UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 ___________________
 FORM 10-QSB
 
 
 
 
 [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal quarter ended March 31, 2004
 
 
 [ ]  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 0-26594
 _______________________
 
 
 
 
 PLM EQUIPMENT GROWTH & INCOME FUND VII
 (Exact name of registrant as specified in its charter)
 
 
 California

94-3168838(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)235 3RDStreet South, Suite 200St. Petersburg, FL

33701(Address of principal

(Zip code)executive offices) 
 
 Registrant's telephone number, including area code: (727) 803-1800
 _______________________
 
 
 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 ____
 
 Transitional Small Business Disclosure Format: Yes  No  X
 
 Aggregate market value of voting stock: N/A
 
  
 PLM EQUIPMENT GROWTH & INCOME FUND VII(A Limited Partnership)CONDENSED BALANCE SHEETS(in thousands of dollars, except unit amounts) (unaudited)
 
   March 31,

December 31,2004



2003AssetsEquipment held for operating leases, at cost


$
88,056


$
84,873Less accumulated depreciation



(56,416
)


(55,810
)Net equipment



31,640



29,063Cash and cash equivalents



7,990



8,635Restricted cash



--



60Accounts and note receivable, less allowance for doubtfulaccounts of $546 in 2004 and $640 in 2003



2,481



2,501Equity investments in affiliated entities



4,580



4,876Deferred charges, net of accumulated amortizationof $504 in 2004 and $492 in 2003



146



119Prepaid expenses and other assets



393



324Total assets


$
47,230


$
45,578Liabilities and partners capitalLiabilities:Accounts payable and accrued expenses


$
2,042


$
861Due to affiliates



753



996Reserve for repairs



1,120



1,033Lessee deposits



186



157Notes payable



8,000



8,000Total liabilities



12,101



11,047Commitments and contingenciesPartners' capital:Limited partners (4,981,450 limited partnership units)



35,129



34,531General Partner



--



--Total partners' capital



35,129



34,531Total liabilities and partners capital


$
47,230


$
45,578
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 See accompanying notes to unaudited condensed financial statements.
  
 PLM EQUIPMENT GROWTH & INCOME FUND VII(A Limited Partnership)CONDENSED STATEMENTS OF INCOME(in thousands of dollars, except weighted-average limited partnership unit amounts) (unaudited)
 
 For the Three Months
Ended March 31,2004


2003RevenuesLease revenue

$
3,478

$
3,437Interest and other income


21


42Gain on disposition of equipment


160


16Total revenues


3,659


3,495ExpensesDepreciation and amortization


1,470


1,468Repairs and maintenance


430


710Equipment operating expenses


491


501Insurance expenses


232


165Management fees to affiliate


195


185Interest expense


153


209General and administrative expenses to affiliates


83


36Other general and administrative expenses


231


276Impairment loss on equipment


--


112Recovery of bad debts


(91
)

(85
)Total expenses


3,194


3,577Equity in net income of equity investments


133


93Net income

$
598

$
11Partners' share of net incomeLimited partners

$
598

$
11General Partner


--


--Total

$
598

$
11Limited partners net income per weighted-averagelimited partnership unit

$
0.12

$
0.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See accompanying notes to unaudited condensed financial statements.
  
 
 PLM EQUIPMENT GROWTH & INCOME FUND VII(A Limited Partnership)CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITALFor the Period from December 31, 2003 to March 31, 2004(in thousands of dollars) (unaudited)
 
 
 Limited
Partners
General
Partner
TotalPartners' capital as of December 31, 2003
$
34,531

$
--
$
34,531Net income

598


--

598Partners' capital as of March 31, 2004
$
35,129

$
--
$
35,129 
 
 
 
 See accompanying notes to unaudited condensed financial statements.
  
 PLM EQUIPMENT GROWTH & INCOME FUND VII(A Limited Partnership)CONDENSED STATEMENTS OF CASH FLOWS(in thousands of dollars)(unaudited)For the Three Months
Ended March 31,2004



2003Operating activitiesNet income
$
598


$
11Adjustments to reconcile net incometo net cash provided by (used in) operating activities:Depreciation and amortization

1,470



1,468Amortization of debt issuance costs

6



6Recovery of bad debts

(91
)


(85
)Impairment loss on equipment

--



112Gain on disposition of equipment

(160
)


(16
)Equity in net income from equity investments

(133
)


(93
)Distribution from equity investments

429



460Changes in operating assets and liabilities:Accounts and note receivable

111



446Prepaid expenses and other assets

(69
)


(1
)Accounts payable and accrued expenses

1,181



323Due to affiliates

(243
)


51Reserve for repairs

87



178Lessee deposits

29



(8
)Net cash provided by operating activities

3,215



2,852Investing activitiesPayments for purchase of equipment and capitalized repairs

(4,000
)


(4,090
)Payments of acquisition fees to affiliate

(180
)


(184
)Payments of lease negotiation fees to affiliate

(40
)


(41
)Proceeds from disposition of equipment

300



41Net cash used in investing activities

(3,920
)


(4,274
)Financing activitiesDecrease in restricted cash

60



--Net cash provided by financing activities

60



--Net decrease in cash and cash equivalents

(645
)


(1,422
)Cash and cash equivalents at beginning of period

8,635



9,339Cash and cash equivalents at end of period
$
7,990


$
7,917 
 
 
 
 
 
