**UNITED
      STATES****SECURITIES
      AND EXCHANGE COMMISSION****Washington,
      D.C. 20549****___________________****FORM
      10-KSB****[X]
      Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934****For
      the fiscal year ended December 31, 2004.****[********]
      Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934****For
      the transition period from to****Commission
      file number 0-21806****_______________________****PLM
      EQUIPMENT GROWTH FUND VI**(Exact
      name of Registrant as specified in its charter)**California
      94-3135515**(State
      or other jurisdiction of (I.R.S. Employerincorporation
      or organization) Identification No.)**200
      Nyala Farms Road****.****Westport,
      CT 06880**(Address
      of principal (Zip code)executive
      offices).Registrant's
      telephone number, including area code: (203) 341-0555**_______________________**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. YesXNoTransitional
      Small Business Disclosure Format: YesNoXThe
      Registrant's revenues for the fiscal year ended December 31, 2004 was
      $7,247,000.Aggregate
      market value of voting stock:N/A
 
  
  
 **PART
I**
 ITEM
1.  DESCRIPTION
OF  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 PLMI), 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 offering of units of the Partnership closed on
May 24, 1993. As of December 31, 2004, there were 7,730,965 units outstanding.
The Partnership engages in the business of investing in a diversified equipment
portfolio consisting primarily of used, long-lived, low-obsolescence capital
equipment that is easily transportable by and among prospective
users.
 
 The
Partnership's primary objectives are:
 
 (1)  to
maintain a diversified portfolio of low-obsolescence equipment with long lives
and high residual values which were purchased with the net proceeds of the
initial Partnership offering, supplemented by debt financing, and surplus
operating cash during the investment phase of the Partnership;
 
 (2)  to
generate sufficient net operating cash flow from lease operations to meet
liquidity requirements and to generate cash distributions to the unitholders
until such time as the General Partner commences the orderly liquidation of the
Partnership's assets or unless the Partnership is terminated earlier upon sale
of all Partnership property or by certain other events;
 
 (3)  to
selectively sell equipment when the General Partner believes that, due to market
conditions, market prices for equipment exceed inherent equipment values or
expected future benefits from continued ownership of a particular asset.
Proceeds from these sales, together with excess net operating cash flows from
operations (net cash provided by operating activities plus distributions from
equity investments) are used to repay the Partnership’s outstanding indebtedness
and for distributions to the unitholders; and
 
 (4)  to
preserve and protect the value of the portfolio through quality management,
maintaining diversity, and constantly monitoring equipment markets.
 
 The
Partnership may not reinvest cash flow generated from operations after January
1, 2005 into additional equipment. The Partnership will terminate on December
31, 2011, unless terminated earlier upon the sale of all of the equipment or by
certain other events. Although the Partnership is scheduled to terminate on
December 31, 2011, the General Partner is managing the Partnership with the
objective of having all owned and partially owned equipment disposed of by the
end of 2006.
 
 Table 1,
below, lists the equipment and the original cost of equipment and capitalized
improvements in the Partnership's portfolio, equipment on finance lease and the
Partnership's proportional share of equipment in entities in which the
Partnership has an equity investment as of December 31, 2004 (in thousands of
dollars):
 
 **TABLE
1**
 
 Units
    
    Type
    
    Manufacturer
    
    
    CostOwned
      equipment held for operating leases:9,225
    
    Marine
      containers
    
    Various
    
    $
    22,3321
    
    MD-80
      Stage III commercial aircraft
    
    McDonnell
      Douglas
    
    
    13,9511
    
    Portfolio
      of aircraft rotables
    
    Various
    
    
    1,25618
    
    Pressurized
      tank railcars
    
    Various
    
    
    4384
    
    Nonpressurized
      tank railcars
    
    Various
    
    
    703
    
    Covered
      hopper railcars
    
    Various
    
    
    66Total
      owned equipment held for operating leases
    
    
    
    $
    38,113
    1Owned
      equipment on a finance lease:334
    
    Intermodal
      trailers on direct finance lease
    
    Various
    
    $
    5,135
    1Equipment
      owned by entities in which the Partnership has an equity
      investment:0.62
    
    737-300
      Stage III commercial aircraft
    
    Boeing
    
    $
    14,840
    20.34
    
    Four
      737-500 Stage III commercial aircraft
    
    Boeing
    
    
    21,314
    50.40
    
    Equipment
      on direct finance lease:Two
      DC-9 Stage III commercial aircraft
    
    McDonnell
      Douglas
    
    
    4,807
    30.43
    
    1,457
      railcars
    
    Various
    
    
    21,959
    40.53
    
    Double-hull
      product tanker
    
    Boelwerf-Temse
    
    
    10,476
    20.20
    
    Machinery
      and other equipment
    
    Various
    
    
    4,021
    6Total
      equity investments
    
    
    
    $
    77,417
    1
 
 Equipment
is generally leased under operating leases for a term of one to six years except
for the marine vessel which is usually leased for periods less than one year.
Some of the Partnership's marine containers are leased to operators of
utilization-type leasing pools, which include equipment owned by unaffiliated
parties. In such instances, revenues received by the Partnership consist of a
specified percentage of revenues generated by leasing the pooled equipment to
sublessees, after deducting certain direct operating expenses of the pooled
equipment. The remaining Partnership marine container leases are based on a
fixed rate. Rents for all other equipment are based on fixed rates.
 
 
 1
    Includes
      equipment and investments purchased with the 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), a wholly owned subsidiary of
      FSI, or PLM Worldwide Management Services (WMS), a wholly owned subsidiary
      of PLM International.
 2  Jointly
owned: EGF VI and an affiliated program.
 3  Jointly
owned: EGF VI, an affiliated program and a non-affiliated entity.
 4  Jointly
owned: EGF VI and two affiliated programs.
 5  Jointly
owned: EGF VI and three affiliated entities.
 6  Jointly
owned: EGF VI, two affiliated entities and a non-affiliated
entity.
  
  (B)  Management
of Partnership Equipment and Other Assets
 
 The
Partnership has entered into an equipment management agreement with PLM
Investment Management, Inc. (IMI), a wholly owned subsidiary of FSI, for
the management of the Partnership’s equipment. The Partnership’s management
agreement with IMI is to co-terminate with the dissolution of the Partnership,
unless the limited partners vote to terminate the agreement prior to that date,
or at the discretion of the General Partner.  IMI has agreed to perform all
services necessary to manage the equipment on behalf of the Partnership and to
perform or contract for the performance of all obligations of the lessor under
the Partnership's leases.  In consideration for its services and pursuant
to the partnership agreement, IMI is entitled to a monthly management fee (see
Notes 1 and 2 to the financial statements).
 
 (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 the rents received during the initial
noncancelable term of the lease are insufficient to recover the Partnership’s
purchase price of the equipment. The short- to mid-term nature of operating
leases generally commands a higher rental rate than longer-term full payout
leases and offer lessees relative flexibility in their equipment commitment. In
addition, the rental obligation under an operating lease need not be capitalized
on the lessee's balance sheet.
 
 The
Partnership encounters considerable competition from lessors that utilize full
payout leases on new equipment, i.e., leases that have terms equal to the
expected economic life of the equipment.  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 may write
full payout leases at considerably lower rates and for longer terms than the
Partnership offers, 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 also competes with many equipment lessors, including ACF Industries,
Inc. (Shippers Car Line Division), GATX Corp., 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 currently operates in the five operating segments: marine container
leasing, railcar leasing, aircraft leasing, marine vessel leasing, machinery and
other equipment leasing and intermodal trailer leasing. Each equipment leasing
segment engages in short-term to mid-term operating leases to a variety of
customers except for the Partnership's investment in a trust owning two
commercial aircraft that are on a direct finance lease. The Partnership’s
equipment and investments are primarily used to transport materials and
commodities, except for aircraft leased to passenger air carriers and machinery
and other equipment which is used in the operation of hospitals.
 
 The
following section describes the international and national markets in which the
Partnership’s capital equipment operates:
 
 (1)  Marine
Containers
 
 Marine
containers are used to transport a variety of types of cargo. They typically
travel on marine vessels but may also travel on railroads loaded on certain
types of railcars and highways loaded on a trailer.
 
 Demand
for marine containers is primarily influenced by global economic
conditions.
 
 The
Partnership owns a total of 9,225 standard dry cargo marine
containers **** acquired
from 1998 to 2000. Utilization on these containers is expected to continue to be
very strong in the 90-95% range through at least the first half of 2005. Lease
rates on new marine containers have increased significantly over the last year
due to the increase in price of new containers which was caused primarily by the
increase in the cost of steel. Lease rates on older marine containers, however,
such as those owned by the Partnership, have just begun to increase. This is due
to the large amount of marine containers that leasing companies had off-lease.
Lease rates on Partnership’s marine containers are expected to increase slightly
in 2005.
 
 In
addition, the lessee for approximately 1,190 of the Partnership's marine
containers has the option to purchase these marine containers in the first
quarter of 2006. Should the lessee exercise this option, lease revenues will be
negatively impacted.
 
 (2)  Railcars
 
 (a)  Pressurized
Tank Railcars
 
 Pressurized
tank railcars are used to transport liquefied petroleum gas (LPG) and anhydrous
ammonia (fertilizer). The North American markets for LPG include industrial
applications, residential use, electrical generation, commercial applications,
and transportation. Growth prospects over the long run are good, however, within
any given year, consumption is particularly influenced by the severity of winter
temperatures.
 
 Another
major commodity usage area for pressure railcars is anhydrous ammonia. Within
the fertilizer industry, demand is a function of several factors, including the
level of grain prices, status of government farm subsidy programs, amount of
farming acreage and mix of crops planted, weather patterns, farming practices,
and the value of the United States (US) dollar. Currently, given the domestic
price for natural gas, an increasing amount of anhydrous ammonia is imported
rather than produced locally. These changing distribution patterns offer an
opportunity for increased use of pressure railcars in new transportation
corridors.
 
 On an
industry-wide basis, North American railroad carloadings of the commodity group
that includes petroleum and chemicals posted growth well in excess of the 2-3%
year over year increase anticipated at the beginning of the year. In fact, the
percentage growth above 5% was on a par with 1999; the strongest of the last
decade. Normal growth since the early 90’s is 2%. Demand for tank cars of all
types is growing and lease rates are starting to recover from the historic lows
experienced two years earlier.
 
 Nationwide,
the age of the US and Canadian pressure railcar fleet is advancing. The
Partnership owns pressure tank railcars that are among this fleet. Approximately
10% of the industry fleet has reached the maximum age allowed by regulation (40
years), or will do so in the next two years. The desirability of some of the
railcars in the Partnership is negatively affected by the relatively high age of
the fleet. However, those railcars which do not need to be scrapped and newer
acquired cars should see high levels of utilization as strong commodity growth
driven demand is being served by a declining industry fleet size.
 
 Of the
total fleet of 18 pressurized tank railcars, one railcar is in the process of
being scrapped due to its age and cost to repair. At December 31, 2004, 16 of
the remaining 17 railcars are on lease and the fleet average age is 32
years.
 
 The
Partnership also owns a 43% interest in PLM Rail Partners, LLC, which owns 581
pressure tank railcars as of December 31, 2004. Of this number, eight are
scheduled to be scrapped in the near future. Of the remaining 573 cars, 548 are
on lease (96% utilization). The average fleet age is 23 years.
 
 (b)  General-Purpose
(Nonpressurized) Tank Railcars
 
 General
purpose tank railcars are used to transport bulk liquid commodities and
chemicals not requiring pressurization, such as certain petroleum products,
liquefied asphalt, lubricating oils, molten sulfur, vegetable oils, and corn
syrup. The overall health of the market for non-food types of commodities is
closely tied to overall manufacturing activity and thus both the US and global
economies. The manufacturing, automobile, and housing sectors are the largest
consumers of chemicals. Also, the increased use of ethanol as a fuel additive
has increased demand for this subset of general purpose railcars.
 
 On an
industry-wide basis, North American railroad carloadings of the commodity group
that includes petroleum and chemicals posted growth well in excess of the 2-3%
year over year increase anticipated at the beginning of the year. In fact, the
percentage growth above 5% was on a par with 1999; the strongest of the last
decade. Normal growth since the early 90’s is 2%. Demand for tank cars of all
types is growing and lease rates are starting to recover from the historic lows
experienced two years earlier.
 
 The
Partnership owns four of these type of railcars directly, none of which are
currently on lease. The average age of these railcars is 32 years.
 
 The
Partnership also owns a 43% interest in PLM Rail Partners, LLC, which owns 649
general purpose tank railcars as of December 31, 2004. Of this number, one is
scheduled to be scrapped in the near future. Of the remaining 648 railcars, 644
are on lease (99% utilization). The average fleet age is 22 years.
 
 (c)  Covered
Hopper (Grain) Railcars
 
 The US
agribusiness industry serves a domestic market that is relatively mature, the
future growth of which is expected to be consistent but modest. Most domestic
grain rail traffic moves to food processors, poultry breeders, and feedlots. The
year 200 4 saw
dramatic increases in wheat and corn harvests and some increased demand for rail
shipments. The fourth quarter of this year however was expected to produce a
bumper harvest but instead saw a 13% decline in carloadings. The industry
consensus forecast is now for a steady state level of carloadings for the
foreseeable future.
 
 Railcar
utilization has recovered slowly from a significant oversupply of idle railcars
to be absorbed. A large number of new railcars were built in the late 1990s and
the fleet has become more efficiently utilized by the railroads. This year did
see some small improvements in lease rates compared to the extremely low rates
of the last few years.
 
 Many of
the Partnership’s covered hopper railcars are smaller and thus less desirable
than those currently being built. Because of this factor and the large number of
idle railcars throughout the industry, the Partnership has sold a number of
these railcars. The Partnership owns three railcars of this type at the present,
all of which are off-lease.
 
 The
Partnership also owns a 43% interest in PLM Rail Partners, LLC, which owns 227
covered hopper railcars as of December 31, 2004. Of this number, 34 are
scheduled to be scrapped in the near future. Of the remaining 193 cars, 164 are
on lease (85% utilization). The average fleet age is 33 years.
 
 (3)  Aircraft
 
 (a)
    Commercial
      Aircraft
 
 The
General Partner believe that the commercial aviation industry is recovering from
several years of reduced travel; however, the General Partner views the recovery
with caution as 2004 saw major increases in the cost of fuel and continued
weakening of yields. The General Partner believes that stabilization of fuel
prices will be critical for the recovery in the airline industry to continue.
The recovery has so far been most noticeable among ‘new technology’ and fuel
efficient aircraft.
 
 The US
market continues to suffer from overcapacity and low yields, with the US network
carriers trying to cut costs while reformatting their pricing strategies. With
United Airlines, US Airways, American Trans Air and other US airlines in
bankruptcy, 2005 might see one of them fail completely. The US market probably
needs consolidation, but airlines may limp on in slimmed-down form, with the
low-cost carriers taking an increased market share. Such a scenario is likely to
lead to another year of losses for the global airline industry as the US market
has a large impact on global basis.
 
 In Europe
the expansion by low cost carriers continued during 2004. The year saw several
startups (and charter carriers switching to scheduled) but also some failures,
showing that low cost operations are no guarantee for success.
 
 The Asian
market led the recovery during 2004 with strong traffic growth during the year
although the tsunami catastrophe in the Indian Ocean occurring at year end will
likely have some negative effects on tourism in Thailand, Indonesia, Sri Lanka
and southern India.
 
 Certain
of the Partnership’s aircraft is considered ‘old technology’ (including but not
limited to not meeting current noise regulations in the US, Europe and several
other countries). The General Partner continues to actively liquidate its
positions in old technology aircraft.
 
 The
Partnership owns 100% of one MD-80 Stage III commercial aircraft, which is on
lease to a major US carrier at above market rates through July 2008, 62% of an
entity owning a Boeing 737-300 Stage III commercial aircraft which is on lease
to a South American carrier through April 2008 and 34% of two entities that each
own two Boeing 737-500 Stage III commercial aircraft on lease to a major US
carrier through 2015. The Partnership also owns a 40% interest in two DC-9 Stage
III commercial aircraft on sublease to a South American carrier. In the first
quarter of 2005, the lessee of the two DC-9's exercised its purchase option for
these aircraft.
 
 The
decrease in value of the Partnership’s commercial aircraft has had and will
continue to have a negative impact on the ability of the Partnership to achieve
its original objectives as lower values will also result in significantly lower
revenues than the Partnership has been able to achieve for these assets in the
past.
 
 (b)
    Rotables
 
 The
Partnership owns 100% of a package of aircraft rotables that are used for MD-83
aircraft. Aircraft rotables are replacement spare parts that are held in
inventory by an airline. The types of rotables owned by the Partnership include
avionics, replacement doors, control surfaces, pumps, valves, and other
comparable equipment. The market for the MD-83 spare parts further decreased
during 2004 due to continued decline in demand for the aircraft type and the
increased scrapping and part-out of the aircraft type. The rotables package is
off-lease and being marketed for sale. The General Partner expected that the
rotables would have been sold off during 2004 but due to the continued weak
market approximately 50% of the inventory remains.
 
 (4)  Double-Hull
Product Tanker
 
 The
Partnership has an investment in a double-hull product tanker constructed in
1985, that operates in international markets carrying a variety of clean
commodity-type liquid cargoes. Demand for commodity-based shipping is closely
tied to worldwide economic growth patterns, which can affect demand by causing
changes in specific grade volume on trade routes. The General Partner operates
the Partnership’s product tanker in the spot charter markets, carrying mostly
gasoline, jet fuel, gas oils and similar petroleum distillates or simple
chemicals or vegetable oils, an approach that provides the flexibility to adapt
to changes in market conditions.
 
 The
Partnership’s product tanker has continued to operate with very little idle time
between charters. Freight rates for marine vessels improved and in the fourth
quarter 2004 reached an all time record high, all due to the demand for sea
transportation resulting from improving economies worldwide. The demand is
expected to continue until additional new marine vessels start coming on line in
2005. Cold weather and demand for refined products worldwide and home heating
oil on US east coast should keep the charter rates at or near 2004 highs going
into 2005, with charter rates starting to show signs of decline during the
spring and summer months.
 
