UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ---------------------
                                    FORM 10-K



     [X]       Annual Report  Pursuant to Section 13 or 15(d) of the  Securities
               Exchange Act of 1934 For the fiscal year ended December 31, 1997

     [  ]      Transition Report Pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934
               For the transition period from              to

                         Commission file number 33-32258
                             -----------------------



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


California                                                   94-3104548
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

One Market, Steuart Street Tower
Suite 800, San Francisco, CA                                94105-1301
(Address of principal                                       (Zip code)
executive offices)



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


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

Aggregate market value of voting stock:  N/A

An index of exhibits filed with this Form 10-K is located on page 45.

Total number of pages in this report:  133.


<PAGE>




                                     PART I

ITEM 1.        BUSINESS

(A)     Background

In November 1989, PLM Financial Services,  Inc. (FSI or the General Partner),  a
wholly-owned subsidiary of PLM International, Inc. (PLM International),  filed a
Registration  Statement on Form S-1 with the Securities and Exchange  Commission
with respect to a proposed  offering of  10,000,000  limited  partnership  units
(including  2,500,000 option units) in PLM Equipment Growth Fund V, a California
limited   partnership  (the  Partnership,   the  registrant,   or  EGF  V).  The
Registration  Statement also proposed  offering an additional  1,250,000 Class B
units through a reinvestment  plan. The General  Partner has determined  that it
will not adopt this  reinvestment  plan for the Partnership.  The  Partnership's
offering became effective on April 11, 1990. FSI, as General Partner,  owns a 5%
interest in the Partnership.  The Partnership  engages in the business of owning
and leasing  transportation  and related equipment to various commodity shippers
and transportation companies.

The  Partnership  was formed to engage in the  business of owning and managing a
diversified  pool of used and new  transportation-related  equipment and certain
other items of equipment. The Partnership's primary objectives are:

     (1) to acquire a diversified  portfolio of low-obsolescence  equipment with
long  lives  and high  residual  values  with the net  proceeds  of the  initial
Partnership  offering,  supplemented by debt financing if deemed  appropriate by
the General  Partner.  The General  Partner  intends to acquire the equipment at
what it believes to be below inherent values and to place the equipment on lease
or under other contractual  arrangements with creditworthy lessees and operators
of  equipment.  All  transactions  over $1.0 million must be approved by the PLM
Credit Review Committee (the  "Committee')  which is made up of members of PLM's
senior  management.  In determining a lessee's  creditworthiness,  the Committee
will  consider,  among other  factors,  the financial  statements,  internal and
external credit ratings, and letters of credit;

     (2) to generate sufficient net operating cash flow from lease operations to
meet liquidity  requirements  and to generate cash  distributions to the limited
partners  until  such  time  as  the  General  Partner   commences  the  orderly
liquidation of the  Partnership  assets or unless the  Partnership is terminated
earlier upon sale of all Partnership property or by certain other events;

     (3)  to  selectively  sell  and  purchase  other  equipment  to  add to the
Partnership's  initial equipment portfolio.  The General Partner intends to sell
equipment  when it believes that,  due to market  conditions,  market prices for
equipment exceed inherent equipment values or that expected future benefits from
continual  ownership  of a  particular  asset  will not  equal or  exceed  other
equipment  investment  opportunities.  Proceeds from these sales,  together with
operating cash flow from operations  (net cash provided by operating  activities
plus distributions from  unconsolidated  special-purpose  entities) that remains
after scheduled principal payments to debt and cash distributions have been made
to the partners,  will be used to acquire  additional  equipment  throughout the
six-year  reinvestment  phase of the  Partnership.  Before buying any additional
equipment  for the  Partnership,  the General  Partner will  evaluate the market
conditions at the time of acquisition  so that the specific  equipment will meet
the investment objectives of the Partnership;

     (4) to  preserve  and protect the value of the  portfolio  through  quality
management, maintaining diversity, and constantly monitoring equipment markets.

The offering of  Partnership  units closed on December 23, 1991.  As of December
31,  1997,  there  were  9,086,608  units   outstanding.   The  General  Partner
contributed $100 for its 5% general partner interest in the Partnership.

Beginning  in the  Partnership's  seventh  year of  operation,  which  commences
January 1, 1999, the General Partner will stop reinvesting cash flow and surplus
funds,  which,  if any, less  reasonable  reserves,  will be  distributed to the
partners.  In the ninth year of  operation,  the General  Partner  will begin to
liquidate  the  assets of the  Partnership  in an  orderly  fashion,  unless the
Partnership  is  terminated  earlier  upon the sale of all of the  Partnership's
equipment or by certain other events.  It is  anticipated  that the  liquidation
will be completed by the end of the tenth year of operation of the Partnership.

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

                                     TABLE 1
<TABLE>
<CAPTION>

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


Owned equipment held for operating leases:

<S>       <C>                                                       <C>                             <C>
1         Product tanker                                            Kaldnes M/V                     $    16,276
5         737-200 Stage II commercial aircraft                      Boeing                               26,405
1         DC-9-32 Stage II commercial aircraft                      McDonnell Douglas                    10,056
2         DHC-8-102 commuter aircraft                               DeHavilland                           7,629
1         DHC-8-300 commuter aircraft                               DeHavilland                           5,748
531       Refrigerated marine containers                            Various                               9,485
2,054     Various marine containers                                 Various                               8,107
125       Covered hopper cars                                       Various                               2,945
106       Anhydrous ammonia tank cars                               GATX                                  2,483
85        Sulphur tank cars                                         ACF/RTC                               2,907
73        Tank cars                                                 Various                               1,917
44        Mill gondola cars                                         Bethlehem Steel                       1,248
183       Refrigerated trailers                                     Various                               5,557
154       Dry trailers                                              Various                               1,878
148       Piggyback refrigerated trailers                           Oshkosh                               2,261
                                                                                                   -------------
              Total equipment held for operating leases                                             $   104,902<F1>
                                                                                                   =============

Investment in equipment owned by unconsolidated special-purpose
entities:

0.5       Bulk carrier                                              Nipponkai & Toyama              $     9,705<F2>
0.48      Product tanker                                            Boelwerf-Temse                        9,492<F2>
0.5       Product tanker                                            Kaldnes M/V                           8,249<F2>
0.17      Two trusts comprised of:
            Three 737-200 Stage II commercial aircraft              Boeing                                4,706<F4>
            Two Stage II JT8D aircraft engines                      Pratt & Whitney                         195<F4>
            Portfolio of aircraft rotables                          Various                                 325<F4>
0.60      727-200 Stage III commercial aircraft                     Boeing                                3,759<F3>
0.25      Equipment on direct finance lease:
            Two DC-9 Stage III commercial aircraft                  McDonnell Douglas                     2,787<F3>
                                                                                                   -------------
              Total investments                                                                     $    39,218<F1>
                                                                                                   =============
<FN>

<F1> Includes proceeds from capital contributions,  undistributed cash flow from
     operations,  and  partnership  borrowings  invested in equipment.  Includes
     costs  capitalized  subsequent  to the date of  acquisition,  and equipment
     acquisition fees paid to PLM Transportation  Equipment Corporation (TEC), a
     wholly-owned subsidiary of FSI, or PLM Worldwide Management Services (WMS),
     a  wholly-owned  subsidiary  of PLM  International.  All equipment was used
     equipment  at the time of  purchase,  except 125 dry van  trailers  and 150
     piggyback refrigerated trailers.

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

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

<F4> Jointly owned:  EGF V and three affiliated programs.

</FN>

</TABLE>


The equipment is generally  leased under  operating  leases with terms of one to
six years. Some of the  Partnership's  marine containers are leased to operators
of utilization-type  leasing pools with equipment owned by unaffiliated parties.
In such instances,  revenues received by the Partnership  consist of a specified
percentage of revenues  generated by leasing the pooled equipment to sublessees,
after deducting certain direct operating expenses of the pooled equipment.

As of  December  31,  1997,  approximately  70%  of  the  Partnership's  trailer
equipment operated in rental yards owned and maintained by PLM Rental, Inc., the
short-term trailer rental subsidiary of PLM International  doing business as PLM
Trailer Leasing.  Revenues collected under short-term rental agreements with the
rental yards'  customers are credited to the owners of the related  equipment as
received.  Direct expenses associated with the equipment are charged directly to
the  Partnership.  An allocation of other  indirect  expenses of the rental yard
operations is charged to the Partnership monthly.

The lessees of the equipment  include but are not limited to: Chevron USA, Mobil
Oil  Corporation,  Chembulk  Trading,  Inc., Halla Merchant Marine Company Ltd.,
Scanports Shipping Ltd., E. I. Dupont,  Transamerica Leasing,  Marfort Shipping,
Inc., and Continental Airlines, Inc.

(B)     Management of Partnership Equipment

The  Partnership  has entered into an equipment  management  agreement  with PLM
Investment  Management,  Inc.  (IMI), a wholly-owned  subsidiary of FSI, for the
management of the equipment. The Partnership's management agreement with IMI are
to  co-terminate  with the dissolution of the  Partnership,  unless the partners
vote to terminate the agreement  prior to that date or at the  discretion of the
General Partner.  IMI has agreed to perform all services necessary to manage the
equipment  on behalf of the  Partnership  and to  perform  or  contract  for the
performance of all obligations of the lessor under the Partnership's  leases. In
consideration for its services and pursuant to the Partnership Agreement, IMI is
entitled to a monthly management fee (see financial statements, Notes 1 and 2).

(C)     Competition

(1)      Operating Leases versus Full Payout Leases

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

The Partnership  encounters  considerable  competition from lessors that utilize
full payout  leases on new  equipment.  Full payout  leases are leases that have
terms equal to the expected  economic  life of the equipment and are written for
longer terms and for lower monthly rates than the Partnership offers. While some
lessees prefer the flexibility offered by a shorter-term  operating lease, other
lessees  prefer  the  rate  advantages   possible  with  a  full  payout  lease.
Competitors  of the  Partnership  may write full payout  leases at  considerably
lower  rates,  or larger  competitors  with a lower  cost of  capital  may offer
operating leases at lower rates,  which may put the Partnership at a competitive
disadvantage.

(2)      Manufacturers and Equipment Lessors

The Partnership competes with equipment manufacturers who offer operating leases
and full payout leases.  Manufacturers may provide  ancillary  services that the
Partnership  cannot offer, such as specialized  maintenance  service  (including
possible substitution of equipment),  training,  warranty services, and trade-in
privileges.

The Partnership competes with many equipment lessors,  including ACF Industries,
Inc.  (Shippers Car Line Division),  GATX,  General  Electric  Railcar  Services
Corporation,  General Electric Capital Aviation Services Corporation,  and other
limited partnerships that lease the same types of equipment.

(D)   Demand

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


<PAGE>

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

(1) Aircraft

(a)  Commercial Aircraft

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

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

The  Partnership's  fleet consists  primarily of late-model  Stage II narrowbody
commercial aircraft and Stage II aircraft that have been hush-kitted.  The Stage
II  aircraft  either  are  positioned   with  air  carriers   outside  of  Stage
III-legislated  areas,  are  scheduled  for Stage III  hushkit  installation  in
1998-99,  or are anticipated to be sold or leased outside Stage III areas before
the year 2000.

Specifically,  the Partnership  has scheduled some Stage II narrowbody  aircraft
for sale during 1998.  A Stage II  narrowbody  aircraft  that has been hushed to
meet Stage III requirements,  currently  positioned in the United States (U.S.),
is also scheduled for sale in 1998. A Stage II narrowbody  aircraft now on lease
in the U.S. will be sold or leased outside the Stage  III-affected  areas before
the year 2000.

The  Partnership  has entered into  agreements  to install  hushkits on selected
late-model  Boeing  737-200  Advanced  aircraft  over the next two years.  These
modifications  are  expected to enhance the  current and  residual  value of the
aircraft,  while allowing them to continue operating in the Stage III-legislated
areas of North America.

(b)  Commuter Aircraft

The commuter  aircraft  market is  experiencing a revolution with the successful
entry of small regional jets into this market. Major turboprop manufacturers are
re-evaluating  their programs,  and several successful but larger models are now
being  considered for phase-out.  The original concept for regional jets was for
them to take over the  hub-and-spoke  routes served by the larger  turboprops in
North America,  but they are also finding  successful  niches in  point-to-point
routes.  The introduction of this smaller aircraft has allowed major airlines to
shift the regional  jets to marginal  routes  previously  operated by narrowbody
aircraft,  allowing the larger-capacity aircraft to be more efficiently employed
in an airline's route system.

The  Partnership  leases  commuter  aircraft  in  the  36 to 50  seat  turboprop
category.   These   aircraft  are  all   positioned   in  North   America,   the
fastest-growing  market for commuter  aircraft in the world.  The  Partnership's
aircraft possess unique performance capabilities,  compared to other turboprops,
which  allow  them to  readily  operate  at  maximum  payloads  from  unimproved
surfaces,  hot and high runways, and short runways. The market for turboprops is
undergoing   rapid  change  due  to  the  introduction  of  regional  jets.  The
manufacturer  of  the  Partnership's   commuter/regional  aircraft  has  already
announced production cutbacks for some types of turboprops,  which may adversely
affect both demand and near-term values for the Partnership's aircraft.

(c)  Aircraft Engines and Rotables

The demand for spare engines has increased, particularly for the Pratt & Whitney
Stage II JT8D engine, which powers many of the Partnership's Stage II commercial
aircraft.

Aircraft rotables, or components,  are replacement spare parts held in inventory
by an airline.  These parts are components  that are removed from an aircraft or
engine,  undergo  overhaul,  and are recertified and refit to the aircraft in an
"as new" condition.  Rotables carry specific  identification  numbers,  allowing
each part to be individually  tracked. The types of rotables owned and leased by
the  Partnership  include  landing gear,  certain engine  components,  avionics,
auxiliary power units,  replacement doors, control surfaces,  pumps, valves, and
other  comparable  equipment.  The  Partnership  expects to sell this  equipment
during 1998.

