LION PARTNERSHIP
                            ( A LIMITED PARTNERSHIP)

                              FINANCIAL STATEMENTS




<PAGE>







INDEPENDENT AUDITORS' REPORT





The Partners
Lion Partnership

     We have audited the accompanying balance sheet of the Lion Partnership (the
"Partnership") as of December 31, 2001 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  auditing  standards  generally
accepted in the United States of America.  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,  such financial  statements present fairly, in all material
respects,  the financial position of the Partnership as of December 31, 2001 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/ Deloitte & Touche LLP


Certified Public Accountants

Tampa, Florida
March 8, 2002


<PAGE>



                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                                 BALANCE SHEETS
                                  DECEMBER 31,
                            (IN THOUSANDS OF DOLLARS)


<TABLE>
<CAPTION>



                                                                              2001              2000
                                                                                            (unaudited)
                                                                       --------------------------------------
ASSETS

<S>                                                                     <C>                <C>
Marine vessel held for lease, at cost                                   $         19,968   $         19,968
Less accumulated depreciation                                                    (11,141)            (9,375)
                                                                        -------------------------------------
    Net equipment                                                                  8,827             10,593

Accounts receivable                                                                  776                243
                                                                        -------------------------------------
      Total assets                                                      $          9,603   $         10,836
                                                                        =====================================


LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses                                   $            111  $             169
Due to affiliates                                                                     51                 25
Lessee deposits and drydock reserves                                                 514                214
                                                                        -------------------------------------
  Total liabilities                                                                  676                408
                                                                        -------------------------------------

Partners' capital (deficiency):
Limited partners                                                                   9,040             10,525
General partner                                                                     (113)               (97)
                                                                        -------------------------------------
  Total partners' capital                                                          8,927             10,428
                                                                        -------------------------------------

      Total liabilities and partners' capital                           $          9,603  $          10,836
                                                                        =====================================


</TABLE>














                 See accompanying notes to financial statements.


<PAGE>



                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF OPERATIONS
                        FOR THE YEARS ENDED DECEMBER 31,
                            (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>



                                                           2001                 2000               1999
                                                                             (unaudited)        (unaudited)
                                                     ----------------------------------------------------------
REVENUES

<S>                                                   <C>                  <C>                <C>
Lease revenue                                         $        9,514       $        4,378     $         4,213
Interest and other income                                        137                   39                   1
                                                      ---------------------------------------------------------
  Total revenues                                               9,651                4,417               4,214
                                                      ---------------------------------------------------------

EXPENSES

Depreciation and amortization                                  1,766                2,161               2,606
Marine operating expenses                                      3,845                1,739               2,197
Repairs and maintenance                                          639                  732                 560
Management fees to affiliate                                     476                  219                 211
Insurance expense                                                102                  112                 282
Administrative expenses to affiliates                            201                   41                  55
Administrative and other                                          60                   33                  28
                                                      ---------------------------------------------------------
  Total expenses                                               7,089                5,037               5,939
                                                      ---------------------------------------------------------

      Net income (loss)                               $        2,562       $         (620)    $        (1,725)
                                                      =========================================================

</TABLE>























                 See accompanying notes to financial statements.


<PAGE>



                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999
                            (IN THOUSANDS OF DOLLARS)



<TABLE>
<CAPTION>




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

<S>                                                                 <C>             <C>             <C>
  Partners' capital (deficiency) at December 31, 1998
     (unaudited)                                                    $      14,624   $         (56) $       14,568

Net loss (unaudited)                                                       (1,708)            (17)         (1,725)

Cash distribution (unaudited)                                                (470)             (5)           (475)
                                                                    ------------------------------------------------

  Partners' capital (deficiency) at December 31, 1999
     (unaudited)                                                           12,446             (78)         12,368

Net income (unaudited)                                                       (614)             (6)           (620)

Cash distribution (unaudited)                                              (1,307)            (13)         (1,320)
                                                                    ------------------------------------------------

  Partners' capital (deficiency) at December 31, 2000
     (unaudited)                                                           10,525             (97)         10,428

Net income                                                                  2,537              25           2,562

Cash distribution                                                          (4,022)            (41)         (4,063)
                                                                    ------------------------------------------------

  Partners' capital (deficiency) at December 31, 2001               $       9,040   $        (113)  $       8,927
                                                                    ================================================

</TABLE>


















                 See accompanying notes to financial statements.


