<PAGE>



                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

(Mark One)

/X/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934

                     For the quarterly period ended March 31, 1999

                                       OR

/ /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number 0-22300

                        PW PREFERRED YIELD FUND II, L.P.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

        DELAWARE                                     84-1180783
 (State of organization)                            (IRS Employer
                                                 Identification No.)

     88 BROAD STREET
  BOSTON, MASSACHUSETTS                                 02110
  (Address of principal                              (Zip Code)
   executive offices)




      Registrant's telephone number, including area code (617)854-5800

    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 .

<PAGE>

                           PW PREFERRED YIELD FUND II, L.P.
                        QUARTERLY REPORT ON FORM 10-Q FOR THE
                             QUARTER ENDED MARCH 31, 1999

                                  TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
PART I.  FINANCIAL INFORMATION

         Item 1. Financial Statements

                 Balance Sheets - March 31, 1999 and December 31, 1998 
                 (unaudited)                                                   3

                 Statements of Income for the three months ended
                 March 31, 1999 and 1998 (unaudited)                           4

                 Statements of Partners' Equity for the three
                 months ended March 31, 1999 and 1998 (unaudited)              5

                 Statements of Cash Flows for the three months
                 ended March 31, 1999 and 1998 (unaudited)                     6

                 Notes to Financial Statements (unaudited)                   7-8

         Item 2. Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                        9-12

PART II. OTHER INFORMATION

         Item 1. Legal Proceedings                                            13

         Item 5. Other Information                                            13

         Item 6. Exhibits and Reports on Form 8-K                             13

                 Signatures                                                   14

                                       2
<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                        PW PREFERRED YIELD FUND II, L.P.

                                 BALANCE SHEETS
                      MARCH 31, 1999 AND DECEMBER 31, 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            MARCH 31,       DECEMBER 31,
                                                                                              1999              1998
                                                                                       ----------------     ------------
<S>                                                                                   <C>                  <C>
                                                        ASSETS

Cash and cash equivalents                                                              $      4,344,147     $     3,629,653
Rents and other receivables, net of allowance for
    doubtful accounts of $47,000                                                                452,864             558,579
Equipment at cost, net of accumulated depreciation of
   $15,532,584 and $18,645,275 at March 31, 1999 and
   December 31, 1998, respectively                                                            8,767,384           9,863,976
                                                                                       ----------------     ---------------
              Total Assets                                                             $     13,564,395     $    14,052,208
                                                                                       ----------------     ---------------
                                                                                       ----------------     ---------------

                                           LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
   Accounts payable and accrued liabilities                                            $         42,500     $        32,500
   Payable to affiliates                                                                        103,679             109,562
   Deferred rental income                                                                        53,058              53,855
   Distributions payable to partners                                                            319,375             318,785
                                                                                       ----------------     ---------------
       Total Liabilities                                                                        518,612             514,702
                                                                                       ----------------     ---------------

PARTNERS' EQUITY:
   General Partners                                                                             636,917             661,502
   Limited Partners:
     Class A (54,027 Units outstanding)                                                      10,857,003          11,265,748
     Class B                                                                                  1,551,863           1,610,256
                                                                                       ----------------     ---------------

       Total Partners' Equity                                                                13,045,783          13,537,506
                                                                                       ----------------     ---------------

              Total Liabilities and Partners' Equity                                   $     13,564,395     $    14,052,208
                                                                                       ----------------     ---------------
                                                                                       ----------------     ---------------
</TABLE>

                  The accompanying notes are an integral part of 
                           these financial statements.

                                       3
<PAGE>


                         PW PREFERRED YIELD FUND II, L.P.

                              STATEMENTS OF INCOME

                FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)


                                                       1999             1998
                                                   -----------      -----------
REVENUE:
    Lease revenue                                  $ 1,244,137      $ 1,673,987
    Gain on sale of equipment                           39,720           80,167
    Interest income                                     36,578           40,671
                                                   -----------      -----------

         Total Revenue                               1,320,435        1,794,825
                                                   -----------      -----------

EXPENSES:
    Depreciation                                       863,676        1,050,000
    Management fees (Note 2)                            52,371           67,488
    Subordinated disposition fees (Note 2)                  --            9,764
    General and administrative                          27,685           29,388
                                                   -----------      -----------

         Total Expenses                                943,732        1,156,640
                                                   -----------      -----------

NET INCOME                                         $   376,703      $   638,185
                                                   -----------      -----------
                                                   -----------      -----------

