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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 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)
September 30, December 31,
2002 2001
===============================
(As restated,
see Note 14)
ASSETS
Equipment held for operating leases. . . . . . . . . . . . . . $ 62,891 $ 63,694
Less accumulated depreciation. . . . . . . . . . . . . . . . . (42,853) (40,487)
--------------- --------------
Net equipment. . . . . . . . . . . . . . . . . . . . . . . . 20,038 23,207
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . 8,022 8,051
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . 425 425
Accounts receivable, less allowance for doubtful accounts
of $394 in 2002 and $380 in 2001 . . . . . . . . . . . . . 831 1,394
Investments in unconsolidated special-purpose entities . . . . 13,035 15,223
Deferred charges, net of accumulated amortization of
$432 in 2002 and $550 in 2001. . . . . . . . . . . . . . . 276 415
Prepaid expenses and other assets. . . . . . . . . . . . . . . 107 77
--------------- --------------
Total assets . . . . . . . . . . . . . . . . . . . . . . $ 42,734 $ 48,792
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses. . . . . . . . . . . . . $ 436 $ 317
Due to affiliates. . . . . . . . . . . . . . . . . . . . . . . 1,290 947
Notes payable. . . . . . . . . . . . . . . . . . . . . . . . . 13,500 20,000
Lessee deposits and reserve for repairs. . . . . . . . . . . . 6 30
--------------- --------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 15,232 21,294
--------------- --------------
Commitments and contingencies
Partners' capital:
Limited partners (7,730,965 limited partnership units in 2002
and 7,781,898 in 2001) . . . . . . . . . . . . . . . . . . 27,502 27,498
General Partner. . . . . . . . . . . . . . . . . . . . . . . . -- --
--------------- --------------
Total partners' capital. . . . . . . . . . . . . . . . . . . 27,502 27,498
--------------- --------------
Total liabilities and partners' capital. . . . . . . . . $ 42,734 $ 48,792
=============== ==============
See accompanying notes to unaudited condensed financial statements.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
CONDENSED STATEMENTS OF OPERATIONS
(in thousands of dollars, except weighted-average unit amounts)
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
============================================
(As restated,. (As restated,
see Note 14) . . . . see Note 14)
REVENUES
Lease revenue. . . . . . . . . . . . . . . $ 2,350 $ 2,567 $ 7,321 $ 8,998
Interest and other income. . . . . . . . . 97 244 137 561
Gain on disposition of equipment . . . . . 10 -- 123 1,040
Loss on disposition of equipment . . . . . (2) (22) -- (5)
---------- --------- --------- ---------
Total revenues . . . . . . . . . . . . 2,455 2,789 7,581 10,594
---------- --------- --------- ---------
EXPENSES
Depreciation and amortization. . . . . . . 996 1,711 3,127 5,058
Repairs and maintenance. . . . . . . . . . 315 454 909 1,142
Equipment operating expense. . . . . . . . 22 52 61 475
Insurance expense. . . . . . . . . . . . . 38 2 112 85
Management fees to affiliate . . . . . . . 131 142 407 492
Interest expense . . . . . . . . . . . . . 175 503 541 1,508
General and administrative expenses
to affiliates. . . . . . . . . . . . 23 58 153 357
Other general and administrative expenses. 376 223 1,810 879
Provision for bad debts. . . . . . . . . . 2 11 31 98
---------- --------- --------- ---------
Total expenses . . . . . . . . . . . . 2,078 3,156 7,151 10,094
---------- --------- --------- ---------
Equity in net income (loss) of unconsol-
idated special-purpose entities. . . (290) (63) (600) 757
---------- --------- --------- ---------
Net income (loss). . . . . . . . . . . . . $ 87 $ (430) $ (170) $ 1,257
========== ========= ========= =========
PARTNERS' SHARE OF NET INCOME (LOSS)
Limited partners . . . . . . . . . . . . . $ 87 $ (430) $ (170) $ 1,171
General Partner. . . . . . . . . . . . . . -- -- -- 86
---------- --------- --------- ---------
Total. . . . . . . . . . . . . . . . . . . $ 87 $ (430) $ (170) $ 1,257
========== ========= ========= =========
Net income (loss) per weighted-average
limited partnership unit . . . . . . . $ 0.01 $ (0.05) $ (0.02) $ 0.15
========== ========= ========= =========
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 SEPTEMBER 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) (As restated, see Note 14). . (73) 86 13
Purchase of limited partnership units . . . . . (2,765) -- (2,765)
Cash distribution . . . . . . . . . . . . . . . (1,286) (86) (1,372)
---------- --------- --------
Partners' capital as of December 31, 2001
(As restated, see Note 14) . . . . . . . . . . 27,498 -- 27,498
Net loss. . . . . . . . . . . . . . . . . . . . (170) -- (170)
Canceled purchase of limited partnership units. 174 -- 174
---------- --------- --------
Partners' capital as of September 30, 2002. . $ 27,502 $ -- $27,502
========== ========= ========
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 Nine Months
Ended September 30,
2002 2001
======================
(As restated,
see Note 14)
OPERATING ACTIVITIES
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (170) $ 1,257
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . 3,127 5,058
Gain on disposition of equipment. . . . . . . . . . . . . . . . . . . . (123) (1,035)
Equity in net (income) loss from unconsolidated special-purpose
entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 (757)
Changes in operating assets and liabilities:
Accounts receivable, net. . . . . . . . . . . . . . . . . . . . . . . 553 847
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . (30) 47
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . 119 (832)
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 364 238
Lessee deposits and reserve for repairs . . . . . . . . . . . . . . . (24) (137)
---------- --------
Net cash provided by operating activities . . . . . . . . . . . . . 4,416 4,686
---------- --------
INVESTING ACTIVITIES
Payment for capitalized improvements. . . . . . . . . . . . . . . . . . . (2) (2)
Investment in unconsolidated special-purpose entity . . . . . . . . . . . -- (632)
Payment of acquisition fees to affiliate. . . . . . . . . . . . . . . . . -- (678)
Payment of lease negotiation fees to affiliate. . . . . . . . . . . . . . -- (150)
Distribution from unconsolidated special-purpose entities . . . . . . . . 1,567 2,475
Distribution from liquidation of unconsolidated special-purpose entities. -- 2,254
Proceeds from disposition of equipment. . . . . . . . . . . . . . . . . . 347 3,614
---------- --------
Net cash provided by investing activities . . . . . . . . . . . . . 1,912 6,881
---------- --------
FINANCING ACTIVITIES
Payment of notes payable. . . . . . . . . . . . . . . . . . . . . . . . . (21,500) --
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 . . . . . . . . . . . . . . . (6,357) (1,372)
---------- --------
Net (decrease) increase in cash and cash equivalents. . . . . . . . . . . (29) 10,195
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . 8,051 9,226
---------- --------
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . $ 8,022 $19,421
========== ========
SUPPLEMENTAL INFORMATION
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 441 $ 1,508
========== ========
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 September 30, 2002 and December
31, 2001, the unaudited condensed statements of operations 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.
