UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                     --------------------------------------
                                    FORM 10-Q




[x]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934 
         FOR THE FISCAL QUARTER ENDED MARCH 31, 1999

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934
         FOR THE TRANSITION PERIOD FROM                 TO


                          COMMISSION FILE NUMBER 1-9670
                         -------------------------------

                             PLM INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


       DELAWARE                                            94-3041257
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)

ONE MARKET, STEUART STREET TOWER,
  SUITE 800, SAN FRANCISCO, CA                             94105-1301
(Address of principal executive offices)                   (Zip Code)



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


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


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common  stock,  as of the latest  practicable  date:  common stock - $.01 par
value; outstanding as of May 4, 1999 - 8,028,594 shares.


<PAGE>


                             PLM INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
               (in thousands of dollars, except per share amounts)

<TABLE>
<CAPTION>


                                                                                                      For the Three Months
                                                                                                          Ended March 31,
                                                                                                         1999           1998
                                                                                                    --------------------------

     <S>                                                                                               <C>          <C>       
     REVENUES
     Operating lease income                                                                            $ 6,097      $    3,892
     Finance lease income                                                                                3,152           2,652
     Management fees                                                                                     2,368           2,564
     Partnership interests and other fees                                                                  290             324
     Acquisition and lease negotiation fees                                                                461           1,027
     Gain on the sale or disposition of assets, net                                                        313             762
     Aircraft brokerage and services                                                                        --             524
     Other                                                                                                 926             799
     ----------------------------------------------------------------------------------------------------------------------------
         Total revenues                                                                                 13,607          12,544
     ----------------------------------------------------------------------------------------------------------------------------

     COSTS AND EXPENSES
     Operations support                                                                                  3,831           3,810
     Depreciation and amortization                                                                       3,399           2,550
     General and administrative                                                                          1,484           1,913
     ----------------------------------------------------------------------------------------------------------------------------
         Total costs and expenses                                                                        8,714           8,273
     ----------------------------------------------------------------------------------------------------------------------------

     Operating income                                                                                    4,893           4,271

     Interest expense                                                                                   (3,685 )        (3,070 )
     Interest income                                                                                       243             395
     Other expenses, net                                                                                  (948 )            (6 )
     ----------------------------------------------------------------------------------------------------------------------------
       Income before income taxes                                                                          503           1,590

     Provision for income taxes                                                                            207             607
     ----------------------------------------------------------------------------------------------------------------------------

     Net income before cumulative effect of accounting change                                              296             983

     Cumulative effect of accounting change, net of tax of $165                                            236              --
     ----------------------------------------------------------------------------------------------------------------------------

           Net income to common shares                                                                 $    60      $      983 
     ============================================================================================================================

     Basic earnings per weighted-average common share outstanding                                      $  0.01      $     0.12 
     ============================================================================================================================

     Diluted earnings per weighted-average common share outstanding                                    $  0.01      $     0.11 
     ============================================================================================================================





</TABLE>









                  See accompanying notes to these consolidated
                             financial statements.


<PAGE>


                             PLM INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands of dollars, except share amounts)


                                     ASSETS

<TABLE>
<CAPTION>

                                                                            March 31,             December 31,
                                                                               1999                   1998
                                                                         ----------------------------------------

  <S>                                                                      <C>                      <C>         
  Cash and cash equivalents                                                $      3,903             $      8,786
  Receivables (net of allowance for doubtful accounts of $0.5
    million and $0.4 million as of March 31, 1999 and December
    31, 1998, respectively)                                                       7,500                    7,282
  Receivables from affiliates                                                     2,766                    2,944
  Investment in direct finance leases, net                                      142,318                  145,088
  Loans receivable                                                               24,696                   23,493
  Equity interest in affiliates                                                  21,797                   22,588
  Assets held for sale                                                            6,841                       --
  Transportation equipment held for operating leases                             70,765                   63,044
    Less accumulated depreciation                                               (16,694 )                (15,516 )
                                                                         -------------------------------------------
                                                                                 54,071                   47,528

  Commercial and industrial equipment held for operating leases                  24,268                   24,520
    Less accumulated depreciation                                                (9,180 )                 (7,831 )
                                                                         -------------------------------------------
                                                                                 15,088                   16,689

  Restricted cash and cash equivalents                                           11,050                   10,349
  Other, net                                                                      6,294                    7,322
                                                                         -------------------------------------------
        Total assets                                                       $    296,324             $    292,069
                                                                         ===========================================


                      LIABILITIES AND SHAREHOLDERS' EQUITY

  Liabilities:
  Short-term warehouse facilities                                          $     45,751             $     34,420
  Senior secured notes                                                           26,319                   28,199
  Senior secured loan                                                            13,235                   14,706
  Other secured debt                                                             12,844                   13,142
  Nonrecourse securitized debt                                                  112,104                  111,222
  Payables and other liabilities                                                 17,478                   21,768
  Deferred income taxes                                                          18,469                   18,415
                                                                         -------------------------------------------
    Total liabilities                                                           246,200                  241,872

  Shareholders' equity:
  Common stock, ($.01 par value, 50,000,000 shares
    authorized, 8,135,951 issued and outstanding as of
    March 31, 1999 and 8,159,919 as of December 31, 1998)                           112                      112
  Paid-in capital, in excess of par                                              75,051                   74,947
  Treasury stock (3,899,804 and 3,875,836 shares at
     respective dates)                                                          (15,309 )                (15,072 )
  Accumulated deficit                                                            (9,730 )                 (9,790 )
  ------------------------------------------------------------------------------------------------------------------
      Total shareholders' equity                                                 50,124                   50,197
                                                                         -------------------------------------------
        Total liabilities and shareholders' equity                         $    296,324             $    292,069
                                                                         ===========================================

</TABLE>


                  See accompanying notes to these consolidated
                             financial statements.


<PAGE>


                             PLM INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CHANGES IN
                  SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                  For the Year Ended December 31, 1998 and the
                        Three Months Ended March 31, 1999
                            (in thousands of dollars)

<TABLE>
<CAPTION>




                                                                                     
                                                    Common Stock                     Accumulated
                                     -------------------------------------------      Deficit &
                                                    Paid-in                          Accumulated
                                                   Capital in                          Other                              Total
                                         At          Excess             Treasury     Comprehensive   Comprehensive    Shareholders'
                                        Par           of Par              Stock        Income           Income            Equity
                                     ----------------------------------------------------------------------------------------------


<S>                                      <C>        <C>              <C>           <C>               <C>             <C>
Balances, December 31, 1997              $ 112      $  74,650        $ (13,435 )   $  (14,779 )                      $     46,548
Comprehensive income
  Net income                                                                            4,857        $   4,857              4,857
  Other comprehensive income:
    Foreign currency translation
      income                                                                              132              132                132
                                                                                                    =================
Comprehensive income                                                                                 $   4,989
                                                                                                    =================
Exercise of stock options                                 218              211                                                429
Common stock repurchases                                                (2,059 )                                           (2,059 )
Reissuance of treasury stock                               79              211                                                290
----------------------------------------------------------------------------------------------------                 --------------
  Balances, December 31, 1998              112         74,947          (15,072 )       (9,790 )                            50,197

Comprehensive income
  Net income                                                                               60        $      60                 60
                                                                                                    =================
Exercise of stock options                                  18                                                                  18
Common stock repurchases                                                  (405 )                                             (405 )
Reissuance of treasury stock                               86              168                                                254
                                         ===========================================================                 ==============
  Balances, March 31, 1999               $ 112      $  75,051        $ (15,309 )   $   (9,730 )                      $     50,124
                                         ===========================================================                 ==============


</TABLE>
















             See accompanying notes to these consolidated financial
                                  statements.

<PAGE>


                             PLM INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
<TABLE>
<CAPTION>

                                                                                                         For the Three Months
                                                                                                            Ended March 31,
                                                                                                        1999              1998
                                                                                                   --------------------------------
  <S>                                                                                              <C>                 <C>       
  OPERATING ACTIVITIES
  Net income                                                                                       $       60          $      983
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization                                                                     3,399               2,550
      Cumulative effect of accounting change, net of tax of $165                                          236                  --
      Write off of costs associated with initial public offering of AFG                                   948                  --
      Foreign currency translation                                                                         --                  28
      Deferred income tax expense                                                                          54                 537
      Gain on sale or disposition of assets, net                                                         (313 )              (762 )
      Undistributed residual value interests                                                               82                 200
      (Decrease) increase in payables and other liabilities                                            (1,965 )               186
      (Increase) decrease in receivables and receivables from affiliates                                  (40 )             1,184
      Amortization of organization and offering costs                                                     709                 720
      (Increase) decrease in other assets                                                                 (65 )               283
                                                                                                   ---------------------------------
        Net cash provided by operating activities                                                       3,105               5,909
                                                                                                   ---------------------------------

