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, 1997.

     [  ]     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 33-40093
                             -----------------------



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


California                                        94-3135515
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                Identification No.)

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 44.

Total number of pages in this report:  127.


<PAGE>




                                     PART I
ITEM 1.           BUSINESS

(A)     Background

In April 1991,  PLM Financial  Services,  Inc. (FSI or the General  Partner),  a
wholly-owned  subsidiary of PLM International,  Inc. (PLM International or PLM),
filed a  Registration  Statement  on Form S-1 with the  Securities  and Exchange
Commission with respect to a proposed offering of 8,750,000 limited  partnership
units  (the  units)  in PLM  Equipment  Growth  Fund  VI, a  California  limited
partnership  (the  Partnership,  the registrant,  or EGF VI). The  Partnership's
offering became effective on December 23, 1991. FSI, as General Partner,  owns a
5% interest  in the  Partnership.  The  Partnership  engages in the  business of
owning and leasing  transportation  and related  equipment to various  commodity
shippers and transportation companies.

The Partnership's primary objectives are:

     (1)  Investment  in equipment:  to acquire a  diversified  portfolio of low
obsolescence  equipment with long lives and high residual values, at prices that
the  General  Partner  believes  to be below  inherent  values  and to place the
equipment on lease or under other  contractual  arrangements  with  creditworthy
lessees and operators of equipment.  All transactions  over $1.0 million must be
approved by PLM  International's  Credit Review  Committee,  which is made up of
members of PLM  International's  senior  management.  In  determining a lessee's
creditworthiness, the committee will consider, among other factors, the lessee's
financial  statements,  internal and  external  credit  ratings,  and letters of
credit.

     (2) Cash distributions:  to generate cash distributions (a portion of which
may represent a return of an investor's  investment)  to investors  beginning in
the calendar  quarter  following the month in which the minimum  number of Units
were sold;

     (3)  Safety:  to  preserve  and  protect  the  value  of the  Partnership's
equipment  portfolio  through  investment in a diverse range of low obsolescence
equipment in many different  equipment sectors,  leasing such equipment pursuant
to leases having  various  maturity  dates to a diverse group of lessees,  while
carefully monitoring the equipment markets; and

     (4) Growth: to invest a substantial portion of the Partnership's capital in
equipment which the General Partner  believes will retain its value, to reinvest
a portion of sales proceeds and rental revenues in additional  equipment  during
the first six years of the  Partnership's  operation and sell equipment when the
General  Partner  believes  that,  due to market  conditions,  prices  are above
inherent equipment values.

The offering of Units of the Partnership  closed on May 24, 1993. As of December
31,  1997,  there  were  8,247,264  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,  which commences  January 1,
2002, the General  Partner  intends to begin the  dissolution and liquidation of
the  Partnership  in an orderly  fashion,  unless the  Partnership is terminated
earlier upon sale of all of the equipment or by certain  other events.  However,
under certain circumstances,  the term of the Partnership may be extended. In no
event will the Partnership extend beyond December 31, 2011.










                     (This space intentionally left blank.)




<PAGE>


Table  1,  below,  lists  the  equipment  and  the  cost  of  equipment  in  the
Partnership's portfolio as of December 31, 1997 (in thousands of dollars):

                                     TABLE 1
<TABLE>
<CAPTION>

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


Owned equipment held for operating leases:



  <S>      <C>                                                <C>                                      <C>
      2    Container cargo carrier vessels                    O. C. Staalskibsvaerft A/F               $    16,035
      2    737-200 Stage II commercial aircraft               Boeing                                        11,919
    265    Over-the-road refrigerated trailers                Various                                        7,352
    444    Over-the-road dry trailers                         Various                                        3,547
    345    Dry piggyback trailers                             Stoughton                                      5,304
    141    Covered hopper railcars                            Various                                        3,130
     27    Nonpressurized tank railcars                       Various                                          554
    423    Pressurized tank railcars                          Various                                       11,973
    343    Refrigerated marine containers                     Various                                        5,432
  2,176    Various marine containers                          Various                                        6,351
                                                                                                     --------------
               Total equipment held for operating leases                                               $    71,597<F1>
                                                                                                     ==============


Investment in equipment owned by unconsolidated special-purpose entities:


   0.64    Trust comprised of a 767-200ER

             Stage III commercial aircraft                    Boeing                                   $    27,329<F3>

   0.50    Trust comprised of four 737-200
             Stage II commercial aircraft                     Boeing                                        11,724<F3>
   0.53    Product tanker                                     Boelwerf-Temse                                10,476<F2>
   0.30    Mobile offshore drilling unit                      AT & CH de France                              6,165<F3>
   0.40    Equipment on direct finance lease:
             Two DC-9 Stage III commercial aircraft           McDonnell Douglas                              4,505<F3>
   0.50    Container cargo feeder vessels                     O. C. Staalskibsvaerft A/F                     4,004<F2>
   0.20    Handymax bulk-carrier marine vessel                Tsuneishi Shipbuilding Co., Ltd.               3,553<F2>
                                                                                                     -------------
           Total investments                                                                           $    67,756<F1>
                                                                                                     ==============
<FN>

<F1> Includes proceeds from capital contributions,  undistributed cash flow from
     operations,  and  Partnership  borrowings  invested in equipment.  Includes
     costs  capitalized,  subsequent  to the  date  of  purchase  and  equipment
     acquisition fees paid to PLM Transportation Equipment Corporation (TEC), or
     PLM Worldwide Management Services (WMS).

<F2> Jointly owned:  EGF VI and an affiliated program.

<F3> Jointly owned:  EGF VI and two affiliated programs.

</FN>

</TABLE>

The equipment is generally  leased under  operating  leases with terms 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.

As of  December  31,  1997,  approximately  66%  of  the  Partnership's  trailer
equipment operated in rental yards owned and maintained by PLM Rental, Inc., the
short-term trailer rental subsidiary of PLM International  doing business as PLM
Trailer Leasing.  Revenues collected under short-term rental agreements with the
rental yards'  customers are credited to the owners of the related  equipment as
received.  Direct expenses associated with the equipment are charged directly to
the  Partnership.  An allocation of other  indirect  expenses of the rental yard
operations is charged to the Partnership monthly.

The  lessees of the  equipment  include  but are not  limited  to:  Transamerica
Leasing,  Burlington Northern Railroad Company,  Northern  Navigation  Services,
Inc.,  Malaysian Air Systems Berhad,  CSX  Transportation,  Inc.,  Union Pacific
Railroad Company, Westway Express Incorporated, and Pacific Carriers Ltd.


(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 equipment.  The Partnership's management agreement with IMI are to
co-terminate  with the dissolution of the Partnership,  unless the partners vote
to  terminate  the  agreement  prior to that  date or at the  discretion  of the
General  Partner.  IMI 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 will be  entitled  to a monthly  management  fee (see  financial
statements, Notes 1 and 2).

(C)      Competition

(1)      Operating Leases versus Full Payout Leases

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

The Partnership  encounters  considerable  competition from lessors that utilize
full payout  leases on new  equipment.  Full payout  leases are leases that have
terms equal to the expected  economic  life of the equipment and 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,  which may put the Partnership at a competitive
disadvantage.

(2)     Manufacturers and Equipment Lessors

The Partnership competes with equipment manufacturers who offer operating leases
and full payout leases.  Manufacturers may provide  ancillary  services that 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),  GATX,  General  Electric  Railcar  Services
Corporation,  General Electric Capital Aviation Services Corporation,  and other
programs that lease the same types of equipment.

(D)      Demand

The Partnership has investments in transportation-related  capital equipment and
relocatable  environments.  Types  of  transportation  equipment  owned  by  the
Partnership   include  aircraft,   marine  vessels,   railcars,   and  trailers.
Relocatable   environments   are   functionally   self-contained   transportable
equipment,  and include mobile  offshore  drilling units and marine  containers.
Except for those aircraft  leased to passenger air carriers,  the  Partnership's
equipment is used to transport materials and commodities, rather than people.

The following  section describes the international and national markets in which
the Partnership's capital equipment operates:

(1)      Aircraft

(a)  Commercial Aircraft

The international  commercial  aircraft market experienced  another good year of
growth and expansion in 1997,  with a third  consecutive  year of profits by the
world's  airlines.   Airline   managements  have  continued  to  emphasize  cost
reductions and a moderate increase in capacity. However, even the limited volume
of new  aircraft  deliveries  has  caused  the  market to change  from  being in
equilibrium at the end of 1996 to having excess supply. This market imbalance is
expected  to  continue,  with the number of  surplus  aircraft  increasing  from
approximately  350 aircraft at the end of 1996 to an  estimated  600 aircraft by
the end of the decade.

The changes  taking  place in the  commercial  aircraft  market also reflect the
impact of noise  legislation  enacted in the United  States and Europe.  Between
1997 and the end of 2002,  approximately  1,400 Stage II aircraft (aircraft that
have been  shown to comply  with  Stage II noise  levels  prescribed  in Federal
Aviation Regulation section C36.5) are forecast to be retired,  primarily due to
noncompliance with Stage III noise requirements (Stage III aircraft are aircraft
that have been shown to comply with Stage III noise levels prescribed in Federal
Aviation  Regulation  section C36.5).  This represents about 41% of the Stage II
aircraft now in commercial service worldwide.  By 2002, about 2,000 (59%) of the
current fleet of Stage II aircraft will remain in operational service outside of
Stage III-legislated  regions or as aircraft that have had hushkits installed so
that engine noise levels meet the quieter  Stage III  requirements.  The cost to
install  a hushkit  is  approximately  $1.5  million,  depending  on the type of
aircraft. All aircraft currently manufactured meet Stage III requirements.

The  Partnership's  fleet provides a balance of Stage II  narrowbody,  Stage III
narrowbody,  and Stage III widebody aircraft in the portfolio.  This strategy is
intended to optimize  individual  aircraft and the  corresponding  lease rentals
with projected  demand.  The Stage II aircraft  either are  positioned  with air
carriers outside Stage III-legislated areas, are scheduled for Stage III hushkit
installation  in 1998-99,  or are anticipated to be sold or leased outside Stage
III areas before the year 2000.

Specifically,  the Partnership  has scheduled some Stage II narrowbody  aircraft
for sale during 1998. It is anticipated  that a Stage III widebody  aircraft now
on lease will also be sold before the end of 1998. The  Partnership  has entered
into  agreements  to install  hushkits  on selected  late-model  Stage II Boeing
737-200  advanced  aircraft owned or partially owned by the Partnership over the
next two years.  These  modifications  are  expected  to enhance the current and
residual value of the aircraft, while allowing them to continue operating in the
Stage III-legislated areas of North America.

(2)      Marine Vessels

The Partnership owns or has investments with other affiliated  programs in small
to medium-sized dry bulk vessels,  product tankers, and container feeder vessels
which are traded in worldwide markets and carry commodity  cargoes.  The markets
for dry bulk vessels and product  tankers took different paths in 1997. Dry bulk
and  container  carrier  markets  experienced  flat freight  rates,  with supply
increases  outrunning  demand  growth.  In  the  product  tanker  trades,  rates
strengthened  through most of the year and supply and demand were well balanced.
Demand for commodity shipping closely tracks worldwide economic growth patterns;
however,  economic  development alters trade patterns from time to time, causing
changes  in  volume  on  trade  routes.   The  General   Partner   operates  the
Partnership's  marine  vessels  under spot charters and period  charters.  It is
believed  that this  operating  approach  provides the  flexibility  to adapt to
changing demand patterns.

Freight rates for dry bulk vessels in 1997 maintained the levels  experienced in
the fourth  quarter of 1996.  Freight rates had declined  significantly  in 1996
until a moderate  recovery occurred late in the year due to an increase in grain
trade. In 1997, rates moved little  throughout the year. The size of the overall
dry bulk  carrier  fleet  increased by 3%, as measured by the number of vessels,
and by 5%, as  measured  by  deadweight  tonnage.  Scrapping  of ships was not a
significant  factor in 1997:  126 dry bulk  ships were  scrapped  while 247 were
delivered.  Total dry trade (as measured in deadweight tons) grew by 3% in 1997,
versus 1% in 1996.  This  balance of supply and demand  made  market  conditions
soft, providing little foundation for increasing freight rates.

Growth in 1998 is expected to be approximately  2%, with most commodity  trading
flat.  The  majority  of growth is  forecast to come from grain (2%) and thermal
coal (6%). The primary  variable in forecasts is Asian growth;  if there is some
recovery from the economic  shake-up of the second half of 1997, then there will
be prospects for  improvement in 1998.  Delivery of ships in 1998 is expected to
be about the same as in 1997;  however,  an increase in scrapping is anticipated
to strengthen the market.

Current rates do not justify any new construction of dry bulk carriers and there
should be a  significant  drop in orders  over the next two years.  If growth in
demand  matches  historic  averages of around 3%, then the current excess supply
should be absorbed by the end of 1999, leading to the possible  strengthening of
freight rates.

(3)      Marine Containers

The marine  container  market began 1997 with a continuation  of the weakness in
industrywide  container utilization and rate pressures that had been experienced
in 1996. A reversal of this trend began in early spring and continued during the
remainder of 1997, as utilization  returned to the 80% range. Per diem rates did
not strengthen, however, since customers resisted attempts to raise daily rental
rates.

Industrywide  consolidation continued in 1997. Late in the year, Genstar, one of
the world's largest container leasing  companies,  announced that it had reached
an agreement  with  SeaContainers,  another  large  container  leasing  company,
whereby  SeaContainers  will take over the management of Genstar's  fleet.  Long
term, such industrywide  consolidation  should bring more rationalization to the
container leasing market and result in both higher fleetwide utilization and per
diem rates.

(4)      Railcars

(a)  Pressurized Tank Cars

Pressurized  tank cars are used  primarily in the  petrochemical  and fertilizer
industries  to transport  liquefied  petroleum gas and  anhydrous  ammonia.  The
demand for natural gas is  anticipated  to grow through 1999, as the  developing
world,  former Communist  countries,  and the industrialized  world all increase
their energy  consumption.  World demand for fertilizer is expected to increase,
based on an awareness of the necessity of fertilizing crops and improving diets,
the shortage of farm land, and population growth in developing nations. Based on
ongoing  renewals with current  lessees,  demand for these cars  continues to be
strong and is projected to remain so during 1998.

