Back to GetFilings.com
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 JUNE 30, 2002
[ ] 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 0-21806
_______________________
PLM EQUIPMENT GROWTH FUND VI
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-3135515
(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 VI
(A LIMITED PARTNERSHIP)
CONDENSED BALANCE SHEETS
(in thousands of dollars, except unit amounts)
(unaudited)
June 30, December 31,
2002 2001
---------- ------------
ASSETS
Equipment held for operating leases $ 63,153 $ 63,694
Less accumulated depreciation (42,107) (40,487)
--------- ---------
Net equipment 21,046 23,207
Cash and cash equivalents 6,645 8,051
Restricted cash 425 425
Accounts receivable, less allowance for doubtful accounts
of $409 in 2002 and $380 in 2001 933 1,394
Investments in unconsolidated special-purpose entities 13,647 15,202
Deferred charges, net of accumulated amortization of
$389 in 2002 and $610 in 2001 318 355
Prepaid expenses and other assets 64 77
--------- ---------
Total assets $ 43,078 $ 48,711
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 203 $ 1,276
Due to affiliates 1,173 926
Lessee deposits and reserve for repairs 37 30
Notes payable 14,250 20,000
------- -------
Total liabilities 15,663 22,232
Partners' capital:
Limited partners (7,730,965 limited partnership units in 2002
and 7,781,898 in 2001) 27,415 26,479
General Partner -- --
Total partners' capital 27,415 26,479
------- -------
Total liabilities and partners' capital $43,078 $48,711
======= =======
See accompanying notes to unaudited condensed financial statements.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
CONDENSED STATEMENTS OF INCOME
(in thousands of dollars, except weighted-average unit amounts)
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
------ ------ ----- ------
REVENUES
Lease revenue $2,424 $2,866 $4,971 $6,431
Interest and other income 21 174 40 317
Net gain on disposition of equipment 101 515 115 1,057
------ ------ ----- ------
Total revenues 2,546 3,555 5,126 7,805
EXPENSES
Depreciation and amortization 1,027 1,594 2,071 3,347
Repairs and maintenance 300 419 594 688
Equipment operating expense 23 115 39 423
Insurance expense 37 13 74 83
Management fees to affiliate 135 159 276 350
Interest expense 191 502 366 1,005
General and administrative expenses
to affiliates 74 102 130 299
Other general and administrative expenses 325 248 475 656
Provision for bad debts 7 64 29 87
------ ------ ----- ------
Total expenses 2,119 3,216 4,054 6,938
------ ------ ----- ------
Equity in net income (loss) of unconsol-
idated special-purpose entities (215) 873 (310) 820
------ ------ ----- ------
Net income $ 212 $1,212 $ 762 $1,687
PARTNERS' SHARE OF NET INCOME
Limited partners $ 212 $1,212 $ 762 $1,601
General Partner -- -- -- 86
------ ------ ----- ------
Total $ 212 $1,212 $ 762 $1,687
------ ------ ----- ------
Net income per weighted-average
limited partnership unit $ 0.03 $ 0.15 $ 0.10 $ 0.20
------ ------ ----- ------
Cash distributions $ -- $ -- $ -- $1,372
------ ------ ----- ------
Cash distributions per weighted-average
limited partnership unit $ -- $ -- $ -- $ 0.16
====== ======= ======= ======
See accompanying notes to unaudited condensed financial statements.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIOD FROM DECEMBER 31, 2000 TO JUNE 30, 2002
(in thousands of dollars)
(unaudited)
Limited General
Partners Partner Total
-------- ------- -----
Partners' capital as of December 31, 2000 $31,622 $ -- $31,622
Net income (loss) (1,092) 86 (1,006)
Purchase of limited partnership units (2,765) -- (2,765)
Cash distribution (1,286) (86) (1,372)
-------- ----- -------
Partners' capital as of December 31, 2001 26,479 -- 26,479
Net income 762 -- 762
Canceled purchase of limited partnership units 174 -- 174
-------- ----- --------
Partners' capital as of June 30, 2002 $27,415 $ -- $27,415
======== ===== ========
See accompanying notes to unaudited condensed financial statements.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(unaudited)
For the Six Months
Ended June 30,
2002 2001
------ ------
OPERATING ACTIVITIES
Net income $ 762 $ 1,687
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,071 3,347
Net gain on disposition of equipment (115) (1,057)
Equity in net (income) loss from unconsolidated special-purpose
entities 310 (820)
Changes in operating assets and liabilities:
Accounts receivable, net 451 858
Prepaid expenses and other assets 13 34
Accounts payable and accrued expenses (1,073) (871)
Due to affiliates 247 18
Lessee deposits and reserve for repairs 7 (130)
-------- --------
Net cash provided by operating activities 2,673 3,066
INVESTING ACTIVITIES
Payments for capitalized repairs (2) (2)
Distribution from unconsolidated special-purpose entities 1,245 1,443
Distribution from liquidation of unconsolidated special-purpose entities -- 2,254
Proceeds from disposition of equipment 285 3,559
-------- --------
Net cash provided by investing activities 1,528 7,254
FINANCING ACTIVITIES
Payment of notes payable (20,750) --
Payment of debt placement fees (42) --
Proceeds from notes payable 15,000 --
Cash distribution paid to limited partners -- (1,286)
Cash distribution paid to General Partner -- (86)
Canceled purchase of limited partnership units 174 --
Refund from limited partnership units not eligible for purchase 11 --
-------- --------
Net cash used in financing activities (5,607) (1,372)
Net (decrease) increase in cash and cash equivalents (1,406) 8,948
Cash and cash equivalents at beginning of period 8,051 9,226
-------- --------
Cash and cash equivalents at end of period $ 6,645 $18,174
======== ========
SUPPLEMENTAL INFORMATION
Interest paid $ 422 $ 1,005
======== ========
See accompanying notes to unaudited condensed financial statements.