  INVESTING ACTIVITIES
  Principal payments received on finance leases                                                         8,917               6,356
  Principal payments received on loans                                                                  1,807                 967
  Investment in direct finance leases                                                                 (11,604 )           (38,809 )
  Investment in loans receivable                                                                       (3,010 )            (3,020 )
  Purchase of property, plant, and equipment                                                             (409 )              (126 )
  Purchase of transportation equipment and capital improvements                                       (21,907 )           (11,259 )
  Purchase of commercial and industrial equipment held for operating lease                             (2,092 )            (5,255 )
  Proceeds from  the sale of transportation equipment for lease                                           103               1,078
  Proceeds from the sale of assets held for sale                                                        6,960               5,366
  Proceeds from the sale of commercial and industrial equipment                                         5,771               9,406
  (Increase) decrease in restricted cash and restricted cash equivalents                                 (701 )             1,001
                                                                                                   ---------------------------------
        Net cash used in investing activities                                                         (16,165 )           (34,295 )
  ----------------------------------------------------------------------------------------------------------------------------------

  FINANCING ACTIVITIES
  Borrowings of short-term warehouse credit facilities                                                 30,916              36,285
  Repayment of short-term warehouse credit facilities                                                 (19,585 )           (20,591 )
  Repayment of senior secured notes                                                                    (1,880 )            (1,255 )
  Repayment of senior secured loan                                                                     (1,471 )            (1,470 )
  Repayment of other secured debt                                                                        (298 )               (31 )
  Borrowings of other secured debt                                                                         --                 167
  Borrowings of nonrecourse debt                                                                       12,904              18,121
  Repayment of nonrecourse debt                                                                       (12,022 )            (2,232 )
  Proceeds from exercise of stock options                                                                  18                  --
  Purchase of stock                                                                                      (405 )              (605 )
                                                                                                   ---------------------------------
        Net cash provided by financing activities                                                       8,177              28,389
                                                                                                   ---------------------------------

  Net (decrease) increase in cash and cash equivalents                                                 (4,883 )                 3
  Cash and cash equivalents at beginning of period                                                      8,786               5,224
                                                                                                   =================================
  Cash and cash equivalents at end of period                                                       $    3,903          $    5,227
                                                                                                   =================================

  SUPPLEMENTAL INFORMATION
  Net cash paid for interest                                                                       $    3,737          $    3,451
  ==================================================================================================================================
  Net cash paid for income taxes                                                                   $      137          $      632
  ==================================================================================================================================


</TABLE>


                  See accompanying notes to these consolidated
                             financial statements.


<PAGE>



                             PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999


1.   GENERAL

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain all adjustments  necessary,  consisting  primarily of normal
recurring  accruals,  to present fairly PLM International,  Inc. and its wholly-
and majority-owned  subsidiaries (the Company's)  financial position as of March
31, 1999 and December 31, 1998,  statements of income for the three months ended
March 31,  1999 and 1998,  statements  of  changes in  shareholders'  equity and
comprehensive  income for the year ended  December 31, 1998 and the three months
ended March 31, 1999 and  statements  of cash flows for the three  months  ended
March 31,  1999 and 1998.  Certain  information  and note  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  have been  condensed  or omitted  from the  accompanying
consolidated financial statements. For further information,  reference should be
made to the financial  statements  and notes  thereto  included in the Company's
Annual  Report on Form 10-K for the year ended  December 31, 1998,  on file with
the Securities and Exchange Commission.

2. RECLASSIFICATIONS

Certain  prior-period  amounts have been  reclassified to conform to the current
period's presentation.

3. FINANCING TRANSACTION ACTIVITIES

American  Finance Group,  Inc. (AFG), a wholly-owned  subsidiary of the Company,
originates and manages lease and loan  transactions  on primarily new commercial
and industrial  equipment that is financed by nonrecourse  securitized  debt for
the  Company's  own  account or for sale to other  unaffiliated  investors.  The
Company uses one of its warehouse  credit  facilities to finance the acquisition
of the  assets,  subject  to leases,  prior to sale or  permanent  financing  by
nonrecourse  securitized debt. The majority of these  transactions are accounted
for as direct  finance  leases,  while some  transactions  qualify as  operating
leases or loans.

During the three months ended March 31, 1999,  the Company  funded $11.6 million
in  equipment  that was placed on finance  lease.  Also during the three  months
ended  March 31,  1999,  the Company  sold  equipment  on finance  lease with an
original  equipment  cost  of  $6.2  million,  resulting  in a net  gain of $0.1
million.

4.   EQUIPMENT

Equipment  held  for  operating  lease  includes  transportation  equipment  and
commercial and industrial  equipment  which is depreciated on the  straight-line
method down to the equipment's estimated salvage value.

During the three months ended March 31, 1999, the Company funded $2.1 million in
commercial and industrial  equipment that was placed on operating lease.  During
the  three  months  ended  March 31,  1999,  the  Company  sold  commercial  and
industrial  equipment that was on operating lease, with an original cost of $2.1
million, for a net gain of $0.2 million.

During the first three months of 1999, the Company  purchased  trailers for $8.1
million  and sold  trailers  with a net  book  value  of $0.1  million  for $0.1
million.

The Company  classifies  equipment as held for sale if the  particular  asset is
subject  to a  pending  contract  for sale or is held for sale to an  affiliated
partnership.  Equipment held for sale is valued at the lower of the  depreciated
cost or the fair  value less costs to sell.  During  the first  three  months of
1999, the Company purchased marine containers for $13.8 million, and sold marine
containers for $7.0 million to an affiliated program at cost, which approximated
their fair market value.  As of March 31, 1999, the Company held containers with
a net  book  value of $6.8  million  for sale to an  affiliated  program.  As of
December 31, 1998, the Company had no equipment held for sale.



<PAGE>

                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

5.   DEBT

The Company has warehouse  credit  facilities for PLM Financial  Services,  Inc.
(FSI) and AFG. FSI has a $24.5 million  warehouse  credit facility to be used to
acquire  assets on an interim  basis  prior to sale to  affiliated  programs  or
unaffiliated third parties and to purchase trailers prior to obtaining permanent
financing.  FSI's  facility  is shared  with PLM  Equipment  Growth Fund VI, PLM
Equipment  Growth & Income Fund VII, and Professional  Lease  Management  Income
Fund I, LLC.  Borrowings  under this  facility by the other  eligible  borrowers
reduce the amount available to be borrowed by the Company.  All borrowings under
this facility are guaranteed by the Company.  AFG has a $60.0 million  warehouse
credit  facility  to be used to  acquire  assets on an  interim  basis  prior to
placement  in the  Company's  nonrecourse  securitization  facility  or  sale to
unaffiliated  third  parties.  These  facilities  expire  December 14, 1999. The
Company believes it will be able to renew these facilities on substantially  the
same terms upon  expiration.  As of March 31, 1999, FSI and PLM Equipment Growth
Fund VI had $11.3  million and $3.7  million in  borrowings  outstanding  on the
$24.5  million  facility,  respectively.  As of March  31,  1999,  AFG had $34.5
million in borrowings outstanding on its $60.0 million facility.

The Company has  available a nonrecourse  securitization  facility to be used to
acquire assets by AFG secured by direct finance leases,  operating  leases,  and
loans on commercial and industrial  equipment that generally have terms from one
to seven years.  The facility  allows the Company to borrow up to $150.0 million
through  October 12, 1999.  The Company  believes it will be able to extend this
facility on similar  terms prior to its  expiration.  Repayment  of the facility
matches the terms of the  underlying  leases.  As of March 31, 1999 , there were
$105.3  million in borrowings  under this  facility.  The Company is required to
hedge at least 90% of the aggregate  discounted  lease  balance  (ADLB) of those
leases and loans used as collateral in its nonrecourse securitization facility.
As of March 31, 1999, 92% of the ADLB had been hedged.

During the first quarter of 1999,  the Company made  principal  payments of $0.8
million on its nonrecourse notes payable.  As of March 31, 1999, the Company had
$6.8 million in nonrecourse  notes payable.  Principal and interest on the notes
are due monthly beginning April 1998 through March 2001. The notes bear interest
ranging  from 8.32% to 9.5% per annum and are secured by direct  finance  leases
for  commercial and industrial  equipment that have terms  corresponding  to the
repayment of the notes.

During the first quarter of 1999,  the Company repaid $1.5 million of the senior
secured loan, $1.9 million of the senior secured notes,  and $0.3 million of the
other secured debt, in accordance with the debt repayment schedules.

6.   SHAREHOLDERS' EQUITY

During the first quarter of 1999, the Company  repurchased  67,053 shares of the
Company's  common stock for $0.4  million,  under the $5.0 million  common stock
repurchase  program  authorized by the Company's  Board of Directors in December
1998. As of March 31, 1999, 130,353 shares had been repurchased under this plan,
for a total of $0.8 million.

During the three  months ended March 31,  1999,  43,085  shares were issued from
treasury stock as part of the senior management bonus program. Consequently, the
total common shares outstanding decreased to 8,135,951 as of March 31, 1999 from
the 8,159,919 outstanding as of December 31, 1998.

