UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               -------------------
                                    FORM 10-K


     [X]      Annual  Report  Pursuant to Section 13 or 15(d) of the  Securities
              Exchange Act of 1934 For the fiscal year ended December 31, 1996.

     [  ]     Transition Report Pursuant to Section 13 or 15(d) of the 
              Securities Exchange Act of 1934
              For the transition period from              to

                         Commission file number 33-27746
                             -----------------------


                          PLM EQUIPMENT GROWTH FUND IV
             (Exact name of registrant as specified in its charter)


       California                                         94-3090127
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                        Identification No.)

   One Market, Steuart Street Tower
    Suite 800, San Francisco, CA                            94105-1301
      (Address of principal                                  (Zip code)
        executive offices)


        Registrant's telephone number, including area code (415) 974-1399
                             -----------------------

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ______

Aggregate Market Value of Voting Stock:  N/A

An index of exhibits filed with this Form 10-K is located at page 24.

Total number of pages in this report:  44



<PAGE>


                                     PART I
ITEM 1.  BUSINESS
(A)  Background

In March 1989,  PLM Financial  Services,  Inc. (FSI or the General  Partner),  a
wholly-owned subsidiary of PLM International, Inc. (PLM International),  filed a
Registration  Statement on Form S-1 with the Securities and Exchange  Commission
with  respect to a proposed  offering  of  8,750,000  Class A  Depositary  units
(including  1,250,000 option units) (the Units) in PLM Equipment Growth Fund IV,
a California  limited  partnership (the Partnership,  the Registrant or EGF IV).
The  Partnership's  offering  became  effective on May 23, 1989. FSI, as General
Partner,  owns a 5% interest in the Partnership.  The Partnership engages in the
business of owning and leasing transportation equipment to be operated by and/or
leased to various  shippers and  transportation  companies.  The Partnership was
formed to engage in the  business of owning and managing a  diversified  pool of
used  and new  transportation-related  equipment  and  certain  other  items  of
equipment. The Partnership's primary objectives are:

     (i) to acquire a diversified  portfolio of  long-lived,  low  obsolescence,
high residual value  equipment with the net proceeds of the initial  partnership
offering,  supplemented  by debt financing if deemed  appropriate by the General
Partner,  until the  conclusion  of the  reinvestment  phase of the  Partnership
operations on December 31, 1996;

     (ii) to generate  sufficient net operating cash flow from lease  operations
to meet existing  liquidity  requirements and to generate cash  distributions to
the  Limited  Partners  until such time as the  General  Partner  commences  the
orderly  liquidation  of the  Partnership  assets or unless the  Partnership  is
terminated  earlier upon sale of all  Partnership  property or by certain  other
events;

     (iii) to selectively  sell  equipment or purchase  (until the conclusion of
the reinvestment phase, which ended on December 31, 1996) other equipment to add
to the  Partnership's  initial  portfolio.  The General  Partner intends to sell
equipment  when it believes that,  due to market  conditions,  market prices for
equipment  exceeds  inherent  equipment  values or expected future benefits from
continued  ownership  of a  particular  asset  will not  equal or  exceed  other
equipment  investment  opportunities.  Proceeds from these sales,  together with
excess  net  operating  cash flow  from  operations  that  remained  after  cash
distributions  have  been made to the  Limited  Partners,  were used to  acquire
additional   equipment  throughout  the  six  year  reinvestment  phase  of  the
Partnership, which concluded on December 31, 1996;

     (iv)to  preserve  and protect the value of the  portfolio  through  quality
management  and  by  maintaining  the   portfolio's   diversity  and  constantly
monitoring equipment markets.

     The offering of the Units of the  Partnership  closed on March 28, 1990. As
of December  31,  1996,  there were  8,628,420  Units  outstanding.  The General
Partner contributed $100 for its 5% general partner interest in the Partnership.

     In the ninth year of operations  of the  Partnership,  the General  Partner
will begin to liquidate  the assets of the  Partnership  in an orderly  fashion,
unless  the  Partnership  is  terminated   earlier  upon  sale  of  all  of  the
Partnership's  equipment  or by certain  other  events.  It is  anticipated  the
liquidation  will be completed by the end of the tenth year of operations of the
Partnership.  Beginning in the  Partnership's  seventh year of  operations,  all
surplus cash flow will be distributed to the Partners, used to repay Partnership
debt, or held as Partnership working capital. The sixth year of operations ended
December 31, 1996.


<PAGE>


     Table 1, below, the cost of equipment in the Partnership's  portfolio,  and
the cost of investments in unconsolidated  special purpose entities, at December
31, 1996 (in thousands):
<TABLE>
<CAPTION>


                                                      TABLE 1

 Units                             Type                                    Manufacturer                     Cost
---------------------------------------------------------------------------------------------------------------------

Equipment held for operating leases:


    <S>         <C>                                                 <C>                                 <C>
      1         Bulk carrier                                        Namura Shipping                     $     9,719   
      1         DC-9-32 commercial aircraft                         McDonnell-Douglas                        10,041
      3         737-200 commercial aircraft - Stage II              Boeing                                   26,945
      1         Dash 8-300                                          Dehavilland                               5,748
    685         Dry marine containers                               Various                                   2,532
    574         Refrigerated marine containers                      Various                                  12,966
     99         Woodchip railcars                                   General Electric                          2,365
    365         Pressurized & non-pressurized tank cars             Various                                  10,349
    110         Bulkhead flatcars                                   Marine Industries, Ltd.                   2,153
    106         Refrigerated trailers                               Various                                   2,444
    145         Dry Piggyback trailers                              Stoughton                                 1,113
    275         Dry trailers                                        Various                                   3,391
                                                                                                         ------------

                Equipment held for operating leases                                                          89,766<F1>

Equipment held for sale:

      1         Product tanker                                      K.K. Uwatima Zosen                       17,261<F1>
                                                                                                         ------------

                Total  equipment                                                                        $   107,027   
                                                                                                         ============

Investments in unconsolidated special purpose entities:

   0.50         Bulk carrier                                        Nipponkai & Toyama                        9,705<F2>
   0.17         Trust consisting of six 737-200A
                  Stage II commercial aircraft                      Boeing                                    4,494<F3>
   0.35         Equipment on direct finance
                 lease: Two DC-9-47 commercial aircraft             McDonnell-Douglas                         4,206<F3>
                                                                                                         ------------

                                                                                                        $    18,405<F1>  
                                                                                                         ============
<FN>

<F1> Includes  proceeds from capital  contributions,  operations and Partnership
     borrowings invested in equipment. Includes costs capitalized, subsequent to
     the  date  of  acquisition  and  equipment  acquisition  fees  paid  to PLM
     Transportation Equipment Corporation, a wholly-owned subsidiary of FSI. All
     equipment was used equipment and the time of purchase.

<F2> Jointly owned by Growth Fund IV and an affiliated partnership.

<F3> Jointly owned by Growth Fund IV and affiliated partnerships.

</FN>

</TABLE>

     The equipment is generally  leased under operating leases for a term of one
to six  years.  Some  of the  Partnership's  marine  containers  are  leased  to
operators of  utilization-type  leasing pools which include  equipment  owned by
unaffiliated  parties.  In such instances  revenues  received by the Partnership
consist of a specified  percentage  of revenues  generated by leasing the pooled
equipment to sublessees,  after deducting  certain direct operating  expenses of
the pooled equipment.

     The lessees of the  equipment  include,  but are not  limited  to,  Cargill
International  S.A.,  Continental  Airlines,  Inc.,  Transamerica  Leasing,  and
Canadian Pacific Railways.  As of December 31, 1996, all of the equipment was on
lease except 48 marine containers, an aircraft, and three railcars.

(B)  Management of Partnership Equipment

The  Partnership  has entered into an equipment  management  agreement  with PLM
Investment  Management,  Inc.  (IMI), a wholly-owned  subsidiary of FSI, for the
management of the equipment. IMI has agreed to perform all services necessary to
manage the transportation  equipment on behalf of the Partnership and to perform
or contract  for the  performance  of all  obligations  of the lessor  under the
Partnership's  leases.  In  consideration  for its  services and pursuant to the
Partnership  Agreement,  IMI  is  entitled  to a  monthly  management  fee  (See
Financial Statement, Notes 1 and 2).

 (C) Competition

(1)  Operating Leases vs. Full Payout Leases

Generally the equipment  owned by the  Partnership is leased out on an operating
lease basis wherein the rents owed during the initial non-cancelable term of the
lease are  insufficient  to  recover  the  Partnership's  purchase  price of the
equipment. The short to mid-term nature of operating leases generally commands a
higher rental rate than the longer term,  full payout leases and offers  lessees
relative  flexibility in their  equipment  commitment.  In addition,  the rental
obligation  under the operating  lease need not be  capitalized  on the lessee's
balance sheet.

     The Partnership encounters considerable  competition from lessors utilizing
full payout leases on new equipment,  i.e., leases which have terms equal to the
expected  economic  life of the  equipment.  Full payout  leases are written for
longer terms and for lower monthly rates than the Partnership offers. While some
lessees prefer the flexibility  offered by a shorter term operating lease, other
lessees  prefer  the  rate  advantages   possible  with  a  full  payout  lease.
Competitors  of the  Partnership  may write full payout  leases at  considerably
lower  rates,  or larger  competitors  with a lower  cost of  capital  may offer
operating  leases at lower rates,  and as a result,  the Partnership may be at a
competitive disadvantage.

(2)  Manufacturers and Equipment Lessors

The Partnership also competes with equipment  manufacturers  who offer operating
leases and full payout  leases.  Manufacturers  may provide  ancillary  services
which the  Partnership  cannot offer,  such as specialized  maintenance  service
(including possible substitution of equipment), training, warranty services, and
trade-in privileges.

     The  Partnership  competes  with  many  equipment  lessors,  including  ACF
Industries, Inc. (Shippers Car Line Division), General Electric Railcar Services
Corporation,  Greenbrier  Leasing  Company,  General  Electric  Capital Aviation
Services Corporation,  and other limited partnerships which lease the same types
of equipment.

(D)  Demand

The Partnership invests in  transportation-related  capital equipment. A general
distinction  can be drawn  between  equipment  used for the  transport of either
materials and  commodities or people.  With the exception of aircraft  leased to
passenger air carriers,  the  Partnership's  equipment is used primarily for the
transport of materials.

The following describes the markets for the Partnership's equipment:

(1) Aircraft:

Commercial Aircraft

The market for commercial  aircraft  continued to improve in 1996,  representing
two consecutive  years of growth and profits in the airline  industry.  The $5.7
billion in net profits  recorded by the world's top 100 airlines in 1995 grew to
over $6 billion in 1996.  The profits are a result of the  continued  management
emphasis on costs.  The demand for ever lower unit costs by airline  managements
has  caused a  significant  reduction  of  surplus  used  Stage II and Stage III
commercial aircraft. The result is a return to supply/demand equilibrium. On the
demand side,  passenger  traffic is  improving,  cargo  movement is up, and load
factors are generally higher across the major markets.

     These  changes are  reflected  in the  performance  of the world's 62 major
airlines  that  operate 60% of the world  airline  fleet but handle 78% of world
passenger traffic. Focusing on the supply/demand for Partnership-type narrowbody
commercial  aircraft,  there were 213 used narrowbody aircraft available at year
end 1995.  In the first ten  months of 1996,  this  supply  was  reduced  to 119
narrowbody  aircraft  available  for  sale or  lease.  Forecasts  for 1997 see a
continuing  supply/demand  equilibrium  due to air travel  growth  and  balanced
aircraft supply.

     The Partnership's  narrowbody fleet includes  late-model (post 1974) Boeing
737-200 Advanced  aircraft.  There are a total of 939 Boeing 737-200 aircraft in
service,  with 219 built prior to 1974.  Independent forecasts estimate that 250
of the total  737-200s will be retired,  leaving  approximately  700 aircraft in
service after 2003. The forecasts  regarding  hushkits estimate that half of the
700  Boeing  737-200s  will be  hushed  to meet  Stage  III  noise  levels.  The
Partnership's  Stage II aircraft  are  prospects  for Stage III  hushkits due to
their age, hours, cycles, engine configurations, and operating weights.

     The  Partnership's  DC-9-32  is  a  late-model  aircraft.   There  are  663
DC-9-30/40/50  series aircraft in service.  Independent  forecasts estimate that
300 older DC-9  aircraft will be retired by the year 2003.  The remaining  fleet
will total approximately 350 aircraft, and most of these aircraft will be hushed
to Stage III. The aircraft will remain in active  airline  service.  The lessees
are likely to be secondary airlines operating in markets outside the U.S.

     The  Partnership  predominantly  owns  aircraft  that are  affected by U.S.
Federal Aviation  Administration  (FAA) regulatory  requirements.  However,  the
majority of  equipment is on  long-term  leases in foreign  markets and has been
commanding lease rates higher than those available in the U.S.

(2)  Marine Containers

At the end of 1995,  the  consensus of industry  sources was that 1996 would see
both higher  container  utilization and  strengthening  of per diem lease rates.
Such was not the case, as there was no appreciable  cyclical  improvement in the
container market following the traditional winter slowdown. Industry utilization
continues to be under pressure, with per diem rates being impacted as well.

     A  substantial  portion of the  Partnership's  containers  are on long-term
utilization  leases that were entered  into with Trans Ocean  Leasing as lessee.
The industry has seen a major consolidation as Transamerica Leasing, late in the
fourth quarter of 1996,  acquired Trans Ocean Leasing.  Transamerica  Leasing is
the second largest container leasing company in the world.  Transamerica Leasing
is the  substitute  lessee for Trans Ocean  Leasing.  Long term,  such  industry
consolidation  should  bring  more  rationalization  to the market and result in
higher utilization and per diem rates.

(3)  Railcars

Pressurized Tank Cars

These cars are used primarily in the  petrochemical  and fertilizer  industries.
They  transport  liquefied  petroleum  gas  (LPG)  and  anhydrous  ammonia.  The
utilization  rate on the  Partnership's  fleet of pressurized tank cars was over
98% during 1996.  Independent  forecasts show the demand for natural gas growing
during 1997 to 1999, as the developing world,  former Communist  countries,  and
the  industrialized  world all increase their demand for energy.  The fertilizer
industry  was  undergoing a rapid  restructuring  toward the end of 1996 after a
string of major mergers, which began in 1995. These mergers reduce the number of
companies that use pressurized tank cars for fertilizer service.  Whether or not
the economies of the mergers allow the total fleet size to be reduced remains to
be seen.

General Purpose Tank Cars

General  purpose,  or  nonpressurized,  tank cars are used to  transport  a wide
variety of bulk liquid commodities,  such as petroleum fuels,  lubricating oils,
vegetable oils, molten sulfur,  corn syrup,  asphalt,  and specialty  chemicals.
Demand for  general  purpose  tank cars in the  Partnership  fleet has  remained
healthy  over  the  last  two  years,  with  utilization  remaining  above  98%.
Independent  projections  show the demand for petroleum  growing  during 1997 to
1999,  as  the  developing   world,   former   Communist   countries,   and  the
industrialized world all increase their demand for energy.  Chemical carloadings
for the  first 40 weeks of 1996  were up  one-tenth  of one  percent  (0.1%)  as
compared to the same period in 1995.