PLM EQUIPMENT GROWTH FUND VI
(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 VI (the Partnership) as of June 30, 2002 and December 31,
2001, the unaudited condensed statements of income for the three and six months
ended June 30, 2002 and 2001, the unaudited condensed statements of changes in
partners' capital for the period from December 31, 2000 to June 30, 2002, and
the unaudited condensed statements of cash flows for the six months ended June
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 is currently in its investment phase during which the
Partnership uses a portion of the cash generated from operations and proceeds
from asset sales to purchase additional equipment. The General Partner believes
these acquisitions may cause the Partnership to generate additional earnings and
cash flow for the Partnership.
The Partnership may reinvest its cash flow, surplus cash and equipment sale
proceeds in additional equipment, consistent with the objectives of the
Partnership, until December 31, 2004. The Partnership will terminate on
December 31, 2011, unless terminated earlier upon sale of all equipment and by
certain other events.
3. Cash Distributions
-------------------
Cash distributions are recorded when paid and may include amounts in excess of
net income that are considered a return of capital.
For the three and six months ended June 30, 2001, cash distributions totaled
$-0- and $1.4 million, respectively. None of the cash distributions to the
limited partners during the six months ended June 30, 2001, were deemed to be a
return of capital. No cash distributions were paid to the limited partners
during the three and six months ended June 30, 2002.
4. Transactions with General Partner and Affiliates
-----------------------------------------------------
The balance due to affiliates as of June 30, 2002 included $0.1 million due to
FSI and its affiliates for management fees and $1.1 million due to affiliated
unconsolidated special-purpose entities (USPEs). The balance due to affiliates
as of December 31, 2001 included $0.1 million due to FSI and its affiliates for
management fees and $0.8 million due to affiliated USPEs.
The Partnership's proportional share of the affiliated expenses incurred by
USPEs during 2002 and 2001 is listed in the following table (in thousands of
dollars):
For the Three Months For the Six Months
Ended June 30, Ended June 30,
================== ==================
2002 2001 2002 2001
---- ---- ---- ----
Management fees $ 38 $ 92 $ 79 $ 203
Data processing and administrative
expenses 21 41 37 79
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
4. Transactions with General Partner and Affiliates (continued)
-----------------------------------------------------
These affiliate expenses reduced the Partnership's proportional share of the
equity interest in the income of USPEs.
5. Equipment
---------
Owned equipment held for operating leases is stated at cost. The components of
owned equipment were as follows (in thousands of dollars):
June 30, December 31,
2002 2001
------ ------
Marine containers $ 24,549 $ 25,045
Railcars 17,168 17,213
Aircraft and components 16,224 16,224
Trailers 5,212 5,212
-------- ---------
63,153 63,694
Less accumulated depreciation (42,107) (40,487)
-------- ---------
Net equipment $ 21,046 $ 23,207
======== =========
As of June 30, 2002, all owned equipment in the Partnership's portfolio was on
lease except for 138 railcars and one marine container. As of December 31,
2001, all owned equipment in the Partnership's portfolio was on lease except for
118 railcars. The net book value of the off-lease equipment was $0.9 million as
of June 30, 2002 and $1.2 million as of December 31, 2001.
During the six months ended June 30, 2002, the Partnership disposed of marine
containers and railcars, with an aggregate net book value of $0.2 million for
proceeds of $0.3 million. During the six months ended June 30, 2001, the
Partnership disposed of a Boeing 737-200 commercial aircraft, a marine vessel,
marine containers, and a trailer with an aggregate net book value of $2.8
million, for proceeds of $3.6 million. Included in the net gain on sale of the
marine vessel was the unused portion of marine vessel drydocking liability of
$0.3 million.
