TEXTAINER FINANCIAL SERVICES CORPORATION
                        650 California Street, 16th Floor
                             San Francisco, CA 94108


August 13, 1999


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting  herewith  for  filing on behalf of TCC  Equipment  Income  Fund (the
"Company")  the Company's  Quarterly  Report on Form 10-Q for the Second Quarter
ended June 30, 1999.

This filing is being effected by direct  transmission to the Commission's  EDGAR
System.

Sincerely,

Nadine Forsman
Controller

<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549



                                    FORM 10-Q



                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended June 30, 1999


                         Commission file number 0-17688


                            TCC EQUIPMENT INCOME FUND
                        A California Limited Partnership
             (Exact name of Registrant as specified in its charter)


         California                                              94-3045888
  (State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                            Identification No.)

 650 California Street, 16th Floor
         San Francisco, CA                                         94108
(Address of Principal Executive Offices)                         (ZIP Code)

                                 (415) 434-0551
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes [X] No [ ]





<PAGE>


<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 1999

Table of Contents
----------------------------------------------------------------------------------------------------------



                                                                                                      Page
<S>                                                                                                  <C>
Item 1.   Financial Statements

          Balance Sheets - June 30, 1999 (unaudited)
          and December 31, 1998........................................................................  3


          Statements of Earnings for the three and six months
          ended June 30, 1999 and 1998 (unaudited).....................................................  4


          Statements of Partners' Capital for the six months
          ended June 30, 1999 and 1998 (unaudited).....................................................  5


          Statements of Cash Flows for the six months
          ended June 30, 1999 and 1998 (unaudited).....................................................  6


          Notes to Financial Statements (unaudited)....................................................  8


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


</TABLE>
<PAGE>

<TABLE>
<CAPTION>


TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Balance Sheets

June 30, 1999 and December 31, 1998
(Amounts in thousands)
---------------------------------------------------------------------------------------------------------


                                                                             1999               1998
                                                                         -------------      -------------
                                                                          (unaudited)
<S>                                                                     <C>                <C>
Assets
Container rental equipment, net of accumulated
   depreciation of $8,908 (1998:  $9,373) (note 4)                       $     11,939       $     13,153
Cash                                                                            1,254              1,959
Net investment in direct financing leases                                          29                 18
Accounts receivable, net of allowance for doubtful
   accounts of $170 (1998:  $134)                                                 797                896
Due from affiliates, net (note 2)                                                 188                239
Prepaid expenses                                                                    2                  6
                                                                         -------------      -------------
                                                                         $     14,209       $     16,271
                                                                         =============      =============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                      $        138       $        128
   Accrued liabilities                                                             29                 33
   Accrued recovery costs                                                          29                 22
   Accrued damage protection plan costs                                           109                 83
   Warranty claims                                                                100                132
                                                                         -------------      -------------
       Total liabilities                                                          405                398
                                                                         -------------      -------------

Partners' capital:
   General partners                                                                 -                  -
   Limited partners                                                            13,804             15,873
                                                                         -------------      -------------
       Total partners' capital                                                 13,804             15,873
                                                                         -------------      -------------
                                                                         $     14,209       $     16,271
                                                                         =============      =============


See accompanying notes to financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Earnings

For the three and six months ended June 30, 1999 and 1998
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
-------------------------------------------------------------------------------------------------------------------------------


                                                        Three months        Three months           Six months          Six months
                                                            Ended               Ended                 Ended               Ended
                                                       June 30, 1999        June 30, 1998        June 30, 1999        June 30, 1998
                                                       -------------        -------------        -------------        -------------
<S>                                                   <C>                  <C>                  <C>                  <C>
Rental income                                          $        796         $      1,100         $      1,650         $      2,227
                                                       -------------        -------------        -------------        -------------

Costs and expenses:
   Direct container expenses                                     259                  218                  443                  418
   Bad debt expense (benefit)                                      9                  (32)                  38                  (46)
   Depreciation (note 4)                                         343                  329                  653                  665
   Professional fees                                              15                   10                   24                   16
   Management fees to affiliates (note 2)                         86                  110                  208                  196
   General and administrative costs to affiliates (note 2)        44                   62                   99                  136
   Other general and administrative costs                         15                   12                   26                   26
                                                       -------------        -------------        -------------        -------------
                                                                 771                  709                1,491                1,411
                                                       -------------        -------------        -------------        -------------
   Income from operations                                         25                  391                  159                  816
                                                       -------------        -------------        -------------        -------------

Other income:
   Interest income                                                14                   24                   28                   42
   (Loss) gain on sale of containers (note 4)                     (9)                  22                   (9)                 138
                                                       -------------        -------------        -------------        -------------
                                                                   5                   46                   19                  180
                                                       -------------        -------------        -------------        -------------
    Net earnings                                       $          30        $         437        $         178        $         996
                                                       =============        =============        =============        =============

Allocation of net earnings (note 2):
   General partners                                    $          29        $           7        $          30        $          15
   Limited partners                                                1                  430                  148                  981
                                                       -------------        -------------        -------------        -------------
                                                       $          30        $         437        $         178        $         996
                                                       =============        =============        =============        =============
Limited partners' per unit share
   of net earnings                                     $           -        $        0.29        $        0.10        $        0.67
                                                       =============        =============        =============        =============

Limited partners' per unit share
   of distributions                                    $        0.50        $        0.50        $        1.50        $        1.00
                                                       =============        =============        =============        =============

Weighted average number of limited
   partnership units outstanding                           1,467,029            1,471,779            1,467,029            1,471,779
                                                       =============        =============        =============        =============



See accompanying notes to financial statements

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Partners' Capital

For the six months ended June 30, 1999 and 1998
(Amounts in thousands)
(unaudited)
------------------------------------------------------------------------------------------------------


                                                                Partners' Capital
                                             ---------------------------------------------------------
                                                General             Limited                Total
                                             --------------      ---------------       ---------------
<S>                                         <C>                 <C>                   <C>
Balances at January 1, 1998                  $         (36)      $       18,087        $       18,051

Distributions                                          (15)              (1,472)               (1,487)

Net earnings                                            15                  981                   996
                                             --------------      ---------------       ---------------

Balances at June 30, 1998                    $         (36)      $       17,596        $       17,560
                                             ==============      ===============       ===============

Balances at January 1, 1999                  $           -       $       15,873        $       15,873

Distributions                                          (30)              (2,202)               (2,232)