<PAGE>



                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,
                            (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>

                                                                      2001               2000              1999
                                                                                      (unaudited)      (unaudited)
                                                               ---------------------------------------------------------

OPERATING ACTIVITIES

<S>                                                            <C>                <C>              <C>
Net income (loss)                                              $         2,562    $         (620 ) $          (1,725)
Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                          1,766             2,161               2,606
  Changes in operating assets and liabilities:
    Accounts receivable                                                   (533)               92                (336)
    Prepaid expenses                                                        --                --                  82
    Accounts payable and accrued expenses                                  (58)             (144)                173
    Due to affiliates                                                       26                (6)                  8
    Lessee deposits and drydock reserves                                   300              (163)               (333)
                                                               ---------------------------------------------------------
      Net cash provided by operating activities                          4,063             1,320                 475
                                                               ---------------------------------------------------------

FINANCING ACTIVITIES

Cash distributions-General Partner                                         (41)              (13)                 (5)
Cash distributions-limited partners                                     (4,022)           (1,307)               (470)
                                                               ---------------------------------------------------------
      Net cash used in by financing activities                          (4,063)           (1,320)               (475)
                                                               ---------------------------------------------------------

Net change in cash and cash equivalents                                     --                --                  --
Cash and cash equivalents at beginning of year                              --                --                  --
                                                               ---------------------------------------------------------
Cash and cash equivalents at end of year                       $            --    $           --   $              --
                                                               =========================================================


</TABLE>



















                 See accompanying notes to financial statements.


<PAGE>



                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

Lion Partnership, a California limited partnership (the Partnership), was formed
during July 1997.  The  Partnership  was formed for the purpose of  purchasing a
tanker  marine  vessel and commenced  significant  operations in July 1997.  The
Partnership  has no employees  nor  operations  other than the  operation of the
marine vessel.  The  Partnership is owned 99% by the limited  partners and 1% by
the General  Partner.  The Partnership has two limited  partners:  PLM Equipment
Growth  Fund V (EGF V), a  California  limited  partnership,  and PLM  Equipment
Growth  &  Income  Fund  VI  (EGF  VI),  a   California   limited   partnership,
(collectively,  the Limited Partners). The Limited Partnership is owned 47.5% by
EGF V and 52.5% by EGF VI.  The  General  Partner is the Lion  Corporation  (LC)
which is owned 47.5% by EGF V and 52.5% by EGF VI.

PLM Financial  Services Inc. (FSI) is the General  Partner of EGF V and EGF VII.
FSI is a wholly-owned subsidiary of PLM International, Inc.

The marine vessel was purchased in July 1997 for $19.1 million. EGF V and EGF VI
paid acquisition and lease negotiation fees of $1.1 million to FSI.

     ESTIMATES

These accompanying  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.  All amounts
as of and for the years ended December 31, 2000 and 1999 are unaudited.

     OPERATIONS

The marine vessel in 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
marine  vessel  (Note 3).  FSI,  in  conjunction  with its  subsidiaries,  sells
equipment  to  investor   programs   and  third   parties,   manages   pools  of
transportation  equipment under  agreements with investor  programs,  and is the
general partner of other limited partnerships.

     CASH AND CASH EQUIVALENTS

All cash generated from operations is distributed to the partners;  accordingly,
the Partnership has no cash balance at December 31, 2001 and 2000.

     ACCOUNTING FOR LEASES

The marine vessel in the Partnership is leased under operating leases. Under the
operating  lease method of accounting,  the leased asset is recorded at cost and
depreciated  over its  estimated  useful life.  Rental  payments are recorded as
revenue over the lease term as earned in accordance  with Statement of Financial
Accounting  Standards No. 13,  "Accounting for Leases".  Lease origination costs
were amortized over three years.


<PAGE>


                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     DEPRECIATION

Depreciation of the marine vessel is computed using the double-declining balance
method,  taking a full month's  depreciation in the month of acquisition,  based
upon an estimated useful life of 12 years.  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 of $0.9 million,  that were paid to FSI, were  capitalized  as
part of the cost of the equipment.  Lease  negotiation fees of $0.2 million were
capitalized as well. Major  expenditures  that are expected to extend the marine
vessel's  useful life or reduce future  equipment  operating  expenses have been
capitalized  and  amortized  over the  estimated  remaining  life of the  marine
vessel.

     MARINE VESSEL

The  marine  vessel  held  for  operating  leases  is  stated  at cost  less any
reductions  to  the  carrying  value  as  required  by  Statement  of  Financial
Accounting   Standards  (SFAS)  No.  121,  "Accounting  for  the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS No. 121).

In accordance  with SFAS No. 121, the General Partner reviews the carrying value
of the Partnership's marine vessel at least quarterly and whenever circumstances
indicate that the carrying  value of the marine  vessel will not be  recoverable
due to expected future market  conditions.  If the projected  undiscounted  cash
flows and the fair market value of the marine  vessel are less than the carrying
value of the marine vessel,  a loss on revaluation is recorded.  No revaluations
to the marine vessel were required in 2001, 2000, or 1999.