2. Schedule of Partnership Phases
---------------------------------
The Partnership is currently in its investment phase during which the
Partnership uses cash generated from operations and proceeds from asset
dispositions 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
disposition 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. Reclassification
----------------
Certain amounts in the 2001 financial statements have been reclassified to
conform to the 2002 presentations.
4. Cash Distributions
-------------------
Cash distributions are recorded when paid and may include amounts in excess of
net income that are considered a return of capital.
No cash distributions were paid to the limited partners during the three and
nine months ended September 30, 2002. For the three and nine months ended
September 30, 2001, cash distributions totaled $-0- and $1.4 million,
respectively. Cash distributions of $0.1 million to the limited partners during
the nine months ended September 30, 2001, were deemed to be a return of capital.
5. Transactions with General Partner and Affiliates
-----------------------------------------------------
The balance due to affiliates as of September 30, 2002 included $0.1 million due
to FSI and its affiliates for management fees and $1.2 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.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
5. Transactions with General Partner and Affiliates (continued)
-----------------------------------------------------
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 Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
========================================
Management fees. . . . . . . . . . $ 25 $ 30 $ 174 $ 281
Data processing and administrative
expenses. . . . . . . . . . . . 2 25 51 120
These affiliate expenses reduced the Partnership's proportional share of the
equity interest in the income of USPEs.
6. Equipment
---------
Owned equipment held for operating leases is stated at cost. The components of
owned equipment were as follows (in thousands of dollars):
September 30, December 31,
2002 2001
===============================
Marine containers . . . . . . $ 24,305 $ 25,045
Railcars. . . . . . . . . . . 17,150 17,213
Aircraft and components . . . 16,224 16,224
Trailers. . . . . . . . . . . 5,212 5,212
--------------- --------------
62,891 63,694
Less accumulated depreciation (42,853) (40,487)
--------------- --------------
Net equipment . . . . . . $ 20,038 $ 23,207
=============== ==============
As of September 30, 2002, all owned equipment in the Partnership's portfolio was
on lease except for 180 railcars and 15 marine containers. 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 $1.7 million as
of September 30, 2002 and $1.2 million as of December 31, 2001.
During the nine months ended September 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 nine months ended September 30, 2001,
the Partnership disposed of a Boeing 737-200 commercial aircraft, a marine
vessel, marine containers, railcars, and a trailer with an aggregate net book
value of $2.9 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.
7. 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. Ownership interest is based on the Partnership's contribution
towards the cost of the equipment in the USPEs. The Partnership's proportional
share of equity and income (loss) in each entity is not necessarily the same as
its ownership interest.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7. Investments in Unconsolidated Special-Purpose Entities (continued)
----------------------------------------------------------
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 USPEs.
The tables below set forth 100% of the assets, liabilities, and equity of the
entities in which the Partnership has an interest and the Partnership's
proportional share of equity in each entity as of September 30, 2002 and
December 31, 2001 (in thousands of dollars):
Boeing Aero
737-300 California Lion
As of September 30, 2002. . . . . . . . . Trust1 Trust2 Partnership3 Total
- ---------------------------------------------------------------------------------
Assets
Equipment less accumulated depreciation $12,973 $ -- $ 7,724
Receivables 1,682 420 110
Finance lease receivable -- 2,763 --
Other assets 3 6 --
------- -------- -----------
Total assets $14,658 $ 3,189 $ 7,834
======= ======== ===========
Liabilities
Accounts payable $ -- $ 1 $ 320
Due to affiliates -- 2 31
Lessee deposits and reserve for repairs 1,659 420 224
------- -------- -----------
Total liabilities 1,659 423 575
------- -------- -----------
Equity 12,999 2,766 7,259
------- -------- -----------
Total liabilities and equity $14,658 $ 3,189 $ 7,834
======= ======== ===========
Partnership's share of equity $ 8,126 $ 1,106 $ 3,803 $13,035
======= ======== =========== =======
Boeing Aero
737-300 California Lion
As of December 31, 2001 . . . . . . . . . Trust1 Trust2 Partnership3 Total
- ----------------------------------------------------------------------------------
Assets
Equipment less accumulated depreciation $14,768 $ -- $ 8,827
Receivables 1,078 420 776
Finance lease receivable -- 3,449 --
Other assets 12 10 --
------- -------- -----------
Total assets $15,858 $ 3,879 $ 9,603
======= ======== ===========
Liabilities
Accounts payable $ 70 $ -- $ 111
Due to affiliates 20 39 51
Lessee deposits and reserve for repairs 1,027 420 514
------- -------- -----------
Total liabilities 1,117 459 676
------- -------- -----------
Equity 14,741 3,420 8,927
------- -------- -----------
Total liabilities and equity $15,858 $ 3,879 $ 9,603
======= ======== ===========
Partnership's share of equity $ 9,176 $ 1,368 $ 4,679 $15,223
======= ======== =========== =======
1 The Partnership owns a 62% interest of the Boeing 737-300 Trust that owns
a stage III commercial aircraft.
2 The Partnership owns a 40% interest in the Aero California Trust that owns
two stage III commercial aircraft on a direct finance lease.