(2)  Marine Vessels

The Partnership owns or has investments with other affiliated  programs in small
to  medium-sized  dry bulk  vessels  and  product  tankers,  which are traded in
worldwide markets and carry commodity cargoes.  The markets for dry bulk vessels
and product tankers took different  paths in 1997. Dry bulk markets  experienced
flat freight rates,  with supply  increases  outrunning  demand  growth.  In the
product tanker trades,  rates  strengthened  through most of the year and supply
and demand were well  balanced.  Demand for commodity  shipping  closely  tracks
worldwide economic growth patterns;  however,  economic development alters trade
patterns from time to time, causing changes in volume on trade routes.

The  General  Partner  operates  the  Partnership's  marine  vessels  under spot
charters,  period charters, and pooled-vessel  operations. It believes that this
operating  approach  provides  the  flexibility  to  adapt  to  changing  demand
patterns.

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

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

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

Marine Containers

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

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


<PAGE>



(4)  Railcars

(a)  Pressurized Tank Cars

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

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

(b)  General Purpose (Nonpressurized) Tank Cars

General purpose or nonpressurized tank cars are used to transport a wide variety
of bulk liquid commodities, such as petroleum fuels, lubricating oils, vegetable
oils, molten sulfur,  corn syrup,  asphalt,  and specialty  chemicals.  Chemical
carloadings  for the  first 45 weeks of 1997  were up 4%,  compared  to the same
period  in 1996.  The  demand  for  petroleum  is  anticipated  to grow,  as the
developing  world,  former Communist  countries,  and the  industrialized  world
increase energy consumption.

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

(c) Covered Hopper (Grain) Cars

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

(d)  Mill Gondolas

Mill  gondolas are typically  used to haul scrap steel from  processors to steel
mills throughout the United States.  Recycled scrap steel constitutes nearly all
of the raw material used by small steel mills, called minimills. For example, in
1960  minimills  produced only 8% of the total steel output in the U.S.,  but by
1996 that figure had reached 42%. The overall  stability of the U.S. economy and
relatively steady levels of steel production have  strengthened  demand for mill
gondolas over the last year. In 1997, the national  gondola fleet increased from
90,583 to 91,351  cars,  a change  consistent  with the  anticipated  continuing
expansion of demand for steel mill products through 2000, averaging 2.5% to 3% a
year.

(5)  Trailers

(a)  Intermodal Trailers

In all intermodal  equipment  areas,  1997 was a remarkably  strong year. The US
inventory of  intermodal  equipment  was  approximately  164,000  units in 1997,
divided  between about 55% intermodal  trailers  (piggyback) 20 and 45% domestic
containers.  Trailer loadings increased approximately 4% in 1997 due to a robust
economy and a  continuing  shortage  of drivers in  over-the-road  markets.  The
expectation is for flat to slightly declining  utilization of intermodal trailer
fleets in the near future.

(b)  Over-the-Road Dry Trailers

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

(c)  Over-the-Road Refrigerated Trailers

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

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

 (E)      Government Regulations

The use,  maintenance,  and  ownership  of equipment  are  regulated by federal,
state, local, or foreign governmental  authorities.  Such regulations may impose
restrictions and financial burdens on the Partnership's  ownership and operation
of  equipment.  Changes  in  government  regulations,   industry  standards,  or
deregulation  may also  affect  the  ownership,  operation,  and  resale  of the
equipment.  Substantial  portions of the Partnership's  equipment  portfolio are
either registered or operated internationally.  Such equipment may be subject to
adverse  political,   government,  or  legal  actions,  including  the  risk  of
expropriation  or loss arising from  hostilities.  Certain of the  Partnership's
equipment is subject to extensive  safety and operating  regulations,  which may
require  its  removal  from  service  or  extensive  modification  to meet these
regulations,  at considerable cost to the Partnership.  Such regulations include
(but are not limited to):

     (1)  the U.S. Oil  Pollution Act of 1990 (which  established  liability for
          operators  and owners of vessels and mobile  offshore  drilling  units
          that create environmental pollution).  This regulation has resulted in
          higher  oil  pollution  liability  insurance.   The  lessee  typically
          reimburses the Partnership for these additional costs;

     (2)  the U.S. Department of Transportation's  Aircraft Capacity Act of 1990
          (which  limits or eliminates  the operation of commercial  aircraft in
          the  U.S.  that  do not  meet  certain  noise,  aging,  and  corrosion
          criteria). In addition, under U.S. Federal Aviation Regulations, after
          December 31, 1999,  no person shall operate an aircraft to or from any
          airport in the contiguous  United States unless that airplane has been
          shown to comply with Stage III noise levels. The Partnership has Stage
          II aircraft that do not meet Stage III requirements;

     (3)  the Montreal  Protocol on Substances  that Deplete the Ozone Layer and
          the U.S.  Clean Air Act Amendments of 1990 (which call for the control
          and eventual  replacement of substances  that have been found to cause
          or contribute  significantly  to harmful effects on the  stratospheric
          ozone  layer  and  which  are  used  extensively  as  refrigerants  in
          refrigerated  marine cargo containers and  over-the-road  refrigerated
          trailers);

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

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



<PAGE>



ITEM 2.        PROPERTIES

The Partnership  neither owns nor leases any properties other than the equipment
it has purchased for leasing purposes.  As of December 31, 1997, the Partnership
owned a portfolio of transportation equipment and investments in equipment owned
by special  purpose  entities as described  in Part I, Table 1. The  Partnership
acquired  equipment  with  the  proceeds  of the  Partnership  offering  through
approximately the first quarter of 1992.

The  Partnership  maintains its principal  office at One Market,  Steuart Street
Tower, Suite 800, San Francisco,  California  94105-1301.  All office facilities
are provided by FSI without reimbursement by the Partnership.

ITEM 3.        LEGAL PROCEEDINGS

PLM  International  along  with  FSI,  TEC,  IMI and  PLM  Securities  (the  PLM
Entities),  are  named as  defendants  in a lawsuit  filed as a class  action on
January 22, 1997 in the Circuit Court of Mobile County,  Mobile,  Alabama,  Case
No.  CV-97-251  (the Koch action).  The  plaintiffs,  who filed the complaint on
their  own and on  behalf  of all  class  members  similarly  situated,  are six
individuals who allegedly invested in certain  California  limited  partnerships
for  which FSI acts as the  general  partner,  including  the  Partnership,  PLM
Equipment Growth Fund IV, PLM Equipment Growth Fund VI, and PLM Equipment Growth
and Income Fund VII (the Growth  Funds).  The complaint  asserts eight causes of
action  against  all  defendants,  as follows:  fraud and  deceit,  suppression,
negligent  misrepresentation  and suppression,  intentional  breach of fiduciary
duty,  negligent breach of fiduciary duty, unjust  enrichment,  conversion,  and
conspiracy.  Additionally,  plaintiffs  allege a cause  of  action  against  PLM
Securities for breach of third party  beneficiary  contracts in violation of the
National  Association of Securities  Dealers rules of fair practice.  Plaintiffs
allege that each defendant  owed  plaintiffs and the class certain duties due to
their status as fiduciaries,  financial advisors,  agents,  general partner, and
control persons. Based on these duties,  plaintiffs assert liability against the
defendants  for improper  sales and marketing  practices,  mismanagement  of the
Growth Funds,  and concealing  such  mismanagement  from investors in the Growth
Funds.  Plaintiffs seek unspecified  compensatory and recissory damages, as well
as punitive damages,  and have offered to tender their limited partnership units
back to the defendants.

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

On  October  10,  1997,  defendants  filed a motion  to  compel  arbitration  of
plaintiffs' claims,  based on an agreement to arbitrate contained in the limited
partnership  agreement  of each Growth  Fund,  and to stay  further  proceedings
pending the outcome of such arbitration. Notwithstanding plaintiffs' opposition,
the district court granted the motion on December 8, 1997. On December 15, 1997,
plaintiffs  filed with the Eleventh Circuit a notice of appeal from the district
court's order granting  defendants' motion to compel arbitration and to stay the
proceedings,  and of the  district  court's  September  24,  1997 order  denying
plaintiffs'  motion to  remand  and  dismissing  the  claims  of the  California
plaintiff.  Plaintiffs  filed an amended  notice of appeal on December 31, 1997.
The PLM Entities  believe that the allegations of the Koch action are completely
without merit and intend to continue to defend this matter vigorously.

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

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

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

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Partnership's limited partners during
the fourth quarter of its fiscal year ended December 31, 1997.

<PAGE>



                                     PART II


ITEM 5.  MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED UNITHOLDER MATTERS

Pursuant  to the terms of the  partnership  agreement,  the  General  Partner is
generally  entitled to a 5% interest in the profits and losses and distributions
of the  Partnership.  The General  Partner is the sole holder of such interests.
Gross  income in each year of the  Partnership  is  specially  allocated  to the
General  Partner to the extent,  if any,  necessary to cause the capital account
balance  of the  General  Partner  to be zero at the  close  of such  year.  The
remaining  interests  in  the  profits  and  losses  and  distributions  of  the
Partnership are owned, as of December 31, 1997, by the 9,855 holders of Units in
the Partnership.

Several   secondary   exchanges   facilitate  sales  and  purchases  of  limited
partnership units.  Secondary markets are characterized as having few buyers for
limited  partnership   interests  and,   therefore,   are  generally  viewed  as
inefficient  vehicles  for the  sale of  limited  partnership  units.  There  is
presently  no public  market  for the units  and none is likely to  develop.  To
prevent the units from being considered  "publicly  traded" and thereby to avoid
taxation of the Partnership as an association treated as a corporation under the
Internal Revenue Code, the units will not be transferred  without the consent of
the  General  Partner,  which may be withheld in its  absolute  discretion.  The
General  Partner  intends to monitor  transfers  of units in an effort to ensure
that they do not exceed  the  percentage  or number  permitted  by certain  safe
harbors  promulgated  by  the  Internal  Revenue  Service.  A  transfer  may  be
prohibited if the intended  transferee is not a U.S.  citizen or if the transfer
would  cause  any  portion  of the units to be  treated  as "plan  assets."  The
Partnership  may  redeem a certain  number of units each year under the terms of
the Partnership's Limited Partnership  Agreement,  beginning January 1, 1994. If
the number of units made  available  for  purchase  by limited  partners  in any
calendar year exceeds the number that can be purchased  with  reinvestment  plan
proceeds,  then the  Partnership  may,  subject to certain terms and conditions,
redeem up to 2% of the  outstanding  units each year.  The purchase  price to be
offered  by the  Partnership  for  these  units  will  be  equal  to 110% of the
unrecovered  principal  attributable to the units. The unrecovered principal for
any  unit  will  be  equal  to  the  excess  of  (i)  the  capital  contribution
attributable to the unit over (ii) the  distributions  from any source paid with
respect to the  units.  As of  December  31,  1997,  the  Partnership  agreed to
purchase  approximately 9,000 units for an aggregate price of approximately $0.1
million. The General Partner anticipates that these units will be repurchased in
the  first and  second  quarters  of 1998.  The  General  Partner  may  purchase
additional units on behalf of the Partnership in the future.



<PAGE>



ITEM 6.        SELECTED FINANCIAL DATA

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

                                     TABLE 2

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

<TABLE>
<CAPTION>

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

<S>                                         <C>             <C>              <C>              <C>              <C>
Operating results:

  Total revenues                            $     41,123    $    44,322      $    39,142      $    44,291      $    38,476
  Net gain (loss) on disposition
    of equipment                                  10,990         14,199            3,835            4,920             (584)
  Loss on revaluation of
    equipment                                         --             --               --               --           (4,125)
  Equity in net loss of unconsolidated
    special-purpose entities                        (264)          (116)              --               --               --
  Net income (loss)                                7,921         12,441            2,045            3,193           (8,443)

At year-end:
  Total assets                              $     80,033    $    98,419      $   102,109      $   120,114      $   135,582
  Total liabilities                               35,947         46,123           44,092           44,221           43,462
  Notes payable                                   32,000         40,463           38,000           38,000           38,000

Cash distribution                           $     15,346    $    18,083      $    19,342      $    19,420      $    19,430
                                                                                                        `
Cash distribution that represent
  a return of capital                       $      7,425    $     5,642      $    17,297      $    16,227      $    18,460

Per weighted-average of limited partnership
unit:



  Net income (loss)                         $       0.79    $      1.26      $      0.12      $      0.24      $     (1.02)

  Cash distribution                         $       1.60    $      1.87      $      2.00      $      2.00      $      2.00

  Cash distribution that represent
    a return of capital                     $       0.81    $      0.61      $      1.89      $      1.76      $      2.00


</TABLE>


<PAGE>



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

(A)  Introduction

Management's  discussion  and  analysis of  financial  condition  and results of
operations  relates to the financial  statements of PLM Equipment  Growth Fund V
(the Partnership).  The following  discussion and analysis of operations focuses
on the  performance  of the  Partnership's  equipment in various  sectors of the
transportation  industry and its effect on the  Partnership's  overall financial
condition.

(B)  Results of Operations - Factors Affecting Performance

(1)  Re-leasing and Repricing Activity

The exposure of the Partnership's  equipment portfolio to re-pricing risk occurs
whenever the leases for the equipment expire or are otherwise terminated and the
equipment must be remarketed.  Major factors influencing the current market rate
for transportation equipment include supply and demand for similar or comparable
types of  transport  capacity,  desirability  of the  equipment  in the  leasing
market,  market  conditions  for the  particular  industry  segment in which the
equipment is to be leased,  and various  regulations  concerning  the use of the
equipment.  Equipment  that is idle or out of service  between the expiration of
one lease and the assumption of a subsequent  lease can result in a reduction of
contribution  to the  Partnership.  The  Partnership  experienced  re-leasing or
repricing activity in 1997 primarily in its trailer,  marine vessels, and marine
container portfolios.

     (a)  Trailers: The majority of the Partnership's trailer portfolio operates
          in short-term rental  facilities or with short-line  railroad systems.
          The  relatively  short  duration  of most  leases in these  operations
          exposes   the   trailers   to   considerable    re-leasing   activity.
          Contributions  from  the  Partnership's   trailers  were  higher  than
          projected due to higher utilization and lease rates.

     (b)  Marine vessels:  Certain of the partnership's  marine vessels operated
          in the voyage  charter  market.  Voyage  charters are usually short in
          duration and reflect the  short-term  demand and pricing trends in the
          vessel   market.   The   Partnership   experienced   an   increase  in
          contributions  due to the higher  lease  rates in the  voyage  charter
          market.  Higher revenues were partially offset by the higher operating
          costs associated with this type of charter.