Redemptions (note 5)                                     -                  (15)                  (15)

Net earnings                                            30                  148                   178
                                             --------------      ---------------       ---------------

Balances at June 30, 1999                    $           -       $       13,804        $       13,804
                                             ==============      ===============       ===============





See accompanying notes to financial statements


</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Cash Flows

For the six months ended June 30, 1999 and 1998
(Amounts in thousands)
(unaudited)
--------------------------------------------------------------------------------------------------------------


                                                                               1999                 1998
                                                                           --------------       --------------
<S>                                                                       <C>                  <C>
Cash flows from operating activities:
      Net earnings                                                         $         178        $         996
      Adjustments to reconcile net earnings to
        net cash provided by operating activities:
          Depreciation (note 4)                                                      653                  665
          Increase (decrease) in allowance for doubtful accounts,
             excluding write-off (note 6)                                             36                  (85)
          Loss (gain) on sale of containers (note 4)                                   9                 (138)
          (Increase) decrease in assets:
             Net investment in direct financing leases                                 8                  124
             Accounts receivable, excluding write-off (note 6)                        63                  376
             Due from affiliates, net                                                 43                 (199)
             Prepaid expenses                                                          4                   14
          Increase (decrease) in liabilities:
             Accounts payable and accrued liabilities                                  6                  (28)
             Accrued recovery costs                                                    7                  (14)
             Damage protection plan costs                                             26                   (6)
             Warranty claims                                                         (32)                 (32)
                                                                           --------------       --------------
                Net cash provided by operating activities                          1,001                1,673
                                                                           --------------       --------------

Cash flows from investing activities:
      Proceeds from sale of containers                                               539                  856
      Container purchases                                                              -                  (17)
                                                                           --------------       --------------
                Net cash provided by investing activities                            539                  839
                                                                           --------------       --------------

Cash flows from financing activities:
      Redemptions of limited partnership units                                       (15)                   -
      Distributions to partners                                                   (2,230)              (1,487)
                                                                           --------------       --------------
                Net cash used in financing activities                             (2,245)              (1,487)
                                                                           --------------       --------------

Net (decrease) increase in cash                                                     (705)               1,025

Cash at beginning of period                                                        1,959                1,166
                                                                           --------------       --------------
Cash at end of period                                                      $       1,254        $       2,191
                                                                           ==============       ==============



See accompanying notes to financial statements

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)


Statements Of Cash Flows--Continued

For the six months ended June 30, 1999 and 1998
(Amounts in thousands)
(unaudited)
----------------------------------------------------------------------------------------------------------

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds  from sale of  containers  which had not been paid or
received as of June 30, 1999 and 1998, and December 31, 1998 and 1997, resulting
in differences in amounts  recorded and amounts of cash disbursed or received by
the  Partnership,  as shown in the  Statements  of Cash Flows for the  six-month
periods ended June 30, 1999 and 1998.

                                                                June 30        Dec. 31          June 30       Dec. 31
                                                                   1999           1998             1998          1997
                                                             ----------     ----------       ----------      --------
<S>                                                          <C>            <C>              <C>           <C>
Container purchases included in:
     Due to affiliates..............................               $  -           $  -             $  -         $  12

Distributions to partners included in:
     Due to affiliates..............................                  4              2                2             2

Proceeds from sale of containers included in:
     Due from affiliates............................                198            204              166           296

The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers recorded by the Partnership and
the amounts  paid or received as shown in the  Statements  of Cash Flows for the
six-month periods ended June 30, 1999 and 1998.

                                                                                                   1999          1998
                                                                                                   ----          ----

Container purchases recorded......................................................                $   -          $  5
Container purchases paid..........................................................                    -            17

Distributions to partners declared................................................                2,232         1,487
Distributions to partners paid....................................................                2,230         1,487

Proceeds from sale of containers recorded.........................................                  533           726
Proceeds from sale of containers received.........................................                  539           856


See accompanying notes to financial statements



</TABLE>


<PAGE>



TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Notes To Financial Statements

For the three and six months ended June 30, 1999 and 1998
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
--------------------------------------------------------------------------------


Note 1.   General

      TCC  Equipment  Income  Fund  (the  Partnership),   a  California  limited
      partnership  with a maximum  life of 20  years,  was  formed in 1987.  The
      Partnership owns a fleet of intermodal marine cargo containers,  which are
      leased to international shipping lines.

      In January 1998,  the  Partnership  ceased  purchasing  containers  and in
      October 1998, the Partnership began its liquidation  phase. This phase may
      last between two to six or more years  depending on whether the containers
      are sold in one or more large  transactions  or are sold gradually as they
      reach the end of their useful marine lives.  The  Partnership  anticipates
      that all excess cash, after redemptions and working capital reserves, will
      be distributed to the limited and general partners on a quarterly basis.

      The  final  termination  and  winding  up of the  Partnership,  as well as
      payment  of  final   distributions   with  respect  to  the  Partnership's
      dissolution,  will occur at the end of the  liquidation  phase when all or
      substantially all of the Partnership's containers have been sold.

      All adjustments  (which were only normal and recurring  adjustments) which
      are,  in the  opinion  of  management,  necessary  to fairly  present  the
      financial position of the Partnership as of June 30, 1999 and December 31,
      1998, and the results of its operations,  changes in partners' capital and
      cash flows for the three and  six-month  periods  ended June 30,  1999 and
      1998, have been made.

      The financial  information  presented herein should be read in conjunction
      with  the  audited  financial  statements  and  other  accompanying  notes
      included in the Partnership's  annual audited  financial  statements as of
      December 31, 1998, in the Annual Report filed on Form 10-K.

      Certain   estimates  and  assumptions  were  made  by  the   Partnership's
      management that affect the reported  amounts of assets and liabilities and
      disclosures  of  contingent  assets  and  liabilities  at the  date of the
      financial  statements  and the  reported  amounts of revenue and  expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.

      Certain  reclassifications,  not affecting net earnings, have been made to
      prior year  amounts in order to  conform to the 1999  financial  statement
      presentation.