3 The Partnership owns a 53% interest in the Lion Partnership that owns a
product tanker.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
7. Investments in Unconsolidated Special-Purpose Entities (continued)
----------------------------------------------------------
The tables below set forth 100% of the revenues, gain on disposition of
equipment, direct and indirect expenses and net income (loss) of the entities in
which the Partnership has an interest, and the Partnership's proportional share
of income (loss) in each entity for the three and nine months ended September
30, 2002 and 2001 (in thousands of dollars):
Boeing Aero
For the three months ended 737-300 California Lion
September 30, 2002 . . . . . . . Trust1 Trust2 Partnership3 Other Total
- --------------------------------------------------------------------------------------
Revenues $ 465 $ 119 $ 1,013 $ --
Less: Direct expenses 12 5 977 (24)
Indirect expenses 651 29 427 --
-------- ------- --------- ------
Net income (loss) $ (198) $ 85 $ (391) $ 24
======== ======= ========= ======
Partnership's share of net income (loss) $ (114) $ 34 $ (216) $ 6 $(290)
======== ======= ========= ====== ======
Boeing Aero Pacific
For the three months ended 737-300 California Lion Spear Source
September 30, 2001 . . Trust1 Trust2 Partnership3 Partnership4 Partnership5 Total
- -----------------------------------------------------------------------------------------------
Revenues $ 605 $ 328 $ 2,097 $ (10) $ (2)
Less: Direct expenses 16 6 1,151 32 38
Indirect expenses 980 39 600 71 7
-------- ------- ---------- ----------- --------
Net income (loss) $ (391) $ 283 $ 346 $ (113) $ (47)
======== ======= ========== =========== ========
Partnership's share of
Net income (loss) $ (292) $ 113 $ 182 $ (57) $ (9) $(63)
======== ======= ========== =========== ======== ======
Boeing Aero
For the nine months ended 737-300 California Lion
September 30, 2002 . . . . . . Trust1 Trust2 Partnership3 Other Total
- -------------------------------------------------------------------------------------
Revenues $ 1,395 $ 384 $4,009 $ --
Less: Direct expenses 28 17 3,101 (22)
Indirect expenses 2,103 101 1,429 --
-------- -------- ------ -----
Net income (loss) $ (736) $ 266 $(521) $ 22
======== ======== ====== =====
Partnership's share of net income (loss) $ (427) $ 106 $(285) $ 6 $(600)
======== ======== ====== ===== ======
Boeing Aero Pacific
For the nine months ended 737-300 California Lion Spear Source
September 30, 2001 . . . . Trust1 Trust2 Partnership3 Partnership4 Partnership5 Total
- ----------------------------------------------------------------------------------------------------
Revenues $ 1,405 $ 1,011 $ 7,613 $ 710 $ 921
Gain on disposition of equipment -- -- -- 458 2,595
Less: Direct expenses 931 14 3,591 578 565
Indirect expenses 2,515 119 1,892 280 448
-------- -------- -------- ------- -------
Net income (loss) $ (2,041) $ 878 $ 2,130 $ 310 $ 2,503
======== ======== ======== ======= =======
Partnership's share of
Net income (loss) $ (1,284) $ 351 $ 1,118 $ 75 $ 497 $ 757
======== ======== ======== ======= ======= =====
As of September 30, 2002 and December 31, 2001, all jointly-owned equipment in
the Partnership's USPE portfolio was on lease.
1 The Partnership owns a 62% interest of the Boeing 737-300 Trust that owns
a stage III commercial aircraft.
2 The Partnership owns a 40% interest in the Aero California Trust that owns
two stage III commercial aircraft on a direct finance lease.
3 The Partnership owns a 53% interest in the Lion Partnership that owns a
product tanker.
4 The Partnership owned a 50% interest in the Spear Partnership that owned a
container feeder vessel.
5 The Partnership owned a 20% interest in the Pacific Source Partnership
that owned a handymax dry bulk carrier.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
8. 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
September 30, 2002 Leasing Leasing Leasing Leasing Leasing Other 1 Total
- -----------------------------------------------------------------------------------------------------------------------
REVENUES
Lease revenue. . . . . . . . . . . . . . $ -- $ 409 $ 784 $ 175 $ 982 $ -- $ 2,350
Interest income and other. . . . . . . . 71 -- -- -- -- 26 97
Gain (loss) on disposition of equipment. -- -- (2) -- 10 -- 8
--------- ---------- --------- --------- ----------- --------- --------
Total revenues. . . . . . . . . . . . 71 409 782 175 992 26 2,455
--------- ---------- --------- --------- ----------- --------- --------
COSTS AND EXPENSES
Operations support . . . . . . . . . . . 6 1 179 164 10 15 375
Depreciation and amortization. . . . . . -- 47 235 73 598 43 996
Interest expense . . . . . . . . . . . . -- -- -- -- -- 175 175
Management fees to affiliate . . . . . . -- 16 56 10 49 -- 131
General and administrative expenses. . . 1 31 56 39 -- 272 399
Provision for bad debts. . . . . . . . . -- -- 1 1 -- -- 2
--------- ---------- --------- --------- ----------- --------- --------
Total costs and expenses . . . . . . 7 95 527 287 657 505 2,078
--------- ---------- --------- --------- ----------- --------- --------
Equity in net loss of USPEs. . . . . . . . (210) (80) -- -- -- -- (290)
--------- ---------- --------- --------- ----------- --------- --------
Net income (loss). . . . . . . . . . . . . $ (146) $ 234 $ 255 $ (112) $ 335 $ (479) $ 87
========= ========== ========= ========= =========== ========= ========
Total assets as of September 30, 2002. . . $ 3,803 $ 10,047 $ 6,078 $ 1,117 $ 12,859 $ 8,830 $42,734
========= ========== ========= ========= =========== ========= ========
Marine . . . . . . . . . . . . . . . . Marine
For the three months ended . . . . . . . . Vessel Aircraft Railcar Trailer Container
September 30, 2001. . . . . . . . Leasing Leasing Leasing Leasing Leasing Other 2 Total
- ------------------------------------------------------------------------------------------------------------------------
REVENUES
Lease revenue. . . . . . . . . . . . . . $ 2 $ 409 $ 827 $ 223 $ 1,106 $ -- $ 2,567
Interest income and other. . . . . . . . 73 -- -- -- -- 171 244
Loss on disposition of equipment . . . . -- (2)-- (5) -- (15) -- (22)
--------- ---------- --------- --------- ----------- --------- --------
Total revenues. . . . . . . . . . . . 75 407 822 223 1,091 171 2,789