     (c)  Marine  containers:  All of the  Partnership's  marine  containers are
          leased to operators of  utilization-type  leasing  pools and, as such,
          are highly exposed to repricing  activity.  The Partnership saw higher
          re-lease rates earned on the remaining marine  containers fleet during
          1997.

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

(2)  Equipment Liquidations and Nonperforming Lessees

Liquidation  of   Partnership   equipment,   unless   accompanied  by  immediate
replacement  of additional  equipment  earning  similar rates (see  Reinvestment
Risk, below),  represents a reduction in the size of the equipment portfolio and
may result in  reductions  of  contributions  to the  Partnership.  Lessees  not
performing  under the terms of their  leases,  either by not  paying  rent,  not
maintaining or operating the equipment in accordance  with the conditions of the
leases,  or other possible  departures from the lease terms, can result not only
in reductions in  contributions,  but also may require the Partnership to assume
additional costs to protect its interests under the leases, such as repossession
or legal fees.

     (a)  Liquidations:  During the year, the Partnership  received  proceeds of
          approximately $25.8 million from the sale of vessels, aircraft, marine
          containers,  trailers,  a jet engine, and a railcar. The sale proceeds
          represented  approximately  52% of the original cost of the assets. By
          year end, the  Partnership  had  reinvested  or reached  agreements to
          reinvest  approximately $18.5 million of these proceeds. The remainder
          was used to pay down debt.

     (b)  Nonperforming  lessees:  As of December  31,  1997,  the lessee of the
          Partnership's  hushkit had been  delinquent in lease  payments for the
          full year. The Partnership  took an ownership  interest in an aircraft
          as compensation for the past due amounts.  This aircraft,  now jointly
          owned  with two  affiliated  Partnerships,  along  with  the  attached
          hushkit, was sold in the first quarter of 1998.

(3)  Reinvestment Risk

Reinvestment  risk occurs when (1) the Partnership  cannot  generate  sufficient
surplus cash after  fulfillment of operating  obligations and  distributions  to
reinvest in additional  equipment during the  reinvestment  phase of Partnership
operations, (2) equipment is sold or liquidated for less than threshold amounts,
(3) proceeds from sales,  losses,  or surplus cash  available  for  reinvestment
cannot be reinvested at the threshold lease rates, or (4) proceeds from sales or
surplus cash available for reinvestment cannot be deployed in a timely manner.

During the first six years of operations,  the  Partnership  intends to increase
its  equipment  portfolio by  investing  surplus  cash  available in  additional
equipment after fulfilling operating  requirements and payments of distributions
to  the  partners.  Subsequent  to  the  end of  the  reinvestment  period,  the
Partnership  will  continue  to operate  for another two years and then begin an
orderly  liquidation  over an  anticipated  two-year  period.  The  income  from
operating  and  finance  leases,  together  with  the  proceeds  from  sales  of
equipment, are intended to enhance financial returns to the partners.

During 1997, the Partnership  purchased an interest in an entity owning a marine
vessel for $9.1  million  and  reached an  agreement  to buy an  anchor-handling
vessel for $9.2 million. The purchase of the anchor-handling  vessel is expected
to be completed in the first quarter of 1998. During 1997, the Partnership began
paying  quarterly  installments on the principal  portion of the senior loan. In
addition  the  Partnership  paid down $2.5  million  on a  short-term  borrowing
facility  used to purchase  equipment in 1996.  The total amount of $8.5 million
accounts for the difference between sale proceeds and reinvested cash.

(4)  Equipment Valuation

In March 1995, the Financial  Accounting Standards Board (FASB) issued statement
No. 121,  "Accounting  for the  Impairment of Long-Lived  Assets and  Long-Lived
Assets to Be Disposed  Of" (SFAS 121).  This  standard  is  effective  for years
beginning after December 15, 1995. The Partnership adopted SFAS 121 during 1995,
the effect of which was not material,  as the method previously  employed by the
Partnership  was  consistent  with SFAS 121. In  accordance  with SFAS 121,  the
General  Partner  reviews  the  carrying  value of the  Partnership's  equipment
portfolio at least annually in relation to expected future market conditions for
the purpose of assessing  the  recoverability  of the recorded  amounts.  If the
projected  future lease revenue plus residual  values are less than the carrying
value of the equipment,  a loss on revaluation is recorded.  No reductions  were
required to the carrying value of equipment during 1997, 1996 or 1995.

As of December 31, 1997, the General  Partner  estimated the current fair market
value of the Partnership's  equipment  portfolio,  including  equipment owned by
unconsolidated  special-purpose  entities  (USPEs),  to be approximately  $100.3
million.

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

The General Partner purchased the Partnership's initial equipment portfolio with
capital raised from its initial equity  offering and permanent debt financing of
$38.0  million.  No further  capital  contributions  from original  partners are
permitted under the terms of the Partnership's  limited  partnership  agreement.
The total outstanding debt,  currently $32.0 million, can only be increased with
borrowings from the short-term Committed Bridge Facility. The Partnership relies
on  operating   cash  flow  to  meet  its  operating   obligations,   make  cash
distributions  to limited  partners,  and increase the  Partnership's  equipment
portfolio with any remaining available surplus cash. For the year ended December
31,  1997,  the  Partnership  generated  sufficient  operating  cash to meet its
operating obligations, make principal debt payments, and pay distributions.


For the year ended December 31, 1997, the Partnership generated $15.5 million in
operating   cash  (net  cash   provided  by  operating   activities   plus  cash
distributions  from  unconsolidated   special-purpose   entities)  to  meet  its
operating  obligations  and maintain the current level of  distributions  (total
1997 of approximately $15.3 million) to the partners.

<PAGE>

Pursuant to the terms of the limited partnership agreement, beginning January 1,
1994, if the number of units made available for purchase by limited  partners in
any calendar  year exceeds the number that can be  purchased  with  reinvestment
plan  proceeds,   then  the  Partnership  may,  subject  to  certain  terms  and
conditions,  redeem up to 2% of the outstanding  limited  partnership units each
year. The purchase price to be offered for such outstanding  units will be equal
to 110% of the unrecovered  principal attributed to the units, where unrecovered
principal is defined as the excess of the capital contribution attributable to a
unit over the  distributions  from any  source  paid with  respect to that unit.
During 1997, the Partnership  repurchased  82,000 units for $0.8 million.  As of
December 31, 1997, the Partnership agreed to purchase  approximately 9,000 units
for an  aggregate  price of  approximately  $0.1  million.  The General  Partner
anticipates  that  these  units  will be  repurchased  in the first  and  second
quarters of 1998. The General Partner may purchase additional units on behalf of
the Partnership in the future.

During 1997 the  Partnership  borrowed $1.6 million from the General Partner for
45 days. The General  Partner  charged the  Partnership  market  interest rates.
Total interest paid to the General Partner was $10,000.

The General  Partner has entered into a joint $50.0 million credit facility (the
Committed Bridge  Facility) on behalf of the  Partnership,  PLM Equipment Growth
Fund VI (Fund  VI),  PLM  Equipment  Growth & Income  Fund VII (Fund  VII),  and
Professional Lease Management Income Fund I (Fund I), (all affiliated investment
programs);  TEC Acquisub,  Inc. (TECAI), an indirect wholly-owned  subsidiary of
the General Partner; and American Finance Group, Inc. (AFG), a subsidiary of PLM
International,  which may be used to provide interim  financing of up to (i) 70%
of the  aggregate  book value or 50% of the  aggregate  net fair market value of
eligible equipment owned by the Partnership,  plus (ii) 50% of unrestricted cash
held by the borrower. The Committed Bridge Facility became available on December
20, 1993, and was amended and restated on December 2, 1997 to expire on November
2, 1998. The  Partnership,  Funds VI and VII, Fund I, and TECAI may collectively
borrow up to $35.0 million of the Committed Bridge Facility,  and AFG may borrow
up to $50.0  million.  The  Committed  Bridge  Facility also provides for a $5.0
million  Letter of  Credit  Facility  for the  eligible  borrowers.  Outstanding
borrowings  by one  borrower  reduce the amount  available  to each of the other
borrowers under the Committed  Bridge  Facility.  Individual  borrowings for the
Partnership  may be outstanding for no more than 179 days, with all advances due
no later than  November  2, 1998.  Interest  accrues at either the prime rate or
adjusted LIBOR plus 1.625%, at the borrower's  option, and is set at the time of
an advance of funds. Borrowings by the Partnership are guaranteed by the General
Partner.  As of  December  31,  1997,  AFG  had  $23.0  million  in  outstanding
borrowings.  No other  eligible  borrower had any  outstanding  borrowings.  The
General  Partner  believes it will renew the Committed  Bridge Facility upon its
expiration with similar terms as those in the current Committed Bridge Facility.

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




<PAGE>



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

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

(a)  Owned Equipment Operations

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

<TABLE>
<CAPTION>

                                                                             For the Years Ended
                                                                                December 31,

                                                                           1997               1996
                                                                      ---------------------------------
<S>                                                                     <C>                <C>
Aircraft and aircraft engines                                           $   9,304          $   6,348
Marine vessels                                                              2,650              4,910
Rail equipment                                                              2,062              1,532
Marine containers                                                           2,057              2,790
Trailers                                                                    1,918              1,567
Mobile offshore drilling unit                                                  --              1,062

</TABLE>

Aircraft and aircraft engines:  Aircraft lease revenues and direct expenses were
$9.4 million and $0.1  million,  respectively,  for the year ended  December 31,
1997, compared to $6.5 million and $0.1 million,  respectively,  during the same
period of 1996. The increase in aircraft contribution was due to the transfer of
two commercial aircraft into the Partnership from unconsolidated special-purpose
entities and the purchase of three commercial  aircraft and a commuter  aircraft
during  the  second  and  third  quarters  of 1996.  The  increase  in  aircraft
contribution  caused by these events was offset,  in part,  by a decrease in the
contribution  from the aircraft engine that was off lease and subsequently  sold
during 1997. This engine was on lease during 1996.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses were $12.8
million and $10.1 million,  respectively,  for the year ended December 31, 1997,
compared to $14.0 million and $9.1 million, respectively, during the same period
of 1996.  The decrease in marine  vessel  contribution  was primarily due to the
sale of two marine vessels during the fourth quarter of 1997. Additionally,  the
marine  vessels  liability  insurance  increased  $1.0 million  during 1997 when
compared to 1996.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $2.5
million and $0.5 million,  respectively,  for the year ended  December 31, 1997,
compared to $2.4 million and $0.9 million, respectively,  during the same period
of 1996.  Although the railcar fleet remained  relatively the same size for both
years, the increase in railcar contribution  resulted from a decrease in repairs
required on certain of the railcars in the fleet during 1997,  when  compared to
the same period of 1996.

Marine containers: Marine container lease revenues and direct expenses were $2.1
million  and  $17,000,  respectively,  for the year  ended  December  31,  1997,
compared to $2.8 million and $25,000,  respectively,  during the same quarter of
1996.  The  number  of  marine  containers  owned  by the  Partnership  has been
declining over the past 12 months due to sales and  dispositions.  The result of
this declining fleet has been a decrease in marine container contribution.

Trailers:  Trailer lease revenues and direct expenses were $2.8 million and $0.8
million,  respectively,  for the year ended December 31, 1997,  compared to $2.0
million and $0.5  million,  respectively,  during the same  period of 1996.  The
number of trailers that  transferred  to the  PLM-affiliated  short-term  rental
yards increased during 1996,  resulting in a larger number of the  Partnership's
trailers  operating in the rental yards during 1997,  when  compared to the same
period of 1996.  Trailers  earned  higher  lease rates  while in the  affiliated
short-term  rental  yards than they earned  during the same period of 1996 while
they were on term lease;  however, the trailers also incurred higher maintenance
costs.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct expenses were $1.1 million and $3,000,  respectively,  for the year ended
December  31,  1996.  The  elimination  of the  mobile  offshore  drilling  unit
contribution during 1997 was due to the sale of this equipment during the second
quarter of 1996.



<PAGE>



(b)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $21.4 million for the year ended  December 31, 1997
increased  from  $21.1  million  for the same  period in 1996.  The  significant
variances are explained as follows:

     (i) A $0.8 million increase in depreciation and amortization  expenses from
1996 levels  reflects the purchase of three  commercial  aircraft and a commuter
aircraft,  and the transfer of two  commercial  aircraft from USPEs during 1996;
the  increase  was  offset  in part by the  double-declining  balance  method of
depreciation and the sale of two marine vessels during 1997.

     (ii) A $0.3 million  decrease in bad debt  expenses was due to the recovery
of receivables previously reserved for as bad debts.

     (iii)  A $0.2  million  decrease  in  interest  expense  was due to a lower
average balance outstanding on the notes payable in 1997 compared to 1996.

(c)  Net Gain on Disposition of Owned Equipment

The net gain on the  disposition  of equipment  for the year ended  December 31,
1997 totaled $11.0 million,  which resulted from the sale of an aircraft engine,
a  commuter  aircraft,  marine  containers,  trailers,  and a  railcar,  with an
aggregate net book value of $4.7 million,  for proceeds of $7.8 million, and the
sale of two marine  vessels with a net book value of $10.9  million for proceeds
of $18.0  million.  Included  in the gain of $7.9  million  from the sale of the
marine vessels is the unused portion of accrued drydocking of $0.8 million.  For
the same period in 1996, a $14.2  million net gain  resulted  from the sale of a
mobile  offshore  drilling  unit  with a net book  value of $10.7  million,  for
proceeds of $21.3 million,  and marine containers,  aircraft engines, a commuter
aircraft,  a trailer  and  railcars  with an  aggregate  net book  value of $5.1
million, for proceeds of $8.7 million.

(d)   Interest and Other Income

Interest and other income decreased $0.7 million for the year ended December 31,
1997, when compared to the same period of 1996. This was partially due to a $0.3
business  interruption  claim that was received  during 1996.  No such claim was
received during 1997. In addition, interest income decreased $0.3 million due to
lower average cash balances  available for investment  throughout  most of 1997,
when compared to the same period of 1996. Additionally, interest income from the
direct finance lease decreased $0.1 million, due to a lower balance due from the
lessee and the termination of the direct finance lease during 1997(see Note 5 to
the financial statements).

