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, 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 33-83216-01
-----------------------
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(Exact name of registrant as specified in its charter)
Delaware 94-3209289
(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 executive offices) (Zip code)
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
Class Outstanding at November 12, 1996
Member A 4,999,581
Member B 1
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
-------------------------------------
<S> <C> <C>
Assets:
Equipment held for operating leases $ 64,465,916 $ 36,139,950
Less accumulated depreciation (8,223,345 ) (2,869,535 )
-------------------------------------
Net equipment 56,242,571 33,270,415
Cash and cash equivalents 14,491,509 6,803,946
Restricted cash -- 6,315,548
Investment in unconsolidated special purpose entities 19,548,978 14,596,206
Accounts receivable, net of allowance for doubtful accounts
of $0 in 1996 and $7,835 in 1995 1,506,589 797,097
Prepaid expenses 348,894 416,515
Organization and offering costs, net of accumulated amortization
of $111,632 in 1996 and $45,732 in 1995 330,505 389,289
-------------------------------------
Total assets $ 92,469,046 $ 62,589,016
=====================================
LIABILITIES AND MEMBERS' EQUITY
Liabilities:
Accounts payable and accrued expenses $ 573,884 $ 664,686
Due to affiliates 59,148 387,197
Prepaid deposits and reserves for repairs 595,300 135,409
-------------------------------------
Total liabilities 1,228,332 1,187,292
Subscriptions in escrow -- 6,259,500
Members' equity:
Class A Members (4,999,581 Units at September 30, 1996 and
2,831,388 Units at December 31, 1995) 91,240,714 54,836,617
Class B Member -- 305,607
-------------------------------------
Total Members' Equity 91,240,714 55,142,224
-------------------------------------
Total liabilities and members' equity $ 92,469,046 $ 62,589,016
=====================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1996 1995 1996 1995
---------------------------------------------------------------------
Revenues:
<S> <C> <C> <C> <C>
Lease revenue $ 2,194,389 $ 1,969,109 $ 6,468,408 $ 2,329,606
Interest and other income 487,199 15,634 1,187,925 48,871
Gain on sale of equipment -- 24,593 -- 24,593
---------------------------------------------------------------------
Total revenues 2,681,588 2,009,336 7,656,333 2,403,070
Expenses:
Depreciation and amortization 2,363,072 1,492,507 5,419,712 1,956,829
Management fees to affiliate 127,349 138,527 383,905 156,552
Repairs and maintenance 322,038 233,882 845,324 283,150
Interest expense -- 125,757 8,902 227,467
Insurance expense to affiliate 2,237 393 6,449 5,393
Insurance expense 85,665 -- 218,014 --
Marine equipment operating expenses 139,374 304,940 616,010 310,200
General and administrative
expenses to affiliates 5,509 49,736 219,227 58,304
Other general and administrative
expenses 210,995 116,972 365,038 123,893
---------------------------------------------------------------------
Total expenses 3,256,239 2,462,714 8,082,581 3,121,788
---------------------------------------------------------------------
Equity in net income of unconsolidated
special purpose entities 103,755 -- 38,334 --
---------------------------------------------------------------------
Net loss $ (470,896 ) $ (453,378 ) $ (387,914 ) $ (718,718 )
=====================================================================
Partners' share of net income (loss):
Class A Members $ (886,696 ) $ (448,845 ) $ (995,111 ) $ (711,531 )
Class B Member 415,800 (4,533 ) 607,197 (7,187 )
---------------------------------------------------------------------
Total $ (470,896 ) $ (453,378 ) $ (387,914 ) $ (718,718 )
=====================================================================
Net loss per Class A Unit
(4,999,581 and 1,810,068 Units,
respectively, at September 30,
1996 and 1995) $ (0.18 ) $ (0.25 ) $ (0.20 ) $ (0.39 )
=====================================================================
Cash distributions $ 2,885,107 $ 316,360 $ 6,884,572 $ 338,085
=====================================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
STATEMENT OF CHANGES IN MEMBERS' EQUITY
For the period from December 31, 1994 to September 30, 1996
<TABLE>
<CAPTION>
Class A Class B Total
---------------------------------------------------------
<S> <C> <C> <C>
Members' equity at December 31, 1994 $ 100 $ -- $ 100
Members' capital contributions 56,627,660 9,536,106 66,163,766
Syndication costs -- (9,101,085 ) (9,101,085 )
Net loss (611,811 ) (6,180 ) (617,991 )
Distributions (1,179,332 ) (123,234 ) (1,302,566 )