--------- ---------- --------- --------- ----------- --------- --------
COSTS AND EXPENSES
Operations support . . . . . . . . . . . (23) 7 381 112 15 16 508
Depreciation and amortization. . . . . . -- 347 265 74 939 86 1,711
Interest expense . . . . . . . . . . . . -- -- -- -- -- 503 503
Management fees to affiliate . . . . . . -- 16 59 11 56 -- 142
General and administrative expenses. . . 1 (13) 52 40 -- 201 281
Provision for bad debts. . . . . . . . . -- -- 11 -- -- -- 11
--------- ---------- --------- --------- ----------- --------- --------
Total costs and expenses . . . . . . (22) 357 768 237 1,010 806 3,156
--------- ---------- --------- --------- ----------- --------- --------
Equity in net income (loss) of USPEs . . . 116 (179) -- -- -- -- (63)
--------- ---------- --------- --------- ----------- --------- --------
Net income (loss). . . . . . . . . . . . . $ 213 $ (129) $ 54 $ (14) $ 81 $ (635) $ (430)
========= ========== ========= ========= =========== ========= ========
1 Includes certain assets not identifiable to a specific segment such as
cash and restricted cash, 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)
8. Operating Segments (continued)
-------------------
Marine Marine
For the nine months ended Vessel Aircraft Railcar Trailer Container
September 30, 2002 Leasing Leasing Leasing Leasing Leasing Other 1 Total
- ------------------------------------------------------------------------------------------------------------------
REVENUES
Lease revenue. . . . . . . . . . . . $ -- $ 1,228 $ 2,591 $ 559 $ 2,943 $ -- $ 7,321
Interest income and other. . . . . . 71 -- -- -- -- 66 137
Gain on disposition of equipment . . -- -- 10 -- 113 -- 123
--------- ---------- --------- --------- ---------- --------- --------
Total revenues. . . . . . . . . . 71 1,228 2,601 559 3,056 66 7,581
--------- ---------- --------- --------- ---------- --------- --------
COSTS AND EXPENSES
Operations support . . . . . . . . . 1 22 557 424 31 47 1,082
Depreciation and amortization. . . . -- 142 707 218 1,878 182 3,127
Interest expense . . . . . . . . . . -- -- -- -- -- 541 541
Management fees to affiliate . . . . -- 50 181 29 147 -- 407
General and administrative expenses. 1 128 134 114 1 1,585 1,963
Provision for bad debts. . . . . . . -- -- 14 17 -- -- 31
--------- ---------- --------- --------- ---------- --------- --------
Total costs and expenses . . . . 2 342 1,593 802 2,057 2,355 7,151
--------- ---------- --------- --------- ---------- --------- --------
Equity in net loss of USPEs. . . . . . (279) (321) -- -- -- -- (600)
--------- ---------- --------- --------- ---------- --------- --------
Net income (loss). . . . . . . . . . . $ (210) $ 565 $ 1,008 $ (243) $ 999 $ (2,289) $ (170)
========= ========== ========= ========= ========== ========= ========
Marine . . . . . . . . . . . . . . Marine
For the nine months ended. . . . . . . Vessel Aircraft Railcar Trailer Container
September 30, 2001. . . . . . Leasing Leasing Leasing Leasing Leasing Other 1 Total
- --------------------------------------------------------------------------------------------------------------------
REVENUES
Lease revenue. . . . . . . . . . . . $ 515 $ 1,433 $ 2,885 $ 625 $ 3,540 $ -- $ 8,998
Interest income and other. . . . . . 73 40 -- -- -- 448 561
Gain on disposition of equipment . . 488 518 (5) 2 32 -- 1,035
--------- ---------- --------- --------- ---------- --------- --------
Total revenues. . . . . . . . . . 1,076 1,991 2,880 627 3,572 448 10,594
--------- ---------- --------- --------- ---------- --------- --------
COSTS AND EXPENSES
Operations support . . . . . . . . . 314 16 883 347 49 93 1,702
Depreciation and amortization. . . . 102 1,388 807 220 2,434 107 5,058
Interest expense . . . . . . . . . . -- -- -- -- -- 1,508 1,508
Management fees to affiliate . . . . 26 58 200 31 177 -- 492
General and administrative expenses. 48 211 104 111 1 761 1,236
Provision for bad debts. . . . . . . -- 46 43 2 7 -- 98
--------- ---------- --------- --------- ---------- --------- --------
Total costs and expenses . . . . 490 1,719 2,037 711 2,668 2,469 10,094
--------- ---------- --------- --------- ---------- --------
Equity in net income (loss) of USPEs . 1,690 (933) -- -- -- -- 757
--------- ---------- --------- --------- ---------- --------- --------
Net income (loss). . . . . . . . . . . $ 2,276 $ (661) $ 843 $ (84) $ 904 $ (2,021) $ 1,257
========= ========== ========= ========= ========== ========= ========
9. Net Income (Loss) Per Weighted-Average Limited Partnership Unit
----------------------------------------------------------------------
Net income (loss) per weighted-average limited partnership unit was computed by
dividing net income (loss) 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 nine months ended September 30, 2002 was
7,730,965 and 7,736,749, respectively. The weighted-average number of limited
partnership units deemed outstanding during the three and nine months ended
September 30, 2001 was 8,189,463 and 8,189,464, respectively.
10. Limited Partnership Units
---------------------------
During 2001, the Partnership agreed to purchase 489,344 limited partnership
units and paid $2.8 million to the purchasing agent for this purchase. The
purchasing agent purchased 407,565 units as of December 31, 2001 and an
additional 50,933 units during the nine months ended September 30, 2002, which
is reflected as a reduction in limited partnership units. Under the terms of
the purchase agreement,
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)
10. Limited Partnership Units(continued)
---------------------------
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.
11. Debt
----
During January 2002, the Partnership prepaid the $20.0 million note payable and
a prepayment penalty, included in other general and administrative expenses, of
$1.0 million to prepay the existing senior note payable. 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 or 2003.
The Partnership made the regularly scheduled principal payments of $1.5 million
to the lender of the notes during the nine months ended September 30, 2002.
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 of the facility 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 September 30, 2002, there were no outstanding borrowings on this facility
by any of the eligible borrowers.