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

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

<TABLE>
<CAPTION>

                                                                             For the Years Ended
                                                                                December 31,

                                                                           1997               1996
                                                                      ---------------------------------
<S>                                                                     <C>                <C>
Aircraft, rotable components, and aircraft engines                      $   1,215          $    (265)
Marine vessels                                                             (1,479)               149

</TABLE>

Aircraft, rotable components, and aircraft engines: As of December 31, 1997, the
Partnership  had an interest in two trusts that own three  commercial  aircraft,
two aircraft engines,  and a portfolio of aircraft rotables;  an interest in two
commercial  aircraft on a direct finance lease;  and an interest in a commercial
aircraft that was transferred  from a direct finance lease (see Notes 4 and 5 to
the financial  statements).  As of December 31, 1996, the Partnership  owned the
interest  in the two trusts that own three  commercial  aircraft,  two  aircraft
engines,  and a portfolio  of aircraft  rotables,  as well as an interest in two
commercial  aircraft on a direct finance  lease.  During the year ended December
31,  1997,   revenues  of  $2.3  million   were  offset  by   depreciation   and
administrative  expenses of $1.0 million.  During 1996, revenues of $3.3 million
were offset by depreciation  and  administrative  expenses of $3.5 million.  The
decrease in revenues and administrative  expenses was due to the transfer of two
commercial  aircraft from the USPEs to the  Partnership  during 1996,  which was
offset in part by the  revenue  earned from the  interest in the direct  finance
lease that was purchased in the fourth quarter of 1996.

Marine vessels:  As of December 31, 1997, the  Partnership  owned an interest in
three marine  vessels,  one of which was  purchased on the last day of the third
quarter of 1997. As of December 31, 1996, the  Partnership  owned an interest in
two marine  vessels.  During the year ended December 31, 1997,  revenues of $4.2
million were offset by depreciation and administrative expenses of $5.7 million.
During the same period of 1996,  lease  revenues of $3.9  million were offset by
depreciation and administrative expenses of $3.7 million. The primary reason for
the increase in revenues and  depreciation  and  administrative  expenses during
1997 was due to the purchase of an additional marine vessel in the third quarter
of 1997.

(f)  Net Income

As a result of the foregoing,  the Partnership's net income for the period ended
December  31, 1997 was $7.9  million,  compared  to net income of $12.4  million
during  the same  period in 1996.  The  Partnership's  ability  to  operate  and
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
is subject to many factors,  and the Partnership's  performance  during the year
ended December 31, 1997 is not necessarily  indicative of future periods. In the
year ended December 31, 1997, the Partnership  distributed  $14.6 million to the
limited partners, or $1.60 per weighted-average limited partnership unit.

(2)  Comparison  of the  Partnership's  Operating  Results  for the Years  Ended
December 31, 1996 and 1995

(a)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
increased  during the year ended  December 31, 1996,  when  compared to the same
period of 1995. The following table presents lease revenues less direct expenses
by owned equipment type (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                           For the Years Ended
                                                                               December 31,
                                                                          1996              1995
                                                                      ------------------------------
<S>                                                                     <C>               <C>
Aircraft and aircraft engines                                           $ 6,348           $ 4,727
Marine vessels                                                            4,910             3,542
Marine containers                                                         2,790             3,939
Trailers                                                                  1,567             1,436
Rail equipment                                                            1,532             1,797
Mobile offshore drilling unit                                             1,062             2,553

</TABLE>

Aircraft and aircraft engines:  Aircraft lease revenues and direct expenses were
$6.5 million and $0.1  million,  respectively,  for the year ended  December 31,
1996, compared to $4.7 million and $35,000, respectively, during the same period
of 1995. The increase in aircraft  contribution  was due to the purchase of five
aircraft  during the latter half of the second quarter 1995.  This equipment was
on lease for the entire year of 1996,  compared to being on lease for only seven
months of 1995.  In  addition,  lease  revenues  from  owned  equipment  in 1996
reflects a transfer  of two  aircraft  from the USPEs to comply  with the credit
agreement  (see Note 4 to the  financial  statements).  The increase in aircraft
contribution was offset, in part, by the sale of two aircraft engines during the
third quarter of 1996.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses were $14.0
million and $9.1 million,  respectively,  for the year ended  December 31, 1996,
compared  to $13.5 and $10.0  million,  respectively,  during the same period of
1995. The increase in marine vessel contribution was due primarily to two marine
vessels that were  operating  under a voyage charter during the first six months
of 1996 and  transferred  to a time  charter  during the third  quarter of 1996,
compared to operating  under a time charter  during all of 1995.  Marine vessels
typically earn a higher lease rate while under a voyage  charter,  compared to a
time charter.  Marine vessel direct expenses  remained  relatively  constant for
both periods, except dry docking expenses,  which decreased significantly during
1996 due to an increase in the number of months between required dry docking.

Marine containers: Marine container lease revenues and direct expenses were $2.8
million  and  $25,000,  respectively,  for the year  ended  December  31,  1996,
compared to $4.1 million and $0.1 million, respectively,  during the same period
of 1995.  The  number of marine  containers  owned by the  Partnership  has been
declining over the past 12 months due to sales and  dispositions.  The result of
this declining fleet has been a decrease in marine  container net  contribution.
In addition,  the container fleet  experienced a decline in the utilization rate
during 1996, compared to 1995.

Trailers:  Trailer lease revenues and direct expenses were $2.0 million and $0.5
million,  respectively,  for the year ended December 31, 1996,  compared to $1.5
and $0.1  million,  respectively,  during the same  period of 1995.  The trailer
fleet remained  virtually constant for both periods;  however,  over the past 12
months the number of trailers in the PLM-affiliated  short-term rental yards has
increased due to the expiration of term leases. These trailers are now earning a
higher  utilization  rate while in the rental yards,  compared to the fixed term
leases.  Due to the  increase in the number of  trailers  in the  PLM-affiliated
short-term rental yards, repairs to maintain these trailers in running condition
also increased.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $2.4
million and $0.9 million,  respectively,  for the year ended  December 31, 1996,
compared to $2.5 million and $0.7 million, respectively,  during the same period
of 1995. The decrease in railcar contribution was due to the sale of 98 railcars
in May 1995.

Mobile offshore  drilling unit: Rig lease revenues and direct expenses were $1.1
million and $3,000, respectively, for the year ended December 31, 1996, compared
to $2.6 million and $3,000,  respectively,  during the same quarter of 1995. The
decrease in the rig  contribution  was due to the sale of this equipment  during
the latter part of the second quarter of 1996.

(b)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $21.1 million for the year ended  December 31, 1996
increased  from  $20.8  million  for the same  period in 1995.  The  significant
variances are explained below:

     (i) Administrative  expenses  increased $0.6 million,  due primarily to the
additional costs to transfer the off-lease trailers to the PLM-affiliated rental
yards and the  additional  allocation  of rental yard costs  incurred due to the
increased  number of trailers in the rental yards. The Partnership also incurred
higher  professional  services  during 1996, when compared to the same period of
1995.  Also,  during  1995 the  Partnership  received a $0.1  million  refund of
services not performed; a similar refund was not received during 1996.

     (ii) A $0.3 million increase in bad debt expenses was due to an increase in
uncollectable amounts owing from certain lessees.

     (iii) The $0.3  million  decrease  in  interest  expense was due to a lower
interest  rate charged to the  Partnership  on the  existing  senior loan during
1996.

     (iv)  Depreciation  and amortization  expenses  decreased $0.3 million from
1995 levels,  reflecting the double-declining balance method of depreciation and
the sale of certain  assets during 1996 and 1995. The decrease was partly offset
by the purchase of two commercial aircraft during 1996.

(c)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the year ended  December 31, 1996
totaled $14.2 million, and resulted from the sale of a rig with a net book value
of $10.7 million for proceeds of $21.3 million; and aircraft engines, a commuter
aircraft, marine containers,  railcars, and a trailer with an aggregate net book
value of $5.1 million for proceeds of $8.7 million.  The net gain on disposition
of equipment  during the same period of 1995 of $3.8 million was realized on the
disposal of marine containers,  marine vessels, an aircraft, and railcars,  with
an aggregate  net book value of $15.8  million,  for proceeds of $18.3  million.
Included  in the gain on the sale of one of the  marine  vessels  is the  unused
portion  of dry  docking  reserves  and  commissions  in the net  amount of $1.3
million.

(d)  Interest and Other Income

Interest and other income  increased $0.4 million during the year ended December
31, 1996,  due primarily to a business  interruption  claim of $0.3 million that
was received  during 1996 and interest  earned from a finance lease that was not
in place during 1995.  This increase was offset by a decrease in interest income
earned  on cash  investments  during  1996,  due to  lower  cash  available  for
investment.

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

Net income (loss) generated from the operation of jointly owned assets accounted
for under the equity method (see Note 4 to the financial statements) is shown in
the following table by equipment type (in thousands):

<TABLE>
<CAPTION>

                                                                            For the Year Ended
                                                                               December 31,
                                                                          1996              1995
                                                                      ------------------------------
<S>                                                                     <C>                <C>
Marine vessels                                                          $   149            $  135
Aircraft, rotable components, and aircraft engines                         (265 )             (87)

</TABLE>

Marine vessels:  As of December 31, 1996, the  Partnership  owned an interest in
two entities that own marine vessels.  The revenues  generated by this equipment
decreased $0.9 million,  when compared to the same period of 1995, due to one of
the marine  vessels  transferring  to a time  charter  during 1996 from a voyage
charter during the same period of 1995. The $0.6 million decrease in 1996 marine
operating  expenses,  when compared to the same period of 1995,  was also due to
the transfer of one marine vessel to a time charter during 1996,  which had been
a voyage charter during the same period of 1995.  Depreciation expense decreased
$0.2 million due to the double-declining balance method of depreciation.

Aircraft,  rotable components, and aircraft engines: As of December 31 1996, the
Partnership had an interest in two trusts that owned three commercial  aircraft,
two aircraft engines, and a portfolio of aircraft rotables.  The Partnership had
also  purchased  an interest  in an  additional  trust  during  1996,  which was
transferred  into equipment  held for operating  lease during the latter part of
the third  quarter  of 1996  (see  Notes 3 and 4 to the  financial  statements).
Revenues  earned by these trusts during the year ended December 31, 1996 of $3.3
million were offset by depreciation and amortization expenses,  management fees,
and  administrative  costs  of  $3.5  million.  As  of  December  31  1995,  the
Partnership had an interest in three trusts that owned four commercial aircraft,
two aircraft engines, and a portfolio of aircraft rotables,  which was purchased
at the end of the last two  quarters of 1995.  Revenues  earned by these  trusts
during the same period in 1995, of $0.7 million, were offset by depreciation and
amortization expenses and management fees of $0.8 million.

(f)  Net Income

As a result of the foregoing,  the Partnership's net income of $12.4 million for
the year ended  December  30, 1996  increased  from a net income of $2.0 million
during  the same  period in 1995.  The  Partnership's  ability  to  operate  and
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
during the  remainder of the  Partnership  is subject to many  factors,  and the
Partnership's  performance  in the 12  months  ended  December  31,  1996 is not
necessarily  indicative of future  periods.  In the 12 months ended December 31,
1996, the  Partnership  distributed  $17.2 million to the limited  partners,  or
$1.87 per weighted average limited partnership unit.

(E)  Geographic Information

The  Partnership  operates  certain of its equipment in  international  markets.
Although these operations expose the Partnership to certain currency, political,
credit,  and economic risks,  the General Partner  believes that these risks are
minimal or has implemented  strategies to control the risks.  Currency risks are
at a minimum  because all  invoicing,  with the  exception  of a small number of
railcars  operating in Canada,  is conducted in US dollars.  Political risks are
minimized by avoiding operations in countries that do not have a stable judicial
system and established  commercial  business laws. Credit support strategies for
lessees  range from letters of credit  supported  by US banks to cash  deposits.
Although  these credit support  mechanisms  generally  allow the  Partnership to
maintain  its  lease  yield,  there are risks  associated  with  slow-to-respond
judicial systems when legal remedies are required to secure payment or repossess
equipment.  Economic risks are inherent in all  international  markets,  and the
General  Partner  strives to minimize  this risk with market  analysis  prior to
committing  equipment to a particular  geographic  area.  Refer to the financial
statements,  Note 3 for information on the revenues,  income, and net book value
of equipment in various geographic regions.

Revenues and net operating income by geographic  region are impacted by the time
period  the  asset is owned  and the  useful  life  ascribed  to the  asset  for
depreciation  purposes.  Net  income  (loss)  from  equipment  is  significantly
impacted  by  depreciation  charges,  which are  greatest  in the early years of
ownership due to the use of the double-declining balance method of depreciation.
The relationships of geographic revenues,  net income (loss), and net book value
of equipment are expected to change  significantly in the future, as assets come
off  lease and  decisions  are made to either  redeploy  the  assets in the most
advantageous geographic location or sell the assets.

The  Partnership's  equipment  on lease to  U.S.-domiciled  lessees  consists of
trailers, railcars, and aircraft. During 1997, U.S. lease revenues accounted for
21% of the total lease revenues of wholly and partially  owned  equipment  while
net income  accounted for $4.5 million of the total aggregate net income for the
Partnership  of $7.9 million.  The primary  reason for this is that a large gain
was realized from the sale of assets in the United States and another geographic
region, while the other geographic region recorded a loss.

The Partnership's  owned equipment and its ownership share in equipment owned by
USPEs on lease to Canadian-domiciled  lessees consists of railcars. During 1997,
Canadian lease revenues  accounted for 12% of the total lease revenues of wholly
and  partially  owned  equipment,  and  recorded a net  income of $0.9  million,
compared to the total aggregate net income for the Partnership of $7.9 million.

The Partnership's owned aircraft on lease to a South  American-domiciled  lessee
during 1997 accounted for 8% of the total lease revenues of wholly and partially
owned equipment, and recorded a net loss of $2.7 million,  compared to the total
aggregate net income for the Partnership of $7.9 million.