 The
marine vessel owned by an entity in which the Partnership has an interest is 20
years old which may limit its future marketability. Marine vessels 20 years of
age typically earn a lower lease rate than newer marine vessels and may have
increased off-hire time.
 
 (5)  Machinery
and Other Equipment
 
 In 2004
the Partnership, along with two affiliated programs and a non-affiliated entity,
entered into a tenancy-in-common agreement (CFHS). The Partnership owns 20% of
CFHS. CFHS purchased machinery and other equipment for $19.0 million and leased
it back to the seller, an entity that operates three hospitals. The equipment is
critical to the day to day operations of the hospitals. The equipment was leased
for a two year term that expires in November 2006 with up to three one year
renewals following the initial term, at the lessee’s option. As the equipment is
critical to the operation of the hospitals operated by the lessee and the lessee
does not have the right to return less than all the equipment, the General
Partner considers it highly likely that the lessee will exercise each of its
renewal options. Should the equipment be returned, the General Partner believes
it would be able to sell the equipment for a price in excess of its purchase
price less any rents received.
 
 (6)  Intermodal
Trailers
 
 Intermodal
trailers are used to transport a variety of dry goods by rail on flatcars,
usually for distances of over 400 miles. Over the past ten years, intermodal
trailers have continued to be rapidly displaced by domestic containers as the
preferred method of transport for such goods. This displacement occurs because
railroads offer approximately 20% lower wholesale freight rates on domestic
containers compared to intermodal trailers. During 2004, demand for intermodal
trailers increased moderately from very depressed levels during the past two
years. Low demand occurred over the first half of the year (similar to 2002 and
2003) due to comparatively low rail freight rates for 53-foot domestic
containers. Average utilization of the entire US intermodal trailer pool fleet
rebounded from a record low of 49% in 2003 to approximately 57% in 2004. The
Partnership's 334 intermodal trailers are on a direct finance lease with a
single lessee through 2006.
 
 (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,
governmental, or legal actions, including the risk of expropriation or loss
arising from hostilities. Certain of the Partnership's equipment is subject to
extensive safety and operating regulations, which may require its 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 new
maritime and port security laws as passed by the United States Congress and
other International Maritime Organizations came into full effect in July 2004.
US Coastguard and members of Homeland Security are patrolling ports and boarding
vessels to insure regulations are being followed. The Partnership partially
owned marine vessel meets the new code and are in compliance with the necessary
reporting procedures and precautions for pre-entry into US waters and ports.
Similarly, the Partnership's partially owned marine vessel meets port entry
security regulations of foreign countries as mandated by international
law.
 
 No new US
or International Regulations are scheduled to come into effect during 2005 which
would have a significant impact on the Partnership's partially owned marine
vessel;
 
 (2)  The US
Department of Transportation Hazardous Material Regulations regulates the
classification and packaging requirements of hazardous materials, which apply,
particularly to the Partnerships tank railcars. Per those regulations several
mandated inspections and or repairs are required to be performed annually. The
average cost of re-qualification for jacketed tank railcars is approximately
$1,900 and $1,100 on non-jacketed railcars. The Partnership is required to
re-qualify one jacketed owned railcars and no non-jacketed owned railcars in
2005. The Partnership also owns a 43% interest in PLM Rail Partners, LLC, which
has 164 railcars due re-qualification inspection and repairs during 2005. PLM
Rail Partners, LLC is required to re-qualify 52 jacketed railcars and 112
non-jacketed railcars in 2005; and
 
 (3)  The tank
railcar industry faces several possible  regulatory
events in the near future. The General Partner expects a ruling for some of
these issues during 2005 including but not limited to: the Minot North Dakota
accident and non-normalized steel, constant contact side bearing retrofit and
the addition of a reflector strip to railcars. At this point the General Partner
cannot estimate the cost or outcome of any of these proposed
programs.
 
 As of
December 31, 2004, 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.  DESCRIPTION
OF PROPERTIES
 
 The
Partnership neither owns nor leases any properties other than the equipment it
has purchased and its interests in entities that own equipment for leasing
purposes. As of December 31, 2004, the Partnership owned a portfolio of
transportation and related equipment and investment entities that owned
transportation equipment and machinery and other equipment as described in Item
1, Table 1. The Partnership acquired equipment with the proceeds of the
Partnership offering of $166.1 million, with proceeds from the debt financing of
$30.0 million, and by reinvesting a portion of its operating cash flow in
additional equipment. The Partnership does not own any real
property.
 
 The
Partnership maintains its principal office at 200 Nyala Farms Road, Westport, CT
06880.
 
 ITEM
3.  LEGAL
PROCEEDINGS
 
 On
December 31, 2003 and during 2004, in the Court of Common Pleas for Williamsburg
County, South Carolina, actions have been filed by Harold H. Collins, Dianne
Collins his wife, and Rickey Thomas, Sr. against South Carolina Central Railroad
Company, Inc., CSX Transportation, Inc., TradeMark Nitrogen, Inc. and PLM
Investment Management, Inc. The actions involve a chemical spill from a railcar
owned by the Partnership. All three law suits claim permanent injuries and
allege negligence on the part of all four defendants in their duty to exercise
reasonable care in the inspection, maintenance and repair of the railcar. The
complaints do not allege a specific amount of damages. The General Partner
expects that these actions will be amended at some point and that the
Partnership will also be named as a defendant.
 
 Demand
for indemnification has been made upon the lessee pursuant to the terms of the
lease of the railcar.
 
 The
attorney for these plaintiffs states that he also represents additional
potential plaintiffs. Twenty-two additional actions were recently filed, however
such additional actions have not yet been served. A review of the new complaints
reveals that they are substantially similar to the original complaints.
Published reports indicate that several nearby residents were evacuated. The
potential exists for additional claims.
 
 The
General Partner believes that the actions will not have a material effect on the
financial condition of the Partnership, are completely without merit and will
vigorously defend against the actions.
 
 The
Partnership is involved as plaintiff or defendant in various legal actions
incidental to its business. General Partner does not believe that any of these
actions will be material to the financial condition or results of operations of
the Partnership (see Note 13 to the financial statements).
 
 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, 2004.
 **PART
II**
 ITEM
5.  MARKET
FOR THE PARTNERSHIP'S EQUITY AND RELATED UNITHOLDER MATTERS
 
 Pursuant
to the terms of the partnership agreement, the General Partner is entitled to 5%
of the cash distributions of the Partnership. The General Partner is the sole
holder of such interests. Net income is allocated to the General Partner to the
extent necessary to cause the General Partner’s capital account to equal zero.
The remaining interests in the profits, losses, and cash distributions of the
Partnership are allocated to the limited partners. As of December 31, 2004,
there were 7,412 limited partners holding 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 viewed as being inefficient vehicles for the sale of limited
partnership units. Presently, there is no public market for the limited
partnership 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 limited partnership 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 limited
partnership 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 United
States citizen or if the transfer would cause any portion of the units of a
“Qualified Plan” as defined by the Employee Retirement Income Security Act of
1974 and Individual Retirement Accounts to exceed the allowable limit.
 
 ITEM
      6.
    MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
 
 The
Partnership's consolidated financial statements contained in the 2004 annual
report have been prepared in accordance with the requirements for a Small
Business Issuer as prescribed by Regulation S-B under the Securities Exchange
Act of 1934. Generally, a Small Business Issuer cannot file under Regulation S-B
if its annual revenues or public float exceed $25.0 million for two consecutive
years. The Partnership qualifies as a Regulation S-B filer since both its 2004
and 2003 annual revenues were less than $25.0 million and its public float has
not exceeded $25.0 million. The
Partnership will continue to qualify as an S-B filer through at least 2006, as
its revenues for the year ended December 31, 2004 are less than $25.0
million.
 
 (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 segments in which it operates 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 remarketed. Major factors influencing the current market rate
for Partnership equipment include supply and demand for similar or comparable
types 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, overall economic conditions, and various regulations
concerning the use of the equipment. Equipment that is idle or out of service
between the expiration of one lease and the assumption of a subsequent lease can
result in a reduction of operating cash flow to the Partnership. The Partnership
experienced re-leasing or re-pricing activity in 2004 for its railcar, aircraft,
marine vessel, trailer, marine container and machinery and other equipment
portfolios.
 
 (a)  Railcars:
This equipment experienced significant re-leasing activity. Lease rates in this
market are showing signs of improvement and this will lead to higher
contribution to the Partnership as existing leases expire and renewal leases are
negotiated.
 
 (b)  Aircraft:  As of
December 31, 2004, the Partnership’s owned aircraft rotables were off-lease and
are being marketed for sale.
 
 (c)  Marine
vessel: The Partnership’s investment in an entity owning a marine vessel
operated in the short-term leasing market. As a result of this, the
Partnership’s partially owned marine vessel was remarketed during 2004 exposing
it to re-leasing and re-pricing risk. The marine vessel is expected to be
operated in the short-term leasing market through 2005.
 
 (d)  Trailers:
During 2004 the General Partner restructured the lease with the existing carrier
to grant a purchase option for the trailers at the end of 2006. Accordingly, the
Partnership will no longer earn operating lease revenue from
trailers.
 
 (e)  Marine
containers: Some of the Partnership’s marine containers are leased to operators
of utilization-type leasing pools and, as such, are highly exposed to re-pricing
activity. Starting in 2002 and continuing through 2006, a significant number of
the Partnership’s marine containers currently on a fixed rate lease will be
switching to a lease based on utilization. PLM Financial Services, Inc. (FSI or
the General Partner) anticipates that this will result in a significant decrease
in lease revenue as lease rates are significantly lower today than when the
fixed rate lease was entered into several years ago.
 
 (f)  Machinery
and other equipment: In 2004, the Partnership along with two affiliated programs
and a non-affiliated entity purchased machinery and other equipment and leased
it back to the seller. This equipment is on lease until the fourth quarter of
2006.
 
 (2)  Equipment
Liquidations
 
 Liquidation
of Partnership owned equipment and equipment owned by entities in which the
Partnership has an equity investment, 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 a reduction of future operating cash flow to the Partnership.
 
 During
2004, the Partnership disposed of owned equipment that included aircraft
rotables, marine containers, trailers and railcars for proceeds of $1.6 million
and an equity investment disposed of partially owned railcars for proceeds of
$0.4 million.
 
 (3)  Nonperforming
Lessees
 
 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 lease terms, can result not only
in reductions in contribution, but also may require the Partnership to assume
additional costs to protect its interests under the leases, such as repossession
or legal fees.
 
 An
aircraft lessee in India defaulted on its lease. The Partnership has recovered
the leased aircraft and initiated legal proceedings to recover its lost lease
payments and recovery costs. The Partnership has been awarded a judgment in this
matter and is currently attempting to collect the judgment. At this time, there
can be no assurance that it will be collected.
 
 (4)  Equipment
Valuation
 
 The
Partnership evaluates long-lived assets for impairment whenever events or
circumstances indicate that the carrying values of such assets may not be
recoverable. Losses for impairment are recognized when the undiscounted cash
flows estimated to be realized from a long-lived asset are determined to be less
than the carrying value of the asset and the carrying amount of long-lived
assets exceed its fair value. The determination of fair value for a given
investment requires several considerations, including but not limited to, income
expected to be earned from the asset, estimated sales proceeds, and holding
costs excluding interest.
 
 (C)  Financial
Condition - Capital Resources and Liquidity
 
 The
General Partner purchased the Partnership's initial equipment portfolio with
capital raised from its initial equity offering of $166.1 million and permanent
debt financing of $30.0 million. No further capital contributions from the
limited partners are permitted under the terms of the Partnership's limited
partnership agreement.
 
 For the
year ended December 31, 2004, the Partnership generated cash from operations of
$4.7 million to fund its ongoing operating obligations, purchase additional
equipment, pay debt and interest, and maintain working capital
reserves.
 
 During
2004, the Partnership purchased railcars for $6.0 million and paid FSI or its
affiliates $0.3 million for acquisition fees and $0.1 million for lease
negotiation fees. During 2004, the Partnership disposed of owned equipment and
received aggregate proceeds of $1.6 million. Partially owned railcars were also
disposed of during 2004 for proceeds of $0.4 million. The proceeds from the
railcar disposals will be used to pay down outstanding debt in 2005.
 
 Restricted
cash increased $5.7 million during 2004. An increase of $6.1 million was the
result of funds being deposited into an escrow account to fund equipment
purchases in 2005 for which legally binding commitments were signed in 2004.
This increase was partially offset by a decrease of $0.4 million resulting from
the withdrawal of the lender from the Partnership's debt facilities that
required these deposits. No such deposits were required from the new
lender.
 
 Equity
investments in affiliated entities increased $8.1 million during 2004. An
increase of $35.0 million was caused by the Partnership's net investment into
four newly formed equity investments with a cash investment of $23.6 million and
the transfer of owned railcars to one of the entities with a net book value of
$11.4 million. This increase was partially off-set by a decrease of $24.5
million caused by non-operating cash distributions. Further decreases were
caused by operating cash distributions of $1.7 million from the equity
investments to the Partnership and by the loss of $0.6 million recorded by the
Partnership for its interests in the equity investments.
 
 Other
assets increased $0.1 million during 2004. An increase of $0.4 million was due
to the transfer of all of the Partnership's owned trailers from equipment held
for operating lease to finance lease receivable. This increase was partially
offset by a decrease of $0.1 million due to a refund to the Partnership in 2004,
decreased $0.1 million due to the decrease in prepaid insurance and decreased
$0.1 million due to the amortization of debt placement fees during
2004.
 
 Accounts
payable and accrued expenses decreased $0.1 million during 2004 due to the
timing of payments to vendors.
 
 Due to
affiliates decreased $0.2 million during 2004. Decreases due to the payment of
$0.4 million in engine reserves due to an equity investment to repair the
engines on an aircraft and $0.2 million due to the return of a security deposit
to an equity investment, were partially offset by an increase of $0.4 million in
additional engine reserve deposits during 2004.
 
 The
Partnership made its scheduled principal payments totaling $4.0 million on the
notes payable during 2004. The remaining balance of the notes of $10.0 million
is due with principal payments totaling $4.0 million in 2005, and 2006, a
principal payment of $1.0 million in March 2007, and a final principal payment
of $1.0 million in June 2007. The cash for each payment will come from
operations and equipment dispositions.
 
 The
Partnership is a participant in a $10.0 million warehouse credit facility. The
warehouse credit facility is shared by the Partnership, PLM Equipment Growth
& Income Fund VII, MILPI Holdings LLC (MILPI) and it's subsidiaries, and
Railcar Investors II all of which are related parties and controlled by Gary
Engle, Chairman of the Board of the General Partner. The facility provides for
financing up to 100% of the cost of the equipment and expires on May 1, 2006.
Borrowings by the Partnership are collateralized by equipment purchased with the
proceeds of the loan. Outstanding borrowings by one borrower reduce the amount
available to each of the other borrowers under the facility. Individual
borrowings may be outstanding for no more than 360 days, with all advances due
no later than May 1, 2006. Interest accrues either at the prime rate or LIBOR
plus 2.0% at the borrower’s option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by FSI, PLM International,
Inc. and MILPI, the parent companies of the General Partner. The Partnership is
not liable for the advances made to the other borrowers.
 
 As of
March 29, 2005, there were no outstanding borrowings on this facility by the
Partnership. Other borrowers had loans outstanding totaling $9.4
million.
 
 On July
1, 2004, the Partnership transferred 774 owned railcars with a net book value of
$11.4 million into a newly formed equity investment, PLM Rail Partners, LLC
(Rail Partners) which is jointly owned with two affiliated partnerships. The
Partnership owns a 43.3% interest in Rail Partners. Rail Partners borrowed $25.3
million (see below). The loan is non-recourse to the Partnership and its
affiliated partnerships and is collateralized by the railcars and future lease
payments. During July 2004, proceeds of $9.9 million from this loan were
distributed to the Partnership.
 
 The loan
amount of $25.3 million consists of two tranches of borrowings, tranche A with
an interest rate of 5.63% and tranche B with an interest rate of 7.25%. Tranche
A, in an original amount of $15.7 million, will be repaid with quarterly
principal payments of $0.7 million totaling $1.4 million in 2004, $2.6 million
in 2005, 2006, 2007, 2008, 2009 and $1.3 million in 2010. Tranche B, in an
original amount of $9.6 million, will be repaid with quarterly payments totaling
$0.9 million in 2010, $1.4 million in 2011, a quarterly payment of $0.2 million
in March of 2012 and a balloon payment of $7.0 million in June 2012. Rail
Partners made the regularly scheduled principal payment of $1.4 million to the
lender during 2004.
 
 At the
end of each quarter, cash remaining in Rail Partners after payment of all
operating expenses, required debt payment, all fees and expenses, will be
distributed at the rate of 25% as a prepayment of tranche A loan and 75% to the
owners of Rail Partners based on their proportional share of ownership.
 
 During
the year ended December 31, 2004, the Partnership, with three affiliated
entities, formed two new entities, PLM CAL I LLC (CAL I) and PLM CAL II LLC (CAL
II). The Partnership contributed a total of $19.4 million to these entities and
owns a 33.7% interest in CAL I and CAL II. CAL I and CAL II each own two Boeing
737-500 stage III commercial aircraft. CAL I and CAL II each assumed two loans
totaling $25.7 million that bear an interest rate of 7.46% and 7.42%. The loans
are non-recourse to the Partnership. The loans are collateralized by the
aircraft and future lease payments. CAL I and CAL II distributed a total of
$14.6 million as a non-operating cash distribution to the Partnership during the
third quarter of 2004.
 
 The
Partnership's proportional share of acquisition fees, lease negotiation fees and
debt placements fees paid by CAL I and CAL II to an affiliate of the General
Partner totaled $1.3 million.
 
 Additionally
during 2004, the Partnership, two affiliated programs and a non-affiliated
entity formed a tenancy-in-common (CFHS), that purchased machinery and other
equipment used in the operations of three hospitals. The Partnership contributed
$4.1 million and owns a 20% interest in this entity. The Partnership's
proportional share of acquisition and lease negotiation fees paid by this entity
to an affiliate of the General Partner totaled $0.2 million.
 