12. Commitments and Contingencies
-------------------------------
In October 2002, PLM Transportation Equipment Corp. Inc. (TEC), a wholly owned
subsidiary of FSI, arranged for the lease or purchase of a total of 1,050
pressurized tank railcars by (i) partnerships and managed programs in which FSI
serves as the general partner or manager and holds an ownership interest
(Program Affiliates) or (ii) partnerships or managed programs in which FSI
provides management services but does not hold an ownership interest or third
parties (Non-Program Affiliates). These railcars will be delivered over the
next three years. A leasing company affiliated with the manufacturer will
acquire approximately 70% of the railcars and lease them to a Non-Program
Affiliate. The remaining approximately 30% will either be purchased by other
third parties to be managed by PLMI, or by the Program Affiliates. An affiliate
of TEC will manage the leased and purchased railcars. Neither TEC nor its
affiliate will be liable for these railcars. TEC estimates that the total value
of purchased railcars will not exceed $26.0 million with one third of the
railcars being purchased in each of 2002, 2003, and 2004. Although the General
Partner has neither determined which Program Affiliates will purchase the
railcars nor the timing of any purchases, it is possible the Partnership may
purchase some of the railcars.
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
13. Subsequent Event
-----------------
During October 2002, the Partnership made its regularly scheduled debt payment
of $0.8 million to the lenders of the $30.0 million term loan facility.
14. Restatement of Financial Statements
--------------------------------------
Subsequent to the issuance of the Partnership's financial statements for the
three and nine month periods ended September 30, 2001 and for the year ended
December 31, 2001, the General Partner determined that the accounting treatment
related to the prepayment penalty and the unamortized debt placement fees on the
Partnership's note payable was incorrect. The Partnership accrued the estimated
penalty of $1.1 million in the third quarter of 2001 and adjusted the accrual to
$1.0 million in the fourth quarter of 2001. The Partnership also accelerated
$0.1 million amortization of debt placement fees in September 2001. The actual
retirement of the debt occurred in January 2002. The proper accounting
treatment was to expense the prepayment penalty and the debt placement fees in
the period in which the debt was retired. As a result, the condensed financial
statements for the three and nine month periods ended September 30, 2001 and the
condensed balance sheets as of December 31, 2001 and September 30, 2001 have
been restated from the amounts previously reported. The General Partner expects
to file an amended December 31, 2001 Form 10-K/A, an amended March 31, 2002 Form
10-Q/A, and an amended June 30, 2002 Form 10-Q/A as soon as practicable.
A summary of the significant effects of the restatement is as follows (in
thousands of dollars except, weighted-average unit amounts):
As of December 31, 2001 As of September 30, 2001
======================== ========================
As As
Previously As Previously As
Reported Adjustments Restated Reported Adjustments Restated
==================================================================
Deferred charges, net of
accumulated amortization. . . $ 355 $ 60 $ 415 $ 102 $ 60 $ 162
Total assets. . . . . . . . . . 48,732 60 48,792 62,818 60 62,878
Accounts payable and
accrued expenses. . . . . . . 1,276 (959) 317 1,369 (1,069) 300
Total liabilities . . . . . . . 22,253 (959) 21,294 32,464 (1,069) 31,395
Limited partners' capital . . . 26,479 1,019 27,498 30,378 1,129 31,507
Total partners' capital . . . . 26,479 1,019 27,498 30,378 1,129 31,507
Total liabilities and partners'
capital . . . . . . . . . . . 48,732 60 48,792 62,818 60 62,878
PLM EQUIPMENT GROWTH FUND VI
(A LIMITED PARTNERSHIP)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
14. Restatement of Financial Statements (continued)
--------------------------------------
Three Months Ended Nine Months Ended
September 30, 2001 September 30, 2001
==================== ===================
As As
Previously As Previously As
Reported Adjustments Restated Reported Adjustments Restated
=======================================================================
Depreciation and amortization. . . . . . . . $ 1,771 $ (60) $ 1,711 $ 5,118 $ (60) $ 5,058
Other general and administrative expenses. . 1,292 (1,069) 223 1,948 (1,069) 879
Total expenses . . . . . . . . . . . . . . . 4,285 (1,129) 3,156 11,223 (1,129) 10,094
Net income (loss). . . . . . . . . . . . . . (1,559) 1,129 (430) 128 1,129 1,257
Limited partners' share of net income (loss) (1,559) 1,129 (430) 42 1,129 1,171
Net income (loss) per weighted-average
limited partnership unit . . . . . . . . $ (0.19) $ 0.14 $ (0.05) $ 0.01 $ 0.14 $ 0.15
15. Recent Accounting Pronouncements
----------------------------------
In April 2002, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections" (SFAS
No. 145). The provisions of SFAS No. 145 are effective for fiscal years
beginning after May 15, 2002. As permitted by the pronouncement, the
Partnership has elected early adoption of SFAS No. 145 as of January 1, 2002,
and, accordingly, the loss on extinguishment of long-term debt in January 2002
has been reported in "Other general and administrative expenses" in the
statements of operations.
The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants has issued an exposure draft of a proposed
statement of position (SOP) entitled "Accounting for Certain Costs and
Activities Related to Property, Plant and Equipment". The Partnership has
historically accrued legally mandated maintenance such as marine vessel
dry-docking and aircraft engine maintenance over the periods prior to the
required maintenance date. If the SOP is adopted as proposed, the Partnership
and USPEs would reverse all previously accrued maintenance reserves. If this
proposed change were in effect at September 30, 2002, the Partnership and USPEs
would have been required to reverse maintenance reserves of approximately $1.0
million. Maintenance reserves will change in 2002 as maintenance is performed
and past maintenance reserves are depleted and additional reserves are recorded.
If adopted in its present form, charges related to this proposed change would be
taken in the first quarter of 2003 and would be reported as a cumulative effect
of an accounting change, in the statements of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------------------------------------------------------------------
RESULTS OF OPERATIONS
-------------------
As discussed in Note 14 to the condensed financial statements included in Item
1, the Partnership has restated its financial statements as of December 31, 2001
and September 30, 2001 and for the three and nine months ended September 30,
2001. The following management discussion and analysis takes into account the
effects of the restatement. The Partnership intends to amend its Annual Report
on Form 10-K for the year ended December 31, 2001 and its quarterly reports on
Form 10-Q for the quarterly periods ended March 31, 2002 and June 30, 2002 to
include the restated financial statements as soon as practicable.