 
 See accompanying notes to unaudited condensed financial statements.
  PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 1.  Basis of Presentation
 
 The unaudited financial statements presented herein are prepared in conformity with generally accepted accounting principles in the United States of America and the instructions for preparing Form 10-QSB under Rule 310 of Regulation S-B of the Securities and Exchange Commission. Rule 310 provides that disclosures that would substantially duplicate those contained in the most recent annual report to the limited partners may be omitted from interim financial statements. The accompanying unaudited condensed financial statements have been prepared on that basis and, therefore, should be read in conjunction with the financial statements and notes presented in the 2003 Annual Report (Form 10-KSB) of PLM Equipment Growth & Income Fund VII (the Partnership) on file with the United States Securities and Exchange Commission. Except as disclosed herein, there have been no material changes to the information presented in the notes to the 2003 Annual Report in Form 10-KSB.
 
 In the opinion of the management of PLM Financial Services, Inc. (FSI or the General Partner) all adjustments necessary, consisting primarily of normal recurring accruals, to present fairly the Partnerships unaudited condensed balance sheets at March 31, 2004 and December 31, 2003, condensed statements of income for the three months ended March 31, 2004 and 2003, condensed statements of changes in partners capital for the period from December 31, 2003 to March 31, 2004, and the condensed statements of cash flows for the three months ended March 31, 2004 and 2003 have been made and are reflected.
 
 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 commit its cash flow, surplus cash and equipment disposition proceeds to purchase 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.  Reclassifications
 
 Certain amounts previously reported have been reclassified to conform to the 2004 presentation. These reclassifications did not have any effect on total assets, total liabilities, partners capital, or net income.
 
 4.  Transactions with General Partner and Affiliates
 
 The balance due to affiliates as of March 31, 2004 and December 31, 2003, included $0.2 million due to FSI or its affiliates for management fees and $0.5 million and $0.8 million due to affiliated equity investments, respectively.
 
 During the three months ended March 31, 2004 and 2003 the Partnerships proportional share of affiliated fees paid or accrued by its equity investments to FSI or its affiliates was as follows: management fees, $27,000 and $33,000, respectively; and administrative and data processing services, $3,000 and $2,000, respectively.
 
 These affiliate expenses reduced the Partnership's proportional share of the equity interest in the income of equity investments.
 
  
 PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 4.  Transactions with General Partner and Affiliates (continued)
 
 During the three months ended March 31, 2004, the Partnership purchased $4.0 million in railcars from FSI or its affiliates and paid $0.2 million for acquisition fees and $40,000 for lease negotiation fees. The Partnership's cost for these railcars was the lower of FSI's or its affiliates cost or the fair market value at the time of purchase. During the three months ended March 31, 2003, the Partnership purchased railcars from an unaffiliated third party and paid FSI or its affiliates $0.2 million for acquisition fees and $41,000 for lease negotiation fees.
 
 5.  Equipment
 
 Owned equipment held for operating leases is stated at cost. The components of owned equipment were as follows (in thousands of dollars):
 
 March 31,

December 31,2004



2003Marine containers

$
38,598


$
38,667Marine vessels


22,212



22,212Rail equipment


18,081



14,799Aircraft


5,483



5,483Trailers


3,682



3,71288,056



84,873Less accumulated depreciation


(56,416
)


(55,810
)Net equipment

$
31,640


$
29,063 
 Equipment held for operating leases is stated at cost less depreciation and any reductions due to impairment of asset value.
 
 As of March 31, 2004, all owned equipment in the Partnerships portfolio was on lease except for 115 railcars with a net book value of $0.4 million. As of December 31, 2003, all owned equipment was on lease except for 158 railcars with a net book value of $0.7 million.
 
 During the three months ended March 31, 2004, the Partnership purchased railcars for $4.2 million including acquisition fees of $0.2 million. During the three months ended March 31, 2003, the Partnership purchased a fleet of railcars for $4.3 million including acquisition fees of $0.2 million.
 
 During the three months ended March 31, 2004, the Partnership disposed of marine containers, railcars and a trailer with a net book value of $0.1 million for proceeds of $0.3 million. During the three months ended March 31, 2003, the Partnership disposed of marine containers and railcars with a net book value of $0.1 million for proceeds of $0.1 million.
 
 In the three months ended March 31, 2003, the Partnership recorded an impairment of $0.1 million to 26 owned railcars with corrosion damage. The General Partner determined that these railcars should be scrapped. This indicated that an impairment to these railcars may exist. The fair value of the railcars with this defect was determined by using industry expertise. No reductions were required to the carrying value of the owned equipment during the three months ended March 31, 2004.
  PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 6.  Equity Investments in Affiliated 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 equity investments. The Partnerships proportional share of equity and income (loss) in each entity is not necessarily the same as its ownership interest. The primary reason for this is that certain fees such as management fees, acquisition fees, and lease and re-lease negotiation fees vary among the owners of the equity investments. The Partnerships investment in equity investments includes acquisition and lease negotiation fees paid by the Partnership to the General Partner or its affiliates. The Partnerships equity interest in the net income (loss) of equity investments is reflected net of management fees paid or payable and the amortization of acquisition and lease negotiation fees.
 
