10-Q 1 doc1.txt 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 QUARTER ENDED SEPTEMBER 30, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-15436 _______________________ PLM EQUIPMENT GROWTH FUND (Exact name of registrant as specified in its charter) CALIFORNIA 94-2998816 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 450 CARILLON PARKWAY, SUITE 200 ST. PETERSBURG, FL 33716 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code: (727) 803-8200 _______________________ 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 (A LIMITED PARTNERSHIP) CONDENSED BALANCE SHEETS (in thousands of dollars, except unit amounts) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF INCOME (in thousands of dollars, except weighted-average unit amounts) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE PERIOD FROM DECEMBER 31, 2000 TO SEPTEMBER 30, 2002 (in thousands of dollars) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CASH FLOWS (in thousands of dollars) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. Opinion of Management ----------------------- In the opinion of the management of PLM Financial Services, Inc. (FSI or the General Partner), the accompanying unaudited condensed financial statements contain all adjustments necessary, consisting primarily of normal recurring accruals, to present fairly the unaudited condensed financial position of PLM Equipment Growth Fund (the Partnership) as of September 30, 2002 and December 31, 2001, the unaudited condensed statements of income for the three and nine months ended September 30, 2002 and 2001, the unaudited condensed statements of changes in partners' capital for the period from December 31, 2000 to September 30, 2002, and the unaudited condensed statements of cash flows for the nine months ended September 30, 2002 and 2001. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from the accompanying condensed 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, 2001, on file at the Securities and Exchange Commission. 2. Schedule of Partnership Phases --------------------------------- The Partnership, in accordance with its limited partnership agreement, entered its liquidation phase on January 1, 1998, and has commenced an orderly liquidation of the Partnership's assets. The Partnership will terminate on December 31, 2006, unless terminated earlier upon the sale of all equipment or by certain other events. The General Partner may no longer reinvest cash flows and surplus funds in equipment. All future cash flows and surplus funds, if any, are to be used for distributions to partners, except to the extent used to maintain reasonable reserves. During the liquidation phase, the Partnership's assets will continue to be recorded at the lower of the carrying amount or fair value less cost to sell. 3. Cash Distributions ------------------- Cash distributions are recorded when paid and may include amounts in excess of net income that are considered a return on capital. There were no cash distributions in the three months ended September 30, 2002 and 2001. For the nine months ended September 30, 2002 and 2001, cash distributions totaled $0.5 and $1.7 million, respectively. Cash distributions of $-0- and $1.0 million in the nine months ended September 30, 2002 and 2001, respectively were deemed a return of capital. 4. Transactions with General Partner and Affiliates ----------------------------------------------------- The balance due to affiliates as of September 30, 2002 and December 31, 2001 of $7,000 and $19,000, respectively, are payable to FSI and its affiliate for management fees. The Partnership's proportional share of the affiliated expenses incurred by the unconsolidated special-purpose entity (USPE) during 2002 and 2001 is listed in the following table (in thousands of dollars):

These affiliated expenses (increased) or reduced the Partnership's proportional share of the equity interest in the income of the USPE. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 5. Equipment --------- Owned equipment held for operating leases is stated at cost. The components of owned equipment were as follows (in thousands of dollars):

As of September 30, 2002, all equipment was on lease, except for 89 railcars and 8 marine containers with an aggregate net book value of $0.1 million. As of December 31, 2001, all equipment was on lease except for 30 railcars and 8 marine containers with an aggregate net book value of $38,000. For the nine months ended September 30, 2002, the Partnership disposed of marine containers and railcars with an aggregate net book value of $17,000 for proceeds of $0.2 million. During the nine months ended September 30, 2001, the Partnership disposed of marine containers and railcars with an aggregate net book value of $25,000, for proceeds of $0.1 million. 6. Investment in Unconsolidated Special-Purpose Entity ------------------------------------------------------- The Partnership owns a 50% interest in the Clement Partnership that owns a product tanker jointly with an affiliated program. This is a single purpose entity that does not have any debt or other financial encumbrances. Ownership interest is based on the Partnership's contribution towards the cost of the equipment in the USPE. The Partnership's proportional share of equity and income (loss) in the entity is not necessarily the same as its ownership interest. The primary reason for this difference has to do with certain fees such as management and acquisition and lease negotiation fees varying among the owners of the USPE. The tables below set forth 100% of the assets, liabilities, and equity of the entity in which the Partnership has an interest and the Partnership's proportional share of equity in the entity as of September 30, 2002 and December 31, 2001 (in thousands of dollars): September 30, December 31, 2002 2001 ======= =======