(4)  Marine Vessels

The  Partnership  owns or has  investments  in small- to  medium-sized  dry bulk
vessels and a chemical  tanker  vessel,  which are traded in worldwide  markets,
carrying commodity cargoes.

     The freight  rates in the dry bulk  shipping  market are  dependent  on the
balance of supply and demand for shipping  commodities and trading  patterns for
such dry bulk commodities. In 1995, dry bulk shipping demand was robust (growing
at 5% over 1994) and there was a  significant  infusion  of new vessel  tonnage,
especially late in the year,  causing some decline in freight rates after a peak
in midyear.  The slide in freight rates  continued in the first half of 1996, as
new tonnage was delivered and shipping demand slipped from the high growth rates
of 1995. In the third quarter of 1996,  there was a significant  acceleration in
the drop of freight rates,  primarily  caused by the lack of  significant  grain
shipment volumes and the infusion of new tonnage.  The low freight rates induced
many  ship  owners to scrap  older  tonnage  and to defer or cancel  newbuilding
orders. In the fourth quarter,  a strong grain harvest worldwide gave the market
new strength,  and freight rates  recovered to the levels  experienced  in early
1996, but not to 1995 levels.  Overall, 1996 was a soft year for shipping,  with
dry bulk demand  growing only 1.8% and the dry bulk fleet growing 3% in tonnage.
The  outlook for 1997 shows an expected  improvement  in demand,  with growth at
2.4%, but a high orderbook remains.  The year 1997 is expected to be a soft year
with relatively low freight rates; however, prospects may be strengthened by the
continued scrapping of older vessels in the face of soft rates and the deferment
or canceling of orders.

     Demand for commodity  shipping  closely tracks  worldwide  economic growth;
however,  economic  development may alter demand patterns from time to time. The
Partnership  operated  its vessels in spot  charters and period  charters.  This
operating  approach  provides  the  flexibility  to  adapt  to  changing  demand
patterns.

     Independent  forecasts show that the longer-term outlook (past 1997) should
bring improvement in freight rates earned by vessels; however, this is dependent
on the  supply/demand  balance and stability in growth levels.  The  newbuilding
orderbook  currently  is  slightly  lower  than at the  end of 1995 in  tonnage.
Shipyard  capacity is booked through late 1998;  however,  it remains to be seen
how many of these orders will  actually be fulfilled.  Historically,  demand has
averaged approximately 3% annual growth,  fluctuating between flat growth and 6%
annually.  With  predictable  long-term  demand  growth,  the long-term  outlook
depends on the supply  side,  which is affected by  interest  rates,  government
shipbuilding  subsidy programs,  and prospects for reasonable capital returns in
shipping.

(5) Trailers

Intermodal Trailers

The robust  intermodal  trailer market that began four years ago began to soften
in 1995 and reduced demand continued in 1996.  Intermodal  trailer loadings were
flat in 1996 from  1995's  depressed  levels.  This lack of growth  has been the
result of many factors,  ranging from truckload firms  aggressively  recapturing
market share from the railroads  through  aggressive  pricing to the  continuing
consolidation  activities and asset  efficiency  improvements  of the major U.S.
railroads.

     All of these factors helped make 1996 a year of equalizing equipment supply
as  railroads  and lessors were  pressured  to retire  older and less  efficient
trailers.  The two largest  suppliers of railroad trailers reduced the available
fleet  in  1996  by over  15%.  Overall  utilization  for  intermodal  trailers,
including the Partnership's fleet, was lower in 1996 than in previous years.

Over-The-Road Dry Trailers

The  over-the-road  dry trailer market was weak in 1996, with  utilization  down
15%. The trailer industry  experienced a record year in 1994 for new production,
and 1995  production  levels were similar to 1994.  However,  in 1996, the truck
freight recession,  along with an overbuilding situation,  contributed to 1996's
poor  performance.  The year 1996 had too little  freight and too much equipment
industrywide.



<PAGE>


Over-The-Road Refrigerated Trailers

PLM  experienced  fairly  strong  demand  levels  in 1996  for its  refrigerated
trailers.  With  over 15% of our  fleet in  refrigerated  trailers,  PLM and the
Partnerships are the largest supplier of short-term rental refrigerated trailers
in the U.S.

 (E) Government Regulations

The use, maintenance, and ownership of equipment is regulated by federal, state,
local and/or  foreign  governmental  authorities.  Such  regulations  may impose
restrictions and financial burdens on the Partnership's  ownership and operation
of  equipment.  Changes  in  government  regulations,   industry  standards,  or
deregulation  may  also  affect  the  ownership,  operation  and  resale  of the
equipment.  Substantial  portions of the Partnership's  equipment  portfolio are
either registered or operated internationally.  Such equipment may be subject to
adverse  political,   government,  or  legal  actions,  including  the  risk  of
expropriation  or loss arising from  hostilities.  Certain of the  Partnership's
equipment is subject to extensive  safety and  operating  regulations  which may
require the removal from service or extensive  modification of such equipment to
meet these regulations at considerable cost to the Partnership. Such regulations
include (but are not limited to):

     (1)      the U.S. Oil  Pollution Act of 1990 (which  established  liability
              for  operators  and owners of vessels,  mobile  offshore  drilling
              units, etc. that create environmental pollution);

     (2)      the U.S. Department of  Transportation's  Aircraft Capacity Act of
              1990 (which  limits or  eliminates  the  operation  of  commercial
              aircraft in the U.S. that do not meet certain  noise,  aging,  and
              corrosion criteria);

     (3)      the Montreal  Protocol on Substances  that Deplete the Ozone layer
              and the U.S.  Clean Air Act Amendments of 1990 (which call for the
              control and  eventual  replacement  of  substances  that have been
              found to cause or contribute  significantly  to harmful effects on
              the  stratospheric  ozone layer and which are used  extensively as
              refrigerants    in   refrigerated    marine   cargo    containers,
              over-the-road trailers, etc.).

     (4)      the  U.S.  Department  of  Transportation's   Hazardous  Materials
              Regulations  (which regulate the  classification  of and packaging
              requirements for hazardous  materials and which apply particularly
              to the Partnership's tank cars).

ITEM 2.  PROPERTIES

The Partnership  neither owns nor leases any properties other than the equipment
it has purchased for leasing  purposes.  At December 31, 1996,  the  Partnership
owned a portfolio  of  transportation  equipment  as  described in Part I, Table
1(a).

     The  Partnership  maintains  its  principal  office at One Market,  Steuart
Street  Tower,  Suite 800,  San  Francisco,  California  94105-1301.  All office
facilities are provided by FSI without reimbursement by the Partnership.


<PAGE>


ITEM 3.  LEGAL PROCEEDINGS


PLM  International,  Inc. along with PLM Financial  Services,  Inc.  (FSI),  PLM
Investment  Management,  Inc. (IMI), PLM  Transportation  Equipment  Corporation
(TEC), and PLM Securities Corp. (PLM  Securities),  and collectively  with PLMI,
FSI, IMI, TEC and PLM Securities, (the "PLM Entities"), were named as defendants
in a class action lawsuit filed in the Circuit Court of Mobile  County,  Mobile,
Alabama, Case No. CV-97-251.  The PLM Entities received service of the complaint
on February 10, 1997, and pursuant to an extension of time granted by plaintiffs
attorneys, have sixty days to respond to the complaint. PLM International,  Inc.
is currently  reviewing the substance of the allegations  with its counsel,  and
believes the  allegations  to be completely  without merit and intends to defend
this matter vigorously.

        The  plaintiffs,  who filed the  compliant on their own and on behalf of
all class members similarly situated, are six individuals who allegedly invested
in certain California  limited  partnerships (the Growth Funds) sponsored by PLM
Securities,  for which FSI acts as the general partner,  including PLM Equipment
Growth Fund IV, PLM Equipment  Growth Fund V, PLM Equipment  Growth Fund VI, and
PLM Equipment Growth and Income Fund VII. The complaint purports eight causes of
action  against  all  defendants  as  follows:  fraud and  deceit,  suppression,
negligent  misrepresentation  and suppression,  intentional  breach of fiduciary
duty,  negligent breach of fiduciary duty, unjust  enrichment,  conversion,  and
conspiracy.  Additionally,  plaintiffs  allege a cause of action  for  breach of
third party  beneficiary  contracts  against and /in  violation  of the National
Association  of  Securities  Dealers  rules of fair  practice by PLM  Securities
alone.

        Plaintiffs  allege that each  defendant  owed  plaintiffs  and the class
certain duties due to their status as fiduciaries,  financial advisors,  agents,
general partner, and control persons.  Based on these duties,  plaintiffs assert
liability  against the PLM Entities for improper sales and marketing  practices,
mismanagement  of the Growth  Funds,  and  concealing  such  mismanagement  from
investors in the Growth Funds.  Plaintiffs  seek  unspecified  compensatory  and
recissory damages, as well as punitive damages, and have offered to tender their
limited partnership units back to the defendants.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Partnership's limited partners during
the fourth quarter of its fiscal year ended December 31, 1996.






















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<PAGE>


                                     PART II

ITEM 5.  MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED UNITHOLDER MATTERS

Pursuant  to the terms of the  Partnership  Agreement,  the  General  Partner is
entitled to a 5% interest  in the  profits and losses and  distributions  of the
Partnership.  The  General  Partner is the sole holder of such  interest.  Gross
income in each year of the  Partnership  is  specially  allocated to the General
Partner to the extent  necessary  to cause the  capital  account  balance of the
General Partner to be zero as of the close of such year. The remaining interests
in the profits and losses and  distributions of the Partnership are owned, as of
December 31, 1996, by the 9,739 holders of Units in the Partnership.

     There are  several  secondary  exchanges  which will  facilitate  sales and
purchases of limited  partnership units.  Secondary markets are characterized as
having few buyers for limited partnership  interests and,  therefore,  generally
are viewed as inefficient  vehicles for the sale of partnership  units. There is
presently  no public  market for the Units,  and none is likely to  develop.  To
prevent the Units from being considered "publicly traded" and, thereby, to avoid
taxation of the Partnership as an association treated as a corporation under the
Internal  Revenue Code, the Units can not be transferred  without the consent of
the  General  Partner,  which may be withheld at its  absolute  discretion.  The
General  Partner  intends to monitor  transfers  of Units in an effort to ensure
that they do not exceed the number permitted by certain safe harbors promulgated
by the Internal  Revenue  Service.  The Partnership may be obligated to redeem a
certain  number of Units each year. A transfer may be prohibited if the intended
transferee is not a U.S.  Citizen or if the transfer  would cause any portion of
the Units to be treated as "plan  assets." In the twelve  months ended  December
31, 1996, the Partnership had  repurchased  15,350 units for a total  repurchase
price of $0.2 million.  As of December 31, 1996, the Partnership had repurchased
a cumulative total of 121,580 units at a cost of $1.6 million.



















                      (This space intentionally left blank)



<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

     Table 2, below,  lists  selected  financial  data for the  Partnership  (in
thousands):
<TABLE>

                                     TABLE 3

                               For the years ended
                  December 31, 1996, 1995, 1994, 1993, and 1992
                     (in thousands except per unit amounts)
<CAPTION>

                                                  1996          1995           1994            1993            1992
                                               -------------------------------------------------------------------------

   <S>                                         <C>           <C>            <C>            <C>              <C>        
   Operating results:
     Total revenues                            $ 22,120      $  21,410      $  24,367      $   27,925       $  33,670  
     Net gain on disposition
       of equipment                               3,179            530          3,336             179              47
     Loss on revaluation of
       equipment                                     --           (417 )         (820 )            --          (3,428 )
     Equity in net loss of
       unconsolidated special purpose
       entities                                    (331 )           --             --              --              --
     Net loss                                    (4,119 )       (3,611 )       (5,112 )        (6,380 )        (7,153 )

   At year-end:
     Total assets                              $ 59,009      $  71,924      $  82,773      $   98,453       $ 118,824  
     Total liabilities                           34,100         35,449         35,997          38,880          37,210
     Notes payable                               29,250         30,800         30,800          33,000          34,000

   Cash distributions                          $  7,271      $   6,443      $   7,523      $   14,628       $  19,437  

   Cash distribution which represent a return                                                                          
   of capital                                  $  6,908      $   6,124      $   7,135      $   13,891       $  18,470

   Per weighted average Limited Partnership
   Unit:

   Net loss                                    $  (0.52 )    $   (0.45 )    $   (0.63 )    $    (0.82 )     $   (0.93 ) 

   Cash distributions                          $   0.80      $    0.71      $    0.82      $     1.60       $    2.11  

   Cash distribution which represent a return                                                                        
   of capital                                  $   0.80      $    0.71      $    0.82      $     1.60       $    2.11

</TABLE>

<PAGE>


ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND   
              RESULTS OF OPERATIONS

Introduction

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  relates to the Financial  Statements of PLM Equipment Growth Fund IV
(the Partnership).  The following  discussion and analysis of operations focuses
on the  performance  of the  Partnership's  equipment in various  sectors of the
transportation  industry and its effect on the  Partnership's  overall financial
condition.

Results of Operations - Factors Affecting Performance

(A)  Re-leasing and Repricing Activity

The exposure of the Partnership's  equipment  portfolio to repricing risk occurs
whenever the leases for the equipment expire or are otherwise terminated and the
equipment must be remarketed.  Major factors influencing the current market rate
for transportation equipment include supply and demand for similar or comparable
types or kinds of transport capacity, desirability of the equipment in the lease
market,  market  conditions  for the  particular  industry  segment in which the
equipment is to be leased,  overall  economic  conditions,  various  regulations
concerning the use of the equipment,  and others.  Equipment that is idle or out
of  service  between  the  expiration  of one  lease  and  the  assumption  of a
subsequent one can result in a reduction of contribution to the Partnership. The
Partnership  experienced  re-pricing exposure in 1996 primarily in its aircraft,
marine vessel, marine container, railcar and trailer portfolios.

     (1) Aircraft:  Aircraft contribution decreased from 1995 to 1996 due to the
off-lease  status of a Boeing  737-200  aircraft that is being  remarketed.  All
other aircraft investments were on lease for the entire year.

     (2) Marine Vessels:  The Partnership's  marine vessels operated in the time
and spot  charter  markets  during  1996.  Spot  charters  are  usually of short
duration  and reflect  the  short-term  demand and pricing  trends in the vessel
market.  A marine vessel,  owned by an entity in which the Partnership has a 50%
investment,   experienced  off-hire  time  in  the  beginning  of  1996  due  to
drydocking.  While the average  freight rates were lower in 1996 than 1995,  the
Partnership  experienced  an increase in revenue  primarily due to the switching
from a bare-boat charter to a time charter for a marine vessel and the switching
from a pooling arrangement to a time charter for another marine vessel.

     (3) Marine Containers:  The majority of the Partnership's  marine container
portfolio  operates in  utilization-based  leasing  pools and as such was highly
exposed to re-leasing and repricing activity. The Partnership's marine container
contributions  declined from 1995 to 1996,  due to soft market  conditions  that
caused a decline in re-leasing activity.