The  Partnership's  ownership  share  of  equipment  owned  by USPEs on lease to
European-domiciled lessees consisted of aircraft, aircraft engines, and aircraft
rotables,  and accounted for 5% of lease revenues of wholly and partially  owned
equipment and $0.8 million of the Partnership's  total aggregate net income. The
primary  reason  for  this is that the  Partnership  sold  some of the  aircraft
equipment and realized a gain on the sales.

The  Partnership's  owned equipment and its ownership share in USPEs on lease to
lessees  in the  rest of the  world  consisted  of  marine  vessels  and  marine
containers.  During 1997, lease revenues for these lessees  accounted for 54% of
the total lease revenues of wholly and partially  owned equipment and recorded a
net income of $7.5 million,  compared to the total  aggregate net income for the
Partnership.  The primary reason for this is that a large gain was realized from
the sale of assets in worldwide markets

(F)  Year 2000 Compliance

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

(G)  Accounting Pronouncements

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

(H)  Inflation

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




<PAGE>



(I)  Forward-Looking Information

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

(J)  Outlook for the Future

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

The Partnership's operation of a diversified equipment portfolio in a broad base
of markets is  intended  to reduce its  exposure  to  volatility  in  individual
equipment sectors.  In 1997, market conditions,  supply and demand  equilibrium,
and other factors varied in several markets.  In the dry  over-the-road  trailer
markets, strong demand produced high utilization and returns. The marine vessel,
rail, and mobile offshore  drilling unit markets can generally be categorized by
increasing rates, as the demand for equipment is increasing faster than the size
of worldwide fleets.  Finally, the demand for narrowbody Stage II aircraft, such
as those owned by the Partnership, has increased, as expected savings from newer
narrowbody  aircraft have not  materialized and deliveries of the newer aircraft
have slowed down.  These  different  markets have had individual  effects on the
performance of Partnership  equipment,  in some cases  resulting in a decline in
performance and in others in an improvement in performance.

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

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

(1)  Repricing and Reinvestment Risk

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

(2)  Impact of Government Regulations on Future Operations

The General  Partner  operates the  Partnership's  equipment in accordance  with
current applicable regulations (see Item 1, Section E, Government  Regulations).
However, the continuing implementation of new or modified regulations by some of
the  authorities  mentioned  previously,  or others,  may  adversely  affect the
Partnership's  ability to continue to own or operate equipment in its portfolio.
Additionally,  regulatory  systems  vary  from  country  to  country,  which may
increase the burden to the Partnership of meeting regulatory  compliance for the
same equipment  operated between countries.  Currently,  the General Partner has
observed  rising  insurance  costs to  operate  certain  vessels  into US ports,
resulting  from  implementation  of the US Oil  Pollution  Act of 1990.  Ongoing
changes  in the  regulatory  environment,  both  in the US and  internationally,
cannot be  predicted  with  accuracy,  and  preclude  the General  Partner  from
determining the impact of such changes on Partnership operations,  purchases, or
sale of equipment.

(3)  Distributions

Pursuant to the limited  partnership  agreement,  the Partnership  will cease to
reinvest in  additional  equipment  beginning in its seventh year of  operation,
which  commences on January 1, 1999. The General Partner intends to continue its
strategy of selectively redeploying equipment to achieve competitive returns. By
the  end of the  reinvestment  period,  the  General  Partner  intends  to  have
assembled an equipment  portfolio capable of achieving a level of operating cash
flow for the remaining  life of the  Partnership  that is sufficient to meet its
obligations and sustain a predictable level of distributions to the partners.

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

ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

None.

















                      (this space intentionally left blank)




<PAGE>



                                    PART III

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

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

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

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

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

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

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

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

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

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

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

Frank Diodati                            43                    President, PLM Railcar Management Services Canada Limited

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

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

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

</TABLE>

Robert N.  Tidball  was  appointed  Chairman  of the  Board in  August  1997 and
President and Chief Executive Officer of PLM International in March 1989. At the
time of his appointment,  he was Executive Vice President of PLM  International.
Mr.  Tidball became a director of PLM  International  in April 1989. Mr. Tidball
was  appointed  Director of PLM  Financial  Services,  Inc. in July 1997 and was
elected President of PLM Worldwide Management Services Limited in February 1998.
He has served as an officer of PLM Railcar Management Services,  Inc. since June
1987.  Mr.  Tidball was  Executive  Vice  President  of Hunter  Keith,  Inc.,  a
Minneapolis-based  investment  banking  firm,  from March 1984 to January  1986.
Prior to Hunter Keith, he was Vice President,  General Manager,  and Director of
North American Car Corporation and a director of the American Railcar  Institute
and the Railway Supply Association.

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

Douglas  P.  Goodrich  was  elected  to the  Board of  Directors  in July  1996,
appointed  Senior  Vice  President  of PLM  International  in  March  1994,  and
appointed Director and President of PLM Financial  Services,  Inc. in June 1996.
Mr.  Goodrich  has also served as Senior Vice  President  of PLM  Transportation
Equipment Corporation since July 1989 and as President of PLM Railcar Management
Services,  Inc. since September 1992,  having been a senior vice president since
June 1987.  Mr.  Goodrich was an executive  vice  president of G.I.C.  Financial
Services  Corporation,  a  subsidiary  of  Guardian  Industries  Corporation  of
Chicago, Illinois, from December 1980 to September 1985.

Harold R. Somerset was elected to the Board of Directors of PLM International in
July 1994.  From February 1988 to December 1993, Mr.  Somerset was President and
Chief Executive  Officer of California & Hawaiian Sugar Corporation (C&H Sugar),
a recently acquired subsidiary of Alexander & Baldwin,  Inc. Mr. Somerset joined
C&H Sugar in 1984 as  Executive  Vice  President  and Chief  Operating  Officer,
having  served on its Board of  Directors  since  1978,  a position  in which he
continues  to serve.  Between  1972 and 1984,  Mr.  Somerset  served in  various
capacities with Alexander & Baldwin,  Inc., a publicly held land and agriculture
company headquartered in Honolulu, Hawaii, including Executive Vice President of
Agriculture and Vice President, General Counsel, and Secretary. In addition to a
law degree from Harvard Law School,  Mr.  Somerset  also holds  degrees in civil
engineering from the Rensselaer  Polytechnic Institute and in marine engineering
from the US Naval Academy.  Mr.  Somerset also serves on the boards of directors
for various other  companies  and  organizations,  including  Longs Drug Stores,
Inc., a publicly held company.

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

J. Michael Allgood was appointed Vice President and Chief  Financial  Officer of
PLM International in October 1992 and Vice President and Chief Financial Officer
of PLM Financial Services,  Inc. in December 1992. Between July 1991 and October
1992,  Mr.  Allgood  was a  consultant  to  various  private  and  public-sector
companies  and  institutions   specializing  in  financial   operations  systems
development.  In October 1987, Mr. Allgood  co-founded  Electra Aviation Limited
and its holding  company,  Aviation  Holdings Plc of London,  where he served as
Chief Financial Officer until July 1991. Between June 1981 and October 1987, Mr.
Allgood  served as a first vice  president  with  American  Express Bank Ltd. In
February 1978,  Mr. Allgood  founded and until June 1981 served as a director of
Trade Projects  International/Philadelphia  Overseas  Finance  Company,  a joint
venture with  Philadelphia  National Bank. From March 1975 to February 1978, Mr.
Allgood served in various capacities with Citibank, N.A.

Stephen M. Bess was appointed Director of PLM Financial  Services,  Inc. in July
1997.  Mr. Bess was appointed  President of PLM  Securities  Corporation in June
1996 and President of PLM  Investment  Management,  Inc. in August 1989,  having
served as Senior Vice President of PLM Investment Management,  Inc. beginning in
February  1984 and as  Corporate  Controller  of PLM  Financial  Services,  Inc.
beginning in October 1983. Mr. Bess served as Corporate  Controller of PLM, Inc.
beginning  in December  1982.  Mr. Bess was Vice  President-Controller  of Trans
Ocean Leasing  Corporation,  a container leasing company,  from November 1978 to
November  1982,  and Group Finance  Manager with the Field  Operations  Group of
Memorex  Corporation,  a manufacturer  of computer  peripheral  equipment,  from
October 1975 to November 1978.

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

Frank Diodati was appointed  President of PLM Railcar Management Services Canada
Limited in 1986. Previously,  Mr. Diodati was Manager of Marketing and Sales for
G.E. Railcar Services Canada Limited.

Steven O. Layne was appointed  Vice  President of PLM  Transportation  Equipment
Corporation's  Air Group in November  1992, and was appointed Vice President and
Director of PLM Worldwide  Management  Services  Limited in September  1995. Mr.
Layne was its Vice President,  Commuter and Corporate Aircraft beginning in July
1990.  Prior to joining PLM, Mr. Layne was Director of Commercial  Marketing for
Bromon Aircraft Corporation, a joint venture of General Electric Corporation and
the  Government  Development  Bank of Puerto  Rico.  Mr. Layne is a major in the
United States Air Force Reserves and a senior pilot with 13 years of accumulated
service.

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

Thomas L.  Wilmore was  appointed  Vice  President,  Rail of PLM  Transportation
Equipment  Corporation  in March  1994,  and has  served  as Vice  President  of
Marketing for PLM Railcar  Management  Services,  Inc. since May 1988.  Prior to
joining PLM, Mr. Wilmore was Assistant  Vice President and Regional  Manager for
MNC Leasing  Corporation  in Towson,  Maryland from February 1987 to April 1988.
From July 1985 to  February  1987,  he was  President  and  co-owner of Guardian
Industries  Corporation,  Chicago,  and between December 1980 and July 1985, Mr.
Wilmore was an executive vice  president for its  subsidiary,  G.I.C.  Financial
Services  Corporation.  Mr.  Wilmore also served as Vice  President of Sales for
Gould Financial Services,  located in Rolling Meadows,  Illinois, from June 1978
to December 1980.

The  directors of PLM  International  are elected for a three-year  term and the
directors of PLM  Financial  Services,  Inc. are elected for a one-year  term or
until their successors are elected and qualified.  No family relationships exist
between any director or executive  officer of PLM International or PLM Financial
Services, Inc.



<PAGE>



ITEM 11.       EXECUTIVE COMPENSATION

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


ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     (a)      Security Ownership of Certain Beneficial Owners

         The General Partner is generally entitled to 5% interest in the profits
and losses and  distributions  of the  Partnership.  As of December 31, 1997, no
investor was known by the General  Partner to  beneficially  own more than 5% of
the units of the Partnership.

     (b)      Security Ownership of Management

         Neither  the  General  Partner  and its  affiliates  nor any officer or
director  of the  General  Partner  and  its  affiliates  own any  units  of the
Partnership as of December 31, 1997.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a)      Transactions with Management and Others

         During 1997, the Partnership  paid or accrued the following fees to FSI
         or its affiliates:  management fees, $1.5 million,  and  administrative
         and data processing  services  performed on behalf of the  Partnership,
         $1.0 million.  The Partnership paid Transportation  Equipment Indemnity
         Company Ltd.  (TEI), a  wholly-owned,  Bermuda-based  subsidiary of PLM
         International,  $0.8 million for insurance coverages during 1997; these
         amounts   were  paid   substantially   to  third-   party   reinsurance
         underwriters  or  placed  in risk  pools  managed  by TEI on  behalf of
         affiliated partnerships and PLM International,  which provide threshold
         coverages on marine vessel loss of hire and hull and machinery  damage.
         All pooling  arrangement  funds are either paid out to cover applicable
         losses or refunded pro rata by TEI.

         During 1997, the USPEs paid or accrued the following fees to FSI or its
affiliates  (based  on  the  Partnership's  proportional  share  of  ownership):
management fees, $0.3 million; administrative and data processing services, $0.1
million;  equipment  acquisition fees, $0.4 million; and lease negotiation fees,
$0.1  million.  The USPEs also paid TEI $0.3  million  for  insurance  coverages
during 1997

     (b)      Certain Business Relationships

         None.

     (c)      Indebtedness of Management

         None.

     (d)      Transactions with Promoters

         None.






<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)      1.           Financial Statements

                  The financial  statements listed in the accompanying  Index to
Financial Statements are filed as part of this Annual Report on Form 10-K.

     (b)      Reports on Form 8-K

               None.

     (c)    Exhibits

         4.    Limited  Partnership  Agreement of  Partnership.  Incorporated by
               reference to the Partnership's Registration Statement on Form S-1
               (Reg. No.  33-32258),  which became effective with the Securities
               and Exchange Commission on April 11, 1990.

         10.1  Management  Agreement  between  Partnership  and  PLM  Investment
               Management,  Inc.  Incorporated by reference to the Partnership's
               Registration  Statement on Form S-1 (Reg.  No.  33-32258),  which
               became  effective with the Securities and Exchange  Commission on
               April 11, 1990.

         10.2  Loan  Agreement,  amended and restated as of  September  26, 1996
               regarding  Senior  Notes due  November 8, 1999.  Incorporated  by
               reference to the  Partnership's  Annual Report on Form 10-K filed
               with the Securities and Exchange Commission on March 30, 1992.

         10.3  Amendment  No. 1 to the Amended  and  Restated  $38,000,000  Loan
               Agreement, dated as of December 29, 1997

         10.4  Third amended and restated Warehousing Credit Agreement, dated as
               of  December  2, 1997 with  First  Union  National  Bank of North
               Carolina and others.

         24.   Powers of Attorney.




<PAGE>



                                           SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Partnership  has duly  caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

The Partnership has no directors or officers.  The General Partner has signed on
behalf of the Partnership by duly authorized officers.


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

                                   By:      PLM Financial Services, Inc.
                                            General Partner


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


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


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  directors of the  Partnership's  General
Partner on the dates indicated.


Name                         Capacity                     Date



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



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



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

*Susan Santo,  by signing her name hereto,  does sign this document on behalf of
the persons indicated above pursuant to powers of attorney duly executed by such
persons and filed with the Securities and Exchange Commission.