The utilization  rate of the  Partnership's  fleet of pressurized  tank cars was
over 98% during 1997.

(b)  General-Purpose (Nonpressurized) 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.  Chemical
carloadings  for the  first 45 weeks of 1997  were up 4%,  compared  to the same
period  in 1996.  The  demand  for  petroleum  is  anticipated  to grow,  as the
developing  world,  former Communist  countries,  and the  industrialized  world
increase energy consumption.

The demand for general-purpose tank cars in the Partnership's fleet has remained
healthy over the last three years, with utilization remaining above 98%.

(c)  Covered Hopper (Grain) Cars

Industrywide,  the size of the covered  hopper car fleet has  increased  only 9%
over the last 10 years,  from a total of 299,172 cars in 1985 to 325,882 cars in
1995.  Covered  hopper cars  accounted for 30% of all new railcar  deliveries in
1995 and 50% of new  deliveries  in 1996.  During 1997,  there was some downward
pressure on rental rates,  as demand for covered hopper cars softened  somewhat.
Grain car loadings decreased 2% compared to the same period in 1996.

(5)      Trailers

(a)  Intermodal (Piggyback) Trailers

In all intermodal equipment areas, 1997 was a remarkably strong year. The United
States inventory of intermodal  equipment totaled 163,900 units in 1997, divided
between  about 55%  intermodal  trailers  and 45% domestic  containers.  Trailer
loadings  increased  approximately  4% in 1997  due to a  robust  economy  and a
continuing shortage of drivers in over-the-road  markets. The expectation is for
flat to slightly declining  utilization of intermodal trailer fleets in the near
future.

(b)  Over-the-Road Dry Trailers

The United States  over-the-road dry trailer market began to recover in mid-1997
as an oversupply of equipment from 1996 subsided. The strong domestic economy, a
continuing focus on integrated  logistics  planning by American  companies,  and
numerous  service  problems on Class I railroads  contributed to the recovery in
the dry van market. In addition,  federal  regulations  requiring antilock brake
systems on all new trailers,  effective in March 1998, have helped stimulate new
trailer  production,  and the market is anticipated to remain strong in the near
future. There continues to be much consolidation of the trailer leasing industry
in North America, as the two largest lessors of dry vans now control over 60% of
the market. The reduced level of competition, coupled with anticipated continued
strong utilization, may lead to an increase in rates.

(c)  Over-the-Road Refrigerated Trailers

The  temperature-controlled  over-the-road  trailer  market  recovered  in 1997;
freight levels improved and equipment oversupply was reduced as industry players
actively  retired older  trailers and  consolidated  fleets.  Most  refrigerated
carriers posted revenue growth of between 2% and 5% in 1997, and accordingly are
planning  fleet  upgrades.   In  addition,   with   refrigeration   and  trailer
technologies   changing  rapidly  and  industry  regulations  becoming  tighter,
trucking companies are managing their refrigerated fleets more effectively.

As a  result  of  these  changes  in  the  refrigerated  trailer  market,  it is
anticipated that trucking  companies will utilize short-term trailer leases more
frequently  to  supplement  their  fleets.  Such  a  trend  should  benefit  the
Partnership,  which generally  leases its equipment of this type on a short-term
basis from rental yards owned and operated by PLM International subsidiaries.

(6)      Mobile Offshore Drilling Units (Rigs)

Worldwide demand in all sectors of the mobile offshore drilling unit industry in
1997 was a continuation  of the increases  experienced in 1996. This increase in
demand was spread  over all the  geographic  regions of  offshore  drilling  and
affected  both  jackup and  floating  rigs.  Potential  demand  during  1997 was
difficult to estimate because of the shortage of rigs.

The tightness in the market caused  significant  increases in contract day rates
throughout the year. Day rates at the end of 1997 approached  levels  justifying
new rig construction. While continuing market improvement can be attributed to a
number of factors,  the primary reason is worldwide growth in the use of oil and
natural gas for energy.  Stable prices at moderate  levels have  encouraged such
growth, while providing adequate margins for oil and natural gas exploration and
production development.

The trend of contractor  consolidation continued in 1997; three major mergers or
acquisitions initiated late in 1997 are expected to be consummated by the end of
1998.  For 1998,  utilization  and demand are  expected  to remain at the levels
reached in 1997. Industry participants project that demand for both floating and
jackup rigs will continue at current high levels through 1998,  with  additional
rig supply absorbed by demand  increases.  Day rates are expected to continue to
increase; however, the rate of increase will slow, since the current high levels
have induced long-term contracting with few opportunities for increases.

The floating rig sector has  experienced a strengthening  in market  conditions.
Technological advances and more efficient operations have improved the economics
of drilling and production in the deep-water  operations for which floating rigs
are utilized.  Overall, demand for floating rigs increased from 128 rig-years in
1996 to 131 rig-years in 1997,  growth being  constrained by a limited supply of
rigs. The increase in demand and utilization prompted  significant  increases in
contract day rates and floating rig market  values.  Twenty-five  floating  rigs
were  ordered  in  1996  and  several   conversion  and  upgrade  projects  were
contracted, none of which will be delivered until late 1998.

(E)     Government Regulations

The use,  maintenance,  and  ownership  of equipment  are  regulated by federal,
state, local, 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  that 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 and mobile  offshore  drilling units that create
environmental  pollution).  This regulation has resulted in higher oil pollution
liability  insurance.  The lessee typically reimburses the Partnership for these
additional costs;

     (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).  In addition,
under U.S.  Federal  Aviation  Regulations,  after  December 31, 1999, no person
shall operate an aircraft to or from any airport in the contiguous United States
unless that airplane has been shown to comply with Stage III noise  levels.  The
Partnership has Stage II aircraft that do not meet Stage III requirements;

     (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 and
over-the-road refrigerated trailers);

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

As of  December  31,  1997,  the  Partnership  is in  compliance  with the above
governmental  regulations.  Typically,  costs  related  to  extensive  equipment
modifications to meet government regulations are passed on to the lessee of that
equipment.

ITEM 2.       PROPERTIES

The Partnership  neither owns nor leases any properties other than the equipment
it has purchased for leasing purposes.  As of December 31, 1997, the Partnership
owned a portfolio of transportation equipment and investments in equipment owned
by  special-purpose  entities,  as described in Part I, Table 1. The Partnership
acquired  equipment  with  the  proceeds  of the  Partnership  offering  through
approximately the first nine months of 1993 and proceeds from the debt financing
of $30.0 million.

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.

ITEM 3.           LEGAL PROCEEDINGS

PLM  International  along  with  FSI,  TEC,  IMI and  PLM  Securities  (the  PLM
Entities),  are  named as  defendants  in a lawsuit  filed as a class  action on
January 22, 1997 in the Circuit Court of Mobile County,  Mobile,  Alabama,  Case
No.  CV-97-251  (the Koch action).  The  plaintiffs,  who filed the complaint on
their  own and on  behalf  of all  class  members  similarly  situated,  are six
individuals who allegedly invested in certain  California  limited  partnerships
for  which FSI acts as the  general  partner,  including  the  Partnership,  PLM
Equipment  Growth Fund IV, PLM Equipment Growth Fund V, and PLM Equipment Growth
and Income Fund VII (the Growth  Funds).  The complaint  asserts 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  against  PLM
Securities for breach of third party  beneficiary  contracts in violation of the
National  Association of Securities  Dealers rules of fair practice.  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
defendants  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.

On March 6, 1997, the defendants removed the Koch action from the state court to
the United States District Court for the Southern District of Alabama,  Southern
Division (Civil Action No. 97-0177-BH-C) based on the district court's diversity
jurisdiction,  following which plaintiffs filed a motion to remand the action to
the state court.  On September 24, 1997, the district  court denied  plaintiffs'
motion and dismissed  without  prejudice the individual claims of the California
class  representative,  reasoning  that he had  been  fraudulently  joined  as a
plaintiff.  On October 3, 1997,  plaintiffs  filed a motion  requesting that the
district  court  reconsider  its ruling or, in the  alternative,  that the court
modify its order  dismissing the California  plaintiff's  claims so that it is a
final  appealable  order,  as well as  certify  for an  immediate  appeal to the
Eleventh  Circuit  Court of Appeals that part of its order  denying  plaintiffs'
motion to remand.  On October 7, 1997,  the district  court denied each of these
motions.  In responses to such denial,  plaintiffs  filed a petition for writ of
mandamus  with the Eleventh  Circuit,  which was denied on November 18, 1997. On
November 24,  1997,  plaintiffs  filed with the Eleventh  Circuit a petition for
rehearing  and en banc  consideration  of the court's order denying the petition
for a writ of mandamus, which petition was supplemented by plaintiffs on January
27, 1998.

On  October  10,  1997,  defendants  filed a motion  to  compel  arbitration  of
plaintiffs' claims,  based on an agreement to arbitrate contained in the limited
partnership  agreement  of each Growth  Fund,  and to stay  further  proceedings
pending the outcome of such arbitration. Notwithstanding plaintiffs' opposition,
the district court granted the motion on December 8, 1997. On December 15, 1997,
plaintiffs  filed with the Eleventh Circuit a notice of appeal from the district
court's order granting defendants'

motion to compel  arbitration and to stay the  proceedings,  and of the district
court's  September  24,  1997  order  denying  plaintiffs'  motion to remand and
dismissing the claims of the California  plaintiff.  Plaintiffs filed an amended
notice of  appeal on  December  31,  1997.  The PLM  Entities  believe  that the
allegations  of the Koch  action  are  completely  without  merit and  intend to
continue to defend this matter vigorously.

On June 5, 1997, the PLM Entities were named as defendants in another  purported
class  action  filed  in  the  San  Francisco  Superior  Court,  San  Francisco,
California,  Case No. 987062 (the Romei action). The plaintiff is an investor in
PLM  Equipment  Growth Fund V, and filed the  complaint on her own behalf and on
behalf  of  all  class  members  similarly  situated  who  invested  in  certain
California  limited  partnerships  for  which FSI acts as the  general  partner,
including  the Growth Funds.  The complaint  alleges the same facts and the same
nine  causes of action as in the Koch  action,  plus five  additional  causes of
action  against all of the  defendants,  as follows:  violations  of  California
Business and  Professions  Code Sections  17200,  et seq. for alleged unfair and
deceptive  practices,  constructive  fraud,  unjust  enrichment,  violations  of
California  Corporations Code Section 1507, and a claim for treble damages under
California Civil Code Section 3345.

On July 31,  1997,  the PLM  Entities  filed  with the  district  court  for the
Northern  District of California  (Case No.  C-97-2847 WHO) a petition under the
Federal  Arbitration Act seeking to compel arbitration of plaintiff's claims and
for an order  staying  the state  court  proceedings  pending the outcome of the
arbitration.  In connection with this motion,  plaintiff agreed to a stay of the
state court  action  pending the  district  court's  decision on the petition to
compel arbitration. By memorandum and order dated October 23, 1997, the district
court denied the PLM Entities'  petition to compel  arbitration.  On November 5,
1997, the PLM Entities filed an expedited  motion for leave to file a motion for
reconsideration  of this order,  which  motion was granted on November 14, 1997.
The parties have agreed to have oral argument on the reconsideration  motion set
for April 23, 1998.  The state court action has been stayed pending the district
court's decision on this motion.

In  connection  with  her  opposition  to  the  Company's   petition  to  compel
arbitration,  on August 22, 1997, the plaintiff filed an amended  complaint with
the  state  court  alleging  two new  causes  of action  for  violations  of the
California  Securities Law of 1968 (California  Corporations Code Sections 25400
and 25500) and for  violation  of  California  Civil Code Section 1709 and 1710.
Plaintiff has also served certain discovery  requests on defendants.  Because of
the stay, no response to the amended  complaint or to the discovery is currently
required. The PLM Entities believe that the allegations of the amended complaint
in the Romei  action are  completely  without  merit and  intend to defend  this
matter vigorously.

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, 1997.



<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
generally  entitled to a 5% interest in the profits and losses and distributions
of the  Partnership.  The General  Partner is the sole holder of such interests.
Gross income in each year of the Partnership will be 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 at the  close  of such  year.  The
remaining  interests  in  the  profits  and  losses  and  distributions  of  the
Partnership  are owned as of December 31, 1997, by the 8,053 holders of units in
the Partnership.

There are several  secondary  markets in which Limited  Partnership Units trade.
Secondary markets are characterized as having few buyers for limited partnership
interests and therefore are generally viewed as being  inefficient  vehicles for
the sale of limited partnership units. Presently,  there is 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 will not be transferable without the consent of the General Partner, which
may be withheld in its  absolute  discretion.  The  General  Partner  intends to
monitor  transfers  of units in an effort to ensure  that they do not exceed the
percentage  or number  permitted  by certain  safe  harbors  promulgated  by the
Internal  Revenue  Service.  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.  The  Partnership  may redeem a certain
number  of  units  each  year  under  the  terms  of the  Partnership's  Limited
Partnership Agreement,  beginning November 24, 1995. If the number of units made
available  for  purchase by limited  partners in any  calendar  year exceeds the
number  that  can  be  purchased  with  reinvestment  plan  proceeds,  then  the
Partnership may redeem up to 2% of the outstanding  units each year,  subject to
certain  terms and  conditions.  As of December 31, 1997,  the  Partnership  had
agreed  to  purchase  approximately  47,000  units  for an  aggregate  price  of
approximately  $0.5 million.  The General Partner  anticipates  that these units
will be repurchased in the first and second quarters of 1998. As of December 31,
1997, the Partnership  has  repurchased a cumulative  total of 70,983 units at a
cost of $1.0  million.  The General  Partner may  purchase  additional  units on
behalf of the Partnership in the future.