Net income per basic  weighted-average  common share outstanding was computed by
dividing net income to common  shares by the  weighted-average  number of shares
deemed  outstanding  during the period.  The  weighted-average  number of shares
deemed outstanding for the basic earnings per share calculation during the three
months ended March 31, 1999 and 1998 was 8,164,672 and 8,380,578,  respectively.
The weighted-average number of shares deemed outstanding,  including potentially
dilutive  common shares,  for the diluted  earnings per  weighted-average  share
calculation  during the three months ended March 31, 1999 and 1998 was 8,288,189
and 8,547,544, respectively.

<PAGE>

                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

7. LEGAL MATTERS

In November  1995,  a former  employee of PLM  International  filed and served a
first amended  complaint (the complaint) in the United States District Court for
the  Northern  District  of  California  (Case No.  C-95-2957  MMC)  against the
Company,  the PLM International,  Inc. Employee Stock Ownership Plan (ESOP), the
ESOP's trustee, and certain individual employees, officers, and directors of the
Company. The complaint contains claims for relief alleging breaches of fiduciary
duties and various violations of the Employee  Retirement Income Security Act of
1974  (ERISA)  arising  principally  from  purported  defects in the  structure,
financing,  and termination of the ESOP, and for defendants'  allegedly engaging
in prohibited  transactions and interfering with plaintiff's rights under ERISA.
Plaintiff seeks monetary damages, rescission of the preferred stock transactions
with the ESOP and/or  restitution of ESOP assets,  and attorneys' fees and costs
under ERISA. In January 1996, the Company and other defendants filed a motion to
dismiss  the  complaint  for lack of subject  matter  jurisdiction,  arguing the
plaintiff  lacked standing under ERISA.  The motion was granted and in May 1996,
the district  court  entered a judgment  dismissing  the  complaint  for lack of
subject matter jurisdiction. Plaintiff appealed to the U.S. Court of Appeals for
the Ninth Circuit  seeking a reversal of the district  court's  dismissal of his
ERISA  claims,  and in an  opinion  filed in  October  1997,  the Ninth  Circuit
reversed  the  decision  of the  district  court  and  remanded  the case to the
district  court for  further  proceedings.  The  Company  filed a  petition  for
rehearing,  which was denied in November  1997.  The Ninth  Circuit  mandate was
filed in the district court in December 1997.

In February 1998, plaintiff was permitted by the district court to file a second
amended  complaint  in order to bring the fourth,  fifth,  and sixth  claims for
relief as a class action on behalf of himself and all similarly situated people.
These claims  allege that the Company and the other  defendants  breached  their
fiduciary duties and entered into prohibited transactions in connection with the
termination  of the  ESOP  and by  causing  the  ESOP to sell  or  exchange  the
preferred  shares  held for the benefit of the ESOP  participants  for less than
their fair market value. Also in February 1998, the defendants filed a motion to
dismiss the fourth,  fifth,  and sixth claims relating to the termination of the
ESOP, and the seventh claim relating to defendants'  alleged  interference  with
plaintiff's  rights under ERISA, all for failure to state claims for relief. The
district  court,  in an order  dated  July 14,  1998,  granted  this  motion and
dismissed the fourth through seventh claims for relief.

In June 1998,  the  defendants  filed a motion for  summary  judgment  seeking a
ruling that the first two claims for relief,  which allege breaches  arising out
of the  purchase and sale of stock at the  inception of the ESOP,  are barred by
the  applicable  statute of  limitations.  In an order dated July 14, 1998,  the
district  court  granted in part and  denied in part this  motion and ruled that
these claims for relief are barred by the statute of  limitations  to the extent
that they rely on a theory that the automatic conversion feature and other terms
and conditions of the purchase and sale of the preferred  stock violated  ERISA,
but are not so barred to the extent that they rely on a theory that the purchase
and sale of the  preferred  stock at the inception of the ESOP was for more than
adequate consideration.

On September 30, 1998,  plaintiff filed a motion to certify as final,  and enter
judgment  on, the two July 14, 1998 orders.  This motion was denied.  Defendants
filed their  answer to the second  amended  complaint  on  September  18,  1998,
denying the  allegations  contained in the first,  second,  and third claims for
relief.  The  parties  reached an  agreement  to settle this matter on April 15,
1999,  subject  to  preparation,  review  and  execution  by  all  parties  of a
settlement agreement and release. Defendants continue to deny each of the claims
and contentions  and admit no liability in connection  with the settlement.  The
matter will be dismissed  with  prejudice  upon the execution of the release and
payment to plaintiff.  The amount to be paid by the Company in settlement is not
expected to be material to the financial condition of the Company.

The Company and various of its  affiliates  are named as defendants in a lawsuit
filed as a purported  class  action on January 22, 1997 in the Circuit  Court of
Mobile  County,   Mobile,   Alabama,  Case  No.  CV-97-251  (the  Koch  action).
Plaintiffs,  who  filed  the  complaint  on their own and on behalf of all class
members  similarly  situated,  are  six  individuals  who  invested  in  certain
California  limited  partnerships  (the  Partnerships)  for which the  Company's
wholly-owned subsidiary, PLM Financial Services, Inc. (FSI), acts as the general
partner, including PLM Equipment Growth Funds IV, V, and VI, and PLM Equipment

<PAGE>

                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

7.   LEGAL MATTERS (CONTINUED)

Growth & Income Fund VII (Fund  VII).  The state  court ex parte  certified  the
action as a class action (i.e.,  solely upon plaintiffs' request and without the
Company  being  given the  opportunity  to file an  opposition).  The  complaint
asserts eight causes of action  against all  defendants,  as follows:  fraud and
deceit, suppression,  negligent  misrepresentation and suppression,  intentional
breach of fiduciary duty, negligent breach of fiduciary duty, unjust enrichment,
conversion,  and conspiracy.  Additionally,  plaintiffs allege a cause of action
against PLM Securities Corp. for breach of third party beneficiary  contracts in
violation  of the  National  Association  of  Securities  Dealers  rules of fair
practice.  Plaintiffs  allege that each defendant owed  plaintiffs and the class
certain duties due to their status as fiduciaries,  financial advisors,  agents,
and control persons. Based on these duties,  plaintiffs assert liability against
defendants  for improper  sales and marketing  practices,  mismanagement  of the
Partnerships,   and  concealing  such   mismanagement   from  investors  in  the
Partnerships. Plaintiffs seek unspecified compensatory and recissory damages, as
well as punitive damages,  and have offered to tender their limited  partnership
units back to the defendants.

In March 1997,  the  defendants  removed the Koch action from the state court to
the United States District Court for the Southern District of Alabama,  Southern
Division (Civil Action No. 97-0177-BH-C) based on the district court's diversity
jurisdiction,  following which plaintiffs filed a motion to remand the action to
the state court. Removal of the action to federal court automatically  nullified
the state court's ex parte  certification  of the class.  In September 1997, the
district court denied plaintiffs' motion to remand the action to state court and
dismissed without  prejudice the individual claims of the California  plaintiff,
reasoning that he had been fraudulently joined as a plaintiff.  In October 1997,
defendants filed a motion to compel arbitration of plaintiffs' claims,  based on
an agreement to arbitrate contained in the limited partnership agreement of each
Partnership,  and to  stay  further  proceedings  pending  the  outcome  of such
arbitration.  Notwithstanding plaintiffs' opposition, the district court granted
defendants' motion in December 1997.

Following  various  unsuccessful  requests that the district court  reverse,  or
otherwise certify for appeal, its order denying plaintiffs' motion to remand the
case to state court and dismissing the California plaintiff's claims, plaintiffs
filed with the U.S.  Court of Appeals for the Eleventh  Circuit a petition for a
writ of mandamus  seeking to reverse the district  court's  order.  The Eleventh
Circuit  denied  plaintiffs'  petition in  November  1997,  and  further  denied
plaintiffs  subsequent  motion in the  Eleventh  Circuit for a rehearing on this
issue.  Plaintiffs also appealed the district court's order granting defendants'
motion  to compel  arbitration,  but in June 1998  voluntarily  dismissed  their
appeal pending settlement of the Koch action, as discussed below.

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

On July 31,  1997,  defendants  filed with the  district  court for the Northern
District of California  (Case No. C-97-2847 WHO) a petition (the petition) under
the Federal  Arbitration Act seeking to compel arbitration of plaintiff's claims
and for an order staying the state court proceedings  pending the outcome of the
arbitration.  In connection with this motion,  plaintiff agreed to a stay of the
state court  action  pending the  district  court's  decision on the petition to
compel  arbitration.  In October 1997,  the district  court denied the Company's
petition  to  compel  arbitration,  but in  November  1997,  agreed  to hear the
Company's motion for  reconsideration  of this order. The hearing on this motion
has been taken off calendar and the district  court has  dismissed  the petition
pending  settlement of the Romei  action,  as discussed  below.  The state court
action  continues to be stayed pending such  resolution.  In connection with her
opposition

<PAGE>


                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

7.   LEGAL MATTERS (CONTINUED)

to the petition to compel arbitration, plaintiff filed an amended complaint with
the state court in August 1997, alleging two new causes of action for violations
of the California Securities Law of 1968 (California  Corporations Code Sections
25400 and 25500) and for  violation of  California  Civil Code Sections 1709 and
1710. Plaintiff also served certain discovery requests on defendants. Because of
the stay, no response to the amended  complaint or to the discovery is currently
required.