 During
2004, the General Partner signed legally binding commitments on behalf of the
Partnership to purchase in 2005, 69 newly constructed tank railcars for $5.1
million and manufacturing equipment for $1.1 million. The funds to purchase
these railcars were placed in escrow accounts as of December 31, 2004 and are
included in restricted cash on the accompanying balance sheet.
 
 Commitments
and contingencies as of December 31, 2004 are as follows (in thousands of
dollars):
 Less
      than
    
    1-3Partnership
      Obligations:
    
    Total
    
    1
      Year
    
    YearsNotes
      payable
    
    $
    10,000
    
    $
    4,000
    
    $
    6,000Commitment
      to purchase railcars
    
    $
    5,082
    
    $
    5,082
    
    $
    -Commitment
      to purchasemanufacturing
      equipment
    
    
    1,056
    
    
    1,056
    
    
    -$
    6,138
    
    $
    6,138
    
    $
    -
 
 The
General Partner has not planned any expenditures, nor is it aware of any
contingencies that would cause it to require any additional capital over that
mentioned above.
 
 (D)  Critical
Accounting Policies and Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the General Partner
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. On a regular basis, the General Partner reviews
these estimates including those related to asset lives and depreciation methods,
impairment of long-lived assets, allowance for doubtful accounts, reserves
related to legally mandated equipment repairs ** and
contingencies and litigation. These estimates are based on the General Partner's
historical experience and on various other assumptions believed to be reasonable
under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions. The General Partner believes, however, that
the estimates, including those for the above-listed items, are reasonable and
that actual results will not vary significantly from the estimated
amounts.
 
 The
General Partner believes the following critical accounting policies affect the
more significant judgments and estimates used in the preparation of the
Partnership's financial statements:
 
 Revenue
recognition: Revenues are generally earned by placing equipment under operating
leases. Rental payments are recorded as revenue on a straight-line basis over
the lease term as earned. A portion of the Partnership's marine containers are
leased to operators of utilization-type leasing pools, which include equipment
owned by unaffiliated parties. In such instances, revenues received by the
Partnership consist of a specified percentage of revenues generated by leasing
the pooled equipment to sublessees, after deducting certain direct operating
expenses of the pooled equipment. The remaining Partnership leases for marine
containers are based on a fixed rate. Rents for all other equipment are based on
fixed rates.
 
 The
Partnership has an equity investment that owns aircraft jointly with other
affiliated programs. These aircraft are leased on a direct finance lease. The
Partnership also has owned trailers that were transferred into a direct finance
lease. The equity investment’s revenues from the direct finance lease are
primarily interest income and are based on a monthly amortization schedule.
 
 Asset
lives and depreciation methods: The Partnership’s primary business involves the
purchase and subsequent lease of long-lived transportation and related
equipment. The General Partner has chosen asset lives that it believes
correspond to the economic life of the related asset. Depreciation is computed
using 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, 12 years for all other transportation equipment and 7 years for
machinery and other equipment. The depreciation method changes to straight line
when annual depreciation expense using the straight-line method exceeds that
calculated by the double-declining balance method. The General Partner has
chosen a depreciation method that it believes matches the benefit to the
Partnership from the asset with the associated costs. These judgments have been
made based on the General Partner’s expertise in each equipment segment that the
Partnership operates. If the asset life and depreciation method chosen does not
reduce the book value of the asset to at least the potential future cash flows
from the asset to the Partnership, the Partnership would be required to record
an impairment loss. Likewise, if the net book value of the asset was less than
the economic value, the Partnership may record a gain on sale upon final
disposition of the asset.
 
 Impairment
of long-lived assets: Whenever circumstances indicate that an impairment may
exist such as when cash-flows decrease, there are unexpected maintenance issues
or when economic conditions deteriorate in the market the equipment operates,
the General Partner reviews the carrying value of its equipment and equity
investments in affiliated entities to determine if the carrying value of the
assets may not be recoverable, in consideration of the current economic
conditions. This requires the General Partner to make estimates related to
future cash flows from each asset as well as the determination if the
deterioration is temporary or permanent. If these estimates or the related
assumptions change in the future, the Partnership may be required to record
additional impairment charges.
 
 Allowance
for doubtful accounts: The Partnership maintains allowances for doubtful
accounts for estimated losses resulting from the inability of the lessees to
make the lease payments. These estimates are primarily based on the amount of
time that has lapsed since the related payments were due as well as specific
knowledge related to the ability of the lessees to make the required payments.
If the financial condition of the Partnership’s lessees were to deteriorate,
additional allowances could be required that would reduce income. Conversely, if
the financial condition of the lessees were to improve or if legal remedies to
collect past due amounts were successful, the allowance for doubtful accounts
may need to be reduced and income would be increased.
 
 Reserves
for repairs: The Partnership accrues for legally required repairs to equipment
such as dry docking for marine vessels and engine overhauls to aircraft engines
over the period prior to the required repairs. The amount that is reserved for
is based on the General Partner’s expertise in each equipment segment, the past
history of such costs for that specific piece of equipment and discussions with
independent, third party equipment brokers. If the amount reserved for is not
adequate to cover the cost of such repairs or if the repairs must be performed
earlier than the General Partner estimated, the Partnership would incur
additional repair and maintenance or equipment operating expenses.
 
 Contingencies
and litigation: The Partnership is subject to legal proceedings involving
ordinary and routine claims related to its business. The ultimate legal and
financial liability with respect to such matters cannot be estimated with
certainty and requires the use of estimates in recording liabilities for
potential litigation settlements. Estimates for losses from litigation are
disclosed if considered possible and accrued if considered probable after
consultation with outside counsel. If estimates of potential losses increase or
the related facts and circumstances change in the future, the Partnership may be
required to record additional litigation expense.
 
 (E)  Recent
Accounting Pronouncements
 
 On
December 24, 2003, Financial Accounting Standards Board (FASB) issued
Interpretation No. 46(R), “Consolidation of Variable Interest Entities” (FIN
46(R)). FIN 46(R) is effective for the Partnership beginning on January 1, 2004
and it requires the Partnership to evaluate all existing equity investments to
identify situations where the Partnership has a “variable interest,” commonly
evidenced by a guarantee arrangement or other commitment to provide financial
support, in a “variable interest entity,” commonly a thinly capitalized entity,
and further determine when such variable interest requires the Partnership to
consolidate the variable interest entities’ financial statements with its
own.  The General Partner has determined that none of its equity
investments qualify as variable interest entities. Adoption of FIN 46(R) did not
have a material effect on financial position or results of
operations.
 
 In March
2004, FASB's Emerging Issues Task Force (EITF) released Issue No. 03-1, “The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments" (EITF 03-1).   EITF 03-1 provides guidance for determining
whether impairment for certain debt and equity investments is
other-than-temporary and the measurement of an impaired loss. Certain disclosure
requirements of EITF 03-1 were adopted in 2003 and the Partnership has complied
with the new disclosure requirements in its consolidated financial statements.
The recognition and measurement requirements of EITF 03-1 were initially
effective for reporting periods beginning after June 15, 2004. In September
2004, the FASB Staff issued FASB Staff Position (FSP) EITF 03-1-1 that delayed
the effective date for certain measurement and recognition guidance contained in
EITF 03-1. The FSP requires that entities continue to apply previously existing
“other-than-temporary” guidance until a final consensus is reached. The General
Partner does not anticipate that issuance of a final consensus will materially
impact the Partnership’s financial condition or results of
operations.
 
 In
December 2004, FASB issued Statement 153, "Exchanges of Non-monetary Assets"
(Statement 153), an amendment of Accounting Principles Board Opinion No. 29.
Statement 153 is effective for non-monetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005. Statement 153 eliminates the exception to
fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance - that is, transactions that are not expected to result in significant
changes in the cash flows of the reporting entity.  The General Partner
does not believe that the adoption of Statement 153 will have a significant
effect on the Partnership.
  (F)  Results
of Operations - Year-to-Year Detailed Comparison
 
 Comparison
of the Partnership's Operating Results for the Years Ended December 31, 2004 and
2003
 
 (a)  Owned
Equipment Operations
 
 Operating
lease revenues less direct expenses (defined as repairs and maintenance and
asset-specific insurance expenses) on owned equipment decreased during the year
ended December 31, 2004, compared to 2003. Gains or losses from the disposition
of equipment, interest and other income, and certain expenses such as management
fees to affiliate, depreciation and amortization, interest expense, impairment
loss on equipment and general and administrative expenses relating to the
operating segments (see Note 6 to the financial statements), are not included in
the owned equipment operation discussion because these expenses are indirect in
nature and not a result of operations, but the result of owning a portfolio of
equipment. The following table presents lease revenues less direct expenses by
segment (in thousands of dollars):
 
 For
      the YearsEnded
      December 31,2004
    
    2003Marine
      containers
    $
    2,983
    
    
    $
    2,890Railcars
    
    1,342
    
    
    
    2,370Aircraft
      and rotables
    
    1,247
    
    
    
    1,475Trailers
    
    26
    
    
    
    477
 
 Marine
containers: Marine container lease revenues and direct expenses were $3.0
million and $54,000, respectively, for the year ended December 31, 2004,
compared to $2.9 million and $48,000, respectively, during the same period of
2003. The increase in lease revenues in 2004 is due to an increase in the
utilization rate of the marine containers compared to 2003.
 
 Railcars:
Railcar lease revenues and direct expenses were $1.9 million and $0.5 million,
respectively, for the year ended December 31, 2004, compared to $3.4 million and
$1.0 million, respectively, during the same period of 2003. Railcar lease
revenues decreased $1.6 million due to the transfer of most of the Partnership's
owned railcar portfolio into an equity investment (see Note 5 to the financial
statements) during the third quarter of 2004 and decreased $0.1 million due to
the sale of railcars that were on lease during the year ended December 31, 2003.
These decreases were partially off-set by an increase in lease revenues of $0.2
million due the purchase and lease of railcars during 2004 and 2003. Direct
expenses decreased $0.5 million during the year ended December 31, 2004 due to
the transfer of most of the Partnership's owned railcars into an equity
investment during the third quarter of 2004.
 
 Aircraft
and rotables: Aircraft and rotables lease revenues were $1.2 million for the
year ended December 31, 2004, compared to $1.5 million during the same period of
2003. The decrease in aircraft and rotables lease revenues was primarily due to
the one time receipt of a termination fee from a former lessee of the aircraft
components during 2003. A similar event did not occur in the year ended December
31, 2004. The Partnership's wholly owned aircraft is on lease through July 2008
and as such, lease revenues are expected to remain at their current level
through the end of the current lease.
 
 Trailers:  Trailer
lease revenues and direct expenses were $0.1 million and $27,000, respectively,
for the year ended December 31, 2004, compared to $0.8 million and $0.3 million,
respectively, during the same period of 2003. Trailer operating lease revenues
and direct expenses decreased in 2004 due to all of the Partnership trailers
being placed on a direct finance lease in the first quarter of
2004.
 
 (b)  Indirect
Expenses Related to Owned Equipment Operations
 
 Total
indirect expenses of $5.4 million for the year ended December 31, 2004 decreased
from $7.5 million for the same period in 2003. Significant variances are
explained as follows:
 
 (i)  A $2.0
million decrease in depreciation and amortization expenses from 2003 levels
reflects the decrease of $1.2 million caused by the transfer of most of the
Partnership's owned railcar portfolio into an equity investment, a decrease of
$0.5 million caused by the double-declining balance method of depreciation which
results in greater depreciation in the first years an asset is owned, a decrease
of $0.3 million caused by the Partnership's trailer portfolio being placed in a
direct finance lease, and a $0.2 decrease caused by the sale of railcars during
2004 and 2003. These decreases were partially offset by an increase of $0.2
million caused by the purchase of railcars during 2004 and 2003;
 
 (ii)  A $0.3
million decrease in the impairment loss on equipment resulted from the
Partnership reducing the carrying value of the owned aircraft rotables $0.2
million and owned railcars $0.1 million to their estimated fair value during the
year ended December 31, 2003. No impairment of equipment was required during
2004;
 
 (iii)  A
decrease of $0.1 million in management fees to affiliates was primarily the
result of lower lease revenues on owned equipment during 2004; and
 
 (iv)  A $0.3
million increase in general and administrative expenses during the year ended
December 31, 2004 was primarily due to additional professional
costs.
 
 (c)  Net Gain
on Disposition of Owned Equipment
 
 The gain
on the disposition of owned equipment for the year ended December 31, 2004
totaled $0.9 million, and resulted from the disposition of aircraft rotables,
marine containers, railcars and trailers, with an aggregate net book value of
$0.8 million for proceeds of $1.6 million. The net gain on the disposition of
owned equipment for the year ended December 31, 2003 totaled $0.1 million, and
resulted from the disposition of marine containers and railcars, with an
aggregate net book value of $0.2 million for proceeds of $0.4
million.
 
 (d)  Equity in
Net Loss of Equity Investments
 
 Equity in
net income (loss) of equity investments represents the Partnership's share of
the net income or loss generated from the operation of jointly owned entities
accounted for under the equity method of accounting. The following table
presents equity in net income (loss) by equipment type (in thousands of
dollars):
 
 For
      the Years
      Ended
      December 31,2004
    
    2003Marine
      vessel
    
    $
    672
    
    $
    366Machinery
      and other equipment
    
    
    (149
    )
    
    -Railcars
    
    
    (228
    )
    
    -Aircraft
    
    
    (933
    )
    
    (968
    )Equity
      in net loss of equity investments
    
    $
    (638
    )
    $
    (602
    )
 
 The
following equity investment discussion by equipment type is based on the
Partnership's proportional share of revenues, gain on disposition of equipment,
depreciation expense, direct expenses, interest expense, administrative
expenses, and impairment loss on equipment in the equity
investments:
 
 Marine
vessel:  As of
December 31, 2004 and 2003, the Partnership owned an interest in an entity that
owned a marine vessel. During the year ended December 31, 2004, lease revenues
of $3.8 million were partially offset by depreciation expense, direct expenses,
and administrative expenses of $3.2 million. During the same period of 2003,
lease revenues of $4.1 million were offset by depreciation expense, direct
expenses, and administrative expenses of $3.7 million.
 
 Marine
vessel lease revenues decreased $0.3 million during the year ended December 31,
2004 A decrease of $0.6 million was due to being off-lease approximately 40 days
more in 2004 than 2003 while undergoing dry docking. This decrease was partially
offset by an increase of $0.3 million due to the earning a higher lease rate
while on lease during the year ended December 31, 2004 compared to
2003.
 
 Marine
vessel depreciation expense, direct expenses, and administrative expenses
decreased $0.2 million due to lower operating expenses resulting from being
off-lease for approximately 40 days while undergoing scheduled dry docking
during 2004 when compared to 2003 during which a similar event did not occur,
decreased $0.3 million during 2004 due to lower repairs compared to 2003 and
decreased $0.1 million due to the double-declining balance method of
depreciation which results in greater depreciation in the first years an asset
is owned compared to 2003.
 
 Machinery
and other equipment: As of December 31, 2004, the Partnership owned an interest
in an entity that owned machinery and other equipment. During 2004, lease
revenues of $0.1 million were offset by depreciation expense, direct expenses,
and administrative expenses of $0.2 million. The Partnership had no equity
investments that owned machinery and other equipment in 2003.
 
 Railcars:
As of December 31, 2004, the Partnership owned an interest in an entity that
owned railcars. These railcars were transferred into this entity on July 1, 2004
from the Partnership's owned equipment portfolio. During 2004, lease revenues of
$1.7 million and the gain on the disposition of equipment of $0.2 million were
offset by depreciation expense, direct expenses, interest expense and
administrative expenses of $2.2 million. The Partnership had no equity
investments that owned railcars in 2003.
 
 Aircraft:
As of December 31, 2004, the Partnership owned an interest in entities owning
two commercial aircraft on a direct finance lease, an interest in an entity
owning a Boeing 737-300 commercial aircraft, an interest in two entities each
owning two Boeing 737-500 commercial aircraft, and an interest in an entity
owning other aircraft related assets. As of December 31, 2003, the Partnership
owned an interest in entities owning two commercial aircraft on a direct finance
lease, an interest in an entity owning a Boeing 737-300 commercial aircraft, and
an interest in an entity owning other aircraft related assets.
 
 During
the year ended December 31, 2004, entities owning aircraft equipment generated
revenues of $2.1 million which were offset by depreciation expense, direct
expenses, interest expense and administrative expenses of $3.1 million. During
the same period of 2003, entities owning equipment generated revenues of $1.3
million which were offset by depreciation expense, direct expenses and
administrative expenses of $1.3 million and the impairment loss on equipment of
$1.0 million.
 
 Aircraft
revenues increased $0.9 million due to the Partnership's investment into two
entities in 2004 that each own two Boeing 737-500 commercial aircraft and an
increase of $0.1 million in the finance lease income due to the renegotiation of
the lease in 2004. This increase was partially offset by a decrease in lease
revenues of $0.2 million in 2004 due to a lower lease rate being earned on the
Boeing 737-300 commercial aircraft.
 
 Depreciation
expense, direct expenses, interest expense and administrative expenses increased
$1.8 million during the year ended December 31, 2004 compared to the same period
2003. An increase in depreciation expense of $1.5 million was caused by the
Partnership's investment into two entities each owning two Boeing 737-500
commercial aircraft during the third quarter of 2004. This increase was
partially offset by a decrease of $0.2 million on the remaining aircraft due to
the double-declining balance method of depreciation which results in greater
depreciation in the first years an asset is owned. An increase in direct
expenses of $0.5 million was caused by interest expense from the non-recourse
debt that is included as part of the Partnership's investment in two entities
each owning two Boeing 737-500 commercial aircraft. Equity investments during
the same period of 2003 did not have any debt or interest expense.
 
 During
the year ended December 31, 2003, an impairment loss of $0.8 million resulted
from the reduction of the carrying value of a Boeing 737-300 commercial aircraft
to its estimated fair value and an impairment loss of $0.1 million resulted from
the reduction of the carrying value of the direct finance lease to its estimated
fair value. No impairment was required during the period of 2004.
 