     (4) Railcars:  The majority of the Partnership's railcar equipment remained
on-lease  throughout the year, and thus was not adversely affected by re-leasing
and repricing exposure.

     (5) Trailers:  The majority of the Partnership's trailer portfolio operates
in short-term rental facilities or short-line  railroad systems.  The relatively
short  duration  of most  leases in these  operations  exposes  the  trailers to
considerable re-leasing activity.  Contributions from the Partnership's trailers
operated in short-term  rental  facilities  and the short-line  railroad  system
declined from 1995 to 1996, due to soft market  conditions that caused a decline
in re-leasing activity.

 (B)  Equipment Liquidations and Nonperforming Lessees

Liquidation of Partnership  equipment  represents a reduction in the size of the
equipment  portfolio,  and will result in reduction of net  contributions to the
Partnership.  Lessees not performing under the terms of their leases,  either by
not paying rent, not  maintaining or operating the equipment in accordance  with
the conditions of the leases,  or other possible  departures from the leases can
result not only in  reductions  in net  contribution,  but also may  require the
Partnership  to assume  additional  costs to  protect  its  interests  under the
leases, such as repossession,  legal fees, etc. The Partnership  experienced the
following in 1996:

     (1)  Liquidations:  During 1996,  the  Partnership  sold a mobile  offshore
drilling  unit,  283 marine  containers,  one aircraft,  two  railcars,  and two
trailers.  The net result of all sales and  liquidations has been a reduction in
the cost basis of the Partnership's  equipment  portfolio of approximately $30.5
million.

     (2)  Nonperforming  Lessees:  In the third  quarter  of 1996,  the  General
Partner  repossessed  an  aircraft  due to the  lessee's  inability  to pay  the
Partnership for outstanding  receivables.  During 1996,  another aircraft lessee
and a marine  container  lessee also  encountered  financial  difficulties.  The
Partnership  established  reserves against these  receivables due to the General
Partner's   determination  that  ultimate   collection  of  these  revenues  are
uncertain. Other equipment such as railcars, trailers and the remaining aircraft
and marine  containers  experienced  minor  non-performing  issues  that have no
significant impact on the Partnership.

(C)  Reinvestment Risk

During  the  first  six  years of  operations,  the  Partnership  increased  its
equipment  portfolio by investing  surplus cash in  additional  equipment  after
fulfilling  operating  requirements  and paying  distributions  to the partners.
Subsequent to the end of the reinvestment period which concluded on December 31,
1996, the Partnership will continue to operate for an additional two years, then
begin an orderly liquidation over an anticipated two-year period.

     During the year, the Partnership  received proceeds of approximately  $13.1
million from the liquidation or sale of equipment.  The  Partnership  reinvested
approximately  $10.0 million of these sales  proceeds,  in an aircraft and a 35%
investment  in a trust  consisting of two McDonnell  Douglas  DC-9-47  aircraft.
These purchases occurred in the second and fourth quarters of 1996. In the third
quarter of 1996, the Partnership paid $1.6 million in principal and $0.2 million
in prepayment fees to remain in compliance with the net worth ratio contained in
the note agreement.

 (D) Equipment Valuation and Write-downs

In March 1995, the Financial  Accounting Standards Board (FASB) issued statement
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed  Of" (SFAS 121).  This  standard  is  effective  for years
beginning after December 15, 1995. The Partnership adopted SFAS 121 during 1995,
the effect of which was not  material as the method  previously  employed by the
Partnership  was  consistent  with SFAS 121. In  accordance  with SFAS 121,  the
Partnership  reviews the carrying  value of its  equipment at least  annually in
relation to expected  future market  conditions for the purpose of assessing the
recoverability of the recorded  amounts.  If projected future lease revenue plus
residual  values are less than the carrying  value of the  equipment,  a loss on
revaluation is recorded.  The carrying value of a commuter  aircraft was reduced
by $0.4  million  in 1995 and sold in the  second  quarter.  There were no write
downs required in 1996.

     As of December 31, 1996,  the General  Partner  estimated  the current fair
market value of the Partnership's equipment portfolio, including equipment owned
by unconsolidated special purpose entities, to be approximately $86.5 million.

Financial Condition - Capital Resources and Liquidity

The General Partner purchased the Partnership's initial equipment portfolio with
capital raised from its initial equity offering and permanent debt financing. No
further  capital  contributions  from original  partners are permitted under the
terms of the  Partnership's  Limited  Partnership  Agreement.  In  addition  the
Partnership,  under its current  loan  agreement,  does not have the capacity to
incur additional debt. The Partnership relies on operating cash flow to meet its
operating obligations, and make cash distributions to Limited Partners.

     For the year ended December 31, 1996, the Partnership  generated sufficient
funds to meet its operating obligations.  In addition, the Partnership generated
sufficient  cash flow to invest surplus funds into  additional  equipment and to
maintain the level of distributions.

     The Partnership has one loan outstanding totaling $29.3 million.  This loan
is due in three yearly principal payments of $8.2 million on July 1, 1997, 1998,
1999, and $6.2 million in 2000. The interest on the loan is fixed at 9.75%.  The
loan  agreement  requires  the  Partnership  to maintain a net worth ratio of at
least 33.33% of the fair market value of equipment plus cash.  Current  economic
conditions  coupled  with the  increasing  age of the  Partnership's  equipment,
resulted in decreased market values for the Partnership's equipment and required
an optional prepayment to be made in order to remain in compliance with the loan
covenants.  As a result,  during 1996,  the  Partnership  repaid $1.6 million in
principal and $0.2 million in prepayment fees.

     Pursuant to its  prospectus,  beginning  January 1, 1993,  the  Partnership
could  become  obligated  under  certain  conditions  to  redeem up to 2% of the
outstanding  Depositary  Units each year.  The purchase  price to be offered for
such  outstanding  units  is to be equal  to 110% of the  unrecovered  principal
attributed to the Units where unrecovered  principal is defined as the excess of
the capital contribution  attributable to a Unit over the distributions from any
source  paid with  respect  to that  Unit.  The  Partnership  does not intend to
repurchase  any Units in 1997. At December 31, 1995, the  Partnership  agreed to
repurchase  approximately  21,994 Units for the aggregate price of approximately
$0.3 million.  During 1996,  only 15,350 units were  repurchased  for a price of
$0.2 million.

Results of Operations - Year to Year Detail Comparison

Comparison of Partnership's Operating Results for the Years Ended December 31, 
1996 and 1995

(A)  Owned equipment operations

Lease revenues less direct expenses (defined as repairs and maintenance,  marine
equipment  operating,  and asset specific insurance expenses) on owned equipment
decreased during the year ended

December 31, 1996 when compared to the same period of 1995. The following  table
presents  lease  revenues  less  direct  expenses  by owned  equipment  type (in
thousands):

<TABLE>
<CAPTION>

                                                                             For the year ended
                                                                                December 31,
                                                                            1996             1995
                                                                         ----------------------------
   <S>                                                                   <C>              <C>      
   Aircraft                                                              $  2,487         $  5,540 
   Marine vessels                                                           2,232            2,496
   Trailers                                                                 1,595              943
   Rail equipment                                                           2,251            2,837
   Marine containers                                                        1,191            1,218
   Mobile offshore drilling unit                                              163              224

</TABLE>

Aircraft: Aircraft lease revenues and direct expenses were $5.1 million and $2.6
million,  respectively,  for the year ended December 31, 1996,  compared to $5.9
million and $0.4  million,  respectively,  during the same  period of 1995.  The
decrease in revenue was  attributable  to the sale of two aircraft in 1995,  and
the off-lease  status of another  aircraft which was repossessed from the lessee
in the third quarter of 1996. The  repossessed  aircraft  earned revenue for the
entire year of 1995  compared to 8 months of 1996.  The decrease was offset,  in
part, by the purchase of a Dash 8-300  aircraft at the end of the second quarter
of 1996.  Direct  expenses  increased  due to the overhaul of four engines on an
aircraft  sold  at the  end of  1996.  This  aircraft  had  been  off-lease  for
approximately two years. In addition,  repairs on the repossessed  aircraft were
required to meet airworthiness conditions before it could be re-leased;

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $6.6
million and $4.4 million,  respectively,  for the year ended  December 31, 1996,
compared to $6.3 million and $3.8 million, respectively,  during the same period
of 1995. Lease revenue increased due to higher charter rates earned for a marine
vessel that switched from a  utilization-based  pooling  arrangement  to a fixed
rate time charter in the beginning of 1996. In addition,  revenues increased due
to the higher profit sharing revenue earned on another marine vessel in the year
ended December 31, 1996,  compared to the same period in 1995.  Direct  expenses
increased due to higher  estimated  future drydock costs for both marine vessels
in the year ended December 31, 1996, when compared to the same period in 1995;

Trailers:  Trailer lease revenues and direct expenses were $2.0 million and $0.4
million,  respectively,  for the year ended December 31, 1996,  compared to $1.3
million and $0.4  million,  respectively,  during the same  period of 1995.  The
increase in lease  revenues was primarily due to the addition of 333 trailers in
1995;

Rail equipment: Railcar lease revenues and direct expenses were $3.6 million and
$1.4 million,  respectively,  for the year ended December 31, 1996,  compared to
$3.6  million and $0.8  million,  respectively,  during the same period of 1995.
Although the railcar fleet  remained  relatively the same size for both periods,
the decrease in railcar  contribution  resulted from running repairs required on
certain of the  railcars in the fleet  during 1996 which were not needed  during
1995;

Marine containers: Marine container lease revenues and direct expenses were $1.2
million  and  $23,000,  respectively,  for the year  ended  December  31,  1996,
compared to $1.6 million and $0.4 million during the same period of 1995.  Lease
revenues have decreased due to sales and dispositions of marine  containers over
the last twelve months and lower  utilization.  Direct  expenses have  decreased
primarily due to repairs performed on 327 marine containers in 1995;

Mobile  offshore  drilling  unit (rig):  The  Partnership's  rig was sold in the
second  quarter of 1996,  resulting in the  elimination of  contribution  in the
third  quarter.  Rig lease  revenues and direct  expenses  were $0.1 million and
$1,000,  respectively,  for the year ended  December 31, 1996,  compared to $0.2
million and $45,000, respectively, during the same period of 1995.

(B)  Indirect expenses related to owned equipment operations

Total indirect expenses decreased to $17.0 million in 1996 from $17.3 million in
1995. The variances are explained as follows:

     (1) A $1.0  million  increase  in bad debt  expense  reflects  the  General
Partner's  evaluation of the collectibility of receivables due from two aircraft
lessees that encountered financial difficulties;

     (2) A $0.3 million  increase in general and  administrative  expenses  from
1995 levels results from the increased  administrative costs associated with the
short-term  rental  facilities  due  to  additional  trailers  operating  in the
facilities in the first months of 1996 compared to the same period in 1995;

     (3) A $1.5 million decrease in depreciation and amortization  expenses from
1995 levels reflects the sale of certain assets during 1996 and 1995;

     (4) A $0.1 million decrease in management fees to affiliates,  reflects the
lower levels of lease  revenues in the year ended December 31, 1996, as compared
to the same  period in 1995.  Management  fees are  calculated  as a monthly fee
equal to the  lesser of (i) the fees which  would be  charged by an  independent
third party for similar services for similar equipment or (ii) the sum of (A) 5%
of the Gross  Lease  Revenues  attributable  to  equipment  which is  subject to
Operating  Leases,  and  (B) 2% of the  Gross  Lease  Revenues  attributable  to
Equipment  which is subject to Full Payout Net  leases,  and (C) 7% of the Gross
Lease Revenues attributable to Equipment,  if any, which was subject to per diem
leasing arrangements and thus is operated by the Partnership;

(C) Loss on  revaluation  of equipment of $0.4 million in 1995 resulted from the
reduction of the net book value of an aircraft to its estimated  fair value less
cost to sell. This aircraft was sold in the second quarter of 1995. There was no
loss on revaluation of equipment in the year ended December 31, 1996.

(D)  Net gain on disposition of owned equipment

Net gain on  disposition  of  equipment  for the year ended  December  31,  1996
totaled  $3.2  million  which  resulted  from the sale or disposal of 283 marine
containers,  an aircraft,  two  railcars,  two trailers,  and a mobile  offshore
drilling  unit,  with an aggregate  net book value of $9.9 million for aggregate
proceeds  of $13.1  million.  For the year ended  December  31,  1995,  the $0.5
million net gain on disposition of equipment  resulted from the sale or disposal
of 357 marine containers,  two aircraft,  and 121 trailers with an aggregate net
book value of $5.7 million, for aggregate proceeds of $6.2 million.

(E)  Interest and other income

Interest and other income  decreased $0.1 million during the year ended December
31, 1996 due primarily to lower interest rates earned on cash balances available
for investments when compared to the same period of 1995.

(F) Equity in net loss of unconsolidated special purpose entities represents net
loss generated from the operation of  jointly-owned  assets  accounted for under
the equity method (see Note 2 to the financial statements).
<TABLE>
<CAPTION>

                                                                             For the year months
                                                                             ended December 31,
                                                                            1996             1995
                                                                         ----------------------------
   <S>                                                                   <C>               <C>       
   Aircraft                                                              $   (315 )        $  (263 ) 
   Marine vessels                                                             (16 )            203
</TABLE>

Aircraft:   Revenues   and  expenses   were  $1.1  million  and  $1.4   million,
respectively, for the year ended December 31, 1996, compared to $0.2 million and
$0.5 million,  respectively,  for the same period in 1995.  The  investment in a
trust owning 737-200A  commercial  aircraft was acquired at the end of the third
quarter  of  1995.  The  net  contribution  is  significantly  impacted  by  the
depreciation charges which are greatest in the early years due to the use of the
200%  declining  balance  method of  depreciation.  The Trust  depreciates  this
investment over 6 years;

Marine vessel: As of December 31, 1996, the Partnership had a 50% interest in an
entity which owns a marine  vessel.  Revenues and expenses were $1.7 million and
$1.7 million,  respectively,  for the year ended December 31, 1996,  compared to
$1.2 million and $1.0 million, respectively, for the same period in 1995. At the
end of 1995,  this marine vessel was transferred  from a bare-boat  charter to a
time charter.  Time charters have higher revenues associated with them since the
owner pays for costs,  such as operating  costs,  normally  borne by the lessees
under bare-boat  charters.  In addition,  lease revenue decreased  slightly as a
result of this  marine  vessel  being  off-lease  for 17 to 19 days in the first
quarter of 1996 due to scheduled drydocking repairs.

(G)  Net Loss

As a result of the foregoing, the Partnership's net loss of $4.1 million for the
year ended  December 31, 1996,  remained the same compared to the same period in
1995. The Partnership's  ability to operate and liquidate assets, secure leases,
and  re-lease  those  assets  whose  leases  expire  during the  duration of the
Partnership is subject to many factors and the Partnership's  performance in the
year ended December 31, 1996, is not  necessarily  indicative of future periods.
For the year ended December 31, 1996, the Partnership  distributed  $6.9 million
to the Unitholders, or $0.80 per weighted average Depositary Unit.