<PAGE>



ITEM 6.           SELECTED FINANCIAL DATA

Table 2, below, lists selected financial data for the Partnership:

                                     TABLE 2

               For the years ended December 31, 1997, 1996, 1995,
                 1994, and 1993 (In thousands of dollars, except
                         weighted-average unit amounts)

<TABLE>
<CAPTION>

                                                  1997            1996            1995             1994            1993
                                            ---------------------------------------------------------------------------------

<S>                                           <C>              <C>              <C>             <C>              <C>
Operating results:
  Total revenues                              $    32,723      $    31,436      $    33,445     $     37,467     $     20,072
  Net gain (loss) on disposition of
    equipment                                      10,121            7,214              128            4,295             (113)
  Loss on revaluation of equipment                     --               --               --            1,175               --
  Equity in net income of unconsolidated
    special-purpose entities                        3,384            3,426               --               --               --
  Net income (loss)                                 9,232            8,291           (1,974)          (1,680)          (3,266)

At year-end:
  Total assets                                $   103,961      $   113,525      $   121,957     $    139,848     $    160,529
  Total liabilities                                36,809           37,735           36,527           34,926           36,390
  Notes payable                                    30,000           31,286           30,000           30,000           30,000

Cash distribution                             $    17,384      $    17,467      $    17,518     $     17,537     $     14,828

Cash distributions representing
  a return of capital                         $     8,152      $     9,176      $    16,642     $     16,661     $     14,133

Per weighted-average limited partnership unit:


  Net income (loss)                           $      1.01      $      0.89      $     (0.34)    $      (0.31)       Various

                                                                                                                     according

  Cash distribution                           $      2.00      $      2.00      $      2.00     $       2.00           to
                                                                                                                    interim

  Cash distribution representing                                                                                     closings

    a return of capital                       $      0.99      $      1.11      $      2.00     $       2.00


</TABLE>


<PAGE>


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

(A)  Introduction

Management's  discussion  and  analysis of  financial  condition  and results of
operations  relates to the financial  statements of PLM Equipment Growth Fund VI
(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.

(B)  Results of Operations -- Factors Affecting Performance

(1)      Re-leasing Activity and Re-pricing Exposure to Current Economic
         Conditions

The exposure of the Partnership's  equipment portfolio to re-pricing risk occurs
whenever the leases for the equipment expire or are otherwise terminated and the
equipment must be re-marketed. 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
leasing market,  market conditions for the particular  industry segment in which
the equipment is to be leased,  various  regulations  concerning  the use of the
equipment,  and others. The Partnership  experienced  repricing exposure in 1997
primarily in its trailer and container portfolios.

     (a) Aircraft:  The Partnership's  aircraft  continued to be on pre-existing
leases throughout the year. Aircraft  contribution  decreased during 1997 due to
the sale of aircraft equipment which were on lease in the previous year.

     (b) 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
were largely unaffected by re-leasing.

     (c) Marine  Vessels:  Marine  vessel  lease  revenues  remained  relatively
unchanged during 1997.

     (d) Marine Containers:  All of the Partnership's marine containers that are
on lease are leased to operators of utilization-type leasing pools and, as such,
are highly  exposed  to  repricing  activity.  The  decline in marine  container
contributions  was due to equipment  sales.  Market  conditions  were relatively
constant in repricing activity during 1997.

     (e) Other Equipment: While market conditions and other factors may have had
some  impact  on  lease  rates in  markets  in which  the  Partnership  owns the
remainder  of its  equipment  portfolio,  the  majority  of this  equipment  was
unaffected.

(2)      Equipment Liquidations and Nonperforming Lessees

Liquidation  of  Partnership  equipment,  unless  accompanied  by  an  immediate
replacement  of additional  equipment  earning  similar rates (see  Reinvestment
Risk, below),  represents a reduction in the size of the equipment portfolio and
may result in  reductions  of  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  contributions,  but also may require the  Partnership  to assume
additional costs to protect its interests under the leases, such as repossession
or legal fees.

     (a)  Liquidations:  During the year,  the  Partnership  liquidated  or sold
marine vessels, aircraft components,  marine containers,  and trailers for $25.0
million. The sale proceeds of the owned equipment represented  approximately 66%
of the original cost of these assets.

     (b)  Nonperforming  Lessees:  During 1997,  the  Partnership  reposessed an
aircraft  from a  lessee  that  did not  comply  with  the  terms  of the  lease
agreement. The Partnership incurred legal fees, and reposession and repair costs
associated  with  this  lessee.  In  addition,  the  Partnership  wrote  off all
outstanding receivables from this lessee.  Currently, the Partnership expects to
sell this asset.

(3)      Reinvestment Risk

Reinvestment  risk occurs when (a) the Partnership  cannot  generate  sufficient
surplus cash after  fulfillment of operating  obligations and  distributions  to
reinvest in additional  equipment during the  reinvestment  phase of Partnership
operations, (b) equipment is sold or liquidated for less than threshold amounts,
(c) proceeds from sales,  losses,  or surplus cash  available  for  reinvestment
cannot be  reinvested  at threshold  lease rates,  or (d) proceeds from sales or
surplus cash available for reinvestment cannot be deployed in a timely manner.

During the first six years of operations,  the  Partnership  intends to increase
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, the Partnership will continue
to operate for another two years and then begin an orderly  liquidation  over an
anticipated two-year period.

Other  nonoperating  funds  for  reinvestment  are  generated  from  the sale of
equipment prior to the Partnership's  planned  liquidation phase, the receipt of
funds  realized from the payment of stipulated  loss values on equipment lost or
disposed  of during  the time it is  subject  to lease  agreements,  or from the
exercise of purchase  options written into certain lease  agreements.  Equipment
sales  generally  result from  evaluations by the General Partner that continued
ownership  of  certain  equipment  is  either  inadequate  to  meet  Partnership
performance  goals,  or  that  market  conditions,   market  values,  and  other
considerations indicate it is the appropriate time to sell certain equipment.

During  1997,  the  Partnership  purchased  an interest in an entity that owns a
marine vessel for $10.6 million.

In 1997, the Partnership entered into a commitment to purchase a MD-80 Stage III
commercial  aircraft for $13.4 million.  The Partnership  made a deposit of $1.3
million  toward this purchase in 1997 which is included in this balance sheet as
equipment acquisition  deposits.  The Partnership completed the purchase of this
equipment  during January 1998 and paid $0.7 million for  acquisition  and lease
negotiation fees to FSI related to this acquisition.

(4)      Equipment Valuation

In March 1995, the Financial  Accounting Standards Board (FASB) issued statement
No. 121,  "Accounting  for the  Impairment of Long-Lived  Assets and  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
General  Partner  reviews  the  carrying  value of the  Partnership's  equipment
portfolio at least annually in relation to expected future market conditions for
the purpose of assessing  the  recoverability  of the recorded  amounts.  If the
projected  future lease revenues plus residual values are less than the carrying
value of the equipment,  a loss on revaluation is recorded.  No reductions  were
required to the carrying value of equipment during 1997, 1996 or 1995.

As of December 31, 1997, the General  Partner  estimated the current fair market
value of the Partnership's  equipment  portfolio,  including  equipment owned by
USPEs, to be approximately $124.7 million.

(C)      Financial Condition -- Capital Resources, Liquidity, and
         Unit Redemption Plan

The General Partner purchased the Partnership's initial equipment portfolio with
capital raised from its initial equity  offering,  borrowings from the Committed
Bridge  Facility  (described  below) and permanent  debt  financing.  No further
capital  contributions  from original  partners are permitted under the terms of
the  Partnership's  limited  partnership  agreement.   The  Partnership's  total
outstanding  indebtedness,  currently $30.0 million,  can only be increased by a
maximum  of  $5.0  million  subject  to  specific  covenants  in  existing  debt
agreements  unless the  Partnership's  senior  lender  will issue a waiver.  The
Partnership relies on operating cash flow to meet its operating  obligations and
to make cash distributions to the limited partners.

For the year ended December 31, 1997, the Partnership generated $15.4 million in
operating   cash  (net  cash   provided  by  operating   activities   plus  cash
distributions  from  unconsolidated   special-purpose   entities)  to  meet  its
operating  obligations and maintain the current level of distributions (total in
1997  of   approximately   $17.4  million)  to  the  partners,   but  also  used
undistributed available cash from prior periods of approximately $1.9 million.

Beginning  December 1, 1994, if the number of units made  available for purchase
by  limited  partners  in any  calendar  year  exceeds  the  number  that can be
purchased with reinvestment plan proceeds, then the Partnership may redeem up to
2% of the outstanding units each year,  subject to certain terms and conditions.
The  purchase  price to be  offered  for such units will be equal to 110% of the
unrecovered principal attributed to the units.  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. As of December 31,
1997, the Partnership had agreed to purchase  approximately  47,000 units for an
aggregate price of approximately $0.5 million.  The General Partner  anticipates
that these units will be repurchased in the first and second quarters of 1998.

During 1997 the  Partnership  borrowed  $1.0  million and $9.0  million from the
General  Partner  for 52 days  and 3 days,  respectively.  The  General  Partner
charged the  Partnership  market  interest  rates.  Total  interest  paid to the
General Partner was $17,000.

The General  Partner has entered into a joint $50.0 million credit facility (the
Committed Bridge  Facility) on behalf of the  Partnership,  PLM Equipment Growth
Fund  V  (EGF  V),  PLM  Equipment  Growth  &  Income  Fund  VII  (EGFVII),  and
Professional Lease Management Income Fund I (Fund I), all affiliated  investment
programs; TEC Acquisub, Inc. (TECAI); an indirect wholly-owned subsidiary of the
General  Partner;  and 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 the Partnership,  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 on December 2, 1997 to expire on November
2, 1998.  The  Partnership,  EGF V, EGF VII, Fund I, and TECAI may  collectively
borrow up to $35.0 million of the Committed  Bridge  Facility and AFG may borrow
up to $50.0  million.  The  Committed  Bridge  Facility also provides for a $5.0
million  Letter of  Credit  Facility  for the  eligible  borrowers.  Outstanding
borrowings  by one  borrower  reduce the amount  available  to each of the other
borrowers under the Committed  Bridge  Facility.  Individual  borrowings for the
Partnership  may be outstanding for no more than 179 days, with all advances due
no later than  November  2, 1998.  Interest  accrues at either the prime rate or
adjusted LIBOR plus 1.625% at the borrower's  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,  1997,  AFG  had  $23.0  million  in  outstanding
borrowings.  No other  eligible  borrower had any  outstanding  borrowings.  The
General  Partner  believes it will renew the Committed  Bridge Facility upon its
expiration with similar terms as those in the current Committed Bridge Facility.

The General  Partner has not  planned any  expenditures,  nor is it aware of any
contingencies  that would  cause it to require  any  additional  capital to that
mentioned above.


















                      (this space intentionally left blank)
<PAGE>


(D)      Results of Operations - Year-to-Year Detailed Comparison

(1)  Comparison  of the  Partnership's  Operating  Results  for the Years  Ended
December 31, 1997 and 1996

(a)       Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as  repair  and  maintenance,
equipment operation,  and asset-specific  insurance expenses) on owned equipment
decreased  during the year ended  December,  31, 1997, when compared to the same
period of 1996. The following  table presents  revenues less direct  expenses by
owned equipment type (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                              For the Years
                                                                            Ended December 31,
                                                                          1997              1996
                                                                      ------------------------------
<S>                                                                     <C>               <C>
Rail equipment                                                          $  3,134          $  2,774
Aircraft, aircraft engines, and components                                 3,083             3,982
Trailers                                                                   2,890             3,148
Marine containers                                                          1,668             2,179
Marine vessels                                                             1,610             3,816

</TABLE>

Rail  Equipment:  Rail equipment  lease  revenues and direct  expenses were $4.1
million and $1.0 million,  respectively,  for the year ended December, 31, 1997,
compared to $4.1 million and $1.3 million, respectively,  during the same period
of 1996.  Although the railcar fleet remained  relatively the same size for both
years, the increase in railcar contribution  resulted from fewer running repairs
during 1997 than were  required on certain of the  railcars in the fleet  during
1996.

Aircraft,  Aircraft Engines, and Components:  Aircraft lease revenues and direct
expenses  were $3.6 million and $0.5 million,  respectively,  for the year ended
December,  31, 1997,  compared to $4.2 million and $0.2  million,  respectively,
during 1996.  The decrease in aircraft  contribution  was due to the sale of two
aircraft  engines during the second quarter of 1996 and the sale of the aircraft
components during the fourth quarter of 1997.

Trailers:  Trailer lease revenues and direct expenses were $3.8 million and $0.9
million,  respectively,  for the year ended December, 31, 1997, compared to $4.2
million and $1.1  million,  respectively,  during  1996.  The number of trailers
owned by the Partnership has been declining over the past 12 months due to sales
and  dispositions.  The result of this  declining  fleet has been a decrease  in
trailer contribution.

Marine Containers: Marine container lease revenues and direct expenses were $1.7
million  and  $13,000,  respectively,  for the year ended  December,  31,  1997,
compared to $2.2 million and $12,000,  respectively,  during 1996. The number of
marine  containers  owned by the Partnership has been declining over the past 12
months due to sales and  dispositions.  The result of this  declining  fleet has
been a decrease in marine container contribution.

Marine  Vessels:  Marine  vessel lease  revenues and direct  expenses  were $8.9
million and $7.3 million,  respectively,  for the year ended December, 31, 1997,
compared to $8.9  million  and $5.1  million,  respectively,  during  1996.  The
decrease in marine vessel contribution was due in part to the sale of two marine
vessels during the fourth  quarter of 1997. The decrease in marine  contribution
caused by these  dispositions was offset in part by an increase in marine vessel
lease  revenues  due to the  purchase  of two marine  vessels  during the second
quarter of 1996 that were on lease for the full year of 1997,  compared to being
on lease for only a partial  period of 1996. The increase in lease revenues from
the purchased marine vessels was offset in part by lower day rates earned on two
marine  vessels  that were sold  during  1997,  when  compared  to 1996.  Direct
expenses  increased  $2.2 million  during the year ended 1997,  due primarily to
repairs to two marine vessel that were not needed during 1996 and an increase in
the liability insurance for these marine vessels.