 (e)  Net
Income (Loss)
 
 As a
result of the foregoing, the Partnership's net income for the year ended
December 31, 2004 was $0.6 million, compared to a net loss of $0.6 million
during the same period of 2003. The Partnership's ability to acquire, operate,
and liquidate assets, secure leases and re-lease those assets whose leases
expire is subject to many factors. Therefore, the Partnership's performance
during the year ended December 31, 2004 is not necessarily indicative of future
periods.
 
 (G)  Geographic
Information
 
 Certain
of the Partnership’s equipment operates in international markets. Although these
operations expose the Partnership to certain currency, political, credit and
economic risks, the General Partner believes these risks are minimal or has
implemented strategies to control the risks. Currency risks are at a minimum
because all invoicing, with the exception of a small number of railcars
operating in Canada, is conducted in United States (US) 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 may range from letters of credit supported by US 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
Note 7 to the financial statements for information on the lease revenues, net
income (loss), and net book value of equipment in various geographic regions.
 
 Revenues
and net operating income (loss) 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 either to redeploy the assets in the most
advantageous geographic location or sell the assets.
 
 The
Partnership's owned equipment and investments in equipment owned by equity
investments on lease to US - domiciled lessees consists of aircraft, trailers,
railcars and machinery and other equipment. During 2004, US lease revenues
accounted for 37% of the total lease revenues of wholly and jointly owned
equipment while this region reported net loss of $0.4 million. The primary
reason for this loss was due to the double-declining balance method of
depreciation that results in greater depreciation in the first years an asset is
owned.
 
 The
Partnership's owned equipment and investments in equipment owned by equity
investments on lease to Canadian-domiciled lessees consists of railcars. During
2004, Canadian lease revenues accounted for 6% of the total lease revenues of
wholly and jointly owned equipment, while this region reported net income of
$0.3 million.
 
 The
Partnership's investment in equipment owned by an equity investment on lease to
a lessee domiciled in South America consists of an aircraft. South American
lease revenues accounted for 7% of the total lease revenues of wholly and
jointly owned equipment while this region reported net loss of $0.1 million. The
primary reasons for this loss was due to the double-declining balance method of
depreciation that results in greater depreciation in the first years an asset is
owned.
 
 The
Partnership's ownership share in equipment owned by an equity investment on
lease to a Latin American-domiciled lessee consisted of two aircraft on a direct
finance lease. No operating lease revenues were reported in this region while
this region reported net income of $0.2 million.
 
 The
Partnership's owned equipment and investments in equipment owned by equity
investments on lease to lessees in the rest of the world consists of a marine
vessel and marine containers. During 2004, lease revenues from these operations
accounted for 50% of the total lease revenues of wholly and jointly owned
equipment, while reporting net income from these operations of $2.2 million.
 
 (H)  Inflation
 
 Inflation
had no significant impact on the Partnership's operations during 2004 or
2003.
 
 (I)  Forward-Looking
Information
 
 Except
for historical information contained herein, the discussion in this Form 10-KSB
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-KSB should be read as
being applicable to all related forward-looking statements wherever they appear
in this Form 10-KSB. The Partnership’s actual results could differ materially
from those discussed here.
 
 (J)  Outlook
for the Future
 
 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.
 
 The
ability of the Partnership to realize acceptable lease rates on its equipment in
the different equipment markets is contingent upon many factors, such as
specific market conditions and economic activity, technological obsolescence,
and government or other regulations. The unpredictability of these factors makes
it difficult for the General Partner to clearly define trends or influences that
may impact the performance of the Partnership's equipment. The General Partner
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 those equipment markets in
which it determines that it cannot operate equipment and achieve acceptable
rates of return.
 
 The
Partnership intends to use future cash flow from operations to satisfy its
operating requirements, pay principal and interest on debt and make cash
distributions to the partners.
 
 The
Partnership will not reinvest cash flows generated from operations after January
1, 2005 into additional equipment. The Partnership will terminate on December
31, 2011, unless terminated earlier upon sale of all equipment and by certain
other events.
 
 Factors
affecting the Partnership’s contribution during the year 2005 and beyond
include:
 
 (i)  Demand
for marine containers is closely tied to worldwide economic conditions. The
market for the Partnership's marine containers is expected to remain strong
during 2005 with utilization in the 90 - 95% range with lease rates increasing
slightly;
 
 (ii)  Economic
recovery in the railcar segment continues to be strong. Overall railcar loadings
are forecast to grow approximately 6% in 2005. Railcar manufacturers now have
full production schedules until the summer of 2005 for tank railcars.
 
 The
Partnership's railcar fleet is largely used by a broadly defined chemical
sector. Chemical and petroleum railcar loadings are projected to grow at a
substantially higher rate this year than the 3% per year long run average. The
continuation of high steel prices have resulted in increases in the price of a
new tank railcars and lease rates have now increased in response this price
increase. While this improves returns for railcar lessors in the short run,
reduced railcar availability and higher lease costs along with railroad
operating inefficiencies may cause the chemical industry growth to slow and
perhaps cause chemical producers to shift to other forms of transportation.
Also, there are a number of potential new railroad operating requirements and
regulations which, if adopted, could increase the cost of railcar ownership. At
present, the Partnership's tank railcar fleet is highly utilized and appears to
be in a position to remain so for the foreseeable future.
 
 The
General Partner believes that the market for the Partnership's railcars and
those in PLM Rail Partners, LLC. in which the Partnership has an equity
interest, will remain strong for several years. The General Partner has engaged
an investment banking firm to explore strategic alternatives with respect to its
railcar operations which could include the sale of the Partnership owned and
partially owned railcars;
 
 (iii)  The
Partnership has an investment in a double-hull product tanker constructed in
1985, that operates in international markets carrying a variety of clean
commodity-type liquid cargoes. Demand for commodity-based shipping is closely
tied to worldwide economic growth patterns, which can affect demand by causing
changes in specific grade volume on trade routes. The General Partner operates
the Partnership’s product tanker in the spot charter markets, carrying mostly
gasoline, jet fuel, gas oils and similar petroleum distillates or simple
chemicals or vegetable oils, an approach that provides the flexibility to adapt
to changes in market conditions.
 
 The
Partnership’s product tanker has continued to operate with very little idle time
between charters, except for required scheduled major maintenance. During 2004
freight rates for marine vessels progressively improved and in the fourth
quarter 2004 reached an all time record high, all due to the demand for sea
transportation resulting from improving economies worldwide. The demand is
expected to continue until additional new tonnage starts coming on line in 2005.
Cold weather and demand for refined products worldwide and home heating oil on
US east coast should keep the charter rates at or near 2004 highs going into
2005. Charter rates are expected to begin to show sign of decreasing during the
spring and summer months of 2005. The marine vessel in which the Partnership
owns an interest is not scheduled to undergo major maintenance until September
2006.
 
 The
marine vessel owned by an entity in which the Partnership has an interest is 20
years old which may limit its future marketability. Marine vessels 20 years of
age typically earn a lower lease rate than newer marine vessels and may have
increased off-hire time;
 
 (iv)  Market
demand for new and used aircraft has been severely impacted by the poor
financial condition of the airline industry. The General Partner believes that
there is a significant oversupply of commercial aircraft available that has
caused a decrease in aircraft fair market values. The General Partner believes
prices on selected aircraft have reached levels which make them attractive
investment opportunities.
 
 The
Partnership’s owned aircraft rotables are off-lease. The General Partner is
currently marketing this equipment for sale. Due to the poor market for these
rotables, it may take a considerable period of time to dispose of
them.
 
 During
2004, the General Partner renegotiated the lease for the partially owned Boeing
737-300. The lease was extended from April 2005 to July 2008 and the monthly
lease rate was lowered by 6%.
 
 In the
first quarter of 2005, the lessee of the two aircraft on direct finance lease in
which the Partnership owned an interest, exercised its purchase option on these
aircraft. Accordingly, revenues from these aircraft will decrease in
2005;
 
 (v)  The
Partnership's trailer portfolio is on lease through the end of 2006. The lessee
of this equipment has indicated it may exercise its option to prepay the
remaining rent and purchase some of this equipment in 2005;
 
 (vi)  The
management fee rate paid by the Partnership has been reduced by 25% for the
period starting January 1, 2003 and ending June 30, 2005;
 
 (vii)  The
Partnership is expected to have increased general and administrative costs as
the General Partner liquidates other investment programs that currently share
certain general and administrative expenses; and
 
 (viii)  While the
Partnership is scheduled to terminate on December 31, 2011, the General Partner
is managing the Partnership with the objective of having all owned and partially
owned equipment disposed of by the end of 2006.
 
 Several
other factors may affect the Partnership's operating performance in the year
2005 and beyond, including changes in the markets for the Partnership's
equipment and changes in the regulatory environment in which that equipment
operates.
 
 (1)  Re-pricing
Risk
 
 Certain
portions of the Partnership's aircraft and aircraft rotables, railcar, marine
container, and marine vessel portfolios will be remarketed in 2005 as existing
leases expire, exposing the Partnership to considerable re-pricing
risk/opportunity.
 
 (2)  Equipment
Liquidations
 
 The
General Partner may elect to sell certain underperforming equipment, equipment
whose continued operation may become prohibitively expensive, or has a greater
strategic value to others. 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. The
proceeds from the sold or liquidated equipment will be used to fund operations,
make principal and interest payments on outstanding debt and make cash
distributions to the partners.
 
 (3)  Impact of
Government Regulations on Future Operations
 
 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.
 
 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.
 
 (K)  Distribution
Levels and Additional Capital Resources
 
 Pursuant
to the amended limited partnership agreement, the Partnership ceased entering
into binding commitments to purchase additional equipment beginning on January
1, 2005 with any cash generated from operations or proceeds from equipment
disposals after that date. The Partnership committed its cash flow, surplus cash
and equipment disposition proceeds to purchase additional equipment, consistent
with the objectives of the Partnership, generated until December 31, 2004. In
2004, the Partnership committed to purchase $6.1 million in equipment in 2005.
The funds to purchase this equipment were in escrow accounts as of December 31,
2004 and are shown as restricted cash on the accompanying balance sheet. The
General Partner intends to continue its strategy of selectively redeploying
equipment to achieve competitive returns and selling equipment that is
underperforming, whose operation becomes prohibitively expensive, or has a
greater strategic value to others. During this time, the Partnership will use
operating cash flow, and proceeds from the sale of equipment to meet its
operating obligations, make principal and interest payments on outstanding debt
and make cash distributions to the partners. In the long term, changing market
conditions and used-equipment values preclude the General Partner from
accurately determining the impact of future re-leasing activity and equipment
sales on Partnership performance and liquidity.
 
 The
General Partner is currently in the process of reviewing its cash distribution
policy to determine if there may be a cash distribution declared in 2005. Cash
distributions when paid to the limited partners generally consist of both a
return of and a return on capital. Cash distributions do not represent and are
not indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Partnership and will be
dependent upon the collection of all future contracted rent, the generation of
renewal and/or re-lease rents and the residual value realized for each asset at
its disposal.
 
 The
General Partner believes that sufficient cash flow will be available in the
future for repayment of debt and to meet Partnership operating cash flow
requirements.
 
 ITEM
7.  FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
 
 The
financial statements for the Partnership are listed in the Index to Financial
Statements included in Item 13(a) of this Annual Report on Form
10-KSB.
 
 ITEM
      8.
    CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
 
 (A)
    Disagreements
      with Accountants on Accounting and Financial
Disclosures
 
 None.
 
 (B)
    Changes
      in Accountants
 
 In
November 2004 the General Partner announced that Ernst & Young LLP had declined to stand
for reelection as the Partnership’s independent auditor . Ernst
& Young LLP issued
an unqualified opinion on the Partnership's 2003 financial statements. During
2003 and the subsequent interim periods preceding the announcement that Ernst
& Young LLP would not stand as the Partnership’s independent
auditor , there
were no disagreements with Ernst
& Young LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure. In December 2004, the General Partner announced
that the Partnership had engaged Grant Thornton LLP as the Partnership’s
independent auditor.
 
 ITEM
8A.  CONTROLS
AND PROCEDURES
 
 (A)  Limitations
on the Effectiveness of Controls
 
 The
General Partner’s management, including it’s President and Chief Financial
Officer (CFO), does not expect that our internal controls or disclosure control
will prevent all errors and all fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs.
 
 Because
of the inherent limitations in all control systems, no evaluation of control can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Partnership have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, collusion
of two or more people, or by management override of the control. The design of
any system of controls also is based partly on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
 
 Notwithstanding
the forgoing limitations, we believe that our internal controls and disclosure
controls provide reasonable assurances that the objectives of our control system
are met.
 
 (B)  Quarterly
Evaluation of the Partnership’s Disclosure Controls and Internal
Controls
 
 (1)  Within
the 90-day period prior to the filing of this report, the General Partner
carried out an evaluation, under the supervision and with the participation of
the General Partner’s management, including it’s President and CFO, of the
effectiveness of the design and operation of the Partnership’s disclosure
controls and procedures pursuant to Rule 13a-14 under the Securities Exchange
Act of 1934 (the “Exchange Act”). Based upon that evaluation, the President and
CFO concluded that the Partnership’s disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Partnership’s required to be included in the Partnership’s exchange act filings.
 
 (2)  There
have been no significant changes in the Partnership’s internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the General Partner carried out its evaluations.
 
 **PART
III**
 
 ITEM
      9.
    DIRECTORS
      AND EXECUTIVE OFFICERS OF PLM FINANCIAL SERVICES, INC.
 
 As of the
date of this annual report, the directors and executive officers of PLM
Financial Services, Inc. (and key executive officers of its subsidiaries) are as
follows:
 
 Name
    Age
    PositionGary
      D. Engle
    56
    Director,
      PLM Financial Services, Inc., PLM Investment Management, Inc., and PLM
      Transportation Equipment Corp.James
      A. Coyne
    44
    Director,
      Secretary and President, PLM Financial Services, Inc. and PLM Investment
      Management, Inc., Director and Secretary, PLM Transportation Equipment
      Corp.Richard
      K Brock
    42
    Chief
      Financial Officer, PLM Financial Services, Inc., PLM Investment
      Management, Inc. and PLM Transportation Equipment
Corp.
 
 Gary D.
Engle was appointed a Director of PLM Financial Services, Inc. in January 2002.
He was appointed a director of PLM International, Inc. in February 2001. He is a
director and President of MILPI Holdings, LLC (MILPI). Since November 1997, Mr.
Engle has been Chairman and Chief Executive Officer of Semele Group Inc.
(“Semele”). Mr. Engle is President and Chief Executive Officer of Equis
Financial Group (“EFG”), which he joined in 1990 as Executive Vice President.
Mr. Engle purchased a controlling interest in EFG in December 1994. He is also
President of AFG Realty, Inc.
 
 James A.
Coyne was appointed President of PLM Financial Services, Inc. in August 2002. He
was appointed a Director and Secretary of PLM Financial Services, Inc. in April
2001. He was appointed a director of PLM International, Inc. in February 2001.
He is a director, Vice President and Secretary of MILPI. Mr. Coyne has been a
director, President and Chief Operating Officer of Semele since 1997. Mr. Coyne
is Executive Vice President of Equis Corporation, the general partner of EFG.
Mr. Coyne joined EFG in 1989, remained until 1993, and rejoined in November
1994.
 
 Richard K
Brock was appointed Chief Financial Officer of PLM Financial Services, Inc. in
August 2002. From June 2001 through August 2002, Mr. Brock was a consultant to
various leasing companies including PLM Financial Services, Inc. From October
2000 through June 2001, Mr. Brock was a Director of PLM Financial Services, Inc.
Mr. Brock was appointed Vice President and Chief Financial Officer of PLM
International, Inc. and PLM Financial Services, Inc. in January 2000, having
served as Acting Chief Financial Officer since June 1999 and as Vice President
and Corporate Controller of PLM International, Inc. and PLM Financial Services,
Inc. since June 1997. Prior to June 1997, Mr. Brock served as an Director of
Planning and General Accounting beginning in February 1994.
 
 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 Financial Services, Inc., PLM
Transportation Equipment Corp., or PLM Investment Management, Inc.
 
 CODE
OF ETHICS
 
 The Board
of Directors of PLM Financial Services Inc, (“FSI”) the General Partner, has
adopted a written Code of Ethics that is applicable to the Board, executive
officers and employees of PLM Financial Services Inc. FSI’s Code of Ethics is
designed to deter wrongdoing and to promote:
 
 -
    the
      integrity and values of FSI, including the ethical handling of actual or
      apparent conflicts of interest between personal and professional
      relationships;-
    compliance
      with applicable governmental laws, rules and
  regulations;-
    internal
      reporting of violations of the Code of Ethics to any member of FSI’s Board
      of Directors; and-
    accountability
      for adherence to the Code of Ethics.
 
 ITEM
10.  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, 2004.
 
 ITEM
11.  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
(subject to certain allocations of income), and cash distributions. As of
December 31, 2004, no investor was known by the General Partner to beneficially
own more than 5% of the limited partnership 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 limited partnership units of
the Partnership as of December 31, 2004.
 
 ITEM
12.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
 
 (A)  Transactions
with Management and Others
 
 During
2004, the Partnership paid or accrued the following fees to FSI or its
affiliates: acquisition fees, $0.3 million; lease negotiation fees, $0.1
million; management fees, $0.3 million; and administrative and data processing
services performed on behalf of the Partnership, $0.5 million.
 
 During
2004, the Partnership’s proportional share of ownership in equity investments
paid or accrued the following fees to FSI or its affiliates (based on the
Partnership’s proportional share of ownership): acquisition fees, $1.1 million;
lease negotiation fees, $0.2 million; debt placements fees, $0.2 million,
management fees, $0.3 million; and administrative and data processing services
performed on behalf of these entities, $0.1 million.
 
 The
balance due to affiliates as of December 31, 2004 includes $0.1 million due to
FSI and its affiliates for management fees and $1.2 million due to a equity
investment.
 
 ITEM
13.  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-KSB.
 
 (B)
    Financial
      Statement Schedule
 
 None.
 