 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 March 31, 2004 and December 31, 2003 (in thousands of dollars):
 
 TWA
TWA
BoeingS/N 49183
MD-82
737-300As of March 31, 2004

Trust1
Trust2
Trust3
Total 
 AssetsEquipment less accumulated depreciation

$
--

$
2,620

$
8,792Accounts receivable


26


26


--Due from affiliates


--


--


1,389Other assets


--


--


4Total assets

$
26

$
2,646

$
10,185LiabilitiesAccounts payable

$
2

$
--

$
69Due to affiliates


6


6


5Lessee deposits and reserve for repairs


--


--


1,389Total liabilities


8


6


1,463Equity


18


2,640


8,722Total liabilities and equity

$
26

$
2,646

$
10,185Partnerships share of equity

$
9

$
1,349

$
3,222

$
4,580 
 TWA
TWA
BoeingS/N 49183
MD-82
737-300As of December 31, 2003

Trust1
Trust2
Trust3
Total 
 AssetsEquipment less accumulated depreciation

$
--

$
2,935

$
9,177Due from affiliates


--


--


2,034Other assets


--


--


7Total assets

$
--

$
2,935

$
11,218LiabilitiesAccounts payable

$
3

$
--

$
37Due to affiliates


5


5


7Lessee deposits and reserve for repairs


--


--


2,034Total liabilities


8


5


2,078Equity


(8
)

2,930


9,140Total liabilities and equity

$
--

$
2,935

$
11,218Partnerships share of equity

$
--

$
1,493

$
3,383

$
4,876 
  1   The Partnership owns a 50% interest in the TWA S/N 49183 Trust that owns a MD-82 stage III commercial aircraft.
 2   The Partnership owns a 50% interest in the TWA MD-82 Trust that owns a MD-82 stage III commercial aircraft.
 3   The Partnership owns a 38% interest in the Boeing 737-300 Trust that owns a Boeing stage III commercial aircraft.
  PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 6.  Equity Investments in Affiliated Entities (continued)
 
 The tables below set forth 100% of the revenues, direct and indirect expenses, and net income or loss of the entities in which the Partnership has an interest, and the Partnerships proportional share of income or loss in each entity for the three months ended March 31, 2004 and 2003 (in thousands of dollars):
 
 TWA
TWA
BoeingFor the three months ended

S/N 49183
MD-82
737-300March 31, 2004

Trust1
Trust2
Trust3
Total 
 Revenues

$
326

$
326

$
390Less: Direct expenses


--


--


7Indirect expenses


20


334


408Net income (loss)

$
306

$
(8
)
$
(25
)Partnerships share of net income (loss)

$
153

$
(8
)
$
(12
)
$
133 
 
 TWA
TWA
BoeingFor the three months ended

S/N 49183
MD-82
737-300March 31, 2003

Trust1
Trust2
Trust3
Total 
 Revenues

$
315

$
315

$
465Less: Direct expenses


(1
)

(1
)

5Indirect expenses


21


335


550Net income (loss)

$
295

$
(19
)
$
(90
)Partnerships share of net income (loss)

$
147

$
(13
)
$
(41
)
$
93 
 As of March 31, 2004 and December 31, 2003, all jointly-owned equipment in the Partnerships equity investment portfolio was on lease.
 
   1   The Partnership owns a 50% interest in the TWA S/N 49183 Trust that owns a MD-82 stage III commercial aircraft.
 2   The Partnership owns a 50% interest in the TWA MD-82 Trust that owns a MD-82 stage III commercial aircraft.
 3   The Partnership owns a 38% interest in the Boeing 737-300 Trust that owns a Boeing stage III commercial aircraft.
  PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 7.  Operating Segments
 
 The Partnership operates in five primary operating segments: marine container leasing, trailer leasing, aircraft leasing, railcar leasing, and marine vessel leasing. Each equipment leasing segment engages in short-term to mid-term operating leases to a variety of customers. The following tables present a summary of the operating segments (in thousands of dollars):
 
 Marine



MarineFor the three months ended













Container
Trailer
Aircraft
Railcar
VesselMarch 31, 2004













Leasing
Leasing
Leasing
Leasing
Leasing
Other 1
Total 
 RevenuesLease revenue

$1,485
$146
$97
$520
$1,230
$--
$3,478Interest income and other income

--
--
7
--
--
14
21Gain on disposition of equipment

22
8
--
130
--
--
160Total revenues

1,507
154
104
650
1,230
14
3,659ExpensesOperations support

19
92
3
102
907
30
1,153Depreciation and amortization

778
52
--
329
310
1
1,470Management fees to affiliate

74
7
8
44
62
--
195Interest expense

--
--
--
--
--
153
153General and administrative expenses

--
19
1
69
30
195
314(Recovery of) provision for bad debts

--
(1)
(114)
24
--
--
(91)Total expenses

871
169
(102)
568
1,309
379
3,194Equity in net income of equityinvestments

--
--
133
--
--
--
133Net income (loss)

$636
$(15)
$339
$82
$(79)
$(365)
$598Equipment purchases andcapitalized improvements

