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, 1996.

     [  ]         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 at page 44.

Total number of pages in this report:  47.


<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  Depositary  Units (including
2,500,000 option units) (the 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   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:

     (i) 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;

     (ii)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;

     (iii)  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 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
excess  net  operating  cash  flow  from  operations  that  remains  after  cash
distributions have been made to the partners, will be used to acquire additional
equipment throughout the six year reinvestment phase of the Partnership;

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

     The offering of the Units of the  Partnership  closed on December 23, 1991.
As of December 31, 1996,  there were 9,169,019  Units  outstanding.  The General
Partner contributed $100 for its 5% general partner interest in the Partnership.

     Beginning in the Partnership's seventh year of operations,  which commences
January 1, 1999, the General Partner will stop reinvesting cash flow and surplus
funds,  all of which, if any, less reasonable  reserves,  will be distributed to
the partners.  In the ninth year of operations of the  Partnership,  the General
Partner  will begin to  liquidate  the assets of the  Partnership  in an orderly
fashion,  unless the  Partnership is terminated  earlier upon 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 operations of the
Partnership.


<PAGE>


     Table 1, below,  lists the  equipment  and the cost of the equipment in the
Partnership portfolio as of December 31, 1996 (in thousands of dollars):
<TABLE>

                                     TABLE 1
<CAPTION>

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

      Owned equipment held for operating leases:

       <S>     <C>                                                      <C>                            <C>       
           1   Product tanker                                           KK Uwajima Zosen               $   17,254
           1   Product tanker                                           Kaldnes M/V                        16,276
           1   Panamax bulk carrier                                     China S.B. Corp.                   18,729
           5   737-200 Stage II commercial aircraft                     Boeing                             26,405
           2   Metro III commuter aircraft                              Fairchild                           1,515
           2   DHC-8-102 commuter aircraft                              DeHavilland                         7,629
           1   DHC-8-300 commuter aircraft                              DeHavilland                         5,748
           1   DC-9-32 commercial aircraft                              McDonnell Douglas                  10,056
           1   Stage III aircraft engine RB-211-535E4                   Rolls Royce                         5,852
         752   Refrigerated marine containers                           Various                            13,208
       3,236   Various marine containers                                Various                            11,243
         126   Covered hopper cars                                      Various                             2,972
         106   Anhydrous ammonia tank cars                              GATX                                2,483
          44   Mill gondola cars                                        Bethlehem Steel                     1,248
          85   Sulphur tank cars                                        ACF/RTC                             2,786
          73   Tank cars                                                Various                             1,917
         183   Refrigerated trailers                                    Various                             5,529
         154   Dry trailers                                             Various                             1,878
         149   Piggyback refrigerated trailers                          Oshkosh                             2,276
                                                                                                       -----------

               Total equipment held for operating leases                                               $  155,004<F1>
                                                                                                       ===========

      Investment in equipment owned by unconsolidated special purpose entities:
         0.5   Bulk carrier                                             Nipponkai and Toyama           $    9,705<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<F3>
                 Two aircraft engines                                   Pratt Whitney                         195<F3>
                 Portfolio of aircraft rotables                         Various                               325<F3>
        0.25   Equipment on direct finance lease:
                 Two DC-9 commercial aircraft                           McDonnell Douglas                   3,004<F4>
                                                                                                       -----------
               Total investments                                                                       $   26,184<F1>
                                                                                                       ===========

     Owned equipment on direct finance lease:

           1   Stage III hushkit installed on B727-200                                                 $    2,525
                                                                                                       ===========
<FN>

<F1> Includes proceeds from capital contributions,  undistributed cash flow from
     operations,  and  partnership  borrowings  invested in equipment.  Includes
     costs  capitalzied  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 partnership.

<F3> Jointly owned:  EGF V (17%) and three affiliated partnerships.

<F4> Jointly owned:  EGF V (25%) and two affiliated partnerships.

</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.

     At  December  31,  1996,  approximately  69% 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.  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  direct  expenses  of  the  rental  yard  operations  are  billed  to  the
Partnership monthly.

     The lessees of the equipment include,  but are not limited to: America West
Airlines,  Inc.,  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. IMI has agreed to perform all services necessary to
manage the transportation  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 3).

(C)  Competition

(1)  Operating Leases vs. 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 the lessee's balance sheet.

      The Partnership encounters considerable competition from lessors utilizing
full payout leases on new equipment,  i.e., leases which have terms equal to the
expected  economic  life of the  equipment.  Full payout  leases 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,  and as a result,  the Partnership may be at a
competitive disadvantage.

(2)  Manufacturers and Equipment Lessors

The Partnership also competes with equipment  manufacturers  who offer operating
leases and full payout  leases.  Manufacturers  may provide  ancillary  services
which 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), General Electric Railcar Services
Corporation,  Greenbrier  Leasing  Company,  General  Electric  Capital Aviation
Services Corporation,  and other limited partnerships which lease the same types
of equipment.

(D)  Demand

The  Partnership  invests in  transportation-related  capital  equipment  and in
"relocatable   environments."   "Relocatable  environments"  refers  to  capital
equipment  constructed  to be  self-contained  in  function  but  transportable,
examples of which include mobile  offshore  drilling units,  storage units,  and
relocatable buildings. A general distinction can be drawn between equipment used
for the  transport  of either  materials  and  commodities  or people.  With the
exception  of aircraft  leased to  passenger  air  carriers,  the  Partnership's
equipment is used primarily for the transport of materials and commodities.

The following describe the markets for the Partnership's equipment:

(1)  Commercial Aircraft

The market for commercial aircraft continued to improve in 1996 representing two
consecutive  years of growth  and  profits  in the  airline  industry.  The $5.7
billion in net profits  recorded by the world's top 100 airlines in 1995 grew to
over $6 billion in 1996.  The profits are a result of the  continued  management
emphasis on costs.  The demand for ever-lower  unit costs by airline  management
has  caused a  significant  reduction  of  surplus  used  Stage II and Stage III
commercial aircraft. The result is a return to supply/demand equilibrium. On the
demand side,  passenger  traffic is  improving,  cargo  movement is up, and load
factors are generally higher across the major markets.

These changes are reflected in the  performance of the world's 62 major airlines
that operate 60% of the world  airline  fleet but handle 78% of world  passenger
traffic.   Focusing  on  the  supply/demand  for   Partnership-type   narrowbody
commercial  aircraft,  there were 213 used narrowbody aircraft available at year
end 1995.  In the  first 10  months of 1996,  this  supply  was  reduced  to 119
narrowbody  aircraft  available  for  sale or  lease.  Forecasts  for 1997 see a
continuing  supply/demand  equilibrium  due to air travel  growth  and  balanced
aircraft supply.

The  Partnership's  narrowbody fleet is primarily  late-model (post 1974) Boeing
737-200 Advanced  aircraft.  There are a total of 939 Boeing 737-200 aircraft in
service,  with 219 built prior to 1974.  Independent forecasts estimate that 250
total 737-200s will be retired,  leaving  approximately  700 aircraft in service
after 2003.  The  forecasts  regarding  hushkits  estimate  that half of the 700
Boeing  737-200's,   will  be  hushed  to  meet  Stage  III  noise  levels.  The
Partnership's  aircraft  are all  prospects  for Stage III hushkits due to their
age, hours, cycles, engine configurations, and operating weights.

Independent projections for the Boeing 727-200 aircraft indicate there are 1,050
in service,  with 299 built prior to 1974.  The  Partnership's  aircraft are all
1974 or earlier model 727-100/200s and are expected to be retired prior to 2003.
The current  strategy is to optimize their  remaining value based on the present
value of lease cash flows and projected residuals.

The  Partnership's  Douglas  DC-9-32s  are late  model  aircraft.  There are 663
DC-9-30/40/50 series aircraft in-service,  437 built prior to 1974.  Independent
forecasts  estimate  that 300 older  DC-9  aircraft  will be retired by the year
2003.  The  remaining  fleet will total  approximately  350 aircraft and most of
these  aircraft  will be hushed to Stage III. The aircraft will remain in active
airline service.  The lessees are likely to be secondary  airlines  operating in
markets outside the United States.