 (C)  Reports
on Form 8-K and 8-K/A
 
 1.
    Form
      8-K dated October 1, 2004 announcing that Ernst & Young LLP would not
      stand for reelection as the Partnership's independent auditors for the
      year ended December 31, 2004.
 
 2.
    Form
      8-K/A dated October 14, 2004 announcing that Ernst & Young LLP would
      not stand for reelection as the Partnership's independent auditors for the
      year ended December 31, 2004.
 
 3.
    Form
      8-K dated December 22, 2004 announcing the engagement of Grant Thornton
      LLP as the Partnership's independent auditor for the year ended December
      31, 2004.
 
  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, 1991.4.1
    Second
      Amendment to the Amended and Restated Limited Partnership Agreement dated
      August 24, 2001, incorporated by reference to the Partnership’s Form
      10-KSB dated December 31, 2001 filed with the Securities and Exchange
      Commission on March 26, 2002.10.1
    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 December 21, 2001, regarding $30.0 million term
      loan notes due December 21, 2006, incorporated by reference to the
      Partnership’s Form 10-KSB dated December 31, 2001 filed with the
      Securities and Exchange Commission on March 26, 2002.10.3
    First
      Amendment to Credit Agreement, dated March 2, 2003, incorporated by
      reference to the Partnership’s Form 10-QSB dated June 30, 2003 filed with
      the Securities and Exchange Commission on August 14,
  2003.10.4
    Second
      Amendment to Credit Agreement, dated June 30, 2003, incorporated by
      reference to the Partnership’s Form 10-QSB dated June 30, 2003 filed with
      the Securities and Exchange Commission on August 14,
  2003.10.5
    Third
      Amendment to Credit Agreement, dated September 30, 2003, incorporated by
      reference to the Partnership’s Form 10-QSB dated September 30, 2003 filed
      with the Securities and Exchange Commission on November 13,
      2003.10.6
    Amended
      and restated Warehouse Credit Agreement, dated March 17, 2004,
      incorporated by reference to the Partnership’s Form 10-KSB dated December
      31, 2003 filed with the Securities and Exchange Commission on March 29,
      2004.10.7
    Loan
      agreement between PLM Rail Partners, LLC and HSH Nordbank AG, New York,
      dated June 30, 2004, incorporated by reference to the Partnership’s Form
      10-QSB dated June 30, 2004 filed with the Securities and Exchange
      Commission on August 13, 2004.10.8
    Asset
      Transfer Agreement between PLM Equipment Growth Fund VI and PLM Rail
      Partners, LLC, dated July 1, 2004, incorporated by reference to the
      Partnership’s Form 10-QSB dated June 30, 2004 filed with the Securities
      and Exchange Commission on August 13, 2004.10.9
    Limited
      Liability Company Agreement of PLM Railcars Partners dated June 29, 2004,
      incorporated by reference to the Partnership’s Form 10-QSB dated June 30,
      2004 filed with the Securities and Exchange Commission on August 13,
      2004.10.10
    First
      Amendment to Amended and Restated Warehouse Credit Agreement dated
      September 3, 2004, incorporated by reference to the Partnership’s Form
      10-QSB dated September 30, 2004 filed with the Securities and Exchange
      Commission on November 12, 2004.
 
 10.11
    Second
      Amendment to Amended and Restated Warehouse Credit Agreement dated October
      20, 2004, incorporated by reference to the Partnership’s Form 10-QSB dated
      September 30, 2004 filed with the Securities and Exchange Commission on
      November 12, 2004.10.12
    PLM
      CAL I LLC operating agreement dated June 4, 2004, incorporated by
      reference to the Partnership’s Form 10-QSB dated September 30, 2004 filed
      with the Securities and Exchange Commission on November 12,
      2004.10.13
    PLM
      CAL II LLC operating agreement dated June 4, 2004, incorporated by
      reference to the Partnership’s Form 10-QSB dated September 30, 2004 filed
      with the Securities and Exchange Commission on November 12,
      2004.10.14
    PLM
      CAL I LLC equipment purchase agreement dated August 26, 2004, incorporated
      by reference to the Partnership’s Form 10-QSB dated September 30, 2004
      filed with the Securities and Exchange Commission on November 12,
      2004.10.15
    PLM
      CAL II LLC equipment purchase agreement dated August 26, 2004,
      incorporated by reference to the Partnership’s Form 10-QSB dated September
      30, 2004 filed with the Securities and Exchange Commission on November 12,
      2004.10.16
    Trust
      Indenture and Mortgage 645 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
    I.10.17
    Trust
      Indenture and Mortgage 646 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
    I.10.18
    Trust
      Indenture and Mortgage 647 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
      II.10.19
    Trust
      Indenture and Mortgage 648 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
      II.10.20
    Trust
      Indenture and Mortgage 645 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      I.10.21
    Trust
      Indenture and Mortgage 646 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      I.10.22
    Trust
      Indenture and Mortgage 647 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      II.10.23
    Trust
      Indenture and Mortgage 648 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      II.10.24
    Letter
      of intent to purchase 69 tank railcars with PLM International, Inc. dated
      December 23, 2004.10.25
    Letter
      of intent to purchase manufacturing equipment with PLM International, Inc.
      dated December 23, 2004.10.26
    Third
      Amendment to Amended and Restated Warehouse Credit Agreement dated
      December 28, 2004.10.27
    Fourth
      Amendment to Amended and Restated Warehouse Credit Agreement dated March
      24, 2005.14
    PLM
      Financial Services Inc. Code of Ethics, incorporated by reference to the
      Partnership’s Form 10-KSB dated December 31, 2003 filed with the
      Securities and Exchange Commission on March 29, 2004.31.1
    Certificate
      of President of the General Partner pursuant to Section 302 of Sarbanes -
      Oxley Act.31.2
    Certificate
      of Chief Financial Officer of the General Partner pursuant to Section 302
      of Sarbanes - Oxley Act.32.1
    Certificate
      of President of the General Partner pursuant to Section 906 of Sarbanes -
      Oxley Act.32.2
    Certificate
      of Chief Financial Officer of the General Partner pursuant to Section 906
      of Sarbanes - Oxley Act.
 
 
 ITEM
      14.
    PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
 
 The table
below list principal accountant fees and services (in thousands of
dollars):
 
 Audit
    
    Audit
    
    Tax
    
    All
      OtherFees
    
    Related
      Fees
    
    Fees
    
    Fees
 
 Year
      Ended December 31, 2004
    $
    70
    
    $
    --
    
    $
    --
    
    $
    --Year
      Ended December 31, 2003
    $
    47
    
    $
    --
    
    $
    --
    
    $
    --
 
 It is the
policy of the Board of Managers that its Board of Director's pre-approves all of
the services described above in this Item 14.
 
  
  
 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 29, 2005  PLM
EQUIPMENT GROWTH FUND VI PARTNERSHIP
 
 By:  PLM
Financial Services, Inc.
 General
Partner
 
 
 By:  /s/
James A. Coyne
 James A.
Coyne
 President
 
 
 By:  /s/
Richard K Brock
 Richard K
Brock
 Chief
Financial Officer
 
 CERTIFICATION
 
 The
undersigned hereby certifies, in their capacity as an officer of the General
Partner of PLM Equipment Growth Fund VI (the Partnership), that the Annual
Report of the Partnership on Form 10-KSB for the year ended December 31, 2004,
fully complies with the requirements of Section 13(a) of the Securities Exchange
Act of 1934 and that the information contained in such report fairly presents,
in all material respects, the financial condition of the Partnership at the end
of such period and the results of operations of the Partnership for such
period.
 
 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
 
 
 
 
 /s/
Gary D. Engle
 Gary D.
Engle     Director,
FSI  March 29,
2005
 
 
 
 
 /s/
James A. Coyne
 James A.
Coyne   Director,
FSI  March 29,
2005
 
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **INDEX
TO FINANCIAL STATEMENTS**
 
 (Item
13(a))
 
 PageReports
      of independent registered public accounting firms
    30-31Balance
      sheets as of December 31, 2004 and 2003
    32Statements
      of operations for the years endedDecember
      31, 2004 and 2003
    33Statements
      of changes in partners’ capital for theyears
      ended December 31, 2004 and 2003
    34Statements
      of cash flows for the years endedDecember
      31, 2004 and 2003
    35Notes
      to financial statements
    36-51
  
 
 **REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 
 
 
 The
Partners
 PLM
Equipment Growth Fund VI:
 
 
 We have
audited the accompanying balance sheet of PLM Equipment Growth Fund VI, a
limited partnership (the Partnership), as of December 31, 2004, and the related
statements of operations, changes in partners' capital, and cash flows for the
year then ended. 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 audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Partnership is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides 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 at
December 31, 2004 and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
 
 
 
 
 
 /s/ Grant
Thornton LLP
 
 New York,
New York
 March 24,
2005
  
 
 **REPORT
OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTANTS**
 
 
 
 
 
 The
Partners
 PLM
Equipment Growth Fund VI:
 
 
 We have
audited the accompanying balance sheet of PLM Equipment Growth Fund VI, a
limited partnership, as of December 31, 2003, and the related statements of
operations, changes in partners' capital, and cash flows for the year then
ended. 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 audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audit provides 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 at
December 31, 2003 and the results of its operations and its cash flows for the
year then ended in conformity with U.S. generally accepted accounting
principles.
 
 
 
 
 
 /s/ Ernst
& Young LLP
 
 Tampa,
Florida
 March 26,
2004
 
  
  
 **PLM
      EQUIPMENT GROWTH FUND VI****(A
      Limited Partnership)****BALANCE
      SHEETS****December
      31,**(in
      thousands of dollars, except unit amounts)2004
    
    
    
    2003**Assets**Equipment
      held for operating leases, at cost
    $
    38,113
    
    
    $
    65,675Less
      accumulated depreciation
    
    (29,809
    )
    
    
    (48,220
    )Net
      equipment
    
    8,304
    
    
    
    17,455Cash
      and cash equivalents
    
    4,656
    
    
    
    13,294Restricted
      cash
    
    6,138
    
    
    
    410Accounts
      receivable, less allowance for doubtful accounts of$454
      in 2004 and $444 in 2003
    
    1,054
    
    
    
    1,060Equity
      investments in affiliated entities
    
    17,376
    
    
    
    9,241Other
      assets, net of accumulated amortization of$348
      in 2004 and $508 in 2003
    
    668
    
    
    
    543Total
      assets
    $
    38,196
    
    
    $
    42,003**Liabilities
      and partners’ capital**LiabilitiesAccounts
      payable and accrued expenses
    $
    354
    
    
    $
    495Due
      to affiliates
    
    1,307
    
    
    
    1,552Notes
      payable
    
    10,000
    
    
    
    14,000Total
      liabilities
    
    11,661
    
    
    
    16,047Commitments
      and contingenciesPartners'
      capitalLimited
      partners (7,730,965 limited partnership units outstanding)
    
    26,535
    
    
    
    25,956General
      Partner
    
    --
    
    
    
    --Total
      partners' capital
    
    26,535
    
    
    
    25,956Total
      liabilities and partners' capital
    $
    38,196
    
    
    $
    42,003
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See
accompanying notes to financial statements.
  
  
 **PLM
      EQUIPMENT GROWTH FUND VI****(A
      Limited Partnership)****STATEMENTS
      OF OPERATIONS****For
      the Years Ended December 31,**(In
      thousands of dollars, except weighted-average partnership unit
      amounts)
 
 
 2004
    
    
    
    2003**Revenues**Lease
      revenue
    $
    6,205
    
    
    $
    8,558Interest
      and other income
    
    185
    
    
    
    148Gain
      on disposition of equipment
    
    857
    
    
    
    141Loss
      on disposition of equipment
    
    --
    
    
    
    (18
    )Total
      revenues
    
    7,247
    
    
    
    8,829**Expenses**Depreciation
      and amortization
    
    2,667
    
    
    
    4,625Repairs
      and maintenance
    
    502
    
    
    
    1,177Insurance
      expenses
    
    232
    
    
    
    268Management
      fees to affiliate
    
    281
    
    
    
    374Interest
      expense
    
    616
    
    
    
    611General
      and administrative expenses to affiliates
    
    535
    
    
    
    300Other
      general and administrative expenses
    
    1,212
    
    
    
    1,183Impairment
      loss on equipment
    
    --
    
    
    
    278(Recovery
      of) provision for bad debts
    
    (15
    )
    
    
    31Total
      expenses
    
    6,030
    
    
    
    8,847Equity
      in net loss of equity investments
    
    (638
    )
    
    
    (602
    )Net
      income (loss)
    $
    579
    
    
    $
    (620
    )**Partners'
      share of net income (loss)**Limited
      partners
    $
    579
    
    
    $
    (620
    )General
      Partner
    
    --
    
    
    
    --Total
    $
    579
    
    
    $
    (620
    )Limited
      partner’s net income (loss) perweighted-average
      limited partnership unit
    $
    0.07
    
    
    $
    (0.08
    )
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See
accompanying notes to financial statements.
  
  
 **PLM
      EQUIPMENT GROWTH FUND VI****(A
      Limited Partnership)****STATEMENTS
      OF CHANGES IN PARTNERS' CAPITAL****For
      the Years Ended December 31, 2004 and 2003**(in
      thousands of dollars)
 
 
 Limited
      Partners
    
    
    
    General
      Partner
    
    
    
    TotalPartners'
      capital as of December 31, 2002
    $
    26,576
    
    
    $
    --
    
    
    $
    26,576Net
      loss
    
    (620
    )
    
    
    --
    
    
    
    (620
    )Partners'
      capital as of December 31, 2003
    
    25,956
    
    
    
    --
    
    
    
    25,956Net
      income
    
    579
    
    
    
    --
    
    
    
    579Partners'
      capital as of December 31, 2004
    $
    26,535
    
    
    $
    --
    
    
    $
    26,535
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See
accompanying notes to financial statements.
  
  
 **PLM
      EQUIPMENT GROWTH FUND VI****(A
      Limited Partnership)****STATEMENTS
      OF CASH FLOWS****For
      the Years Ended December 31,**(in
      thousands of dollars)
 
 2004
    
    
    
    2003**Operating
      activities**Net
      income (loss)
    $
    579
    
    
    $
    (620
    )Adjustments
      to reconcile net income (loss)to
      net cash provided by (used in) operating activities:Depreciation
      and amortization
    
    2,667
    
    
    
    4,625Amortization
      of debt placement fees
    
    110
    
    
    
    125(Recovery
      of) provision for bad debts
    
    (15
    )
    
    
    31Impairment
      loss on equipment
    
    --
    
    
    
    278Net
      gain on disposition of equipment
    
    (857
    )
    
    
    (123
    )Equity
      in net loss from equity investments
    
    638
    
    
    
    602Distribution
      from equity investments
    
    1,747
    
    
    
    2,782Changes
      in operating assets and liabilities:Accounts
      receivable
    
    21
    
    
    
    (147
    )Other
      assets
    
    172
    
    
    
    32Accounts
      payable and accrued expenses
    
    (141
    )
    
    
    28Due
      to affiliates
    
    (245
    )
    
    
    161Net
      cash provided by operating activities
    
    4,676
    
    
    
    7,774**Investing
      activities**Payments
      for purchase of equipment and capitalized repairs
    
    (5,969
    )
    
    
    (4,099
    )Increase
      in restricted cash
    
    (5,728
    )
    
    
    --Investment
      in equity investments
    
    (23,585
    )
    
    
    --Non-operating
      distributions from equity investments
    
    24,513
    
    
    
    --Payments
      of acquisition fees to affiliate
    
    (269
    )
    
    
    (184
    )Payments
      of lease negotiation fees to affiliate
    
    (60
    )
    
    
    (41
    )Payments
      on finance lease receivable
    
    172
    
    
    
    --Proceeds
      from disposition of equipment
    
    1,637
    
    
    
    368Net
      cash used in investing activities
    
    (9,289
    )
    
    
    (3,956
    )**Financing
      activities**Payments
      of notes payable
    
    (4,000
    )
    
    
    (3,750
    )Proceeds
      from notes payable
    
    --
    
    
    
    5,000Payment
      of debt placement fees
    
    (25)
    
    
    
    (60
    )Net
      cash (used in) provided by financing activities
    
    (4,025
    )
    
    
    1,190Net
      (decrease) increase in cash and cash equivalents
    
    (8,638
    )
    
    
    5,008Cash
      and cash equivalents at beginning of year
    
    13,294
    
    
    
    8,286Cash
      and cash equivalents at end of year
    $
    4,656
    
    
    $
    13,294**Supplemental
      information**Interest
      paid
    $
    514
    
    
    $
    629Non-cash
      transfer of equipment at net book value fromthe
      Partnership to an equity investment
    $
    11,416
    
    
    $
    --Non-cash
      transfer of lease negotiation fees at net bookvalue
      from the Partnership to an equity investment
    $
    32
    
    
    $
    --Non-cash
      transfer of equipment at net book value fromequipment
      held for operating leases to other assets
    $
    554
    
    
    $
    --
 
 
 See
accompanying notes to financial statements.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 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, leasing or
otherwise investing in 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. (PLMI) and manages the
affairs of the Partnership.
 
 The
Partnership may not reinvest cash flow generated from operations after January
1, 2005 into additional equipment. The Partnership will terminate on December
31, 2011, unless terminated earlier upon the sale of all of the equipment or by
certain other events. Although the Partnership is scheduled to terminate on
December 31, 2011, the General Partner is managing the Partnership with the
objective of having all owned and partially owned equipment disposed of by the
end of 2006.
 
 Estimates
 
 These
financial statements have been prepared on the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of
America. This requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, 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.
 
 Accounting
for Leases
 
 The
Partnership's leasing operations generally consist of operating leases. Under
the operating lease method of accounting, the lessor records the leased asset at
cost and depreciates the leased asset over its estimated useful life. Rental
payments are recorded as revenue on a straight-line basis over the lease term as
earned. Lease origination costs are capitalized and amortized over the term of
the lease. Periodically, the Partnership or equity investments in which the
Partnership has an interest 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).
 