---------------------------------------------------------
Members' equity at December 31, 1995 54,836,617 305,607 55,142,224
Members' capital contributions 43,363,860 5,068,825 48,432,685
Syndication costs -- (5,061,709 ) (5,061,709 )
Net income (loss) (995,111 ) 607,197 (387,914 )
Distributions (5,964,652 ) (919,920 ) (6,884,572 )
---------------------------------------------------------
Members' equity at September 30, 1996 $ 91,240,714 $ -- $ 91,240,714
=========================================================
</TABLE>
See accompanying notes to financial
statements.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
STATEMENT OF CASH FLOWS
For the nine months ended September 30,
<TABLE>
<CAPTION>
1996 1995
----------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (387,914 ) $ (718,718 )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 5,419,712 1,956,829
Gain on sale of equipment -- (24,593 )
Cash distribution from unconsolidated special purpose
entities in excess of income 4,114,841 --
Changes in operating assets and liabilities:
Accounts receivable, net (709,492 ) (740,848 )
Prepaid expenses 67,621 (145,000 )
Accounts payable and accrued expenses (536,602 ) 176,989
Due to affiliates (328,049 ) 156,552
Prepaid deposits and reserves for repairs 459,891 22,171
----------------------------------------
Net cash provided by operating activities 8,100,008 683,382
----------------------------------------
Investing activities:
Payments for purchase of equipment (27,880,168 ) (37,219,347 )
Equipment purchased and placed in unconsolidated
special purpose entities (9,067,613 ) --
Proceeds from disposition of equipment -- 55,028
----------------------------------------
----------------------
Net cash used in investing activities (36,947,781 ) (37,164,319 )
----------------------------------------
Financing activities:
Proceeds from notes payable -- 1,057,221
Cash distributions to Class A Members (5,964,652 ) (321,069 )
Cash distributions to Class B Member (919,920 ) (17,016 )
Class A members capital contribution 43,363,860 36,201,260
(Decrease) increase in subscriptions in escrow (6,259,500 ) 6,864,660
Decrease (increase) in restricted cash from subscriptions
in escrow, net 6,315,548 (6,875,956 )
----------------------------------------
Cash provided by financing activities 36,535,336 36,909,100
----------------------------------------
Cash and cash equivalents:
Net increase in cash and cash equivalents 7,687,563 428,163
Cash and cash equivalents at beginning of period 6,803,946 100
----------------------------------------
Cash and cash equivalents at end of period $ 14,491,509 $ 428,263
========================================
Supplemental information:
Interest paid $ 8,902 $ 227,467
========================================
Non cash items:
Syndication and offering costs paid by Class B Member $ 5,061,709 $ 6,886,933
========================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
1. Basis of Preparation
Organization
Professional Lease Management Income Fund I, L.L.C., a Delaware Limited
Liability Company (Fund I or the Company) was formed on August 22, 1994.
The Company's offering became effective on January 23, 1996. On May 13,
1996, the Company ceased its offering after subscriptions were accepted for
5,000,000 Class A Units ($100,000,000).
At September 30, 1996, the Class B Member had capital contributions of
$14,604,932 representing the cash payments for organization and syndication
costs. Syndication costs of $14,162,794 are recorded as a reduction to
Class B Member's equity.
2. Opinion of Management
In the opinion of the management of PLM Financial Services, Inc. (FSI), the
Manager, the accompanying unaudited financial statements contain all
adjustments necessary, consisting primarily of normal recurring accruals,
to present fairly the financial position of Fund I or the Company as of
September 30, 1996, the statements of operations for the three and nine
months ended September 30, 1996 and 1995, the statements of changes in
partners' capital for the period from December 31, 1994 to September 30,
1996, and the statements of cash flow for the nine months ended September
30, 1996 and 1995. 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-A for the year ended December
31, 1995, on file at the Securities and Exchange Commission.
3. Investment in Unconsolidated Special Purpose Entities
During the nine months ended September 30, 1996, the Company purchased a
20% beneficial interest in a trust which owns five Boeing 737-200 aircraft
for $5.6 million, and a 50% interest in a marine vessel for $3.4 million (a
deposit of $0.4 million was lodged in December of 1995). The remaining
interests are owned by affiliated partnerships.