Note 2.   Transactions with Affiliates

      Textainer  Financial  Services  Corporation  (TFS) is the managing general
      partner of the Partnership  and is a wholly-owned  subsidiary of Textainer
      Capital Corporation (TCC).  Textainer  Equipment  Management Limited (TEM)
      and  Textainer   Limited  (TL)  are  associate  general  partners  of  the
      Partnership.  The  managing  general  partner  and the  associate  general
      partners  are  collectively  referred to as the General  Partners  and are
      commonly  owned by Textainer  Group Holdings  Limited  (TGH).  The General
      Partners also act in this capacity for other limited  partnerships.  Prior
      to its liquidation in October 1998, Textainer Acquisition Services Limited
      (TAS),  a former  affiliate of the General  Partners,  performed  services
      related to the  acquisition  of  containers  outside the United  States on
      behalf of the  Partnership.  The General  Partners  manage and control the
      affairs of the Partnership.

      In accordance with the Partnership Agreement, sections 3.10 and 3.11,  net
      earnings or losses and  distributions  are generally  allocated  1% to the
      General Partners and 99% to the Limited  Partners.  If the  allocation  of
      distributions exceeds the allocation of net earnings and creates a deficit
      in  the General  Partners'  aggregate  capital  account,  the  Partnership
      Agreement provides for a special  allocation  of gross income equal to the
      amount of the deficit.

      As part of the operation of the Partnership,  the Partnership is to pay to
      the General Partners, or TAS prior to its liquidation, an acquisition fee,
      an equipment  management fee, an incentive management fee and an equipment
      liquidation  fee.  These  fees  are  for  various  services   provided  in
      connection with the administration and management of the Partnership.  The
      Partnership  incurred $31 and $93 of incentive  management fees during the
      three and six-month periods ended June 30, 1999, respectively, and $31 and
      $62 for  the  comparable  period  in  1998,  respectively.  There  were no
      acquisition  fees  or  equipment  liquidation  fees  incurred  during  the
      six-month periods ended June 30, 1999 and 1998.

      The  Partnership's  container  fleet  is  managed  by TEM.  In its role as
      manager,  TEM has  authority to acquire,  hold,  manage,  lease,  sell and
      dispose of the  Partnership's  containers.  TEM holds,  for the payment of
      direct operating expenses,  a reserve of cash that has been collected from
      leasing operations;  such cash is included in due from affiliates,  net at
      June 30, 1999 and December 31, 1998.

      Subject to certain reductions, TEM receives a monthly equipment management
      fee equal to 7% of gross revenues  attributable to operating leases and 2%
      of gross  revenues  attributable  to full  payout net  leases.  These fees
      totaled $55 and $115 for the three and  six-month  periods  ended June 30,
      1999,  respectively,  and $79 and $134 for the comparable  period in 1998,
      respectively.  The Partnership's container fleet is leased by TEM to third
      party lessees on operating  master  leases,  spot leases,  term leases and
      direct finance leases. The majority of the container fleet is leased under
      operating master leases with limited terms and no purchase option.

      Certain  indirect  general  and  administrative  costs  such as  salaries,
      employee  benefits,   taxes  and  insurance  are  incurred  in  performing
      administrative  services  necessary to the  operation of the  Partnership.
      These  costs  are  incurred  and paid by TFS and TEM.  Total  general  and
      administrative  costs  allocated  to  the  Partnership  in the  three  and
      six-month periods ended June 30, 1999 and 1998 were as follows:

                                       Three months               Six months
                                       ended June 30,            ended June 30,
                                      ---------------           ----------------
                                      1999       1998           1999        1998
                                      ----       ----           ----        ----

      Salaries                        $ 24       $ 32           $ 53       $  67
      Other                             20         30             46          69
                                      ----       ----           ----        ----
      Total general and
        administrative costs          $ 44       $ 62           $ 99       $ 136
                                      ====       ====           ====        ====

      TEM allocates these general and administrative costs based on the ratio of
      the  Partnership's  interest  in  the  managed  containers  to  the  total
      container  fleet  managed by TEM during the period.  TFS  allocates  these
      costs  based on the  ratio of the  Partnership's  containers  to the total
      container  fleet of all limited  partnerships  managed by TFS. The General
      Partners allocated the following general and  administrative  costs to the
      Partnership  in the three and  six-month  periods  ended June 30, 1999 and
      1998:

                                     Three months                 Six months
                                     ended June 30,              ended June 30,
                                    ----------------           -----------------
                                    1999        1998           1999         1998
                                    ----        ----           ----         ----

      TEM                           $ 40        $ 56           $ 89         $122
      TFS                              4           6             10           14
                                    ----        ----           ----         ----
      Total general and
        administrative costs        $ 44        $ 62           $ 99         $136
                                    ====        ====           ====         ====

      At June 30,  1999 and  December  31,  1998,  due from  affiliates,  net is
      comprised of:

                                                             1999           1998
                                                             ----           ----
      Due from affiliates:
        Due from TL....................................     $   -          $   1
        Due from TEM...................................       209            254
                                                             ----           ----
                                                              209            255
                                                             ----           ----

      Due to affiliates:
        Due to TCC.....................................         8              6
        Due to TFS.....................................        12             10
        Due to TL......................................         1              -
                                                             ----           ----
                                                               21             16
                                                             ----           ----
      Due from affiliates, net                              $ 188          $ 239
                                                             ====           ====

      These amounts  receivable  from and payable to affiliates were incurred in
      the ordinary course of business between the Partnership and its affiliates
      and represent timing differences in the accrual and remittance of expenses
      and fees  described  above and in the accrual and remittance of net rental
      revenues and sales proceeds from TEM.

Note 3.   Rentals Under Long-Term Operating Leases

      The following are the future  minimum rent  receivables  under  cancelable
      long-term  operating  leases at June 30,  1999.  Although  the  leases are
      generally  cancelable  with a  penalty  at the  end of  each  twelve-month
      period,  the  following  schedule  assumes  that  the  leases  will not be
      terminated.

              Year ending June 30:

              2000.............................................           $  169
              2001.............................................               21
              2002.............................................               16
              2003.............................................               16
              2004.............................................                6
                                                                           -----
              Total minimum future rentals receivable..........           $  228
                                                                            ====
Note 4.   Container Rental Equipment Write-Down

      The price of new containers has been declining since 1995, and the cost of
      new  containers  at  year-end  1998 and  during the first half of 1999 was
      significantly  less than the cost of containers  purchased in prior years.
      The  Partnership  evaluated the  recoverability  of the recorded amount of
      container  rental  equipment at June 30, 1999 and  December 31, 1998,  and
      determined  that a reduction to the carrying value of the containers  held
      for  continued  use was not  required,  but that a write-down  in value of
      certain containers identified for sale was required. During the year ended
      December  31,  1998 and the  six-month  period  ended June 30,  1999,  the
      Partnership  wrote down the value of these  containers to their  estimated
      fair value, which was based on recent sales prices.