 Revenue
Recognition
 
 Revenues
are generally earned by placing equipment under operating leases. A portion of
the Partnership's marine containers are leased to operators of utilization-type
leasing pools, which include equipment owned by unaffiliated parties. In such
instances, revenues received by the Partnership consist of a specified
percentage of revenues generated by leasing the pooled equipment to sublessees,
after deducting certain direct operating expenses of the pooled equipment. The
remaining Partnership leases for marine containers are based on a fixed rate.
Rents for all other equipment are based on fixed rates.
 
 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, 12
years for all other transportation equipment and 7 years for non-transportation
equipment. The depreciation method changes to straight line when the annual
depreciation expense using the straight-line method exceeds that calculated by
the double-declining balance method. Acquisition fees paid to the General
Partner (see Note 2 to the financial statements) and certain other acquisition
costs have been capitalized as part of the cost of the equipment. Major
expenditures that are expected to extend the useful lives or reduce future
operating expenses of equipment are capitalized and amortized over the estimated
remaining life of the equipment. Lease negotiation fees are amortized over the
initial equipment lease term. Debt placement fees are amortized over the term of
the loan using either the effective interest or the straight-line method if that
method approximates the effective interest method and are included in interest
expense in the accompanying statements of operations (see Note 10 to the
financial statements).
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 1.  Basis
of Presentation (continued)
 
 Equipment
 
 Equipment
held for operating leases is recorded at cost and depreciated over its useful
life.
 
 The
Partnership evaluates long-lived assets for impairment whenever events or
circumstances such as when cash-flows decrease, there are unexpected maintenance
issues or when economic conditions in which the equipment operate deteriorates
indicate that the carrying values of such assets may not be recoverable. Losses
for impairment are recognized when the undiscounted cash flows estimated to be
realized from a long-lived asset are determined to be less than the carrying
value of the asset and the carrying amount of long-lived assets exceed their
fair value. The determination of fair value for a given investment requires
several considerations, including but not limited to, income expected to be
earned from the asset, estimated sales proceeds, and holding costs excluding
interest.
 
 The
estimate of the fair value for the Partnership’s owned and partially owned
equipment is based on the opinion of the Partnership’s equipment managers using
data, reasoning and analysis of prevailing market conditions of similar
equipment, data from recent purchases, independent third party valuations and
discounted cash flows.
 
 Equity
Investments in Affiliated Entities
 
 The
Partnership has equity interests in entities that own transportation equipment
and other types of equipment. These entities are accounted for using the equity
method.
 
 Repairs
and Maintenance
 
 Repairs
and maintenance costs related to marine vessels, railcars, and trailers are
usually the obligation of the Partnership and are charged against operations as
incurred. Costs associated with marine vessel dry-docking are estimated and
accrued ratably over the period prior to such dry-docking. If a marine vessel is
sold and there is a balance in the dry-docking reserve account for that marine
vessel, the balance in the reserve account is included as additional gain on
disposition. Maintenance costs of aircraft, marine containers and machinery and
other equipment are the obligation of the lessee. To meet the maintenance
requirements of aircraft airframes and engines, reserve accounts are prefunded
by certain lessees over the period of the lease based on the number of hours
this equipment is used, times the estimated rate to repair this equipment. If
repairs exceed the amount prefunded by the lessee or the lessee defaults on the
lease, the Partnership may have the obligation to fund and accrue the
difference. If an aircraft is sold and there is a balance in the reserve account
for repairs to that aircraft, the balance in the reserve account is reclassified
as additional gain on disposition. Marine vessel dry-docking reserve accounts
and aircraft reserves are included in equity investments in affiliated entities.
 
 Net
Income (Loss) and Distributions
 
 Special
allocations of income are made to the General Partner to the extent necessary to
cause the capital account balance of the General Partner to be zero as of the
close of such year. The limited partners' net income (loss) is 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 of the Partnership are allocated 95% to the limited partners and
5% to the General Partner and may include amounts in excess of net income.
 
  
  
 **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 1.  Basis
of Presentation (continued)
 
 Net
Income (Loss) and Distributions (continued)
 
 Cash
distributions are recorded when declared. Cash distributions are generally paid
in the same quarter they are declared.
 
 No cash
distributions were declared or paid during 2004 or 2003.
 
 Net
Income (Loss) Per Weighted-Average Limited Partnership Unit
 
 Net
income (loss) per weighted-average limited partnership unit was computed by
dividing net income or loss attributable to limited partners by the
weighted-average number of limited partnership units deemed outstanding during
the year. The weighted-average number of limited partnership units deemed
outstanding during the years ended December 31, 2004 and 2003 was
7,730,965.
 
 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. The carrying amount of cash equivalents approximates fair value due
to the short-term nature of the investments.
 
 Restricted
Cash
 
 As of
December 31, 2004, restricted cash consists of escrowed funds which will be used
to purchase equipment in 2005 for which the General Partner entered into legally
binding commitments to purchase in 2004. The cash to fund these purchases are in
an escrow account with an unaffiliated third party as escrow agent. As of
December 31, 2003, restricted cash consists of bank accounts or short-term
investments that are subject to withdrawal restrictions per loan agreements.
 
 Accounts
Receivable
 
 The
Partnership generally invoices its lessees monthly for the lease of its
equipment. Payment is generally due on the first day of each month in advance.
The Partnership reserves as bad debts any unpaid account receivable that is past
due over 90 days. The Partnership will also reserve any unpaid receivable as a
bad debt when circumstances indicate that it will not be paid, such as when the
lessee goes into bankruptcy. Unpaid receivables are written-off only when all
collection efforts have been exhausted.
 
 Fair
Value of Financial Instruments
 
 The
Partnership's financial instruments consist of cash, accounts receivable,
accounts payable and notes payable. The fair value of cash, accounts receivable
and accounts payable approximate book value due to their short-term nature. The
fair value of the Partnership's notes payable approximates its book value as the
interest rate on the notes are adjusted on a regular basis.
 
 Comprehensive
Income (Loss)
 
 The
Partnership’s comprehensive income (loss) is equal to net income or loss for the
years ended December 31, 2004 and 2003.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 1.  Basis
of Presentation (continued)
 
 New
Accounting Standards
 
 On
December 24, 2003, Financial Accounting Standards Board (FASB) issued
Interpretation No. 46(R), “Consolidation of Variable Interest Entities” (FIN
46(R)). FIN 46(R) is effective for the Partnership beginning on January 1, 2004
and it requires the Partnership to evaluate all existing equity investments to
identify situations where the Partnership has a “variable interest,” commonly
evidenced by a guarantee arrangement or other commitment to provide financial
support, in a “variable interest entity,” commonly a thinly capitalized entity,
and further determine when such variable interest requires the Partnership to
consolidate the variable interest entities’ financial statements with its
own.  The General Partner has determined that none of its equity
investments qualify as variable interest entities. Adoption of FIN 46(R) did not
have a material effect on financial position or results of
operations.
 
 In March
2004, FASB's Emerging Issues Task Force (EITF) released Issue No. 03-1, “The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments" (EITF 03-1).”  EITF 03-1 provides guidance for determining
whether impairment for certain debt and equity investments is
other-than-temporary and the measurement of an impaired loss. Certain disclosure
requirements of EITF 03-1 were adopted in 2003 and the Partnership has complied
with the new disclosure requirements in its consolidated financial statements.
The recognition and measurement requirements of EITF 03-1 were initially
effective for reporting periods beginning after June 15, 2004. In September
2004, the FASB Staff issued FASB Staff Position (FSP) EITF 03-1-1 that delayed
the effective date for certain measurement and recognition guidance contained in
EITF 03-1.  The FSP requires that entities continue to apply previously
existing “other-than-temporary” guidance until a final consensus is reached. The
General Partner does not anticipate that issuance of a final consensus will
materially impact the Partnership’s financial condition or results of
operations.
 
 In
December 2004, FASB issued Statement 153, "Exchanges of Non-monetary Assets"
(Statement 153), an amendment of Accounting Principles Board Opinion No. 29.
Statement 153 is effective for non-monetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005. Statement 153 eliminates the exception to
fair value for exchanges of similar productive assets and replaces it with a
general exception for exchange transactions that do not have commercial
substance - that is, transactions that are not expected to result in significant
changes in the cash flows of the reporting entity.  The General Partner
does not believe that the adoption of Statement 153 will have a significant
effect on its financial statements.
 
 Reclassifications
 
 Certain
amounts in the 2003 financial statements have been reclassified to conform to
the 2004 presentations. These reclassifications did not have any effect on total
assets, total liabilities, partners’ capital, or net income (loss).
 
 2.  Transactions
with General Partner and Affiliates
 
 The
equipment of the Partnership is managed, under a continuing management
agreement, by PLM Investment Management, Inc. (IMI), a wholly owned subsidiary
of FSI. IMI receives a monthly management fee from the Partnership for managing
the equipment.
 
 The
equipment management agreement, subject to certain reductions, requires the
payment of a monthly management fee attributable to either owned equipment or
interests in equipment owned by the equity investments to be paid to IMI in an
amount 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 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.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 2.  Transactions
with General Partner and Affiliates (continued)
 
 As part
of the settlement of litigation filed against the General Partner and its
affiliates in a prior year, Partnership management fees will be reduced 25% for
the period January 1, 2003 through June 30, 2005.
 
 The
General Partner is entitled to receive a subordinated incentive fee as defined
in the limited partnership agreement after the limited partners receive a
minimum return on, and a return of, their invested capital. The General Partner
does not anticipate that the conditions to earn this fee will be
met.
 
 PLM
Transportation Equipment Corp. (TEC), an affiliate of the General Partner, will
also be entitled to receive an equipment liquidation fee equal to the lesser of
(i) 3% of the sales price of equipment sold on behalf of the Partnership or (ii)
50% of the "Competitive Equipment Sale Commission," as defined in the agreement,
if certain conditions are met. The General Partner does not anticipate that this
liquidation fee will be earned.
 
 The
Partnership had equity investments in affiliated entities that own equipment and
other assets during 2004 and 2003 (see Note 5 to the financial
statements).
 
 The
balance due to affiliates as of December 31, 2004 includes $0.1 million due to
FSI and its affiliates for management fees and $1.2 million due to affiliates in
which the Partnership has an equity investment. The balance due to affiliates as
of December 31, 2003 includes $0.1 million due to FSI and its affiliates for
management fees and $1.4 million due to affiliates in which the Partnership has
an equity investment.
 
 During
2004, the Partnership purchased $6.0 million in railcars from FSI or its
affiliates. The Partnership's cost for the railcars was the lower of FSI's or
its affiliates cost or the fair market value at the time of purchase. During
2004, the Partnership, and three affiliated entities, formed two investment
entities which each purchased two commercial aircraft. The Partnership's net
investment in these entities was $4.7 million. The Partnership, two affiliated
programs and a non-affiliated entity formed a tenancy-in-common which purchased
certain machinery and other equipment used in hospitals. The Partnership's net
investment in this entity was $4.1 million. In addition, the Partnership
transferred 774 owned railcars with a net book value of $11.4 million into
another newly formed entity. This investment is owned with two affiliated
partnerships that also transferred owned railcars into this entity (see Note 5
to the financial statements).
 
 During
the year ended December 31, 2004 and 2003, FSI or its affiliates were paid or
accrued acquisition, lease negotiation, debt placement, and management fees and
reimbursed FSI or its affiliates for data processing and administrative
expenses. The components of these fees and expenses paid or accrued to FSI or
its affiliates were as follows (in thousands of dollars):
 
 Owned
      Equipment
    
    Equity
      Investments2004
    
    2003
    
    2004
    
    2003Acquisition
      fees
    
    $
    269
    
    $
    184
    
    $
    1,091
    
    $
    --Lease
      negotiation fees
    
    
    60
    
    
    41
    
    
    242
    
    
    --Debt
      placement fees
    
    
    --
    
    
    --
    
    
    178
    
    
    --Management
      fees
    
    
    281
    
    
    374
    
    
    292
    
    
    205Data
      processing and administrativeexpenses
    
    
    535
    
    
    300
    
    
    116
    
    
    14
 
 3.  Restricted
Cash
 
 In
December 2004, the General Partner entered into an escrow agreement on behalf of
the Partnership. The General Partner placed $6.1 million with the escrow agent,
an unaffiliated third party, during 2004. These funds will be used to pay for
equipment in 2005 for which the General Partner had entered into a legally
binding commitment to purchase in 2004 (see Notes 4 and 13 to the financial
statements).
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 4.  Equipment
 
 The
components of owned equipment as of December 31 are as follows (in thousands of
dollars):
 
 Equipment
      Held for Operating Leases
    
    
    2004
    
    
    
    2003Marine
      containers
    
    $
    22,332
    
    
    $
    23,381Aircraft
      and rotables
    
    
    15,207
    
    
    
    15,987Rail
      equipment
    
    
    574
    
    
    
    21,095Trailers
    
    
    --
    
    
    
    5,21238,113
    
    
    
    65,675Less
      accumulated depreciation
    
    
    (29,809
    )
    
    
    (48,220
    )Net
      equipment
    
    $
    8,304
    
    
    $
    17,455
 
 Equipment
held for operating leases is stated at cost less depreciation and any reductions
to the carrying value. During 2003, the Partnership recorded an impairment to
owned aircraft rotables and to owned railcars. The Partnership marketed the
aircraft rotables for re-lease or sale and this indicated to the General Partner
that an impairment may exist. The General Partner determined the fair value of
the aircraft rotables based on the valuation given by its independent third
party aircraft equipment manager that considered, among other factors, expected
income to be earned from the asset, condition of the aircraft rotables,
estimated sales proceeds and holding costs excluding interest. As a result of
this, the Partnership recorded an impairment of $0.2 million to owned aircraft
rotables. Additionally, during 2003, the Partnership recorded an impairment of
$0.1 million to 19 owned railcars with cracks in the seal weld. The General
Partner determined that these railcars should be scrapped and this indicated to
the General Partner that an impairment may exist. The fair value of the railcars
with this defect was determined by using industry expertise.
 
 In 2004,
the Partnership amended its lease for the trailer portfolio with an equipment
original cost of $5.2 million and a net book value of $0.6 million which
resulted in a change in classification of the lease from an operating lease to a
direct financing lease. As of December 31, 2004, the Partnership no longer
records this equipment as equipment held for operating lease, but rather as a
finance lease receivable which is included in other assets, net, on the
accompanying balance sheet (see Note 9 to the financial statements).
 
 No
reductions were required to the carrying value of the owned equipment during the
year ended December 31, 2004.
 
 As of
December 31, 2004, all owned equipment in the Partnership's portfolio was on
lease except for the aircraft rotables and nine railcars with an aggregate net
book value of $0.3 million. As of December 31, 2003, all owned equipment in the
Partnership's portfolio was on lease except for the aircraft rotables and 218
railcars with an aggregate net book value of $1.3 million.
 
 During
2004 and 2003, the Partnership purchased railcars for $6.2 million and $4.3
million, respectively, including acquisition fees paid to FSI or it's affiliates
of $0.3 million and $0.2 million, respectively. In addition, the General
Partner, on behalf of the Partnership, entered into legally binding commitments
in 2004 to purchase railcars totaling $6.1 million. The funds to purchase this
equipment have been placed with an unaffiliated escrow agent. The equipment is
expected to be delivered and paid for in 2005.
 
 During
2004, the Partnership disposed of aircraft rotables, marine containers and
railcars, with an aggregate net book value of $0.8 million for proceeds of $1.6
million. During 2003, the Partnership disposed of aircraft rotables, marine
containers and railcars, with an aggregate net book value of $0.2 million for
proceeds of $0.4 million.
 
 On July
1, 2004, the Partnership transferred 774 owned railcars with an original cost of
$22.8 million and a net book value of $11.4 million from its owned equipment
portfolio into PLM Railcar Partners, LLC, an equity investment owned with two
affiliated entities (see Note 5 to the financial statements).
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 4.  Equipment (continued)
 
 The
lessee for approximately 1,190 of the Partnership's marine containers has the
option to purchase these marine containers in the first quarter of 2006. The
purchase option for these marine containers is in excess of the net book value.
Should the lessee exercise this option, lease revenues will be negatively
impacted.
 
 Future
minimum rentals under noncancelable operating leases as of December 31, 2004,
for owned equipment held for operating leases during each of the next five years
are approximately $1.7 million in 2005; $1.5 million in 2006; $1.2 million in
2007; $0.6 million in 2008, $-0- in 2009 and thereafter. Per diem and short-term
rentals consisting of utilization rate lease payments included in owned
equipment lease revenues amounted to $2.6 million in 2004 and $2.8 million in
2003.
 
 5.  Equity
Investments in Affiliated Entities
 
 The
Partnership owns assets jointly with affiliated programs and non-affiliated
entities.
 
 Ownership
interest is based on the Partnership’s contribution towards the cost of the
assets in the equity investments. The Partnership’s proportional share of equity
and income (loss) in each entity is not necessarily the same as its ownership
interest. The primary reason for this is that certain fees such as management
fees, acquisition fees, and lease and re-lease negotiation fees vary among the
owners of the equity investments. The Partnership’s investment in equity
investments includes acquisition fees, lease negotiation fees, and debt
placement fees paid by the Partnership to the General Partner or its affiliates.
The Partnership’s equity interest in the net income (loss) of equity investments
is reflected net of management fees paid or payable and the amortization of
acquisition fees, lease negotiation fees, and debt placement fees.
 