The Company accounts for investments in unconsolidated special purpose
entities using the equity method.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
3. Investment in Unconsolidated Special Purpose Entities (continued)
The net investments in unconsolidated special purpose entities include the
following jointly-owned equipment (and related assets and liabilities):
<TABLE>
<CAPTION>
September 30, December 31,
% Ownership Equipment 1996 1995
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
33.33% Two trusts consisting of:
Three 737-200A Stage II
commercial aircraft
Two aircraft engines
Portfolio of rotable components $ 8,428,387 $ 10,109,664
14.28% Trust consisting of seven 737-200A
Stage II commercial aircraft (see
note below) -- 4,108,555
16.67% Trust consisting of six 737-200A
Stage II commercial aircraft (see
note below) 3,149,497 --
25% Trust consisting of four 737-200A
Stage II commercial aircraft (see
note below) 4,613,368 --
50% Cargo marine vessel 3,357,726 377,987
----------------------------------------------
Total investments $ 19,548,978 $ 14,596,206
==============================================
</TABLE>
The Company has beneficial interest in two unconsolidated special purpose
entities that own multiple aircraft (the Trusts). These Trusts contain
provisions, under certain circumstances, for allocating specific aircraft
to the beneficial owners. During September 1996, PLM Equipment Growth Fund
V, an affiliated partnership which also has a beneficial interest in the
Trust, renegotiated its senior loan agreement and was required, for loan
collateral purposes, to withdraw the aircraft designated to it from the
Trust. The result was to restate the percentage ownership of the remaining
beneficial owners of the Trusts beginning September 30, 1996. This change
has no effect on the income or loss recognized in the nine months ended
September 30, 1996.
4. Reclassifications
Certain amounts in the 1995 financial statements have been reclassified to
conform with the 1996 presentation.
5. Cash Distributions
Cash distributions are recorded when paid and totaled $2,885,107 and
$316,360 for the three months ended September 30, 1996 and 1995,
respectively, and $6,884,572 and $338,085 for the nine months ended
September 30, 1996 and 1995, respectively. Cash distributions to Class A
Unitholders in excess of net income are considered to represent a return of
capital on a generally accepted accounting principle basis. Cash
distributions to Class A Unitholders of $5,964,652 and $321,069 for the
nine months ended September 30, 1996 and 1995, were deemed to be a return
of capital.
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
5. Cash Distributions (continued)
Cash distributions related to the third quarter results of $621,124 were
paid or are payable during October, 1996, to the Class A Unitholders of
record as of September 30, 1996, for unitholders who elected for monthly
distributions. Quarterly cash distributions of approximately $1,087,027
were declared on October 30, 1996 and are to be paid on November 15, 1996
to Class A and Class B Unitholders.
6. Restricted Cash
At December 31, 1995, restricted cash represented subscription deposits for
Units in escrow which were considered restricted cash until the members
were admitted, usually the first day of the following month, upon which the
funds were no longer considered restricted cash.
7. Equipment
Owned equipment held for operating leases is stated at cost. The components
of owned equipment are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---------------------------------------
<S> <C> <C>
Rail equipment $ 13,161,235 $ 13,112,390
Aircraft 24,605,000 4,000,000
Marine vessel 12,256,531 12,256,532
Trailers 14,443,150 6,771,028
---------------------------------------
64,465,916 36,139,950
Less accumulated depreciation (8,223,345 ) (2,869,535 )
---------------------------------------
Net equipment $ 56,242,571 $ 33,270,415
=======================================
</TABLE>
Revenues are earned by placing the equipment under operating leases which
are generally billed monthly or quarterly. The Company's marine vessel is
leased to an operator of utilization-type leasing pools which include
equipment owned by unaffiliated entities. In such instances, revenues
received by the Company consist of a specified percentage of revenues
generated by leasing the equipment to sublessees, after deducting certain
direct operating expenses of the pooled equipment. Rents for railcars are
based on mileage traveled or a fixed rate; rents for all other equipment
are based on fixed rates.
During the nine months ended September 30, 1996, the Company purchased four
737-200A Stage II commercial aircraft, 50 new refrigerated trailers and one
railcar for $28.3 million.
As of September 30, 1996, all equipment in the Company portfolio was either
on lease or operating in PLM-affiliated short-term trailer rental
facilities except for three railcars with a carrying value of $84,000. At
December 31, 1995, all equipment in the Company portfolio was either on
lease or operating in PLM-affiliate short-term trailer rental facilities.