Comparison of Partnership's Operating Results for the Years Ended December 31, 
1995 and 1994

(A)  Revenues

Total  revenues  for the years  ended  December  31,  1995 and 1994,  were $21.4
million and $24.4  million,  respectively.  The  decrease in 1995  revenues  was
attributable  primarily  to a smaller gain on  disposition  of equipment in 1995
compared to 1994.  The  Partnership's  ability to acquire or  liquidate  assets,
secure leases, and re-lease those assets whose leases expire during the duration
of the Partnership is subject to many factors and the Partnership's  performance
in 1995 is not necessarily indicative of future periods.

     (1) Lease revenue declined by $0.1 million for the 12 months ended December
31, 1995. The following  table lists lease revenues earned by equipment type (in
thousands):
<TABLE>
<CAPTION>

                                                        For the year ended December
                                                                    31,
                                                           1995              1994
                                                        -----------------------------
   <S>                                                  <C>               <C>      
   Marine vessels                                       $  7,466          $   9,851
   Aircraft                                                6,193              6,819
   Rail equipment                                          3,639              1,985
   Marine containers                                       1,611              1,063
   Trailers                                                1,307                357
   Mobile offshore drilling unit                             259                533
                                                        =============================
                                                        $ 20,475          $  20,608
                                                        =============================
</TABLE>

     This decrease resulted primarily from:

     (a) A decrease in marine vessel  revenue of $2.4 million due to the sale of
a vessel in August 1994 and another vessel in October of 1994,  offset partially
by increases  resulting  from profit  sharing  earned on a vessel for the fourth
quarter of 1994 and the first and fourth  quarters of 1995,  and another  vessel
which changed from a lower fixed rate bareboat to a higher-yielding  utilization
pooled charter in July of 1994;

     (b) A decrease in mobile offshore  drilling rig revenue of $0.3 million due
to lower lease rates in the Gulf of Mexico and the  off-lease  status of the rig
during the second and third quarters of 1995;

     (c) A decrease in aircraft  revenue of $0.6  million due  primarily  to the
sale of two  aircraft  in the second  quarter of 1995,  partially  offset by the
acquisition of an aircraft in August of 1994;

The above detailed decreases in revenue were partially offset by:

     (d) An increase in rail revenue of $1.7  million due to the  December  1994
acquisition of 235 pressurized and nonpressurized tank cars;

     (e) An increase in trailer  revenue of $1.0  million due to the addition of
50 trailers during 1994 and 333 trailers during 1995;

     (f) An increase in container  revenue of $0.5 million  related to off-lease
containers with roof problems being repaired and going back on lease.

     (2) Net gain on disposition of equipment  totaled $0.5 million during 1995,
as a result of the disposal of 357 marine containers, the sale of 2 aircraft and
121 trailers  with an  aggregate  net book value of $5.7 million for proceeds of
$6.2 million.  Net gain on disposition of equipment  totaled $3.3 million during
1994, due to the sale or disposal of 2 trailers,  2 railcars,  2 marine vessels,
and 380 marine containers. These assets had an aggregate net book value of $11.6
million;  accrued drydock reserves at the time of sale were $0.3 million.  These
assets were sold or disposed of for aggregate proceeds of $14.6 million.

(B)  Expenses

The Partnership's total expenses for the years ended December 31, 1995 and 1994,
were $25.0 million and $29.5 million,  respectively.  The decrease was primarily
attributable to decreases in marine operating  expenses,  depreciation  expense,
repositioning expense, loss on revaluation of equipment,  and insurance expense,
offset in part by increases in bad debt expense.

     (1)  Direct  operating   expenses  (defined  as  repairs  and  maintenance,
insurance  expense,  marine  equipment  operating  expenses,  and  repositioning
expense) decreased to $5.9 million in 1995 from $8.6 million in 1994.
This change resulted from the following:

     (a) A decrease  of $2.0  million in marine  equipment  operating  costs due
primarily  to the sale of a vessel  in  August  of 1994 and the sale of  another
vessel in October of 1994.  In addition,  another  marine  vessel which was on a
short-term  voyage  charter was leased on a time charter.  On short-term  voyage
charters,  the Partnership pays for some costs,  such as bunkers and port costs,
which are the  lessee's  obligation  under a time  charter.  This  decrease  was
partially  offset by another vessel which moved from a bareboat  charter,  where
the lessee pays for all costs, to a pooled charter where costs are shared;

     (b) A decrease of $0.7 million in repositioning  expense due to the cost to
relocate a rig to the Gulf of Mexico in 1994;

     (c) A decrease of $0.3 million in insurance expense to affiliates and other
insurance  expense due to the sale of two vessels in 1994,  offset  partially by
hull and machinery and loss of hire insurance claims in process for 1991 through
1993;

     (d) An increase of $0.4 million in repairs and  maintenance  resulted  from
several  factors:  the roof  delamination  and  normal  wear  and  tear  repairs
performed on 327 marine  containers in 1995;  the  increased  number of trailers
coming off term leases which required  refurbishment  prior to  transitioning to
short-term  rental  facilities  operated by an affiliate of the General Partner,
and normal  repairs on 235  tankcars  purchased  in the fourth  quarter of 1994.
These increases were offset by decreases in vessel  expenses  resulting from the
sale of two marine vessels in the third and fourth quarters of 1994.

     (2) Indirect  operating  expenses (defined as depreciation and amortization
expense,  management  fees,  interest  expense,  and general and  administrative
expenses)  decreased to $18.7 million in 1995 from $20.0  million in 1994.  This
change resulted primarily from the following:

     (a) A decrease of $1.6 million in  depreciation  and  amortization  expense
from 1994 levels  reflecting  the  Partnership's  double-declining  depreciation
method and the disposal of equipment  during 1994 and 1995;  partially offset by
depreciation expense on $11.0 million of equipment acquired during 1995;

     (b) A  decrease  of $0.3  million  in  interest  expense  due to a  smaller
principal   balance  in  1995.  During  1994,  the  Partnership  paid  down  the
outstanding  debt by $2.2 million,  partially  offset by interest owed to former
charterers  of  one  of  the  Partnership's  vessels.  The  claim  relates  to a
cancellation  of the charter in January  1991.  Interest  was due from this date
until the final settlement date;

     (c) A decrease of $0.1  million in  management  fees to  affiliates  due to
lower lease  revenues in 1995.  Management  fees are calculated as a monthly fee
equal to the  lesser of (i) the fees which  would be  charged by an  independent
third party for similar services for similar equipment or (ii) the sum of (A) 5%
of the Gross  Lease  Revenues  attributable  to  equipment  which is  subject to
Operating  Leases,  and  (B) 2% of the  Gross  Lease  Revenues  attributable  to
Equipment  which is subject to Full Payout Net  leases,  and (C) 7% of the Gross
Lease Revenues attributable to Equipment,  if any, which was subject to per diem
leasing arrangements and thus is operated by the Partnership;

     (d) An  increase  of $0.7  million in bad debt  expense  due to the General
Partner's  evaluation of the  collectibility  of trade  receivables  due from an
aircraft lessee that encountered financial difficulties.

     (3) Loss on  revaluation  of  equipment  of $0.4  million  results from the
reduction of the net book value of an aircraft to its estimated  fair value less
costs to sell.  This  aircraft was sold in the second  quarter of 1995.  Loss on
revaluation  of equipment in 1994 resulted from the  Partnership's  reducing the
net book value of one  commercial  aircraft,  and one commuter  aircraft by $0.8
million to their estimated net fair value less costs to sell.

(C)  Net Loss

The Partnership's net loss of $3.6 million for the year ended December 31, 1995,
decreased from a net loss of $5.1 million for 1994. During 1995, the Partnership
distributed $6.1 million to the Limited Partners,  or $0.71 per weighted average
Limited Partnership Unit.

Geographic Information

The Partnership operates its equipment in international markets.  Although these
operations  expose the Partnership to certain  currency,  political,  credit and
economic  risks,  the General  Partner  believes  these risks are minimal or has
implemented strategies to control the risks as follows:  Currency risks are at a
minimum because all invoicing,  with the exception of a small number of railcars
operating in Canada, is conducted in U.S. dollars. Political risks are minimized
generally  through the avoidance of  operations in countries  that do not have a
stable judicial system and established  commercial business laws. Credit support
strategies  for lessees range from letters of credit  supported by U.S. banks to
cash  deposits.  Although these credit support  mechanisms  generally  allow the
Partnership  to  maintain  its lease  yield,  there are  risks  associated  with
slow-to-respond  judicial  systems  when legal  remedies  are required to secure
payment or repossess equipment. Economic risks are inherent in all international
markets  and the  General  Partner  strives to  minimize  this risk with  market
analysis prior to committing equipment to a particular geographic area. Refer to
the Financial  Statements,  Note 3 for information on the revenues,  income, and
assets in various geographic regions.

     Revenues and net operating income by geographic  region are impacted by the
time  period the asset is owned and the useful  life  ascribed  to the asset for
depreciation  purposes.  Net  income  (loss)  from  equipment  is  significantly
impacted by  depreciation  charges  which are greatest in the early years due to
the use of the 200% declining balance method of depreciation.  The relationships
of  geographic  revenues,  net income  (loss) and net book value are expected to
significantly  change in the future as additional  equipment is sold or disposed
of in various  equipment  markets and  geographic  areas.  An explanation of the
current relationships is presented below:

     The Partnership's  equipment on lease to U.S. domiciled lessees consists of
trailers,  railcars,  and  aircraft.  During  1996,  lease  revenues in the U.S.
accounted for 25% of the lease revenues while net operating income accounted for
$0.8 million in profit  versus $4.1 million in loss for the entire  Partnership.
The  primary  reason  for this  relationship  is the fact  that the  Partnership
depreciates  its rail  equipment  over a fifteen year period versus twelve years
for other equipment types owned and leased in other geographic regions.

     The Partnership's  equipment leased to Canadian  domiciled lessees consists
of  railcars,  aircraft  and a  16.67%  investment  in a trust  consisting  of 6
737-200A aircraft.  During 1996, lease revenues accounted for 15% of total lease
revenues and $4,000 of the $4.1 million of the net operating loss for the entire
Partnership.

     The  Partnership's  equipment  on  lease to South  Asia  domiciled  lessees
accounted  for 10% of the  lease  revenues  while net  operating  loss for these
assets  accounted  for $2.9  million of the $4.1  million in loss for the entire
Partnership.  The primary reason for this  relationship is that during 1996, two
of the Partnership's  aircraft in South Asia encountered financial  difficulties
forcing the  Partnership  to  repossess  one of the  aircraft.  The  Partnership
established  reserves  against these  receivables  due to the General  Partner's
determination  that  ultimate  collection  of  these  rents  are  uncertain.  In
addition,  the  repossessed  aircraft  underwent  repairs to meet  airworthiness
conditions.  These  repairs  were  more  extensive  than  anticipated,   costing
approximately $1.6 million.

     In 1996,  marine  containers,  marine  vessels and a 50%  investment  in an
entity  which  owns a marine  vessel,  which  were  leased  in  various  regions
throughout  the period,  accounted for 44% of the lease  revenues  while the net
operating income accounted for $0.6 million in profit versus a $4.1 million loss
for the entire Partnership.

     European  operations  consisted  of an  aircraft  that  accounted  for $1.7
million of the $4.1 million in loss for the entire  Partnership.  This  aircraft
was off-lease for all of 1996 and incurred $1.0 million for the overhaul of four
engines  and  repairs  to  meet  airworthiness  conditions.  This  aircraft  was
eventually sold in Australia at the end of 1996 for a gain of $0.6 million.

     South  American  operations  consisted of an aircraft  where lease revenues
accounted for 5% of total lease  revenues while net operating  income  accounted
for $0.3  million  in profit  compared  to $4.1  million  in loss for the entire
Partnership.

     Gulf of Mexico  operations  consisted of a mobile  offshore  drilling  unit
which was sold during 1996 for a gain of $2.5 million  offset by a operating net
loss of $0.2 million.

Inflation

There was no significant  impact on the Partnership's  operations as a result of
inflation during 1996, 1995, or 1994.

Forward Looking Information

Except for historical  information contained herein, the discussion in this Form
10-K 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-K should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-K. The Partnership's actual results could differ materially from
those discussed here.

Outlook for the Future

In 1997, the Partnership  will be in its holding or passive  liquidation  phase.
The General  Partner will be seeking to  selectively  re-lease or sell assets as
the existing leases expire. Sale decisions will cause the operating  performance
of the  Partnership  to decline  over the  remainder  of its life.  The  General
Partner anticipates that the liquidation of Partnership assets will be completed
by the scheduled termination of the Partnership at the end of the year 2000.

     The  Partnership  intends to use cash flow from  operations  to satisfy its
operating  requirements,  pay loan principal on debt, and pay cash distributions
to the investors.

 (A) Impact of Government Regulations on Future Operations

The General  Partner  operates the  Partnership's  equipment in accordance  with
current applicable  regulations (see Item 1, Section E Government  Regulations).
However, the continuing implementation of new or modified regulations by some of
the  authorities  mentioned  previously,  or others,  may  adversely  affect the
Partnership's  ability to continue to own or operate equipment in its portfolio.
Additionally,  regulatory  systems  vary  from  country  to  country,  which may
increase the burden to the Partnership of meeting regulatory  compliance for the
same equipment  operated  between  countries.  Ongoing changes in the regulatory
environment, both in the U.S. and internationally,  cannot be predicted with any
accuracy and preclude the General  Partner from  determining  the impact of such
changes on Partnership operations, purchases, or sale of equipment.

(B) Distributions

Pursuant  to the  Limited  Partnership  Agreement,  the  Partnership  ceased  to
reinvest in  additional  equipment  beginning in its seventh year of  operations
which  commenced  on January 1, 1997.  The General  Partner  intends to pursue a
strategy of selectively  re-leasing equipment to achieve competitive returns, or
selling   equipment  that  is   underperforming   or  whose  operation   becomes
prohibitively  expensive,  in the period prior to the final  liquidation  of the
Partnership.  During this time, the Partnership will use operating cash flow and
proceeds from the sale of equipment to meet its operating  obligations  and make
distributions to the partners.  Although the General Partner intends to maintain
a  sustainable  level  of  distributions  prior  to  final  liquidation  of  the
Partnership, actual Partnership performance and other considerations may require
adjustments to then-existing  distribution  levels.  In the long term,  changing
market  conditions and  used-equipment  values may preclude the General  Partner
from  accurately  determining  the  impact of  future  re-leasing  activity  and
equipment  sales on Partnership  performance  and liquidity.  Consequently,  the
General Partner cannot establish future  distribution  levels with any certainty
at this time.



<PAGE>


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  statements  for the  Partnership  are listed on the Index to
Financial Statements included in Item 14(a) of this Annual Report.

ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

     None.









                     (This space intentionally left blank.)



<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

As of the date of this Annual  Report,  the directors and executive  officers of
PLM  International  (and key  executive  officers  of its  subsidiaries)  are as
follows:
<TABLE>
<CAPTION>

Name                                   Age                 Position
-------------------------------------- ------------------- -------------------------------------------------------

<S>                                    <C>                 <C>                                                   
J. Alec Merriam                        61                  Director, Chairman of the Board, PLM International,
                                                           Inc.; Director, PLM Financial Services, Inc.