6. Investments in Unconsolidated Special-Purpose Entities
----------------------------------------------------------
The Partnership owns equipment jointly with affiliated programs. These are
single purpose entities that do not have any debt or other financial
encumbrances. The net investments in USPEs include the following jointly-owned
equipment and related assets and liabilities (in thousands of dollars):
June 30, December 31,
2002 2001
=========== ===========
62% interest in a trust owning a stage III commercial aircraft $ 8,455 $ 9,176
53% interest in an entity owning a product tanker 4,015 4,679
40% interest in a trust owning two stage III commercial aircraft
on a direct finance lease 1,187 1,368
Other (10) (21)
-------- --------
Net investments $13,647 $15,202
======== ========
As of June 30, 2002 and December 31, 2001, all jointly-owned equipment in the
Partnership's USPE portfolio was on lease.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7. Operating Segments
-------------------
The Partnership operates in five primary operating segments: marine vessel
leasing, aircraft leasing, railcar leasing, trailer leasing and marine container
leasing. Each equipment leasing segment primarily 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):
Marine Marine
For the three months ended Vessel Aircraft Railcar Trailer Container
June 30, 2002 Leasing Leasing Leasing Leasing Leasing Other 1 Total
REVENUES
Lease revenue $ -- $ 409 $ 890 $ 173 $ 952 $ -- $ 2,424
Interest income and other -- -- -- -- -- 21 21
Gain on disposition of equipment -- -- 16 -- 85 -- 101
--------- ---------- -------- --------- ----------- --------- --------
Total revenues -- 409 906 173 1,037 21 2,546
COSTS AND EXPENSES
Operations support -- -- 211 122 11 16 360
Depreciation and amortization -- 48 236 72 629 42 1,027
Interest expense -- -- -- -- -- 191 191
Management fees to affiliate -- 17 61 9 48 -- 135
General and administrative expenses -- 101 40 37 -- 221 399
Provision for (recovery of) bad debts -- -- 8 (1) -- -- 7
--------- ---------- -------- --------- ----------- --------- --------
Total costs and expenses -- 166 556 239 688 470 2,119
--------- ---------- -------- --------- ----------- --------- --------
Equity in net loss of USPEs (106) (109) -- -- -- -- (215)
--------- ---------- -------- --------- ----------- --------- --------
Net income (loss) $ (106) $ 134 $ 350 $ (66) $ 349 $ (449) $ 212
========= ========= ======== ========= ========== ========= ========
Total assets as of June 30, 2002 $ 4,005 $ 10,537 $ 6,285 $ 1,195 $ 13,577 $ 7,479 $43,078
========= ========= ======== ========= ========== ========= ========
Marine Marine
For the three months ended Vessel Aircraft Railcar Trailer Container
June 30, 2001 Leasing Leasing Leasing Leasing Leasing Other 2 Total
REVENUES
Lease revenue $ 148 $ 329 $ 1,005 $ 189 $ 1,195 $ -- $ 2,866
Interest income and other -- 33 -- -- -- 141 174
Gain on disposition of equipment 488 -- -- -- 27 -- 515
--------- ---------- -------- --------- ----------- --------- --------
Total revenues 636 362 1,005 189 1,222 141 3,555
COSTS AND EXPENSES
Operations support 71 2 305 135 17 17 547
Depreciation and amortization 25 492 258 73 733 13 1,594
Interest expense -- -- -- -- -- 502 502
Management fees to affiliate 8 11 72 9 59 -- 159
General and administrative expenses 17 58 27 45 1 202 350
Provision for (recovery of) bad debts -- 46 19 -- (1) -- 64
--------- ---------- -------- --------- ----------- --------- --------
Total costs and expenses 121 609 681 262 809 734 3,216
--------- ---------- -------- --------- ----------- --------- --------
Equity in net income (loss) of USPEs 984 (111) -- -- -- -- 873
--------- ---------- -------- --------- ----------- --------- --------
Net income (loss) $ 1,499 $ (358) $ 324 $ (73) $ 413 $ (593) $ 1,212
========= ========= ======== ========= ========== ========= ========
1 Includes certain assets not identifiable to a specific segment such as cash
and restricted cash, certain accounts receivable, deferred charges and prepaid
expenses. Also includes interest income and costs not identifiable to a
particular segment, such as interest expense, and certain amortization, general
and administrative and operations support expenses.