$--
$--
$--
$4,000
$--
$--
$4,000Acquisition fees to affiliate

$--
$--
$--
$180
$--
$--
$180Total assets as of March 31, 2004

$19,190
$524
$4,766
$10,734
$3,492
$8,524
$47,230 
 Marine



MarineFor the three months ended












Container
Trailer
Aircraft
Railcar
VesselMarch 31, 2003












Leasing
Leasing
Leasing
Leasing
Leasing
Other 2
Total 
 RevenuesLease revenue

$1,607
$165
$--
$395
$1,270
$--
$3,437Interest income and other income

--
--
10
--
--
32
42Gain on disposition of equipment

9
--
--
7
--
--
16Total revenues

1,616
165
10
402
1,270
32
3,495ExpensesOperations support

13
65
3
186
1,091
18
1,376Depreciation and amortization

938
52
--
167
310
1
1,468Management fees to affiliate

80
9
5
27
64
--
185Interest expense

--
--
--
--
--
209
209General and administrative expenses

--
28
14
34
21
215
312Impairment loss on equipment

--
--
--
112
--
--
112(Recovery of) provision for bad debts

--
--
(107)
22
--
--
(85)Total expenses

1,031
154
(85)
548
1,486
443
3,577Equity in net income of equityinvestments

--
--
93
--
--
--
93Net income (loss)

$585
$11
$188
$(146)
$(216)
$(411)
$11Equipment purchases andcapitalized improvements

$--
$--
$--
$4,090
$--
$--
$4,090Acquisition fees to affiliate

$--
$--
$--
$184
$--
$--
$184  1  Includes certain assets not identifiable to a specific segment such as cash, deferred charges and certain prepaid expenses and other assets . Also includes certain 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 & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 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 months ended March 31, 2004 and 2003 was 4,981,450.
 
 9.  Accounts and Note Receivable
 
 Accounts and note receivable represent balances due from current or former lessees for unpaid balances incurred from leasing Partnership owned equipment and uncollected receivables from insurance claims. The components of accounts and note receivable were as follows (in thousands of dollars):
 
 March 31,
December 31,2004

2003Trade accounts receivable

$2,147
$2,093Note receivable

402
570Insurance receivables

478
478Allowance for doubtful accounts

(546)
(640)$2,481
$2,501 
 At March 31, 2004 and December 31, 2003, the balance in note receivable of $0.4 million and $0.6 million, respectively, was due from an aircraft lessee. The note receivable is scheduled to be fully paid by October 2004. Unpaid outstanding balances will accrue interest at a rate of 5%. Due to the uncertainty of ultimate collection of the note, the General Partner will continue to fully reserve the unpaid outstanding balance less any security deposits and any payments received through May 14, 2004.
 
 During March 2004, the General Partner received notification from the insurance carrier that the insurance receivable should be paid before the end of September 2004. The amount of the insurance receivable is net of any deductible and any commissions due to brokers.
 
 10.  Debt
 
 The Partnership is a participant in a $7.5 million warehouse facility. The warehouse facility is scheduled to expire on December 31, 2004 with all advances due no later than December 31, 2004. As of March 31, 2004, the Partnership had no borrowings outstanding under this facility.
 
 11.  Commitments and Contingencies
 
 PLM Transportation Equipment Corp. (TEC), an affiliate of the General Partner, arranged for the lease or purchase of up to 1,050 railcars with a delivery date between 2002 and 2004. As of March 31, 2004, TEC or an affiliated program have purchased 208 railcars, at a cost of $15.3 million, and have leased 487 railcars. During 2004, TEC or an affiliated program will purchase or lease the remaining 352 railcars included in the commitment. The commitment requires a minimum of 30% of the 352 railcars to be purchased at a cost of $7.5 million. The remaining 70% of the 352 railcars may be leased or purchased. The total purchase price for the 352 railcars is $25.0 million.
 
 The remaining railcars to be purchased or leased under this commitment, with a cost of $25.0 million, will be delivered in 2004 and may be purchased or leased by TEC, the Partnership, an affiliated program, or an unaffiliated third party.
 
  
 PLM EQUIPMENT GROWTH & INCOME FUND VII
 (A Limited Partnership)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (unaudited)
 
 11.  Commitments and Contingencies (continued)
 
 In the fourth quarter of 2003, FSI exercised its option under the above agreement to purchase or lease 400 additional railcars which will be delivered in 2004 and 2005. The total cost for the purchase of all 400 railcars is approximately $28.4 million. In accordance with the agreement, up to 70% of these railcars may be leased.
 
 The Partnership, an affiliate, or unaffiliated third party may purchase or lease these railcars. While FSI has not determined which managed program will buy these railcars, it is possible that they will be purchased by the Partnership.
 
 In the first quarter of 2004, an affiliate of FSI purchased 43 sulfur railcars for $2.5 million. FSI anticipates these railcars will be sold to a managed program or an unaffiliated third party in 2004.
 
 At March 31, 2004, railcars with an original equipment cost of $2.5 million were owned by FSI or its affiliates, some of which were purchased from the above transaction. While FSI has neither determined if a Program Affiliate will purchase these railcars nor the timing of any purchases, it is possible the Partnership may purchase some of the railcars.
 
 12.  Recent Accounting Pronouncements
 
 In January 2003, Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 requires the Partnership to evaluate all existing arrangements to identify situations where the Partnership has a variable interest, commonly evidenced by a guarantee arrangement or other commitment to provide financial support, in a variable interest entity, commonly a thinly capitalized entity, and further determine when such variable interest requires the Partnership to consolidate the variable interest entities financial statements with its own. The Partnership is required to perform this assessment by December 31, 2004 and consolidate any variable interest entities for which the Partnership will absorb a majority of the entities expected losses or receive a majority of the expected residual gains.
 
 The General Partner is still in the process of evaluating its impact and has not completed its analysis or concluded on the impact that FIN 46 will have on the Partnership.
 