Douglas P. Goodrich                    50                  Director and Senior Vice President, PLM
                                                           International; Director and President, PLM Financial
                                                           Services, Inc.; Senior Vice President, PLM
                                                           Transportation Equipment Corporation; President, PLM
                                                           Railcar Management Services, Inc.

Walter E. Hoadley                      80                  Director, PLM International, Inc.

Robert L. Pagel                        60                  Director, Chairman of the Executive Committee, PLM
                                                           International, Inc.; Director, PLM Financial
                                                           Services, Inc.

Harold R. Somerset                     62                  Director, PLM International, Inc.

Robert N. Tidball                      58                  Director, President and Chief Executive Officer, PLM
                                                           International, Inc.

J. Michael Allgood                     48                  Vice President and Chief Financial Officer, PLM
                                                           International, Inc. and PLM Financial Services, Inc.

Stephen M. Bess                        50                  President, PLM Investment Management, Inc.;
                                                           President, PLM Securities, Inc.; Vice President, PLM
                                                           Financial Services, Inc.

David J. Davis                         40                  Vice President and Corporate Controller, PLM
                                                           International and PLM Financial Services, Inc.

Frank Diodati                          42                  President, PLM Railcar Management Services Canada
                                                           Limited.

Steven O. Layne                        42                  Vice President, PLM Transportation Equipment
                                                           Corporation.; Vice President and Director, PLM
                                                           Worldwide Management Services, Ltd.

Stephen Peary                          48                  Senior Vice President, General Counsel and Secretary,
                                                           PLM International, Inc.; Vice President, General
                                                           Counsel and Secretary, PLM Financial Services, Inc.,
                                                           PLM Investment Management, Inc., PLM Transportation
                                                           Equipment Corporation; Vice President, PLM
                                                           Securities, Corp.

Thomas L. Wilmore                      54                  Vice President, PLM Transportation Equipment
                                                           Corporation; Vice President, PLM Railcar Management
                                                           Services, Inc.
</TABLE>

     J. Alec  Merriam was  appointed  Chairman of the Board of  Directors of PLM
International  in September  1990,  having served as a director  since  February
1988. In October 1988 he became a member of the Executive Committee of the Board
of Directors of PLM International.  From 1972 to 1988, Mr. Merriam was Executive
Vice President and Chief Financial  Officer of Crowley Maritime  Corporation,  a
San Francisco area-based company engaged in maritime shipping and transportation
services.  Previously,  he  was  Chairman  of the  Board  and  Treasurer  of LOA
Corporation of Omaha,  Nebraska and served in various  financial  positions with
Northern Natural Gas Company, also of Omaha.

     Douglas P. Goodrich was elected to the Board of Directors in July 1996, and
appointed  Director and  President of PLM Financial  Services in June 1996,  and
appointed Senior Vice President of PLM International in March 1994. Mr. Goodrich
has also  served  as  Senior  Vice  President  of PLM  Transportation  Equipment
Corporation  since  July  1989,  and  as  President  of PLM  Railcar  Management
Services,  Inc. since September 1992,  having been a Senior Vice President since
June 1987.  Mr.  Goodrich was an Executive  Vice  President of G.I.C.  Financial
Services  Corporation,  a subsidiary  of Guardian  Industries  Corp. of Chicago,
Illinois from December 1980 to September 1985.

     Dr. Hoadley joined PLM International's Board of Directors and its Executive
Committee in September  1989. He served as a Director of PLM, Inc. from November
1982 to June 1984 and PLM  Companies,  Inc. from October 1985 to February  1988.
Dr.  Hoadley has been a Senior  Research  Fellow at the Hoover  Institute  since
1981.  He was  Executive  Vice  President  and Chief  Economist  for the Bank of
America  from  1968  to  1981  and  Chairman  of the  Federal  Reserve  Bank  of
Philadelphia  from  1962 to 1966.  Dr.  Hoadley  had  served  as a  Director  of
Transcisco Industries, Inc. from February 1988 through August 1995.

     Robert L. Pagel was appointed  Chairman of the  Executive  Committee of the
Board of Directors of PLM  International  in September 1990,  having served as a
director  since  February  1988.  In  October  1988,  he  became a member of the
Executive  Committee of the Board of Directors of PLM  International.  From June
1990 to April 1991,  Mr. Pagel was President and Co-Chief  Executive  Officer of
The Diana Corporation,  a holding company traded on the New York Stock Exchange.
He is the former  President and Chief Executive  Officer of FanFair  Corporation
which  specializes in sports fans' gift shops. He previously served as President
and Chief Executive Officer of Super Sky International,  Inc., a publicly traded
company,  located in Mequon,  Wisconsin,  engaged in the manufacture of skylight
systems.  He was formerly Chairman and Chief Executive Officer of Blunt, Ellis &
Loewi,  Inc., a  Milwaukee-based  investment firm. Mr. Pagel retired from Blunt,
Ellis & Loewi in 1985  after a career  spanning  20 years in all  phases  of the
brokerage  and financial  industries.  Mr. Pagel has also served on the Board of
Governors of the Midwest Stock Exchange.

     Harold  R.   Somerset  was  elected  to  the  Board  of  Directors  of  PLM
International  in July 1994.  From February 1988 to December 1993, Mr.  Somerset
was  President  and Chief  Executive  Officer of  California  &  Hawaiian  Sugar
Corporation (C&H), a recently-acquired  subsidiary of Alexander & Baldwin,  Inc.
Mr.  Somerset joined C&H in 1984 as Executive Vice President and Chief Operating
Officer, having served on its Board of Directors since 1978, a position in which
he continues to serve.  Between 1972 and 1984,  Mr.  Somerset  served in various
capacities with Alexander & Baldwin,  Inc., a publicly-held land and agriculture
company headquartered in Honolulu,  Hawaii, including Executive Vice President -
Agricultures,  Vice President,  General Counsel and Secretary.  In addition to a
law degree from Harvard Law School,  Mr.  Somerset  also holds  degrees in civil
engineering from the Rensselaer  Polytechnic Institute and in marine engineering
from the U.S. Naval Academy. Mr. Somerset also serves on the Boards of Directors
for various other  companies  and  organizations,  including  Longs Drug Stores,
Inc., a publicly-held company headquartered in Maryland.

     Robert N. Tidball was appointed  President and Chief  Executive  Officer of
PLM  International  in  March  1989.  At the  time  of his  appointment,  he was
Executive Vice President of PLM International.  Mr. Tidball became a director of
PLM  International in April 1989 and a member of the Executive  Committee of the
Board of  Directors of PLM  International  in September  1990.  Mr.  Tidball was
elected President of PLM Railcar Management Services,  Inc. in January 1986. Mr.
Tidball was Executive Vice President of Hunter Keith, Inc., a  Minneapolis-based
investment banking firm, from March 1984 to January 1986. Prior to Hunter Keith,
Inc., he was Vice President,  a General Manager and a Director of North American
Car  Corporation,  and a Director  of the  American  Railcar  Institute  and the
Railway Supply Association.

     J. Michael Allgood was appointed Vice President and Chief Financial Officer
of PLM  International  in October 1992.  Between July 1991 and October 1992, Mr.
Allgood was a consultant  to various  private and public  sector  companies  and
institutions  specializing  in financial  operational  systems  development.  In
October 1987, Mr. Allgood  co-founded  Electra  Aviation Limited and its holding
company,  Aviation  Holdings  Plc of London  where he served as Chief  Financial
Officer until July 1991.  Between June 1981 and October 1987, Mr. Allgood served
as a First Vice President with American Express Bank, Ltd. In February 1978, Mr.
Allgood  founded  and until June 1981,  served as a director  of Trade  Projects
International/Philadelphia  Overseas  Finance  Company,  a  joint  venture  with
Philadelphia National Bank. From March 1975 to February 1978, Mr. Allgood served
in various capacities with Citibank, N.A.

     Stephen M. Bess was  appointed  President of PLM  Securities,  Inc. in June
1996 and President of PLM  Investment  Management,  Inc. in August 1989,  having
served as Senior Vice President of PLM Investment Management,  Inc. beginning in
February  1984 and as  Corporate  Controller  of PLM  Financial  Services,  Inc.
beginning in October 1983. Mr. Bess served as Corporate Controller of PLM, Inc.,
beginning  in December  1982.  Mr. Bess was Vice  President-Controller  of Trans
Ocean Leasing  Corporation,  a container leasing company,  from November 1978 to
November  1982,  and Group Finance  Manager with the Field  Operations  Group of
Memorex Corp., a manufacturer  of computer  peripheral  equipment,  from October
1975 to November 1978.

     David  J.  Davis  was  appointed  Vice  President  and  Controller  of  PLM
International  in January 1994.  From March 1993 through January 1994, Mr. Davis
was engaged as a consultant for various firms,  including PLM. Prior to that Mr.
Davis was Chief Financial Officer of LB Credit Corporation in San Francisco from
July  1991 to March  1993.  From  April  1989 to May  1991,  Mr.  Davis was Vice
President and Controller for ITEL Containers International Corporation which was
located  in San  Francisco.  Between  May 1978 and April  1989,  Mr.  Davis held
various positions with Transamerica Leasing Inc., in New York, including that of
Assistant Controller for their rail leasing division.

     Frank Diodati was appointed  President of PLM Railcar  Management  Services
Canada  Limited in 1986.  Previously,  Mr.  Diodati was Manager of Marketing and
Sales for G.E. Railcar Services Canada Limited.

     Steven O. Layne was appointed Vice President,  PLM Transportation Equipment
Corporation's  Air Group in November  1992, and was appointed Vice President and
Director of PLM Worldwide Management Services, Ltd. in September 1995. Mr. Layne
was PLM  Transportation  Equipment  Corporation's  Vice President,  Commuter and
Corporate  Aircraft  beginning in July 1990. Prior to joining PLM, Mr. Layne was
the Director,  Commercial  Marketing for Bromon  Aircraft  Corporation,  a joint
venture of General Electric  Corporation and the Government  Development Bank of
Puerto Rico.  Mr. Layne is a Major in the United  States Air Force  Reserves and
senior pilot with 13 years of accumulated service.

     Stephen Peary became Vice President,  Secretary, and General Counsel of PLM
International  in February  1988 and Senior Vice  President  in March 1994.  Mr.
Peary was Assistant General Counsel of PLM Financial Services,  Inc. from August
1987  through  January  1988.  Previously,  Mr. Peary was engaged in the private
practice of law in San  Francisco.  Mr. Peary is a graduate of the University of
Illinois,  Georgetown  University Law Center, and Boston University  (Masters of
Taxation Program).

     Thomas L. Wilmore was appointed Vice  President - Rail, PLM  Transportation
Equipment Corporation in March 1994 and has served as Vice President,  Marketing
for PLM Railcar Management Services,  Inc. since May 1988. Prior to joining PLM,
Mr. Wilmore was Assistant Vice President  Regional Manager for MNC Leasing Corp.
in Towson, Maryland from February 1987 to April 1988. From July 1985 to February
1987,  he was  President  and Co-Owner of Guardian  Industries  Corp.,  Chicago,
Illinois and between  December 1980 and July 1985,  Mr. Wilmore was an Executive
Vice President for its subsidiary,  G.I.C.  Financial Services Corporation.  Mr.
Wilmore  also served as Vice  President  of Sales for Gould  Financial  Services
located in Rolling Meadows, Illinois from June 1978 to December 1980.

     The  directors  of the General  Partner are elected for a one-year  term or
until  their  successors  are  elected  and  qualified.   There  are  no  family
relationships  between  any  director  or any  executive  officer of the General
Partner.


<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

     The Partnership has no directors,  officers, or employees.  The Partnership
has no pension, profit-sharing, retirement, or similar benefit plan in effect as
of December 31, 1996.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     (a) Security Ownership of Certain Beneficial Owners

         The  General  Partner is  generally  entitled  to a 5%  interest in the
         profits and losses and  distributions of the  Partnership.  At December
         31, 1996, no investor was known by the General  Partner to beneficially
         own more than 5% of the Units of the Partnership.

     (b) Security Ownership of Management

         Neither  the  General  Partner  and its  affiliates  nor any officer or
         director of the General Partner and its affiliates own any Units of the
         Partnership as of December 31, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a) Transactions with Management and Others

         During 1996,  management fees to IMI were $0.9 million. The Partnership
         reimbursed FSI and its affiliates $0.6 million for  administrative  and
         data  processing  services  performed on behalf of the  Partnership  in
         1996. The Partnership paid or accrued acquisition and lease negotiation
         fees of $0.3  million  in 1996.  The  Partnership  paid  Transportation
         Equipment  Indemnity Company Ltd., (TEI) a wholly-owned,  Bermuda-based
         subsidiary of PLM  International  $0.2 million for insurance  coverages
         during  1996,  which  amounts  were paid  substantially  to third party
         reinsurance  underwriters  or placed in risk  pools  managed  by TEI on
         behalf of affiliated  partnerships and PLM International  which provide
         threshold  coverages  on  marine  vessel  loss of  hire  and  hull  and
         machinery damage. All pooling  arrangement funds are either paid out to
         cover applicable losses or refunded pro rata by TEI.

            During 1996, the  Unconsolidated  Special  Purpose  Entities paid or
         accrued  the  following  fees to FSI or its  affiliates  (based  on the
         Partnership's  proportional  share  of  ownership):  management  fees -
         $155,000;  administrative  and  data  processing  services  -  $38,000;
         equipment  acquisition  fees - $181,000  and lease  negotiation  fees -
         $40,000.  The  Unconsolidated  Special  Purpose  Entities also paid TEI
         $72,000 for insurance coverages during 1996.

     (b) Certain Business Relationships

         None.

     (c) Indebtedness of Management

         None.

     (d) Transactions With Promoters

         None.


<PAGE>


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) 1.   Financial Statements

              The  financial  statements  listed  in the  accompanying  Index to
              Financial Statements are filed as part of this Annual Report.


     (b)    Reports on Form 8-K

              None.

     (c)      Exhibits

         4.   Limited  Partnership  Agreement  of  Registrant,  incorporated  by
              reference to the Partnership's  Registration Statement on Form S-1
              (Reg. No. 33-27746) which became effective with the Securities and
              Exchange Commission on May 23, 1989.

     10.1     Management   Agreement  between  Partnership  and  PLM  Investment
              Management,  Inc.,  incorporated by reference to the Partnership's
              Registration  Statement  on Form S-1  (Reg.  No.  33-27746)  which
              became  effective with the  Securities and Exchange  Commission on
              May 23, 1989.

     10.2     Note Agreement,  dated as of July 1, 1990,  regarding  $33,000,000
              9.75% Senior Notes due July 1, 2000.  Incorporated by reference to
              the  Partnership's  Annual  Report  on Form  10-K  filed  with the
              Securities and Exchange Commission on March 30, 1991.

     10.3     Note Agreement,  dated as of August 21, 1992, regarding $6,000,000
              variable rate line of credit due August 19, 1994.