(2)  Commuter/Regional Aircraft

Independent  forecasts show the regional aircraft market is growing at a rate of
5.5% per year through 2013. This is slightly  higher than the comparable  growth
rate in commercial  aircraft of 4.7% over the same period.  Currently  there are
4,390  regional  aircraft  in  service in the 15 to 70 seat  class.  Independent
forecasts show this will grow to over 5,000  aircraft  during the next 17 years.
The highest growth markets are the 30 to 50 seat turboprops. The emphasis on the
larger aircraft in the future is a result of growing passenger numbers,  airport
congestion and the extension of regional airline route networks requiring longer
range  aircraft.  These  events will  continue  the  current  trend of the major
airlines  to hand down the  operations  of their  marginal  shorthaul  routes to
affiliated regional carriers.

The Partnership leases regional aircraft that are in the 19 seat, 36 seat and 50
seat categories.  The 19 seat aircraft are in North America and New Zealand.  We
expect to sell all 19 seat class  aircraft in 1997. The  Partnership's  30 to 50
seat regional aircraft are in North America,  which is the highest growth market
for this  class.  The 30 seat market is growing at the expense of the smaller 19
seat  aircraft.  The 50 seat market is growing as a result of the major airlines
taking +100 seat jets off "thin"  routes which are more  economically  served by
the large turboprop powered aircraft.




<PAGE>


(3)  Aircraft Engines

The  demand  for spare  engines  has  increased  as a result  of the air  travel
industry's  expansion  over the last two  years.  The most  significant  area of
increase is in the Pratt & Whitney Stage II JT8D engine which powers many of the
Partnership's Stage II commercial  aircraft.  Today there are over 3000 Stage II
commercial jets in service.  In December 1993 there were 288 Stage II narrowbody
aircraft  available  for sale or  lease.  As of  October  1996,  the  number  of
available Stage II narrowbody's was only 107 aircraft. The increase in the Stage
II fleet has placed over 450 engines back into service. This level of demand has
placed a premium on spare JT8D engines and resulted in a good leasing market for
available engines. The Partnership's spare engines will all be re-leased or sold
over the next two years during this market cycle.

The demand for spare Stage III engines has also risen due to the growth in Stage
III aircraft.  The Partnership leases one Stage III spare engine manufactured by
Rolls Royce (RR). This engine is an RB211-535E4 and powers the Boeing 757 series
aircraft.  Today,  there  are 257  B757's  operating  the RB211  engine  with 52
different airlines. The engine fleet is approximately 600 engines operating over
3000  hours  per year.  Approximately  every  three  years  each  engine on wing
requires  removal for  overhaul.  This results in the need for a spare engine to
allow the aircraft to operate  during this  interim  period.  The  Partnership's
engine will be available for sale or lease during 1997.

(4)  Aircraft Rotables

Aircraft  rotables are replacement  spare parts held by an airline in inventory.
These  parts are  components  that are  removable  from an  aircraft  or engine,
undergo  overhaul,  and are recertified and refit to the aircraft in an "as new"
condition.   Components  or  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 (APU's),  replacement doors,  control surfaces,
pumps, valves and other comparable  equipment.  Generally a rotable has a useful
life that is either  measured  in terms of time in  service  or number of cycles
(takeoffs and landings).  While there are no specific  guidelines  that apply to
the  time or  cycles  between  overhauls  for  rotable  equipment,  there  is no
limitation on the number of times a rotable may be overhauled  and  recertified.
The  component  will be  overhauled  until  the  cost of such  overhaul  becomes
uneconomic relative to the units' replacement cost.

The  Partnership's  rotable  parts will be available  for sale or lease in 1997.
Rotables  generally  reflect the market conditions of the aircraft they support.
The  Partnership's  rotables support  primarily Boeing  737-300/400/500  and the
Boeing  737-200  Advanced  aircraft.  Independent  forecasts for 1997 indicate a
supply-demand equilibrium for these aircraft types.

(5)  Marine Containers

At the end of 1995,  the  consensus of industry  sources was that 1996 would see
both higher container  utilization and  strengthening per diem lease rates. Such
was not  the  case as  there  was no  appreciable  cyclical  improvement  in the
container   market  following  the  traditional   winter  slow  down.   Industry
utilization continues to be under pressure with per diem rates being impacted as
well.

     A  substantial  portion of the  Partnership's  containers  are on long-term
utilization  leases which were entered into with Trans Ocean  Leasing as lessee.
The industry has seen a major consolidation as Transamerica  Leasing late in the
fourth quarter of 1996,  acquired Trans Ocean Leasing.  Transamerica  Leasing is
the second largest container leasing company in the world.  Transamerica Leasing
is the  substitute  lessee for Trans Ocean  Leasing.  Long term,  such  industry
consolidation  should  bring  more  rationalization  to the market and result in
higher utilization and per diem rates.

(6)  Railcars

Pressurized Tank Cars

These cars are used primarily in the petro-chemical  and fertilizer  industries.
They  transport  liquefied  petroleum  gas ("LPG") and  anhydrous  ammonia.  The
utilization  rate on the  Partnership's  fleet of pressurized tank cars was over
98% during 1996.  Independent  forecasts show the demand for natural gas to grow
during 1997 to 1999, as the developing world, former Communist countries and the
industrialized  world all  increase  their  demand for  energy.  The  fertilizer
industry  was  undergoing a rapid  restructuring  toward the end of 1996 after a
string of major mergers, which began in 1995. These mergers reduce the number of
companies that use pressurized tank cars for fertilizer service.  Whether or not
the economies of the mergers allow the total fleet size to be reduced remains to
be seen.

Non-Pressurized Tank Cars

General  purpose  or  non-pressurized  tank  cars are used to  transport  a wide
variety of bulk liquid  commodities such as petroleum fuels,  lubricating  oils,
vegetable oils, molten sulphur,  corn syrup,  asphalt,  and specialty chemicals.
Demand for general  purpose  tank cars in the  Partnership's  fleet has remained
healthy over the last two years with utilization remaining above 98%. The demand
for  petroleum is  anticipated  to grow during 1997 to 1999,  as the  developing
world,  former  communist  countries and the  industrialized  world all increase
their demand for energy. Chemical carloadings for the first 40 weeks of 1996 are
up one tenth of one percent (0.1%) as compared to the same period in 1995.

Covered Hopper Cars

Through  October 5, 1996,  grain car loadings were down 13% compared to the same
period for 1995.  Even with the greatly  reduced  loadings,  the  on-lease  rate
during 1996 for the Partnership grain cars remained at 100%. Industry-wide,  the
covered  hopper is one car type that has  increased  in number over the last ten
years, going from a total of 299,172 cars in 1985 to 325,882 cars in 1995. It is
possible that another poor crop year,  combined with more available cars,  could
place downward pressure on grain car rental rates during 1997.

Mill Gondola Cars

The  Partnership's  net per diem rental income remained high during 1996, as the
demand for mill gondolas remained strong. Quoting from the December,  1996 issue
of Railway Age magazine:  "Significant building programs have lessened shortages
somewhat,  as have  changes  in rules  on  railroad  cars  and car  assignments.
However,  gondolas are still in short supply in many  places..."  The  November,
1996 WEFA Group report  indicates  that they  anticipate  scrap metal demands to
grow as electric  furnace process gain share.  Also, they anticipate  demand for
steel mill products to expand by 2.5 - 3%, on average, from 1997 to 2000.

(7)  Marine Vessels

The  Partnership  owns or has  investments  in  small to  medium-sized  dry bulk
vessels and product  tankers,  which are traded in worldwide  markets,  carrying
commodity cargoes.