(I) RESULTS OF OPERATIONS
Comparison of PLM Equipment Growth Fund VI'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,
equipment operating, and asset-specific insurance expenses) on owned equipment
decreased during the three months ended September 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 8 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 September 30,
2002 2001
==================
Marine containers . . . $ 972 $ 1,091
Railcars. . . . . . . . 605 446
Aircraft and components 408 402
Trailers. . . . . . . . 11 111
Marine vessel . . . . . (6) 25
Marine containers: Marine container lease revenues and direct expenses were
$1.0 million and $10,000, respectively, for the three months ended September 30,
2002, compared to $1.1 million and $15,000, respectively, during the same
quarter of 2001. The decrease in lease revenues of $0.1 million during the
third quarter of 2002 was due to the marine containers switching from a fixed
lease rate to utilization based rate resulting in lower lease revenues.
Railcars: Railcar lease revenues and direct expenses were $0.8 million and $0.2
million, respectively, for the three months ended September 30, 2002, compared
to $0.8 million and $0.4 million, respectively, during the same quarter of 2001.
A decrease in railcar lease revenues of $43,000 was due to lower re-lease rates
earned on new leases as old leases expired during 2002. A decrease in railcar
direct expenses of $0.2 million in the third quarter of 2002 was due to a
decrease in the repairs and maintenance of railcars compared to the same period
of 2001.
Aircraft and components: Aircraft lease revenues and direct expenses remained
relatively the same at $0.4 million and $1,000, respectively, for the three
months ended September 30, 2002, compared to $0.4 million and $7,000,
respectively, during the same period of 2001.
Trailers: Trailer lease revenues and direct expenses were $0.2 million and
$0.2 million, respectively, for the three months ended September 30, 2002,
compared to $0.2 million and $0.1 million, respectively, during the same quarter
of 2001. Lease revenues decreased $0.1 million in the third quarter of 2002 due
to a lower utilization rates and direct expenses increased $0.1 million due to
higher repairs and maintenance costs when compared to the same period of 2001.
Marine vessels: Marine vessel contribution decreased 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 $1.7 million for the quarter ended September 30, 2002
decreased from $2.7 million for the same period in 2001. Significant variances
are explained as follows:
(i) A $0.7 million decrease in depreciation and amortization expenses
from 2001 levels reflects the decrease of approximately $0.2 million caused by
the double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned and a decrease of $0.5 million
resulting from certain assets becoming fully depreciated during 2001; and
(ii) A $0.3 million decrease in interest expense resulted from a
decrease of $0.2 million caused by lower average borrowings outstanding in the
third quarter of 2002 compared to the same period of 2001 and from a decrease of
$0.1 million caused by a lower interest rate charged during 2002 compared to
2001.
(iii) A $0.1 million increase in general and administrative expenses
during the three months ended September 30, 2002 was due to a $0.1 increase in
administrative services during 2002;
(C) Interest and Other Income
Interest and other income decreased $0.1 million during 2002 due to lower cash
balances compared to 2001.
(D) Gain on Disposition of Owned Equipment
The net gain on the disposition of owned equipment for the third quarter of 2002
totaled $8,000, and resulted from the sale of marine containers and a railcar,
with an aggregate net book value of $0.1 million for proceeds of $0.1 million.
The net loss on the disposition of owned equipment for the third quarter of 2001
totaled $22,000, and resulted from the sale of marine containers and railcars
with an aggregate net book value of $0.1 million, for proceeds of $0.1 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 September 30,
2002 2001
===================
Aircraft. . . . . . . . . . . . $ (80) $ (179)
Marine vessels. . . . . . . . . (210) 116
-------- --------
Equity in net loss of USPEs $ (290) $ (63)
======== ========
Aircraft: As of September 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 third quarter of 2002, the
Partnership's share of revenues of $0.3 million were offset by the Partnership's
share of depreciation expense, direct expenses and administrative expenses of
$0.4 million. During the same period of 2001, the Partnership's share of
revenues of $0.5 million were offset by the Partnership's share of depreciation
expense, direct expenses and administrative expenses of $0.7 million.
Aircraft revenues decreased $0.2 million due to the leases for the aircraft in
the trusts being renegotiated at a lower rate.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.3 million during the three months ended September 30, 2002 resulting from the
double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned.
Marine vessels: As of September 30, 2002 and 2001, the Partnership owned an
interest in an entity that owned a marine vessel. During the three months ended
September 30, 2002, the Partnership's share of lease revenues of $0.5 million
were offset by the Partnership's share of depreciation expense, direct expenses,
and administrative expenses of $0.7 million. During the same period of 2001,
the Partnership's share of lease revenues of $1.1 million were offset by the
Partnership's share of depreciation expense, direct expenses, and administrative
expenses of $1.0 million.
Marine vessel lease revenues decreased $0.5 million during the three months
ended September 30, 2002 due to being in dry dock for three weeks of the third
quarter of 2002. While the marine vessel was in dry dock it did not earn any
lease revenues. A similar event did not take place during the same period of
2001.
Direct expenses decreased $0.3 million during the three months ended September
30, 2002 compared to the same period in 2001 due to a decrease of $0.1 million
resulting from the double-declining balance method of depreciation which results
in greater depreciation in the first years an asset is owned and a decrease of
$0.2 million due lower operating expenses.
(F) Net Income (Loss)
As a result of the foregoing, the Partnership's net income for the three months
ended September 30, 2002 was $0.1 million, compared to a net loss of $0.4
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 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):
For the Nine Months
Ended September 30,
2002 2001
=====================
Marine containers . . . $ 2,912 $ 3,491
Railcars. . . . . . . . 2,034 2,002
Aircraft and components 1,206 1,417
Trailers. . . . . . . . 135 278
Marine vessel . . . . . (1) 201
Marine containers: Marine container lease revenues and direct expenses were
$2.9 million and $31,000, respectively, for the nine months ended September 30,
2002, compared to $3.5 million and $49,000, respectively, during the same period
of 2001. The decrease in lease revenues of $0.6 million during 2002 was due to
a decrease of $0.3 million caused by certain marine containers switching from a
fixed lease rate to utilization based rate resulting in lower lease revenues and
a decrease of $0.2 million caused by a lower lease rate earned of the remaining
fleet under utilization leases compared to the same period of 2001.