     10.4     Second Amended and Restated Warehousing Credit Agreement, dated as
              of May 31, 1996 with First Union Bank of North Carolina.

     10.5     Amendment No. 1 to Second Amended and restated  Warehousing Credit
              Agreement,  dated as of November 5, 1996 with First Union National
              Bank of North Carolina.

     24.      Powers of Attorney.





                     (This space intentionally left blank.)


<PAGE>



                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the  Partnership  has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

     The  Partnership  has no  directors or  officers.  The General  Partner has
signed on behalf of the Partnership by duly authorized officers.


Date:  March 5, 1997                       PLM EQUIPMENT GROWTH FUND IV
                                           PARTNERSHIP

                                           By:      PLM Financial Services, Inc.
                                                    General Partner



                                           By:      /s/ Douglas P. Goodrich
                                                    --------------------------
                                                    Douglas P. Goodrich
                                                    President and Director



                                           By:      /s/ David J. Davis
                                                    --------------------------
                                                    David J. Davis
                                                    Vice President and
                                                    Controller



Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  directors of the  Partnership's  General
Partner on the dates indicated.


Name                                     Capacity                 Date



*____________________
J. Alec Merriam                        Director - FSI         March 5, 1997


*____________________
Robert L. Pagel                        Director - FSI         March 5, 1997




* Stephen Peary, by signing his name hereto does sign this document on behalf of
the persons indicated above pursuant to powers of attorney duly executed by such
persons and filed with the Securities and Exchange Commission.


/s/ Stephen Peary
--------------------
Stephen Peary
Attorney-in-Fact




<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)

                          INDEX TO FINANCIAL STATEMENTS


                                  (Item 14(a))


                                                                        Page

Report of Independent Auditors                                            27

Balance sheets as of December 31, 1996 and 1995                           28

Statements of operations for the years ended December 31, 1996,
     1995 and 1994                                                        29

Statements of changes in partners' capital for the years
     ended December 31, 1996, 1995 and 1994                               30

Statements of cash flows for the years ended December 31, 1996,
     1995 and 199431

Notes to financial statements                                          32-41


All other  financial  statement  schedules  have been  omitted  as the  required
information  is not pertinent to the  Registrant or is not material,  or because
the  information  required  is included in the  financial  statements  and notes
thereto.



<PAGE>


                                          REPORT OF INDEPENDENT AUDITORS


The Partners
PLM Equipment Growth Fund IV

We have audited the accompanying  balance sheets of PLM Equipment Growth Fund IV
as of December  31, 1996 and 1995,  and the related  statements  of  operations,
changes  in  partners'  capital,  and cash  flows  for each of the  years in the
three-year  period ended December 31, 1996.  These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of PLM Equipment Growth Fund IV as
of December  31, 1996 and 1995 and the  results of its  operations  and its cash
flows for each of the years in the three-year  period ended December 31, 1996 in
conformity with generally accepted accounting principles.


/S/ KPMG PEAT MARWICK LLP
--------------------------
SAN FRANCISCO, CALIFORNIA
February 28, 1997


<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)

                                 BALANCE SHEETS
                                  December 31,
                (in thousands of dollars except per unit amounts)

<TABLE>

                                     ASSETS
<CAPTION>
                                                                             1996                 1995
                                                                         ---------------------------------

   <S>                                                                   <C>                  <C>       
   Equipment held for operating leases, at cost                          $   89,766           $  131,783
   Less accumulated depreciation                                            (50,784 )            (73,508 )
                                                                         ---------------------------------
                                                                             38,982               58,275
   Equipment held for sale                                                    5,524                   --
                                                                         ---------------------------------
       Net equipment                                                         44,506               58,275

   Cash and cash equivalents                                                  2,142                1,236
   Restricted cash                                                              552                  575
   Due from affiliates                                                          357                  332
   Accounts receivable, net of allowance for doubtful
     accounts of $2,329 in 1996 and $775 in 1995                              1,447                3,356
   Investments in unconsolidated special purpose entities                     9,616                7,380
   Notes receivable                                                              30                  325
   Lease negotiation fees to affiliate, net of accumulated
     amortization of $139 in 1996 and $1,882 in 1995                             86                  163
   Debt placement fees to affiliate, net of accumulated
     amortization of $275 in 1996 and $237 in 1995                              133                  171
   Prepaid expenses and other assets                                            140                  111
                                                                         ---------------------------------
       Total assets                                                      $   59,009           $   71,924
                                                                         =================================

                        LIABILITIES AND PARTNERS' CAPITAL

   Liabilities:

     Due to affiliates                                                   $      304           $      998
     Accounts payable and accrued expenses                                    1,027                  403
     Lessee deposits and reserve for repairs                                  2,967                2,673
     Security deposits                                                          552                  575
     Notes payable                                                           29,250               30,800
                                                                         ---------------------------------
       Total liabilities                                                     34,100               35,449

   Partners' capital:

     Limited Partners (8,628,420 Limited Partnership Units
       in 1996 and 8,643,770 in 1995)                                        24,909               36,475
     General Partner                                                             --                   --
                                                                         ---------------------------------
       Total partners' capital                                               24,909               36,475
                                                                         ---------------------------------
         Total liabilities and partners' capital                         $   59,009           $   71,924
                                                                         =================================

</TABLE>


                       See accompanying notes to financial
                                  statements.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)

                            STATEMENTS OF OPERATIONS
                        For the years ended December 31,
                (in thousands of dollars except per unit amounts)
<TABLE>
<CAPTION>



                                                                            1996            1995           1994
                                                                         -------------------------------------------
   <S>                                                                   <C>             <C>            <C>      
   Revenues:

     Lease revenue                                                       $  18,671       $  20,475      $  20,608
     Interest and other income                                                 270             405            423
     Net gain on disposition of equipment                                    3,179             530          3,336
                                                                         -------------------------------------------
       Total revenues                                                       22,120          21,410         24,367

   Expenses:

     Depreciation and amortization                                           9,791          12,561         14,175
     Management fees to affiliate                                              895           1,064          1,183
     Repairs and maintenance                                                 5,639           2,822          2,456
     Interest expense                                                        3,109           3,126          3,379
     Insurance expense to affiliate                                            180             256            521
     Other insurance expense                                                   622             552            636
     Repositioning expense                                                      --              --            689
     Marine equipment operating expenses                                     2,445           2,282          4,316
     General and administrative expenses
       to affiliates                                                           606             563            425
     Other general and administrative expenses                                 993             717            879
     Bad debt expense                                                        1,628             661             --
     Loss on revaluation of equipment                                           --             417            820
                                                                         -------------------------------------------
       Total expenses                                                       25,908          25,021         29,479

   Equity in net loss of unconsolidated special purpose entities              (331 )            --             --
                                                                         -------------------------------------------
       Net loss                                                          $  (4,119 )     $  (3,611 )    $  (5,112 )
                                                                         ===========================================

   Partners' share of net income (loss):

     Limited Partners                                                    $  (4,482 )     $  (3,930 )    $  (5,500 )
     General Partner                                                           363             319            388
                                                                         ===========================================
       Total                                                             $  (4,119 )     $  (3,611 )    $  (5,112 )
                                                                         ===========================================

   Net loss per weighted average Limited Partnership Unit
     (8,633,331, 8,647,516, and 8,665,650 Units)
      at December 31,1996, 1995, and 1994                                $   (0.52 )     $   (0.45 )    $   (0.63 )
                                                                         ===========================================

   Cash distributions                                                    $   7,271       $   6,443      $   7,523
                                                                         ===========================================

   Cash distribution per weighted average Limited Partnership Unit       $    0.80       $    0.71      $    0.82
                                                                         ===========================================
</TABLE>

                       See accompanying notes to financial
                                  statements.


<PAGE>




                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
              For the years ended December 31, 1995, 1994, and 1993
                                 (in thousands)

<TABLE>
<CAPTION>



                                                          Limited          General
                                                         Partners          Partner            Total
                                                        -----------------------------------------------

   <S>                                                  <C>                <C>             <C>      
   Partners' capital at December 31, 1993               $  59,574          $   --          $  59,574

   Net income (loss)                                       (5,500 )           388             (5,112 )

   Cash distributions                                      (7,135 )          (388 )           (7,523 )

   Repurchase of Units                                       (163 )            --               (163 )
                                                        -----------------------------------------------

   Partners' capital at December 31, 1994                  46,776              --             46,776

   Net income (loss)                                       (3,930 )           319             (3,611 )

   Cash distributions                                      (6,124 )          (319 )           (6,443 )

   Repurchase of Units                                       (247 )            --               (247 )
                                                        -----------------------------------------------

   Partners' capital at December 31, 1995                  36,475              --             36,475

   Net income (loss)                                       (4,482 )           363             (4,119 )

   Cash distributions                                      (6,908 )          (363 )           (7,271 )

   Repurchase of Units                                       (176 )            --               (176 )
                                                        -----------------------------------------------

   Partners' capital at December 31, 1996               $  24,909          $   --          $  24,909   
                                                        ===============================================

</TABLE>


                       See accompanying notes to financial
                                  statements.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                        for the years ended December 31,
                             (thousands of dollars)
<TABLE>
<CAPTION>


                                                                             1996            1995            1994
                                                                         --------------------------------------------
   <S>                                                                   <C>             <C>             <C>         
   Operating activities:
     Net loss                                                            $   (4,119 )    $   (3,611 )    $   (5,112 )
     Adjustments to reconcile net loss
         to net cash provided by operating activities:
       Depreciation and amortization                                          9,791          12,561          14,175
       Net gain on disposition of equipment                                  (3,179 )          (530 )        (3,336 )
       Loss on revaluation of equipment                                          --             417             820
       Equity in net loss of unconsolidated special purpose
         entities                                                               331              --              --
       Changes in operating assets and liabilities:
         Restricted cash                                                         23              --              --
         Due from affiliates                                                    (25 )          (332 )            --
         Accounts and notes receivable, net                                   2,204          (1,009 )           402
         Prepaid expenses and other assets                                      (29 )           (21 )            43
         Due to affiliates                                                     (694 )          (103 )           448
         Accounts payable and accrued expenses                                  624             203          (1,416 )
         Lessee deposits and reserve for repairs                                279            (114 )           286
                                                                         --------------------------------------------
   Net cash provided by operating activities                                  5,206           7,461           6,310
                                                                         --------------------------------------------

   Investing activities:
     Purchase of equipment                                                   (5,542 )       (10,670 )       (12,935 )
     Equipment purchased for Unconsolidated Special
       Purpose Entity                                                        (4,247 )            --              --
     Payments of acquisition fees to affiliate                                 (247 )           (47 )          (649 )
     Payments of lease negotiation fees to affiliate                            (12 )           (11 )          (129 )
     Proceeds from disposition of equipment                                  13,065           6,239          14,591
     Distributions from unconsolidated special purpose entities               1,680              --              --
                                                                         --------------------------------------------
   Cash (used in) provided by  investing activities                           4,697          (4,489 )           878
                                                                         --------------------------------------------

   Financing activities:
     Repayment of notes payable                                              (1,550 )            --          (2,200 )
     Cash distributions paid to Limited Partners                             (6,908 )        (6,124 )        (7,135 )
     Cash distributions paid to General Partner                                (363 )          (319 )          (388 )
     Repurchase of Limited Partnership Units                                   (176 )          (247 )          (163 )
                                                                         --------------------------------------------
   Cash used in financing activities                                         (8,997 )        (6,690 )        (9,886 )
                                                                         --------------------------------------------

   Net (decrease) increase in cash and cash
       equivalents                                                              906          (3,718 )        (2,698 )

   Cash and cash equivalents at beginning of year (See Note 4)                1,236           5,629           8,327
                                                                         --------------------------------------------

   Cash and cash equivalents at end of year                              $    2,142      $    1,911      $    5,629
                                                                         ============================================

   Supplemental information:
   Interest paid                                                         $    3,159      $    3,003      $    3,379
                                                                         ============================================
</TABLE>

                       See accompanying notes to financial
                                  statements.


<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

1.       Basis of Presentation

         Organization

         PLM Equipment  Growth Fund IV, a California  limited  partnership  (the
         Partnership),  was formed on March 25, 1989.  The  Partnership  engages
         primarily  in the  business of owning and leasing  used  transportation
         equipment.  The Partnership offering became effective May 23, 1989. The
         Partnership  commenced  significant  operations in September  1989. PLM
         Financial  Services,  Inc.  (FSI)  is  the  General  Partner.  FSI is a
         wholly-owned subsidiary of PLM International, Inc. (PLM International).

              The  Partnership  will  terminate  on December  31,  2009,  unless
         terminated  earlier  upon sale of all  equipment  or by  certain  other
         events. At the conclusion of the Partnership's sixth year of operations
         on December 31, 1996, the General  Partner stopped  reinvesting  excess
         cash and will start  distributing  any funds remaining to the Partners.
         Beginning in the  Partnership's  ninth year of operations,  the General
         Partner  intends to begin an orderly  liquidation of the  Partnership's
         assets.  The General  Partner  anticipates  that the liquidation of the
         assets will be completed by the end of the Partnership's  tenth year of
         operations.

              FSI manages the affairs of the Partnership.  The net income (loss)
         and distributions of the Partnership are generally allocated 95% to the
         Limited  Partners and 5% to the General  Partner (see Net Income (Loss)
         and Distribution per Unit, below). The General Partner is entitled to a
         subordinated incentive fee equal to 7.5% of "Surplus  Distributions" as
         defined  in the  Limited  Partnership  Agreement  remaining  after  the
         Limited Partners have received a certain minimum rate of return.

              The  General  Partner  has  determined  that it will  not  adopt a
         reinvestment plan for the Partnership. The Partnership may be obligated
         to redeem up to 2% of the  outstanding  Units each year  subject to the
         General Partner's right to terminate the Plan at any time. The purchase
         price to be offered by the Partnership  for the outstanding  Units will
         be  equal  to 110% of the  unrecovered  principal  attributable  to the
         Units.  The  unrecovered  principal  for any Unit  will be equal to the
         excess of (i) the capital  contribution  attributable  to the Unit over
         (ii) the distributions  from any source paid with respect to the Units.
         In the twelve  months  ended  December 31, 1996,  the  Partnership  has
         repurchased  15,350 units at a total  repurchase price of $0.2 million.
         As of December 31, 1996, the  Partnership  had repurchased a cumulative
         total of 121,580 units at a cost of $1.6 million.

              These financial statements have been prepared on the accrual basis
         of  accounting  in  accordance  with  generally   accepted   accounting
         principles.  This requires management to make estimates and assumptions
         that  affect  the  reported  amounts  of  assets  and  liabilities  and
         disclosures  of contingent  assets and  liabilities  at the date of the
         financial  statements and the reported amounts of revenues and expenses
         during the  reporting  period.  Actual  results could differ from those
         estimates.