In May 1998, all parties to the Koch and Romei actions entered into a memorandum
of understanding  (MOU) related to the settlement of those actions (the monetary
settlement).  The  monetary  settlement  contemplated  by the MOU  provides  for
stipulating to a class for settlement purposes,  and a settlement and release of
all claims  against  defendants  and third party brokers in exchange for payment
for the benefit of the class of up to $6.0 million.  The final settlement amount
will  depend on the  number  of claims  filed by  authorized  claimants  who are
members  of the  class,  the  amount of the  administrative  costs  incurred  in
connection with the settlement, and the amount of attorneys' fees awarded by the
Alabama  district court. The Company will pay up to $0.3 million of the monetary
settlement, with the remainder being funded by an insurance policy.

The  parties  to the  monetary  settlement  have  also  agreed  to an  equitable
settlement (the equitable  settlement) which provides,  among other things:  (a)
for the  extension  of the  operating  lives of Funds V, VI, and VII by judicial
amendment to each of their  partnership  agreements,  such that FSI, the general
partner of each such  partnership,  will be  permitted  to  reinvest  cash flow,
surplus partnership funds or retained proceeds in additional  equipment into the
year 2004, and will liquidate the partnerships'  equipment in 2006; (b) that FSI
is entitled to earn front-end fees (including  acquisition and lease negotiation
fees) in excess of the compensatory limitations set forth in the NASAA Statement
of Policy by judicial  amendment to the partnership  agreements for Funds V, VI,
and VII; (c) for a one-time  redemption of up to 10% of the outstanding units of
Funds V, VI, and VII at 80% of such  partnership's  net asset value; and (d) for
the deferral of a portion of FSI's  management  fees.  The equitable  settlement
also  provides  for  payment  of  the  equitable  class   attorneys'  fees  from
partnership funds in the event that  distributions paid to investors in Funds V,
VI, and VII during the extension period reach a certain internal rate of return.

Defendants will continue to deny each of the claims and contentions and admit no
liability in connection with the proposed settlements. The parties completed the
documentation  of the  monetary and  equitable  settlements  in April 1999.  The
monetary  settlement remains subject to numerous  conditions,  including but not
limited to, notice to and  certification  of the monetary  class for purposes of
the monetary  settlement,  and  preliminary  and final  approval of the monetary
settlement  by the Alabama  district  court.  The equitable  settlement  remains
subject to numerous conditions,  including but not limited to: (a) notice to the
current  unitholders  in  Funds  V,  VI,  and  VII  (the  equitable  class)  and
certification  of the equitable class for purposes of the equitable  settlement,
(b)  preparation,  review by the Securities and Exchange  Commission  (SEC), and
dissemination  to the members of the equitable class of solicitation  statements
regarding  the  proposed  extensions,  (c)  disapproval  by less than 50% of the
limited  partners  in Funds V, VI,  and VII of the  proposed  amendments  to the
limited partnership agreements, (d) judicial approval of the proposed amendments
to the limited partnership agreements, and (e) preliminary and final approval of
the equitable  settlement by the Alabama  district  court. If the district court
grants preliminary  approval,  notices to the monetary class and equitable class
will be sent following  review by the SEC of the  solicitation  statements to be
prepared in connection with the equitable  settlement.  The monetary settlement,
if approved,  will go forward regardless of whether the equitable  settlement is
approved or not. The Company  continues to believe that the  allegations  of the
Koch and Romei actions are  completely  without merit and intends to continue to
defend this matter vigorously if the monetary settlement is not consummated.

The Company is involved as plaintiff or defendant in various other legal actions
incident to its business.  Management does not believe that any of these actions
will be material to the financial condition of the Company.




<PAGE>

                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

8.   PURCHASE COMMITMENTS

As of March 31, 1999,  the Company had  committed to purchase  $37.3  million of
equipment  for its  commercial  and  industrial  lease  and  finance  receivable
portfolio.

From April 1, 1999 to May 4,  1999,  the  Company  funded  $18.7  million of the
commitments  outstanding  as of March 31, 1999 for its commercial and industrial
lease and finance receivable portfolio.

As of May 4, 1999,  the  Company had  committed  to  purchase  $23.9  million of
equipment  for its  commercial  and  industrial  lease  and  finance  receivable
portfolio.

9.   OPERATING SEGMENTS

The Company operates in three operating  segments:  trailer leasing,  commercial
and industrial equipment leasing and financing, and the management of investment
programs  and other  transportation  equipment  leasing.  The trailer  equipment
leasing  segment  includes 19 trailer rental  facilities that engage in short to
mid-term  operating  leases of refrigerated and dry van trailers to a variety of
customers,   and  management  of  trailers  for  the  investment  programs.  The
commercial and industrial  equipment  leasing and financing  segment  originates
finance and operating  leases and loans on commercial and  industrial  equipment
that is financed  through a  securitization  facility,  brokers  equipment,  and
manages institutional  programs. The management of investment programs and other
transportation  equipment  leasing  segment  manages its  syndicated  investment
programs, from which it earns fees and equity interests, and arranges short-term
to mid-term operating leases of other transportation equipment.

The Company  evaluates the  performance  of each segment based on profit or loss
from operations before allocating general and administrative expenses and before
allocating  income  taxes.  The  segments  are managed  separately  because each
operation requires different business strategies.


<PAGE>


                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

9.   OPERATING SEGMENTS (CONTINUED)

The following  tables present a summary of the operating  segments (in thousands
of dollars):


<TABLE>
<CAPTION>

                                                             Commercial        Management
                                                                and          of Investment
                                                             Industrial         Programs
                                                             Equipment         and Other
                                                              Leasing        Transportation
                                                Trailer         and            Equipment
For the quarter ended March 31, 1999            Leasing      Financing          Leasing           Other<F1>   Total
-------------------------------------                                                               
                                              -------------------------------------------------------------------------
<S>                                                <C>            <C>                  <C>    <C>                   
REVENUES
Lease income                                       $3,691         $ 5,323              $  235 $              $ 9,249
                                                                                                      --
Fees earned                                           205             215               2,699         --       3,119
Gain (loss) on sale or disposition of
  assets, net                                          (9)            322                  --         --         313
Other                                                  --             562                 364         --         926
                                              -------------------------------------------------------------------------
  Total revenues                                    3,887           6,422               3,298         --      13,607
                                              -------------------------------------------------------------------------
COSTS AND EXPENSES
Operations support                                  1,899           1,080                 494        358       3,831
Depreciation and amortization                       1,459           1,830                 110         --       3,399
General and administrative expenses                    --              --                  --      1,484       1,484
                                              -------------------------------------------------------------------------
  Total costs and expenses                          3,358           2,910                 604      1,842       8,714
                                              -------------------------------------------------------------------------
Operating income (loss)                               529           3,512               2,694     (1,842)      4,893
Interest expense, net                                (554)         (2,442)               (446)        --      (3,442)
Other expenses, net                                    --            (948)                 --         --        (948)
                                              -------------------------------------------------------------------------
  Income (loss) before income taxes                $ (25)          $  122              $2,248    $(1,842)     $  503
                                              =========================================================================
Cumulative effect of accounting change,
  net of tax of $165                               $   --          $  236              $   --      $  --      $  236
                                              =========================================================================

Total assets as of March 31, 1999                 $57,316        $193,668             $36,271    $ 9,069    $296,324
                                              =========================================================================


<FN>

<F1> Includes costs not identifiable to a particular segment such as general and
     administrative and certain operations support expenses.

</FN>

</TABLE>

<PAGE>

                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

9.   OPERATING SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>

                                                             Commercial        Management
                                                                and          of Investment
                                                             Industrial         Programs
                                                             Equipment         and Other
                                                              Leasing        Transportation
                                                Trailer         and            Equipment
For the quarter ended March 31, 1998            Leasing      Financing          Leasing          Other<F2>    Total
-------------------------------------                                                               
                                              -------------------------------------------------------------------------
<S>                                                <C>            <C>               <C>           <C>         <C>   
REVENUES
Lease income                                       $1,578         $ 4,240           $     726     $   --      $6,544
Fees earned                                           262             220               3,433         --       3,915
Gain on sale or disposition of assets, net             76             519                 167         --         762
Other                                                   3             151               1,169         --       1,323
                                              -------------------------------------------------------------------------
  Total revenues                                    1,919           5,130               5,495         --      12,544
                                              -------------------------------------------------------------------------
COSTS AND EXPENSES
Operations support                                    854             963               1,595        398       3,810
Depreciation and amortization                         677           1,296                 577         --       2,550
General and administrative expenses                    --              --                  --      1,913       1,913
                                              -------------------------------------------------------------------------
  Total costs and expenses                          1,531           2,259               2,172      2,311       8,273
                                              -------------------------------------------------------------------------
Operating income (loss)                               388           2,871               3,323     (2,311)      4,271
Interest expense, net                                (214)         (2,027)               (434)        --      (2,675)
Other expenses, net                                    --              --                  (6)        --          (6)
                                              -------------------------------------------------------------------------
  Income (loss) before income taxes                 $ 174          $  844           $   2,883    $(2,311)    $ 1,590
                                              =========================================================================

Total assets as of March 31, 1998                 $38,252        $176,794           $  39,023    $ 7,047    $261,116
                                              =========================================================================

<FN>

<F2> Includes costs not identifiable to a particular segment such as general and
     administrative and certain operations support expenses.