(b) Indirect Expenses Related to Owned Equipment Operations

Total indirect  expenses of $17.0 million for the year ended December,  31, 1997
decreased  from  $18.8  million  for the same  period in 1996.  The  significant
variances are explained as follows:

     (i) A $2.6 million decrease in depreciation and amortization  expenses from
1996 levels  reflects  the sale of certain  assets  during 1997 and 1996 and the
double-declining balance method of depreciation.

     (ii) A $0.2  million  decrease  in  management  fees was due to lower lease
revenues.

     (iii) A $0.7 million increase in administrative expenses was because of the
additional  professional services needed to collect outstanding  receivables due
from certain nonperforming lessees.

     (iv) A $0.3 million  increase in the  allowance for bad debts was due to an
increase in uncollectable amounts due from certain lessees during 1997.

(c) Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of equipment  for the year ended  December 31,
1997 totaled $10.1 million, which resulted from the sale of aircraft components,
marine  containers,  and  trailers,  with an  aggregate  net book  value of $5.4
million, for proceeds of $7.2 million, and the sale of two marine vessels with a
net book value of $10.3 million for proceeds of $17.8  million.  Included in the
gain of $8.3 million from the sale of the marine  vessels is the unused  portion
of accrued  drydocking of $0.8 million.  For the year ended December,  31, 1996,
the $7.2 million net gain on the disposition of equipment resulted from the sale
or disposal of marine containers, aircraft engines, trailers, and railcars, with
an aggregate net book value of $6.0 million,  for proceeds of $7.0 million.,  In
addition,  one marine vessel with a net book value of $14.6 million was sold for
proceeds of $20.8 million. Included in the gain of $6.3 million from the sale of
the marine vessel was the unused portion of accrued drydocking of $0.1 million.

(d)       Interest and Other Income

Interest and other income  decreased  $0.1 million  during the year of 1997 when
compared to the same period of 1996.  Interest  income  decreased  $0.4  million
during 1997, due to lower cash balances available for investment.  This decrease
was offset,  in part,  by the receipt of $0.3  million in business  interruption
claims during 1997  resulting  from the off-hire  status of a marine vessel that
had various mechanical breakdowns.

(e)  Equity in Net  Income  (Loss) of  Unconsolidated  Special-Purpose  Entities
(USPEs)

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

<TABLE>
<CAPTION>

                                                                               For the Years
                                                                            Ended December, 31,

                                                                           1997               1996
                                                                      ---------------------------------
<S>                                                                     <C>                 <C>
Aircraft                                                                $   4,090           $  (1,853)
Mobile offshore drilling unit                                                   1               5,694
Marine vessels                                                               (707 )              (415)

</TABLE>

Aircraft:  As of December,  31, 1997,  the  Partnership  owned an interest in an
entity that owns a Boeing 767 commercial  aircraft,  an interest in a trust that
owns two commercial aircraft on direct finance lease, and an interest in a trust
that holds four commercial aircraft.  As of December,  31, 1996, the Partnership
owned an interest in an entity that owned a Boeing 767 commercial  aircraft,  an
interest in a trust that held two  commercial  aircraft on direct finance lease,
and an interest in a trust that held ten  commercial  aircraft.  During the year
ended  December 31, 1997,  lease  revenues of $7.6 million and the gain from the
sale of an  interest  in a trust  that  held six  commercial  aircraft,  of $3.4
million,  were  offset  by  depreciation  and  administrative  expenses  of $6.9
million.  During the same period of 1996,  lease  revenues of $6.3  million were
offset by depreciation and administrative expenses of $8.2 million. The increase
of $1.3  million in  revenues  was due to the  purchase of a trust that owns two
commercial  aircraft on direct  finance  lease during 1997 and the purchase of a
trust that holds five  commercial  aircraft  during the latter half of the first
quarter of 1996. The decrease of $1.3 million in depreciation and administrative
expenses  was  primarily  due  to  the   double-declining   balance   method  of
depreciation

Mobile Offshore  Drilling Unit: As of December,  31, 1997, the Partnership owned
an interest in a rig that was  purchased  during the fourth  quarter of 1996. In
the third  quarter of 1996,  the  Partnership  sold its interest in another rig.
During the year ended December 31, 1997, revenues of $1.1 million were offset by
depreciation and administrative expenses of $1.1 million. During the same period
of 1996,  revenues of $0.8 million and the gain from the sale of the rig of $5.8
million were offset by depreciation and administrative expenses of $0.9 million.

Marine Vessels:  As of December,  31, 1997, the Partnership owned an interest in
entities that own three marine  vessels,  one of which was purchased  during the
third  quarter of 1997.  As of December,  31,  1996,  the  Partnership  owned an
interest  in two  marine  vessels.  During the year ended  December,  31,  1997,
revenues of $3.2 million were offset by depreciation and administrative expenses
of $3.9 million.  During the same period of 1996,  revenues of $1.6 million were
offset by depreciation and administrative  expenses of $2.0 million. The primary
reason revenues and expenses increased during 1997 was due to the purchase of an
interest in an entity that owns a marine vessel during 1997.

(f)      Net Income

As a result of the foregoing,  the  Partnership's  net income for the year ended
December,  31, 1997 was $9.2  million,  compared to a net income of $8.3 million
during  the same  period in 1996.  The  Partnership's  ability  to  operate  and
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
is subject to many factors, and the Partnership's  performance in the year ended
December,  31, 1997 is not necessarily indicative of future periods. In the year
ended  December,  31, 1997,  the  Partnership  distributed  $16.5 million to the
limited partners, or $2.00 per weighted-average limited partnership unit.

(2)  Comparison  of the  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,
equipment operation,  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 of dollars):

<TABLE>
<CAPTION>

                                                                              For the Years


                                                                            Ended December 31,
                                                                          1996              1995
                                                                      ------------------------------
<S>                                                                     <C>               <C>
Aircraft and aircraft engines                                           $ 3,982           $ 4,571
Marine vessels                                                            3,816             5,661
Trailers                                                                  3,148             4,080
Rail equipment                                                            2,774             3,252
Marine containers                                                         2,179             2,880

</TABLE>

Aircraft and Aircraft Engines:  Aircraft lease revenues and direct expenses were
$4.2 million and $0.2  million,  respectively,  for the year ended  December 31,
1996, compared to $4.9 and $0.3 million, respectively, during the same period of
1995.  The decrease in aircraft  contribution  was due to a lower  re-lease rate
earned on two aircraft  engines that were sold during 1996  compared to the same
period during 1995.

Marine  Vessels:  Marine  vessel lease  revenues and direct  expenses  were $8.9
million and $5.1 million,  respectively,  for the year ended  December 31, 1996,
compared to $10.7 million and $5.1 million, respectively, during the same period
of 1995. The decrease in marine vessel contribution during 1996 was due to lower
day rates earned by two marine  vessels and the sale of a marine  vessel  during
the first  quarter  of 1996,  which was  offset in part by the  purchase  of two
marine  vessels  during the first  quarter of 1996,  when  compared  to the same
period of 1995.

Trailers:  Trailer lease revenues and direct expenses were $4.2 million and $1.0
million,  respectively,  for the year ended December 31, 1996,  compared to $5.0
million and $1.0  million,  respectively,  during the same  period of 1995.  The
number of trailers owned by the  Partnership has been declining over the past 12
months due to sales and  dispositions.  The result of this  declining  fleet has
been a decrease in trailer net contribution.  In addition,  the trailer fleet is
experiencing lower utilization in the PLM-affiliated short-term rental yards due
to soft market conditions.

Rail  Equipment:  Rail equipment  lease  revenues and direct  expenses were $4.1
million and $1.3 million,  respectively,  for the year ended  December 31, 1996,
compared to $4.1 million and $0.9 million, respectively,  during the same period
of 1995.  Although  the rail fleet  remained  relatively  the same size for both
periods,  the  decrease  in rail  contribution  resulted  from  running  repairs
required  on  certain of the  railcars  in the fleet  during  1996 that were not
needed during 1995.

Marine  Containers:  Marine  container  lease  revenues and  expenses  were $2.2
million  and  $12,000,  respectively,  for the year  ended  December  31,  1996,
compared to $2.9  million and $23,000,  respectively,  during the same period of
1995.  The  number  of  marine  containers  owned  by the  Partnership  has been
declining over the past 12 months due to sales and  dispositions.  The result of
this  declining  fleet  has  resulted  in a  decrease  in marine  container  net
contribution.

(b) Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $18.8 million for the year ended  December 31, 1996
decreased  from $21.4  million for the same period in 1995.  The  variances  are
explained as follows:

     (i) A $3.4 million decrease in depreciation and amortization  expenses from
1995 levels  reflects  the sale of certain  assets  during 1996 and 1995 and the
double-declining balance method of depreciation.  These decreases were offset in
part by the purchase of two marine vessels during the first quarter of 1996.

     (ii) A $0.1 million  decrease in management  fees was due to lower revenues
earned, when compared to the same period of 1995.

     (iii) A $0.1  million  decrease in  administrative  expenses was due to the
lower costs associated with data processing services and general  administration
of the Partnership, when compared to the same period of 1995.

     (iv) A $0.7 million  increase in bad debt expense was due to an increase in
uncollectible amounts due from certain lessees.

     (v) A $0.3 million increase in interest expense was due to the net increase
in short-term  debt of $12.5  million,  which was in place for six months during
1996,  compared to $1.7 million in short-term debt, which was in place for three
months during the same period of 1995.

(c) Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of equipment  for the year ended  December 31,
1996 totaled $7.2 million,  which  resulted  primarily from the sale of a marine
vessel that was held for sale as of December 31, 1995,  with a net book value of
$14.6 million at the date of sale,  for proceeds of $20.8  million.  Included in
the gain of $6.3  million  from  the sale of the  marine  vessel  is the  unused
portion of accrued drydocking of $0.1 million.  Other equipment sold or disposed
of during 1996 included  marine  containers,  trailers,  aircraft  engines,  and
railcars, with an aggregate net book value of $6.0 million, for proceeds of $7.0
million.  The net  gain on the  disposition  of  equipment  for the  year  ended
December  31,  1995  totaled  $0.1  million,  which  resulted  from  the sale or
disposition of marine containers, trailers, and a railcar, with an aggregate net
book value of $0.9 million, for proceeds of $1.0 million.

(d)      Interest and Other Income

Interest and other income  increased $0.2 million during the year ended December
31, 1996,  which was due primarily to an increase in interest income from higher
cash  balances  available for  investments,  when compared to the same period of
1995.

(e)      Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities

The net income  (loss)  generated  from the  operation of  jointly-owned  assets
accounted  for  under  the  equity  method  is shown in the  following  table by
equipment type (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                              For the Years
                                                                            Ended December 31,

                                                                            1996             1995
                                                                      --------------------------------
<S>                                                                     <C>               <C>
Mobile offshore drilling unit                                           $    5,694        $     (269)

Marine vessels                                                                (415)             (130)

Aircraft                                                                    (1,853)           (1,113)

</TABLE>

Mobile  Offshore  Drilling  Unit:  As of December 31, 1996,  the interest in the
entity that owned a rig was sold by the  General  Partner.  The  increase in net
income  of $5.9  million  during  the year  ended  December  31,  1996  resulted
primarily from the gain on the sale of the rig. The  Partnership's  share of the
liquidating  distribution  was $11.7  million.  Revenues of $0.8 million  earned
during  the year  ended  December  31,  1996  were  offset by  depreciation  and
administrative  expenses  of $0.9  million.  During  the  same  period  of 1995,
revenues of $1.2 million were offset by depreciation and administrative expenses
of $1.5 million.

Marine Vessel:  As of December 31, 1996, the Partnership owned a 20% interest in
an entity that owns a marine  vessel and a 50%  interest in another  entity that
owns a marine vessel, purchased during the first quarter of 1996. As of December
31, 1995,  the  Partnership  only owned the 20%  interest in the marine  vessel.
During the year ended December 31, 1996, revenues of $1.6 million were offset by
depreciation and administrative expenses of $2.0 million. During the same period
of 1995, revenues of $0.7 million were offset by depreciation and administrative
expenses of $0.8 million.

Aircraft:  As of December 31, 1996, the  Partnership  had an interest in a trust
that owns a Boeing 767  commercial  aircraft and had acquired an interest in two
trusts that own 10  commercial  aircraft  during the latter half of 1995 and the
first quarter of 1996; then,  during the fourth quarter of 1996, the Partnership
purchased  an  interest  in a trust  owning two  commercial  aircraft  on direct
finance lease.  As of December 31, 1995, the  Partnership had an interest in the
trust holding the Boeing 767 commercial  aircraft and purchased an interest in a
trust containing seven commercial  aircraft.  During the year ended December 31,
1996,  revenues of $6.3 million were offset by depreciation  and  administrative
expenses  of $8.2  million.  During the same  period of 1995,  revenues  of $3.4
million were offset by depreciation and administrative expenses of $4.5 million.

(f)      Net Income (Loss)

As a result of the foregoing,  the  Partnership's net income of $8.3 million for
the year ended  December  31,  1996  increased  from a net loss of $2.0  million
during  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  remainder 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  $16.6  million  to  the  unitholders,   or  $2.00  per
weighted-average limited partnership unit.

(E)  Geographic Information

Certain of the Partnership equipment operates in international markets. Although
these operations expose the Partnership to certain currency,  political,  credit
and economic risks, the General Partner believes that these risks are minimal or
has implemented strategies to control the risks. 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
by avoiding  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 (loss),  and net book value of equipment 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 of
ownership due to the use of the double-declining balance method of depreciation.
The relationships of geographic revenues,  net income (loss), and net book value
of equipment are expected to change  significantly in the future, as assets come
off  lease and  decisions  are made to either  redeploy  the  assets in the most
advantageous geographic location or sell the assets.