The table below sets forth 100% of the lease revenues, direct and indirect expenses and net loss of the entity in which the Partnership has an interest and the Partnership's proportional share of loss in the equity for the three and nine months ended September 30, 2002 and 2001 (in thousands of dollars): For the three months ended September 30, 2002 2001 -----------------------------------------------

For the nine months ended September 30, 2002 2001 -----------------------------------------------

As of September 30, 2002 and December 31, 2001, the jointly-owned equipment in the Partnership's USPE portfolio was on lease. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7. Operating Segments ------------------- The Partnership operates in three different segments: railcar leasing, marine container leasing, and marine vessel 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):

__________________________ 1. Includes certain assets not identifiable to a particular segment, such as cash and prepaid expenses. Also includes interest income and costs not identifiable to a particular segment, such as management fees to affiliate and certain operations support and general and administrative expenses and costs. 2. Includes interest income and costs not identifiable to a particular segment such as management fees to affiliate, certain operations support and general and administrative expenses. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7. Operating Segments (continued) -------------------

__________________________ 1. Includes interest income and costs not identifiable to a particular segment, such as management fees to affiliate and certain operations support and general and administrative expenses. PLM EQUIPMENT GROWTH FUND (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 8. Net Income Per Weighted-Average Depositary Unit ---------------------------------------------------- Net income per weighted-average depositary unit was computed by dividing net income attributable to the limited partners by the weighted-average number of depositary units deemed outstanding during the period. The weighted-average number of depositary units deemed outstanding during the three and nine months ended September 30, 2002 and 2001 were 5,784,275, respectively. 9. Liquidation ----------- On January 1, 1998, the General Partner began the liquidation phase of the Partnership and commenced an orderly liquidation of the Partnership's assets. The amounts reflected for assets and liabilities of the Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depreciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Upon final liquidation, the Partnership will be dissolved. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ------------------------------------------------------------------- RESULTS OF OPERATIONS ------------------- (I) RESULTS OF OPERATIONS Comparison of PLM Equipment Growth Fund's (the Partnership's) Operating Results -------------------------------------------------------------------------------- for the Three Months Ended September 30, 2002 and 2001 --------------------------------------------------------------- (A) Owned Equipment Operations Lease revenues less direct expenses (defined as repairs and maintenance and asset specific insurance expenses) on owned equipment decreased during the third quarter of 2002 compared to the same quarter of 2001. Gains or losses from the sale of equipment, interest and other income and certain expenses such as depreciation, management fees to affiliate, and general and administrative expenses relating to the operating segments (see Note 7 to the unaudited condensed 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):

Railcars: Railcar lease revenues and direct expenses were $1.1 million and $0.3 million, respectively, for the third quarter of 2002, compared to $1.3 million and $0.3 million, respectively, for the same quarter of 2001. Lease revenues decreased $0.2 million due to the disposition of railcars in 2001 and 2002. Marine containers: Marine container lease revenues were $3,000 and $18,000 in the third quarter of 2002 and 2001, respectively. The decrease of $15,000 in lease revenues was due to the disposition of marine containers in 2001 and 2002. (B) Indirect Expenses Related to Owned Equipment Operations Total indirect expenses of $0.3 million for the third quarter of 2002 decreased from $0.6 million for the same period in 2001. Significant variances are explained as follows: (i) A $0.3 million decrease in depreciation expense from 2001 levels reflects the effect of asset dispositions in 2001 and 2002. (ii) A $0.1 million decrease in the provision for bad debts was based on the General Partner's evaluation of the collectability of receivables compared to 2001. (iii) A $0.1 million increase in general and administrative expenses was due to increased professional service costs. (C) Gain (Loss) on Disposition of Owned Equipment Gain on disposition of equipment in the third quarter of 2002 totaled $3,000, and resulted from the disposition of railcars with an aggregate net book value of $-0-, for proceeds of $3,000. The loss on disposition of owned equipment for the third quarter of 2001 totaled $1,000, and resulted from the sale of marine containers with an aggregate net book value of $12,000, for aggregate proceeds of $11,000. (D) Equity in Net Loss of an Unconsolidated Special-Purpose Entity (USPE) Equity in net loss of an USPE represents the Partnership's share of the net loss generated from the operation of jointly-owned assets accounted for under the equity method of accounting. This entity is a single purpose entity that has no debt or other financial encumbrances. As of September 30, 2002 and 2001 the Partnership had an interest in an entity that owns a marine vessel. During the third quarter of 2002, the Partnership's share of lease revenues of $0.1 million were offset by depreciation expense, direct expenses, and administrative expenses of $0.5 million. During the same period of 2001, lease revenues of $0.3 million were offset by depreciation, direct expenses, and administrative expenses of $0.6 million. The decrease in lease revenues of $0.2 million was due to an increase in off-lease time in the third quarter of 2002 compared to the same period of 2001. (E) Net Income As a result of the foregoing, the Partnership's had net income of $0.1 million for the third quarter of 2002 and 2001. The Partnership's ability to operate and liquidate assets, secure leases and re-lease those assets whose leases expire is subject to many factors, and the Partnership's performance in the third quarter of 2002 is not necessarily indicative of future periods. Comparison of the Partnership's Operating Results for the Nine Months Ended -------------------------------------------------------------------------------- September 30, 2002 and 2001 ------------------------------- (A) Owned Equipment Operations Lease revenues less direct expenses on owned equipment decreased during the nine months ended September 30, 2002 compared to the same period of 2001. The following table presents lease revenues less direct expenses by segment (in thousands of dollars):