</FN>

</TABLE>

10.  CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX

In April 1998, the American  Institute of Certified  Public  Accountants  issued
Statement of Position  98-5,  "Reporting  on the Costs of Start-Up  Activities,"
which requires costs related to start-up  activities to be expensed as incurred.
The  statement  requires  that initial  application  be reported as a cumulative
effect of a change in accounting  principle.  The Company adopted this statement
during the first quarter of 1999,  at which time it took a $0.2 million  charge,
net  of  tax  of  $0.2  million,  related  to  start-up  costs  of  one  of  its
subsidiaries.

11.  STOCK OFFERING

During 1998,  AFG filed a registration  statement  with the U.S.  Securities and
Exchange Commission for the purpose of undertaking an initial public offering of
common stock. During the first quarter of 1999, the Company's Board of Directors
determined  that it was in the  Company's  best interest to sell AFG rather than
proceed with a stock offering.  As a result of this decision,  the Company wrote
off $0.9 million of costs related to the proposed initial public offering during
the first  quarter of 1999,  which is  included in other  expenses,  net, on the
consolidated statements of income. The Company has engaged an investment banking
firm to pursue the sale of AFG.



<PAGE>


                            PLM INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

12.  SUBSEQUENT EVENTS

In April 1999, the Company  entered into a $5.0 million debt  agreement  bearing
interest at 6.20%,  with  payments of $0.1 million due monthly  beginning  April
1999 with a final  payment of $1.3  million due April  2006,  secured by certain
trailer equipment. In return for favorable financing terms, this agreement gives
beneficial tax treatment in these secured trailers to the lenders.

On April 28, 1999, the Company  amended the Directors' 1995  Nonqualified  Stock
Option Plan and the 1998 Management Stock Compensation Plan (1998 Plan) to limit
the amount of common  shares that can be  purchased  in any one  calendar  year,
pursuant to the exercise of options  under the two plans,  to no more than 5% of
the Company's outstanding shares on May 12, 1998 (416,880),  and to provide that
any excess  options  sought to be exercised will be purchased by the Company for
the difference between the exercise price of the option and the trading price of
the  stock.  The 1998 Plan was  further  amended  to reduce the number of shares
reserved for awards under the 1998 Plan from 800,000 to 700,000.



<PAGE>



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

TRAILER LEASING

The  Company  operates  19 trailer  rental  facilities  that engage in short and
mid-term operating leases.  Equipment  operated in these facilities  consists of
refrigerated trailers used to transport  temperature-sensitive food products and
dry van (nonrefrigerated) trailers leased to a variety of customers. The Company
opened 3 of these  rental  yards in 1999 and intends to open  additional  rental
yard  facilities  in the  future.  The  Company is selling  certain of its older
trailers and is replacing them with new or late-model refrigerated trailers. The
new trailers will be placed in existing rental facilities or in new yards.

COMMERCIAL AND INDUSTRIAL EQUIPMENT LEASING AND FINANCING

The Company funds and manages long-term direct finance leases, operating leases,
and loans through its American  Finance  Group,  Inc. (AFG)  subsidiary.  Master
lease agreements are entered into with  predominately  investment-grade  lessees
and serve as the basis for marketing efforts.  The underlying assets represent a
broad range of  commercial  and  industrial  equipment,  such as  point-of-sale,
materials  handling,  computer and  peripheral,  manufacturing,  general purpose
plant and  warehouse,  communications,  medical,  and  construction  and  mining
equipment.  Through  AFG,  the  Company  is also  engaged in the  management  of
institutional  programs for which it originates leases and receives  acquisition
and  management  fees.  The Company also earns  syndication  fees for  arranging
purchases and sales of equipment between other unaffiliated third parties.

During 1998,  AFG filed a registration  statement  with the U.S.  Securities and
Exchange  Commission  (SEC) for the  purpose of  undertaking  an initial  public
offering of common stock.  During the first quarter of 1999, the Company's Board
of Director's  determined that it was in the Company's best interest to sell AFG
rather than proceed with a stock offering. The Company has engaged an investment
banking firm to pursue the sale of AFG.

MANAGEMENT OF INVESTMENT PROGRAMS

The Company has syndicated  investment programs from which it earns various fees
and equity interests.  Professional Lease Management Income Fund I, LLC (Fund I)
was structured as a limited liability company with a no front-end fee structure.
The  previously  syndicated  limited  partnership  programs allow the Company to
receive fees for the acquisition and initial leasing of the equipment.  The Fund
I program  does not provide for  acquisition  and lease  negotiation  fees.  The
Company  invested the equity raised  through  syndication  for these programs in
transportation  equipment and related assets, which it then manages on behalf of
the investors.  The equipment management  activities for these types of programs
generate  equipment  management fees for the Company over the life of a program.
The limited partnership agreements generally entitle the Company to receive a 1%
or 5% interest in the cash distributions and earnings of a partnership,  subject
to certain allocation provisions. The Fund I agreement entitles the Company to a
15% interest in the cash  distributions and earnings of the program,  subject to
certain  allocation  provisions.  The  Company's  interest in the  earnings  and
distributions  of Fund I will increase to 25% after the investors  have received
distributions equal to their original invested capital.

         In 1996, the Company announced the suspension of public  syndication of
equipment  leasing  programs  with  the  close  of Fund I. As a  result  of this
decision,  revenues earned from managed programs, which include management fees,
partnership  interests and other fees,  and  acquisition  and lease  negotiation
fees, will be reduced in the future as the older programs begin  liquidation and
the managed equipment portfolio for these programs becomes permanently reduced.



<PAGE>

COMPARISON OF THE COMPANY'S  OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH
31, 1999 AND 1998

The following analysis reviews the operating results of the Company:

REVENUES
--------

<TABLE>
<CAPTION>

                                                                             For the Three Months
                                                                                Ended March 31,

                                                                        1999                      1998
                                                                     -----------------------------------------
                                                                           (in thousands of dollars)

<S>                                                                   <C>                     <C>         
Operating lease income                                                $     6,097             $      3,892
Finance lease income                                                        3,152                    2,652
Management fees                                                             2,368                    2,564
Partnership interests and other fees                                          290                      324
Acquisition and lease negotiation fees                                        461                    1,027
Gain on the sale or disposition of assets, net                                313                      762
Aircraft brokerage and services                                                --                      524
Other                                                                         926                      799
                                                                     -----------------------------------------
  Total revenues                                                      $    13,607             $     12,544

</TABLE>

The fluctuations in revenues for the three months ended March 31, 1999, compared
to the same quarter in 1998, are summarized and explained below.

OPERATING LEASE INCOME BY EQUIPMENT TYPE:

<TABLE>
<CAPTION>

                                                                             For the Three Months
                                                                                Ended March 31,

                                                                         1999                     1998
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)

<S>                                                                   <C>                     <C>         
Refrigerated and dry van over-the-road trailers                       $     3,691             $      1,578
Commercial and industrial equipment                                         2,225                    1,613
Marine containers                                                             179                       --
Intermodal trailers                                                            --                      589
Other                                                                           2                      112
                                                                     -----------------------------------------
  Total operating lease income                                        $     6,097             $      3,892

</TABLE>

Operating  lease  income  includes  revenues  generated  from  assets  held  for
operating  leases and assets  held for sale that are on lease.  Operating  lease
income increased $2.2 million during the first quarter of 1999,  compared to the
same quarter of 1998, due to the following:

(a)  A $2.1  million  increase in  operating  lease  income was  generated  from
     refrigerated  and dry van  trailer  equipment,  due to an  increase  in the
     amount of these types of equipment  owned and on operating  lease.  For the
     quarter ended March 31, 1999, the average  investment in  refrigerated  and
     dry van trailer equipment was $66.7 million,  compared to $43.4 million for
     the first quarter of 1998.

(b)  A $0.6  million  increase in  operating  lease  income was  generated  from
     commercial  and industrial  equipment,  due to an increase in the amount of
     these types of equipment owned and on operating lease.

(c)  A $0.2 million increase in operating lease income was generated from marine
     containers.  During the first quarter of 1999, the Company  purchased $13.8
     million in marine  containers and sold $7.0 million in marine containers to
     an affiliated  program at cost, which approximated their fair market value.
     The Company earned operating lease income on these marine containers during
     the first  quarter of 1999.  There were no marine  containers  owned by the
     Company during the first quarter of 1998.



<PAGE>


These  increases  in  operating  lease  income  were  partially  offset  by  the
following:

(a)  A $0.6 million decrease in operating lease income from intermodal  trailers
     due to the sale of all of the Company's  intermodal  trailers during August
     1998.