         Operations

         The  equipment  of the  Partnership  is  managed,  under  a  continuing
         management  agreement  by PLM  Investment  Management,  Inc.  (IMI),  a
         wholly-owned  subsidiary of FSI. IMI receives a monthly  management fee
         from the  Partnership  for managing the equipment (see Note 2). FSI, in
         conjunction with its subsidiaries,  syndicates investor programs, sells
         equipment to investor  programs  and third  parties,  manages  pools of
         transportation  equipment under agreements with the investor  programs,
         and is a General Partner of other Limited Partnerships.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

1.       Basis of Presentation  (continued)

         Accounting for Leases

         The  Partnership's  leasing  operations  generally consist of operating
         leases.  Under the  operating  lease method of  accounting,  the leased
         asset is recorded at cost and  depreciated  over its  estimated  useful
         life.  Rental  payments  are  recorded as revenue  over the lease term.
         Lease  origination costs are capitalized and amortized over the term of
         the lease.

         Depreciation and Amortization

         Depreciation of equipment held for operating  leases is computed on the
         200% declining  balance method,  taking a full month's  depreciation in
         the month of acquisition, based upon estimated useful lives of 15 years
         for railcars,  12, 8, 6 and 5 years for aircraft,  and 12 years for all
         other types of equipment.  The depreciation  method changes to straight
         line when annual  depreciation  expense  using the straight line method
         exceeds  that   calculated  by  the  200%  declining   balance  method.
         Acquisition  fees  have  been  capitalized  as part of the  cost of the
         equipment.  Lease  negotiation  fees are  amortized  over  the  initial
         equipment  lease term.  Debt issuance costs and debt placement fees are
         amortized  over  the  term  of the  loan  for  which  they  were  paid.
         Organization  costs  are  amortized  over  a  60-month  period.   Major
         expenditures  which are  expected to extend the useful  lives or reduce
         future operating expenses of equipment are capitalized.

         Transportation Equipment

         In March 1995, the Financial  Accounting  Standards Board (FASB) issued
         statement No. 121,  "Accounting for the Impairment of Long-Lived Assets
         and for Long-Lived  Assets to be Disposed Of" (SFAS 121). This standard
         is  effective  for  years   beginning  after  December  15,  1995.  The
         Partnership  adopted SFAS 121 during 1995,  the effect of which was not
         material  as the method  previously  employed  by the  Partnership  was
         consistent  with SFAS 121. In accordance with SFAS 121, the Partnership
         reviews  the  carrying  value of its  equipment  at least  annually  in
         relation  to  expected  future  market  conditions  for the  purpose of
         assessing  the  recoverability  of the recorded  amounts.  If projected
         future lease  revenue plus  residual  values are less than the carrying
         value of the equipment, a loss on revaluation is recorded.

              Equipment held for operating  leases is stated at cost.  Equipment
         held for sale is  stated at the  lower of the  equipment's  depreciated
         cost or  estimated  fair  value  less costs to sell and is subject to a
         pending contract for sale.

         Investments in Unconsolidated Special Purpose Entities

         The Partnership has interests in  unconsolidated  special purpose which
         own transportation  equipment.  These interests are accounted using the
         equity method.

              The  Partnership's  investment in  unconsolidated  special purpose
         entities  includes  acquisition and lease  negotiation fees paid by the
         Partnership to TEC. The Partnership's  equity interest in net income of
         unconsolidated  special purpose entities is reflected net of management
         fees paid or payable to IMI and the  amortization  of  acquisition  and
         lease negotiation fees paid to TEC.


<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

1.       Basis of Presentation  (continued)

         Repairs and Maintenance

         Maintenance costs are usually the obligation of the lessee. If they are
         not  covered by the  lessee,  they are charged  against  operations  as
         incurred. Estimated costs associated with marine vessel drydockings are
         accrued and  charged to income  ratably  over the period  prior to such
         drydocking.  The reserve  accounts are included in the balance sheet as
         lessee deposits and reserve for repairs.

         Net Income (Loss) and Distribution per Depositary Unit

         The  net  income  (loss)  and  distributions  of  the  Partnership  are
         generally  allocated 95% to the Limited  Partners and 5% to the General
         Partner.  Gross  income  in each  year is  specially  allocated  to the
         General Partner to the extent,  if any,  necessary to cause the capital
         account  balance of the  General  Partner to be zero as of the close of
         such year.  The Limited  Partners' net income (loss) and  distributions
         are allocated  among the Limited  Partners based on the number of Units
         owned by each  Limited  Partner  and on the  number of days of the year
         each Limited Partner is in the  Partnership.  The Partnership  computes
         net  income  (loss)  per Unit  beginning  in the first  full year after
         closing of the offering.

              Cash  distributions are recorded when paid. Cash  distributions of
         $1,693,000,  $1,695,000,  and $1,298,000  were declared on December 31,
         1996,  1995,  and 1994 and paid on February 15, 1997,  1996,  and 1995,
         respectively,  to the  unitholders  of record as of December  31, 1996,
         1995, and 1994, respectively. Cash distributions to investors in excess
         of net income are  considered  to  represent a return of capital.  Cash
         distributions  to  Limited  Partners  of  $6,908,000,  $6,124,000,  and
         $7,135,000 in 1996, 1995, and 1994,  respectively,  were deemed to be a
         return of capital.

         Cash and Cash Equivalents

         The Partnership  considers  highly liquid  investments that are readily
         convertible to known amounts of cash with original  maturities of three
         months or less as cash  equivalents.  Lessee security  deposits held by
         the Partnership are considered restricted cash.

         Reclassifications

         Certain  amounts in the 1995 and 1994  financial  statements  have been
         reclassified to conform to the 1996 presentation.

2.       General Partner and Transactions with Affiliates

         FSI contributed $100 of the  Partnership's  initial capital.  Under the
         equipment management  agreement,  IMI receives a monthly management fee
         attributable  to either owned equipment or interests in equipment owned
         by the  Unconsolidated  Special  Purpose  Entities  (USPE) equal to the
         lesser of (i) the fees which would be charged by an  independent  third
         party for similar services for similar equipment or (ii) the sum of (A)
         5% of the Gross  Lease  Revenues  attributable  to  equipment  which is
         subject  to  operating  leases,  (B) 2% of  the  Gross  Lease  Revenues
         attributable  to Equipment  which is subject to full payout net leases,
         and (C) 7% of the Gross Lease Revenues  attributable  to Equipment,  if
         any,  which is subject  to per diem  leasing  arrangements  and thus is
         operated  by the  Partnership.  Partnership  management  fees  of  $0.3
         million and $1.0  million  were  payable at December 31, 1996 and 1995,
         respectively.  The  Partnership's  proportional  share  of  the  USPE's
         management fees of $8,000,  and $0 were payable as of December 31, 1996
         and 1995,  respectively.  The Partnership's  proportional  share of the
         USPE's management fees expenses during 1996 was $155,000.  An affiliate
         of the


<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

2.       General Partner and Transactions with Affiliates (continued)

         General  Partner is reimbursed for  administrative  and data processing
         services  directly  attributable  to the  Partnership,  which were $0.6
         million,  $0.6 million and $0.4 million  during 1996,  1995,  and 1994,
         respectively.  The  Partnership's  proportional  share  of  the  USPE's
         administrative  and data  processing  expenses was $38,000 during 1996.
         Debt placement fees are paid to the General  Partner in an amount equal
         to 1% of the Partnership's long-term borrowings, less any costs paid to
         unaffiliated parties related to obtaining the borrowing. Transportation
         Equipment Corporation (TEC), a wholly-owned  subsidiary of FSI receives
         a fee for arranging the  acquisition of equipment and  negotiating  the
         initial  lease of the  equipment.  The  Partnership  and USPE's paid or
         acrrued  lease  negotiation  and  equipment  acquisition  fees  of $0.5
         million,  $0.2 million,  and $0.8 million to TEC and WMS in 1996, 1995,
         and  1994,  respectively.  WMS  is a  wholly-owned  subsidiary  of  PLM
         International.

              The Partnership  paid $0.2 million,  $0.3 million and $0.5 million
         in 1996,  1995, and 1994,  respectively,  to  Transportation  Equipment
         Indemnity Company,  Ltd. (TEI) which provides marine insurance coverage
         and other insurance brokerage services. The Partnership's  proportional
         share of  USPE's  marine  insurance  coverage  paid to TEI was  $72,000
         during 1996. TEI is an affiliate of the General Partner.  A substantial
         portion of this amount was paid to third party reinsurance underwriters
         or  placed  in  risk  pools  managed  by TEI on  behalf  of  affiliated
         partnerships and PLM International which provide threshold coverages on
         marine vessel loss of hire and hull and machinery  damage.  All pooling
         arrangement  funds are either  paid out to cover  applicable  losses or
         refunded pro rata by TEI.

              The   Partnership   has  an  interest  in  certain   equipment  in
         conjunction   with  affiliated   partnerships   which  is  included  in
         investment in Unconsolidated  Special Purpose  Entities.  In 1996, this
         equipment  included  an interest  in a trust  consisting  of six Boeing
         737-200A  aircraft  (16.67%  owned),  an interest in an entity owning a
         bulk  carrier  marine  vessel  (50%  owned) and an  interest in a trust
         consisting of two McDonnell Douglas DC-9-47 aircraft (35% owned).

              The balance in due from affiliates at December 31, 1996,  includes
         a $0.4 million due from TEI for a settlement on an insurance  claim for
         one of the  Partnership's  marine  vessel which was sold in 1995.  This
         settlement  was  received by TEI in  December  of 1996.  The balance at
         December  31,  1995,   includes   $0.3  million  due  from   affiliated
         investments in unconsolidated special purpose entities.

3.       Equipment

         The  components  of  equipment  at December  31, 1996 and 1995,  are as
follows (in thousands):
<TABLE>
<CAPTION>

   Equipment held for operating leases:                    1996                1995
                                                        --------------------------------

     <S>                                                <C>                <C>         
     Rail equipment                                     $  14,867          $   14,907  
     Marine containers                                     15,498              17,355
     Marine vessels                                         9,719              26,980
     Aircraft                                              42,734              51,111
     Mobile offshore drilling unit                             --              14,486
     Trailers                                               6,948               6,944
                                                        --------------------------------
                                                           89,766             131,783
   Less accumulated depreciation                          (50,784 )           (73,508 )
                                                        ------------------------------
                                                           38,982              58,275
   Equipment held for sale                                  5,524                  --
                                                        --------------------------------
   Net equipment                                        $  44,506          $   58,275  
                                                        ================================
</TABLE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

3.       Equipment (continued)

              Revenues  are  earned by placing  the  equipment  under  operating
         leases which are billed monthly or quarterly.  As of December 31, 1996,
         all of the  Partnership's  marine containers are leased to operators of
         utilization-type   leasing  pools  which  include  equipment  owned  by
         unaffiliated  parties.  In  such  instances  revenues  received  by the
         Partnership consist of a specified  percentage of revenues generated by
         leasing the pooled  equipment to sublessees,  after  deducting  certain
         direct  operating  expenses  of the pooled  equipment.  Rents for other
         equipment are based on fixed rates.

              As of December  31,  1996,  all  equipment  was either on lease or
         operating  in  PLM-affiliated  short-term  trailer  rental  facilities,
         except for 48  containers,  an aircraft and three  railcars  which were
         off-lease.  As of December 31, 1995,  all equipment was either on lease
         or operating in PLM-affiliated  short-term  trailer rental  facilities,
         except  for  62  containers  and  one  commuter   aircraft  which  were
         off-lease.

              One commercial  aircraft is on lease to Continental  Airlines Inc.
         (Continental). Continental filed for protection under Chapter 11 of the
         U.S.  Bankruptcy  Code in December 1990.  Unpaid past due rent payments
         totaling $1.4 million were converted  into two promissory  notes by the
         Bankruptcy  Court with terms of 42 and 48 equal  monthly  installments,
         with  interest  accruing at the rate of 8.64% and 12% per annum.  As of
         December 31, 1996 and 1995,  $30,000 and  $325,000,  respectively,  was
         outstanding on these promissory notes.  Continental  remains current on
         all payments due under the promissory notes.

              In 1995, the Partnership  reduced the net book value of a commuter
         aircraft $0.4 million,  to its estimated fair value less costs to sell.
         This aircraft was sold in the second quarter of 1995.

              During  1996,  the  Partnership  sold or  disposed  of 283  marine
         containers,  an aircraft,  2 railcars, 2 trailers and a mobile offshore
         drilling  unit with an  aggregate  net book value of $9.9  million  for
         proceeds  of  $13.1  million.  During  1995,  the  Partnership  sold or
         disposed of 357 marine containers,  2 aircraft and 121 trailers with an
         aggregate net book value of $5.7 million for proceeds of $6.2 million.

              Periodically,  PLM International  Inc., (PLM) will purchase groups
         of  assets  whose   ownership   may  be  allocated   among   affiliated
         partnerships  and the Company.  Generally  in these cases,  only assets
         that are on lease will be purchased by the affiliated partnerships. The
         Company will  generally  assume the  ownership  and  remarketing  risks
         associated with off-lease  equipment.  Allocation of the purchase price
         will be determined by a combination  of third party  industry  sources,
         and recent  transactions  or published  fair market  value  references.
         During 1996, the Company  realized $0.7 million of gains on the sale of
         69  off-lease  railcars  purchased by the Company as part of a group of
         assets in 1994 which had been  allocated to PLM Equipment  Growth Funds
         IV, VI, VII,  Professional  Lease Management  Income Fund I, L.L.C. and
         the  Company.  These  assets  were  included in assets held for sale at
         December 31, 1995.  During 1995,  the Company  realized $1.3 million in
         gains on sales of railcars  and  aircraft  purchased  by the Company in
         1994 and 1995 as part of a group of assets which had been  allocated to
         EGFs IV, V, VI, VII, Fund I, and the Company.

              The  Partnership  owns  certain  equipment  which  is  leased  and
         operated  internationally.   A  limited  number  of  the  Partnership's
         transactions  are  denominated in a foreign  currency.  Gains or losses
         resulting  from  foreign  currency  transactions  are  included  in the
         results of operations and are not material.

         All leases are being accounted for as operating leases.  Future minimum
         rentals  receivable  under  noncancelable  leases at December 31, 1996,
         during  each of the next five years are  approximately  $8.5  million -
         1997; $6.6 million - 1998; $4.8 million - 1999; $2.8 million - 2000;


<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

3.       Equipment (continued)

         and $1.8 million - 2001 and thereafter.  Contingent  rentals based upon
         utilization were  approximately  $1.0 million,  $3.9 million,  and $2.2
         million in 1996, 1995, and 1994, respectively.