The Partnership's owned equipment and investments in equipment owned by USPEs on
lease to U.S.- domiciled lessees consist of trailers and railcars.  During 1997,
U.S. lease revenues  accounted for 22% of the total lease revenues of wholly and
partially  owned  equipment,  while net  income  accounted  for 13% of the total
aggregate  net  income  for  the  Partnership.   The  primary  reason  for  this
relationship  is that a large  gain  was  realized  from the sale of an asset in
other  geographic  regions.  In addition,  the Partnership  depreciates its rail
equipment over a 15-year period versus 12 years for other  equipment types owned
and leased in other geographic regions.

The Partnership's owned equipment and investments in equipment owned by USPEs on
lease to  Canadian-domiciled  lessees  consist of aircraft and railcars.  During
1997,  Canadian lease revenues  accounted for 13% of the total lease revenues of
wholly and partially owned equipment,  while net income accounted for 39% of the
total  aggregate  net income for the  Partnership.  The primary  reason for this
relationship  is that a large gain was realized  from the sale of assets in this
geographic region.

The  Partnership's  investment in an aircraft  owned by a USPE on lease to South
American-domiciled  lessees  during  1997  accounted  for 9% of the total  lease
revenues of wholly and partially  owned  equipment.  South  American  operations
accounted  for 2% of the total  aggregate  net income for the  Partnership.  The
primary reason for this  relationship is that a large gain was realized from the
sale of assets in other geographic regions.

The Partnership's owned equipment that was on lease to lessees domiciled in Asia
consists of  aircraft.  Lease  revenues in this region  accounted  for 8% of the
total lease revenues of wholly and partially  owned equipment and recorded a net
loss $1.2  million  when  compared  to the  total  aggregate  net  income of the
Partnership of $9.2 million.  The primary reason for this  relationship  is that
during 1997 the Partnership reserved $1.2 million in bad debts for this region.

The  Partnership's  sold  equipment  that  was on  lease to  lessees  in  Europe
consisted  of two  packages of aircraft  rotable  spare-part  components,  which
accounted for 3% of lease  revenues of wholly and partially  owned  equipment in
1997,  while net income  accounted  for $2.4 million of the total  aggregate net
income for the  Partnership.  The primary  reason for the income is that a large
gain was realized from the sale of all equipment in this geographic region.

The Partnership's owned equipment and investments in equipment owned by USPEs on
lease to lessees in the rest of the world consists of marine vessels, a rig, and
marine containers.  During 1997, lease revenues from these operations  accounted
for 45% of the total lease  revenues of wholly and  partially  owned  equipment,
while net income from these operations  accounted for $5.4 million when compared
to the total  aggregate net income for the  Partnership.  The primary reason for
this  relationship is that during 1996 the  Partnership  sold two marine vessels
for a gain of $8.3 million.

(F)  Year 2000 Compliance

The General  Partner is currently  addressing  the Year 2000  computer  software
issue.  The General Partner is creating a timetable for carrying out any program
modifications that may be required. The General Partner does not anticipate that
the cost of these modifications allocable to the Partnership will be material.

(G)  Accounting Pronouncements

In  June  1997,  the  Financial   Accounting  Standards  Board  issued  two  new
statements:  SFAS No. 130,  "Reporting  Comprehensive  Income,"  which  requires
enterprises to report,  by major  component and in total,  all changes in equity
from  nonowner  sources;  and SFAS No. 131,  "Disclosures  about  Segments of an
Enterprise  and  Related  Information,"  which  establishes  annual and  interim
reporting  standards  for a public  company's  operating  segments  and  related
disclosures about its products, services, geographic areas, and major customers.
Both statements are effective for the  Partnership's  fiscal year ended December
31, 1998, with earlier  application  permitted.  The effect of adoption of these
statements  will  be  limited  to the  form  and  content  of the  Partnership's
disclosures and will not impact the  Partnership's  results of operations,  cash
flow, or financial position.

(H)  Inflation

Inflation had no significant impact on the Partnership's operations during 1997,
1996, or 1995.

(I)  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.

(J)  Outlook for the Future

Several factors may affect the Partnership's  operating  performance in 1998 and
beyond,  including  changes in the markets for the  Partnership's  equipment and
changes in the regulatory environment in which that equipment operates.

The Partnership's operation of a diversified equipment portfolio in a broad base
of markets is  intended  to reduce its  exposure  to  volatility  in  individual
equipment sectors.  In 1997, market conditions,  supply and demand  equilibrium,
and other factors varied in several markets. In the container market,  continued
industry  consolidations,  and other factors,  are helping increase  utilization
resulting in higher per diem rates and returns. In the dry over-the-road trailer
markets,  strong demand and a backlog of new equipment  deliveries produced high
utilization and returns.  The marine vessel,  rail, and mobile offshore drilling
unit markets can generally be categorized by increasing rates, as the demand for
equipment is increasing faster than new additions, net of retirements.  Finally,
the Partnership has made plans to sell specific narrowbody Stage II aircraft and
has made  plans  to  install  a  hushkit  on the  others  in  order to  continue
operating.   These  different  markets  have  had  individual   effects  on  the
performance of Partnership  equipment,  in some cases  resulting in a decline in
performance and in others in an improvement in performance.

The  ability  of the  Partnership  to  realize  acceptable  lease  rates  on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and  government  or other  regulations.  The  unpredictability  of some of these
factors makes it difficult for the General  Partner to clearly  define trends or
influences that may impact the performance of the Partnership's  equipment.  The
General  Partner  continuously  monitors  both  the  equipment  markets  and the
performance of the Partnership's equipment in these markets. The General Partner
may make an evaluation to reduce the Partnership's exposure to equipment markets
in which it determines that it cannot operate  equipment and achieve  acceptable
rates of return. Alternatively,  the General Partner may make a determination to
enter  equipment  markets in which it  perceives  opportunities  to profit  from
supply-demand instabilities or other market imperfections.

The  Partnership  intends to use  excess  cash flow,  if any,  after  payment of
expenses and cash distributions to acquire additional equipment during the first
seven years of Partnership  operations.  The General Partner believes that these
acquisitions may cause the Partnership to generate  additional earnings and cash
flow for the Partnership.

(1)      Repricing and Reinvestment Risk

Certain portions of the  Partnership's  aircraft,  marine vessel,  railcar,  and
trailer  portfolios  will  be  remarketed  in 1998 as  existing  leases  expire,
exposing  the  Partnership  to  repricing  risk/opportunity.  Additionally,  the
General  Partner  may  select  to  sell  certain  underperforming  equipment  or
equipment  whose  continued  operation may become  prohibitively  expensive.  In
either  case,  the General  Partner  intends to re-lease  or sell  equipment  at
prevailing  market rates;  however,  the General  Partner  cannot  predict these
future rates with any certainty at this time, and cannot  accurately  assess the
effect of such activity on future Partnership performance.

(2)      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.  Currently,  the General Partner has
observed  rising  insurance  costs to operate  certain  vessels into U.S.  ports
resulting  from  implementation  of the U.S. Oil Pollution Act of 1990.  Ongoing
changes  in  the  regulatory   environment,   both  in  the  United  States  and
internationally,  cannot be predicted  with  accuracy,  and preclude the General
Partner from determining the impact of such changes on Partnership operations or
sale of equipment.

(3)      Additional Capital Resources and Distribution Levels

The Partnership's  initial contributed capital was composed of the proceeds from
its initial  offering,  supplemented  later by  permanent  debt in the amount of
$30.0 million.  The General Partner has not planned any expenditures,  nor is it
aware of any  contingencies,  that  would  cause it to  require  any  additional
capital  or debt (an  additional  $5.0  million of debt is  allowable  under the
Partnership's debt agreement covenants) to that mentioned above.

Pursuant to the limited  partnership  agreement,  the Partnership  will cease to
reinvest surplus cash in additional  equipment  beginning in its seventh year of
operations,  which  commences on January 1, 2000. The General Partner intends to
continue  its  strategy of  selectively  redeploying  equipment  throughout  the
reinvestment phase of the Partnership to achieve competitive returns. By the end
of this  reinvestment  period,  the General Partner intends to have assembled an
equipment  portfolio capable of achieving a level of operating cash flow for the
remaining life of the Partnership sufficient to meet its obligations and sustain
a predictable level of distributions to the partners.

The  General  Partner  believes  the  current  level  of  distributions  can  be
maintained throughout 1998 using cash from operations,  undistributed  available
cash from prior periods,  and proceeds from sales or  dispositions of equipment,
if necessary.  Subsequent to this period,  the General Partner will evaluate the
level of distributions the Partnership can sustain over extended periods of time
and, together with other  considerations,  may adjust the level of distributions
accordingly.  In the long term, the difficulty in predicting  market  conditions
precludes  the  General  Partner  from  accurately  determining  the  impact  on
liquidity or distribution levels.

The  Partnership's  permanent debt obligation begins to mature in November 2001.
The General Partner  believes that sufficient cash flow will be available in the
future for repayment of debt.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  financial  statements  for the  Partnership  are  listed  in the  Index  to
Financial Statements included in Item 14(a) of this Annual Report on Form 10-K

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


None.



<PAGE>



                                                     PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF PLM INTERNATIONAL AND
         PLM FINANCIAL SERVICES, INC.

As of the date of this annual  report,  the directors and executive  officers of
PLM  International  (and key executive  officers of its subsidiaries) and of PLM
Financial Services, Inc. are as follows:

<TABLE>
<CAPTION>

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

<S>                                      <C>                   <C>
Robert N. Tidball                        59                    Chairman of the Board, Director, President,
                                                               and Chief Executive Officer, PLM International, Inc.;
                                                               Director, PLM Financial Services, Inc.;
                                                               Vice President, PLM Railcar Management Services, Inc.;
                                                               President, PLM Worldwide Management Services Ltd.

Randall L.-W. Caudill                    50                    Director, PLM International, Inc.

Douglas P. Goodrich                      51                    Director and Senior Vice President, PLM International;
                                                               Director and President, PLM Financial Services, Inc.;
                                                               President, PLM Transportation Equipment Corporation;
                                                               President, PLM Railcar Management Services, Inc.

Harold R. Somerset                       63                    Director, PLM International, Inc.

Robert L. Witt                           57                    Director, PLM International, Inc.

J. Michael Allgood                       49                    Vice President and Chief Financial Officer,
                                                               PLM International, Inc. and PLM Financial Services, Inc.

Stephen M. Bess                          51                    President, PLM Investment Management, Inc. and PLM Securities Corp.;
                                                               Vice President and Director, PLM Financial Services, Inc.

Richard K Brock                          35                    Vice President and Corporate Controller,
                                                               PLM International, Inc. and PLM Financial Services, Inc.

Frank Diodati                            43                    President, PLM Railcar Management Services Canada Limited

Steven O. Layne                          43                    Vice President, PLM Transportation Equipment Corporation;
                                                               Vice President, PLM Worldwide Management Services Ltd.

Susan C. Santo                           35                    Vice President, Secretary, and General Counsel,
                                                               PLM International, Inc. and PLM Financial Services, Inc.

Thomas L. Wilmore                        55                    Vice President, PLM Transportation Equipment Corporation;
                                                               Vice President, PLM Railcar Management Services, Inc.

</TABLE>

Robert N.  Tidball  was  appointed  Chairman  of the  Board in  August  1997 and
President and Chief Executive Officer of PLM International in March 1989. At the
time of his  appointment  to  President  and  Chief  Executive  Officer,  he was
Executive Vice President of PLM International.  Mr. Tidball became a director of
PLM  International  in April 1989.  Mr.  Tidball was  appointed  Director of PLM
Financial Services, Inc. in July 1997 and was elected President of PLM Worldwide
Management Services Limited in February 1998. He has served as an officer of PLM
Railcar  Management  Services,  Inc.  since June 1987. 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,  he was Vice
President, General Manager, and Director of North American Car Corporation and a
director of the American Railcar Institute and the Railway Supply Association.

Randall L.-W.  Caudill was elected to the Board of Directors in September  1997.
He is  President  of  Dunsford  Hill  Capital  Partners,  a San  Francisco-based
financial consulting firm serving emerging growth companies in the United States
and  abroad,  as well as a senior  advisor  to the  investment  banking  firm of
Prudential  Securities,  where he has been employed since 1987. Mr. Caudill also
serves as a director of VaxGen, Inc. and SBE, Inc.

Douglas  P.  Goodrich  was  elected  to the  Board of  Directors  in July  1996,
appointed  Senior  Vice  President  of PLM  International  in  March  1994,  and
appointed Director and President of PLM Financial  Services,  Inc. in June 1996.
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  Corporation  of
Chicago, Illinois, from December 1980 to September 1985.

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 Sugar),
a recently acquired subsidiary of Alexander & Baldwin,  Inc. Mr. Somerset joined
C&H Sugar 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 of
Agriculture and 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 US 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.

Robert L. Witt was elected to the Board of Directors  in June 1997.  Since 1993,
Mr. Witt has been a principal with WWS  Associates,  a consulting and investment
group specializing in start-up situations and private  organizations about to go
public.  Prior to that, he was Chief Executive Officer and Chairman of the Board
of Hexcel  Corporation,  an international  advanced materials company with sales
primarily in the aerospace,  transportation, and general industrial markets. Mr.
Witt also serves on the boards of  directors  for various  other  companies  and
organizations.

J. Michael Allgood was appointed Vice President and Chief  Financial  Officer of
PLM International in October 1992 and Vice President and Chief Financial Officer
of PLM Financial Services,  Inc. in December 1992. Between July 1991 and October
1992,  Mr.  Allgood  was a  consultant  to  various  private  and  public-sector
companies  and  institutions   specializing  in  financial   operations  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 Director of PLM Financial  Services,  Inc. in July
1997.  Mr. Bess was appointed  President of PLM  Securities  Corporation 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  Corporation,  a manufacturer  of computer  peripheral  equipment,  from
October 1975 to November 1978.