      At December 31, 1998, the  Partnership  recorded  additional  depreciation
      expense of $61 to write down the value of 298  containers  identified  for
      sale in low demand  locations.  During the six-month period ended June 30,
      1999, the Partnership sold 195 of these previously written down containers
      for a gain of $3 and recorded an additional depreciation expense of $68 to
      write down the value of 186 additional containers  subsequently identified
      for sale in these locations.

      If more containers in these or other low demand locations are subsequently
      identified as available for sale or if container  sales prices continue to
      decline,  the Partnership may incur  additional  write-downs on containers
      and/or may incur losses on the sale of containers.

Note 5.   Redemptions

      The following  redemptions were consummated by the Partnership  during the
      six-month period ended June 30, 1999:

<TABLE>
<CAPTION>
                                                                 Units               Average
                                                                Redeemed        Redemption Price            Amount Paid
                                                                --------        ----------------            -----------
<S>                                                            <C>             <C>                         <C>
          Inception through December 31, 1998........              5,775             $  9.35                   $ 54

          Quarter ended:
                March 31, 1999.......................              1,750             $  8.57                     15
                                                                   -----                                       ----

          Partnership to date........................              7,525             $  9.17                   $ 69
                                                                   =====                                       ====
</TABLE>

      The Partnership did not redeem any units during the six-month period ended
      June 30, 1998. The redemption price is fixed by formula.

Note 6.   Accounts Receivable Write-Off

      During  March  1998,   the   Partnership   wrote-off  $391  of  delinquent
      receivables  from two lessees against which reserves were recorded in 1994
      and 1995.

Note 7.  Readiness for Year 2000

      Many computer  systems may experience  difficulty  processing dates beyond
      the year 1999; as a  consequence,  some computer  hardware and software at
      many companies will need to be modified or replaced prior to the year 2000
      in order to remain functional. The Partnership relies on the financial and
      operating systems provided by the General Partners;  these systems include
      both information technology systems as well as non-information  technology
      systems.  There can be no assurance  that issues  related to the Year 2000
      will not have a material  impact on the  financial  condition,  results of
      operations or cash flows of the Partnership.

<PAGE>


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

(Amounts in thousands except for unit and per unit amounts)
--------------------------------------------------------------------------------

The Financial  Statements contain  information,  which will assist in evaluating
the financial condition of the Partnership as of and for the three and six-month
periods ended June 30, 1999 and 1998.  Please refer to the Financial  Statements
and Notes thereto in connection with the following discussion.

Liquidity and Capital Resources

From  October  1987  until  October  1989,  the   Partnership   offered  limited
partnership  interests  to the  public.  The  Partnership  received  its minimum
subscription  amount of $1,000 on April 8, 1988,  and on October 26,  1989,  the
Partnership's offering of limited partnership interests was closed at $29,491.

In October 1998, the Partnership  entered its liquidation  phase, which may last
between two to six or more years depending on whether the containers are sold in
one or more large  transactions  or are sold  gradually as they reach the end of
their  useful  marine  lives or when an  analysis  indicates  that their sale is
warranted based on existing market  conditions and the container's age, location
and  condition.   The  Partnership  anticipates  that  all  excess  cash,  after
redemptions and working capital reserves, will be distributed to the general and
limited partners on a quarterly basis. These  distributions will consist of cash
from operations and/or cash from sales proceeds. As the Partnership's  container
fleet decreases,  cash from operations is expected to decrease,  while cash from
investing  activities is expected to fluctuate based on the number of containers
sold  and  the  actual  sales  price  per  container  received  on the  sale  of
containers.  Consequently,  the Partnership  anticipates that a large portion of
all future distributions will be a return of capital.

The final  termination and winding up of the Partnership,  as well as payment of
final distributions with respect to the Partnership's dissolution, will occur at
the  end  of  the  liquidation  phase  when  all  or  substantially  all  of the
Partnership's containers have been sold.

From time to time,  the  Partnership  redeems units from Limited  Partners for a
specified  redemption  value,  which  is  set  by  formula.  Up  to  2%  of  the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the managing general  partner's  discretion.  All redemptions
are subject to the managing  general  partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its distribution  policy.  During the six-month period ended June 30, 1999,
the Partnership redeemed 1,750 units for a total dollar amount of $15.

The Partnership  invests working capital and cash flow from operations  prior to
its  distribution  to  the  partners  in  short-term,  liquid  investments.  The
Partnership's  cash is  affected  by  cash  provided  by or  used in  operating,
investing and financing  activities.  These  activities  are discussed in detail
below.

During the six-month  period ended June 30, 1999, the Partnership  declared cash
distributions to limited  partners  pertaining to the fourth quarter of 1998 and
the first quarter of 1999 in the amount of $2,202.  This amount represents $1.50
per unit,  or 7.5%,  of the Limited  Partner's  original  investment.  On a cash
basis,  $1,001 of total  distributions  was from  operating  activities  and the
remainder was from excess cash. On a GAAP basis,  $2,054 of total  distributions
was a return of capital and the balance was from net income.

Net cash provided by operating  activities for the six-month periods ending June
30, 1999 and 1998 was $1,001 and $1,673, respectively.  The decrease of $672 was
primarily  attributable  to  decreases  in net  earnings,  adjusted for non-cash
transactions and fluctuations in accounts receivable, net of write-offs,  offset
by fluctuations in due from affiliates,  net. Net earnings adjusted for non-cash
transactions  decreased primarily due to the decrease in rental income, which is
discussed  more fully in  "Results  of  Operations".  The  decrease  in accounts
receivable of $63 for the six-month period ended June 30, 1999 resulted from the
decrease in rental income.  The decrease in accounts  receivable of $376 for the
comparable  period in 1998 resulted  primarily from a decrease in the collection
period of accounts receivable and lower rental income.  Fluctuations in due from
affiliates,  net result from timing  differences  in the payment of expenses and
fees and the remittance of net rental revenues.

For the six-month  periods  ending June 30, 1999 and 1998,  net cash provided by
investing  activities (the sale of containers) was $539 and $839,  respectively.
The  decrease of $300 was  primarily  due to the  Partnership  having sold fewer
containers  and receiving a lower average sales price per container in 1999 than
during the  equivalent  period in 1998.  In  addition to the  liquidation  plans
discussed above, as a result of current market  conditions,  the Partnership has
recently  sold and plans to continue to sell  certain  containers  in low demand
locations.  Current  market  conditions  have also had an adverse  effect on the
average sales price  recently  realized on the sale of  containers.  The sale of
certain containers and market conditions are discussed more fully under "Results
of Operations".