2 Includes interest income and costs not identifiable to a particular segment,
such as interest expense, and certain amortization, general and administrative
and operations support expenses.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7. Operating Segments (continued)
-------------------
Marine Marine
For the six months ended Vessel Aircraft Railcar Trailer Container
June 30, 2002 Leasing Leasing Leasing Leasing Leasing Other 1 Total
REVENUES
Lease revenue $ -- $ 819 $ 1,807 $ 384 $ 1,961 $ -- $4,971
Interest income and other -- -- -- -- -- 40 40
Gain on disposition of equipment -- -- 12 -- 103 -- 115
--------- ---------- -------- --------- ---------- --------- -------
Total revenues -- 819 1,819 384 2,064 40 5,126
COSTS AND EXPENSES
Operations support (5) 21 378 260 21 32 707
Depreciation and amortization -- 95 472 145 1,280 79 2,071
Interest expense -- -- -- -- -- 366 366
Management fees to affiliate -- 34 125 19 98 -- 276
General and administrative expenses -- 97 78 75 1 354 605
Provision for bad debts -- -- 13 16 -- -- 29
--------- ---------- -------- --------- ---------- --------- -------
Total costs and expenses (5) 247 1,066 515 1,400 831 4,054
--------- ---------- -------- --------- ---------- --------- -------
Equity in net loss of USPEs (69) (241) -- -- -- -- (310)
--------- ---------- -------- --------- ---------- --------- -------
Net income (loss) $ (64) $ 331 $ 753 $ (131) $ 664 $ (791) $ 762
========= ========== ======== ========= ========== ========= =======
Marine Marine
For the six months ended Vessel Aircraft Railcar Trailer Container
June 30, 2001 Leasing Leasing Leasing Leasing Leasing Other 1 Total
REVENUES
Lease revenue $ 513 $ 1,024 $ 2,058 $ 402 $ 2,434 $ -- $6,431
Interest income and other -- 40 -- -- -- 277 317
Gain on disposition of equipment 488 520 -- 2 47 -- 1,057
--------- ---------- -------- --------- ---------- --------- -------
Total revenues 1,001 1,584 2,058 404 2,481 277 7,805
COSTS AND EXPENSES
Operations support 337 9 502 235 34 77 1,194
Depreciation and amortization 102 1,041 542 146 1,495 21 3,347
Interest expense -- -- -- -- -- 1,005 1,005
Management fees to affiliate 26 42 141 20 121 -- 350
General and administrative expenses 47 224 52 71 1 560 955
Provision for bad debts -- 46 32 2 7 -- 87
--------- ---------- -------- --------- ---------- --------- -------
Total costs and expenses 512 1,362 1,269 474 1,658 1,663 6,938
--------- ---------- -------- --------- ---------- --------- -------
Equity in net income (loss) of USPEs 1,574 (754) -- -- -- -- 820
--------- ---------- -------- --------- ---------- --------- -------
Net income (loss) $ 2,063 $ (532) $ 789 $ (70) $ 823 $ (1,386) $1,687
========= ========== ======== ========= ========== ========= =======
8. Net Income Per Weighted-Average Limited Partnership Unit
--------------------------------------------------------------
Net income per weighted-average limited partnership unit was computed by
dividing net income attributable to limited partners by the weighted-average
number of limited partnership units deemed outstanding during the period. The
weighted-average number of limited partnership units deemed outstanding during
the three and six months ended June 30, 2002 was 7,730,965 and 7,739,688,
respectively. The weighted-average number of limited partnership units deemed
outstanding during the three and six months ended June 30, 2001 was 8,189,463
and 8,189,464, respectively.
1 Includes interest income and costs not identifiable to a particular
segment, such as interest expense, and certain amortization, general and
administrative and operations support expenses.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
9. Limited Partnership Units
---------------------------
During 2001, the General Partner agreed to purchase 489,344 limited partnership
units and paid $2.8 million to the purchasing agent for this purchase.
The purchasing agent purchased 50,933 units during the six months ended June 30,
2002 and 407,565 units as of December 31, 2001, which is reflected as a
reduction in limited partnership units. Under the terms of the purchase
agreement, only the units held by the owner on the date of the agreement were
eligible to be purchased. The General Partner has not been able to purchase the
remaining 30,846 units due to the eligible owners selling the units in the open
market. The General Partner has determined that the remaining units will not be
purchased and has received $0.2 million refund from the purchasing agent.
10. Debt
----
During January 2002, the Partnership prepaid the $20.0 million note payable and
related $1.0 million prepayment penalty that was included in accounts payable
and accrued expenses on the accompanying unaudited condensed balance sheet at
December 31, 2001. Concurrent with this payment, the Partnership borrowed $15.0
million under the new $30.0 million term loan facility. The Partnership entered
into two loans totaling $15.0 million that bear an interest rate between 4.38%
and 4.94%. The loans made in January 2002 were based on three and twelve month
LIBOR and will be adjusted to market rates at the end of the LIBOR term. All
loans under this facility will be repaid over five years with equal principal
plus interest payments. The General Partner anticipates that the Partnership
will borrow an additional $15.0 million under this facility in 2002.
The Partnership made the regularly scheduled principal payments of $0.8 million
to the lender of the notes during the six months ended June 30, 2002.
11. Subsequent Events
------------------
In July 2002, PLM International, Inc. (PLMI), the parent company of FSI, reached
an agreement with the lenders of the $10.0 million warehouse facility to extend
the expiration date to June 30, 2003. The warehouse facility is shared by the
Partnership, PLM Equipment Growth Fund V, PLM Equipment Growth & Income Fund
VII, Professional Lease Management Income Fund I, LLC, and Acquisub LLC, a
wholly owned subsidiary of PLMI. The facility provides for financing up to 100%
of the cost of the equipment. Outstanding borrowings by one borrower reduce the
amount available to each of the other borrowers under the facility. Individual
borrowings may be outstanding for no more than 270 days, with all advances due
no later than June 30, 2003. Interest accrues either at the prime rate or LIBOR
plus 2.0% at the borrower's option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by PLMI. The Partnership
is not liable for the advances made to the other borrowers.
During July 2002, the Partnership made its regularly scheduled debt payment of
$0.8 million to the lenders of the $30.0 million term loan facility.