  
 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 (I)  RESULTS OF OPERATIONS
 
 Comparison of the PLM Equipment Growth & Income Fund VIIs (the Partnerships) Operating Results for the Three Months Ended March 31, 2004 and 2003
 
 (A)  Owned Equipment Operations
 
 Lease revenues less direct expenses (defined as repairs and maintenance, equipment operating, and asset-specific insurance expenses) on owned equipment increased during the three months ended March 31, 2004 compared to the same period of 2003. Gains or losses from the disposition of equipment, interest and other income, and certain expenses such as management fees to affiliate, depreciation and amortization, impairment loss of equipment, general and administrative expenses, and recovery of bad debts relating to the operating segments (see Note 7 to the unaudited condensed financial statements), are not included in the owned equipment operation discussion because they are indirect in nature and not a result of operations, but the result of owning a portfolio of equipment. The following table presents lease revenues less direct expenses by segment (in thousands of dollars):
 
 For the Three MonthsEnded March 31,2004

2003Marine containers
$
1,466


$
1,594Railcars

418



209Marine vessels

323



179Aircraft

94



(3
)Trailers

54



100 
 Marine containers:  Lease revenues and direct expenses for marine containers were $1.5 million and $19,000 respectively, for the three months ended March 31, 2004, compared to $1.6 million and $13,000, respectively, during the same period of 2003. The decrease in lease revenues of $0.1 million during the three months ended March 31, 2004 was due to certain marine containers owned by the Partnership switching from a fixed lease rate to utilization based rate resulting in lower lease revenues. Additional marine containers owned by the Partnership will be converting from a fixed term lease to one based on utilization over the next 24 months. This is expected to cause lease revenues to decline further.
 
 Railcars:  Railcar lease revenues and direct expenses were $0.5 million and $0.1 million, respectively, for the three months ended March 31, 2004, compared to $0.4 million and $0.2 million, respectively, during the same period of 2003. During the three months ended March 31, 2004, an increase in lease revenues of $0.1 million resulted from the purchase and lease of railcars during 2004 and in 2003.
 
 Marine vessels:  Marine vessel lease revenues and direct expenses were $1.2 million and $0.9 million, respectively, for the three months ended March 31, 2004, compared to $1.3 million and $1.1 million, respectively, during the same period of 2003. Lease revenues decreased $40,000 during the three months ended March 31, 2004 compared to the same period of 2003 due to off-hire time needed for repairs to one of the Partnerships two marine vessels. Direct expenses decreased $0.2 million during the three months ended March 31, 2004 compared to 2003 resulting from lower repairs of $0.2 million partially offset by higher insurance costs of $0.1 million.
 
 Aircraft:  Aircraft lease revenues and direct expenses were $0.1 million and $3,000, respectively, for the three months ended March 31, 2004, compared to $-0- and $3,000, respectively, during the same period of 2003. The increase on lease revenues of $0.1 million was due to the Partnerships owned aircraft being on-lease during the three months ended March 31, 2004 compared to the same period of 2003, during which this aircraft was off-lease.
 
 Trailers:  Trailer lease revenues and direct expenses were $0.1 million and $0.1 million, respectively, for the three months ended March 31, 2004, compared to $0.2 million and $0.1 million, respectively, during the same period of 2003. The decrease in trailer lease revenues of $19,000 was due to a decrease in utilization compared to the same period of 2003. The increase of $27,000 in trailer direct expenses was due to an increase in the repairs and maintenance compared to the same period of 2003.
 
 (B)  Indirect Expenses Related to Owned Equipment Operations
 
 Total indirect expenses of $2.1 million for the three months ended March 31, 2004 decreased from $2.2 million for the same period in 2003. Significant variances are explained as follows:
 
 (i)  A $0.1 million decrease in the impairment loss of equipment resulted from the Partnership reducing the carrying value of 26 railcars to their estimated fair value during the first quarter of 2003. No impairment of owned equipment was required during the three months ended March 31, 2004;
 
 (ii)  A $0.1 million decrease in interest expense was due to a lower average outstanding debt balance in the first quarter of 2004 compared to the same period of 2003; and
 
 (iii)  Depreciation and amortization expenses remained the same during the three months ended March 31, 2004 and 2003. A decrease of approximately $0.2 million was caused by the double-declining balance method of depreciation which results in greater depreciation in the first years an asset is owned, was offset by an increase of $0.2 million resulting from the purchase of railcars during 2004 and 2003.
 
 (C)  Gain on Disposition of Owned Equipment
 
 Gain on disposition of owned equipment for the three months ended March 31, 2004 totaled $0.2 million, and resulted from the sale of marine containers, railcars and a trailer with a net book value of $0.1 million for proceeds of $0.3 million. The gain on disposition of owned equipment for the first quarter of 2003 totaled $16,000, and resulted from the sale of marine containers and railcars with a net book value of $0.1 million for proceeds of $0.1 million.
 
 (D)  Equity in Net Income of Equity investments
 
 Equity in net income of equity investments 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 equity investment discussion by equipment type is based on the Partnership's proportional share of revenues, depreciation expense, direct expenses, and administrative expenses in the equity investments:
 
 As of March 31, 2004 and 2003, the Partnership owned interests in three trusts that each own a commercial aircraft. During the three months ended March 31, 2004, lease revenues of $0.5 million were partially offset by depreciation expense, direct expenses, and administrative expenses of $0.3 million. During the same period of 2003, lease revenues of $0.5 million were partially offset by depreciation expense, direct expenses, and administrative expenses of $0.4 million.
 