Richard K Brock was appointed  Vice  President  and Corporate  Controller of PLM
International and PLM Financial Services, Inc. in June 1997, having served as an
accounting  manager  beginning in September 1991 and as Director of Planning and
General  Accounting  beginning  in  February  1994.  Mr.  Brock  was a  division
controller of Learning Tree International,  a technical education company,  from
February 1988 through July 1991.

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 of PLM  Transportation  Equipment
Corporation's  Air Group in November  1992, and was appointed Vice President and
Director of PLM Worldwide  Management  Services  Limited in September  1995. Mr.
Layne was its Vice President,  Commuter and Corporate Aircraft beginning in July
1990.  Prior to joining PLM, Mr. Layne was Director of 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 a senior pilot with 13 years of accumulated
service.

Susan C. Santo  became Vice  President,  Secretary,  and General  Counsel of PLM
International and PLM Financial Services,  Inc. in November 1997. She has worked
as an  attorney  for PLM  International  since  1990 and  served  as its  Senior
Attorney since 1994.  Previously,  Ms. Santo was engaged in the private practice
of law in San  Francisco.  Ms. Santo  received her J.D.  from the  University of
California, Hastings College of the Law.

Thomas L.  Wilmore was  appointed  Vice  President,  Rail of PLM  Transportation
Equipment  Corporation  in March  1994,  and has  served  as Vice  President  of
Marketing for PLM Railcar  Management  Services,  Inc. since May 1988.  Prior to
joining PLM, Mr. Wilmore was Assistant  Vice President and Regional  Manager for
MNC Leasing  Corporation  in Towson,  Maryland from February 1987 to April 1988.
From July 1985 to  February  1987,  he was  President  and  co-owner of Guardian
Industries  Corporation,  Chicago,  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 PLM  International  are elected for a three-year  term and the
directors of PLM  Financial  Services,  Inc. are elected for a one-year  term or
until their successors are elected and qualified.  No family relationships exist
between any director or executive  officer of PLM International or PLM Financial
Services, Inc.





<PAGE>




ITEM 11.  EXECUTIVE COMPENSATION

The Partnership has no directors, officers, or employees. The Partnership had no
pension,  profit  sharing,  retirement,  or similar benefit plan in effect as of
December 31, 1997.


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. As of December
         31, 1997, 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  executive
         officer or director of the General Partner and its affiliates owned any
         units of the Partnership as of December 31, 1997.

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (A)      Transactions with Management and Others

         During 1997, the Partnership  paid or accrued the following fees to FSI
         or its affiliates:  management fees, $1.2 million,  and  administrative
         and data processing  services  performed on behalf of the  Partnership,
         $0.9 million.  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 1997; these
         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 1997, the USPEs paid or accrued the following fees to FSI or its
         affiliates   (based  on  the   Partnership's   proportional   share  of
         ownership):  management  fees,  $0.5 million;  administrative  and data
         processing  services,  $0.1 million;  equipment  acquisition fees, $0.4
         million,  and lease negotiation fees, $0.1 million.  The USPEs paid TEI
         $0.1 million for insurance coverages during 1997.

     (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 on Form 10-K.

     (b)    Reports on Form 8-K

              None.

     (c)    Exhibits

      4.      Limited  Partnership  Agreement of  Partnership.  Incorporated  by
              reference to the Partnership's  Registration Statement on Form S-1
              (Reg. No. 33-40093) which became effective with the Securities and
              Exchange Commission on December 23, 1991. - -

      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.  33-40093)  which
              became  effective with the  Securities and Exchange  Commission on
              December 23, 1991.

      10.2    Note  Agreement,  dated as of  August  1,  1993,  regarding  $30.0
              million in 6.7% senior notes due November 17, 2003.

      10.3    Third Amended and Restated Warehousing Credit Agreement,  dated as
              of  December  2, 1997,  with First  Union  National  Bank of North
              Carolina and others.

      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.


Dated: March 24, 1998              PLM EQUIPMENT GROWTH FUND VI
                                   PARTNERSHIP

                                   By:      PLM Financial Services, Inc.
                                            General Partner


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


                                   By:      /s/ Richard K Brock
                                            -------------------------
                                            Richard K Brock
                                            Vice President and
                                            Corporate 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



*_______________________
Robert N. Tidball               Director, FSI               March 24, 1998



*_______________________
Douglas P. Goodrich             Director, FSI               March 24, 1998



*_______________________
Stephen M. Bess                 Director, FSI               March 24, 1998

*Susan Santo,  by signing her 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/ Susan Santo
------------------------
Susan Santo
Attorney-in-Fact




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          INDEX TO FINANCIAL STATEMENTS

                                  (Item 14(a))


                                                                   Page

Report of independent auditors                                       29

Balance sheets as of December 31, 1997 and 1996                      30

Statements of operations for the years ended December 31, 1997,
     1996, and 1995                                                  31

Statements of changes in partners' capital for the years
     ended December 31, 1997, 1996, and 1995                         32

Statements of cash flows for the years ended December 31, 1997,
     1996, and 1995                                                  33

Notes to financial statements                                   34 - 43


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 VI:


We have audited the financial  statements  of PLM  Equipment  Growth Fund VI, as
listed  in the  accompanying  index to  financial  statements.  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 have  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 VI as
of December 31, 1997 and 1996,  and the results of its  operations  and its cash
flows for each of the years in the three-year period ended December 31, 1997, in
conformity with generally accepted accounting principles.


/S/ KPMG PEAT MARWICK LLP
-------------------------------

SAN FRANCISCO, CALIFORNIA
March 12, 1998



<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                            (A Limited Partnership)
                                 BALANCE SHEETS
                                  December 31,
                 (in thousands of dollars, except unit amounts)
<TABLE>
<CAPTION>



                                                                                     1997                   1996
                                                                               ---------------------------------------
<S>                                                                              <C>                   <C>
Assets:


Equipment held for operating leases, at cost                                     $     71,597          $    109,551
Less accumulated depreciation                                                         (33,895)              (46,544)
                                                                               ---------------------------------------
  Net equipment                                                                        37,702                63,007

Cash and cash equivalents                                                              14,204                 3,017
Restricted cash                                                                           792                 1,285
Accounts receivable, less allowance for doubtful accounts of
    $2,524 in 1997 and $1,188 in 1996                                                   2,560                 3,253
Investments in unconsolidated special-purpose entities                                 46,796                42,119
Net investment in direct finance lease                                                    153                   254
Lease negotiation fees to affiliate, less accumulated
    amortization of $92 in 1996 and $291 in 1996                                           58                   139
Debt issuance costs, less accumulated amortization
    of $61 in 1997 and $45 in 1996                                                         91                   107
Debt placement fees to affiliate, less accumulated
    amortization of $59 in 1997 and $45 in 1996                                            89                   103
Prepaid expenses and other assets                                                         181                   241
Equipment acquisition deposits                                                          1,335                    --
                                                                               ---------------------------------------

      Total assets                                                               $    103,961          $    113,525
                                                                               =======================================

Liabilities and partners' capital:

Liabilities:
Accounts payable and accrued expenses                                            $      1,296          $      1,048
Due to affiliates                                                                       2,822                 2,177
Lessee deposits and reserve for repairs                                                 2,691                 3,224
Short-term note payable                                                                    --                 1,286
Note payable                                                                           30,000                30,000
                                                                               ---------------------------------------
  Total liabilities                                                                    36,809                37,735
                                                                               ---------------------------------------

Partners' capital:
Limited partners (limited partnership units of 8,247,264 and
      8,286,966 as of December 31, 1997 and 1996, respectively)                        67,152                75,790
General Partner                                                                            --                    --
                                                                               ---------------------------------------
  Total partners' capital                                                              67,152                75,790
                                                                               ---------------------------------------

      Total liabilities and partners' capital                                    $    103,961          $    113,525
                                                                               =======================================

</TABLE>


                       See accompanying notes to financial
                                  statements.




<PAGE>




                          PLM EQUIPMENT GROWTH FUND VI
                            (A Limited Partnership)
                            STATEMENTS OF OPERATIONS
                        For the years ended December 31,

         (In thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>



                                                                    1997              1996              1995
                                                              ----------------------------------------------------
<S>                                                            <C>                <C>                <C>
Revenues:

Lease revenue                                                  $     22,116       $     23,592       $   32,878
Interest and other income                                               486                630              439
Net gain on disposition of equipment                                 10,121              7,214              128
                                                              ----------------------------------------------------
  Total revenues                                                     32,723             31,436           33,445
                                                              ----------------------------------------------------

Expenses:

Depreciation and amortization                                         9,793             12,394           21,993
Management fees to affiliate                                          1,187              1,363            1,775
Repairs and maintenance                                               4,743              3,085            3,108
Equipment operating expenses                                          3,635              3,775            3,245
Interest expense                                                      2,296              2,339            2,044
Insurance expense to affiliate                                          224                186              603
Other insurance expenses                                              1,277                694              547
General and administrative expenses
    to affiliates                                                       860                953            1,161
Other general and administrative expenses                             1,587                766              684
Provision for bad debts                                               1,273              1,016              259
                                                              ----------------------------------------------------
    Total expenses                                                   26,875             26,571           35,419
                                                              ----------------------------------------------------

Equity in net income of unconsolidated
    special-purpose entities                                          3,384              3,426               --
      Net income (loss)                                        $      9,232       $      8,291       $   (1,974)
                                                              ====================================================

Partners' share of net income (loss):

Limited partners                                               $      8,363       $      7,418       $   (2,850)
General Partner                                                         869                873              876
                                                              ----------------------------------------------------

Total                                                          $      9,232       $      8,291       $   (1,974)
                                                              ====================================================

Net income (loss) per weighted-average limited
    partnership unit (8,257,256, 8,292,853, and
    8,318,247 in 1997, 1996, and 1995, respectively)           $       1.01       $       0.89       $    (0.34)
                                                              ====================================================

Cash distribution                                              $     17,384       $     17,467       $   17,518
                                                              ====================================================

Cash distribution per weighted-average
    limited partnership unit                                   $       2.00       $       2.00       $     2.00
                                                              ====================================================
</TABLE>



                       See accompanying notes to financial
                                  statements.




<PAGE>




                          PLM EQUIPMENT GROWTH FUND VI
(A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the years
                    ended December 31, 1997, 1996, and 1995

                            (in thousands of dollars)

<TABLE>
<CAPTION>



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

<S>                                                    <C>                 <C>                 <C>
Partners' capital as of December 31, 1994              $   104,922         $        --         $    104,922

Net income (loss)                                           (2,850 )               876               (1,974)

Cash distribution                                          (16,642 )              (876 )            (17,518)
                                                     ---------------------------------------------------------

  Partners' capital as of December 31, 1995                 85,430                  --               85,430

Net income                                                   7,418                 873                8,291

Repurchase of limited partnership units                       (464 )                --                 (464)

Cash distribution                                          (16,594 )              (873 )            (17,467)
                                                     ---------------------------------------------------------

  Partners' capital as of December 31, 1996                 75,790                  --               75,790

Net income                                                   8,363                 869                9,232

Repurchase of limited partnership units                       (486 )                --                 (486)

Cash distribution                                          (16,515 )              (869 )            (17,384)
                                                     ---------------------------------------------------------

  Partners' capital as of December 31, 1997            $    67,152         $        --         $     67,152
                                                     =========================================================


</TABLE>























                       See accompanying notes to financial
                                  statements.




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                            (A Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                        For the years ended December 31,

                            (In thousands of dollars)

<TABLE>
<CAPTION>


                                                                                  1997            1996            1995
                                                                             -----------------------------------------------
<S>                                                                            <C>             <C>            <C>
Operating activities:
Net income (loss)                                                              $    9,232      $    8,291     $   (1,974 )
Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating activities:
  Net gain on disposition of equipment                                            (10,121 )        (7,214)          (128 )
  Equity in net income from unconsolidated special-purpose entities                (3,384 )        (3,426)            --
  Depreciation and amortization                                                     9,793          12,394         21,993
  Changes in operating assets and liabilities:
    Restricted cash                                                                   493              13           (551 )
    Accounts receivable                                                               946             160           (711 )
    Prepaid expenses and other assets                                                  60             (14)            46
    Accounts payable and accrued expenses                                             (34 )           196            387
    Due to affiliates                                                                 645             217            (59 )
    Lessee deposits and reserve for repairs                                           240             448            914
                                                                             -----------------
                                                                                             -------------------------------
      Net cash provided by operating activities                                     7,870          11,065         19,917
                                                                             -----------------------------------------------

Investing activities:
Payments for purchase of equipment                                                    (17 )       (13,927)        (4,688 )
Investment in and equipment purchased and placed in
   unconsolidated special-purpose entities                                        (10,604 )       (26,287)            --
Distribution from unconsolidated special-purpose entities                           7,575           7,941             --
Distribution from liquidation of
   unconsolidated special-purpose entities                                          1,736          11,677             --
Payments of acquisition fees to affiliate                                              --            (675)          (194 )
Payments for equipment acquisition deposits                                        (1,335 )            --         (1,880 )
Principal payments received on direct finance lease                                   101              41             --
Payments of lease negotiation fees to affiliate                                        --            (152)           (43 )
Proceeds from disposition of equipment                                             25,017          27,379          1,038
                                                                             -----------------------------------------------
      Net cash provided by (used in) investing activities                          22,473           5,997         (5,767 )
                                                                             -----------------------------------------------

Financing activities:
Proceeds from short-term-note payable                                              10,551          12,506             --
Payments of short-term note payable                                               (11,837 )       (11,220)            --
Proceeds from short-term loan from affiliate                                       10,001              --             --
Payment of short-term loan to affiliate                                           (10,001 )            --             --
Cash distribution paid to limited partners                                        (16,515 )       (16,594)       (16,642 )
Cash distribution paid to General Partner                                            (869 )          (873)          (876 )
Repurchase of limited partnership units                                              (486 )          (464)            --
                                                                             -----------------------------------------------
      Net cash used in financing activities                                       (19,156 )       (16,645)       (17,518 )
                                                                             -----------------------------------------------

Net increase (decrease) in cash and cash equivalents                               11,187             417         (3,368 )
Cash and cash equivalents at beginning of year (see Note 4)                         3,017           2,600          6,246
                                                                             ------------------------------------------------
Cash and cash equivalents at end of year                                       $   14,204      $    3,017     $    2,878
                                                                             ===============================================

Supplemental information:
Interest paid                                                                  $    2,297      $    2,513     $    1,869
                                                                             ===============================================
Supplemental disclosure of noncash investing and financing activities:
   Direct finance billing included in accounts receivable                      $        9      $        8     $       --
                                                                             ===============================================
   Sale proceeds included in accounts receivable                               $      290      $       38     $       --
                                                                             ===============================================
   Sales commissions in accounts payable                                       $      282      $       --     $       --
                                                                             ===============================================

</TABLE>

                       See accompanying notes to financial
                                  statements.