/s/ Susan Santo
-----------------------
Susan Santo
Attorney-in-Fact



<PAGE>




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

                                  (Item 14(a))


                                                                      Page

Report of independent auditors                                          30

Balance sheets as of December 31, 1997 and 1996                         31

Statements of income for the years ended
     December 31, 1997, 1996, and 1995                                  32

Statements of changes in partners' capital for the
     years ended December 31, 1997, 1996, and 1995                      33

Statements of cash flows for the years ended
     December 31, 1997, 1996, and 1995                                  34

Notes to financial statements                                      35 - 44

All other financial statement schedules have been omitted,  because the required
information  is not pertinent to the  Registrant or is not material,  or because
the  information  required  is included in the  financial  statements  and notes
thereto.





<PAGE>



                         REPORT OF INDEPENDENT AUDITORS



The Partners
PLM Equipment Growth Fund V:



We have audited the  accompanying  financial  statements of PLM Equipment Growth
Fund V, as listed in the accompanying index. These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We have  conducted our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of PLM Equipment Growth Fund V as
of December  31, 1997 and 1996 and the  results of its  operations  and its cash
flows for each of the years in the three-year period ended December 31, 1997, in
conformity with generally accepted accounting principles.



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


SAN FRANCISCO, CALIFORNIA
March 12, 1998




<PAGE>




                           PLM EQUIPMENT GROWTH FUND V
                            (A Limited Partnership)
                                 BALANCE SHEETS
                                  December 31,
                 (in thousands of dollars, except unit amounts)




Assets
<TABLE>
<CAPTION>

                                                                           1997                1996
                                                                       ---------------------------------

<S>                                                                     <C>                   <C>
Equipment held for operating lease, at cost                             $   104,902           $  155,004
Less accumulated depreciation                                               (62,320)             (81,541 )
                                                                      -------------------------------------
  Net equipment                                                              42,582               73,463

Cash and cash equivalents                                                     9,884                4,662
Restricted cash                                                                 111                  553
Accounts and note receivable, less allowance for doubtful
    accounts of $113 in 1997 and $236 in 1996                                 3,229                3,508
Investments in unconsolidated special-purpose entities                       22,758               12,673
Net investment in direct finance lease                                           --                2,282
Lease negotiation fees to affiliate, less accumulated
  amortization of $325 in 1997 and $184 in 1996                                 156                  319
Debt issuance and loan costs, less accumulated amortization
  of $331 in 1997 and $255 in 1996                                              192                  268
Debt placement fees to affiliate, less accumulated
  amortization of $292 in 1997 and $245 in 1996                                  87                  134
Prepaid expenses and other assets                                               114                  557
Equipment acquisition deposit                                                   920                   --
                                                                      -------------------------------------

Total assets                                                            $    80,033           $   98,419
                                                                      =====================================


Liabilities and partners' capital


Liabilities
  Accounts payable and accrued expenses                                 $     1,826           $    1,060
  Due to affiliates                                                             477                  699
  Short-term note payable                                                        --                2,463
  Lessee deposits and reserve for repairs                                     1,644                3,901
  Note payable                                                               32,000               38,000
                                                                      -------------------------------------
    Total liabilities                                                        35,947               46,123
                                                                      -------------------------------------

Partners' capital
Limited partners (limited partnership units of 9,086,608 in 1997
    and 9,169,019 in 1996)                                                   44,086               52,296
General Partner                                                                  --                   --
                                                                      -------------------------------------
    Total partners' capital                                                  44,086               52,296
                                                                      -------------------------------------

Total liabilities and partners' capital                                 $    80,033           $   98,419
                                                                      =====================================

</TABLE>


                       See accompanying notes to financial
                                  statements.



<PAGE>




                           PLM EQUIPMENT GROWTH FUND V
                            (A Limited Partnership)
                              STATEMENTS OF INCOME
                        For the Years Ended December 31,
        (in thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>




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

<S>                                                                     <C>              <C>              <C>
Lease revenue                                                           $   29,493       $   28,763       $  34,298
Interest and other income                                                      640            1,360           1,009
Net gain on disposition of equipment                                        10,990           14,199           3,835
                                                                      ------------------------------------------------
    Total revenues                                                          41,123           44,322          39,142
                                                                      ------------------------------------------------

Expenses

Depreciation and amortization                                               15,693           14,941          17,321
Management fees to affiliate                                                 1,480            1,458           1,767
Repairs and maintenance                                                      2,690            2,843           4,004
Equipment operating expenses                                                 6,088            6,016           7,736
Interest expense                                                             2,593            2,789           3,048
Insurance expense to affiliate                                                 838              768           1,015
Other insurance expenses                                                     1,933              985           1,080
General and administrative expenses to affiliates                              981              838             612
Other general and administrative expenses                                      731              903             514
Provision for (recovery of) bad debts                                          (89)             224              --
                                                                      ------------------------------------------------
    Total expenses                                                          32,938           31,765          37,097
                                                                      ------------------------------------------------

Equity in net loss of unconsolidated
  special-purpose entities                                                    (264)            (116)             --

                                                                      ------------------------------------------------
Net income                                                              $    7,921       $   12,441       $   2,045
                                                                      ================================================

Partners' share of net income

Limited partners                                                        $    7,154       $   11,524       $   1,077
General Partner                                                                767              917             968
                                                                      ------------------------------------------------

Total                                                                   $    7,921       $   12,441       $   2,045
                                                                      ================================================

Net income per weighted-average limited partnership unit
    (9,107,121, 9,170,232, and 9,181,103 limited partnership
    units in 1997, 1996, and 1995, respectively)                        $     0.79       $     1.26       $    0.12
                                                                      ================================================

Cash distribution                                                       $   15,346       $   18,083       $  19,342
                                                                      ================================================

Cash distribution per weighted-average limited
    partnership unit                                                    $     1.60       $     1.87       $    2.00
                                                                      ================================================
</TABLE>



                       See accompanying notes to financial
                                  statements.




<PAGE>





                           PLM EQUIPMENT GROWTH FUND V
(A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL For the Years
       Ended December 31, 1997, 1996, and 1995 (in thousands of dollars)


<TABLE>
<CAPTION>




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


<S>                                                    <C>                  <C>               <C>
Partners' capital as of December 31, 1994              $    75,893          $     --          $    75,893

Net income                                                   1,077               968                2,045

Repurchase of limited partnership units                       (579)               --                 (579)

Cash distribution                                          (18,374)             (968)             (19,342)
                                                     -------------------------------------------------------

  Partners' capital as of December 31, 1995                 58,017                --               58,017

Net income                                                  11,524               917               12,441

Repurchase of limited partnership units                        (79)               --                  (79)

Cash distribution                                          (17,166)             (917)             (18,083)
                                                     -------------------------------------------------------

  Partners' capital as of December 31, 1996                 52,296                --               52,296

Net income                                                   7,154               767                7,921

Repurchase of limited partnership units                       (785)               --                 (785)

Cash distribution                                          (14,579)             (767)             (15,346)
                                                     -------------------------------------------------------

  Partners' capital as of December 31, 1997            $    44,086          $     --          $    44,086
                                                     =======================================================

</TABLE>


















                       See accompanying notes to financial
                                  statements.



<PAGE>



                           PLM EQUIPMENT GROWTH FUND V
                            (A Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                        For the Years Ended December 31,
                           (in thousands of dollars)

<TABLE>
<CAPTION>

                                                                           1997            1996            1995
                                                                       ---------------------------------------------
<S>                                                                     <C>               <C>              <C>
Operating activities
Net income                                                              $     7,921       $   12,441       $    2,045
Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
  Depreciation and amortization                                              15,693           14,941           17,321
  Net gain on disposition of equipment                                      (10,990)         (14,199)          (3,835)
  Equity in net (income) loss of unconsolidated
    special-purpose entities                                                    264              116               --
  Changes in operating assets and liabilities, net:
    Restricted cash                                                             442             (330)             (36)
    Accounts and note receivable, net                                          (374)            (455)           1,973
    Prepaid expenses and other assets                                           443             (364)            (152)
    Accounts payable and accrued expenses                                       766             (294)               7
    Due to affiliates                                                          (222)            (414)             785
    Lessee deposits and reserve for repairs                                  (1,438)             285              620
                                                                      --------------------------------------------------
       Net cash provided by operating activities                             12,505           11,727           18,728
                                                                      ---------------------------------------------------

Investing activities
Proceeds from disposition of equipment                                       25,831           29,992           18,375
Payments for purchase of equipment                                             (165)         (21,378)         (27,128)
Payments for equipment acquisition deposits                                    (920)              --               --
Investment in direct finance lease, net                                          --               --           (2,639)

Principal payments received on direct finance lease                              --              327               --
Investment in and equipment purchased and placed in
   unconsolidated special-purpose entities                                  (10,453)          (8,952)              --
Distribution from unconsolidated special-purpose entities                     3,018            4,348               --
Payments of acquisition fees to affiliate                                        --             (936)          (1,198)
Payments of lease negotiation fees to affiliate                                  --             (214)            (266)
                                                                      ---------------------------------------------------
      Net cash provided by (used in) investing activities                    17,311            3,187          (12,856)
                                                                      ---------------------------------------------------

Financing activities
Proceeds from short-term note payable                                         9,110            8,073               --
Payments of short-term note payable                                         (11,573)          (5,610)              --
Payments of note payable                                                     (6,000)              --               --
Proceeds from short-term loan from affiliate                                  1,610               --               --
Payment of short-term loan to affiliate                                      (1,610)              --               --
Cash distribution paid to affiliate                                            (767)            (917)            (968 )
Cash distribution paid to limited partners                                  (14,579)         (17,166)         (18,374 )
Payment for loan costs                                                           --             (136)              --
Repurchase of limited partnership units                                        (785)             (79)            (579 )
                                                                      ---------------------------------------------------
      Net cash used in financing activities                                 (24,594)         (15,835)         (19,921 )
                                                                      ---------------------------------------------------

Net increase (decrease) in cash and cash equivalents                          5,222             (921)         (14,049 )
Cash and cash equivalents at beginning of year (see Note 4)                   4,662            5,583           20,200
                                                                      ---------------------------------------------------
Cash and cash equivalents at end of year                                $     9,884       $    4,662       $    6,151
                                                                      ===================================================

Supplemental information
Interest paid                                                           $     2,843       $    2,815       $    2,970
                                                                      ===================================================
Noncash transfer of equipment at net book value from
  unconsolidated special-purpose entities                               $        --       $    7,901       $       --
                                                                      ===================================================
Receipt of interest in an unconsolidated special-purpose
  entity in settlement of receivables                                   $    (2,914)      $       --       $       --
                                                                      ===================================================
</TABLE>

                       See accompanying notes to financial
                                  statements.




<PAGE>



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

1.   Basis of Presentation

     Organization

     PLM  Equipment  Growth  Fund  V,  a  California  limited  partnership  (the
     Partnership),  was formed on November 14, 1989.  The  Partnership  offering
     became effective on April 11, 1990 and significant  operations commenced in
     May 1990. PLM Financial Services, Inc. (FSI) is the General Partner. FSI is
     a wholly-owned  subsidiary of PLM International,  Inc. (PLM International).
     The  Partnership  engages in the  business of owning and leasing  primarily
     used transportation and related equipment.

     The  Partnership  will  terminate on December 31, 2010,  unless  terminated
     earlier upon sale of all equipment or by certain other events. Beginning in
     the Partnership's seventh year of operations, which commences on January 1,
     1999, the General Partner will stop reinvesting excess cash, if any, which,
     less reasonable reserves, will be distributed to the partners. Beginning in
     the Partnership's ninth year of operations,  the General Partner intends to
     begin an orderly  liquidation  of the  Partnership's  assets.  The  General
     Partner anticipates that the liquidation of the assets will be completed by
     the end of the Partnership's tenth year of operations.

     FSI  manages  the  affairs of the  Partnership.  The net income  (loss) and
     distributions of the Partnership are generally allocated 95% to the limited
     partners  and  5% to  the  General  Partner  (see  Net  Income  (Loss)  and
     Distributions per Limited  Partnership Unit, below). The General Partner is
     entitled to  subordinated  incentive fees equal to 5% of cash available for
     distribution and of net disposition proceeds (as defined in the partnership
     agreement),  which are  distributed  by the  Partnership  after the limited
     partners have received a certain minimum rate of return.

     The General  Partner has  determined  that it will not adopt a reinvestment
     plan for the  Partnership.  If the  number  of  units  made  available  for
     purchase by limited  partners in any calendar  year exceeds the number that
     can be purchased with reinvestment plan proceeds,  then the Partnership may
     redeem up to 2% of the  outstanding  units  each  year,  subject to certain
     terms and  conditions.  The purchase price to be offered by the Partnership
     for  these  units  will  be  equal  to 110%  of the  unrecovered  principal
     attributable to the units.  The unrecovered  principal for any unit will be
     equal to the excess of (i) the  capital  contribution  attributable  to the
     unit over (ii) the  distributions  from any source paid with respect to the
     units.  For the years ended December 31, 1997 and 1996, the Partnership had
     repurchased 82,411 and 6,925 limited partnership units for $0.8 million and
     $0.1 million, respectively.

     As of December 31, 1997, the Partnership agreed to repurchase approximately
     9,000 units for an  aggregate  price of  approximately  $0.1  million.  The
     General  Partner  anticipates  that these units will be  repurchased in the
     first and  second  quarters  of 1998.  The  General  Partner  may  purchase
     additional units on behalf of the Partnership in the future.

     These  financial  statements  have been  prepared on the  accrual  basis of
     accounting in accordance  with generally  accepted  accounting  principles.
     This requires  management to make estimates and assumptions that affect the
     reported  amounts of assets and  liabilities,  along  with  disclosures  of
     contingent  assets and liabilities at the date of the financial  statements
     and the  reported  amounts of revenues and  expenses  during the  reporting
     period. Actual results could differ from those estimates.

     Operations

     The  equipment  owned by the  Partnership  is managed,  under a  continuing
     management  agreement,   by  PLM  Investment  Management,   Inc.  (IMI),  a
     wholly-owned  subsidiary of FSI. IMI receives a monthly management fee from
     the   Partnership  for  managing  the  equipment  (see  Note  2).  FSI,  in
     conjunction  with  its  subsidiaries,  sells  transportation  equipment  to
     investor  programs  and  third  parties,  manages  pools of  transportation
     equipment  under  agreements with the investor  programs,  and is a General
     Partner of other programs.