(b)  A $0.1  million  decrease in other  operating  lease  income was due to the
     Company's  strategic decision to dispose of certain  transportation  assets
     and exit certain equipment markets.

FINANCE LEASE INCOME:

The Company earns finance lease income for certain leases  originated by its AFG
subsidiary  that are either  retained for long-term  investment or sold to third
parties.  Finance  lease income  increased  $0.5 million in the first quarter of
1999, compared to the same quarter in 1998, due to an increase in commercial and
industrial  assets that were on finance  lease.  For the quarter ended March 31,
1999,  the  average  investment  in direct  finance  leases was $140.4  million,
compared to $120.5 million for the first quarter of 1998.

MANAGEMENT FEES:

         Management  fees are,  for the most part,  based on the gross  revenues
generated by equipment under  management.  Management fees were $2.4 million and
$2.6 million for the quarters ended March 31, 1999 and 1998,  respectively.  The
decrease in management  fees  resulted from a net decrease in managed  equipment
from the PLM  Equipment  Growth Fund (EGF)  programs.  With the  termination  of
syndication  activities  in 1996,  management  fees from the older  programs are
decreasing  and are expected to continue to decrease as the  programs  liquidate
their equipment portfolios.

         The Company also earns management fees from the institutional  programs
managed by the Company's AFG  subsidiary.  During both the quarters  ended March
31, 1999 and 1998,  management  fees for the  institutional  programs  were $0.2
million.  The  Company  does not  expect  to sell  assets  in the  future to the
institutional  programs.  It will,  however,  continue  to manage  the  existing
portfolios  for  these  programs.   As  a  result,   management  fees  from  the
institutional  programs  are  expected to decrease in the future as equipment is
sold from the existing portfolios and not replaced.

PARTNERSHIP INTERESTS AND OTHER FEES:

The Company  records as  revenues  its equity  interest  in the  earnings of the
Company's affiliated programs. The net earnings and distribution levels from the
affiliated  programs  were $0.4 million and $0.5 million for the quarters  ended
March 31, 1999 and 1998,  respectively.  In addition, a decrease of $0.1 million
and $0.2  million  in the  Company's  residual  interests  in the  programs  was
recorded  during the quarters ended March 31, 1999 and 1998,  respectively.  The
decrease in net earnings and distribution levels and residual interests in 1999,
compared to 1998,  resulted  mainly from the disposition of equipment in certain
of the EGF programs.  Residual income is based on the general partner's share of
the  present  value  of the  estimated  disposition  proceeds  of the  equipment
portfolios of the affiliated  partnerships when the equipment is purchased.  Net
decreases in the recorded  residual  values result when  partnership  assets are
sold  and the  proceeds  are  less  than  the  original  investment  in the sold
equipment.

ACQUISITION AND LEASE NEGOTIATION FEES:

During the  quarter  ended March 31,  1999,  the  Company,  on behalf of the EGF
programs,  purchased  transportation  and  other  equipment  for  $7.2  million,
compared to the Company  purchasing  $15.6 million of  transportation  and other
equipment  during the quarter ended March 31, 1998,  resulting in a $0.4 million
decrease in acquisition and lease negotiation fees.

Also during the quarter ended March 31, 1999,  there was no equipment  purchased
by AFG for the institutional  investment programs,  compared to $6.0 million for
the same quarter in 1998,  resulting in a $0.2 million  decrease in  acquisition
and lease  negotiation  fees.  The Company does not expect to sell assets in the
future to the institutional  programs. It will, however,  continue to manage the
existing  portfolios for these  programs.  Because of the Company's  decision to
halt syndication of equipment

<PAGE>


leasing  programs  with the  close of Fund I in  1996,  because  Fund I has a no
front-end fee structure,  and because the Company does not expect to sell assets
in the future to the institutional  programs,  acquisition and lease negotiation
fees will be substantially reduced in the future.

GAIN ON THE SALE OR DISPOSITION OF ASSETS, NET:

         During the quarter  ended March 31,  1999,  the Company  recorded  $0.3
million  in gain  on the  sale  or  disposition  of  commercial  and  industrial
equipment.  During the quarter ended March 31, 1998,  the Company  recorded $0.8
million in gain on the sale or disposition of assets. Of this gain, $0.1 million
resulted from the sale or  disposition  of trailers and $0.2 million  related to
the sale of commercial and industrial  equipment.  Also during the first quarter
of 1998, the Company purchased and subsequently sold railcars to an unaffiliated
third party for a net gain of $0.5 million.

AIRCRAFT BROKERAGE AND SERVICES:

Aircraft  brokerage  and services  revenue  decreased  $0.5  million  during the
quarter ended March 31, 1999,  compared to the same quarter of 1998,  due to the
sale of the Company's  aircraft leasing and spare parts brokerage  subsidiary in
August 1998.


COSTS AND EXPENSES
------------------

<TABLE>
<CAPTION>

                                                                              For the Three Months
                                                                                 Ended March 31,

                                                                          1999                     1998
                                                                     -----------------------------------------
                                                                               (in thousands of dollars)

<S>                                                                   <C>                     <C>         
Operations support                                                    $     3,831             $      3,810
Depreciation and amortization                                               3,399                    2,550
General and administrative                                                  1,484                    1,913
                                                                     -----------------------------------------
  Total costs and expenses                                            $     8,714             $      8,273

</TABLE>

OPERATIONS SUPPORT:

Operations  support expense,  including salary and  office-related  expenses for
operational  activities,  equipment  insurance,  repair and  maintenance  costs,
equipment  remarketing  costs,  costs of goods sold,  and provision for doubtful
accounts,  was $3.8 million for both the quarters ended March 31, 1999 and 1998.
Operations support expense related to the trailer leasing segment increased $1.0
million due to the  expansion  of PLM Rental,  with the  addition of nine rental
yards and new trailers to existing yards.  Operations support expense related to
the commercial and industrial  equipment leasing and financing segment increased
$0.1 million due to an increase in compensation and benefits expenses related to
the expansion of the commercial and industrial equipment lease portfolio.  These
increases were offset by a $1.1 million decrease in operations  support expenses
related  to the  management  of  investment  programs  and other  transportation
equipment  leasing segment mainly related to the sale of the Company's  aircraft
leasing and spare parts  brokerage  subsidiary  in August 1998,  and the sale of
other  transportation  equipment including intermodal trailers (discussed in the
operating lease income section).

 DEPRECIATION AND AMORTIZATION:

         Depreciation and amortization expenses increased $0.8 million (33%) for
the quarter ended March 31, 1999,  compared to the quarter ended March 31, 1998.
The increase  resulted from an increase in commercial and  industrial  equipment
and  refrigerated  trailer  equipment on operating  lease,  which was  partially
offset by the reduction in depreciable  intermodal  trailers and other equipment
(discussed in the operating lease income section).




<PAGE>


GENERAL AND ADMINISTRATIVE:

General and  administrative  expenses  decreased  $0.4 million  (22%) during the
quarter  ended March 31, 1999,  compared to the same quarter in 1998,  primarily
due to a $0.2 million decrease in rent and office related  expenses,  and a $0.2
million  decrease in compensation and benefits  expenses,  net of allocations to
the managed programs.

OTHER INCOME AND EXPENSES
-------------------------

<TABLE>
<CAPTION>

                                                                              For the Three Months
                                                                                 Ended March 31,

                                                                            1999                  1998
                                                                     -----------------------------------------
                                                                             (in thousands of dollars)

<S>                                                                   <C>                     <C>           
Interest expense                                                      $    (3,685 )           $     (3,070 )
Interest income                                                               243                      395
Other expenses, net                                                          (948 )                     (6 )

</TABLE>

INTEREST EXPENSE:

         Interest expense  increased $0.6 million (20%) during the quarter ended
March 31,  1999,  compared  to the same  quarter in 1998,  due to an increase in
borrowings of nonrecourse securitized debt for AFG, an increase in borrowings on
the  short-term  warehouse  facilities,  and an increase in  borrowings of other
secured debt to fund trailer purchases.  The increase in interest expense caused
by these  increased  borrowings was partially  offset by lower interest  expense
resulting from  reductions in the amounts  outstanding  under the senior secured
debt agreements.

INTEREST INCOME:

         Interest  income  decreased $0.2 million (38%) during the quarter ended
March 31,  1999,  compared  to the same  quarter  of 1998,  as a result of lower
average cash balances  during the quarter ended March 31, 1999,  compared to the
same quarter of 1998.

OTHER EXPENSES, NET:

Other  expenses of $0.9 million for the quarter  ended March 31, 1999  represent
the write off of costs related to the proposed  initial  public  offering of the
Company's AFG subsidiary.  During the first quarter of 1999, the Company's Board
of Directors  determined  that it was in the Company's best interest to sell AFG
rather  than  proceed  with a  stock  offering,  and  therefore,  wrote-off  all
associated offering costs.

PROVISION FOR INCOME TAXES:

For the three months ended March 31, 1999,  the  provision  for income taxes was
$0.2 million,  representing an effective rate of 41%. For the three months ended
March 31, 1998, the provision for income taxes was $0.6 million, representing an
effective rate of 38%.

CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX:

In April 1998, the American  Institute of Certified  Public  Accountants  issued
Statement of Position  98-5,  "Reporting  on the Costs of Start-Up  Activities,"
which requires costs related to start-up  activities to be expensed as incurred.
The  statement  requires  that initial  application  be reported as a cumulative
effect of a change in accounting  principle.  The Company adopted this statement
during the first quarter of 1999,  at which time it took a $0.2 million  charge,
net  of  tax  of  $0.2  million,  related  to  start-up  costs  of  one  of  its
subsidiaries.



<PAGE>


NET INCOME
----------

As a result of the  foregoing,  for the three months  ended March 31, 1999,  net
income  was  $0.1  million,   resulting  in  basic  and  diluted   earnings  per
weighted-average  common  share  outstanding  of $0.01.  For the same quarter in
1998, net income was $1.0 million,  resulting in basic and diluted  earnings per
weighted-average common share outstanding of $0.12 and $0.11, respectively.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Cash  requirements  have  historically  been  satisfied  through  cash flow from
operations, borrowings, and the sale of equipment.

Liquidity in 1999 and beyond will depend, in part, on the continued  remarketing
of the equipment  portfolio at similar lease rates,  the  management of existing
sponsored programs, the effectiveness of cost control programs, the purchase and
sale of equipment, the volume of commercial and industrial and trailer equipment
leasing transactions, additional borrowings, and the potential proceeds from the
sale of AFG.  Management  believes the Company can  accomplish the preceding and
that it will have sufficient liquidity and capital resources for the next twelve
months. Future liquidity is influenced by the factors summarized below.

DEBT FINANCING:

NONRECOURSE  SECURITIZED  DEBT:  The Company has  available a  nonrecourse  debt
facility for up to $150.0 million,  secured by direct finance leases,  operating
leases,  and loans on commercial and industrial  equipment at AFG that generally
have terms of one to seven  years.  The  facility  is  available  for a one-year
period expiring October 12, 1999. Repayment of the facility matches the terms of
the underlying  leases.  The Company believes that it will be able to renew this
facility on  substantially  the same terms upon its  expiration and increase its
borrowing capacity as needed. As of March 31, 1999, $105.3 million in borrowings
was  outstanding  under  this  facility.  As of May 4, 1999,  $115.1  million in
borrowings was outstanding under this facility.

   In addition to the $150.0 million  nonrecourse debt facility discussed above,
as of March 31, 1999 and May 4, 1999, the Company also had $6.8 million and $6.6
million,  respectively,  in nonrecourse  notes payable secured by direct finance
leases  on  commercial  and   industrial   equipment  at  AFG  that  have  terms
corresponding  to the note  repayment  schedule  that began  April 1998 and ends
March 2001.  The notes bear interest from 8.32% to 9.5% per annum.

FSI WAREHOUSE CREDIT  FACILITY:  Assets acquired and held on an interim basis by
FSI for sale to affiliated  programs or third  parties have,  from time to time,
been partially funded by this warehouse  credit facility.  This facility is also
used to  temporarily  finance  the  purchase  of  trailers  prior  to  permanent
financing  being  obtained.  This  facility  expires on December 14,  1999.  The
Company  believes it will be able to renew this  facility on  substantially  the
same terms upon its expiration.

This facility is shared with EGF VI, PLM Equipment Growth & Income Fund VII (EGF
VII), and Fund I. Borrowings under this facility by the other eligible borrowers
reduce the amount available to be borrowed by the Company.  All borrowings under
this  facility  are  guaranteed  by the  Company.  This  facility  provides  80%
financing for  transportation  assets purchased by the Company.  The Company can
hold assets under this facility for up to 150 days. Interest accrues at prime or
LIBOR plus 162.5 basis points, at the option of the Company. The Company retains
the  difference  between the net lease revenue  earned and the interest  expense
during the interim holding period, since its capital is at risk. As of March 31,
1999,  the Company and EGF VI had $11.3 million and $3.7 million of  outstanding
borrowings under this facility, respectively. As of May 4, 1999, the Company and
EGF VI had $14.8 million and $3.7 million in borrowings  outstanding  under this
facility, respectively.


<PAGE>


AFG WAREHOUSE CREDIT  FACILITY:  Assets acquired and held on an interim basis by
AFG for  placement  in the  Company's  securitization  facility  or for  sale to
unaffiliated  third parties have, from time to time, been partially  funded by a
$60.0 million warehouse credit facility. The facility expires December 14, 1999;
however,  the  Company  believes  it  will be able to  renew  this  facility  on
substantially the same terms upon its expiration.

This  facility  provides for financing of 100% of the present value of the lease
stream  of  commercial  and  industrial  equipment  for up to  90%  of  original
equipment cost of the assets held on this facility.

Borrowings secured by  investment-grade  lessees can be held under this facility
until the  facility's  expiration.  Borrowings  secured  by  noninvestment-grade
lessees may by outstanding for 120 days. Interest accrues at prime or LIBOR plus
137.5  basis  points,  at the option of the  Company.  The  Company  retains the
difference  between the net lease revenue earned and the interest expense during
the interim holding period,  since its capital is at risk. As of March 31, 1999,
the Company had $34.5  million  outstanding  under this  facility.  As of May 4,
1999,  the  Company  had $30.9  million  in  borrowings  outstanding  under this
facility.

SENIOR SECURED NOTES: The Company's senior secured notes agreement, which had an
outstanding balance of $26.3 million as of March 31, 1999 and May 4, 1999, bears
interest at LIBOR plus 240 basis points.  The Company has pledged  substantially
all of its future management fees,  acquisition and lease negotiation fees, data
processing  fees, and partnership  distributions  as collateral to the facility.
The facility required quarterly  interest-only payments through August 15, 1997,
with principal plus interest  payments  beginning  November 15, 1997.  Principal
payments of $1.9 million are payable quarterly  through  termination of the loan
on August 15, 2002.

SENIOR  SECURED LOAN:  The  Company's  senior loan with a syndicate of insurance
companies,  which had an  outstanding  balance of $13.2  million as of March 31,
1999 and May 4,  1999,  provides  that  equipment  sale  proceeds  from  pledged
equipment  or cash  deposits  be placed  into a  collateral  account  or used to
purchase  additional  equipment  to the extent  required  to meet  certain  debt
covenants. Pledged equipment for this loan consists of the storage equipment and
virtually all trailer equipment  purchased prior to August 1998. As of March 31,
1999, the cash collateral balance for this loan was $0.1 million and is included
in restricted  cash and cash  equivalents on the Company's  balance  sheet.  The
facility  bears  interest  at 9.78% and  required  quarterly  interest  payments
through June 30, 1997,  with quarterly  principal  payments of $1.5 million plus
interest charges beginning June 30, 1997 and continuing until termination of the
loan in June 2001.

OTHER SECURED DEBT: As of March 31, 1999, the Company had $12.8 million in other
secured  debt,  bearing  interest  from 5.35% to 5.55%,  with  payments  of $0.2
million due monthly in advance,  beginning December 1998 with a final payment of
$3.3  million  due  November  2005.  The  debt is  secured  by  certain  trailer
equipment.

In April 1999,  the Company  entered into a $5.0 million  secured debt agreement
bearing interest at 6.20%,  with payments of $0.1 million due monthly  beginning
April  1999 with a final  payment of $1.3  million  due April  2006,  secured by
certain  trailer  equipment.  The  Company  intends  to use this type of debt to
finance the  purchase of new trailers in the future as this  financing  provides
for favorable  financing terms in exchange for beneficial tax treatment in these
secured trailers to the lenders.

INTEREST-RATE  SWAP CONTRACTS:  The Company has entered into  interest-rate swap
agreements in order to manage the  interest-rate  exposure  associated  with its
nonrecourse  securitized  debt. As of March 31, 1999, the swap  agreements had a
weighted-average  duration  of 1.15  years,  corresponding  to the  terms of the
related  debt.  As of March 31,  1999,  a  notional  amount of $98.1  million of
interest-rate swap agreements  effectively fixed interest rates at an average of
6.58% on such obligations.  For the three months ended March 31, 1999,  interest
expense increased by $0.3 million due to these arrangements.



<PAGE>


TRAILER LEASING:

The  Company  operates  19 trailer  rental  facilities  that engage in short and
mid-term operating leases.  Equipment  operated in these facilities  consists of
refrigerated trailers used to transport  temperature-sensitive food products and
dry van trailers leased to a variety of customers. The Company opened 3 of these
rental yards in 1999 and intends to open  additional  rental yard  facilities in
the  future.  The  Company  is  selling  certain  of its older  trailers  and is
replacing them with new or late-model  refrigerated  trailers.  The new trailers
will be placed in existing rental  facilities or in new yards.  During the three
months ended March 31,  1999,  the Company  purchased  $8.1 million of primarily
refrigerated trailers and sold refrigerated and dry van trailers with a net book
value of $0.1 million for proceeds of $0.1 million.

During  1999,  the Company  generated  proceeds of $0.1 million from the sale of
trailers.  The net proceeds from the sale of assets that were  collateralized as
part of the senior loan facility were placed in a collateral account.