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income, container depreciation,  direct container expenses, management fees, and
reimbursement of administrative expenses was directly related to the size of the
container  fleet during the  six-month  periods ended June 30, 1999 and 1998, as
well as certain other factors as discussed  below. The following is a summary of
the container fleet (in units) available for lease during those periods:

                                                               1999        1998
                                                               ----        ----

                 Beginning container fleet...............      6,769      7,887
                 Ending container fleet..................      6,340      7,297
                 Average container fleet.................      6,555      7,592

The average  container fleet decreased 14% from the six-month  period ended June
30,  1998  to the  equivalent  period  in  1999  due to the  continuing  sale of
containers  (i) that had reached  the end of their  useful  lives,  (ii) that an
analysis had indicated that their sale was warranted and (iii) that were located
in low  demand  locations  and had  been  identified  as  being  for  sale.  The
Partnership expects that the size of its container fleet will further decline as
the  container  fleet  continues  to age, as the  Partnership  sells  additional
containers  in  accordance  with its  liquidation  phase and as the  Partnership
continues to sell certain containers in low demand locations as discussed above.
The decline in the  container  fleet has  contributed  to an overall  decline in
rental  income from the six-month  period ended June 30, 1998 to the  equivalent
period in 1999.  This  decline is expected to continue in future  years,  as the
size of the Partnership's container fleet continues to decrease.

Rental income and direct container expenses are also affected by the utilization
of the container  fleet,  which was 72% and 81% on average  during the six-month
periods ended June 30, 1999 and 1998, respectively. This decline in utilization,
primarily  caused by lower demand,  had a significant  adverse  effect on rental
income as  discussed  below.  In  addition,  rental  income is affected by daily
rental rates and leasing incentives.

The  following is a comparative  analysis of the results of  operations  for the
six-month periods ended June 30, 1999 and 1998.

The  Partnership's  income from operations for the six-month periods ending June
30, 1999 and 1998 was $159 and $816,  respectively,  on rental  income of $1,650
and $2,227,  respectively.  The decrease in rental  income of $577, or 26%, from
the six-month  period ended June 30, 1998 to the  comparable  period in 1999 was
primarily attributable to a decrease in income from container rentals, the major
component of total revenue,  which decreased $554, or 28%. This decrease was due
to decreases in the average container fleet of 14%, average on-hire  utilization
of 11% and  average  rental  rates of 4%. The  decline in  utilization,  and the
decline in the size of the container  fleet,  which is discussed  above, had the
most significant adverse effect on rental income.

The decline in average utilization from the six-month period ended June 30, 1998
to the  equivalent  period in 1999 was  primarily due to lower demand for leased
containers.  Demand decreased  primarily due to (i) shipping lines continuing to
purchase  rather  than  lease  containers  as a result of  historically  low new
container  prices  and low  interest  rates  and (ii) the  growth  of the  trade
imbalance in Asia.  Rental rates have also declined as shipping lines  continued
to negotiate  lower rates as a result of this lower demand and the  historically
low container prices.

The trade  imbalance  has resulted in the  continuing  build-up of containers in
lower demand  locations.  The General  Partners have continued  their efforts to
reposition  newer  containers to higher demand locations in an effort to improve
utilization and alleviate container build-up. The Partnership continued to incur
increased direct container  expenses in 1999 as a result of this  repositioning.
For the near-term,  the General  Partners plan to monitor  market  conditions to
determine  whether  additional  repositioning  efforts  are  required.  However,
currently there are no significant repositioning efforts planned.

The  Partnership  also plans to continue to sell certain  containers  located in
lower demand  locations.  The decision to sell these  containers is based on the
current  expectation  that the economic  benefit of selling these  containers is
greater  than  the  estimated  economic  benefit  of  continuing  to  own  these
containers.  The majority of the containers sold during 1998 and 1999 were older
containers  as  the  expected  economic  benefit  of  continuing  to  own  these
containers was significantly less than that of newer containers primarily due to
their  shorter  remaining  marine life and the shipping  lines'  preference  for
leasing newer containers.

Because of the decision to sell  certain  containers  during 1998 and 1999,  the
Partnership wrote down the value of these specifically  identified containers to
their  estimated  fair value,  which was based on recent  sales  prices.  Due to
unanticipated  declines in  container  sales  prices,  the actual  sales  prices
received on certain containers during 1999 was lower than the estimates used for
the write-down recorded in 1998 and the first quarter of 1999,  resulting in the
Partnership  incurring  losses  upon the sale of some of these  containers.  The
Partnership recorded additional write-downs during the second quarter of 1999 on
certain containers, which were identified as meeting the same criteria for sale.
Until market conditions  improve,  the Partnership may incur further write-downs
and/or  losses on the sale of such  containers.  Should the  decline in economic
value  of  continuing  to own such  containers  turn  out to be  permanent,  the
Partnership may be required to increase its depreciation  rate for or write-down
the value of container rental equipment.

For the near term the  General  Partners  do not  foresee  material  changes  in
existing  market  conditions and caution that both  utilization  and lease rates
could further decline, adversely affecting the Partnership's operating results.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the Partnership's containers under short-term operating leases.

The  balance of other  rental  income  consists  of other  lease-related  items,
primarily  income from charges to lessees for dropping off containers in surplus
locations less credits  granted to lessees for leasing  containers  from surplus
locations (location income), income from charges to lessees for handling related
to leasing and returning containers (handling income) and income from charges to
lessees for a Damage  Protection Plan (DPP). For the six-month period ended June
30, 1999,  the total of these other rental  income items was $201, a decrease of
$23 from the  equivalent  period in 1998.  The  decrease  was  primarily  due to
decreases in handling and location income of $26 and $19, respectively. Handling
income  decreased  due to  decreases  in  container  movement and in the average
handling price charged per container  during the six-month period ended June 30,
1999  compared  to the  comparable  period in 1998.  Location  income  decreased
primarily due to a decrease in charges to lessees for dropping off containers in
certain locations.