 A decrease in depreciation expense of $0.1 million was caused by the double-declining balance method of depreciation which results in greater depreciation in the first years an asset is owned.
 
 (E)  Net Income
 
 As a result of the foregoing, the Partnership had net income of $0.6 million for the three months ended March 31, 2004, compared to net income of $11,000 during the same period of 2003. 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 three months ended March 31, 2004 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:
 
 Revenue recognition: Lease revenues are earned by the Partnership monthly and no significant amounts are calculated on factors other than the passage of time. The Partnerships leases are accounted for as operating leases and are noncancellable. Rents received prior to their due dates are deferred.
 
 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 depreciation 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 an impairment loss. Likewise, if the net book value of the asset was less than the economic value, the Partnership may record a gain on sale upon final disposition of the asset.
 
 Impairment of long-lived assets: Whenever circumstances indicate that an impairment may exist, the General Partner reviews the carrying value of its equipment and investments in equity investments to determine if the carrying value of the assets may not be recoverable due to current economic conditions. This requires the General Partner to make estimates related to future cash flows from each asset as well as the determination if the deterioration is temporary or permanent. If these estimates or the related assumptions change in the future, the Partnership may be required to record additional impairment charges.
 
 Allowance for doubtful accounts: The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of the lessees to make the lease payments. These estimates are primarily based on the amount of time that has lapsed since the related payments were due as well as specific knowledge related to the ability of the lessees to make the required payments. If the financial condition of the Partnerships lessees were to deteriorate, additional allowances could be required that would reduce income. Conversely, if the financial condition of the lessees were to improve or if legal remedies to collect past due amounts were successful, the allowance for doubtful accounts may need to be reduced and income would be increased.
 
 Reserves for repairs: The Partnership accrues for legally required repairs to equipment such as dry docking for marine vessels and engine overhauls to aircraft engines over the period prior to the required repairs. The amount that is reserved is based on the General Partners expertise in each equipment segment, the past history of such costs for that specific piece of equipment and discussions with independent, third party equipment brokers. If the amount reserved 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 disclosed if considered possible and accrued if considered probable 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 three months ended March 31, 2004, the Partnership generated cash from operations of $3.2 million to meet its operating obligations, purchase additional equipment, pay debt and interest, and maintain working capital reserves.
 
 During the three months ended March 31, 2004, the Partnership purchased railcars for $4.0 million and paid FSI or its affiliates $0.2 million for acquisition fees and $40,000 for lease negotiation fees. During the three months ended March 31, 2004, the Partnership disposed of owned equipment for proceeds of $0.3 million.
 
 Restricted cash decreased $0.1 million resulting from the withdrawal of the lender from the Partnership's debt facility that required these deposits. No such deposits were required from the new lender.
 
 Accounts and note receivable decreased $20,000 in the three months ended March 31, 2004. The decrease was caused by the collection of $0.2 million in note receivable which was partially offset by an increase of $0.2 million due to the timing of lease receipts.
 
 Equity investments in affiliated entities decreased $0.3 million during the three months ended March 31, 2004 due to cash distributions of $0.4 million from the equity investments to the Partnership partially offset by the income of $0.1 million that was recorded by the Partnership for its interests in the equity investments.
 
 Deferred charges increased $27,000 due to the payment of $40,000 in lease negotiation fees to FSI partially offset by amortization.
 
 Prepaid expenses increased $0.1 million during 2004 due to the payment of insurance expenses during the first quarter of 2004 that will be amortized over the term of the policy.
 
 Accounts payable increased $1.2 million during the three months ended March 31, 2004. An increase of $1.1 million was due to the over payment from a customer in the first quarter of 2004 that was reimbursed during April 2004 and an increase of $0.1 million was due to the accrual of the interest payment due semi-annually on notes payable.
 
 Due to affiliates decreased $0.2 million during the three months ended March 31, 2004 due to the payment of engine reserves due to an equity investment. The equity investment used these funds to repair the engines on an aircraft.
 
 Reserve for repairs increased $0.1 million during the three months ended March 31, 2004 due to dry dock accruals for the Partnership's owned marine vessel.
 
 Lessee deposits increased $29,000 during the three months ended March 31, 2004 due to the receipt of lease payments due in a future period.
 
 The Partnership is scheduled to make an annual debt payment of $4.0 million to the lenders of the notes payable on December 31, 2004. The cash for this payment will come from operations and proceeds from equipment dispositions.
 
 The Partnership is a participant in a $7.5 million warehouse facility. The warehouse facility is shared by the Partnership, PLM Equipment Growth Fund V, PLM Equipment Growth Fund VI, and MILPI Holdings LLC (MILPI), all of which are related parties. The facility provides for financing up to 100% of the cost of the equipment and expires on December 31, 2004. Any borrowings by the Partnership are collateralized by equipment purchased with the proceeds of the loan. 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 December 31, 2004. 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 PLM International, Inc. and MILPI, the parent companies of the General Partner. The Partnership is not liable for the advances made to the other borrowers.
 
 As of May 14, 2004, there were no other outstanding borrowings on this facility by the Partnership or any of the other eligible borrowers.
 