NET INCOME ALLOCATED:
   To the General Partners                         $    18,836      $    31,909
   To the Class A Limited Partners                     334,126          551,483
   To the Class B Limited Partner                       23,741           54,793
                                                   -----------      -----------

                                                   $   376,703      $   638,185
                                                   -----------      -----------
                                                   -----------      -----------

NET INCOME PER WEIGHTED AVERAGE
   NUMBER OF UNITS OF CLASS A LIMITED
   PARTNER INTEREST OUTSTANDING                    $      6.18      $     10.21
                                                   -----------      -----------
                                                   -----------      -----------

WEIGHTED AVERAGE NUMBER OF
   UNITS OF CLASS A LIMITED PARTNER
   INTEREST OUTSTANDING                                 54,027           54,027
                                                   -----------      -----------
                                                   -----------      -----------

                  The accompanying notes are an integral part of 
                           these financial statements.

                                       4
<PAGE>



                        PW PREFERRED YIELD FUND II, L.P.

                         STATEMENTS OF PARTNERS' EQUITY

               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                               CLASS A          CLASS B
                                              GENERAL          LIMITED          LIMITED
                                             PARTNERS         PARTNERS          PARTNER         TOTAL
                                             --------         --------          -------         -----
<S>                                        <C>           <C>               <C>             <C>
Balance, January 1, 1999                    $ 661,502     $ 11,265,748      $ 1,610,256     $ 13,537,506
Net income                                     18,836          334,126           23,741          376,703
Distributions declared to partners            (43,421)        (742,871)         (82,134)        (868,426)
                                            ---------     ------------      -----------     ------------

Balance, March 31, 1999                     $ 636,917     $ 10,857,003      $ 1,551,863     $ 13,045,783
                                            ---------     ------------      -----------     ------------
                                            ---------     ------------      -----------     ------------

Balance, January 1, 1998                    $ 799,215     $ 13,555,240      $ 1,937,327     $ 16,291,782
Net income                                     31,909          551,483           54,793          638,185
Distributions declared to partners            (43,421)        (742,871)         (82,134)        (868,426)
                                            ---------     ------------      -----------     ------------

Balance, March 31, 1998                     $ 787,703     $ 13,363,852      $ 1,909,986     $ 16,061,541
                                            ---------     ------------      -----------     ------------
                                            ---------     ------------      -----------     ------------
</TABLE>

                  The accompanying notes are an integral part of 
                           these financial statements.

                                       5
<PAGE>


                          PW PREFERRED YIELD FUND II, L.P.

                              STATEMENTS OF CASH FLOWS

               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                 1999            1998
                                                                             -----------    ------------
<S>                                                                         <C>            <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                              $   376,703    $    638,185
     Adjustments to reconcile net income to net cash
       from operating activities:
         Depreciation                                                            863,676       1,050,000
         Gain on sale of equipment                                               (39,720)        (80,167)
      Change in assets and liabilities:                                                      
          Rents and other receivables                                            105,715        (124,266)
          Accounts payable and accrued liabilities                                10,000          25,521
          Payable to affiliates                                                   (5,883)        167,345
          Deferred rental income                                                    (797)             --
                                                                             -----------    ------------

             Net cash from operating activities                                1,309,694       1,676,618
                                                                             -----------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                                                              --      (2,010,438)
   Proceeds from equipment sales                                                 272,636         238,798
                                                                             -----------    ------------

            Net cash from (used in) investing activities                         272,636      (1,771,640)
                                                                             -----------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions paid to partners                                               (867,836)       (868,426)
                                                                             -----------    ------------

            Net cash used in financing activities                               (867,836)       (868,426)
                                                                             -----------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             714,494        (963,448)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                               3,629,653       4,215,247
                                                                             -----------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                   $ 4,344,147    $  3,251,799
                                                                             -----------    ------------
                                                                             -----------    ------------

</TABLE>

                  The accompanying notes are an integral part of 
                           these financial statements.

                                       6
<PAGE>


                        PW PREFERRED YIELD FUND II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1999
                                   (UNAUDITED)

1.       GENERAL

         The financial statements presented herein are prepared in conformity 
with generally accepted accounting principles and the instructions for 
preparing Form 10-Q under Rule 10-01 of Regulation S-X of the Securities and 
Exchange Commission and are unaudited. As such, these financial statements do 
not include all information and footnote disclosures required under generally 
accepted accounting principles for complete financial statements and, 
accordingly, the accompanying financial statements should be read in 
conjunction with the footnotes presented in the 1998 Annual Report. Except as 
disclosed herein, there has been no material change to the information 
presented in the footnotes to the 1998 Annual Report.