Railcars: Railcar lease revenues and direct expenses were $3.5 million and $1.0 million, respectively, for the nine months ended September 30, 2002, compared to $4.0 million and $1.1 million, respectively, for the same period of 2001. Lease revenues decreased $0.5 million and direct costs decreased $0.1 million due to the disposition of railcars in 2001 and 2002. Marine containers: Marine container lease revenues were $18,000 and $46,000 in the nine months ended September 30, 2002 and 2001, respectively. The decrease of $28,000 in lease revenues was due to the disposition of marine containers in 2001 and 2002. (B) Indirect Expenses Related to Owned Equipment Operations Total indirect expenses of $0.9 million for the nine months ended September 30, 2002 decreased from $1.9 million for the same period in 2001. Significant variances are explained as follows: (i) A $0.9 million decrease in depreciation expense from 2001 levels reflects the effect of asset dispositions in 2001 and 2002. (ii) A $0.1 million decrease in general and administrative expenses during the nine months ended September 30, 2002 compared to the same period of 2001 resulted from the reduction in the size of the Partnership's equipment portfolio over the last twelve months. (C) Gain on Disposition of Owned Equipment Gain on disposition of equipment in the nine months ended September 30, 2002 totaled $0.1 million, and resulted from the disposition of marine containers and railcars with an aggregate net book value of $17,000, for proceeds of $0.2 million. Gain on disposition of equipment for the nine months ended September 30, 2001 totaled $0.1 million, and resulted from the sale of marine containers and railcars with a net book value of $25,000, for proceeds of $0.1 million. (D) Equity in Net Loss of an Unconsolidated Special-Purpose Entity Equity in net loss of an USPE represents the Partnership's share of the net loss generated from the operation of jointly-owned assets accounted for under the equity method of accounting. This entity is a single purpose entity that has no debt or other financial encumbrances. The following table presents equity in net loss by equipment type (in thousands of dollars):