<PAGE>

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

1.   Basis of Presentation  (continued)

     Accounting for Leases

     The Partnership's leasing operations generally consist of operating leases.
     Under  the  operating  lease  method of  accounting,  the  leased  asset is
     recorded at cost and  depreciated  over its estimated  useful life.  Rental
     payments  are recorded as revenue  over the lease term.  Lease  origination
     costs  are   capitalized   and  amortized  over  the  term  of  the  lease.
     Periodically,  the  Partnership  leases  equipment  with  lease  terms that
     qualify for direct finance lease  classification,  as required by Statement
     of Financial  Accounting  Standards No. 13,  "Accounting  for Leases" (SFAS
     13).

     Depreciation and Amortization

     Depreciation of  transportation  equipment,  held for operating  leases, is
     computed  on the 200%  declining  balance  method,  taking  a full  month's
     depreciation in the month of acquisition, based upon estimated useful lives
     of 15 years for  railcars  and 12 years for all other  types of  equipment.
     Certain  aircraft  are  depreciated  under  the  double-declining   balance
     depreciation method over the lease term. The depreciation method changes to
     straight-line  when annual  depreciation  expense  using the  straight-line
     method  exceeds  that  calculated  by the 200%  declining  balance  method.
     Acquisition  fees and certain  acquisition  costs have been  capitalized as
     part of the cost of the  equipment.  Lease  negotiation  fees are amortized
     over the initial  equipment  lease term.  Debt issuance costs are amortized
     over the term of the related loan. Major  expenditures that are expected to
     extend the useful  lives or reduce  operating  expenses for  equipment  are
     capitalized and amortized over the remaining life of the equipment.

     Transportation Equipment

     In March 1995,  the  Financial  Accounting  Standards  Board (FASB)  issued
     Statement No. 121,  "Accounting for the Impairment of Long-Lived Assets and
     for  Long-Lived  Assets to Be  Disposed  Of" (SFAS 121).  This  standard is
     effective for years  beginning  after  December 15, 1995.  The  Partnership
     adopted SFAS 121 during 1995,  the effect of which was not material,  since
     the method previously  employed by the Partnership was consistent with SFAS
     121. In accordance  with SFAS 121, the General Partner reviews the carrying
     value of the  Partnership's  equipment  at least  annually  in  relation to
     expected   future   market   conditions   for  the  purpose  of   assessing
     recoverability of the recorded  amounts.  If projected future lease revenue
     plus residual  values are less than the carrying value of the equipment,  a
     loss on  revaluation  is recorded.  No reductions to the carrying  value of
     equipment were required during either 1997, 1996 or 1995.

     Investments in Unconsolidated Special-Purpose Entities (USPEs)

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

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

     Repairs and Maintenance

     Maintenance costs are usually the obligation of the lessee. If they are not
     covered by the lessee,  they are charged  against  operations  as incurred.
     Estimated costs  associated with marine vessel  drydockings are accrued and
     charged to income  ratably  over the period prior to such  drydocking.  The
     reserve  accounts are included in the balance sheet as lessee  deposits and
     reserve for repairs.



<PAGE>



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

1.   Basis of Presentation  (continued)

     Net Income (Loss) and Distributions per Limited Partnership Unit

     The net income (loss) and  distributions  of the  Partnership are generally
     allocated 95% to the limited partners and 5% to the General Partner.  Gross
     income in each year is specially  allocated  to the General  Partner to the
     extent,  if any,  necessary  to cause the  capital  account  balance of the
     General  Partner  to be zero as of the  close  of such  year.  The  limited
     partners' net income (loss) and  distributions  are allocated  based on the
     number of limited  partnership  units owned by each limited  partner and on
     the number of days of the year each limited partner has participated in the
     Partnership.

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

     Cash  distributions  to investors in excess of net income are considered to
     represent a return of capital.  Cash  distributions to the limited partners
     of $7.4 million,  $5.6 million,  and $17.3 million in 1997, 1996, and 1995,
     respectively, were deemed to be a return of capital.

     Cash distributions of $2.8 million,  $2.8 million, and $3.5 million related
     to the fourth  quarter of 1997,  1996,  and 1995,  respectively,  were paid
     during January and February 1998, 1997, or 1996.

     Cash and Cash Equivalents

     The  Partnership  considers  highly  liquid  investments  that are  readily
     convertible  to known  amounts of cash with  original  maturities  of three
     months or less as cash equivalents. The carrying amount of cash equivalents
     approximates  fair  market  value  due  to  the  short-term  nature  of the
     investments.   Lessee  security   deposits  held  by  the  Partnership  are
     considered restricted cash.

     Reclassification

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

2.   General Partner and Transactions with Affiliates

     An officer of PLM Securities Corp. (PLM Securities) contributed $100 of the
     Partnership's initial capital. PLM Securities is a wholly-owned  subsidiary
     of the General  Partner.  Under the  equipment  management  agreement,  IMI
     receives a monthly management fee attributable to either owned equipment or
     interests  in  equipment  owned by the USPEs equal to the lesser of (i) the
     fees that  would be  charged  by an  independent  third  party for  similar
     services for similar equipment or (ii) the sum of (a) 5% of the gross lease
     revenues attributable to equipment that is subject to operating leases, (b)
     2% of the gross  lease  revenues,  as  defined  in the  agreement,  that is
     subject to full payout net leases,  and (c) 7% of the gross lease  revenues
     attributable  to  equipment,  if any,  that is subject to per diem  leasing
     arrangements  and  thus  is  operated  by  the   Partnership.   Partnership
     management  fees of $0.4  million  and  $1.0  million  were  payable  as of
     December 31, 1997 and 1996,  respectively.  The Partnership's  proportional
     share of USPE  management  fees of $0.1 million and $26,000 were payable as
     of December 31, 1997 and 1996, respectively. The Partnership's proportional
     share of USPE  management  fees  expense was $0.3  million and $0.3 million
     during 1997 and 1996, respectively. An affiliate of the General Partner was
     reimbursed  for  data  processing  and  administrative   expenses  directly
     attributable  to the  Partnership  in the  amount  of  $1.0  million,  $0.8
     million,  and $0.6 million during 1997, 1996, and 1995,  respectively.  The
     Partnership's proportional share of USPE data processing and administrative
     expenses was $0.1 million  during 1997 and 1996.  Debt  placement fees were
     paid  to FSI  in an  amount  equal  to 1% of  the  Partnership's  long-term
     borrowings.


<PAGE>



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

2.   General Partner and Transactions with Affiliates (continued)

     The  Partnership  and the  USPEs  paid or  accrued  lease  negotiation  and
     equipment  acquisition fees of $0.5 million, $1.6 million, and $1.6 million
     to TEC and WMS in 1997, 1996, and 1995, respectively.

     The Partnership paid $0.8 million,  $0.8 million, and $1.0 million in 1997,
     1996,  and  1995,  respectively,   to  Transportation  Equipment  Indemnity
     Company,  Ltd. (TEI), an affiliate of the General  Partner,  which provides
     marine  insurance  coverage and other  insurance  brokerage  services.  The
     Partnership's  proportional share of USPE marine insurance coverage paid to
     TEI was $0.3 million and $0.2 million during 1997 and 1996, respectively. A
     substantial  portion  of this  amount was paid to  third-party  reinsurance
     underwriters or placed in risk pools managed by TEI on behalf of affiliated
     partnerships and PLM  International,  which provide threshold  coverages on
     marine  vessel  loss of hire and hull and  machinery  damage.  All  pooling
     arrangement  funds  are  either  paid out to  cover  applicable  losses  or
     refunded pro rata by TEI.

     As of December 31, 1997,  approximately  70% of the  Partnership's  trailer
     equipment was in rental facilities  operated by an affiliate of the General
     Partner.  Revenues  collected under short-term  rental  agreements with the
     rental yards' customers are credited to the owners of the related equipment
     as received.  Direct  expenses  associated  with the  equipment are charged
     directly to the  Partnership.  An  allocation  of indirect  expenses of the
     rental yard operations is charged to the Partnership monthly.

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

     During 1997 the Partnership  borrowed $1.6 million from the General Partner
     for 45 days. The General Partner  charged the  Partnership  market interest
     rates. Total interest paid to the General Partner was $10,000.

     The balance due to affiliates as of December 31, 1997 included $0.4 million
due to FSI and its  affiliates  for  management  fees  and $0.1  million  due to
affiliated USPEs. The balance due to affiliates as of December 31, 1996 included
$0.9 million due to FSI and its affiliates for management  fees and $0.3 million
due from affiliated USPEs.

3.   Equipment

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

<TABLE>
<CAPTION>

Equipment held for operating leases:                          1997                  1996
                                                       -----------------------------------
  <S>                                                    <C>                   <C>
  Aircraft                                               $    49,838           $    57,205
  Marine containers                                           17,592                24,451
  Marine vessels                                              16,276                52,259
  Rail equipment                                              11,500                11,406
  Trailers                                                     9,696                 9,683
                                                      --------------------------------------
                                                              104,902               155,004
Less accumulated depreciation                                 (62,320)              (81,541)
                                                      --------------------------------------
Net equipment                                            $    42,582           $    73,463
                                                      ======================================

</TABLE>

     Revenues are earned by placing the equipment  under  operating  leases that
     are  billed  monthly  or  quarterly.   Some  of  the  Partnership's  marine
     containers and marine  vessels are leased to operators of  utilization-type
     leasing pools that include equipment owned by unaffiliated parties. In such
     instances,  revenues  received  by the  Partnership  consist of a specified
     percentage  of  revenues  generated  by  leasing  the pooled  equipment  to
     sublessees, after deducting certain direct operating expenses of the pooled
     equipment. Rents for other equipment are based on fixed rates.


<PAGE>




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

3.   Equipment  (continued)

     As of  December  31,  1997,  all  equipment  was on lease or  operating  in
     PLM-affiliated  short-term  trailer rental yards.  As of December 31, 1996,
     all  equipment  was on  lease or  operating  in  PLM-affiliated  short-term
     trailer rental yards,  except for 14 railcars with a net book value of $0.2
     million.

     As of December 31, 1997, the  Partnership  had entered into a commitment to
     purchase a marine vessel for $9.2 million.  The Partnership  made a deposit
     of $0.9  million  toward this  purchase  which is included in this  balance
     sheet  as  equipment  acquisition  deposits.  The  Partnership  expects  to
     purchase this equipment  during the first quarter of 1998 and will pay $0.5
     million for acquisition and lease  negotiation  fees to FSI related to this
     acquisition.

     During 1997, the  Partnership  disposed of an aircraft  engine,  a commuter
     aircraft,  marine containers,  railcars, and trailers with an aggregate net
     book value of $4.7 million for $7.8 million.  The Partnership also sold two
     marine vessels with a net book value of $10.9 million for proceeds of $18.0
     million.  Included in the gain of $7.9  million from the sale of the marine
     vessels is the unused portion of accrued drydocking $0.8 million.

     During  1996,  the  Partnership  disposed of a rig with a net book value of
     $10.7 million for proceeds of $21.3 million,  as well as aircraft  engines,
     marine containers,  railcars,  a commuter  aircraft,  and a trailer with an
     aggregate net book value of $5.1 million for proceeds of $8.7 million.

     Periodically,  PLM International purchases groups of assets whose ownership
     may be allocated among affiliated programs and PLM International. Generally
     in  these  cases,  only  assets  that  are on  lease  are  purchased  by an
     affiliated program.  PLM International  generally assumes the ownership and
     remarketing  risks associated with off-lease  equipment.  Allocation of the
     purchase  price is  determined  by a combination  of  third-party  industry
     sources,  recent transactions,  and published fair market value references.
     During 1996, PLM International  realized a $0.7 million gain on the sale of
     69 off-lease  railcars purchased by PLM International as part of a group of
     assets in 1994 that had been  allocated to PLM  Equipment  Growth Funds IV,
     VI, and VII, Professional Lease Management Income Fund I, LLC (Fund I), and
     PLM  International.  As of December 31, 1995, PLM International  held these
     assets for sale.  During 1995, PLM  International  realized $1.3 million in
     gains on sales of railcars and aircraft  purchased by PLM  International in
     1994 and 1995 as part of a group of assets that had been  allocated  to the
     Partnership,  PLM  Equipment  Growth Funds IV, VI, and VII, Fund I, and PLM
     International.

     All owned  equipment on lease is being  accounted for as operating  leases.
     Future minimum rentals receivable under noncancelable  operating leases, as
     of December 31, 1997, for owned and partially owned  equipment  during each
     of the next five  years are  approximately  $14.5  million  in 1998,  $11.3
     million in 1999,  $8.5  million  in 2000,  $5.6  million in 2001,  and $2.3
     million   thereafter.   Contingent  rentals  based  upon  utilization  were
     approximately $2.2 million,  $3.1 million,  and $4.8 million in 1997, 1996,
     and 1995, respectively.

     The  Partnership  owns  certain  equipment  that  is  leased  and  operated
     internationally.  A limited  number of the  Partnership's  transactions  is
     denominated in a foreign  currency.  Gains or losses resulting from foreign
     currency transactions are included in the results of operations and are not
     material.