 The
tables below set forth 100% of the assets, liabilities, and equity of the
entities in which the Partnership has an interest and the Partnership’s
proportional share of equity in each entity as of December 31, 2004 and 2003 (in
thousands of dollars):
 
 Aero
    
    Boeing
    
    PLMLion
    
    California
    
    737-300
    
    WorldwideAs
      of December 31, 2004
    
    Partnership1
    
    Trust2
    
    Trust3
    
    Leasing4
 
 AssetsEquipment
      less accumulated depreciation
    $
    5,015
    
    $
    --
    
    $
    7,643
    
    $
    --Cash
      and cash equivalents
    
    --
    
    
    34
    
    
    --
    
    
    140Accounts
      and note receivables
    
    1,318
    
    
    --
    
    
    --
    
    
    2,228Finance
      lease receivable
    
    --
    
    
    191
    
    
    --
    
    
    --Due
      from affiliate
    
    --
    
    
    --
    
    
    1,966
    
    
    4Other
      assets
    
    544
    
    
    2
    
    
    6
    
    
    --Total
      assets
    $
    6,877
    
    $
    227
    
    $
    9,615
    
    $
    2,372LiabilitiesAccounts
      payable
    $
    133
    
    $
    34
    
    $
    65
    
    $
    2,205Due
      to affiliates
    
    111
    
    
    2
    
    
    5
    
    
    --Lessee
      deposits and reserve for repairs
    
    260
    
    
    --
    
    
    1,966
    
    
    --Total
      liabilities
    
    504
    
    
    36
    
    
    2,036
    
    
    2,205Equity
    
    6,373
    
    
    191
    
    
    7,579
    
    
    167Total
      liabilities and equity
    $
    6,877
    
    $
    227
    
    $
    9,615
    
    $
    2,372Partnership’s
      share of equity
    $
    3,346
    
    $
    76
    
    $
    4,791
    
    $
    42
 
 
 
 1
    The
      Partnership owns a 53% interest in the Lion Partnership that owns a
      product tanker.
 2   The
Partnership owns a 40% interest in the Aero California Trust that owns two stage
III commercial aircraft on a direct finance lease.
 3
    The
      Partnership owns a 62% interest in the Boeing 737-300 Trust that owns a
      stage III commercial aircraft.
 4
    The
      Partnership owns a 25% interest in PLM Worldwide Leasing
    Corp.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 5.  Equity
Investments in Affiliated Entities (continued)
 
 PLM
      Rail
    
    PLM
      CAL I
    
    PLM
      CAL IIAs
      of December 31, 2004 (continued)
    
    Partners
      LLC5
    
    LLC6
    
    LLC7
    
    CFHS8
    
    Total
 
 AssetsEquipment
      less accumulated depreciation
    $
    23,714
    
    $
    29,482
    
    $
    29,442
    
    $
    18,900Cash
      and cash equivalents
    
    464
    
    
    1,897
    
    
    1,897
    
    
    125Restricted
      cash
    
    2,000
    
    
    --
    
    
    --
    
    
    --Accounts
      receivable
    
    990
    
    
    --
    
    
    --
    
    
    260Other
      assets
    
    824
    
    
    543
    
    
    542
    
    
    167Total
      assets
    $
    27,992
    
    $
    31,922
    
    $
    31,881
    
    $
    19,452LiabilitiesAccounts
      payable
    
    695
    
    
    480
    
    
    480
    
    
    2Due
      to affiliates
    
    --
    
    
    6
    
    
    6
    
    
    9Notes
      payable
    
    23,922
    
    
    25,744
    
    
    25,716
    
    
    --Lessee
      deposits and reserve for repairs
    
    19
    
    
    199
    
    
    203
    
    
    --Total
      liabilities
    
    24,636
    
    
    26,429
    
    
    26,405
    
    
    11Equity
    
    3,356
    
    
    5,493
    
    
    5,476
    
    
    19,441Total
      liabilities and equity
    $
    27,992
    
    $
    31,922
    
    $
    31,881
    
    $
    19,452Partnership’s
      share of equity
    $
    1,490
    
    $
    1,850
    
    $
    1,844
    
    $
    3,937
    
    
    $
    17,376
 
 Aero
    
    BoeingLion
    
    California
    
    737-300As
      of December 31, 2003
    
    Partnership1
    
    Trust2
    
    Trust3
    
    TotalAssetsEquipment
      less accumulated depreciation
    
    $
    6,130
    
    $
    -
    
    $
    9,177Accounts
      receivable
    
    
    359
    
    
    --
    
    
    --Due
      from affiliate
    
    
    --
    
    
    420
    
    
    2,034Finance
      lease receivable
    
    
    --
    
    
    1,353
    
    
    --Other
      assets
    
    
    9
    
    
    6
    
    
    7Total
      assets
    
    $
    6,498
    
    $
    1,779
    
    $
    11,218LiabilitiesAccounts
      payable
    
    $
    219
    
    $
    -
    
    $
    37Due
      to affiliates
    
    
    68
    
    
    2
    
    
    7Lessee
      deposits and reserve for repairs
    
    
    584
    
    
    420
    
    
    2,034Total
      liabilities
    
    
    871
    
    
    422
    
    
    2,078Equity
    
    
    5,627
    
    
    1,357
    
    
    9,140Total
      liabilities and equity
    
    $
    6,498
    
    $
    1,779
    
    $
    11,218Partnership’s
      share of equity
    
    $
    2,941
    
    $
    543
    
    $
    5,757
    
    $
    9,241
 
 
 
 
 
 
 
 
 
 1
    The
      Partnership owns a 53% interest in the Lion Partnership that owns a
      product tanker.
 2   The
Partnership owns a 40% interest in the Aero California Trust that owns two stage
III commercial aircraft on a direct finance lease.
 3
    The
      Partnership owns a 62% interest in the Boeing 737-300 Trust that owns a
      stage III commercial aircraft.
 4
    The
      Partnership owns a 25% interest in PLM Worldwide Leasing
    Corp.
 5
    The
      Partnership owns a 43% interest in PLM Rail Partners, LLC that owns
      various types of railcars.
 6
    The
      Partnership owns a 34% interest in PLM CAL I LLC that owns two Boeing
      737-500 stage III commercial aircraft.
 7
    The
      Partnership owns a 34% interest in PLM CAL II LLC that owns two Boeing
      737-500 stage III commercial aircraft.
 8
    The
      Partnership owns a 20% interest in CFHS that owns various types of
      machinery and other equipment.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 5.  Equity
Investments in Affiliated Entities (continued)
 
 The
tables below set forth 100% of the lease revenues and other income, gain on
disposition of equipment, depreciation and amortization expense, interest
expense, direct and indirect expenses, impairment loss on equipment, and net
income (loss) of the entities in which the Partnership has an interest, and the
Partnership‘s proportional share of income (loss) in each entity for the years
ended December 31, 2004 and 2003 (in thousands of dollars):
 
 Aero
    
    Boeing
    
    PLMFor
      the year ended
    
    Lion
    
    California
    
    737-300
    
    WorldwideDecember
      31, 2004
    
    Partnership1
    
    Trust2
    
    Trust3
    
    Leasing4
 
 Lease
      revenues and other income
    $
    7,218
    
    $
    495
    
    $
    1,560Less:
      Depreciation and amortization expense
    
    1,115
    
    
    49
    
    
    1,533Direct
      expenses
    
    4,434
    
    
    26
    
    
    23Indirect
      expenses
    
    415
    
    
    25
    
    
    127Net
      income (loss)
    $
    1,254
    
    $
    395
    
    $
    (123
    )Partnership’s
      share of net income (loss)
    $
    672
    
    $
    158
    
    $
    (64
    )
    $
    42
 
 For
      the year ended
    
    PLM
      Rail
    
    PLM
      CAL I
    
    PLM
      CAL IIDecember
      31, 2004 (continued)
    
    Partners
      LLC5
    
    LLC6
    
    LLC7
    
    CFHS8
    
    Total
 
 Lease
      revenues and other income
    $
    3,980
    
    $
    1,372
    
    $
    1,354
    
    $
    260Gain
      on disposition of equipment
    
    550
    
    
    --
    
    
    --
    
    
    --Less:
      Depreciation and amortization expense
    
    2,261
    
    
    2,210
    
    
    2,206
    
    
    979Interest
      expense
    
    1,224
    
    
    683
    
    
    682
    
    
    --Direct
      expenses
    
    845
    
    
    --
    
    
    --
    
    
    --Indirect
      expenses
    
    718
    
    
    65
    
    
    65
    
    
    21Net
      loss
    $
    (518
    )
    $
    (1,586
    )
    $
    (1,599
    )
    $
    (740
    )Partnership’s
      share of net loss
    $
    (228
    )
    $
    (532
    )
    $
    (537
    )
    $
    (149
    )
    
    $
    (638
    )
 
 
 Aero
    
    BoeingFor
      the year ended
    
    Lion
    
    California
    
    737-300December
      31, 2003
    
    Partnership1
    
    Trust2
    
    Trust3
    
    Total
 
 Revenues
    $
    7,817
    
    $
    343
    
    $
    1,860Less:
      Depreciation and amortization expense
    
    1,226
    
    
    83
    
    
    1,857Direct
      expenses
    
    5,504
    
    
    17
    
    
    13Indirect
      expenses
    
    391
    
    
    33
    
    
    146Impairment
      loss on equipment
    
    --
    
    
    375
    
    
    1,321Net
      (loss) income
    $
    696
    
    $
    (165
    )
    $
    (1,477
    )Partnership’s
      share of net (loss) income
    $
    366
    
    $
    (66
    )
    $
    (902
    )
    $
    (602
    )
 
 
 
 
 
 
 
 
 1
    The
      Partnership owns a 53% interest in the Lion Partnership that owns a
      product tanker.
 2   The
Partnership owns a 40% interest in the Aero California Trust that owns two stage
III commercial aircraft on a direct finance lease.
 3
    The
      Partnership owns a 62% interest in the Boeing 737-300 Trust that owns a
      stage III commercial aircraft.
 4
    The
      Partnership owns a 25% interest in PLM Worldwide Leasing
    Corp.
 5
    The
      Partnership owns a 43% interest in PLM Rail Partners, LLC that owns
      various types of railcars.
 6
    The
      Partnership owns a 34% interest in PLM CAL I LLC that owns two Boeing
      737-500 stage III commercial aircraft.
 7
    The
      Partnership owns a 34% interest in PLM CAL II LLC that owns two Boeing
      737-500 stage III commercial aircraft.
 8
    The
      Partnership owns a 20% interest in CFHS that owns various types of
      machinery and other equipment.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 5.  Equity
Investments in Affiliated Entities (continued)
 
 As of
December 31, 2004, all jointly owned assets in the Partnership’s equity
investment portfolio was on lease except for 101 railcars with a net book value
of $0.6 million. As of December 31, 2003, all jointly owned assets in the
Partnership’s equity investment portfolio was on lease.
 
 On July
1, 2004, the Partnership transferred 774 owned railcars with a net book value of
$11.4 million into a newly formed equity investment, PLM Rail Partners, LLC
(Rail Partners) which is jointly owned with two affiliated partnerships. The
Partnership owns a 43.3% interest in Rail Partners. Rail Partners borrowed $25.3
million in notes that have been swapped to fix the rate at 5.63% and 7.25%. The
loan is non-recourse to the Partnership and its affiliated partnerships and is
collateralized by the railcars and future lease payments. During July 2004, Rail
Partners distributed $9.9 million to the Partnership from the proceeds of this
loan.
 
 At the
end of each quarter, cash remaining in Rail Partners after payment of all
operating expenses, required debt payment, all fees and expenses, will be
distributed at the rate of 25% as a prepayment of tranche A loan and 75% to the
owners of Rail Partners based on their proportional share of ownership.
 
 During
2004, the Partnership, with three affiliated entities, formed two new entities,
PLM CAL I LLC (CAL I) and PLM CAL II LLC (CAL II). The Partnership contributed a
total of $19.4 million to these entities and owns a 34% interest in CAL I and
CAL II which each own two Boeing 737-500 stage III commercial aircraft. CAL I
and CAL II each assumed two loans totaling $25.7 million that bear an interest
rate of 7.46% and 7.42%, respectively. The loans are non-recourse to the
Partnership and are collateralized by the aircraft and future lease payments.
CAL I and CAL II distributed a total of $14.6 million as a non-operating cash
distribution to the Partnership during the third quarter of 2004.
 
 The
Partnership's proportional share of acquisition, lease negotiation and debt
placement fees paid by CAL I and CAL II to an affiliate of the General Partner
totaled $1.3 million.
 
 Additionally
during 2004, the Partnership, two affiliated programs and a non-affiliated
entity formed a tenancy-in-common (CFHS) that purchased and subsequently leased
machinery and other equipment used in three hospitals. The Partnership
contributed $4.1 million to this entity and owns a 20% interest in this entity.
The Partnership's proportional share of acquisition and lease negotiation fees
paid by this entity to an affiliate of the General Partner totaled $0.2
million.
 
 During
2004, Rail Partners disposed of 105 railcars in which the Partnership has a 43%
interest. The Partnership’s interest in these railcars was sold for proceeds of
$0.4 million for its net investment of $0.2 million. These proceeds will be used
to pay down outstanding debt in 2005.
 
 During
2003 an impairment of $1.3 million was recorded to a Boeing 737-300 commercial
aircraft in an equity investment. Declining fair values of aircraft similar to
the one owned by the equity investment, indicated that an impairment to this
aircraft may exist. The affiliated entity determined the fair value of the
aircraft based on the valuation given by its independent third party aircraft
equipment manager that considered, among other factors, expected income to be
earned from the asset, condition of the aircraft, estimated sales proceeds and
holding costs excluding interest. Additionally, an affiliated entity recorded an
impairment of $0.4 million to two Stage III commercial aircraft on a direct
finance lease in an equity investment. A reduction in the lease payments
resulting from an amendment to the existing lease indicated that an impairment
existed. The amount of the impairment was determined based on the present value
of the future payments under the amended lease. No impairments to partially
owned equipment were required in 2004.
 
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 5.  Equity
Investments in Affiliated Entities (continued)
 
 All
jointly owned equipment on lease is accounted for as operating leases, except
for two jointly owned commercial aircraft on a direct finance lease. The
Partnership’s proportionate share of future minimum rentals under noncancelable
leases as of December 31, 2004, for jointly owned equipment during each of the
next five years are $3.0 million in 2005, $2.7 million in 2006, $2.7 million in
2007, $2.7 million in 2008, $2.7 million in 2009, and $15.7 million thereafter.
The Partnership’s proportionate share of per diem and short-term rentals
consisting of utilization rate lease payments included in jointly owned lease
revenues amounted to $3.8 million in 2004 and $4.1 million in 2003.
 
 6.  Operating
Segments
 
 The
Partnership operates in six operating segments: aircraft leasing, marine
container leasing, marine vessel leasing, trailer leasing, railcar leasing and
machinery and other equipment. Each equipment leasing segment engages in
short-term to mid-term operating leases to a variety of customers.
 
 The
General Partner evaluates the performance of each segment based on profit or
loss from operations before allocation of interest expense, general and
administrative expenses, and certain other expenses. The segments are managed
separately due to different business strategies for each operation. The
accounting policies of the Partnership’s operating segments are the same as
described in Note 1, Basis of Presentation. There were no intersegment revenues
for the years ended December 31, 2004 and 2003.
 
 The
following tables present a summary of the operating segments (in thousands of
dollars):
 Marine
    
    
    
    
    
    
    
    Machinery
    
    MarineFor
      the year ended
    
    Vessel
    
    Aircraft
    
    Railcar
    
    Trailer
    
    And
      Other
    
    ContainerDecember
      31, 2004
    
    Leasing
    
    Leasing
    
    Leasing
    
    Leasing
    
    Equipment
    
    Leasing
    
    Other1
    
    Total**Revenues**Lease
      revenue
    
    $
    -
    
    $
    1,247
    
    $
    1,868
    
    $
    53
    
    $
    -
    
    $
    3,037
    
    $
    -
    
    $
    6,205Interest
      income and other income
    
    
    -
    
    
    -
    
    
    39
    
    
    42
    
    
    -
    
    
    -
    
    
    104
    
    
    185Gain
      on disposition of equipment
    
    
    -
    
    
    -
    
    
    561
    
    
    5
    
    
    -
    
    
    291
    
    
    -
    
    
    857Total
      revenues
    
    
    -
    
    
    1,247
    
    
    2,468
    
    
    100
    
    
    -
    
    
    3,328
    
    
    104
    
    
    7,247**Expenses**Depreciation
      and amortization
    
    
    -
    
    
    -
    
    
    1,048
    
    
    -
    
    
    -
    
    
    1,613
    
    
    6
    
    
    2,667Operations
      support
    
    
    -
    
    
    -
    
    
    526
    
    
    27
    
    
    -
    
    
    54
    
    
    127
    
    
    734Management
      fees to affiliate
    
    
    -
    
    
    27
    
    
    108
    
    
    32
    
    
    -
    
    
    114
    
    
    -
    
    
    281Interest
      expense
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    616
    
    
    616General
      and administrative expenses
    
    
    2
    
    
    87
    
    
    694
    
    
    31
    
    
    -
    
    
    -
    
    
    933
    
    
    1,747Recovery
      of bad debts
    
    
    -
    
    
    -
    
    
    (15
    )
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (15
    )Total
      expenses
    
    
    2
    
    
    114
    
    
    2,361
    
    
    90
    
    
    -
    
    
    1,781
    
    
    1,682
    
    
    6,030Equity
      in net income (loss) of equityinvestments
    
    
    672
    
    
    (933
    )
    
    (228
    )
    
    -
    
    
    (149
    )
    
    -
    
    
    -
    
    
    (638
    )Net
      income (loss)
    
    
    670
    
    
    200
    
    
    (121
    )
    
    10
    
    
    (149
    )
    
    1,547
    
    
    (1,578
    )
    
    579Equipment
      purchases andcapitalized
      repairs
    
    $
    -
    
    $
    -
    
    $
    5,969
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    5,969Acquisition
      fees to affiliate
    
    $
    -
    
    $
    -
    
    $
    269
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    269Total
      assets as of December 31, 2004
    
    $
    3,346
    
    $
    8,950
    
    $
    6,836
    
    $
    434
    
    $
    3,937
    
    $
    8,787
    
    $
    5,906
    
    $
    38,196Investments
      in equity investments
    
    $
    -
    
    $
    19,358
    
    $
    141
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    4,086
    
    $
    23,585Non-cash
      transfer of assets into anequity
      investment
    
    $
    -
    
    $
    -
    
    $
    11,448
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    11,448
 
 
 1   Includes
certain assets not identifiable to a specific segment such as cash, restricted
cash and certain other assets. Also includes interest income and costs not
identifiable to a particular segment, such as interest expense, and certain
amortization, general and administrative, and operations support
expenses.
 