Direct container expenses increased $25, or 6%, from the six-month period ending
June 30, 1998 to the  equivalent  period in 1999. The increase was primarily due
to increases in storage and DPP expenses of $47 and $25, respectively, offset by
decreases in bankrupt  lessee,  handling and insurance  expenses of $16, $14 and
$14,  respectively.  Storage  expense  increased  due to the decrease in average
utilization  noted above and due to an increase in the average  storage cost per
container  during the  six-month  period  ended June 30,  1999  compared  to the
equivalent period in 1998. DPP expense increased primarily due to an increase in
the average DPP cost per  container.  Bankrupt  lessee  expense,  which consists
primarily of estimated  legal  expenses to be incurred in recovering  containers
and delinquent receivables from bankrupt lessees, decreased primarily due to the
receipt of insurance  proceeds  against costs recorded  during  previous  years.
Handling  expense  decreased  due to decreases in container  movement and in the
average  handling  cost per  container.  Insurance  expense  decreased  due to a
reduction  in  insurance  premiums.  The overall  increase  in direct  container
expenses was also partially offset by a lower average container fleet.

Bad debt expense  increased from a benefit of $46 for the six-month period ended
June 30, 1998 to an expense of $38 in the comparable  period in 1999. The effect
of insurance  proceeds received during the six-month period ended June 30, 1998,
relating to certain receivables against which reserves had been recorded in 1994
and 1995,  as well as the  resolution  of payment  issues with one lessee during
1998, were primarily responsible for the lower cost in 1998 and, therefore,  the
fluctuation in bad debt expense between the periods.

Depreciation  expense decreased $12, or 2%, from the six-month period ended June
30,  1998 to the  comparable  period in 1999  primarily  due to the  decline  in
average  fleet size and due to certain  containers  which were acquired used and
have now been fully depreciated.  This decrease was offset by additional charges
to depreciation as described below.

The price of new containers  has been declining  since 1995, and the cost of new
containers at year-end 1998 and during the first half of 1999, was significantly
less than the cost of  containers  purchased  in prior  years.  The  Partnership
evaluated  the  recoverability  of  the  recorded  amount  of  container  rental
equipment  at June  30,  1999 and  December  31,  1998,  and  determined  that a
reduction to the carrying value of the containers held for continued use was not
required,  but that a write-down in value of certain  containers  identified for
sale was  required.  During the year ended  December 31, 1998 and the  six-month
period  ended  June 30,  1999,  the  Partnership  wrote  down the value of these
containers  to their  estimated  fair  value,  which was  based on recent  sales
prices.

At December 31, 1998, the Partnership  recorded additional  depreciation expense
of $61 to write  down the  value of 298  containers  identified  for sale in low
demand  locations.  During  the  six-month  period  ended  June  30,  1999,  the
Partnership sold 195 of these  previously  written down containers for a gain of
$3 and  recorded  an  additional  depreciation  expense of $68 to write down the
value of 186  additional  containers  subsequently  identified for sale in these
locations.

If more  containers  in these or other low  demand  locations  are  subsequently
identified  as  available  for sale or if  container  sales  prices  continue to
decline,  the Partnership may incur additional  write-downs on containers and/or
may incur losses on the sale of containers.

Management  fees to affiliates  increased $12, or 6%, from the six-month  period
ended  June 30,  1998 to the  comparable  period in 1999 due to an  increase  in
incentive  management  fees offset by a decrease in equipment  management  fees.
Incentive  management  fees,  which are based on the  Partnership's  limited and
general partner  distributions and partners' capital,  increased between the two
periods  primarily due to greater  distributions  paid in the  six-month  period
ended June 30, 1999 compared to the  equivalent  period in 1998. The decrease in
equipment management fees resulted primarily from the decrease in rental income,
upon  which  the  management  fee  is  primarily  based,  and  these  fees  were
approximately  7% of rental income for the six-month period ended June 30, 1999.
Equipment management fees for the six-month period ended June 30, 1998 were only
6% of  rental  income  due to an  adjustment  resulting  from the  write-off  of
receivables for two lessees.

General and administrative  costs to affiliates  decreased $37, or 27%, from the
six-month period ended June 30, 1998 to the comparable  period in 1999 primarily
due  to a  decrease  in  the  allocation  of  overhead  costs  from  TEM  as the
Partnership represented a smaller portion of the total fleet managed by TEM.

Other income decreased from $180 for the six-month period ended June 30, 1998 to
$19 for the  comparable  period ended June 30, 1999.  The decrease was primarily
due to the  fluctuation of gain (loss) on sale of containers from a gain of $138
for the six-month  period ended June 30, 1998 to a loss of $9 for the comparable
period in 1999.  The decline in gain on sale of containers  was primarily due to
the  Partnership  selling  containers  with higher book values at lower  average
sales prices than in the comparable period in 1998.

Net earnings per limited partnership unit decreased from $0.67 to $0.10 from the
six-month period ended June 30, 1998 to the same period in 1999,  reflecting the
decrease  in net  earnings  allocated  to  limited  partners  from $981 to $148,
respectively.  The allocation of net earnings  included a special  allocation of
gross  income  to the  General  Partners  in  accordance  with  the  Partnership
Agreement.


The  following is a comparative  analysis of the results of  operations  for the
three-month periods ended June 30, 1999 and 1998.

The Partnership's income from operations for the three-month periods ending June
30, 1999 and 1998 was $25 and $391,  respectively,  on rental income of $796 and
$1,100,  respectively.  The decrease in rental  income of $304, or 28%, from the
three-month  period  ended June 30,  1998 to the  comparable  period in 1999 was
attributable  to a  decrease  in income  from  container  rentals.  Income  from
container rentals decreased  primarily due to decreases in the average container
fleet of 13%, average on-hire utilization of 12% and average rental rates of 4%.
The increase in leasing incentives also adversely affected income,  however, the
declines in utilization and fleet size had the most  significant  adverse effect
on rental income. Other rental income was comparable for the three-month periods
ended June 30, 1999 and 1998.

Direct  container  expenses  increased $41, or 18%, from the three-month  period
ending  June 30,  1998 to the  equivalent  period  in  1999.  The  increase  was
primarily  due to  increases  in DPP  and  storage  expenses  of  $33  and  $22,
respectively,  offset by a lower average  container fleet. DPP expense increased
primarily  due to an increase in the  average  DPP cost per  container  from the
three-month period ended June 30, 1998 to the comparable period in 1999. Storage
expense increased due to the decrease in average utilization noted above and due
to an increase in the average storage cost per container.