     The Partnership  leases or leased its aircraft,  railcars,  mobile offshore
     drilling  unit,  and  trailers  to  lessees  domiciled  in five  geographic
     regions: North America, South America, Europe, Asia, and Australia.  Marine
     vessels and marine  containers are leased to multiple  lessees in different
     regions that operate the marine  vessels and marine  containers  worldwide.
     The tables below set forth geographic  information  about the Partnership's
     owned equipment and investments in USPEs,



<PAGE>


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

3.   Equipment  (continued)

     grouped by domicile  of the lessee as of and for the years  ended  December
31, 1997, 1996, and 1995 (in thousands of dollars):

<TABLE>
<CAPTION>

                                   Investments in USPEs                      Owned Equipment
                               -----------------------------   -------------------------------------------
             Region                 1997            1996             1997            1996            1995
 ------------------------------------------------------------   --------------------------------------------
  Lease revenues:

     <S>                          <C>              <C>              <C>              <C>             <C>
     United States                $        --      $       --       $      7,553     $     7,806     $      6,666
     Canada                                --           1,509              4,096           1,821              892
     South America                         --              --              3,011             763               --
     Asia                                  --              --                 --           1,062            2,556
     Australia                             --              --                 --              --              258
     Europe                             1,765           1,765                 --             493            1,671
     Rest of the world                  4,103           3,780             14,833          16,818           22,255
                                -------------------------------  ------------------------------------------------
   Total lease revenues           $     5,868      $    7,054       $     29,493     $    28,763     $     34,298
                                ===============================  ================================================
</TABLE>

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

<TABLE>
<CAPTION>

                                      Investments in USPEs                       Owned Equipment
                                     ---------------------------   -------------------------------------------
                Region                    1997           1996            1997             1996            1995
  ----------------------------------------------------------------  -----------------------------------------------
   <S>                                <C>              <C>             <C>             <C>               <C>
   Net income (loss):
     United States                    $       --       $     --        $   4,549       $    1,543        $  2,142
     Canada                                   --           (753)             926             (555)            (75)
     South America                            --             --           (2,712)          (1,419)             --
     Asia                                     --             --               --           10,715             114
     Australia                                --             --               --               --             646
     Europe                                  773            490               --            3,190             410
     Mexico                                  442             (2)              --               --              --
     Rest of the world                    (1,479)           149            8,950            2,500           2,085
                                     -----------------------------  -----------------------------------------------
   Total identifiable loss                  (264)          (116)          11,713           15,974           5,322
   Administrative and other                   --             --           (3,528)          (3,417)         (3,277)
                                     -----------------------------  -----------------------------------------------
   Total net income (loss):           $     (264)      $   (116)       $   8,185       $   12,557        $  2,045
                                     =============================  ===============================================
</TABLE>

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

<TABLE>
<CAPTION>

                                             Investments in USPEs                            Owned Equipment
                                   -----------------------------------------     ---------------------------------------
             Region                1997          1996         1995             1997          1996         1995
  ----------------------------------------------------------------------  ---------------------------------------
   <S>                           <C>           <C>           <C>             <C>            <C>          <C>
   Net book value:
     United States               $      --     $     --      $     --        $   14,602     $  20,465    $  24,971
     Canada                             --           --         4,205            11,366        14,065        2,187
     South America                      --           --            --             8,345        13,909           --
     Mexico                          2,863        2,768            --                --            --           --
     Asia                               --           --            --                --            --       11,540
     Europe                          4,027        4,565         5,334                --            --        3,377
     Rest of the world              12,090        5,340         6,619             8,269        25,024       31,675
                              ------------------------------------------  ------------------------------------------
                                    18,980       12,673        16,158            42,582        73,463       73,750
   Equipment held for sale           3,778           --            --                --            --           --
                              ------------------------------------------  ------------------------------------------
   Total net book value          $  22,758     $ 12,673      $ 16,158        $   42,582     $  73,463    $  73,750
                              ==========================================  ==========================================

</TABLE>


<PAGE>



                           PLM EQUIPMENT GROWTH FUND V
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

3.   Equipment  (continued)

     The lessees that  accounted  for 10% or more of the total  revenues  during
     1997,  1996, and 1995 were M. T. Maritime  (10.6% in 1997),  Halla Merchant
     Marine Company Ltd.  (11.6% in 1995) and Chembulk  Trading,  Inc. (12.2% in
     1996; 11.1% in 1995).

4.   Investments in Unconsolidated Special-Purpose Entities

     During the second half of 1995, the Partnership began to increase the level
     of its participation in the ownership of large-ticket transportation assets
     to be owned and  operated  jointly  with  affiliated  programs.  This trend
     continued during 1996 and 1997.

     Prior  to  1996,  the  Partnership   accounted  for  operating   activities
     associated  with joint ownership of  transportation  equipment as undivided
     interests,  including  its  proportionate  share of each asset with similar
     wholly-owned assets in its financial  statements.  Under generally accepted
     accounting principles,  the effects of such activities, if material, should
     be reported  using the equity method of  accounting.  Therefore,  effective
     January 1, 1996, the  Partnership  adopted the equity method to account for
     its investment in such jointly held assets.

     The principal  differences  between the previous  accounting method and the
     equity method  concern the  presentation  of  activities  relating to these
     assets in the statement of  operations.  Whereas under the equity method of
     accounting the Partnership's  proportionate  share is presented as a single
     net amount, equity in net income (loss) of USPEs, under the previous method
     the Partnership's statement of operations reflected its proportionate share
     of each individual item of revenue and expense.  Accordingly, the effect of
     adopting  the  equity  method of  accounting  has no  cumulative  effect on
     previously  reported  partners'  capital or on the Partnership's net income
     (loss) for the period of adoption. Because the effects on previously issued
     financial  statements  of  applying  the  equity  method of  accounting  to
     investments  in  jointly-owned  assets are not considered to be material to
     such financial  statements  taken as a whole,  previously  issued financial
     statements  have  not been  restated.  However,  certain  items  have  been
     reclassified  in the  previously  issued  balance  sheet to  conform to the
     current period  presentation.  The beginning  cash and cash  equivalent for
     1996 is different from the ending cash and cash  equivalent for 1995 on the
     statement of cash flows due to this reclassification.

     During 1997,  the  Partnership  purchased an interest in an entity owning a
     product  tanker  for  $9.1  million  and  incurred  acquisition  and  lease
     negotiation  fees to FSI of $0.5  million.  In  addition,  the  Partnership
     received a partial interest in an entity that owns a commercial aircraft in
     exchange for past due receivables  and the outstanding  balance on a direct
     finance lease (see Note 5). The Partnership liquidated its interest in this
     entity in January 1998 when the aircraft was sold at its  approximate  book
     value. The Partnership received liquidating proceeds of $3.7 million.

     During 1996, the  Partnership  purchased an interest in a trust owning five
     commercial  aircraft for $5.6  million and an interest in an entity  owning
     two  commercial  aircraft on a direct  finance lease for $2.9 million,  and
     incurred  acquisition  and lease  negotiation  fees of $0.3  million to PLM
     Worldwide Management Services (WMS), an affiliate of the General Partner's.



<PAGE>




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

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

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

<TABLE>
<CAPTION>

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

<S>                              <C>              <C>             <C>               <C>
Net Investments                  $       67,208   $       22,758  $        48,660   $       12,673
Lease revenues                           28,822            5,868           30,337            7,054
Net income (loss)                        11,390             (264)          (1,692)            (116 )

</TABLE>

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

                                                                                     1997            1996
                                                                             ----------------------------------
   <S>                                                                         <C>                <C>
   48% interest in an entity owning a product tanker                           $    8,266         $       --
   17% interest in two trusts owning three commercial aircraft, two
            aircraft engines, and a portfolio of aircraft rotables                  4,027              4,565
   60% interest in a commercial aircraft                                            3,778                 --
   25% interest in two commercial aircraft on direct finance lease                  2,863              2,768
   50% interest in an entity owning a bulk carrier                                  2,277              3,196
   50% interest in an entity owning a product tanker                                1,547              2,144
                                                                             -------------      -------------
  Net investments                                                              $   22,758         $   12,673
                                                                             =============      =============
</TABLE>

     The  Partnership  had  beneficial  interests in two USPEs that own multiple
     aircraft (the Trusts).  These Trusts contained  certain  provisions,  under
     certain circumstances, for allowing the removal of specific aircraft to the
     beneficial  owners.  A  renegotiation  of  the  Partnership's  senior  loan
     agreement  during  the third  quarter  of 1996 (see  Note 6)  required  the
     Partnership  to remove  from the  Trusts  the  aircraft  designated  to the
     Partnership for loan collateral purposes.  As of December 31, 1996, the two
     Boeing 737 aircraft,  one of which was purchased  during 1995 and the other
     of which was purchased  during 1996, are now reported as owned equipment by
     the Partnership.

5.   Net Investment in Direct Finance Lease

     During December 1995, the  Partnership  entered into a direct finance lease
     related to the  installation  of a Stage III hushkit on an Advanced  Boeing
     727-200  aircraft,  at a cost of $2.5  million.  The  Partnership  incurred
     acquisition and lease  negotiation  fees of $139,000 to TEC related to this
     transaction.  Gross lease payments of $3.8 million were to be received over
     a five-year period, which commenced in December of 1995.

     The components of the net investment in direct finance lease as of December
     31, 1996 are as follows (in thousands of dollars):

                                                             1996
                                                         -------------
Total minimum lease payments                               $  2,978
Residual value                                                  125
Less unearned income                                           (821)
                                                          -------------
                                                           $  2,282
                                                          =============

<PAGE>




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

5.   Net Investment in Direct Finance Lease (continued)

     During 1997, the lessee  encountered  financial  difficulties.  The General
     Partner   established   reserves  against  these  receivables  due  to  the
     determination  that collection of these lease payments were uncertain.  Due
     to the uncertainty of collection,  the General Partner exercised its option
     under  the  terms  of the  settlement  agreement.  During  June  1997,  the
     Partnership, together with two affiliated programs to which the lessee also
     owed past due receivables, repossessed the Boeing 727-200 aircraft. This is
     the  aircraft  on which the Stage III hushkit  was  installed  and that was
     owned by the  lessee and  pledged  as  security  for the  financing  of the
     hushkit.  As a result,  the  balance  due from the  lessee  from the direct
     finance lease and the balances due to affiliated programs were reclassified
     to an  investment  in an entity that owns a commercial  aircraft.  The fair
     market value of the  Partnership's  interest in this aircraft  approximated
     its outstanding receivable from the lessee.

6.   Notes Payable

     In November 1991, the Partnership  borrowed $38,000,000 under a nonrecourse
     loan  agreement.  The loan was secured by certain marine  containers,  five
     marine  vessels,  and  one  mobile  offshore  drilling  unit  owned  by the
     Partnership.

     During 1996,  the  Partnership  sold some of the assets in which the lender
     had a secured  interest.  On September 26, 1996,  the existing  senior loan
     agreement  was amended and restated to reduce the interest  rate,  to grant
     increased  flexibility  in  allowable  collateral,   to  pledge  additional
     equipment to the lenders,  and to amend the loan repayment schedule from 16
     consecutive  equal  quarterly  installments  to  20  consecutive  quarterly
     installments  with lower payments of principle for the first four payments.
     The Partnership  incurred a loan amendment fee of $133,000 to the lender in
     connection with the restatement of this loan.  Pursuant to the terms of the
     loan  agreement,   the  Partnership  must  comply  with  certain  financial
     covenants and maintain certain financial ratios.

     On December 29, 1997,  the existing  senior loan  agreement was amended and
     restated to allow the  Partnership to deduct the next  scheduled  principal
     payment from the equipment sales proceeds which had previously been used to
     paydown the loan.

     During 1997, the loan required quarterly principal payments of $1.5 million
     and quarterly  interest payments at a rate of approximately  LIBOR plus 1.2
     percent per annum  (6.962% at December  31, 1997 and 6.825% at December 31,
     1996). The General Partner believes that the book value of the note payable
     approximates fair value due to its variable interest rate.

     The General  Partner has entered into a joint $50.0 million credit facility
     (the Committed Bridge Facility) on behalf of the Partnership, PLM Equipment
     Growth Fund VI (EGF VI), PLM Equipment  Growth & Income Fund VII (EGF VII),
     and Professional  Lease  Management  Income Fund I (Fund I), all affiliated
     investment programs;  TEC Acquisub,  Inc. (TECAI), an indirect wholly-owned
     subsidiary of the General Partner;  and American Finance Group, Inc. (AFG),
     a subsidiary of PLM International Inc. The Committed Bridge Facility may be
     used to provide  interim  financing of up to (i) 70% of the aggregate  book
     value or 50% of the aggregate  net fair market value of eligible  equipment
     owned by the  Partnership,  plus (ii) 50% of unrestricted  cash held by the
     borrower.  The Committed  Bridge Facility became  available on December 20,
     1993,  and was  amended  and  restated  on  December  2,  1997 to expire on
     November 2, 1998. The  Partnership,  Fund I, TECAI,  and the other programs
     may  collectively  borrow  up to  $35.0  million  of the  Committed  Bridge
     Facility.  AFG may  borrow  up to $50.0  million  of the  Committed  Bridge
     Facility.  The Committed  Bridge  Facility also provides for a $5.0 million
     Letter  of  Credit  Facility  for  the  eligible   borrowers.   Outstanding
     borrowings by one borrower reduce the amount available to each of the other
     borrowers under the Committed Bridge Facility. Individual borrowings may be
     outstanding  for no more than 179 days, with all advances due no later than
     November  2, 1998.  Interest  accrues at either the prime rate or  adjusted
     LIBOR  plus  1.625% at the  borrower's  option and is set at the time of an
     advance of funds. Borrowings by the Partnership



<PAGE>



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

6.   Notes Payable (continued)

     are  guaranteed by the General  Partner.  As of December 31, 1997,  AFG had
     $23.0 million in outstanding  borrowings.  No other  eligible  borrower had
     outstanding  borrowings.  The  General  Partner  believes it will renew the
     Committed  Bridge  Facility upon its expiration with similar terms as those
     in the current Committed Bridge Facility.

7.   Income Taxes

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

     As of December 31, 1997, there were temporary  differences of approximately
$34.1 million  between the financial  statement's  carrying values of assets and
liabilities  and the federal  income tax basis of such  assets and  liabilities,
principally due to the differences in depreciation methods and the tax treatment
of underwriting commissions and syndication costs.



<PAGE>


                           PLM EQUIPMENT GROWTH FUND V

                                INDEX OF EXHIBITS



    Exhibit                                                              Page


     4.   Limited Partnership Agreement of Partnership.                     *


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


    10.2  Amended and Restated $38,000,000 Loan Agreement, dated as of
          September 26, 1996                                                *


    10.3  Amendment No. 1 to the Amended and Restated $38,000,000
          Loan Agreement, dated as of December 29, 1997                  46-50


     10.4 Third Amended and Restated  Warehousing Credit Agreement,  dated as of
          December 2, 1997 with First  Union National Bank of North Carolina and
          others                                                         51-130

    24.   Powers of Attorney.                                           131-133



































--------
* Incorporated by reference.  See page 27 of this report.



<PAGE>