COMMERCIAL AND INDUSTRIAL EQUIPMENT LEASING AND FINANCING:

The Company earns finance lease or operating lease income for leases  originated
and retained by its AFG  subsidiary.  The funding of leases requires the Company
to retain an equity  interest in all leases  financed  through  the  nonrecourse
securitization  facility. AFG also originates loans in which it takes a security
interest in the assets  financed.  During the three months ended March 31, 1999,
the Company  funded lease and loan  transactions  for  commercial and industrial
equipment with an original  equipment  cost of $16.7  million.  During the three
months  ended  March 31,  1999,  the  Company  sold  commercial  and  industrial
equipment  with a net book value of $5.5 million for  proceeds of $5.8  million.
The majority of these  transactions was financed,  on an interim basis,  through
the Company's warehouse credit facility.

Some equipment subject to leases is sold to institutional programs for which the
Company is the servicer.  Acquisition  and management  fees are received for the
sale and subsequent  servicing of these leases.  The Company does not believe it
will be selling  assets in the future to the  institutional  programs.  It will,
however, continue to manage the existing portfolios for these programs.

As of March 31, 1999,  the Company had  committed to purchase  $37.3  million of
equipment  for its  commercial  and  industrial  lease and  finance  receivables
portfolio,  to be held by the  Company or sold to third  parties,  of which $6.2
million had been received by lessees and accrued for as of March 31, 1999.

From April 1, 1999  through May 4, 1999,  the Company  funded  $18.7  million of
commitments  outstanding  as of March 31, 1999 for its commercial and industrial
lease and finance receivables portfolio.

As of May 4, 1999,  the  Company had  committed  to  purchase  $23.9  million of
equipment  for its  commercial  and  industrial  lease and  finance  receivables
portfolio.

During 1998, AFG filed a registration  statement with the SEC for the purpose of
undertaking an initial public offering of common stock. During the first quarter
of  1999,  the  Company's  Board  of  Director's  determined  that it was in the
Company's  best interest to sell AFG rather than proceed with a stock  offering.
The Company has engaged an investment banking firm to pursue the sale of AFG.

OTHER TRANSPORTATION EQUIPMENT LEASING AND OTHER:

During the first three months of 1999, the Company  purchased marine  containers
for $13.8 million,  and sold marine containers for $7.0 million to an affiliated
program at cost, which approximated their fair market value.

STOCK REPURCHASE PROGRAM:

In  December  1998,  the  Company  announced  that its  Board of  Directors  had
authorized the  repurchase of up to $5.0 million of the Company's  common stock.
As of May 4, 1999,  237,710  shares had been  repurchased  under this plan for a
total of $1.4 million.


<PAGE>


Management  believes that, through debt and equity financing,  possible sales of
equipment,  proceeds  from  the  potential  sale of AFG,  and  cash  flows  from
operations,  the Company will have sufficient liquidity and capital resources to
meet its projected future operating needs over the next twelve months.

EFFECTS OF THE YEAR 2000:

It is possible that the Company's currently installed computer systems, software
products, and other business systems, or those of the Company's vendors, service
providers,  and customers,  working  either alone or in  conjunction  with other
software or systems,  may not accept  input of,  store,  manipulate,  and output
dates on or after January 1, 2000 without error or  interruption,  a possibility
commonly known as the "Year 2000" or "Y2K" problem.

The Company has  established a special Year 2000  oversight  committee to review
the  impact of Year 2000  issues on its  software  products  and other  business
systems in order to determine  whether  such  systems will retain  functionality
after  December  31,  1999.  The  Company  (a)  is  currently  integrating  Year
2000-compliant  programming  code into its existing  internally  customized  and
internally  developed  transaction  processing  software  systems  and  (b)  the
Company's  accounting and asset management  software systems have either already
been made Year 2000  compliant or Year  2000-compliant  upgrades of such systems
are planned to be implemented by PLMI before the end of fiscal 1999. The Company
believes  that its Year 2000  compliance  program can be completed by the end of
1999. As of March 31, 1999, the Company has spent  approximately $0.1 million to
become Year  2000-compliant.  The Company  expects to spend an  additional  $0.1
million in order to become Year 2000-compliant.

It is possible that certain of the Company's  equipment  lease portfolio may not
be  Year  2000  compliant.   The  Company  is  currently   contacting  equipment
manufacturers of the Company's  leased  equipment  portfolio to assure Year 2000
compliance  or to develop  remediation  strategies.  The Company does not expect
that non-Year 2000  compliance of its leased  equipment  portfolio  will have an
adverse material impact on its financial statements.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Company to control,  including the extent to which third parties can address the
Year  2000  problem.  The  Company  is  communicating  with  vendors,   services
providers,  and customers in order to assess the Year 2000 compliance  readiness
of such  parties  and the  extent  to which the  Company  is  vulnerable  to any
third-party  Year 2000  issues.  There  can be no  assurance  that the  software
systems of such  parties  will be  converted  or made Year 2000  compliant  in a
timely  manner.  Any  failure  by such other  parties  to make their  respective
systems  Year  2000  compliant  could  have a  material  adverse  effect  on the
business,  financial  position,  and results of operations  of the Company.  The
Company will make an ongoing effort to recognize and evaluate potential exposure
relating to third-party Year 2000 noncompliance,  and will develop a contingency
plan if the  Company  determines  that  third-party  noncompliance  would have a
material adverse effect on the Company's business, financial position or results
of operation.

The Company is currently  developing a contingency  plan to address the possible
failure of any systems due to the Year 2000  problems.  The Company  anticipates
these plans will be completed by September 30, 1999.

ACCOUNTING PRONOUNCEMENT:

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting   for  Derivative   Instruments  and  Hedging   Activities,"   which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure  them at fair value.  This  statement is effective  for all
quarters of fiscal years  beginning  after June 15, 1999.  As of March 31, 1999,
the Company is reviewing  the effect this  standard  will have on the  Company's
consolidated financial statements.



<PAGE>


FORWARD-LOOKING INFORMATION:

Except for historical  information contained herein, the discussion in this Form
10-Q contains  forward-looking  statements that contain risks and uncertainties,
such  as  statements  of the  Company's  plans,  objectives,  expectations,  and
intentions.  The cautionary  statements made in this Form 10-Q should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q.  The Company's  actual results could differ  materially  from
those discussed here.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company's  primary  market risk  exposure is that of interest  rate risk. A
change in the U.S. prime  interest  rate,  LIBOR rate, or lender's cost of funds
based on  commercial  paper  market  rates,  would  affect the rate at which the
Company could borrow funds under its various borrowing facilities.  Increases in
interest rates to the Company, which may cause the Company to raise the implicit
rates charged to its customers,  could in turn,  result in a reduction in demand
for the Company's lease financing. The Company's warehouse credit facilities and
senior secured notes are variable rate debt. The Company estimates a one percent
increase or  decrease in the  Company's  variable  rate debt would  result in an
increase or decrease, respectively, in interest expense of $0.3 million in 1999,
$0.2  million in 2000,  $0.1 million in 2001,  and $18,000 in 2002.  The Company
estimates a two percent increase or decrease in the Company's variable rate debt
would result in an increase or decrease,  respectively,  in interest  expense of
$0.7 million in 1999, $0.3 million in 2000, $0.2 million in 2001, and $35,000 in
2002.

The Company hedges  borrowings  under the nonrecourse  securitization  facility,
effectively  fixing  the rate of these  borrowings.  The  Company  is  currently
required to hedge  against the risk of interest  rate  increases  for 90% of the
aggregate  discounted lease balance of those leases and loans used as collateral
for its nonrecourse  securitization facility, but the Company generally does not
enter  into  hedges  for  leases  designated  for  syndication  or for leases of
transportation  equipment.  Such  hedging  activities  may limit  the  Company's
ability to  participate  in the benefits of any decrease in interest  rates with
respect to the hedged portfolio of leases, but may also protect the Company from
increases in interest rates for the hedged portfolio. All of the Company's other
financial assets and liabilities are at fixed rates.



<PAGE>


                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         See Note 7 to the consolidated financial statements.


Item 6.  Exhibits and Reports on Form 8-K

(A)  Exhibits

10.1     Master Lease  Agreement among PLM  International,  Inc. and Wells Fargo
         Equipment Finance, Inc., dated as of April 2, 1999.

10.2     Amendment to PLM International, Inc. Directors' 1995 Nonqualified Stock
         Option Plan, dated April 28, 1999.

10.3     Amendment to PLM International, Inc. 1998 Management Stock Compensation
         Plan, dated April 28, 1999.

10.4     Amended Form of Nonqualified Stock Option Agreement.


(B)  Reports on Form 8-K

January 18, 1999 - Announcement  regarding the election of Howard M. Lorber as a
Class III director of the Board of Directors of the Company.


<PAGE>

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


                                       PLM INTERNATIONAL, INC.



                                       /s/ Richard K Brock
                                       -------------------------- 
                                       Richard K Brock
                                       Vice President and
                                       Corporate Controller






          Date: May 4, 1999