                  The Partnership leases its aircraft,  railcars and trailers to
         lessees domiciled in eight geographic regions:  Canada,  United States,
         Gulf of Mexico,  South  Asia,  South  America,  Europe  Australia,  and
         Mexico.  Marine  vessels and marine  containers  are leased to multiple
         lessees in different  regions who operate the marine vessels and marine
         containers  worldwide.  For the  year  ended  December  31,  1996,  the
         Partnership  accounts for proportional  interest in equipment using the
         equity method. The geographic information is grouped by domicile of the
         lessee as of and for the year ended  December 31, 1996,  1995, and 1994
         (in thousands):
<TABLE>
<CAPTION>

                                             Investments in
                                            Unconsolidated                         Owned
                                            Special Purpose
                                                Entities
                                          ---------------------------------------------------------------------
                                                  1996               1996            1995             1994
                                          ---------------------------------------------------------------------
               <S>                           <C>                  <C>             <C>             <C>        
               Revenues:
               Various                       $   1,699            $   7,827       $   9,077       $   10,914 
               Canada                            1,083                2,042           1,820            1,555
               United States                       --                 5,307           4,819            2,239
               Gulf of Mexico                      --                   164             259              393
               South Asia                          --                 2,221           2,769            2,723
               South America                                          1,110           1,110              511
               Europe                              --                    --             621            2,273
                                          =====================================================================
               Total revenues                $   2,782            $  18,671       $  20,475       $   20,608 
                                          =====================================================================
</TABLE>

         The  following  table  sets  forth   identifiable   net  income  (loss)
         information by equipment type by region for the year ended December 31,
         1996, 1995, and 1994 (in thousands):
<TABLE>
<CAPTION>

                                           Investments in
                                          Unconsolidated                            Owned
                                          Special Purpose
                                              Entities
                                        --------------------------------------------------------------------
                                                1996                1996             1995           1994
                                        --------------------------------------------------------------------
      <S>                                 <C>                    <C>             <C>             <C>       
      Income (loss):
      Various                             $     (16)             $     356       $      (65)     $    521  
      Canada                                   (313)                   309              721         1,201
      United States                                                    832            1,617          (320 )
      Gulf of Mexico                             --                  2,327             (967)         (211 ) 
      South Asia                                 --                 (2,938 )            782           442
      South America                              --                    328              218        (1,652 )
      Europe                                     --                 (1,676 )         (1,152)         (579 )  
      Australia                                  --                    555               --            --
      Mexico                                    (2)                     --               --            --
                                        --------------------------------------------------------------------
      Total identifiable net income            (331)                    93            1,154          (598 )
        Administrative and other                 --                 (3,881 )         (4,765)       (4,514 )  
                                        ====================================================================
      Total net income                    $    (331)             $  (3,788)      $   (3,611)     $ (5,112 ) 
                                        ====================================================================
</TABLE>






<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

3.       Equipment (continued)

         The net book value of owned  assets at December  31,  1996,  1995,  and
         1994,  and the net  investment in the  unconsolidated  special  purpose
         entities at December 31, 1996 and 1995, are as follows (in thousands):
<TABLE>
<CAPTION>

                               Investment in Unconsolidated
                                 Special Purpose Entities                         Owned
                             -----------------------------------------------------------------------------
                                  1996               1995             1996            1995       1994
                             -----------------------------------------------------------------------------
        <S>                      <C>            <C>                <C>             <C>         <C>       
        Net book value:
        Various                  $   3,165      $       3,458      $   7,523       $  16,364   $  25,054 
        Canada                       2,575              3,922          8,145           3,593       3,441
        United States                                      --         12,168          14,613      13,894
        Gulf of Mexico                  --                 --             --           5,835       7,001
        South Asia                      --                 --          7,273           8,826      10,592
        South America                   --                 --          3,873           4,581       5,392
        Europe                          --                 --             --           4,463       8,491
        Mexico                       3,876                 --             --              --          --
                             -----------------------------------------------------------------------------
        Total Equipment          $   9,616      $       7,380      $  38,982       $  58,275   $  73,865 
                             =============================================================================
</TABLE>

              There  were no  lessees  that  accounted  for 10% or more of total
         revenues for 1996 and 1995. Lessees accounting for 10% or more of total
         revenues during 1994 was M.T. Maritime (17% in 1994).

4.       Investments in Unconsolidated Special Purpose Entities

         Prior to 1996,  the  Partnership  accounted  for  operating  activities
         associated  with  joint  ownership  of   transportation   equipment  as
         undivided  interests,  including its proportionate  share of each asset
         with similar  wholly-owned  assets in its financial  statements.  Under
         generally  accepted   accounting   principles,   the  effects  of  such
         activities,  if material, should be reported using the equity method of
         accounting.  Therefore,  effective  January  1, 1996,  the  Partnership
         adopted  the  equity  method  to  account  for its  investment  in such
         jointly-held assets.

              The principle  differences  between the previous accounting method
         and the equity method relate to the presentation of activities relating
         to these  assets in the  statement  of  operations.  Under the previous
         method, the Partnership's  income statement reflected its proportionate
         share of each individual item of revenue and expense.  Under the equity
         method  of  accounting,   the  Partnership's   proportionate  share  is
         presented  as a single  net  amount,  equity  in net  income  (loss) of
         unconsolidated  special purpose  entities.  Accordingly,  the effect of
         adopting the equity  method of accounting  has no cumulative  effect on
         previously  reported  partner's  capital  or on the  Partnership's  net
         income  (loss)  for the  period of  adoption.  Because  the  effects on
         previously issued financial statements of applying the equity method of
         accounting to investments in jointly-owned assets are not considered to
         be material to such financial  statements taken as a whole,  previously
         issued financial  statements have not been restated.  However,  certain
         items have been  reclassified in the previously issued balance sheet to
         conform to the current period presentation. The beginning cash and cash
         equivalents  for  1996 is  different  from  the  ending  cash  and cash
         equivalents   for  1995  on   statements  of  cash  flows  due  to  the
         reclassification.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

4.       Investments in Unconsolidated Special Purpose Entities (continued)

         The net investments in unconsolidated  special purpose entities include
         the  following   jointly-owned   equipment   (and  related  assets  and
         liabilities) (in thousands):
<TABLE>
<CAPTION>


                                                                                  December        December
                                                                                     31,             31,
                                                                                   1996            1995
                                                                               --------------------------------

        <S>                                                                      <C>             <C>    
        50% interest in an entity owning a Bulk Carrier                          $ 3,165         $ 3,458
        14% interest in a Trust owning seven commercial aircraft (see
           note below)                                                                --           3,922
        17% interest in a Trust owning six commercial aircraft (see note
           below)                                                                  2,575              --
        35% interest in two commercial aircraft on a direct finance
          lease                                                                    3,876              --
                                                                               --------------------------------
        Net investments                                                          $ 9,616         $ 7,380
                                                                               ================================
</TABLE>

         The Partnership has a beneficial interest in one unconsolidated special
         purpose  entity that owns multiple  aircraft  (the Trusts).  This Trust
         contains  provisions,  under  certain  circumstances,   for  allocating
         specific aircraft to the beneficial owners.  During September 1996, PLM
         Equipment  Growth Fund V, an  affiliated  partnership  which also has a
         beneficial  interest  in  the  Trust,   renegotiated  its  senior  loan
         agreement and was required,  for loan collateral purposes,  to withdraw
         the aircraft designated to it from the Trust. The result was to restate
         the  percentage  ownership of the  remaining  beneficial  owners of the
         Trust  beginning  September 30, 1996.  This change has no effect on the
         income or loss recognized in the period ended December 31, 1996.

         The  following  summarizes  the financial  information  for the special
         purpose entities and the Company's  interests therein as of and for the
         year ended December 31, 1996 (in thousands):

                                                         Net Interest
                                        Total Numbers   of Partnership
                                     -------------------------------------

    Net Assets                                $33,250            $9,616
    Revenues                                   10,623             2,782
    Net Income                                 (2,350 )            (331 )


5.       Notes Payable

         On July 1, 1990,  the  Partnership  entered  into an agreement to issue
         notes totaling $33.0 million to two institutional  investors. The notes
         accrue  interest  at a rate equal to 9.75% per annum and mature July 1,
         2000. Interest on the notes is payable monthly. Principal is payable in
         annual  installments of $8.2 million on July 1 of 1997, 1998, 1999, and
         a final payment of $6.2 million on July 1, 2000. The agreement requires
         the  Partnership to maintain  certain  financial  covenants  related to
         fixed charge coverage and limits additional borrowings.

              The General  Partner's  estimates,  based on recent  transactions,
         that the fair value of the $29.3 million notes is $33.6 million.

              The loan agreements  require the  Partnership to maintain  certain
         minimum net worth  ratios  based on 33 1/3% of the fair market value of
         equipment plus cash and cash equivalents.  Current economic  conditions
         coupled with the increasing age of the  Partnership's  equipment,  have
         resulted in decreased market values for the Partnership's equipment and
         has required an


<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

5.       Notes Payable (continued)

         optional  prepayment to be made in order to remain in  compliance  with
         the loan covenants.  As a result,  in 1996, the  Partnership  paid $1.6
         million in principal and $0.2 million in  prepayment  fees to remain in
         compliance  with the net worth ratio  contained in the note  agreement.
         During 1995,  the  Partnership  was in compliance  with the  applicable
         lender's covenants.

              The General  Partner has entered  into a joint $50 million  credit
         facility   (the   "Committed   Bridge   Facility")  on  behalf  of  the
         Partnership, PLM Equipment Growth Fund VI, PLM Equipment Growth Fund V,
         PLM Equipment  Growth & Income Fund VII  Professional  Lease Management
         Income fund I ("Fund I"), all affiliated  investment programs,  and TEC
         Acquisub,  Inc. ("TECAI"),  an indirect wholly-owned  subsidiary of the
         General Partner,  American Finance Group, Inc. ("AFG"), a subsidiary of
         PLM International, which may be used to provide interim financing of up
         to (i) 70% of the aggregate book value or 50% of the aggregate net fair
         market value of eligible  equipment owned by an affiliate plus (ii) 50%
         of  unrestricted  cash  held  by the  borrower.  The  Committed  Bridge
         Facility  became  available on December  20, 1993,  and was amended and
         restated in October 1996 to expire on October 31, 1997 and increase the
         available  borrowings for AFG to $50 million.  The Partnership,  TECAI,
         Fund I and the other  partnerships  may borrow up to $35 million of the
         Committed Bridge Facility.  The Committed Bridge Facility also provides
         for a $5 million Letter of Credit Facility for the eligible  borrowers.
         Outstanding  borrowings by Fund I, TECAI,  AFG or PLM Equipment  Growth
         Funds IV through  VII reduce the amount  available  to each other under
         the Committed Bridge Facility. Individual borrowings may be outstanding
         for no more than 179 days,  with all advances due no later than October
         31, 1997. The Committed Bridge Facility  prohibits the Partnership from
         incurring any additional  indebtedness.  Interest accrues at either the
         prime rate or adjusted  LIBOR plus 2.5% at the borrowers  option and is
         set  at  the  time  of  an   advance  of  funds.   Borrowings   by  the
         Partnership are  guaranteed by the General  Partner. As of December 31,
         1996, PLM Equipment  Growth Fund V had borrowings of $2.5 million,  PLM
         Equipment  Growth Fund VI had $1.3 million,  PLM Equipment  Growth Fund
         VII had $2.0 million, AFG had $26.9 million, and TECAI had $4.1 million
         in  outstanding  borrowings.  Neither PLM Equipment  Growth Fund IV nor
         Fund I had any outstanding borrowings. Due to the loan covenants of the
         senior debt, the Partnership  cannot access this line of credit at this
         time.

6.       Income Taxes

         The Partnership is not subject to income taxes as any income or loss is
         included in the tax returns of the individual Partners. Accordingly, no
         provision  for  income  taxes  has  been  made in the  accounts  of the
         Partnership.

              As of December 31, 1996, there were temporary  differences of $7.1
         million  between the  financial  statement  carrying  values of certain
         assets and  liabilities and the federal income tax basis of such assets
         and liabilities,  primarily due to differences in depreciation  methods
         and equipment reserves.

7.       Subsequent Events

         In January 1997,  the  Partnership  sold a product tanker marine vessel
         with a net book value of $4.5  million for  proceeds  of $6.9  million.
         This  marine  vessel  was  classified  as  equipment  held  for sale as
         December 31, 1996.

              PLM International,  Inc. along with PLM Financial  Services,  Inc.
         (FSI),  PLM  Investment  Management,  Inc.  (IMI),  PLM  Transportation
         Equipment Corporation (TEC), and PLM Securities Corp. (PLM Securities),
         and collectively with PLMI, FSI, IMI, TEC and PLM Securities, (the "PLM
         Entities"), were named as defendants in a class action lawsuit filed in
         the  Circuit  Court  of  Mobile  County,  Mobile,   Alabama,  Case  No.
         CV-97-251.  The PLM  Entities  received  service  of the  complaint  on
         February  10,  1997,  and  pursuant to an  extension of time granted by
         plaintiffs

<PAGE>



                          PLM EQUIPMENT GROWTH FUND IV
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

7.       Subsequent Events (continued)

         attorneys,   have  sixty  days  to  respond  to  the   complaint.   PLM
         International,  Inc.  is  currently  reviewing  the  substance  of  the
         allegations  with its  counsel,  and  believes  the  allegations  to be
         completely without merit and intends to defend this matter vigorously.

              The plaintiffs, who filed the compliant on their own and on behalf
         of all  class  members  similarly  situated,  are six  individuals  who
         allegedly  invested in certain  California  limited  partnerships  (the
         Growth Funds)  sponsored by PLM  Securities,  for which FSI acts as the
         general partner,  including PLM Equipment Growth Fund IV, PLM Equipment
         Growth Fund V, PLM Equipment  Growth Fund VI, and PLM Equipment  Growth
         and Income Fund VII.  The  complaint  purports  eight  causes of action
         against  all  defendants  as follows:  fraud and  deceit,  suppression,
         negligent  misrepresentation  and  suppression,  intentional  breach of
         fiduciary duty,  negligent breach of fiduciary duty, unjust enrichment,
         conversion, and conspiracy. Additionally,  plaintiffs allege a cause of
         action for breach of third party beneficiary  contracts against and /in
         violation of the National  Association  of Securities  Dealers rules of
         fair practice by PLM Securities alone.

              Plaintiffs  allege that each  defendant  owed  plaintiffs  and the
         class  certain  duties due to their  status as  fiduciaries,  financial
         advisors,  agents, general partner, and control persons. Based on these
         duties,  plaintiffs  assert  liability  against  the PLM  Entities  for
         improper  sales and marketing  practices,  mismanagement  of the Growth
         Funds, and concealing such  mismanagement  from investors in the Growth
         Funds. Plaintiffs seek unspecified  compensatory and recissory damages,
         as well as punitive  damages,  and have offered to tender their limited
         partnership units back to the defendants.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND IV

                                INDEX OF EXHIBITS



  Exhibit                                                                Page

    4.     Limited Partnership Agreement of Registrant                     *

   10.1    Management Agreement between Registrant and                     
           PLM Investment Management, Inc.                                 *

   10.2    Note Agreement, dated as of July 1, 1990, 
           regarding $33,000,000 9.75% Senior Notes due 
           July 1, 2000.

   10.3    Note  Agreement,  dated as of August 21, 1992,  regarding  
           $6,000,000 variable rate line of credit due August 19, 1994.    *

   10.4    Second Amended and Restated Warehousing Credit Agreement, 
           dated as of May 31, 1996, with First Union National Bank 
           of North Carolina.                                              *

   10.4    Amendment  No. 1 to Second  Amended and Restated  
           Warehousing  Credit Agreement,  dated as of November  5, 
           1996 with First  Union  National Bank of North Carolina.        *

   24.     Powers of Attorney.                                         43-44



* Incorporated by reference. See page 24 of this report.