         In the opinion of management, all adjustments (consisting of normal 
and recurring adjustments) considered necessary to present fairly the 
financial position at March 31, 1999 and December 31, 1998 and results of 
operations for the three month periods ended March 31, 1999 and 1998 have 
been made and are reflected.

2.       TRANSACTIONS WITH AFFILIATES

                        ACQUISITION AND OPERATING STAGES

         ACQUISITION OF EQUIPMENT Pursuant to its investment objectives, the 
Partnership has acquired, on an all-cash basis, certain leased equipment from 
Equis Financial Group L.P. ("EFG") (formerly American Finance Group or AFG), 
an affiliate of the Managing General Partner.

         The purchase price of the equipment acquired from EFG is equal to 
the lesser of the adjusted cost of the equipment or the appraised value of 
the equipment at the time of its acquisition by the Partnership ("EFG 
carrying value"). The adjusted cost of the equipment is equal to the price 
paid by EFG, plus the cost of an appraisal, EFG's cost of interim financing 
for the equipment and any taxes paid by EFG, less certain interim rentals 
received by EFG with respect to the equipment.

         ACQUISITION FEE The Managing General Partner, or its affiliates, 
receives or is entitled to receive a fee equal to (i) 2.25% of the purchase 
price of equipment purchased with net offering proceeds from the sale of 
Units, and (ii) 3% of the purchase price of equipment purchased with 
reinvested Partnership cash flow as compensation for evaluating, selecting, 
negotiating and consummating the acquisition of the equipment.

                                       7
<PAGE>


                        PW PREFERRED YIELD FUND II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                   (CONTINUED)


         MANAGEMENT FEES The General Partners are entitled to receive a 
monthly fee in an amount equal to 2% of gross rentals for Full Payout Leases, 
as defined in the Partnership Agreement and 5% of gross rentals for other 
leases (payable 66.67% to the Managing General Partner and 33.33% to the 
Administrative General Partner) as compensation for services rendered in 
connection with the management of the equipment. Management fees of $52,371 
were earned by the General Partners during the three months ended March 31, 
1999.

         DISPOSITION FEES The General Partners, or their affiliates, were 
entitled to receive a subordinated disposition fee in an amount equal to the 
lesser of (i) 50% of the fee that would be charged by an unaffiliated party, 
or (ii) 3% of the gross contract price relating to each sale of equipment 
(payable 50% to the Managing General Partner or its affiliates and 50% to the 
Administrative General Partner) as compensation for negotiating and 
consummating sales of equipment. During the fourth quarter of 1998, the 
Partnership reversed previously accrued subordinated disposition fees because 
the General Partners concluded that it was no longer probable that these 
subordinated disposition fees would be paid. The Partnership has not accrued 
for subordinated disposition fees during the three months ended March 31, 
1999.

                                       8
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion should be read in conjunction with the 
Consolidated Financial Statements of the Partnership and the Notes thereto. 
This report contains, in addition to historical information, forward-looking 
statements that include risks and other uncertainties. The Partnership's 
actual results may differ materially from those anticipated in these 
forward-looking statements. Factors that might cause such a difference 
include those discussed below, as well as general economic and business 
conditions, competition and other factors discussed elsewhere in this report. 
The Partnership undertakes no obligation to release publicly any revisions to 
these forward-looking statements to reflect events or circumstances after the 
date hereof or to reflect the occurrence of anticipated or unanticipated 
events.

YEAR 2000 ISSUE

     The Year 2000 Issue generally refers to the capacity of computer 
programming logic to correctly identify the calendar year. Many companies 
utilize computer programs or hardware with date sensitive software or 
embedded chips that could interpret dates ending in "00" as the year 1900 
rather than the year 2000. In certain cases, such errors could result in 
system failures or miscalculations that disrupt the operations of the 
affected businesses. The Partnership uses information systems provided by EFG 
and has no information systems of its own. EFG has adopted a plan to address 
the Year 2000 Issue that consists of four phases: assessment, remediation, 
testing, and implementation and has elected to utilize principally internal 
resources to perform all phases. EFG completed substantially all of its Year 
2000 project by March 31, 1999 at an aggregate cost of less than $50,000, 
none of which was incurred by the Partnership. All costs incurred in 
connection with EFG's Year 2000 project have been expensed as incurred.