(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 VI's (the Partnership's) Operating
- --------------------------------------------------------------------------------
Results for the Three Months Ended June 30, 2002 and 2001
- -------------------------------------------------------------------
(A) Owned Equipment Operations
Lease revenues less direct expenses (defined as repairs and maintenance,
equipment operating, and asset-specific insurance expenses) on owned equipment
decreased during the three months ended June 30, 2002, compared to the same
period of 2001. Gains or losses from the sale of equipment, interest and other
income, and certain expenses such as management fees to affiliate, depreciation
and amortization 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 these
expenses 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 June 30,
2002 2001
==================
Marine containers $941 $1,178
Railcars 679 700
Aircraft and components 409 327
Trailers 51 54
Marine vessels -- 77
Marine containers: Marine container lease revenues and direct expenses were
$1.0 million and $11,000, respectively, for the three months ended June 30,
2002, compared to $1.2 million and $17,000, respectively, during the same
quarter of 2001. The decrease in lease revenues of $0.2 million during the
second quarter of 2002 compared to 2001 was due to lower lease rates earned on
the Partnership's marine containers.
Railcars: Railcar lease revenues and direct expenses were $0.9 million and $0.2
million, respectively, for the three months ended June 30, 2002, compared to
$1.0 million and $0.3 million, respectively, during the same quarter of 2001. A
decrease in railcar lease revenues of $0.1 million was due to lower re-lease
rates earned on new leases as old leases expired during 2002. A decrease in
railcar direct expenses of $0.1 million was due to a decrease in the repairs and
maintenance of railcars compared to 2001.
Aircraft and components: Aircraft lease revenues and direct expenses were $0.4
million and $-0-, respectively, for the three months ended June 30, 2002,
compared to $0.3 million and $2,000, respectively, during the same period of
2001. Lease revenues increased $0.1 million during 2002 due to an MD-82
aircraft that was off-lease for one month during the second quarter of 2001 that
was on-lease the full quarter of 2002.
Trailers: Trailer lease revenues and direct expenses were $0.2 million and
$0.1 million, respectively, for the three months ended June 30, 2002 and 2001.
Marine vessels: Marine vessel contribution decreased $0.1 million during the
three months ended June 30, 2002 due to the sale the Partnership's wholly-owned
marine vessel during 2001.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $1.8 million for the quarter ended June 30, 2002
decreased from $2.7 million for the same period in 2001. Significant variances
are explained as follows:
(i) A $0.6 million decrease in depreciation and amortization expenses
from 2001 levels reflects the decrease of approximately $0.1 million caused by
the double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned, a decrease of $0.4 million
resulting from certain assets becoming fully depreciated during 2001, and a
decrease of $25,000 due to the sale of certain equipment during 2002 and 2001;
(ii) A $0.3 million decrease in interest expense resulted from a
decrease of $0.2 million caused by lower average borrowings outstanding and a
$0.1 million decrease was due to a lower interest rate charged during 2002
compared to 2001;
(iii) A $24,000 decrease in management fees was due to lower lease
revenues earned by the Partnership during the three months ended June 30, 2002
compared to 2001; and
(iv) A $49,000 increase in general and administrative expenses during
the three months ended June 30, 2002 was primarily due to an increase in
administrative services.
(C) Interest and Other Income
Interest and other income decreased $0.2 million during 2002. A decrease of
$0.1 million was due to lower cash balances compared to 2001 and $0.1 million
was due to a decrease in the interest rate earned on cash balances.
(D) Net Gain on Disposition of Owned Equipment
The net gain on the disposition of owned equipment for the second quarter of
2002 totaled $0.1 million, and resulted from the sale of marine containers and
railcars, with an aggregate net book value of $0.1 million for proceeds of $0.2
million. The net gain on the disposition of owned equipment for the second
quarter of 2001 totaled $0.5 million, and resulted from the sale of a marine
vessel and marine containers with an aggregate net book value of $1.8 million,
for proceeds of $2.0 million. Included in the net gain on sale of the marine
vessel was the unused portion of marine vessel drydocking liability of $0.3
million.
(E) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
(USPEs)
Equity in net income (loss) of USPEs represents the Partnership's share of the
net income or loss generated from the operation of jointly owned assets
accounted for under the equity method of accounting. These entities are single
purpose and have no debt or other financial encumbrances. The following table
presents equity in net income (loss) by equipment type (in thousands of
dollars):
For the Three Months
Ended June 30,
2002 2001
==================
Marine vessels $(106) $ 984
Aircraft (109) (111)
------ ------
Equity in net income (loss) of USPEs $(215) $ 873
====== ======
Marine vessels: As of June 30, 2002, the Partnership owned an interest in an
entity that owned a marine vessel. As of June 30, 2001, the Partnership owned
an interest in three entities that each owned a marine vessel. During the three
months ended June 30, 2002, lease revenues of $0.8 million were offset by
depreciation expense, direct expenses, and administrative expenses of $0.9
million. During the same period of 2001, lease revenues of $1.5 million and the
gain of $0.7 million from the sale of the Partnership's interest in two entities
that owned marine vessels were offset by depreciation expense, direct expenses,
and administrative expenses of $1.2 million.
Marine vessel lease revenues decreased $0.5 million due to one marine vessel
earning a lower charter rate during the three months ended June 30, 2002
compared to 2001. Additionally, lease revenues decreased $0.2 million due to
the sale of the Partnership's interest in two entities that owned marine vessels
during 2001.