     The freight  rates in the dry bulk  shipping  market are  dependent  on the
balance of supply and demand for shipping  commodities and trading  patterns for
such dry bulk commodities. In 1995, dry bulk shipping demand was robust (growing
at 5%t over 1994) and there was a  significant  infusion  of new vessel  tonnage
especially late in the year,  causing some decline in freight rates after a peak
in mid-year.  The slide in freight rates continued in the first half of 1996, as
new tonnage was delivered and shipping demand slipped from the high growth rates
of 1995. In the third quarter of 1996,  there was a significant  acceleration in
the drop of freight rates,  primarily  caused by the lack of  significant  grain
shipment volumes and the infusion of new tonnage.  The low freight rates induced
many ship  owners to scrap  older  tonnage  and to defer or cancel new  building
orders. In the fourth quarter,  a strong grain harvest worldwide gave the market
new strength and freight  rates  recovered  to the levels  experienced  in early
1996, but not to 1995 levels. Overall 1996 was a soft year for shipping with dry
bulk demand growing only 1.8% and the dry bulk fleet growing 3% in tonnage.  The
outlook  for 1997 shows an expected  improvement  in demand with growth at 2.4%,
but a high orderbook remains. 1997 is expected to be a soft year with relatively
low freight rates; however, prospects may be strengthened by continued scrapping
of older vessels in the face of soft rates and deferment or canceling of orders.

     Demand for commodity  shipping  closely tracks  worldwide  economic growth;
however,  economic  development may alter demand patterns from time to time. The
general  partner  operates its funds' vessels in spot charters,  period charters
and pooled vessel  operations.  This operating approach provides the flexibility
to adapt to changing demand patterns.

     Independent forecasts show the longer term outlook (past 1997) should bring
improvement  in freight rates earned by vessels;  however,  this is dependent on
the  supply/demand  balance and  stability  in growth  levels.  The  newbuilding
orderbook  currently  is  slightly  lower  than at the  end of 1995 in  tonnage.
Shipyard  capacity is booked through late 1998;  however,  it remains to be seen
how many of these orders will  actually be fulfilled.  Historically,  demand has
averaged approximately 3 percent annual growth,  fluctuating between flat growth
and 6 percent annually.  With predictable long term demand growth, the long term
outlook  depends  on the supply  side,  which is  affected  by  interest  rates,
governmental shipbuilding subsidy programs, and prospects for reasonable capital
returns in shipping.

(8)  Trailers

Intermodal Trailers

The robust  intermodal  trailer market that began 4 years ago began to soften in
1995 and reduced demand continued in 1996. Intermodal trailer loadings were flat
in 1996 versus 1995's depressed levels.  This lack of growth has been the result
of many factors ranging from truckload  firms  aggressively  recapturing  market
share  from  the  railroads  through  aggressive   pricing,  to  the  continuing
consolidation  activities and asset  efficiency  improvements  of the major U.S.
railroads.

     All of these factors helped make 1996 a year of equalizing equipment supply
as  railroads  and lessors were  pressured  to retire  older and less  efficient
trailers.  The two largest  suppliers of railroad trailers reduced the available
fleet  in  1996  by over  15%.  Overall  utilization  for  intermodal  trailers,
including the Partnership's fleet , was lower in 1996 than in previous years.

Over-the-Road Dry Trailers

The over-the-road dry trailer market was weak in 1996 with utilization down 15%.
The trailer  industry  experienced a record year in 1994 for new  production and
1995  production  levels  were  similar  to 1994.  However,  in 1996 , the truck
freight recession, along with an over building situation,  contributed to 1996's
poor performance. 1996 had too little freight and too much equipment.

Over-the-Road Refrigerated Trailers

The  Partnership  experienced  fairly  strong  demand  levels  in  1996  for its
refrigerated trailers.  With over 37% of the fleet in over the road refrigerated
trailers,  the Partnership,  PLM and affiliated  partnerships  combined,  is the
largest supplier of short-term rental refrigerated trailers in the U.S..

(E)  Government Regulations

The use, maintenance, and ownership of equipment is regulated by federal, state,
local,  and/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 the removal from service or extensive  modification of such equipment to
meet these regulations at considerable cost to the Partnership. Such regulations
include (but are not limited to):

     (1) the U.S. Oil  Pollution  Act of 1990 (which  established  liability for
     operators and owners of vessels,  mobile offshore drilling units, etc. that
     create environmental pollution);

     (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 cor- rosion criteria);

     (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, over-the-road trailers, etc.);

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

ITEM 2.    PROPERTIES

The Partnership  neither owns nor leases any properties other than the equipment
it has purchased for leasing  purposes.  At December 31, 1996,  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  (PLMI) along with FSI, IMI, TEC and PLM Securities Corp (PLM
Securities),  and collectively with PLMI, FSI, IMI, TEC and PLM Securities, (the
"PLM Entities"), were named as defendants in a class action lawsuit filed in the
Circuit Court of Mobile County,  Mobile,  Alabama,  Case No. CV-97-251.  The PLM
Entities received service of the complaint on February 10, 1997, and pursuant to
an  extension  of time  granted  by  plaintiffs'  attorneys,  have sixty days to
respond to the complaint. PLM International is currently reviewing the substance
of the  allegations  with  its  counsel,  and  believes  the  allegations  to be
completely without merit and intends to defend this matter vigorously.

     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  sponsored by PLM Securities,  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 "PLM Growth  Funds").  The  complaint  purports  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  for  breach of
third party  beneficiary  contracts  against and in  violation  of the  National
Association  of  Securities  Dealers  (NASD)  rules  of  fair  practice  by  PLM
Securities alone.

     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  PLM  Entities  for  improper   sales  and   marketing   practices,
mismanagement  of the PLM Growth Funds, and concealing such  mismanagement  from
investors in the PLM 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.

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, 1996.




<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 as of the close of such  year.  The
remaining  interests  in  the  profits  and  losses  and  distributions  of  the
Partnership  are owned,  as of December 31, 1996,  by the  approximately  10,000
holders of Units in the Partnership.

     There are  several  secondary  exchanges  which will  facilitate  sales and
purchases of limited  partnership units.  Secondary markets are characterized as
having few buyers for limited partnership  interests and,  therefore,  generally
are viewed as inefficient  vehicles for the sale of 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 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 also be obligated
to redeem a certain  number of Units each year  beginning  January  1, 1994.  At
December 31, 1996,  the  Partnership  agreed to purchase  approximately  120,000
Units for an aggregate price of  approximately  $1,171,000.  The General Partner
anticipates  that  these  Units  will be  repurchased  in the first  and  second
quarters of 1997.



<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

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

                                     TABLE 2

               For the years ended December 31, 1996, 1995, 1994,
                 1993, and 1992, (In thousands of dollars except
                                per unit amounts)
<CAPTION>
                                            1996          1995            1994            1993           1992
                                         --------------------------------------------------------------------------

<S>                                    <C>            <C>             <C>             <C>             <C>       
Operating results:
  Total revenues                       $     44,322   $    39,142     $    44,291     $   38,476      $   38,497
  Net gain (loss) on disposition
    of equipment                             14,199         3,835           4,920           (584 )          (273 )
  Loss on revaluation of
    equipment                                    --            --              --         (4,125 )            --
  Equity in net loss of unconsolidated
    special purpose entities                   (116 )          --              --             --              --
  Net income (loss)                          12,441         2,045           3,193         (8,443 )        (4,119 )

At year-end:
  Total assets                         $     98,419   $   102,109     $   120,114     $  135,582      $  162,111
  Total liabilities                          46,123        44,092          44,221         43,462          42,117
  Notes payable                              40,463        38,000          38,000         38,000          38,000

Cash distributions                     $     18,083   $    19,342     $    19,420     $   19,430      $   19,180

Cash distributions which represent
  a return of capital                  $      5,642   $    17,297     $    16,227     $   18,460      $   18,228

Per weighted average of Limited
  Partnership Depositary Unit:

  Net income (loss)                    $       1.26   $      0.12     $      0.24     $    (1.02 )    $    (0.55 )

  Cash distributions                   $       1.87   $      2.00     $      2.00     $     2.00      $      200

  Cash distributions which represent
    a return of capital                $       0.61   $      1.89     $      1.76     $     2.00      $     2.00



</TABLE>



<PAGE>


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

Introduction

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations relates to the Financial Statements of 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.