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

1.   Basis of Presentation

     Organization

     PLM  Equipment  Growth  Fund  VI, a  California  limited  partnership  (the
     Partnership),  was formed on April 17,  1991 to engage in the  business  of
     owning and leasing primarily used transportation and related equipment. PLM
     Financial  Services,  Inc. (FSI) is the General Partner of the Partnership.
     FSI  is  a  wholly-owned   subsidiary  of  PLM  International,   Inc.  (PLM
     International).  The Partnership  offering became effective on December 23,
     1991 and closed on May 24, 1993.

     The  Partnership  will  terminate on December 31, 2011,  unless  terminated
     earlier upon sale of all equipment or by certain other events. Beginning in
     the Partnership's seventh year of operations, which commences on January 1,
     2000, the General Partner will stop reinvesting excess cash, if any, which,
     less reasonable reserves, will be distributed 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) per Limited
     Partnership Unit, below). The General Partner is also entitled to receive a
     subordinated  incentive  fee after the limited  partners  receive a minimum
     return on, and a return of, their invested capital.

     The General Partner has determined that it will not adopt the  reinvestment
     plan for the  Partnership.  Beginning  November 24, 1995,  if the number of
     units made available for purchase by limited  partners in any calendar year
     exceeds the number that can be purchased with  reinvestment  plan proceeds,
     then the  Partnership  may  redeem up to 2% of the  outstanding  units each
     year,  subject to certain terms and  conditions.  The purchase  price to be
     offered  by the  Partnership  for these  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.  For the years ended December 31, 1997 and 1996,
     the Partnership had repurchased 39,702 and 31,281 limited partnership units
     for $0.5 million and $0.5 million, respectively.

     As of December 31, 1997, the Partnership agreed to repurchase approximately
     47,000 units for an aggregate  price of  approximately  $0.5  million.  The
     General  Partner  anticipates  that these units will be  repurchased in the
     first and second quarters of 1998.

     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 the General  Partner.  IMI receives a monthly  management fee
     from the  Partnership  for  managing  the  equipment  (see Note 2). FSI, in
     conjunction  with  its  subsidiaries,  sells  transportation  equipment  to
     investor  programs  and  third  parties,  manages  pools of  transportation
     equipment under agreements with investor programs, and is




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

1.   Basis of Presentation (continued)

     Operations (continued)

     a General Partner of other programs.

     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.
     Periodically,  the  Partnership  leases  equipment  with  lease  terms that
     qualify for direct finance lease  classification,  as required by Statement
     of Financial  Accounting  Standards No. 13,  "Accounting  for Leases" (SFAS
     13).

     Depreciation and Amortization

     Depreciation  of  transportation  equipment  held for  operating  leases is
     computed on the  double-declining  balance  method,  taking a full  month's
     depreciation in the month of acquisition, based upon estimated useful lives
     of 15 years for  railcars  and 12 years for all other  types of  equipment.
     Certain  aircraft  are  depreciated  under  the  double-declining   balance
     depreciation method over the lease term. The depreciation method is changed
     to straight line when annual  depreciation  expense using the straight-line
     method  exceeds that  calculated by the  double-declining  balance  method.
     Acquisition fees and acquisition costs 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.  Major
     expenditures  are  capitalized  if they are  expected  to extend the useful
     lives or reduce future  operating  expenses of equipment and amortized over
     the remaining life of the equipment.

     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,  since
     the method previously  employed by the Partnership was consistent with SFAS
     121. In accordance  with SFAS 121, the General Partner reviews the carrying
     value of the  Partnership's  equipment  at least  annually  in  relation to
     expected   future   market   conditions   for  the  purpose  of   assessing
     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.  No reductions to the carrying  value of
     equipment  were required  during 1997,  1996, or 1995.  Equipment  held for
     operating leases is stated at cost.

     Investments in Unconsolidated Special-Purpose Entities (USPEs)

     The Partnership has interests in  unconsolidated  special-purpose  entities
     (USPEs) that own transportation and related equipment.  These interests are
     accounted for using the equity method.

     The  Partnership's  investment  in USPEs  includes  acquisition  and  lease
     negotiation  fees paid by the Partnership to PLM  Transportation  Equipment
     Corporation  (TEC) and PLM Worldwide  Management  Services (WMS).  TEC is a
     wholly-owned  subsidiary of FSI and WMS is a wholly-owned subsidiary of PLM
     International.  The Partnership's equity interest in net income of USPEs is
     reflected  net  of  management   fees  paid  or  payable  to  IMI  and  the
     amortization of acquisition and lease negotiation fees paid to TEC or WMS.




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

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 dry docking.  The
     reserve  account is included in the balance  sheet as lessee  deposits  and
     reserve for repairs.

     Net Income (Loss) and Distributions per Limited Partnership 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 limited  partnership units owned by
     each  limited  partner  and on the number of days of the year each  limited
     partner is in the Partnership

     Cash  distributions are recorded when paid. Monthly  unitholders  receive a
     distribution check 15 days after the close of the previous month's business
     and quarterly  unitholders  receive a distribution  check 45 days after the
     close of the quarter.

     Cash distributions related to the fourth quarter of 1997, 1996, and 1995 of
     $2.6 million for each year,  were paid during  January and  February  1998,
     1997, or 1996, respectively.

     Cash  distributions  to investors in excess of net income are considered to
     represent a return of capital.  Cash  distributions to the limited partners
     of $8.2  million  and $9.2  million  in 1997 and 1996,  respectively,  were
     deemed to be a return of  capital.  All cash  distributions  to the limited
     partners in 1995 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.

     Restricted Cash

     As of  December  31,  1997 and 1996,  restricted  cash  represented  lessee
     security deposits held by the Partnership.

     Reclassification

     Certain amounts in the 1995 financial  statements have been reclassified to
     conform to the 1997 and 1996 presentation.

2.   General Partner and Transactions with Affiliates

     An officer of PLM Securities Corp. (PLM Securities) contributed $100 of the
     Partnership's initial capital. PLM Securities is a wholly-owned  subsidiary
     of the General  Partner.  Under the equipment  management  agreement,  IMI,
     subject  to  certain   reductions,   receives  a  monthly   management  fee
     attributable  to either owned  equipment or interests in equipment owned by
     the USPEs  equal to the  lesser of (i) the fees that 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
     that is subject to operating leases, (b) 2% of the gross lease revenues, as
     defined in the agreement, that

<PAGE>

                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

2.   General Partner and Transactions with Affiliates (continued)

     is  subject  to full  payout  net  leases,  and (c) 7% of the  gross  lease
     revenues  attributable  to equipment for which IMI provides both management
     and additional  services  relating to the continued and active operation of
     program equipment,  such as on-going marketing and re-leasing of equipment,
     hiring or  arranging  for the  hiring of crew or  operating  personnel  for
     equipment,  and similar services.  Partnership management fees payable were
     $0.3  million  as  of  December  31,  1997  and  1996.  The   Partnership's
     proportional  share of USPE management fees of $0.1 million and $27,000 was
     payable as of December 31, 1997 and 1996,  respectively.  The Partnership's
     proportional share of USPE management fee expense was $0.5 million and $0.3
     million  during 1997 and 1996,  respectively.  An  affiliate of the General
     Partner was reimbursed  for data  processing  and  administrative  expenses
     directly  attributable  to the  Partnership in the amounts of $0.9 million,
     $1.0 million, and $1.2 million in 1997, 1996, and 1995,  respectively.  The
     Partnership's proportional share of USPE data processing and administrative
     expenses was $0.1 million during 1997 and 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.

     The  Partnership  did not incur any  equipment  acquisition  fees and lease
     negotiation fees during 1997 and 1996. The Partnership  incurred  equipment
     acquisition  and  lease  negotiation  fees of $1.3  million  in  1995.  The
     Partnership's  proportional share of USPEs incurred  equipment  acquisition
     and lease  negotiation  fees of $0.6  million  during  1997 to FSI and $1.2
     million  during 1996 to TEC and WMS. The  Partnership  paid $0.2 million in
     1997 and  1996,  and $0.6  million  in 1995,  to  Transportation  Equipment
     Indemnity Company Ltd. (TEI),  which provides marine insurance coverage for
     Partnership  equipment and other insurance  brokerage  services.  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.

     As of December 31, 1997,  approximately  66% of the  Partnership's  trailer
     equipment was in rental facilities  operated by an affiliate of the General
     Partner.  Revenues  collected under short-term  rental  agreements with the
     rental yards' customers are credited to the owners of the related equipment
     as received.  Direct  expense  associated  with the  equipment  are charged
     directly to the  Partnership.  An  allocation  of indirect  expenses of the
     rental yard operations is charged to the Partnership monthly.

     The  Partnership  owned certain  equipment in conjunction  with  affiliated
     partnerships during 1997 and 1996 (see Note 4).

     During 1997 the Partnership borrowed $1.0 million and $9.0 million from the
     General Partner for 52 days and 3 days,  respectively.  The General Partner
     charged the Partnership  market interest rates.  Total interest paid to the
     General Partner was $17,000.

     The balance due to affiliates as of December 31, 1997 includes $0.3 million
     due to FSI and its affiliates for management fees and $2.5 million due to a
     USPE.  The balance due to  affiliates as of December 31, 1996 includes $0.3
     million due to FSI and its affiliates for management  fees and $1.9 million
     due to a USPE.





<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

3.   Equipment

     The components of equipment as of December 31, 1997 and 1996 are as follows
(in thousands of dollars):

<TABLE>
<CAPTION>

         Equipment Held for Operating Leases                1997                1996
----------------------------------------------------------------------------------------
<S>                                                     <C>                  <C>
Trailers                                                $    16,203          $   17,985
Marine vessels                                               16,035              41,263
Rail equipment                                               15,657              15,643
Aircraft, aircraft engines and components                    11,919              18,259
Marine containers                                            11,783              16,401
                                                      ------------------------------------
                                                             71,597             109,551
Less accumulated depreciation                               (33,895)            (46,544 )
    Net equipment                                       $    37,702          $   63,007
                                                      ====================================

</TABLE>

     Revenues are earned by placing the equipment  under  operating  leases that
     are billed monthly or quarterly.  As of December 31, 1997, all equipment in
     the  Partnership's  portfolio  was on lease or operating in  PLM-affiliated
     short-term  trailer rental  facilities,  except for a railcar and 92 marine
     containers with a net book value of $0.4 million.  As of December 31, 1996,
     all equipment in the  Partnership's  portfolio was on lease or operating in
     PLM-affiliated  short-term  trailer  rental  facilities,   except  for  six
     railcars  with  a net  book  value  of  $0.2  million.  A  portion  of  the
     Partnership's  marine  containers and marine vessels is leased to operators
     of   utilization-type   leasing  pools  that  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.

     In 1997,  the  Partnership  entered into a  commitment  to purchase a MD-80
     Stage III commercial  aircraft for $13.4 million.  The  Partnership  made a
     deposit of $1.3 million  toward this  purchase in 1997 which is included in
     this  balance  sheet as equipment  acquisition  deposits.  The  Partnership
     completed the purchase of this equipment  during January 1998 and paid $0.7
     million for acquisition and lease  negotiation  fees to FSI related to this
     acquisition.

     During  1997,  the  Partnership  disposed of or sold  aircraft  components,
     marine containers,  and trailers,  with an aggregate net book value of $5.4
     million, for proceeds of $7.2 million. The Partnership also sold two marine
     vessels  with a net book  value  of $10.3  million  for  proceeds  of $17.8
     million.  Included in the gain of $8.3  million from the sale of the marine
     vessels is the unused portion of accrued drydocking of $0.8 million.

     During  1996,  the  Partnership  sold or  disposed  of  marine  containers,
     trailers,  aircraft engines, and railcars, with an aggregate net book value
     of $6.0 million,  for proceeds of $7.0 million.  The Partnership  also sold
     one marine  vessel that was held for sale as of December 31,  1995,  with a
     net book value of $14.6 million at the date of sale,  for proceeds of $20.8
     million.  Included in the gain of $6.3  million from the sale of the marine
     vessel was the unused portion of accrued drydocking of $0.1 million.

     Periodically,  PLM  International  will  purchase  groups of  assets  whose
     ownership  may  be  allocated  among   affiliated   partnerships   and  PLM
     International.  Generally in these cases only assets that are on lease will
     be  purchased  by  the  affiliated  partnerships.  PLM  International  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,  PLM  International
     realized  $0.7  million  of  gains  on the  sale of 69  off-lease  railcars
     purchased  by PLM  International  as part of a group of assets in 1994 that
     had been allocated to the Partnership,  PLM Equipment Growth Funds (EGF) IV
     and VII, Professional Lease Management Income Fund I, LLC (Fund I), and PLM
     International. As of

<PAGE>

                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

3.   Equipment (continued)

     December  31, 1995,  PLM  International  included  these assets as held for
     sale.  During 1995,  PLM  International  realized  $1.3 million in gains on
     sales of railcars and aircraft  purchased by PLM  International in 1994 and
     1995  as  part  of a  group  of  assets  that  had  been  allocated  to the
     Partnership, EGF IV, V, and VII, Fund I, and PLM International.