     EFG's primary information software was coded by IBM at the point of 
original design to use a four digit field to identify calendar year. All of 
the Partnership's lease billings, cash receipts and equipment remarketing 
processes are performed using this proprietary software. In addition, EFG has 
gathered information about the Year 2000 readiness of significant vendors and 
third party servicers and continues to monitor developments in this area. All 
of EFG's peripheral computer technologies, such as its network operating 
system and third-party software applications, including payroll, depreciation 
processing, and electronic banking, have been evaluated for potential 
programming changes and have required only minor modifications to function 
properly with respect to dates in the year 2000 and thereafter. EFG 
understands that each of its and the Partnership's significant vendors and 
third-party servicers are in the process, or have completed the process, of 
making their systems Year 2000 compliant. Substantially all parties queried 
have indicated that their systems are Year 2000 compliant.

     Presently, EFG is not aware of any outside customer with a Year 2000 
Issue that would have a material effect on the Partnership's results of 
operations, liquidity, or financial position. The Partnership's equipment 
leases were structured as triple net leases, meaning that the lessees are 
responsible for, among other things, (i) maintaining and servicing all 
equipment during the lease term, (ii) ensuring that all equipment functions 
properly and is returned in good condition, normal wear and tear excepted, 
and (iii) insuring the assets against casualty and other events of loss. 
Non-compliance with lease terms on the part of a lessee, including failure to 
address Year 2000 Issues, could potentially result in lost revenues and 
impairment of residual values of the Partnership's equipment assets.

                                       9
<PAGE>


     EFG believes that its Year 2000 compliance plan will be effective in 
resolving all material Year 2000 risks in a timely manner and that the Year 
2000 Issue will not pose significant operational problems with respect to its 
computer systems or result in a system failure or disruption of its or the 
Partnership's business operations. However, EFG has no means of ensuring that 
all customers, vendors and third-party servicers will conform ultimately to 
Year 2000 standards and, therefore, the effect of this risk to the 
Partnership can not be determined.

LIQUIDITY AND CAPITAL RESOURCES

     The Partnership commenced its equipment reinvestment phase during 1993 
by investing excess cash flows available after the payment of the 
distributions to the partners in additional equipment. As of March 31, 1999, 
equipment purchased pursuant to the reinvestment program, including 
acquisition fees and expenses, totaled $22,874,202. Additional equipment will 
be purchased pursuant to the reinvestment program which will end in either 
1999 or 2000, at the General Partners' discretion.

     The Partnership invests working capital and cash flow from operations 
prior to its distribution to the partners or its reinvestment in additional 
equipment in short-term highly liquid investments. These investments are 
primarily short-term commercial paper issued by large domestic corporations. 
At March 31, 1999, the Partnership had approximately $3 million invested in 
commercial paper and a fund that invests in such instruments.

     Cash and cash equivalents increased $714,494 from $3,629,653 at December 
31, 1998 to $4,344,147 at March 31, 1999. This increase primarily represents 
the amount by which cash generated by operating activities and equipment 
sales exceeded distributions to partners.

     During the three months ended March 31, 1999, the Partnership declared 
distributions of cash flow received from operations in the amount of 
$868,426. All distributions to the Class A Limited Partners represented an 
annualized distribution rate of 11% of their contributed capital and all 
distributions to the Class B Limited Partner represented an annualized 
distribution rate of 10% of its contributed capital.

     Distributions may be characterized for tax, accounting and economic 
purposes as a return of capital, a return on capital or both. The portion of 
each cash distribution by a partnership, which exceeds its net income for the 
fiscal period, may be deemed a return of capital. Based upon the amount of 
net income reported by the Partnership for accounting purposes, approximately 
55% of the 11% cash distributions to the Class A Limited Partners for the 
three month ended March 31, 1999 constituted a return of capital. 
Additionally, since inception, approximately 74% of the Class A Limited 
Partner's 11% cash distributions constituted a return of capital. However, 
the total actual return on capital over a leasing partnership's life can only 
be determined at the termination of the Partnership after all residual cash 
flows (which include proceeds from the re-leasing and sale of equipment after 
initial lease terms expire) have been realized.