Results of Operations - Factors Affecting Performance

(A)  Re-leasing and Repricing Activity

The exposure of the Partnership's  equipment  portfolio to repricing 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 or kinds of transport capacity, desirability of the equipment in the lease
market,  market  conditions  for the  particular  industry  segment in which the
equipment  is to be  leased,  various  regulations  concerning  the  use  of the
equipment,  and  others.  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 1996 primarily in its trailer, marine vessel
and marine container portfolios.

     (1) Trailers:  The majority of the Partnership's trailer portfolio operates
in short-term rental facilities or 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
increased  during  1996 due to the  expiration  of various  term  leases and the
transfer of these trailers to the PLM short-term rental facilities which started
earning a higher lease;

     (2) Marine Vessels: Certain of the Partnership's marine vessels transferred
to the voyage charter  market from the time charter  market during 1996.  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
marine vessel  contribution  due to higher  average  rates for these  short-term
charters in 1996;

     (3) 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 decline in marine containers  contributions
was due to soft market conditions that caused a decline in repricing activity.

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

(B)  Equipment Liquidations and Nonperforming Lessees

Liquidation  of  Partnership  equipment,  unless  accompanied  by  an  immediate
replacement  of  additional  equipment  earning  similar  rates  (see  below  in
"Reinvestment  Risk"),  represents  a  reduction  in the  size of the  equipment
portfolio,  and may result in a reduction of  contribution  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 leases can
result  not  only in  reductions  in  contribution,  but also  may  require  the
Partnership  to assume  additional  costs to  protect  its  interests  under the
leases, such as repossession, legal fees, etc.

     (1)  Liquidations:  During the year, the Partnership  received  proceeds of
approximately  $30.0  million from the sale of a mobile  offshore  drilling unit
(rig),  926 marine  containers,  2 aircraft  engines,  1  commuter  aircraft,  1
trailer, and 4 railcars. The sales proceeds represented approximately 81% of the
original  cost of the  assets.  By year  end,  the  Partnership  had  reinvested
approximately all of the $30.0 million received.

     (2)  Nonperforming  Lessees:  At  December  31,  1996,  the  lessee  of the
Partnership's  hushkit and a small number of other  lessees were  delinquent  in
making their lease payments. The Partnership  established reserves against these
receivables  and the General  Partner is in the process of taking the  necessary
steps to repossess the huskit and certain other collateral from the lessee.

(C)  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 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 operating lease
income generated,  together with the proceeds from sales of this equipment,  are
intended to enhance financial returns to the partners.

     Other  nonoperating  funds for  reinvestment are generated from the sale of
equipment,  the receipt of funds  realized from the payment of  stipulated  loss
values on  equipment  lost or disposed of during the time it is subject to lease
agreements,  or the exercise of purchase  options  written  into  certain  lease
agreements.  Equipment  sales generally  result from  evaluations by the General
Partner that continued  ownership of certain  equipment is either  inadequate to
meet Partnership  performance goals, or that market  conditions,  market values,
and other  considerations  indicate it is the  appropriate  time to sell certain
equipment.

     During  1996,  the  Partnership  purchased  four  737-200  Boeing  stage II
commercial  aircraft  for $21.9  million,  $5.7  million  was used to purchase a
DHC-8-300  commuter  aircraft,  and $3.0  million was used to purchase a partial
interest  in an  entity  which  owns two DC-9  commercial  aircraft  on a direct
finance  lease.  The  deployment  of the majority of funds  occurred in a timely
manner; consequently, Partnership performance was largely unaffected by any lack
of reinvestment of available funds.

(D)  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.  There  were no
reductions required to the carrying value of equipment during 1996.

As of December 31, 1996, the General  Partner  estimated the current fair market
value of the Partnership's  equipment  portfolio,  including  equipment owned by
unconsolidated  special purpose entities  (USPE's),  to be approximately  $124.6
million.

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,  borrowings from the Committed
Bridge Facility of $2.5 million, and permanent debt financing of $38 million. No
further  capital  contributions  from original  partners are permitted under the
terms  of  the   Partnership's   Limited   Partnership   Agreement,   while  the
Partnership's  total  outstanding  debt,  currently  $40.5 million,  can only be
increased by a maximum of $4.5 million subject to specific covenants in existing
debt  agreements.  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, 1996, the Partnership  generated sufficient
operating cash to meet its operating obligations and pay distributions, but used
undistributed available cash from prior periods of approximately $2.0 million to
maintain the current level of distributions  (total 1996 of approximately  $18.1
million) to the partners

     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  principle  payments 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.  The General Partner believes
that the book  value of the note  payable  approximates  fair  value  due to its
variable interest rate.

     Pursuant  to the  terms of the  Limited  Partnership  agreement,  beginning
January 1, 1994, the Partnership can become  obligated under certain  conditions
to redeem up to 2% of the outstanding  Depositary  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.  At December
31, 1996, the Partnership agreed to purchase  approximately 120,000 Units for an
aggregate price of  approximately  $1,171,000.  The General Partner  anticipates
that these Units will be repurchased in the first and second quarters of 1997.

     The General  Partner has entered into a joint $50 million  credit  facility
(the "Committed  Bridge  Facility") on behalf of the Partnership,  PLM Equipment
Growth Fund IV, PLM Equipment Growth Fund VI, PLM Equipment Growth & Income 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  Inc.,  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 October
31, 1996, to expire on October 31, 1997 and  increased the available  borrowings
for  AFG  to  $50  million.  The  Partnership,  TECAI,  Fund  I  and  the  other
partnerships  collectively  may borrow up to $35 million of the Committed Bridge
Facility. The Committed Bridge Facility also provides for a $5 million Letter of
Credit Facility for the eligible  borrowers.  Outstanding  borrowings by Fund I,
TECAI,  AFG or PLM  Equipment  Growth  Funds IV  through  VII  reduce the amount
available  to  each  other  under  the  Committed  Bridge  Facility.  Individual
borrowings may be outstanding  for no more than 179 days,  with all advances due
no later than October 31, 1997.  The  Committed  Bridge  Facility  prohibits the
Partnership  from incurring any  additional  indebtedness.  Interest  accrues at
either the prime rate or adjusted LIBOR plus 2.5% at the borrowers 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, 1996, the Partnership had
borrowings of $2.5 million,  PLM Equipment Growth Fund VI had $1.3 million,  PLM
Equipment  Growth and Income Fund VII had $2.0 million,  AFG had $26.9  million,
and TECAI had $4.1  million in  outstanding  borrowings.  Neither PLM  Equipment
Growth Fund IV nor Fund I had any outstanding borrowings.

     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.

Results of Operations - Year to Year Detailed Comparison

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
decreased  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):
<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
   Trailers                                                                 1,567            1,436
   Rail equipment                                                           1,532            1,797
   Marine containers                                                        2,790            3,939
   Mobile offshore drilling unit                                            1,062            2,553

</TABLE>

Aircraft: 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
later 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
2 aircraft  from  USPE's to comply with the credit  agreement  (See Note 2). 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 which were operating  under a voyage charter during the first six months
of 1996,  transferring  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 when 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;

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 twelve
months the number of trailers in the PLM affiliated  short-term rental yards has
increased  due to 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 of trailers in the PLM affiliated  short-term rental
yards,  repairs  to  maintain  these  trailers  in  running  condition  has 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 is due to the sale of 98 railcars
in May of 1995.