Direct expenses decreased $0.1 million during the three months ending June 30,
2002 compared to the same period in 2001 for the remaining entity owning a
marine vessel due to lower operating expenses. Additionally, direct expenses
decreased $0.2 million due to the sale of the Partnership's interest in two
entities that owned marine vessels during 2001.
Aircraft: As of June 30, 2002 and 2001, the Partnership owned an interest in
two commercial aircraft on a direct finance lease and an interest in a Boeing
737-300 commercial aircraft. During the second quarter of 2002, revenues of
$0.3 million were offset by depreciation expense, direct expenses and
administrative expenses of $0.4 million. During the same period of 2001,
revenues of $0.4 million were offset by depreciation expense, direct expenses
and administrative expenses of $0.6 million.
Although aircraft revenues remained relatively the same, revenues earned by the
trust that owns two commercial aircraft on a direct finance lease decreased $0.1
million due to the leases for the aircraft in the trust being renegotiated at a
lower rate.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.1 million during the three months ended June 30, 2002 compared to 2001. The
decrease was due to lower required repairs and maintenance of $0.1 million to
the Boeing 737-300 aircraft during 2001 that were not required during 2002 and
lower depreciation expense of $0.1 million caused by the double-declining
balance method of depreciation which results in greater depreciation in the
first years an asset is owned. These decreases were partially offset by an
increase in administrative expenses of $0.1 million due to an increase in
professional services.
(F) Net Income
As a result of the foregoing, the Partnership's net income for the three months
ended June 30, 2002 was $0.2 million, compared to a net income of $1.2 million
during the same period of 2001. The Partnership's ability to acquire, operate,
and liquidate assets, secure leases and re-lease those assets whose leases
expire is subject to many factors. Therefore, the Partnership's performance in
the second quarter of 2002 is not necessarily indicative of future periods.
Comparison of the Partnership's Operating Results for the Six Months Ended June
- --------------------------------------------------------------------------------
30, 2002 and 2001
- --------------------
(A) Owned Equipment Operations
Lease revenues less direct expenses on owned equipment decreased during the six
months ended June 30, 2002, compared to the same period of 2001. The following
table presents lease revenues less direct expenses by segment (in thousands of
dollars):
For the Six Months
Ended June 30,
2002 2001
==================
Marine containers $1,940 $2,400
Railcars 1,429 1,556
Aircraft and components 798 1,015
Trailers 124 167
Marine vessels 5 176
Marine containers: Marine container lease revenues and direct expenses were
$2.0 million and $21,000, respectively, for the six months ended June 30, 2002,
compared to $2.4 million and $34,000, respectively, during the same period of
2001. The decrease in lease revenues of $0.5 million during 2002 compared to
the same period of 2001 was due to lower lease rates earned on the Partnership's
marine containers.
Railcars: Railcar lease revenues and direct expenses were $1.8 million and $0.4
million, respectively, for the six months ended June 30, 2002, compared to $2.1
million and $0.5 million, respectively, during the same period of 2001. A
decrease in railcar lease revenues of $0.3 million was primarily due to lower
re-lease rates earned on new leases as old leases expired during 2002.
Aircraft and components: Aircraft lease revenues and direct expenses were $0.8
million and $21,000, respectively, for the six months ended June 30, 2002,
compared to $1.0 million and $9,000, respectively, during the same period of
2001. Lease revenues decreased $0.2 million during 2002 due to the reduction in
the lease rate on an MD-82 aircraft as part of a new lease agreement in 2001.
Trailers: Trailer lease revenues and direct expenses were $0.4 million and
$0.3 million, respectively, for the six months ended June 30, 2002, compared to
$0.4 million and $0.2 million, respectively, during the same period of 2001.
Trailer contribution decreased $43,000 during 2002 primarily due to higher
repair costs in 2002 compared to 2001.
Marine vessels: Marine vessel contribution decreased $0.2 million during the
six months ended June 30, 2002 due to the sale of the Partnership's wholly-owned
marine vessel during 2001.
(B) Indirect Expenses Related to Owned Equipment Operations
Total indirect expenses of $3.3 million for the six months ended June 30, 2002
decreased from $5.7 million for the same period in 2001. Significant variances
are explained as follows:
(i) A $1.3 million decrease in depreciation and amortization expenses
from 2001 levels reflects the decrease of approximately $0.3 million caused by
the double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned, a decrease of $0.9 million
resulting from certain assets being fully depreciated during 2001, and a
decrease of $0.1 million due to the sale of certain equipment during 2002 and
2001;
(ii) A $0.6 million decrease in interest expense resulted from a
decrease of $0.5 million caused by lower average borrowings outstanding in the
six months ended June 30, 2002 compared to the same period of 2001 and a $0.1
million decrease was due to a lower interest rate charged during 2002 compared
to 2001;
(iii) A $0.4 million decrease in general and administrative expenses
during the six months ended June 30, 2002 was due to a decrease of $0.2 million
due to lower professional costs and $0.2 million resulting from lower
allocations by the General Partner for office services and data processing
costs; and
(iv) A $0.1 million decrease in management fees was due to lower lease
revenues earned by the Partnership during the six months ended June 30, 2002
compared to the same period of 2001.