In October  2001,  Financial  Accounting  Standards  Board  issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144),
which replaces SFAS No. 121. SFAS No. 144 provides updated  guidance  concerning
the  recognition  and  measurement  of an  impairment  loss for certain types of
long-lived  assets,  expands the scope of a discontinued  operation to include a
component of an entity,  and eliminates the current  exemption to  consolidation
when  control  over a  subsidiary  is likely to be  temporary.  SFAS No.  144 is
effective for fiscal years beginning after December 15, 2001.

The  Partnership  will apply the new rules on accounting  for the  impairment or
disposal of long-lived  assets  beginning in the first quarter of 2002, and they
are not anticipated to have an impact on the Partnership's earnings or financial
position.

     REPAIRS AND MAINTENANCE

Repairs  and  maintenance  for  the  marine  vessel  are the  obligation  of the
Partnership.  Costs  associated with marine vessel  drydocking are estimated and
accrued ratably over the period prior to such  drydocking.  Drydock reserves are
included in lessee  deposits and drydock  reserves in the  accompanying  balance
sheets.

     NET INCOME (LOSS) AND CASH DISTRIBUTION TO LIMITED PARTNERS

The net income (loss) and cash  distributions  of the  Partnership are allocated
99% to the limited partners and 1% to the General Partner. The net income (loss)
and cash  distributions  are  allocated to the limited  partners  based on their
percentage of ownership in the Partnership.

Cash distributions are recorded when paid.








                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS


     COMPREHENSIVE INCOME (LOSS)

The Partnership's net income (loss) is equal to comprehensive  income (loss) for
the years ended December 31, 2001, 2000, and 1999.

2. GENERAL PARTNER

LC contributed $100 of the  Partnership's  initial  capital.  LC is owned by two
shareholders;  EGF V owns 47.5% and EGF VI owns 52.5%.  Dividends,  if declared,
are  paid  to  the  shareholders  based  on the  percentage  of  ownership  each
shareholder owns.

3. TRANSACTIONS WITH AFFILIATES

Under the equipment  management  agreement,  the Partnership  pays IMI a monthly
management fee  attributable  to owned  equipment 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) 5% of the gross lease  revenues  attributable  to
equipment that is subject to operating leases. The Partnership's  management fee
expense to affiliate was $0.5 million,  $0.2  million,  and $0.2 million  during
2001, 2000, and 1999, respectively. The Partnership's management fee in 2001 was
equal to 5% of gross  operating  lease revenues and was less than an independent
third party management fee charged for similar  services for similar  equipment.
The Partnership  reimbursed FSI $0.2 million,  $41,000,  and $0.1 million during
2001,  2000, and 1999,  respectively,  for data  processing  and  administrative
expenses directly attributable to the Partnership.

Partnership  management  fees  payable  to IMI were  $51,000  and  $25,000 as of
December 31, 2001 and 2000, respectively.

4. MARINE VESSEL ON LEASE

The  Partnership's  marine  vessel  is leased to  multiple  operators  on a time
charter  basis.  In such  instances,  revenues  are earned from each lessee that
hires the marine vessel for a specific voyage.

EGF VI's 52.5%  interest  in the  marine  vessel in the  Partnership  is used as
collateral against the senior loan of EGF VI.

The marine vessel's leases are being  accounted for as operating  leases.  There
are no future minimum rentals under non-cancelable  leases at December 31, 2001.
Per diem and short-term  rentals  consisting of utilization  rate lease payments
included in lease  revenues  amounted to $9.5  million in 2001,  $1.7 million in
2000, and $1.4 million in 1999.

5. GEOGRAPHIC INFORMATION

The  Partnership's  marine  vessel is leased to  multiple  lessees in  different
regions that operate worldwide.

6. INCOME TAXES

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

As of December 31, 2001, the financial  statement carrying amounts of assets and
liabilities  were  approximately  $6.1 million lower than the federal income tax
basis of such assets and  liabilities,  primarily due to  differences in reserve
for repairs, depreciation methods, and lessee prepaid deposits.

                                LION PARTNERSHIP
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS

7. CONCENTRATIONS OF CREDIT RISK

Financial   instruments,   which   potentially   subject  the   Partnership   to
concentrations of credit risk, consist principally of accounts receivable.

The  Partnership's  lessees that accounted for 10% or more of the total revenues
for the marine  vessel  during the past three years  were:  Vitol (13% in 2001),
Trafigura (14% in 2001), Team Tankers (76% in 2000),  Shell (16% in 2000), Stolt
Tankers,  Inc.  (67% in 1999),  Alpine  (15% in 1999),  and Bulk  Handle (10% in
1999).

As of December 31, 2001, the General  Partner  believes the  Partnership  had no
other  significant  concentrations  of credit  risk that  could  have a material
adverse effect on the Partnership.