 
 
 
 
 **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 6.  Operating
Segments (continued)
 
 Marine
    
    
    
    
    
    
    
    MarineFor
      the year ended
    
    Vessel
    
    Aircraft
    
    Railcar
    
    Trailer
    
    ContainerDecember
      31, 2003
    
    Leasing
    
    Leasing
    
    Leasing
    
    Leasing
    
    Leasing
    
    Other1
    
    Total**Revenues**Lease
      revenue
    
    $
    -
    
    $
    1,474
    
    $
    3,358
    
    $
    788
    
    $
    2,938
    
    $
    -
    
    $
    8,558Interest
      income and other income
    
    
    --
    
    
    5
    
    
    22
    
    
    --
    
    
    --
    
    
    121
    
    
    148Gain
      (loss) on disposition of equipment
    
    
    --
    
    
    --
    
    
    (18
    )
    
    --
    
    
    141
    
    
    --
    
    
    123Total
      revenues
    
    
    --
    
    
    1,479
    
    
    3,362
    
    
    788
    
    
    3,079
    
    
    121
    
    
    8,829**Expenses**Depreciation
      and amortization
    
    
    --
    
    
    36
    
    
    2,289
    
    
    291
    
    
    2,000
    
    
    9
    
    
    4,625Operations
      support
    
    
    --
    
    
    (1
    )
    
    988
    
    
    311
    
    
    48
    
    
    99
    
    
    1,445Management
      fees to affiliate
    
    
    --
    
    
    41
    
    
    191
    
    
    32
    
    
    110
    
    
    --
    
    
    374Interest
      expense
    
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    611
    
    
    611General
      and administrative expenses
    
    
    --
    
    
    123
    
    
    467
    
    
    151
    
    
    1
    
    
    741
    
    
    1,483Impairment
      loss on equipment
    
    
    --
    
    
    217
    
    
    61
    
    
    --
    
    
    --
    
    
    --
    
    
    278Provision
      for bad debts
    
    
    --
    
    
    --
    
    
    31
    
    
    --
    
    
    --
    
    
    --
    
    
    31Total
      expenses
    
    
    --
    
    
    416
    
    
    4,027
    
    
    785
    
    
    2,159
    
    
    1,460
    
    
    8,847Equity
      in net income (loss) of equityinvestments
    
    
    366
    
    
    (968
    )
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    (602
    )Net
      income (loss)
    
    $
    366
    
    $
    95
    
    $
    (665
    )
    $
    3
    
    $
    920
    
    $
    (1,339
    )
    $
    (620
    )Equipment
      purchases andcapitalized
      repairs
    
    $
    -
    
    $
    -
    
    $
    4,099
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    4,099Acquisition
      fees to affiliate
    
    $
    -
    
    $
    -
    
    $
    184
    
    $
    -
    
    $
    -
    
    $
    -
    
    $
    184Total
      assets as of December 31, 2003
    
    $
    2,942
    
    $
    6,756
    
    $
    6,843
    
    $
    787
    
    $
    10,428
    
    $
    14,247
    
    $
    42,003
 
 7.  Geographic
Information
 
 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, trailers and machinery and
other equipment to lessees domiciled in five geographic regions: United States,
South America, Canada, Latin America, and Europe. Marine vessels and marine
containers are leased to multiple lessees in different regions that operate
worldwide.
 
 The table
below sets forth operating lease revenues by geographic region for the
Partnership's owned equipment grouped by domicile of the lessee as of and for
the years ended December 31 (in thousands of dollars):
 
 Owned
      EquipmentRegion
    
    2004
    
    2003United
      States
    
    $
    2,528
    
    $
    4,655Canada
    
    
    640
    
    
    716Europe
    
    
    -
    
    
    249Rest
      of the world
    
    
    3,037
    
    
    2,938Lease
      revenues
    
    $
    6,205
    
    $
    8,558
 
 1   Includes
certain assets not identifiable to a specific segment such as cash, restricted
cash and certain other assets. Also includes interest income and costs not
identifiable to a particular segment, such as interest expense, certain
amortization, general and administrative, and operations support
expenses.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 
 7.
    Geographic
      Information(continued)
 
 The
following table sets forth net income (loss) information by region for the owned
equipment and equity investments in affiliated entities for the years ended
December 31 (in thousands of dollars):
 
 Owned
      EquipmentEquity
      Investments
 
 Region
    
    
    
    2004
    
    2003
    
    2004
    
    2003United
      States
    
    
    
    
    $
    886
    
    $
    714
    
    $
    (1,301
    )
    $
    --South
      America
    
    
    
    
    
    --
    
    
    --
    
    
    (64
    )
    
    (902
    )Canada
    
    
    
    
    
    364
    
    
    (292
    )
    
    (103
    )
    
    --Latin
      America
    
    
    
    
    
    --
    
    
    --
    
    
    158
    
    
    (66
    )Europe
    
    
    
    
    
    --
    
    
    (21
    )
    
    --
    
    
    --Rest
      of the world
    
    
    
    
    
    1,546
    
    
    920
    
    
    672
    
    
    366Regional
      income (loss)
    
    
    
    
    
    2,796
    
    
    1,321
    
    
    (638
    )
    
    (602
    )Administrative
      and other
    
    
    
    
    
    (1,579
    )
    
    (1,339
    )
    
    --
    
    
    --Net
      income (loss)
    
    
    
    
    $
    1,217
    
    $
    (18
    )
    $
    (638
    )
    $
    (602
    )
 
 The net
book value of owned equipment under operating lease and equity investments in
affiliated entities as of December 31 are as follows (in thousands of
dollars):
 
 Owned Equipment
    
    Equity
      Investments
 
 Region
    
    
    2004
    
    
    2003
    
    
    
    2004
    
    
    2003United
      States
    
    $
    429
    
    $
    5,808
    
    
    $
    8,493
    
    $
    --South
      America
    
    
    --
    
    
    --
    
    
    
    4,791
    
    
    5,757Canada
    
    
    --
    
    
    1,460
    
    
    
    670
    
    
    --Latin
      America
    
    
    --
    
    
    --
    
    
    
    76
    
    
    543Europe
    
    
    --
    
    
    456
    
    
    
    --
    
    
    --Rest
      of the world
    
    
    7,875
    
    
    9,731
    
    
    
    3,346
    
    
    2,941Net
      book value
    
    $
    8,304
    
    $
    17,455
    
    
    $
    17,376
    
    $
    9,241
 
 8.  Accounts
Receivable
 
 Accounts
receivable represent balances due from current or former lessees for unpaid
balances incurred from leasing Partnership owned equipment. The components of
accounts receivable as of December 31 were as follows (in thousands of
dollars):
 
 2004
    
    
    
    2003Trade
      accounts receivable
    
    $
    1,508
    
    
    $
    1,504Allowance
      for doubtful accounts
    
    
    (454
    )
    
    
    (444
    )$
    1,054
    
    
    $
    1,060
 
 
 
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 
 9.  Other
Assets
 
 The
components of the other assets, net, as of December 31 are as follows (in
thousands of dollars):
 
 2004
    
    
    2003Finance
      lease receivable
    $
    382
    
    $
    --Debt
      placement fees, net
    
    125
    
    
    210Lease
      negotiation fees to affiliate, net
    
    92
    
    
    92Prepaid
      expenses
    
    64
    
    
    236Other
      assets
    
    5
    
    
    5$
    668
    
    $
    543
 
 Future
minimum rentals receivable under the direct finance lease at December 31, 2004,
for the next two years are approximately $0.2 million - 2005, $0.2 million -
2006, and $-0- thereafter.
 
 10.  Debt
 
 During
January 2003, the Partnership entered into a $30.0 million term loan facility.
The Partnership borrowed $15.0 million under this facility in 2002 and an
additional $5.0 million in 2003. The drawdown period for this facility expired
on December 31, 2003 and as such, the Partnership will not borrow the additional
$10.0 million under this loan. The remaining balance due on the notes of $10.0
million is scheduled to be repaid $4.0 million in 2005 and 2006 and $1.0 million
in 2007 and 2008. Certain of the Partnerships wholly and partially owned
equipment is used as collateral for this loan.
 
 The term
loans bear an interest rate at the Borrower's option of either the prime rate
plus 0.5%, LIBOR plus 2.5%, or cost of funds rate plus 2.5%. At December 31,
2004, the term loans were 5.06% (4.0% and 3.7% at December 31, 2003).
 
 The debt
contains certain financial covenants requiring operating and total cash flow
coverage be maintained along with a maximum leverage ratio and asset coverage
ratio.
 
 The
General Partner estimates that the fair value of these notes approximates book
value due to the interest rate on the debt being re-priced on a regular
basis.
 
 The
Partnership is a participant in a $10.0 million warehouse credit facility. The
warehouse credit facility is shared by the Partnership, PLM Equipment Growth
& Income Fund VII, MILPI Holdings LLC (MILPI) and its subsidiaries, and
Railcar Investors II all of which are related parties and controlled by Gary
Engle, Chairman of the Board of the General Partner. The facility provides for
financing up to 100% of the cost of the equipment and expires on March 31, 2005.
Borrowings by the Partnership are collateralized by equipment purchased with the
proceeds of the loan. Outstanding borrowings by one borrower reduce the amount
available to each of the other borrowers under the facility. Individual
borrowings may be outstanding for no more than 270 days, with all advances due
no later than March 31, 2005. Interest accrues either at the prime rate or LIBOR
plus 2.0% at the borrower’s option and is set at the time of an advance of
funds. Borrowings by the Partnership are guaranteed by FSI, PLM International,
Inc. and MILPI, the parent companies of the General Partner. The Partnership is
not liable for the advances made to the other borrowers (see Note 13 to the
financial statements).
 
 As of
December 31, 2004, there were no outstanding borrowings on this facility by the
Partnership. Other borrowers had loans outstanding totaling $9.4
million.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 11.  Concentrations
of Credit Risk
 
 For the
year ended December 31, 2004 and 2003, the Partnership’s customer that accounted
for 10% or more of the total revenues for the owned equipment and jointly owned
equipment was Cronos Group (13% in 2004 and 14% in 2003).
 
 For the
year ended December 31, 2004 and 2003, the Partnership’s customers that
accounted for 10% or more of the total accounts receivable for the owned
equipment and jointly owned equipment was Cronos Group (24% in 2004 and 39% in
2003), Capital Leasing (16% in 2004 and 17% in 2003), Stena Bulk LLC (30% in
2004 and 15% in 2003) and Milestone Equipment Corp. (18% in 2003).
 
 As of
December 31, 2004 and 2003, the General Partner believed the Partnership had no
other significant concentrations of credit risk that could have a material
adverse effect on the Partnership.
 
 12.  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, 2004 and 2003, the financial statement carrying amount of assets
and liabilities was approximately $20.9 million and $24.8 million, respectively,
lower than the federal income tax basis of such assets and liabilities and the
Partnership's income in 2004 was approximately $3.9 million higher and the
Partnership's loss in 2003 was approximately $0.8 million lower than the federal
income tax basis. These differences are primarily due to the tax treatment of
depreciation, equipment reserves, provisions for bad debts, lessees’ prepaid
deposits, and of underwriting commissions and syndication costs.
 
 13.  Commitments
and Contingencies
 
 Commitment
to Purchase Railcars
 
 During
2004, the General Partner signed a legally binding commitment on behalf of the
Partnership to purchase in 2005, 69 newly constructed tank railcars for $5.1
million and manufacturing equipment for $1.1 million. The funds to purchase
these railcars were placed in escrow accounts with an unaffiliated third party
as escrow agent as of December 31, 2004 and are included in restricted cash on
the accompanying balance sheet.
 
 Litigation
 
 On
December 31, 2003 and during 2004, in the Court of Common Pleas for Williamsburg
County, South Carolina, actions have been filed by Harold H. Collins, Dianne
Collins his wife, and Rickey Thomas, Sr. against South Carolina Central Railroad
Company, Inc., CSX Transportation, Inc., TradeMark Nitrogen, Inc. and PLM
Investment Management, Inc. The actions involve a chemical spill from a railcar
owned by the Partnership. All three law suits claim permanent injuries and
allege negligence on the part of all four defendants in their duty to exercise
reasonable care in the inspection, maintenance and repair of the railcar. The
complaints do not allege a specific amount of damages. The General Partner
expects that these actions will be amended at some point and that the
Partnership will also be named as a defendant.
 
 Demand
for indemnification has been made upon the lessee pursuant to the terms of the
lease of the railcar.
 
 The
attorney for these plaintiffs states that he also represents additional
potential plaintiffs. Twenty-two additional actions were recently filed, however
such additional actions have not yet been served. A review of the new complaints
reveals that they are substantially similar to the original complaints.
Published reports indicate that several nearby residents were evacuated. The
potential exists for additional claims.
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 **(A
Limited Partnership)**
 **NOTES
TO FINANCIAL STATEMENTS**
 
 13.  Commitments
and Contingencies (continued)
 
 Litigation (continued)
 
 The
General Partner believes that the actions will not have a material effect on the
financial condition of the Partnership, are completely without merit and will
vigorously defend against the actions.
 
 The
Partnership is involved as plaintiff or defendant in various legal actions
incidental to its business. General Partner does not believe that any of these
actions will be material to the financial condition or results of operations of
the Partnership (see Note 13 to the financial statements).
 
 14.  Subsequent
Events
 
 In the
first quarter of 2005, the warehouse credit facility was amended to extend the
facility to May 1, 2006.  In addition, the facility was amended to increase
the maximum period individual borrowings could be outstanding from 270 days to
360 days.
 
 In the
first quarter of 2005, the Partnership settled all litigation with a former
India lessee who had defaulted on its lease for several aircraft. The
Partnership received $3.3 million in cash. The Partnership incurred legal costs
of approximately $0.3 million related to this settlement in the first quarter of
2005.
 
 In the
first quarter of 2005, the General Partner determined that one of the
transactions for which the Partnership had funded an escrow account to purchase
equipment would not close.  Accordingly, the funds for this purchase
totaling $1.1 million was returned to the Partnership from the escrow
agent.
 
 In the
first quarter of 2005, the lessee of the two DC-9's on a finance lease in which
the Partnership had an interest, exercised its purchase option for these
aircraft. As this was a direct finance lease with a bargain purchase option,
there will not be a gain of loss from the sale of these aircraft.
 
  
  **PLM
EQUIPMENT GROWTH FUND VI**
 
 **INDEX
OF EXHIBITS**
 Exhibit
    
    Page4
    Limited
      Partnership Agreement of Partnership.
    *4.1
    Second
      Amendment to the Amended and Restated Limited Partnership
      Agreement.
    *10.1
    Management
      Agreement between Partnership and PLM Investment Management,
      Inc.
    *10.2
    Note
      Agreement, dated as of December 21, 2001, regarding $30.0 million term
      loan notes due December 21, 2006.
    *10.3
    First
      Amendment to Credit Agreement, dated March 2, 2003.
    *10.4
    Second
      Amendment to Credit Agreement, dated June 30, 2003.
    *10.5
    Third
      Amendment to Credit Agreement, dated September 30, 2003.
    *10.6
    Amended
      and restated Warehouse Credit Agreement, dated as of March 17,
      2004.
    *10.7
    Loan
      agreement between PLM Rail Partners, LLC and HSH Nordbank AG, New York,
      dated June 30, 2004.
    *10.8
    Asset
      Transfer Agreement between PLM Equipment Growth Fund VI and PLM Rail
      Partners, LLC, dated July 1, 2004.
    *10.9
    Limited
      Liability Company Agreement of PLM Railcars Partners dated June 29,
      2004.
    *10.10
    First
      Amendment to Amended and Restated Warehouse Credit Agreement dated
      September 3, 2004.
    *10.11
    Second
      Amendment to Amended and Restated Warehouse Credit Agreement dated October
      20, 2004.
    *10.12
    PLM
      CAL I LLC operating agreement dated June 4, 2004.
    *10.13
    PLM
      CAL II LLC operating agreement dated June 4, 2004.
    *10.14
    PLM
      CAL I LLC equipment purchase agreement dated August 26,
    2004.
    *10.15
    PLM
      CAL II LLC equipment purchase agreement dated August 26,
    2004.
    *10.16
    Trust
      Indenture and Mortgage 645 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
    I.
    57-12310.17
    Trust
      Indenture and Mortgage 646 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
    I.
    124-19010.18
    Trust
      Indenture and Mortgage 647 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
      II.
    191-25710.19
    Trust
      Indenture and Mortgage 648 between First Security Bank, National
      Association and Wilmington Trust Company assumed by PLM CAL
      II.
    258-32410.20
    Trust
      Indenture and Mortgage 645 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      I.
    325-33210.21
    Trust
      Indenture and Mortgage 646 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      I.
    333-34010.22
    Trust
      Indenture and Mortgage 647 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      II.
    341-34810.23
    Trust
      Indenture and Mortgage 648 Supplement between First Security Bank,
      National Association and Wilmington Trust Company assumed by PLM CAL
      II.
    349-35610.24
    Letter
      of intent to purchase 69 tank railcars with PLM International, Inc. dated
      December 23, 2004.
    35710.25
    Letter
      of intent to purchase manufacturing equipment with PLM International, Inc.
      dated December 23, 2004.
    35810.26
    Third
      Amendment to Amended and Restated Warehouse Credit Agreement dated
      December 28, 2004.
    359-36710.27
    Fourth
      Amendment to Amended and Restated Warehouse Credit Agreement dated March
      24, 2005.
    368-376*14
    PLM
      Financial Services Inc. Code of Ethics.31.1
    Certificate
      of President of the General Partner pursuant to Section 302 of Sarbanes -
      Oxley Act.
    5331.2
    Certificate
      of Chief Financial Officer of the General Partner pursuant to Section 302
      of Sarbanes - Oxley Act.
    5432.1
    Certificate
      of President of the General Partner pursuant to Section 906 of Sarbanes -
      Oxley Act.
    5532.2
    Certificate
      of Chief Financial Officer of the General Partner pursuant to Section 906
      of Sarbanes - Oxley Act.
    56
  
 
 
 
 
 * Incorporated by reference. See page 25-27 of this report.