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  $123,000,  respectively  during the same period of
1995.  The  number  of  marine  containers  owned  by the  Partnership  has been
declining over the past twelve months due to sales and dispositions.  The result
of this  declining  fleet has  resulted  in a decrease in marine  container  net
contribution.  In addition, the container fleet is experiencing a decline in the
utilization rate during 1996 compared to 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 later 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:

(1) 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;

(2)  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 offset,  in part,
by the purchase of two commercial aircraft during 1996 ;

(3)  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;

(4) A $0.3  million  increase  in  bad  debt  expenses  due  to an  increase  in
uncollectable amounts due from certain lessees;

(C)  Net gain on disposition of owned equipment

Net gain on  disposition  of  equipment  for the year ended  December  31,  1996
totaled  $14.2  million  which  resulted  from the sale of a rig with a net book
value of $10.7  million for proceeds of $21.3  million,  2 aircraft  engines,  1
commuter  aircraft,  926 marine  containers,  1 trailer  and 4 railcars  with an
aggregate net book value of $5.1 million for proceeds of $8.7 million.  Net gain
on  disposition  of equipment  during the twelve months ended December 31, 1995,
was realized on the disposal of 1,519 marine  containers,  2 marine  vessels,  1
aircraft,  and 98 railcars with an aggregate net book value of $15.8 million for
proceeds  of $18.3  million.  Included  in the gain on 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 which
was received  during 1996 and interest  earned from the finance  lease which 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.

(E) Equity in net  income  (loss) of  unconsolidated  special  purpose  entities
represents  net income  generated  from the  operation of  jointly-owned  assets
accounted for under the equity method (see Note 2 to the financial statements).
<TABLE>
<CAPTION>

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

</TABLE>

Aircraft,  aircraft rotable,  and aircraft engines:  As of December 31 1996, the
Partnership  has an interest in two trusts  which own 3 commercial  aircraft,  2
aircraft engines and a portfolio of aircraft rotables.  The Partnership also had
purchased an interest in an additional  trust during 1996 which was  transferred
into  equipment  held for  operating  lease  during  the later part of the third
quarter of 1996 (see Note 2 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   expense,   management  fees  and
administrative  costs of $3.5 million.  As of December 31 1995, the  Partnership
has an interest in three  trusts  which own 4  commercial  aircraft,  2 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 of 1995 of $0.7  million  were offset by  depreciation  and  amortization
expense, and management fees of $0.8 million.

Marine vessels:  As of December 31, 1996, the Partnership owns a 50%-interest in
two entities which 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 compare to the same period of 1995 was also due to the
one marine  vessel which was  transferred  to a time charter  during 1996 from a
voyage charter during the same period of 1995.  Depreciation  expense  decreased
$0.2 million due to the double-declining balance method of depreciation.

(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 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  duration  of the  Partnership  is subject  to many  factors  and the
Partnership's  performance  in the twelve months ended  December 31. 1996 is not
necessarily  indicative of future  periods.  In the twelve months ended December
31, 1996, the Partnership  distributed $17.2 million to the Limited Partners, or
$1.87 per weighted average Depositary Unit.

Comparison of the Partnership's Operating Results for the Years Ended  
December 31, 1995 and 1994
-----------------------------------------------------------------------

(A)  Revenues

Total  revenues  for the years  ended  December  31,  1995 and 1994,  were $39.1
million and $44.3  million,  respectively.  This  decrease in 1995  revenues was
primarily  attributable to lower lease revenues and a lower gain recorded on the
sale of equipment,  offset partially by increased interest and other income. The
Partnership's  ability to acquire,  operate, or liquidate assets, secure leases,
and  re-lease  those  assets  whose  leases  expire  during the  duration of the
Partnership is subject to many factors, therefore, the Partnership's performance
in 1995 or 1994 in this regard is not necessarily indicative of future periods.

     (1) The Partnership's  lease revenue decreased to $34.3 million in the year
ended December 31, 1995, from $38.8 million during the same period in 1994.

     The following  table presents  lease revenues  earned by equipment type (in
thousands):
<TABLE>
<CAPTION>

                                                        For the year ended December
                                                                    31,
                                                          1995               1994
                                                       -------------------------------
   <S>                                                  <C>               <C>         
   Marine vessels                                       $ 18,194          $  21,501   
   Mobile offshore drilling units                          2,556              5,167
   Marine containers                                       4,061              4,646
   Aircraft                                                5,471              3,265
   Rail equipment                                          2,475              2,945
   Trailers                                                1,541              1,233
                                                        ==============================
                                                        $ 34,298          $  38,757   
                                                        ==============================
</TABLE>

     Significant revenue component changes resulted primarily from:

     (a) An increase of $2.2 million in aircraft  revenues due  primarily to the
acquisition and lease of five commuter  aircraft and an interest in three trusts
containing commercial aircraft during 1995;

     (b) An increase of $0.3 million in trailer  revenues  due  primarily to the
acquisition and lease of 150 trailers during the first quarter of 1995;

     (c) The net decline of $3.3 million in marine  vessel  revenues is due to a
number of factors:

         (c-1) Revenues declined $2.1 million during the year ended December 31,
1995, due to the sale of two marine vessels during the first and second quarters
of 1995 which were on lease during 1994;

         (c-2) Revenues declined $2.5 million due to one marine vessel which was
on voyage  charter  (see  below) for all of 1994,  switching  to a time  charter
arrangement  during most of the first two quarters of 1995 before switching back
to  voyage  charter.  This  marine  vessel  was  also  off-hire  for 41 days for
drydocking during the later part of 1995;

         (c-3)  These  declines  were  partially  offset by an  increase of $1.3
million in revenues earned by three marine vessels which are currently operating
under time charter and voyage charter. Although two of these marine vessels went
into  drydocking for an aggregate of 50 days during 1995,  increases in the time
charter  rates earned  during the last two quarters of 1995 plus profit  sharing
from the time charter,  gave these marine  vessels the  increased  earnings when
compared to 1994;

     Voyage  charters  are  short-term  leases  lasting the duration of specific
voyages,  typically  30  to  45  days.  Voyage  charters  have  higher  revenues
associated  with them since the owner pays for costs,  such as bunkers  and port
costs,  normally  borne by the  lessees  under  time or  bareboat  charters.  To
position the  Partnership's  marine  vessel fleet for a potential  upturn in the
marine vessel  market,  the  Partnership  has entered some of its marine vessels
into voyage charters and plans to enter into longer-term contracts as the market
improves;

     (d)  Declines  of $2.6  million in revenues  earned by the mobile  offshore
drilling  unit  (rig) were  primarily  due to the sale of a rig during the later
part of December  1994,  which was on lease during 1994 and to a lower  re-lease
rate earned on the remaining rig;

     (e) Declines of $0.6 million in marine container  revenues due primarily to
the disposal of 1,519  marine  containers  in service  between the 1995 and 1994
periods offset, in part, by higher utilization and rents earned during 1995;

     (f) Declines of $0.4 million in rail  equipment  revenues was due primarily
to the sale of 98 railcars during 1995 which were on lease during 1994.

     (2) Interest and other income  increased $0.4 million when compared to 1994
due primarily to higher cash balances  available for  investment and an increase
in the interest rate earned on cash equivalents.

     (3) Net gain on disposition of equipment during the year ended December 31,
1995, was realized on the disposal of 1,519 marine containers, 2 marine vessels,
1 commuter  aircraft,  and 98 railcars with an aggregate net book value of $15.8
million for  proceeds of $18.3  million.  Included in the gain on sale of one of
the marine vessels is the unused portion of drydocking  reserves and commissions
in the net amount of $1.3 million.  During the year ended December 31, 1994, the
Partnership disposed of 1 mobile offshore drilling unit with a net book value of
$7.9 for proceeds of $12.6 million,  and 1,086 marine containers and 26 railcars
with an aggregate net book value of $2.0 million for aggregate  proceeds of $2.2
million.

(B)  Expenses

Total expenses of $37.1 million for the year ended December 31, 1995,  decreased
from $41.1  million for the same period in 1994.  The decrease in 1995  expenses
was attributable to lower  depreciation  expense,  management fees to affiliate,
and equipment operating  expenses,  partially offset by increases in repairs and
maintenance, interest expense, insurance expense, and administrative expenses.