Railcars: Railcar lease revenues and direct expenses were $2.6 million and $0.6
million, respectively, for the nine months ended September 30, 2002, compared to
$2.9 million and $0.9 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. A
decrease in railcar direct expenses of $0.3 million was due to a decrease in the
repairs and maintenance of railcars in the nine months ended September 30, 2002
compared to the same period in 2001.
Aircraft and components: Aircraft lease revenues and direct expenses were $1.2
million and $22,000, respectively, for the nine months ended September 30, 2002,
compared to $1.4 million and $16,000, 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 $0.6 million and
$0.4 million, respectively, for the nine months ended September 30, 2002,
compared to $0.6 million and $0.3 million, respectively, during the same period
of 2001. Trailer contribution decreased $0.1 million during 2002 due to lower
lease revenues of $0.1 million and higher repair costs of $0.1 million.
Marine vessels: Marine vessel contribution decreased $0.2 million during the
nine months ended September 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 $6.1 million for the nine months ended September 30,
2002 decreased from $8.5 million for the same period in 2001. Significant
variances are explained as follows:
(i) A $1.9 million decrease in depreciation and amortization expenses
from 2001 levels reflects the decrease of approximately $0.6 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 $1.3 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 $1.0 million decrease in interest expense resulted from a
decrease of $0.8 million caused by lower average borrowings outstanding in the
nine months ended September 30, 2002 compared to the same period of 2001 and a
$0.2 million decrease was due to a lower interest rate charged during 2002
compared to 2001; and
(iii) A $0.1 million decrease in management fees was due to lower lease
revenues earned by the Partnership during the nine months ended September 30,
2002 compared to the same period of 2001.
(iv) A $0.7 million increase in general and administrative expenses
during the nine months ended September 30, 2002 was due to a $1.0 million debt
prepayment penalty in the nine months ended September 30, 2002 related to the
Partnership's note payable that was not required during 2001, offset, in part,
by a decrease of $0.2 million due to lower professional service costs;
(C) Interest and Other Income
Interest and other income decreased $0.4 million during 2002. A decrease of
$0.3 million was due to lower average cash balances compared to 2001 and a
decrease of $0.1 million was due to a decrease in the interest rate earned on
cash balances.
(D) Gain on Disposition of Owned Equipment
The net gain on the disposition of owned equipment for the nine months ended
September 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 nine months ended September 30, 2001 totaled $1.0 million, and resulted
from the sale of a Boeing 737-200 commercial aircraft, marine vessel, trailer,
railcars, and marine containers with an aggregate net book value of $2.9
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
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 Nine Months
Ended September 30,
2002 2001
=====================
Marine vessels . . . . . . . . . . . . . $ (279) $ 1,690
Aircraft . . . . . . . . . . . . . . . . (321) (933)
---------- ---------
Equity in net income (loss) of USPEs $ (600) $ 757
========== =========
Marine vessels: As of September 30, 2002 and 2001, the Partnership owned an
interest in an entity that owned a marine vessel. During the nine months ended
September 30, 2002, the Partnership's share of lease revenues of $2.1 million
were offset by the Partnership's share of depreciation expense, direct expenses,
and administrative expenses of $2.4 million. During the same period of 2001,
the Partnership's share of lease revenues of $4.5 million and the Partnership's
share of the gain of $0.7 million from the sale of the Partnership's interest in
two entities that owned marine vessels were offset the Partnership's share of by
depreciation expense, direct expenses, and administrative expenses of $3.5
million.
Marine vessel lease revenues decreased $2.4 million during the nine months ended
September 30, 2002 compared to 2001. During the nine months ended September 30,
2002, marine vessel lease revenues decreased $1.6 million due to one marine
vessel earning a lower charter rate while on charter, lease revenues decreased
$0.3 million due to the marine vessel being in dry dock for three weeks, and
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 $1.1 million during the nine months ending September
30, 2002 compared to the same period in 2001. Direct expenses decreased $0.5
million for the remaining entity owning a marine vessel due to lower operating
expenses and an additional $0.6 million decrease was due to the sale of the
Partnership's interest in two entities that owned marine vessels during 2001.
Aircraft: As of September 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 nine months ended September 30, 2002,
the Partnership's share of revenues of $1.0 million were offset by the
Partnership's share of depreciation expense, direct expenses and administrative
expenses of $1.3 million. During the same period of 2001, the Partnership's
share of revenues of $1.3 million were offset by the Partnership's share of
depreciation expense, direct expenses and administrative expenses of $2.2
million.
Revenues earned by the trust that owns two commercial aircraft on a direct
finance lease decreased $0.3 million due to the leases for the aircraft in the
trust being renegotiated at a lower rate in 2001.
Depreciation expense, direct expenses, and administrative expenses decreased
$0.9 million during the nine months ended September 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 and amortization expense of
$0.4 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 (Loss)
As a result of the foregoing, the Partnership's net loss for the nine months
ended September 30, 2002 was $0.2 million, compared to a net income of $1.3
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 third 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 PLM Financial
Services, Inc. (FSI or 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, in accordance with the Financial Accounting
Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" and
Accounting Principals Board Opinion No. 18 "Equity Method of Accounting for
Investments in Common Stock". 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 AND LIQUIDITY
For the nine months ended September 30, 2002, the Partnership generated $6.0
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 nine months ended September 30, 2002, the Partnership disposed of
owned equipment and received aggregate proceeds of $0.3 million.
Accounts receivable decreased $0.6 million during the nine months ended
September 30, 2002 due to the timing of cash receipts.
Investments in USPEs decreased $2.2 million during the nine months ended
September 30, 2002 due to cash distributions of $1.6 million from the USPEs to
the Partnership and a $0.6 million loss that was recorded by the Partnership for
its equity interests in the USPEs.
Accounts payable increased $0.1 million during the nine months ended September
30, 2002 due to the timing of cash payments.
