances, a percentage
of equipment sale proceeds.
(III) 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.
Several factors may affect the Partnership's operating performance during the
remainder of 2000 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.
Factors affecting the Partnership's contribution during the remainder of 2000
and beyond include:
1. The cost of new marine containers has been at historic lows for the past
several years which has caused downward pressure on per diem lease rates.
Recently, the cost of marine containers have started to increase which, if this
trend continues, should translate into rising per diem lease rates. However,
some of the Partnership's refrigerated marine containers have become
delaminated. This condition lowers the demand for these marine containers which
has lead to declining lease rates and lower utilization on containers with this
problem.
2. Depressed economic conditions in Asia during most of 1999 led to declining
freight rates for dry bulk marine vessels. With the economic recovery in Asia
and in the absence of new additional orders, this market has stabilized.
3. Railcar loading in North America have continued to be high, however a
softening in the market has lead to lower lease rates as existing leases expire
and renewal leases are negotiated.
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
equipment markets in which it determines it cannot operate equipment to achieve
acceptable rates of return.
The Partnership intends to use cash flow from operations to satisfy its
operating requirements, pay loan principal and interest on debt, and pay cash
distributions to the partners.
Beginning in the Partnership's seventh year of operations, which commenced on
January 1, 1999, the General Partner stopped purchasing additional equipment.
Surplus cash, less reasonable reserves, will be distributed to the partners.
Beginning in the Partnership's ninth year of operations, which commences on
January 1, 2001, the General Partner intends to begin an orderly liquidation of
the Partnership's assets. The Partnership will be terminated by December 31,
2010, unless terminated earlier upon sale of all equipment and by certain other
events.
(IV) FORWARD-LOOKING INFORMATION
Except for the historical information contained herein, this Form 10-Q contains
forward-looking statements that involve 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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership's primary market risk exposures are that of interest rate and
currency risk. The Partnership's note payable is a variable rate debt. The
Partnership estimates a one percent increase or decrease in the Partnership's
variable rate debt would result in an increase or decrease, respectively, in
interest expense of $24,000 for the remaining three months of 2000 and $47,000
in 2001. The Partnership estimates a two percent increase or decrease in the
Partnership's variable rate debt would result in an increase or decrease,
respectively, in interest expense of $47,000 for the remaining three months of
2000 and $0.1 million in 2001.
During the nine months ended September 30, 2000, 83% of the Partnership's total
lease revenues from wholly- and partially-owned equipment came from non-United
States domiciled lessees. Most of the Partnership's leases require payment in
United States (U.S.) currency. If these lessees currency devalues against the
U.S. dollar, the lessees could potentially encounter difficulty in making the
U.S. dollar denominated lease payments.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Amendment No. 2 to the Amended and Restated $38,000,000 Loan
Agreement, dated as of August 2, 2000.
(b) Reports on Form 8-K
None.
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: November 10, 2000 By: /s/ Richard K Brock
Richard K Brock
Vice President and
Chief Financial Officer