 PLM Transportation Equipment Corp. (TEC), an affiliate of the General Partner, arranged for the lease or purchase of up to 1,050 railcars with a delivery date between 2002 and 2004. As of March 31, 2004, TEC or an affiliated program have purchased 208 railcars, at a cost of $15.3 million, and have leased 487 railcars. During 2004, TEC or an affiliated program will purchase or lease the remaining 352 railcars included in the commitment. The commitment requires a minimum of 30% of the 352 railcars to be purchased at a cost of $7.5 million. The remaining 70% of the 352 railcars may be leased or purchased. As included in the commitment table below, the total purchase price for the 352 railcars is $25.0 million.
 
 The remaining railcars to be purchased or leased under this commitment, with a cost of $25.0 million, will be delivered in 2004 and may be purchased or leased by TEC, the Partnership, an affiliated program, or an unaffiliated third party.
 
 In the fourth quarter of 2003, FSI exercised its option under the above agreement to purchase or lease 400 additional railcars which will be delivered in 2004 and 2005. The total cost for the purchase of all 400 railcars is approximately $28.4 million. In accordance with the agreement, up to 70% of these railcars may be leased.
 
 The Partnership, an affiliate, or unaffiliated third party may purchase or lease these railcars. While FSI has not determined which managed program will buy these railcars, it is possible that they will be purchased by the Partnership.
 
 In the first quarter of 2004, an affiliate of FSI purchased 43 sulfur railcars for $2.5 million. FSI anticipates these railcars will be sold to a managed program or an unaffiliated third party in 2004.
 
 At March 31, 2004, railcars with an original equipment cost of $2.5 million were owned by FSI, some of which were purchased from the above transaction. While FSI has neither determined if a Program Affiliate will purchase these railcars nor the timing of any purchases, it is possible the Partnership may purchase some of the railcars.
 
 Commitments and contingencies as of March 31, 2004 are as follows (in thousands of dollars):
 
 Less than
1-3Partnership Obligations:
Total

1 Year
YearsNotes payable
$8,000

$4,000

$4,000Affiliate Obligations:Commitment to purchase railcars
$66,237

$45,985

$20,252Commitment to purchasesulfur railcars
2,531

2,531

--$68,768
1
$48,516

$20,252  1  While FSI has neither determined if a Program Affiliate will purchase these railcars nor the timing of any purchases, it is possible the Partnership may purchase some of the railcars.
 
 (IV) RECENT ACCOUNTING PRONOUNCEMENTS
 
 In January 2003, Financial Accounting Standards Board issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 requires the Partnership to evaluate all existing arrangements to identify situations where the Partnership has a variable interest, commonly evidenced by a guarantee arrangement or other commitment to provide financial support, in a variable interest entity, commonly a thinly capitalized entity, and further determine when such variable interest requires the Partnership to consolidate the variable interest entities financial statements with its own. The Partnership is required to perform this assessment by December 31, 2004 and consolidate any variable interest entities for which the Partnership will absorb a majority of the entities expected losses or receive a majority of the expected residual gains.
 
 The General Partner is still in the process of evaluating its impact and has not completed its analysis or concluded on the impact that FIN 46 will have on the Partnership.
 
 (V)  OUTLOOK FOR THE FUTURE
 
 The ability of the Partnership to realize acceptable lease rates on its equipment in the different equipment markets is contingent on many factors, such as specific market conditions and economic activity, technological obsolescence, and government or other regulations. The unpredictability of these factors 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.
 
 Several factors may affect the Partnership's operating performance during the remainder of 2004 and beyond, including changes in the markets for the Partnership's equipment and changes in the regulatory environment in which that equipment operates.
 
 Recently, worldwide steel prices have increased due to the demand in China for steel. While the General Partner is unable to determine if the price of steel will remain at these levels, if they do remain at the current level, or were to increase further, the General Partner would expect to see increases in the price of new or used transportation equipment such as railcars, marine containers and marine vessels that contain this product. In addition, the increase in the price of new steel effectively increases the price paid for scrap steel. Currently, the price of certain new equipment has increased as much as 30% over the past few months. Accordingly, if these prices become sustained for a long period of time, the General Partner would expect the lease rates for this type of equipment to increase as a result of this.
 
 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 operations during the remainder of 2004 and beyond include:
 
 (1)  Starting in 2003 and continuing through 2005, 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 in 2004 compared to 2003;
 
 (2)  Economic recovery in the railcar segment seems to be back on track after an uncertain second half of 2003. Orders for new railcars, a key leading indicator, jumped to 18,000 in the first quarter of 2004 from approximately 12,000 in the fourth quarter of 2003. Overall railcar loadings are now forecast to grow approximately 5% in 2004 which is an extremely strong outlook. Chemical and petroleum railcar loadings, the most important drivers for the majority of the Partnerships fleet, increased 2% and 3% in the first quarter, as reported by the American Association of Railroads. Industry fleet utilization numbers are not specifically available, but are generally considered to have increased in all railcar types. The speed of recovery in lease rates continues to be dependent on the number of idle railcars in fleets owned by various shippers and leasing competitors who have been very aggressive in quoted rates compared to historical norms. Another key will be the ability of the railroads to operate efficiently at the higher volumes and avoid congestion. At this point, congestion has been localized and has not had a significant effect;
 
 (3)  Market demand for new and used aircraft has been severely impacted by the poor financial condition of the airline industry. The General Partner believes that there is a significant oversupply of commercial aircraft available that has caused a decrease in aircraft fair market values. The General Partner believes aircraft prices have decreased to a level which may make them attractive investment opportunities. Accordingly, the Partnership may purchase aircraft in 2004.
 