<PAGE>
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
(A Delaware Limited Liability Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
8. Other Transactions with Affiliates
In certain circumstances, the Manager will be entitled to a monthly
re-lease fee for re-leasing services following expiration of the initial
lease, charter or other contract for certain Equipment equal to the lesser
of (a) the fees which would be charged by an independent third party for
comparable services for comparable equipment or (b) 2% of Gross Lease
Revenues derived from such re-lease. No re-lease fee, however, shall be
payable if such fee would cause the combination of the equipment management
fee paid to IMI or the re-lease fees to exceed 7% Gross Lease Revenues.
9. Debt
The Manager has entered into a joint $35 million credit facility (the
"Committed Bridge Facility") on behalf of the Company, PLM Equipment Growth
Fund III, PLM Equipment Growth Fund IV, PLM Equipment Growth Fund V, PLM
Equipment Growth Fund VI, and PLM Equipment Growth & Income Fund VII, all
affiliated investment programs, TEC Acquisub, Inc. ("TECAI"), an indirect
wholly-owned subsidiary of the Manager and American Finance Group ("AFG"),
a subsidiary of PLM International, 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 an affiliate
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 in June 1996 to expire on May 23, 1997. The Committed Bridge
Facility also provides for a $5 million Letter of Credit Facility for the
eligible borrowers. Outstanding borrowings by the Company, TECAI, AFG or
PLM Equipment Growth Funds III 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 May 23, 1997. The Committed Bridge Facility prohibits the Company 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. To the extent the Company is unable to raise
sufficient capital through the sale of interests to repay its portion of
the Committed Bridge Facility, the Company will continue to be obligated
under the Committed Bridge Facility until the Company generates proceeds
from operations or the sale of Equipment sufficient for repayment.
Borrowings by the Company are guaranteed by the Manager. As of September
30, 1996, AFG had $27.8 million in outstanding borrowings under the
Committed Bridge Facility.
None of the other borrowers had any outstanding borrowings.
On October 31, 1996, the General Partner amended this agreement (for
details refer to "Liquidity and Capital Resources").
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(I) RESULTS OF OPERATIONS - Quarter Over Quarter Summary
(A) Owned equipment operations
Professional Lease Management Income Fund I, L.L.C. (the "Company") commenced
significant operations in May 1995. As of May 13, 1996, the Company completed
its equity-raising stage. As of September 30, 1996, the Company had purchased
and placed into service $64.5 million of equipment, compared to $37.2 million at
September 30, 1995. All of these purchases were completed with a combination of
unrestricted cash, interim financing, and an advance from an affiliate of the
Manager. The nine day advance from the Manager was repaid (including interest at
commercial loan rates) in July of 1995. Revenues of $7.7 million were generated
during the nine months ended September 30, 1996, compared to $2.3 million in the
same period in 1995. The variance is due to the Company's equipment purchasing
activities throughout 1996. Expenses of $8.1 million for the nine months ended
September 30, 1996 consisted primarily of depreciation expense, using the
double-declining balance method, and normal operating costs incurred as
equipment is being purchased and placed in service. Expenses for the same period
in 1995 totaled $3.0 million, and also consisted of depreciation expense and
normal operating costs incurred when equipment is purchased and placed in
service.
(B) Equity in net loss of unconsolidated special purpose entities represents net
loss generated from the operation of jointly-owned assets accounted for under
the equity method (see Note 3 to the financial statements).
As of September 30, 1996, the Company had purchased and placed into service
$23.7 million of jointly-owned assets which consists of a 50% interest in a
marine vessel, a 16.67% beneficial interest in a trust which owns six Boeing
737-200A aircraft, a 25% beneficial interest in a trust which owns four Boeing
737-200A aircraft, and a 33.33% beneficial interest in two trusts (the Trusts)
which own three Boeing 737-200A aircraft, two spare Pratt & Whitney JT8D-17A
engines and a rotables package. Revenues of $4.8 million were generated in the
nine months ended September 30, 1996 compared to $0.1 million in the same period
in 1995. The variance is due to the Company's equipment purchasing activities
throughout 1996. Expenses of $4.8 million for the nine months ended September
30, 1996, compared to $0.1 million in the same period in 1995, consisted
primarily of depreciation expense for both periods.