                                       10
<PAGE>


RESULTS OF OPERATIONS

     For the three months ended March 31, 1999, the Partnership recognized 
lease revenue of $1,244,137 compared to $1,673,987 for the same period in 
1998. The overall decrease in lease revenue from 1998 to 1999 was expected 
and resulted principally from primary lease term expirations and the sale of 
equipment. The Partnership also earns interest income from temporary 
investments of rental receipts and equipment sales proceeds in short-term 
instruments.

     During the three months ended March 31, 1999, the Partnership sold 
equipment having a net book value of $232,916 to existing lessees and third 
parties. These sales resulted in a net gain, for financial statement 
purposes, of $39,720 compared to a net gain in 1998 of $80,167 on equipment 
having a net book value of $245,287.

     It cannot be determined whether future sales of equipment will result in 
a net gain or a net loss to the Partnership, as such transactions will be 
dependent upon the condition and type of equipment being sold and its 
marketability at the time of sale. In addition, the amount of gain or loss 
reported for financial statement purposes is partly a function of the amount 
of accumulated depreciation associated with the equipment being sold.

     The ultimate realization of residual value for any type of equipment is 
dependent upon many factors, including EFG's ability to sell and re-lease 
equipment. Changing market conditions, industry trends, technological 
advances, and many other events can converge to enhance or detract from asset 
values at any given time. EFG attempts to monitor these changes in order to 
identify opportunities which may be advantageous to the Partnership and which 
will maximize total cash returns for each asset.

     The total economic value realized upon final disposition of each asset 
is comprised of all primary lease term revenues generated from that asset, 
together with its residual value. The latter consists of cash proceeds 
realized upon the asset's sale in addition to all other cash receipts 
obtained from renting the asset on a re-lease, renewal or month-to-month 
basis. The Partnership classifies such residual rental payments as lease 
revenue. Consequently, the amount of gain or loss reported in the financial 
statements is not necessarily indicative of the total residual value the 
Partnership achieved from leasing the equipment.

     Depreciation expense was $863,676 and $1,050,000 for the three months 
ended March 31, 1999 and 1998, respectively. For financial reporting 
purposes, to the extent that an asset is held on primary lease term, the 
Partnership depreciates the difference between (i) the cost of the asset and 
(ii) the estimated residual value of the asset on a straight-line basis over 
such term. For purposes of this policy, estimated residual values represent 
estimates of equipment values at the date of primary lease expiration. To the 
extent that an asset is held beyond its primary lease term, the Partnership 
continues to depreciate the remaining net book value of the asset on a 
straight-line basis over the asset's remaining economic life.

     Management fees were approximately 4.2% and 4% of lease revenue during 
the three months ended March 31, 1999 and 1998, respectively. Management fees 
are based on 5% of gross lease revenue generated by operating leases and 2% 
of gross lease revenue generated by full payout leases.

                                       11
<PAGE>


      The General Partners, or their affiliates, were entitled to receive a 
subordinated disposition fee in an amount equal to the lesser of (i) 50% of 
the fee that would be charged by an unaffiliated party, or (ii) 3% of the 
gross contract price relating to each sale of equipment (payable 50% to the 
Managing General Partner or its affiliates and 50% to the Administrative 
General Partner) as compensation for negotiating and consummating sales of 
equipment. During the fourth quarter of 1998, the Partnership reversed 
previously accrued subordinated disposition fees because the General Partners 
concluded that it was no longer probable that these subordinated disposition 
fees would be paid. The Partnership has not accrued for subordinated 
disposition fees during the three months ended March 31, 1999.

     General and administrative expenses consisted primarily of investor 
reporting expenses and transfer agent and audit fees.

                                       12
<PAGE>


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         None.


ITEM 5.  OTHER INFORMATION

         None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      None.

         (b)      On February 3, 1999 the Registrant notified
                  PricewaterhouseCoopers LLP ("PwC") that they were dismissed as
                  the Registrant's independent auditor and appointed Ernst &
                  Young LLP as its independent auditor. The Registrant filed
                  Form 8-K on February 4, 1999.


                                       13
<PAGE>



                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934, 
the Registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized.

                                      PW Preferred Yield Fund II, L.P.
                                      (Registrant)

                                      By:  General Equipment Management II, Inc.
                                           A General Partner

Date: May 13, 1999                    By:  /s/ Carmine Fusco
                                           Carmine Fusco
                                           VICE PRESIDENT, SECRETARY,
                                           TREASURER AND CHIEF FINANCIAL
                                           AND ACCOUNTING OFFICER



                                       14