     (1)  Direct  operating   expenses  (defined  as  repairs  and  maintenance,
insurance expenses, and equipment operating expenses) decreased to $13.8 million
in the year ending  December 31, 1995,  from $15.6 million in the same period in
1994. This change resulted from:

     (a) A decrease of $2.4 million in marine  equipment  operating costs is due
primarily to two of the  Partnership's  marine vessels switching from short-term
voyage  charters,  in which the  Partnership  pays all marine  vessel  operating
costs, such as crew costs and stores, as well as certain  additional costs, such
as bunkers and port costs, to a longer-term time charter. When the marine vessel
is operating  under a time charter,  a portion of the above expenses are paid by
the  charterer  and not the  Partnership.  During the same  period in 1994,  two
marine  vessels  operated on a short-term  voyage  charter and the lessee of the
remaining  marine  vessels  paid for the majority of the above  mentioned  costs
compared to one marine vessel on voyage charter in 1995;

     (b) An increase of $0.3 million in repairs and maintenance  costs from 1994
levels  was  due  primarily  to  additional   repairs  charged  to  two  of  the
Partnership's  marine vessels during their drydocking in the fourth quarter 1995
which were not  anticipated and additional  upgrades  required to another marine
vessel during 1995.  The increase to marine vessel repairs and  maintenance  was
offset, in part, by a reduction to repairs and maintenance caused by the sale of
two marine vessels during 1995;

     (c) An increase of $0.3 million in insurance  expense during the year ended
December 31, 1995,  when  compared to the same period in 1994, is due to overall
escalating insurance premiums charged to the marine vessels.  Also, during 1994,
the Partnership  received a refund of $131,000 from an insurance  company due to
lower loss of hire claims; a similar refund was not received in 1995;

     (2) Indirect  operating  expenses (defined as depreciation and amortization
expense,  management  fees,  interest  expense,  and general and  administrative
expenses)  decreased to $23.3  million in the year ended  December 31, 1995 from
$25.5  million  in the year  ended  December  31,  1994.  This  change  resulted
primarily from:

     (a) A decrease in  depreciation  and  amortization  expense of $2.9 million
from 1994 levels  reflecting  the  Partnership's  double-declining  depreciation
method and the sale of a rig during  December of 1994 and two marine vessels and
other equipment  during 1995. The decrease was offset in part by the purchase of
six additional  aircraft and a partial beneficial  interest in two trusts owning
aircraft during 1995;

     (b) An increase of $0.8  million in interest  expenses due to a rise in the
base rate of interest charged on the Partnership's debt;

     (c) A decrease  of $0.3  million in  management  fees due to a decrease  in
lease revenues;

     (d) An increase of $0.2  million in  administrative  expenses due to higher
bank charges to the  Partnership,  an increase in professional  services needed,
and a loan fee charged the Partnership.


(C)  Net Income

The  Partnership's  net income of $2.0  million in the year ended  December  31,
1995, decreased from a net income of $3.2 million in the year ended December 31,
1994. The Partnership's ability to acquire, operate, or liquidate assets, secure
leases, and re-lease those assets whose leases expire during the duration of the
Partnership, is subject to many factors and the Partnership's performance in the
year ended December 31, 1995, is not  necessarily  indicative of future periods.
In the year ended December 31, 1995, the Partnership  distributed  $18.4 million
to the Limited Partners, or $2.00 per weighted average Depositary Unit.

Geographic Information

The Partnership operates its equipment in international markets.  Although these
operations  expose the Partnership to certain  currency,  political,  credit and
economic risks,  the Manager believes these risks are minimal or has implemented
strategies  to control  the risks as  follows:  Currency  risks are at a minimum
because  all  invoicing,  with  the  exception  of a small  number  of  railcars
operating in Canada, is conducted in U.S. dollars. Political risks are minimized
generally  through the avoidance of  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 U.S. 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 Manager strives to minimize this risk with market analysis prior
to committing equipment to a particular  geographic area. Refer to the Financial
Statements,  Note 4 for  information  on the  revenues,  income,  and  assets 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 due to
the use of 200% declining  balance method of depreciation.  The relationships of
geographic  revenues,  net  income  (loss) and net book  value are  expected  to
significantly  change in the future as assets come off lease and  decisions  are
made to 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 1996, U.S. lease revenues accounted for
22% of the total lease  revenues  while net income  accounted for 12% of the net
income for the  Partnership.  The primary reason for this  relationship  is that
there was a large gain realized from the sale of an asset in another  geographic
region and the  Partnership  depreciates  its rail equipment over a fifteen year
period versus twelve years for other  equipment  types owned and leased in other
geographic regions.

     The  Partnership's  owned  equipment and  investments in equipment owned by
USPE's on lease to Canadian domiciled lessees consists of aircraft and railcars.
During  1996,  Canadian  lease  revenues  accounted  for 9% of the  total  lease
revenues and recorded a net loss of $1.3 million when compared to the net income
for the Partnership of $12.4 million.  The primary reason for this  relationship
is that  there was a large  gain  realized  from the sale of an asset in another
geographic region.

     The  Partnership's  owned aircraft on lease to a South  American  domiciled
lessee during 1996,  accounted for 2% of the total lease revenues and recorded a
net loss of $1.4 million when compared to the net income for the  Partnership of
$12.4  million.  The primary  reason for this  relationship  is that there was a
large gain realized from the sale of an asset in another geographic region.

     The  Partnership  owned a rig which was on lease to a lessee  domiciled  in
Asia. Lease revenues in this region accounted for 3% of the total lease revenues
while net income  accounted for 86% of the net income for the  Partnership.  The
primary reason for this  relationship is that during 1996, the Partnership  sold
this  rig  for a gain  which  accounted  for 85% of  total  net  income  for the
Partnership.  At December 31, 1996. the  Partnership  did not have any remaining
assets in the region surrounding Asia.

     The  Partnership's  owned  equipment and  investments in equipment owned by
USPE's on lease to lessees in Europe  consisted of aircraft which  accounted for
6% of lease  revenues  while net income  accounted for 30% of the net income for
the  Partnership.   The  primary  reason  for  this  relationship  is  that  the
Partnership sold some of the aircraft equipment and realized a gain on the sales

     The  Partnership's  owned  equipment and  investments in USPE's on lease to
lessees  in the  rest  of the  world  consists  of  marine  vessels  and  marine
containers.  During 1996, lease revenues for these lessees  accounted for 58% of
the total lease  revenues and recorded a net income of 21% when  compared to the
net income for the Partnership. The primary reason for this relationship is that
there was a large gain realized from the sale of an asset in another  geographic
region.

Inflation

There was no significant  impact on the Partnership's  operations as a result of
inflation during 1996, 1995 or 1994.

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.

Outlook for the Future

Several factors may affect the Partnership's  operating  performance in 1997 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 1996, market conditions,  supply and demand  equilibrium,
and other factors varied in several  markets.  In the container and refrigerated
over-the-road trailer markets,  oversupply conditions,  industry consolidations,
and other  factors  resulted  in  falling  rates and lower  returns.  In the dry
over-the-road  trailer  markets,  strong  demand and a backlog of new  equipment
deliveries produced high utilization and returns.  The marine vessel,  rail, and
mobile  offshore  drilling  unit  markets  could  be  generally  categorized  by
increasing  rates as the demand for  equipment  is  increasing  faster  than new
additions net of retirements.  Finally, 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
declining performance, and in others, in improved 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,
governmental or other regulations,  and others. The  unpredictability of some of
these  factors,  or of their  occurrence,  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 these  acquisitions  may cause the  Partnership to generate  additional
earnings and cash flow for the Partnership.

(A)  Repricing and Reinvestment Risk

Certain  portions of the  Partnership's  marine  container,  marine vessel,  and
trailer  portfolios  will  be  remarketed  in 1997 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.

(B)  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 U.S.  ports
resulting  from  implementation  of the U.S. Oil Pollution Act of 1990.  Ongoing
changes in the  regulatory  environment,  both in the U.S. and  internationally,
cannot be predicted  with any  accuracy,  and preclude the General  Partner from
determining the impact of such changes on Partnership operations,  purchases, or
sale of equipment.