 During 2001, the lessee of a Stage II Boeing 737-200 commercial aircraft notified the General Partner of its intention to return this aircraft and stopped making lease payments. During October 2002, the General Partner reached an agreement with the lessee of this aircraft for the past due lease payments. The lessee made an initial payment during October 2002, to be followed by 23 equal monthly installments beginning in November 2002. Unpaid outstanding amounts will accrue interest at a rate of 5%. The balance outstanding at March 31, 2004 was $0.4 million. Due to the uncertainty of ultimate collection, the General Partner will continue to fully reserve the unpaid outstanding balance less the security deposit from this lessee. As of May 14, 2004, the lessee was current with all the installment payments due to the Partnership except for the installment payment due during May 2004.
 
 The lessee of the Partnerships two partially owned MD-82 commercial aircraft encountered financial difficulties during 2002 and 2003. The lessee restructured leases (including a $5,000 a month reduction in the lease payment for each aircraft owned by entities in which the Partnership has an interest) and renegotiated labor contracts. While the General Partner believes the financial condition of this lessee has stabilized, it is possible that it could encounter new difficulties in the future. If this aircraft were to be returned prior to its lease expiration in 2008, the aircraft could be off-lease for a significant period of time or re-leased at a significantly lower lease rate;
 
 (4)  The Partnership's two owned marine vessels are on a fixed rate lease through November 2004 and April 2005. Over the last several months, the lease rates earned on similar marine vessels have significantly increased. The General Partner is currently negotiating with the lessee of the marine vessels to extend the leases at current market rates. Alternatively, the General Partner may market the marine vessels for sale;
 
 (5)  The management fee rate paid by the Partnership will be reduced by 25% for the period starting January 1, 2005 and ending June 30, 2006; and.
 
 (6)  The Partnership is expected to continue to have increased general and administrative costs due to costs associated with the acquisition of additional equipment.
 
 The Partnership may commit its cash flow, surplus cash, and equipment sale proceeds to purchase 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, 2013, 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, purchase additional equipment, and pay loan principal and interest on debt.
 
 The General Partner believes prices on certain transportation equipment, primarily railcar equipment and selected aircraft equipment, have reached attractive levels and is currently in the market to make investments in 2004. The General Partner believes that transportation equipment purchased in today's economic environment may appreciate. Accordingly, the General Partner believes that most of the cash currently held by the Partnership will be used to purchase additional equipment.
 
 The General Partner does not anticipate declaring any cash distributions to the partners until at least the end of the investment phase of the Partnership. Cash distributions when paid to the partners generally consist of both a return of and a return on capital. Cash distributions do not represent and are not indicative of yield on investment. Actual yield on investment cannot be determined with any certainty until conclusion of the Partnership and will be dependent upon the collection of all future contracted rent, the generation of renewal and/or re-lease rents and the residual value realized for each asset at its disposal.
 
 (VI)  FORWARD-LOOKING INFORMATION
 
 Except for the historical information contained herein, this Form 10-QSB 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-QSB should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-QSB. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made herein. These factors include, but are not limited to, the collection of the Partnerships contracted rents, the realization of residual proceeds, and future
  economic conditions.
 
 ITEM 3.  CONTROLS AND PROCEDURES
 
 Limitations on the Effectiveness of Controls
 
 The General Partners management, including its President and Chief Financial Officer (CFO), does not expect that our internal controls or disclosure control will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
 
 Because of the inherent limitations in all control systems, no evaluation of control can provide absolute assurance that all control issues and instances of fraud, if any, within the Partnership have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, collusion of two or more people, or by management override of the control. The design of any system of controls also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
 
 Notwithstanding the forgoing limitations, we believe that our internal controls and disclosure control provide reasonable assurances that the objectives of our control system are met.
 
 Quarterly Evaluation of the Partnerships Disclosure Controls and Internal Controls
 
 (1)  Within the 90-day period prior to the filing of this report, the General Partner carried out an evaluation, under the supervision and with the participation of the General Partners management, including its President and CFO, of the effectiveness of the design and operation of the Partnerships disclosure controls and procedures pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 (the Exchange Act). Based upon that evaluation, the President and CFO concluded that the Partnerships disclosure controls and procedures are effective in timely alerting them to material information relating to the Partnerships required to be included in the Partnerships exchange act filings.
 
 (2)  There have been no significant changes in the Partnerships internal controls or in other factors which could significantly affect internal controls subsequent to the date the General Partner carried out its evaluations.
 
  
 PART II -- OTHER INFORMATION
 
 
 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
 (a)  Exhibits
 
 31.1  Certificate of President of the General Partner pursuant to Section 302 of Sarbanes - Oxley Act.
 
 31.2  Certificate of Chief Financial Officer of the General Partner pursuant to Section 302 of Sarbanes - Oxley Act.
 
 32.1  Certificate of President of the General Partner pursuant to Section 906 of Sarbanes - Oxley Act.
 
 32.2  Certificate of Chief Financial Officer of the General Partner pursuant to Section 906 of Sarbanes - Oxley Act.
 
 (b)  Reports on Form 8-K
 
 None.
 
  
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
 PLM EQUIPMENT GROWTH & INCOME FUND VII
  By: PLM Financial Services, Inc.
 General Partner
 
 
 
 Date:  May 14, 2004  By:  /s/ Richard K Brock
 Richard K Brock
 Chief Financial Officer