     All leases are being  accounted  for as  operating  leases,  except for one
     finance  lease.  Future  minimum  rentals  receivable  under  noncancelable
     operating  leases as of December 31, 1997 for the owned and partially owned
     equipment  during  each of the next five years are  approximately  $18.2 in
     1998, $7.4 million in 1999, $4.5 million in 2000, $3.7 million in 2001 $1.2
     million in 2002, and $0.3 million thereafter. Contingent rentals based upon
     utilization  were $2.8  million in 1997,  $7.0  million  in 1996,  and $8.6
     million in 1995.

     The  Partnership  owns  certain  equipment  that  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.

     The Partnership  leases or leased its aircraft,  railcars,  and trailers to
     lessees  domiciled  in four  geographic  regions:  United  States,  Canada,
     Mexico,  Europe, and Asia. Marine vessels,  mobile offshore drilling units,
     and marine  containers are leased to multiple lessees in different  regions
     that operate the marine vessels and marine containers worldwide. The tables
     below set  forth  geographic  information  about  the  Partnership's  owned
     equipment and  investments  in USPEs grouped by domiciles of the lessees as
     of and for the years ended December 31, 1997,  1996, and 1995 (in thousands
     of dollars):

<TABLE>
<CAPTION>

            Region                  Investments in USPEs                     Owned Equipment
 ----------------------------- ------------------------------   ------------------------------------------

         Lease Revenues             1997            1996             1997            1996            1995
 ------------------------------------------------------------   --------------------------------------------

   <S>                            <C>              <C>             <C>              <C>             <C>
   United States                  $        --      $       --      $    7,132       $   7,522       $    8,978
   Canada                               3,619           3,179             764             748              443
   South America                        3,149           3,149              --              --            3,148
   Asia                                    --             693           2,658           3,207            5,028
   Europe                                  --              --             948           1,009            1,009
   Rest of the world                    4,167           1,707          10,614          11,106           14,272
                                -------------------------------  ------------------------------------------------
       Total lease revenues       $    10,935      $    8,728      $   22,116       $  23,592       $   32,878
                                ===============================  ================================================
</TABLE>




<PAGE>



                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

3.   Equipment (continued)

     The following table sets forth  identifiable net income (loss)  information
by region for the owned  equipment and  investments in USPEs for the years ended
December 31, 1997, 1996, and 1995 (in thousands of dollars):

<TABLE>
<CAPTION>

            Region                 Investments in USPEs                    Owned Equipment
------------------------------- ---------------------------   -----------------------------------------

        Net Income (Loss)             1997          1996            1997            1996           1995
 ------------------------------------------------------------  -------------------------------------------

   <S>                            <C>            <C>               <C>             <C>           <C>
   United States                  $      --      $    --           $  1,219        $  1,129      $  1,807
   Canada                             3,159        (1,576)              461             195          (210)
   South America                        224          (274)               --              --          (567)
   Mexico                               707            (3)               --              --            --
   Asia                                  --         5,723            (1,219)            887           (96        )
   Europe                                --            --             2,370             294           245
   Rest of the world                    (706)        (444)            6,076           5,401          (112)
                                  ----------------------------   ----------------------------------------------
     Total identifiable income        3,384         3,426             8,907           7,906         1,067
   Administrative and other              --            --            (3,059)         (3,041)       (3,041)
                                  ----------------------------   ----------------------------------------------
       Total net income (loss)    $   3,384      $  3,426          $  5,848        $  4,865      $ (1,974)
                                  ============================   ==============================================
</TABLE>

     The net book value of these assets as of December 31, 1997,  1996, and 1995
are as follows (in thousands of dollars):

<TABLE>
<CAPTION>

            Region                     Investments in USPEs                       Owned Equipment
--------------------------------------------------------------------- ---------------------------------------

          Net Book Value             1997         1996          1995            1997         1996         1995
  -----------------------------------------------------------------------  -----------------------------------------

   <S>                             <C>          <C>            <C>            <C>           <C>          <C>
   United States                   $    3,491   $       --     $     --       $   14,250    $  17,964    $  22,196
   Canada                               6,614       10,993         3,962           1,978        2,059        1,789
   South America                       12,854       15,453        18,674              --           --           --
   Mexico                               4,581        4,429            --              --           --           --
   Asia                                    --           --         6,633           5,552        6,663       13,760
   Europe                                  --           --            --              --        3,141        3,769
   Rest of the world                   19,256       11,244         2,754          15,922       33,180       23,557
                                -----------------------------------------  -----------------------------------------
                                       46,796       42,119        32,023          37,702       63,007       65,071
   Equipment held for sale                 --           --            --              --           --       14,607
                                -----------------------------------------  -----------------------------------------
       Total net book value        $   46,796   $   42,119     $  32,023      $   37,702    $   63,007   $  79,678
                                =========================================  =========================================
</TABLE>

     The lessees  comprising  approximately 10% or more of the total revenues in
     1995 were Star Shipping and AS (14% in 1995).  There were no lessees during
     1997 and 1996 whose rent was 10% or greater of total revenues.

4.   Investments in Unconsolidated Special-Purpose Entities

     During the second half of 1995, the Partnership began to increase the level
     of its participation in the ownership of large-ticket transportation assets
     to be owned and  operated  jointly  with  affiliated  programs.  This trend
     continued during 1996.

     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.

<PAGE>

                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

4.   Investments in Unconsolidated Special-Purpose Entities (continued)

     The principal  differences  between the previous  accounting method and the
     equity method  concern the  presentation  of  activities  relating to these
     assets in the statement of  operations.  Whereas 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,"  under the  previous  method,  the  Partnership's  statement  of
     operations  reflected its  proportionate  share of each  individual item of
     revenue and expense.  Accordingly, the effect of adopting the equity method
     of accounting  has no cumulative  effect on previously  reported  partners'
     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  equivalent  for 1996 is  different  from the ending cash and
     cash  equivalent  for  1995  on the  statement  of cash  flows  due to this
     reclassification.

     During 1997,  the  Partnership  purchased an interest in an entity owning a
     product  tanker  for  $10.1  million  and  incurred  acquisition  and lease
     negotiation fees to FSI of $0.5 million.

     During 1996, the  Partnership  purchased an interest in a trust owning five
     commercial  aircraft for $11.2 million, an interest in an entity owning two
     commercial  aircraft on a direct  finance  lease for $4.6  million,  and an
     interest in an entity owning a rig (the  remaining  interest is held by two
     affiliated  programs) for $5.9 million,  and incurred acquisition and lease
     negotiation  fees to WMS of $1.2 million.  The Partnership also purchased a
     50% ownership  interest in an entity owning a marine vessel (the  remaining
     interest is held by an  affiliated  program)  for $4.0  million,  including
     acquisition and lease  negotiation fees of $0.2 million incurred to TEC for
     this equipment.

     The following  summarizes the financial  information for the unconsolidated
     special-purpose  entities and the Partnership's  interest therein as of and
     for the year ended December 31, 1997 and 1996 (in thousands of dollars):

<TABLE>
<CAPTION>

                                              1997                             1996
                                 -------------------------------  -------------------------------
                                                   Net Interest
                                      Total             of              Total       Net Interest
                                      USPEs        Partnership          USPEs      of Partnership
                                 --------------------------------  ----------------------------------


<S>                                <C>              <C>              <C>               <C>
Net Investments                    $     95,743     $     46,796     $      97,980     $     42,119

Lease revenues                           27,145           10,935           24,157            8,728
Net income                                6,411            3,384            5,955            3,426

</TABLE>

     The net  investments  in USPEs as of December 31, 1997 and 1996 include the
following  jointly-owned  equipment  (and related  assets and  liabilities)  (in
thousands of dollars):

<TABLE>
<CAPTION>

                                                                                  1997             1996
                                                                             --------------------------------
  <S>                                                                          <C>               <C>
  64% interest in a trust owning a 767-200ER commercial aircraft               $   12,854        $    15,453
  53% interest in an entity owning a product tanker                                 9,881                 --
  50% interest in a trust that owns four commercial aircraft                        6,614              8,410
  30% interest in an entity owning a mobile offshore drilling unit                  5,050              6,196
  40% interest in two commercial aircraft on direct finance lease                   4,581              4,429
  17% interest in a trust that owned a commercial aircraft                          3,491                 --
  50% interest in an entity owning a container feeder vessel                        2,812              3,197
  20% interest in an entity owning a handymax bulk carrier                          1,513              1,851
  17% interest in a trust owning six commercial aircraft                               --              2,583
                                       ---------------------------------------------------      -------------
      Net investments                                                          $   46,796        $    42,119
                                                                             =============      =============
</TABLE>

<PAGE>

                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

4.   Investments in Unconsolidated Special-Purpose Entities (continued)

     The Partnership has interests in two USPEs that own multiple  aircraft (the
     Trusts). These Trusts contain provisions, under certain circumstances,  for
     allocating  specific  aircraft to the beneficial  owners.  During 1997, the
     Partnership and an affiliated program each sold the aircraft  designated to
     it.  The  Partnership's  17%  interest  in  one of the  Trusts  owning  the
     commercial  aircraft  was sold for  proceeds  of $5.2  million  for its net
     investment of $1.8 million.  The Partnership  received liquidating proceeds
     of $1.7 million  during 1997.  The remaining  liquidating  proceeds of $3.5
     were received during January 1998.

     During September 1996, PLM Equipment  Growth Fund V, an affiliated  program
     that also has an  interest in one of the  Trusts,  renegotiated  its senior
     loan agreement and was required,  for loan collateral purposes, to withdraw
     the  aircraft  designated  to  it  from  the  Trust.  The  result  for  the
     Partnership was to restate the ownership in the Trust from 14% to 17%. This
     change had no effect on the income or loss  recognized  during  1996.  Also
     during 1996, the General Partner sold the Partnership's 45% interest in the
     entity  that  owned  a  rig.  The   Partnership   received  a   liquidating
     distribution of $11.7 million for its net investment of $5.9 million.

5.   Net Investment in a Direct Finance Lease

     During 1996, the Partnership entered into a direct finance lease related to
     the sale of 48  trailers.  Gross lease  payments of $0.3 million were to be
     received over a three-year period, which commenced in May of 1996.

     The  components  of the net  investment  in the direct  finance lease as of
     December 31, 1997 and 1996 are as follows (in thousands in dollars):
<TABLE>
<CAPTION>

                                                              1997           1996
                                                          -----------    -----------
<S>                                                         <C>           <C>
Total minimum lease payments                                $  163        $   286
Less unearned income                                           (10)           (32)
                                                          -----------    -----------
                                                            $  153        $   254
                                                          ===========    ===========
</TABLE>

     Future  minimum  rentals  receivable  under the direct  finance lease as of
     December 31, 1997 for the next two years are approximately $123,000 in 1998
     and $40,000 in 1999.

6.   Notes Payable

     In August  1993,  the  Partnership  entered  into an  agreement  to issue a
     long-term note totaling  $30.0 million to an  institutional  investor.  The
     note  bears  interest  at a fixed  rate of 6.7% per  annum  and has a final
     maturity in 2003. Interest on the note is payable monthly. The note will be
     repaid in three  principal  payments of $10.0 million on November 17, 2001,
     2002, and 2003. The agreement  requires the Partnership to maintain certain
     financial  covenants  related to fixed-charge  coverage.  Proceeds from the
     sale of the note have been used to fund additional  equipment  acquisitions
     and to repay any obligations of the  Partnership  under the credit facility
     (see discussion below).

     The General Partner estimates, based on recent transactions,  that the fair
     market value of the $30.0 million fixed-rate note is $29.0 million.

     The General  Partner has entered into a joint $50.0 million credit facility
     (the Committed Bridge  Facility) on behalf of the  Partnership,  EGF V, EGF
     VII, and Fund I, all affiliated  investment  programs;  TEC Acquisub,  Inc.
     (TECAI), an indirect  wholly-owned  subsidiary of the General Partner;  and
     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

<PAGE>


                          PLM EQUIPMENT GROWTH FUND VI
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1997

6.   Notes Payable (continued)

     fair market value of eligible equipment owned by the Partnership, 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  on  December  2,  1997  to  expire  on  November  2,  1998.   The
     Partnership,  TECAI, Fund I, and the other programs may collectively borrow
     up to $35.0 million of the Committed Bridge Facility.  AFG may borrow up to
     $50.0  million of the  Committed  Bridge  Facility.  The  Committed  Bridge
     Facility also provides for a $5.0 million Letter of Credit Facility for the
     eligible  borrowers.  Outstanding  borrowings  by one  borrower  reduce the
     amount  available to each of the other borrowers under the Committed Bridge
     Facility.  Individual  borrowings may be  outstanding  for no more than 179
     days,  with all  advances  due no later than  November  2,  1998.  Interest
     accrues  at either  the prime rate or  adjusted  LIBOR  plus  1.625% at the
     borrower's 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,  1997,  AFG had  $23.0  million  in  outstanding  borrowings.  No other
     eligible borrower had outstanding borrowings.  The General Partner believes
     it will  renew the  Committed  Bridge  Facility  upon its  expiration  with
     similar terms as those in the current Committed Bridge Facility.

7.   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 financial statements of the
     Partnership.

     As of December 31, 1997, there were temporary  differences of approximately
     $28.0 million  between the financial  statement  carrying values of certain
     assets  and  liabilities  and the  income  tax  basis  of such  assets  and
     liabilities,   primarily  due  to  differences  in  depreciation   methods,
     equipment reserves,  and the tax treatment of underwriting  commissions and
     syndication costs.



<PAGE>


                          PLM EQUIPMENT GROWTH FUND VI

                                INDEX OF EXHIBITS



    Exhibit                                                          Page


    4.      Limited Partnership Agreement of Partnership.              *

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

   10.2     Note Agreement,  dated as of August 1, 1993,
            regarding $30.0 million
            in 6.7% senior notes due November 17, 2003                 *

   10.3     Third Amended and Restated Warehousing Credit Agreement,
            dated as of December 2, 1997, with First Union National Bank
            of North Carolina and others                            45-124


   24.     Powers of Attorney                                      125-127


*  Incorporated by reference.  See page 26 of this report.

<PAGE>