 (C) Distributions

Pursuant to the Limited  Partnership  Agreement,  the Partnership  will cease to
reinvest in  additional  equipment  beginning in its seventh year of  operations
which  commences on January 1, 1998. 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  sufficient  to  meet  its
obligations and sustain a predictable level of distributions to the partners.

     The General  Partner  believes the current  level of  distributions  to the
partners  can  be  maintained   throughout  1997  using  cash  from  operations,
undistributed  available  cash from prior  periods,  and proceeds  from sales or
dispositions 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.

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 THE PARTNERSHIP

As of the date of this Annual  Report,  the directors and executive  officers of
PLM  International  (and key  executive  officers  of its  subsidiaries)  are as
follows:
<TABLE>
<CAPTION>

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

<S>                                     <C>                <C>                                                   
 J. Alec Merriam                        61                 Director, Chairman of the Board, PLM International,
                                                           Inc.; Director, PLM Financial Services, Inc.

 Douglas P. Goodrich                    50                 Director and Senior Vice President, PLM
                                                           International; Director and President, PLM Financial
                                                           Services, Inc.; Senior Vice President, PLM
                                                           Transportation Equipment Corporation; President, PLM
                                                           Railcar Management Services, Inc.

 Walter E. Hoadley                      80                 Director, PLM International, Inc.

 Robert L. Pagel                        60                 Director, Chairman of the Executive Committee, PLM
                                                           International, Inc.; Director, PLM Financial
                                                           Services, Inc.

 Harold R. Somerset                     62                 Director, PLM International, Inc.

 Robert N. Tidball                      58                 Director, President and Chief Executive Officer, PLM
                                                           International, Inc.

 J. Michael Allgood                     48                 Vice President and Chief Financial Officer, PLM
                                                           International, Inc. and PLM Financial Services, Inc.

 Stephen M. Bess                        50                 President, PLM Investment Management, Inc.;
                                                           President, PLM Securities Corp.; Vice President, PLM
                                                           Financial Services, Inc.

 David J. Davis                         40                 Vice President and Corporate Controller, PLM
                                                           International and PLM Financial Services, Inc.

 Frank Diodati                          42                 President, PLM Railcar Management Services Canada
                                                           Limited.

 Steven O. Layne                        42                 Vice President, PLM Transportation Equipment
                                                           Corporation; Vice President and Director, PLM
                                                           Worldwide Management Services, Ltd.

 Stephen Peary                          48                 Senior Vice President, General Counsel and Secretary,
                                                           PLM International, Inc.; Vice President, General
                                                           Counsel and Secretary, PLM Financial Services, Inc.,
                                                           PLM Investment Management, Inc., PLM Transportation
                                                           Equipment Corporation; Vice President, PLM
                                                           Securities, Corp.

 Thomas L. Wilmore                      54                 Vice President, PLM Transportation Equipment
                                                           Corporation; Vice President, PLM Railcar Management
                                                           Services, Inc.

</TABLE>


<PAGE>


     J. Alec  Merriam was  appointed  Chairman of the Board of  Directors of PLM
International  in September  1990,  having served as a director  since  February
1988.  In October  1988,  he became a member of the  Executive  Committee of the
Board of  Directors of PLM  International.  From 1972 to 1988,  Mr.  Merriam was
Executive  Vice  President  and Chief  Financial  Officer  of  Crowley  Maritime
Corporation, a San Francisco area-based company engaged in maritime shipping and
transportation services.  Previously, he was Chairman of the Board and Treasurer
of LOA Corporation of Omaha,  Nebraska and served in various financial positions
with Northern Natural Gas Company, also of Omaha.

     Douglas P. Goodrich was elected to the Board of Directors in July 1996, and
appointed  Director and  President of PLM Financial  Services in June 1996,  and
appointed Senior Vice President of PLM International in March 1994. 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  Corp. of Chicago,
Illinois from December 1980 to September 1985.

     Dr. Hoadley joined PLM International's Board of Directors and its Executive
Committee in September, 1989. He served as a Director of PLM, Inc. from November
1982 to June 1984 and PLM  Companies,  Inc. from October 1985 to February  1988.
Dr.  Hoadley has been a Senior  Research  Fellow at the Hoover  Institute  since
1981.  He was  Executive  Vice  President  and Chief  Economist  for the Bank of
America  from  1968  to  1981,  and  Chairman  of the  Federal  Reserve  Bank of
Philadelphia  from 1962 to 1966.  Dr. Hoadley served as a Director of Transcisco
Industries, Inc. from 1988 through August of 1995.

     Robert L. Pagel was appointed  Chairman of the  Executive  Committee of the
Board of Directors of PLM  International  in September 1990,  having served as a
director  since  February  1988.  In  October  1988,  he  became a member of the
Executive  Committee of the Board of Directors of PLM  International.  From June
1990 to April 1991,  Mr. Pagel was President and Co-Chief  Executive  Officer of
The Diana Corporation,  a holding company traded on the New York Stock Exchange.
He is the former  President and Chief Executive  Officer of FanFair  Corporation
which  specializes in sports fans' gift shops. He previously served as President
and Chief Executive Officer of Super Sky International,  Inc., a publicly traded
company,  located in Mequon,  Wisconsin,  engaged in the manufacture of skylight
systems.  He was formerly Chairman and Chief Executive Officer of Blunt, Ellis &
Loewi,  Inc., a  Milwaukee-based  investment firm. Mr. Pagel retired from Blunt,
Ellis & Loewi in 1985  after a career  spanning  20 years in all  phases  of the
brokerage  and financial  industries.  Mr. Pagel has also served on the Board of
Governors of the Midwest Stock Exchange.

     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), a recently-acquired  subsidiary of Alexander & Baldwin,  Inc.
Mr.  Somerset joined C&H 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 -
Agricultures,  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 U.S. 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 N. Tidball was appointed  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 and a member of the Executive  Committee of the
Board of  Directors of PLM  International  in September  1990.  Mr.  Tidball was
elected President of PLM Railcar Management Services,  Inc. in January 1986. 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,
Inc., he was Vice President,  a General Manager and a Director of North American
Car  Corporation,  and a Director  of the  American  Railcar  Institute  and the
Railway Supply Association.

     J. Michael Allgood was appointed Vice President and Chief Financial Officer
of PLM  International  in October 1992.  Between July 1991 and October 1992, Mr.
Allgood was a consultant  to various  private and public  sector  companies  and
institutions  specializing  in financial  operational  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  President of PLM  Securities,  Corp. 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 Corp., a manufacturer  of computer  peripheral  equipment,  from October
1975 to November 1978.

     David  J.  Davis  was  appointed  Vice  President  and  Controller  of  PLM
International  in January 1994.  From March 1993 through January 1994, Mr. Davis
was engaged as a consultant for various firms,  including PLM. Prior to that Mr.
Davis was Chief Financial Officer of LB Credit Corporation in San Francisco from
July  1991 to March  1993.  From  April  1989 to May  1991,  Mr.  Davis was Vice
President and Controller for ITEL Containers International Corporation which was
located  in San  Francisco.  Between  May 1978 and April  1989,  Mr.  Davis held
various positions with Transamerica Leasing Inc., in New York, including that of
Assistant Controller for their rail leasing division.

     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,  PLM Transportation Equipment
Corporation's  Air Group in November  1992, and was appointed Vice President and
Director of PLM Worldwide Management Services, Ltd. in September 1995. Mr. Layne
was PLM  Transportation  Equipment  Corporation's  Vice President,  Commuter and
Corporate  Aircraft  beginning in July 1990. Prior to joining PLM, Mr. Layne was
the Director,  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
senior pilot with 13 years of accumulated service.

     Stephen Peary became Vice President,  Secretary, and General Counsel of PLM
International  in February  1988 and Senior Vice  President  in March 1994.  Mr.
Peary was Assistant General Counsel of PLM Financial Services,  Inc. from August
1987  through  January  1988.  Previously,  Mr. Peary was engaged in the private
practice of law in San  Francisco.  Mr. Peary is a graduate of the University of
Illinois,  Georgetown  University Law Center, and Boston University  (Masters of
Taxation Program).