Bad debt  expense  increased  from a benefit of $32 for the  three-month  period
ended June 30, 1998 to an expense of $9 in the  comparable  period in 1999.  The
resolution  of  payment  issues  with  one  lessee  during  1998  was  primarily
responsible  for the lower cost in 1998 and,  therefore,  the fluctuation in bad
debt expense between the periods.

Depreciation  expense  increased $14, or 4%, from the  three-month  period ended
June 30, 1998 to the  comparable  period in 1999  primarily due to an additional
depreciation expense of $55 to write down the value of 47 containers  identified
for sale in lower demand locations, offset by the decline in average fleet size.

Management fees to affiliates decreased $24, or 22%, from the three-month period
ended June 30,  1998 to the  comparable  period in 1999 due to the  decrease  in
equipment  management  fees.  Equipment  management  fees  decreased  due to the
decrease in rental  income and were  approximately  7% of rental income for both
periods.

General and administrative  costs to affiliates  decreased $18, or 29%, from the
three-month  period  ended  June  30,  1998  to the  comparable  period  in 1999
primarily due to a decrease in the allocation of overhead costs from TEM.

Other income  decreased $41 from the  three-month  period ended June 30, 1998 to
the comparable period in 1999. The decrease was primarily due to the fluctuation
of gain  (loss)  on sale of  containers  from a gain of $22 for the  three-month
period  ended June 30, 1998 to a loss of $9 for the  comparable  period in 1999.
The  decline  in  gain  on sale of  containers  was due to the  sale of  certain
containers in 1999 as discussed above.

Net earnings per limited partnership unit decreased from $0.29 to $0.00 from the
three-month  period  ended June 30, 1998 to the same period in 1999,  reflecting
the decrease in net  earnings  allocated  to limited  partners  from $430 to $1,
respectively.  The allocation of net earnings  included a special  allocation of
gross income to the General  Partners  made in accordance  with the  Partnership
Agreement.

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines,  which transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  containers.  The  Partnership's  business risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease,  rather than the geographic location
of the  containers or the domicile of the lessees.  The containers are generally
operated on the international high seas rather than on domestic  waterways.  The
containers are subject to the risk of war or other political, economic or social
occurrence  where  the  containers  are used,  which  may  result in the loss of
containers,  which,  in turn,  may have a material  impact on the  Partnership's
results of operations  and  financial  condition.  The General  Partners are not
aware of any  conditions as of June 30, 1999,  which would result in such a risk
materializing.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  containers  after  they come  off-lease,  the risk of an
uninsured  loss,  increases in maintenance  expenses or other costs of operating
the  containers,  and the effect of world trade,  industry trends and/or general
business and economic cycles on the Partnership's operations. See "Risk Factors"
in the Partnership's Prospectus, as supplemented,  for additional information on
risks of the Partnership's business.

Readiness for Year 2000

Many computer systems may experience difficulty processing dates beyond the year
1999; as a  consequence,  some computer  hardware and software at many companies
will need to be modified  or replaced  prior to the year 2000 in order to remain
functional.  The  Partnership  relies on the  financial  and  operating  systems
provided  by the  General  Partners;  these  systems  include  both  information
technology (IT) systems as well as non-information  technology (non-IT) systems.
For  IT  and   non-IT   systems   developed   by   independent   third   parties
(externally-developed)  the General Partners have obtained  representations from
their vendors and suppliers  that these systems are Year 2000 compliant and have
internally tested mission critical systems as operational.  The General Partners
have  reviewed  all  internally-developed  IT and non-IT  systems  for Year 2000
issues and  identified  certain of these systems which  required  revision.  The
General  Partners have  completed  the revision and testing of these  identified
systems, and these revised systems are now operational.

The cost of the revisions and testing  relating to these systems was incurred by
TEM and a  portion  of the  cost was  allocated  to the  Partnership  as part of
general and administrative costs allocated from TEM during 1998. While Year 2000
remediation costs were not specifically  identified,  it is estimated that total
Year 2000 related  expenses  included in allocated  overhead  from TEM were less
than $10. The Partnership and the General  Partners do not anticipate  incurring
significant additional remediation costs related to the Year 2000 issue in 1999.
There has been no material effect on the Partnership's  financial  condition and
results of operations as a result of TEM's delay in routine systems  projects as
a result of Year 2000 remediation.

As noted  above,  Year 2000  compliance  testing was  undertaken  by the General
Partners  on  both  externally-  and  internally-developed   systems.   Standard
transactions  were  processed  under  simulated  operating  conditions for dates
crossing  over  January  1, 2000 as well as for  other  critical  dates  such as
February 29, 2000. In the standard  business  scenarios  tested,  the identified
systems  appeared  to  function  correctly.   Under  nonstandard  conditions  or
unforeseen  scenarios,  the results may be  different.  Therefore,  these tests,
regardless of how  carefully  they were  conducted,  cannot  guarantee  that the
General  Partners'  systems  will  function  without  error in the Year 2000 and
beyond.  If these  systems  are not  operational  in the Year 2000,  the General
Partners have determined that they can operate manually for approximately two to
three months while correcting the system problems before  experiencing  material
adverse  effects on the  Partnership's  and the General  Partners'  business and
results of operations.  However,  shifting  portions of the daily  operations to
manual  processes  may result in time  delays and  increased  processing  costs.
Additionally,  the Partnership  and General  Partners may not be able to provide
lessees  with timely and  pertinent  information,  which may  negatively  affect
customer  relations and lead to the potential  loss of lessees,  even though the
immediate  monetary  consequences  of this  would  be  limited  by the  standard
Partnership lease agreements between the lessees and the Partnership.

The Partnership and the General Partners are also continuing their assessment of
Year 2000  issues  with third  parties,  comprised  of  lessees,  manufacturers,
depots,  and other  vendors and  suppliers,  with whom the  Partnership  and the
General  Partners  have  a  material  business   relationship  (Third  Parties).
Non-compliance  by other Third Parties is not expected to have a material effect
on the Partnership's results of operations and financial condition.  The General
Partners have sent letters to the Partnership's  lessees and other Third Parties
requesting  representations  on their Year 2000 readiness.  The General Partners
have received  responses to 90% of these letters with all but seven  respondents
representing that they are or will be Year 2000 compliant.  The General Partners
are continuing to follow up with  non-respondents  and will continue to identify
additional   Third  Parties  whose  Year  2000  readiness  should  be  assessed.
Non-compliance by these seven  respondents and by the remaining  non-respondents
is not  expected  to  have  a  material  adverse  effect  on  the  Partnership's
operations or financial condition.