During September of 1996, an affiliated Partnership converted its portion of
partial beneficial interests in the trust of five commercial aircraft and the
trust of seven commercial aircraft into the ownership of two commercial aircraft
by the PLM Equipment Growth Fund V, resulting in a change in the beneficial
interests for the Company. This change has no effect on the income or loss
recognized in the nine months ended September 30, 1996.
The Company's performance during the nine months ended September 30, 1996, is
not necessarily indicative of future periods.
All equipment purchased by the Company was on lease at September 30, 1996,
except for three railcars.
(II) FINANCIAL CONDITION - CAPITAL RESOURCES, LIQUIDITY AND DISTRIBUTIONS
The Manager is currently purchasing the Company's initial equipment portfolio
with capital raised from its equity offering and interim financing. In the
future, permanent financing may be secured by the Manager to be used for
additional equipment purchases. The Company will use operating cash flow to meet
its operating obligations, make cash distributions to investors, and reinvest
any available surplus cash to increase the Company's equipment portfolio.
The Manager has entered into a joint $50 million credit facility (the "Committed
Bridge Facility") on behalf of the Company, PLM Equipment Growth Fund IV, PLM
Equipment Growth Fund V, PLM Equipment Growth Fund VI, and PLM Equipment Growth
& Income Fund VII, all affiliated investment programs, TEC Acquisub, Inc.
("TECAI"), an indirect wholly-owned subsidiary of the Manager and American
Finance Group ("AFG"), a subsidiary of PLM International, 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 an affiliate
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 in
October 1996 to expire on October 31, 1997 and increase the available borrowings
for AFG to $50 million. The Company, TECAI and the other partnerships
collectively may borrow up to $35 million of the Committed Bridge Facility. The
Committed Bridge Facility also provides for a $5 million Letter of Credit
Facility for the eligible borrowers. Outstanding borrowings by the Company,
TECAI, AFG or PLM Equipment Growth Funds IV 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 October 31, 1997. The Committed Bridge Facility prohibits the
Company from incurring any additional indebtedness. Interest accrues at either
the prime rate or adjusted LIBOR at 2.5% at the borrower's option and is set at
the time of advance of funds. To the extent the Company is unable to raise
sufficient capital through the sale of interests to repay its portion of the
Committed Bridge Facility, the Company will continue to be obligated under the
Committed Bridge Facility until the Company generates proceeds from operations
or the sale of Equipment sufficient for repayment. Borrowings by the Company are
guaranteed by the Manager. As of November 11, 1996, AFG had $39.0 million in
outstanding borrowings and neither the Company, TECAI nor any of the other
programs had any outstanding borrowings.
(III) TRENDS
The Company'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 nine months of 1996, market conditions,
supply and demand equilibrium, and other factors varied in several markets. In
the 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
and rail 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
Company, 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 Company equipment - in some cases
resulting in declining performance, and in others, improved performance.
The ability of the Company 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 Manager to
clearly define trends or influences that may impact the performance of the
Company's equipment. The Manager continuously monitors both the equipment
markets and the performance of the Company's equipment in these markets. The
Manager may make an evaluation to reduce the Company's exposure to equipment
markets in which it determines that it cannot operate equipment and achieve
acceptable rates of return. Alternatively, the Manager may make a determination
to enter equipment markets in which it perceives opportunities to profit from
supply-demand instabilities or other market imperfections.
The Company intends to use excess cash flow, if any, after payment of
expenses, and cash distributions to acquire additional equipment during the
first six years of Company operations. The Manager believes these acquisitions
may cause the Company to generate additional earnings and cash flow for the
Company.
<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.
PROFESSIONAL LEASE MANAGEMENT
INCOME FUND I, L.L.C.
By: PLM Financial Services, Inc.
Manager
Date: November 12, 1996
By: /s/ David J. Davis
-------------------------
David J. Davis
Vice President and
Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 14,491,509
<SECURITIES> 0
<RECEIVABLES> 1,506,589
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 64,465,916
<DEPRECIATION> 8,223,345
<TOTAL-ASSETS> 92,469,046
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 91,240,714
<TOTAL-LIABILITY-AND-EQUITY> 92,469,046
<SALES> 0
<TOTAL-REVENUES> 7,656,333
<CGS> 0
<TOTAL-COSTS> 8,073,679
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,902
<INCOME-PRETAX> (387,914)
<INCOME-TAX> 0
<INCOME-CONTINUING> (387,914)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (387,914)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