(C) Interest and Other Income
Interest and other income decreased $0.3 million during 2002. A decrease of
$0.2 million was due to lower cash balances compared to 2001 and $0.1 million
was due to a decrease in the interest rate earned on cash balances.
(D) Net Gain on Disposition of Owned Equipment
The net gain on the disposition of owned equipment for the six months ended June
30, 2002 totaled $0.1 million and resulted from the sale of marine containers
and railcars, with an aggregate net book value of $0.2 million for proceeds of
$0.3 million. The net gain on the disposition of owned equipment for the six
months ended June 30, 2001 totaled $1.1 million, and resulted from the sale of a
Boeing 737-200 commercial aircraft, marine vessel, trailer, and marine
containers with an aggregate net book value of $2.8 million, for proceeds of
$3.6 million. Included in the net gain on sale of the marine vessel was the
unused portion of marine vessel drydocking liability of $0.3 million.
(E) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
(USPEs)
Equity in net income (loss) of USPEs represents the Partnership's share of the
net income or loss generated from the operation of jointly owned assets
accounted for under the equity method of accounting. These entities are single
purpose and have no debt or other financial encumbrances. The following table
presents equity in net income (loss) by equipment type (in thousands of
dollars):
For the Six Months
Ended June 30,
2002 2001
==================
Marine vessels $ (69) $1,574
Aircraft (241) (754)
------ -------
Equity in net income (loss) of USPEs $(310) $ 820
====== =======
Marine vessels: As of June 30, 2002 and 2001, the Partnership owned an
interest in an entity that owned a marine vessel. During the six months ended
June 30, 2002, lease revenues of $1.6 million were offset by depreciation
expense, direct expenses, and administrative expenses of $1.6 million. During
the same period of 2001, lease revenues of $3.4 million and the gain of $0.7
million from the sale of the Partnership's interest in two entities that owned
marine vessels were offset by depreciation expense, direct expenses, and
administrative expenses of $2.5 million.
Marine vessel lease revenues decreased $1.3 million due to one marine vessel
earning a lower charter rate during the six months ended June 30, 2002 compared
to 2001. Additionally, lease revenues decreased $0.5 million due to the sale of
the Partnership's interest in two entities that owned marine vessels during
2001.
Direct expenses decreased $0.3 million during the six months ending June 30,
2002 compared to the same period in 2001 for the remaining entity owning a
marine vessel due to lower operating expenses. Additionally, direct expenses
decreased $0.6 million due to the sale of the Partnership's interest in two
entities that owned marine vessels during 2001.
Aircraft: As of June 30, 2002 and 2001, the Partnership owned an interest in
two commercial aircraft on a direct finance lease and an interest in a Boeing
737-300 commercial aircraft. During the six months ending June 30, 2002,
revenues of $0.7 million were offset by depreciation expense, direct expenses
and administrative expenses of $0.9 million. During the same period of 2001,
revenues of $0.8 million were offset by depreciation expense, direct expenses
and administrative expenses of $1.5 million.
Revenues earned by the trust that owns two commercial aircraft on a direct
finance lease decreased $0.2 million due to the leases for the aircraft in the
trust being renegotiated at a lower rate. This decrease was partially offset by
an increase of $0.1 million earned by the trust owning a Boeing 737-300
commercial aircraft due to a new lease going into effect at a higher rate.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.6 million during the six months ended June 30, 2002 due to required repairs
and maintenance of $0.5 million to the Boeing 737-300 during 2001 that were not
required during 2002 and lower depreciation expense of $0.1 million caused by
the double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned.
(F) Net Income
As a result of the foregoing, the Partnership's net income for the six months
ended June 30, 2002 was $0.8 million, compared to a net income of $1.7 million
during the same period of 2000. The Partnership's ability to acquire, operate,
and liquidate assets, secure leases and re-lease those assets whose leases
expire is subject to many factors. Therefore, the Partnership's performance in
the second quarter of 2002 is not necessarily indicative of future periods.
(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 repairs and 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 investments in USPEs to
determine if the carrying value of the assets may not be recoverable in
consideration of the 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 and engine overhauls to
aircraft engines over the period prior to the required repairs. The amount that
is reserved for 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 for 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, LIQUIDITY, AND DISTRIBUTIONS
For the six months ended June 30, 2002, the Partnership generated $3.9 million
in operating cash (net cash provided by operating activities plus
non-liquidating cash distributions from USPEs) to meet its operating
obligations, pay debt and interest payments and maintain working capital
reserves.
During the six months ended June 30, 2002, the Partnership disposed of owned
equipment and received aggregate proceeds of $0.3 million.
Accounts receivable decreased $0.5 million during the six months ended June 30,
2002 due to the timing of cash receipts.
Investments in USPEs decreased $1.6 million during the six months ended June 30,
2002 due to cash distributions of $1.2 million from the USPEs to the Partnership
and a $0.3 million loss that was recorded by the Partnership for its equity
interests in the USPEs.
Accounts payable decreased $1.1 million during the six months ended June 30,
2002. The decrease was due to the payment of the $1.0 million prepayment
penalty related to the previous note payable and $0.1 million decrease due to
the timing of cash payments.