Nevertheless,  the  Partnership and the General  Partners  believe that they are
likely to encounter Year 2000 problems with certain Third Parties,  particularly
those  with  significant  operations  within  countries  that  are not  actively
promoting  correction of Year 2000 issues.  Possible  consequences  of Year 2000
non-compliance  among Third Parties  include,  but are not limited to, (i) TEM's
inability  to  provide  service to certain  areas of the world,  (ii)  delays in
container  movement,  (iii)  payment  and  collection  difficulties,   and  (iv)
invoicing errors due to late reporting of transactions.  These types of problems
could  result in  additional  operating  costs and loss of lessee  business.  As
discussed  above,  the General  Partners are prepared to shift portions of their
daily operations to manual processes in the event of Third Party non-compliance.
With respect to manufacturers, vendors and other suppliers, the General Partners
would also  attempt  to find  alternate  sources  for goods and  services.  With
respect to depots and agents who handle,  inspect or repair  containers,  if the
majority of the  computer  systems  and  networks  of TEM are  operational,  the
General Partners believe that they will be able to compensate manually for these
Third  Parties'  failures  (e.g.,  one field  office  performing  data entry for
another,  communication  with  depots  conducted  without  computers),  by using
temporary  personnel at additional cost.  Although costs will be incurred to pay
for the temporary  personnel,  the Partnership  and the General  Partners do not
expect these costs to be material to the  Partnership.  With respect to lessees'
non-compliance,   the  General  Partners  would  compensate  for  communications
failures  manually.  If a  lessee's  noncompliance  is broad  enough to  disrupt
significantly  the  operations of its shipping  business,  the resulting loss of
revenue could result in the lessee renting fewer containers. The Partnership and
the  General  Partners  are unable to  estimate  the  financial  impact of these
problems,  but to the extent that lessee's  problems result in weakening  demand
for  containers,  the  Partnership's  results  of  operations  would  likely  be
adversely  affected.  If Year 2000  problems  result  in delays in  collections,
either  because of the additional  time required to communicate  with lessees or
because of  lessees'  loss of  revenues,  the  Partnership's  cash flow could be
affected and distributions to general and limited partners could be reduced. The
Partnership  and the General  Partners  believe that these risks are inherent in
the industry and are not specific to the Partnership or General Partners.

Forward Looking Statements and Other Risk Factors Relating to the Year 2000

The foregoing analysis of Year 2000 issues includes  forward-looking  statements
and  predictions  about  possible or future  events,  results of operations  and
financial condition. As such, this analysis may prove to be inaccurate,  because
of the  assumptions  made by the  Partnership  and the  General  Partners or the
actual development of future events. No assurance can be given that any of these
forward-looking  statements and predictions  will ultimately prove to be correct
or  even  substantially  correct.  Some  of the  risks  relating  to  Year  2000
compliance are described above. In addition,  in analyzing Year 2000 issues, the
Partnership and the General Partners have assumed that the infrastructure of the
United States and most other  countries,  including  ports and customs,  remains
intact.  If the  infrastructure  of one or  more  countries  were to  fail,  the
resulting  business  disruption  would  likely  have an  adverse  effect  on the
Partnership and the General  Partners.  The Partnership and General Partners are
unable to determine a reasonably  likely worst case  scenario in the event of an
infrastructure failure or failures.

Various  other risks and  uncertainties  could also affect the  Partnership  and
could affect the Year 2000 analysis, causing the effect on the Partnership to be
more severe than discussed above. These risks and uncertainties include, but are
not limited to, the following.  The Partnerships' and the General Partners' Year
2000 compliance testing cannot guarantee that all computer systems will function
without error beyond the Year 2000. Tests were only conducted of normal business
scenarios, and no independent verification or testing was used. Risks also exist
with respect to Year 2000 compliance by Third Parties,  such as the risk that an
external  party,  who may have no  relationship  to the  Partnership  or General
Partners, but who has a significant relationship with one or more Third Parties,
may have a system failure that adversely  affects the  Partnership's  ability to
conduct  its  business.  While the  Partnership  and the  General  Partners  are
attempting  to identify such  external  parties,  no assurance can be given that
they will be able to do so. Furthermore, Third Parties with direct relationships
with the  Partnership,  whose systems have been  identified as likely to be Year
2000 compliant,  may suffer a breakdown due to unforeseen  circumstances.  It is
also possible that the representations and warranties collected in good faith by
the General  Partners from these Third Parties  regarding their  compliance with
Year  2000  issues  may be  incorrect,  as the  information  collected  was  not
independently verified by the General Partners. Finally, it should be noted that
the  foregoing  discussion  of Year 2000 issues  assumes  that to the extent the
General Partners'  systems fail,  either because of unforeseen  complications or
because of Third Parties' failure, switching to manual operations will allow the
Partnership to continue to conduct its business.  While the  Partnership and the
General Partners  believe this assumption to be reasonable,  if it is incorrect,
the Partnership's results of operations would likely be adversely affected.




<PAGE>




                                   SIGNATURES


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.


                                     TCC EQUIPMENT INCOME FUND
                                     A California Limited Partnership

                                     By Textainer Financial Services Corporation
                                        The Managing General Partner



                                     By _______________________________
                                        John R. Rhodes
                                        Executive Vice President


Date:  August 13, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>

Signature                                Title                                          Date


<S>                                      <C>                                            <C>
________________________                 Executive Vice President,                      August 13, 1999
John R. Rhodes                           (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




________________________                 President (Principal Executive                 August 13, 1999
John A. Maccarone                        Officer)


</TABLE>
<PAGE>




                                   SIGNATURES


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.


                                     TCC EQUIPMENT INCOME FUND
                                     A California Limited Partnership

                                     By Textainer Financial Services Corporation
                                        The Managing General Partner



                                     By /s/John R. Rhodes
                                        _______________________________
                                        John R. Rhodes
                                        Executive Vice President


Date: August 13, 1999


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>

Signature                                   Title                                             Date




<S>                                      <C>                                            <C>
/s/John R. Rhodes                        Executive Vice President,                      August 13, 1999
________________________                 (Principal Financial and
John R. Rhodes                           Accounting Officer) and
                                         Secretary



/s/John A. Maccarone                     President (Principal Executive                 August 13, 1999
________________________                 Officer)
John A. Maccarone

</TABLE>