During January 2002, the Partnership prepaid the $20.0 million note payable
outstanding on December 31, 2001 and a prepayment penalty of $1.0 million to
prepay the existing senior note payable. Concurrent with this payment, the
Partnership borrowed $15.0 million under the new $30.0 million term loan
facility. The General Partner anticipates that the Partnership will borrow the
additional $15.0 million available under this facility in 2002 or 2003.
The Partnership made its scheduled principal payments totaling $1.5 million
under the new notes payable during the nine months ended September 30, 2002 and
another payment of $0.8 million during October 2002. The Partnership is
scheduled to make a quarterly debt payment of $0.8 million plus interest 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) 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 November 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.
In October 2002, PLM Transportation Equipment Corp. Inc. (TEC), a wholly owned
subsidiary of FSI, arranged for the lease or purchase of a total of 1,050
pressurized tank railcars by (i) partnerships and managed programs in which FSI
serves as the general partner or manager and holds an ownership interest
(Program Affiliates) or (ii) partnerships or managed programs in which FSI
provides management services but does not hold an ownership interest or third
parties (Non-Program Affiliates). These railcars will be delivered over the
next three years. A leasing company affiliated with the manufacturer will
acquire approximately 70% of the railcars and lease them to a Non-Program
Affiliate. The remaining approximately 30% will either be purchased by other
third parties to be managed by PLMI, or by the Program Affiliates. An affiliate
of TEC will manage the leased and purchased railcars. Neither TEC nor its
affiliate will be liable for these railcars. TEC estimates that the total value
of purchased railcars will not exceed $26.0 million with one third of the
railcars being purchased in each of 2002, 2003, and 2004. Although the General
Partner has neither determined which Program Affiliates will purchase the
railcars nor the timing of any purchases, it is possible the Partnership may
purchase some of the railcars.
(IV) RECENT ACCOUNTING PRONOUNCEMENTS
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections" (SFAS No.
145). The provisions of SFAS No. 145 are effective for fiscal years beginning
after May 15, 2002. As permitted by the pronouncement, the Partnership has
elected early adoption of SFAS No. 145 on January 1, 2002, and, accordingly, the
loss on extinguishment of long-term debt in January 2002 has been reported in
"Other general and administrative expenses" in the statements of operations.
The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants has issued an exposure draft of a proposed
statement of position (SOP) entitled "Accounting for Certain Costs and
Activities Related to Property, Plant and Equipment". The Partnership has
historically accrued legally mandated maintenance such as marine vessel
dry-docking and aircraft engine maintenance over the periods prior to the
required maintenance date. If the SOP is adopted as proposed, the Partnership
and USPEs would reverse all previously accrued maintenance reserves. If this
proposed change were in effect at September 30, 2002, the Partnership and USPEs
would have been required to reverse maintenance reserves of approximately $1.0
million. Maintenance reserves will change in 2002 as maintenance is performed
and past maintenance reserves are depleted and additional reserves are recorded.
If adopted in its present form, charges related to this proposed change would be
taken in the first quarter of 2003 and would be reported as a cumulative effect
of an accounting change, in the statements of operations.
(V) 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 has been at historic lows for the past
several years, which has caused downward pressure on per diem lease rates for
this type of equipment. In addition, during 2002 and continuing through 2003, a
significant number of the Partnership's marine containers currently on a fixed
rate lease will be switching to a lease based on utilization. The General
Partner anticipates that this will result in a significant decrease in lease
revenues;
(2) Railcar freight loadings in the United States and Canada decreased 1%
and 3%, respectively, through the first nine months of 2002. There has been,
however, a recent increase for some of the commodities that drive demand for
those types of railcars owned by the Partnership. It will be some time,
however, before this translates into new leasing demand by shippers since most
shippers have idle railcars 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 marine
vessel began to decrease during the latter half of 2001 and continued through
the first nine months of 2002. This trend is expected to continue during the
remainder of 2002 or until international economies stabilize and begin to
improve;
(4) The airline industry began to see lower passenger travel during 2001.
The events of September 11, 2001, along with a recession in the United States
have continued to adversely affect the market demand for both new and used
commercial aircraft and to significantly weaken the financial position of most
major domestic airlines. As a result of this, 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 to return to their September 11, 2001 values; and
(5) Utilization of intermodal trailers owned by the Partnership decreased
15% in the nine months ended September 30, 2002 compared to the nine months
ended September 30, 2001. This decline was similar to the decline in industry
wide utilization. As the Partnership's trailers are smaller than many shippers
prefer, the General Partner expects continued declines in utilization over the
next few years. Additionally, one of the major shippers that leased the
Partnership's trailers has entered bankruptcy. While the Partnership did not
have any outstanding receivables from the company, its bankruptcy may cause a
further decline in performance of the trailer fleet in the future.
(6) The General Partner has seen an increase in its insurance premiums on
its equipment portfolio and is finding it more difficult to find an insurance
carrier with which to place the coverage. Premiums for aircraft have increased
over 50% and for other types of equipment the increases have been over 25%. The
increase in insurance premiums caused by the increased rate will be partially
mitigated by the reduction in the value of the Partnership's 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 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.
(VI) 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 nine months ended September 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.
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.
(This space intentionally left blank)
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-------------------------------------
(a) Exhibits
--------
October 2002 purchase agreement between PLM Transportation Equipment Corp., Inc.
and Trinity Tank Car, Inc.
(b) Reports on Form 8-K
----------------------
None.
(This space intentionally left blank)
- ------
CONTROL CERTIFICATION
- ----------------------
I, James A. Coyne, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PLM Equipment
Growth Fund VI.
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 14, 2002 By: /s/ James A. Coyne
---------------------
James A. Coyne
President
- ------
CONTROL CERTIFICATION
- ----------------------
I, Richard K Brock, certify that:
1. I have reviewed this quarterly report on Form 10-Q of PLM Equipment
Growth Fund VI.
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 14, 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 VI
By: PLM Financial Services, Inc.
General Partner
Date: November 14, 2002 By: /s/ Richard K Brock
----------------------
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 VI (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 VI
By: PLM Financial Services, Inc.
General Partner
Date: November 14, 2002 By: /s/ James A. Coyne
---------------------
James A. Coyne
President
Date: November 14, 2002 By: /s/ Richard K Brock
----------------------
Richard K Brock
Chief Financial Officer