Marine vessel: As of September 30, 2002 and 2001 the Partnership had an interest in an entity that owns a marine vessel. During the nine months ended September 30, 2002, the Partnership's share of lease revenues of $0.9 million were offset by depreciation expense, direct expenses, and administrative expenses of $1.6 million. During the same period of 2001, lease revenues of $1.5 million were offset by depreciation, direct expenses, and administrative expenses of $1.9 million. Marine vessel lease revenues decreased $0.5 million during the nine months ended September 30, 2002 due to a decrease in voyage charter lease rates compared to the same period of 2001. Depreciation expense, direct expenses, and administrative expenses decreased $0.3 million during the nine months ended September 30, 2002 compared to the same period of 2001. A decrease in direct expenses of $0.3 in the nine months ended September 30, 2002 was due to lower repairs and maintenance expenses compared to the same period of 2001. (E) Net Income As a result of the foregoing, the Partnership's net income was $1.3 million for the nine months ended September 30, 2002, compared to net income of $0.8 million during the same period of 2001. The Partnership's ability to operate and liquidate assets, secure leases and re-lease those assets whose leases expire is subject to many factors, and the Partnership's performance in the nine months ended September 30, 2002 is not necessarily indicative of future periods. In the nine months ended September 30, 2002 the Partnership distributed $0.5 million to the limited partners, or $0.08 per weighted-average depositary unit. (II) CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, the General Partner reviews these estimates including those related to asset lives and depreciation methods, impairment of long-lived assets, allowance for doubtful accounts, reserves related to legally mandated equipment repairsand contingencies and litigation. These estimates are based on the General Partner's historical experience and on various other assumptions believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The General Partner believes, however, that the estimates, including those for the above-listed items, are reasonable and that actual results will not vary significantly from the estimated amounts. The General Partner believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Partnership's financial statements: Asset lives and depreciation methods: The Partnership's primary business involves the purchase and subsequent lease of long-lived transportation and related equipment. The General Partner has chosen asset lives that it believes correspond to the economic life of the related asset. The General Partner has chosen a deprecation method that it believes matches the benefit to the Partnership from the asset with the associated costs. These judgments have been made based on the General Partner's expertise in each equipment segment that the Partnership operates. If the asset life and depreciation method chosen does not reduce the book value of the asset to at least the potential future cash flows from the asset to the Partnership, the Partnership would be required to record a loss on revaluation. Likewise, if the net book value of the asset was reduced by an amount greater than the economic value has deteriorated, the Partnership may record a gain on sale upon final disposition of the asset. Impairment of long-lived assets: On a regular basis, the General Partner reviews the carrying value of its equipment, and investment in an USPE to determine if the carrying value of the assets may not be recoverable due to current economic conditions. This requires the General Partner to make estimates related to future cash flows from each asset as well as the determination if the deterioration is temporary or permanent. If these estimates or the related assumptions change in the future, the Partnership may be required to record additional impairment charges. Allowance for doubtful accounts: The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of the lessees to make the lease payments. These estimates are primarily based on the amount of time that has lapsed since the related payments were due as well as specific knowledge related to the ability of the lessees to make the required payments. If the financial condition of the Partnership's lessees were to deteriorate, additional allowances could be required that would reduce income. Conversely, if the financial condition of the lessees were to improve or if legal remedies to collect past due amounts were successful, the allowance for doubtful accounts may need to be reduced and income would be increased. Reserves for repairs: The Partnership accrues for legally required repairs to equipment such as dry docking for marine vessels over the period prior to the required repairs. The amount that is reserved is based on the General Partner's expertise in each equipment segment, the past history of such costs for that specific piece of equipment and discussions with independent, third party equipment brokers. If the amount reserved is not adequate to cover the cost of such repairs or if the repairs must be performed earlier than the General Partner estimated, the Partnership would incur additional repair and maintenance or equipment operating expenses. Contingencies and litigation: The Partnership is subject to legal proceedings involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are made after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Partnership may be required to record additional litigation expense. (III) FINANCIAL CONDITION -- CAPITAL RESOURCES AND LIQUIDITY, AND DISTRIBUTIONS For the nine months ended September 30, 2002, the Partnership generated $1.5 million in operating cash (net cash provided by operating activities less additional investments in an USPE) to fund operations, to meet its operating obligations and to pay cash distributions (total for the nine months ended September 30, 2002 of $0.5 million) to the partners. During the nine months ended September 30, 2002, the Partnership disposed of marine containers and railcars and received proceeds of $0.2 million. Investment in an unconsolidated special purpose entity decreased by $0.4 million due to the Partnership's recording a loss of $0.7 million from the USPE in the nine months ended September 30, 2002. This decrease was partially offset by the Partnership contributing $0.3 million to the USPE to fund its operations. The General Partner has not planned any expenditures, nor is it aware of any contingencies that would cause the Partnership to require any additional capital. The Partnership is in liquidation phase. As a result, the size of the Partnership's remaining equipment portfolio and, in turn, the amount of net cash flows from operations will continue to become progressively smaller as assets are sold. Significant asset sales may result in special distributions to the partners. (IV) OUTLOOK FOR THE FUTURE The Partnership