During January 2002, the Partnership prepaid the $20.0 million note payable
outstanding on December 31, 2001. Concurrent with this payment, the Partnership
borrowed $15.0 million under the new $30.0 million term loan facility.
The Partnership made its scheduled principal payment of $0.8 million under the
new notes payable during the six months ended June 30, 2002 and another payment
of $0.8 million during July 2002. The Partnership is scheduled to make a
quarterly debt payment of $0.8 million to the lenders of the notes payable at
the beginning of each quarter. The cash for each payment will come from
operations and equipment dispositions.
In July 2002, PLM International, Inc. (PLMI), the parent company of FSI, reached
an agreement with the lenders of the $10.0 million warehouse facility to extend
the expiration date to June 30, 2003. The warehouse facility is shared by the
Partnership, PLM Equipment Growth Fund V, PLM Equipment Growth & Income Fund
VII, Professional Lease Management Income Fund I, LLC, and Acquisub LLC, a
wholly owned subsidiary of PLMI. The facility provides for financing up to 100%
of the cost of the equipment. Outstanding borrowings by one borrower reduce the
amount available to each of the other borrowers under the facility. Individual
borrowings may be outstanding for no more than 270 days, with all advances due
no later than June 30, 2003. Interest accrues either at the prime rate or LIBOR
plus 2.0% at the borrower's option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by PLMI. The Partnership
is not liable for the advances made to the other borrowers.
As of August 13, 2002, the Partnership had no borrowings outstanding under this
facility and there were no other borrowings outstanding under this facility by
any other eligible borrower.
(IV) OUTLOOK FOR THE FUTURE
Several factors may affect the Partnership's operating performance during 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.
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.
Other factors affecting the Partnership's contribution during the remainder of
2002 and beyond include:
(1) The cost of new marine containers have been at historic lows for the
past several years which has caused downward pressure on per diem lease rates
for this type of equipment;
(2) Railcar loadings in North America for the six months ended June 30, 2002
were below those of 2001. This decrease has led to lower utilization and lower
contribution to the Partnership as existing leases expire and renewal leases are
negotiated;
(3) Marine vessel freight rates are dependent upon the overall condition of
the international economy. Freight rates earned by the Partnership's marine
vessel began to decrease during the latter half of 2001 and continued through
the first six months of 2002. This trend is expected to continue during the
latter half of 2002 or until international economies stabilize and begin to
improve;
(4) The airline industry began to see lower passenger travel during 2001.
The tragic events on September 11, 2001 worsened the situation. As a result of
this and the general turmoil in the airline industry, the Partnership has had to
renegotiate leases on its owned aircraft and partially owned aircraft on a
direct finance lease during 2001 that will result in a decrease in revenues
during 2002. In addition, these events have had a negative impact on the fair
market value of the Partnership's owned and partially owned aircraft. Although
no revaluations were required during 2002 to these aircraft, the General Partner
does not expect these aircraft values to return to their previous value in the
foreseeable future;
(5) Industry wide utilization of inter-modal trailers decreased 12% in the
six months ended June 30, 2002 compared to the 2001. This has led to lower
utilization of the Partnership's trailers.
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. Alternatively, the General Partner may make a
determination to enter equipment markets in which it perceives opportunities to
profit from supply/demand instabilities or other market imperfections
The Partnership may reinvest its cash flow, surplus cash, and equipment sale
proceeds in additional equipment, consistent with the objectives of the
Partnership, until December 31, 2004. The General Partner believes that these
acquisitions may cause the Partnership to generate additional earnings and cash
flow for the Partnership. Surplus funds, if any, less reasonable reserves, may
be distributed to the partners. The Partnership will terminate on December 31,
2011, unless terminated earlier upon sale of all equipment and by certain other
events.
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.
(V) 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 exposure is that of currency devaluation
risk. During the six months ended June 30, 2002, 69% 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 (US) currency. If these lessees' currency devalues against the US
dollar, the lessees could potentially encounter difficulty in making the US
dollar denominated lease payments.
(This space intentionally left blank)
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-------------------------------------
(a) Exhibits
--------
10.1 Third amendment to the Warehouse Credit Agreement, dated July 11, 2002.
(b) Reports on Form 8-K
----------------------
On August 5, 2002, the Partnership filed Form 8-K acknowledging the receipt of a
mini-tender offer.
(This space intentionally left blank)
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 VI
By:PLM Financial Services, Inc.
General Partner
Date: August 13, 2002 By:/s/ Stephen M. Bess
----------------------
Stephen M. Bess
President and
Current Chief Accounting
Officer
CERTIFICATION
The undersigned hereby certifies, in their capacity as an officer of the General
Partner of PLM Equipment Growth Fund VI (the Partnership), that the Quarterly
Report of the Partnership on Form 10-Q for the period ended June 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 VI
By:PLM Financial Services, Inc.
General Partner
Date: August 13, 2002 By:/s/ Stephen M. Bess
----------------------
Stephen M. Bess
President and
Current Chief Accounting
Officer
Date: August 13, 2002 By:/s/ James A. Coyne
---------------------
James A. Coyne
Chief Financial Officer