is in its active liquidation phase. Given the current economic environment, and offers received for similar types of equipment owned by the Partnership, the General Partner has determined it would not be advantageous to sell the remaining Partnership equipment at the current time. The General Partner will continue to monitor the equipment markets to determine an optimal time to sell. In the meantime, equipment will continue to be leased, and re-leased at market rates as existing leases expire. Although the General Partner estimates that there will be distributions to the partners after final disposal of assets and settlement of liabilities, the amounts cannot be accurately determined prior to actual disposal of the equipment. Several factors may affect the Partnership's operating performance in the remainder of 2002 and beyond, including changes in the markets for the Partnership's equipment and changes in the regulatory environment in which that equipment operates. Liquidation of the Partnership's equipment represents a reduction in the size of the equipment portfolio and may result in a reduction of contribution to the Partnership. Other factors affecting the Partnership's contribution in 2002 and beyond include: 1. The Partnership's fleet of marine containers is in excess of twelve years of age and is no longer suitable for use in international commerce either due to its specific physical condition, or lessee's preferences for newer equipment. Demand for the Partnership's marine containers will continue to be weak due to their age. 2. Through the first nine months of 2002, U.S. and Canadian freight carloads decreased 1% and 3% respectively, compared to the same period of 2001. There has been, however, some recent increase in some of the commodities, which drive demand for those types of railcars most prevalent in the Partnership's fleet. It will be some time, however, before this translates into new leasing demand by shippers since most shippers have idle cars in their fleets. 3. Marine vessel freight rates are dependent upon the overall condition of the international economy. Freight rates earned by the Partnership's partially owned marine vessel began to decrease during the latter half of 2001 and through the first nine months of 2002. This trend is expected to continue through the reminder of 2002. In addition, the marine vessel in which the Partnership owns an interest was manufactured in 1976 and is nearing the end of its economic life. This marine vessel is also single hulled which restricts the ports which it may enter. These conditions severely limit the marine vessel's marketability. 4. The General Partner has seen an increase in insurance premiums on its equipment portfolio and is finding it more difficult to place the coverage. Premiums for the equipment types owned by the Partnership have increased over 25%. The increase in premiums caused by the increase in rate will be partially mitigated by the reduction in the value of the Partnership equipment portfolio caused by the events of September 11, 2001 and other economic factors. The General Partner has also experienced an increase in the deductible required to obtain coverage. This may have a negative impact on the Partnership in the event of an insurance claim. 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 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 that it cannot operate equipment and achieve acceptable rates of return. The Partnership intends to use cash flow from operations and proceeds from dispositions of equipment to satisfy its operating requirements, maintain working capital reserves, and to pay cash distributions to the unitholders. (V) FORWARD-LOOKING INFORMATION Except for 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 exposure is that of currency devaluation risk. During the nine months ended September 30, 2002, 76% of the Partnership's total lease revenues from wholly- and partially-owned equipment came from non-United States domiciled lessees. Most of the leases require payment in United States (U.S.) currency. If these lessees' currency devalues against the U.S. dollar, the lessees could encounter difficulty in making the U.S. dollar denominated lease payments. ITEM 4. CONTROLS AND PROCEDURES ------------------------- Within the 90-day period prior to the filing of this report, evaluations were carried out under the supervision and with the participation of the General Partner's management, including its President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934). Based upon those evaluations, the President and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. No significant changes have been made in the Partnership's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluations. PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ------------------------------------- (a) Exhibits -------- None. (b) Reports on Form 8-K ---------------------- None. ------ CONTROL CERTIFICATION ---------------------- I, James A. Coyne, certify that: 1. I have reviewed this quarterly report on Form 10-Q of PLM Equipment Growth Fund. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this quarterly report is prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and board of Managers: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 11, 2002 By: /s/ James A. Coyne --------------------- James A. Coyne President (Principal Executive Officer) CONTROL CERTIFICATION ---------------------- I, Richard K Brock, certify that: 5. I have reviewed this quarterly report on Form 10-Q of PLM Equipment Growth Fund. 6. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 7. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 8. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: d) designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this quarterly report is prepared; e) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and f) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and board of Managers: a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 11, 2002 By: /s/ Richard K Brock ---------------------- Richard K Brock Chief Financial Officer (Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PLM EQUIPMENT GROWTH FUND By: PLM Financial Services, Inc. General Partner Date: November 11, 2002 By: /s/ Richard K Brock ---------------------- Chief Financial Officer CERTIFICATION The undersigned hereby certifies, in their capacity as an officer of the General Partner of PLM Equipment Growth Fund (the Partnership), that the Quarterly Report of the Partnership on Form 10-Q for the period ended September 30, 2002, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Partnership at the end of such period and the results of operations of the Partnership for such period. PLM EQUIPMENT GROWTH FUND By: PLM Financial Services, Inc. General Partner Date: November 11, 2002 By /s/ James A. Coyne --------------------- President Date: November 11, 2002 By /s/ Richard K Brock ---------------------- Chief Financial Officer

PLM EQUIPMENT GROWTH FUND 10-Q