     Thomas L. Wilmore was appointed Vice  President - Rail, PLM  Transportation
Equipment Corporation, in March 1994 and has served as Vice President, Marketing
for PLM Railcar Management Services,  Inc. since May 1988. Prior to joining PLM,
Mr. Wilmore was Assistant Vice President  Regional Manager for MNC Leasing Corp.
in Towson, Maryland from February 1987 to April 1988. From July 1985 to February
1987,  he was  President  and Co-Owner of Guardian  Industries  Corp.,  Chicago,
Illinois,  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 the General  Partner are elected for a one-year  term or
until  their  successors  are  elected  and  qualified.   There  are  no  family
relationships  between  any  director  or any  executive  officer of the General
Partner.

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, 1995.


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.  At December 31, 1996,
         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, 1996.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a) Transactions with Management and Others

         During 1996, the Partnership  paid or accrued the following fees to FSI
         or its affiliates:  management fees - $1,458,000; equipment acquisition
         fees - $936,000 and lease negotiation fees - $214,000.  The Partnership
         reimbursed FSI or its affiliates  $838,000 for  administrative and data
         processing  services  performed  on  behalf  of  the  Partnership.  The
         Partnership paid Transportation Equipment Indemnity Company Ltd. (TEI),
         a wholly-owned,  Bermuda-based subsidiary of PLM International $768,000
         for  insurance   coverages   during  1996,   which  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 1996,  the USPE's paid or accrued the following fees to FSI
         or its affiliates  (based on the  Partnership's  proportional  share of
         ownership):   management  fees  -  $304,000;  administrative  and  data
         processing  services - $73,000;  equipment  acquisition fees - $382,000
         and lease negotiation fees - $85,000. The USPE's also paid TEI $231,000
         for insurance coverages during 1996

     (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.

     (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.

         10.4     Second  Amended and  restated  Warehousing  Credit  Agreement,
                  dated as of May 31,  1996 with First  Union  National  Bank of
                  North Carolina.

         10.5     Amendment  No. 1 to Second  Amended and  restated  Warehousing
                  Credit  Agreement,  dated as of  November  5, 1996 with  First
                  Union National Bank of North Carolina.

         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 11, 1997                 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/ David J. Davis
                                               ------------------------
                                               David J. Davis
                                               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



*_______________________
J. Alec Merriam                     Director - FSI               March 11, 1997


*_______________________
Robert L. Pagel                     Director - FSI               March 11, 1997






* Stephen Peary,  by signing his 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/ Stephen Peary
----------------------
Stephen Peary
Attorney-in-Fact


<PAGE>



                           PLM EQUIPMENT GROWTH FUND V
                             (A Limited Partnership)

                          INDEX TO FINANCIAL STATEMENTS

                                  (Item 14(a))


                                                                      Page

Report of Independent Auditors                                          29

Balance sheets as of December 31, 1996 and 1995                         30

Statements of income for the years ended
     December 31, 1996, 1995, and 1994                                  31

Statements of changes in partners' capital for the
     years ended December 31, 1996, 1995, and 1994                      32

Statements of cash flows for the years ended
     December 31, 1996, 1995, and 1994                                  33

Notes to financial statements                                      34 - 43

All other  financial  statement  schedules  have been  omitted  as 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  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, 1996 and 1995 and the  results of its  operations  and its cash
flows for each of the years in the three-year period ended December 31, 1996, in
conformity with generally accepted accounting principles.



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


SAN FRANCISCO, CALIFORNIA
February 28, 1997


<PAGE>



                           PLM EQUIPMENT GROWTH FUND V
                             (A Limited Partnership)

                                 BALANCE SHEETS
                                  December 31,
                             (Dollars in thousands)


<TABLE>

                                     ASSETS
<CAPTION>
                                                                            1996                 1995
                                                                        -----------------------------------

   <S>                                                                   <C>                  <C>       
   Equipment held for operating leases, at cost                          $  155,004           $  159,314
   Less accumulated depreciation                                            (81,541 )            (85,564 )
                                                                         ---------------------------------
     Net equipment                                                           73,463               73,750

   Cash and cash equivalents                                                  4,662                5,583
   Restricted cash                                                              553                  223
   Investments in unconsolidated special purpose entities                    12,673               16,158
   Accounts receivable, net of allowance for doubtful accounts of
     $236 in 1996 and $54 in 1995                                             3,481                2,731
   Net investment in direct finance lease                                     2,282                2,637
   Notes receivable                                                              27                  322
   Lease negotiation fees to affiliate, net of accumulated
     amortization of $184 in 1996 and $805 in 1995                              319                  143
   Debt issuance and loan costs, net of accumulated amortization
     of $255 in 1996 and $199 in 1995                                           268                  187
   Debt placement fees to affiliate, net of accumulated
     amortization of $245 in 1996 and $198 in 1995                              134                  182
   Prepaid expenses and other assets                                            557                  193
                                                                         ---------------------------------
       Total assets                                                      $   98,419           $  102,109
                                                                         =================================

                        LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:

     Due to affiliates                                                   $      699           $    1,116
     Accounts payable and accrued expenses                                    1,060                1,360
     Lessee deposits and reserve for repairs                                  3,901                3,616
     Short term note payable                                                  2,463                   --
     Note payable                                                            38,000               38,000
                                                                         ---------------------------------
       Total liabilities                                                     46,123               44,092

   Partners' capital:

     Limited Partners (9,169,019 Depositary Units in 1996
       and 9,175,944 Depositary Units in 1995)                               52,296               58,017
     General Partner                                                             --                   --
                                                                         ---------------------------------
       Total partners' capital                                               52,296               58,017
                                                                         ---------------------------------
       Total liabilities and partners' capital                           $   98,419           $  102,109
                                                                         =================================

</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 per unit amounts)
<TABLE>
<CAPTION>



                                                                            1996           1995          1994
                                                                        ------------------------------------------
  Revenues:

     <S>                                                                 <C>            <C>            <C>     
     Lease revenue                                                       $  28,763      $  34,298      $ 38,757
     Interest and other income                                               1,360          1,009           614
     Net gain on disposition of equipment                                   14,199          3,835         4,920
                                                                         -----------------------------------------
       Total revenues                                                       44,322         39,142        44,291

   Expenses:

     Depreciation and amortization                                          14,941         17,321        20,266
     Management fees to affiliate                                            1,458          1,767         2,097
     Repairs and maintenance                                                 2,843          4,004         3,657
     Interest expense                                                        2,789          3,048         2,235
     Equipment operating expenses                                            6,016          7,736        10,089
     Insurance expense to affiliate                                            768          1,015           841
     Other insurance expense                                                   985          1,080           996
     General and administrative expenses to affiliates                         838            612           436
     Other general and administrative expenses                                 903            514           481
     Provision for bad debts                                                   224             --            --
                                                                         -----------------------------------------
       Total expenses                                                       31,765         37,097        41,098
                                                                         -----------------------------------------

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

                                                                         -----------------------------------------
       Net income                                                        $  12,441      $   2,045      $  3,193
                                                                         =========================================

   Partners' share of net income:

     Limited Partners                                                    $  11,524      $   1,077      $  2,222
     General Partner                                                           917            968           971
                                                                         =========================================
       Total                                                             $  12,441      $   2,045      $  3,193
                                                                         =========================================

   Net income per weighted average  Depositary Unit (9,181,074 Units 
     at December 31, 1996, 9,175,460 Units at
     December 31, 1995; 9,219,932 Units at December 31, 1994)            $    1.26      $    0.12      $   0.24
                                                                         =========================================

   Cash distributions                                                    $  18,083      $  19,342      $ 19,420
                                                                         =========================================

   Cash distribution per Depositary Unit                                 $    1.87      $    2.00      $   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, 1996, 1995, and 1994
                                 (In thousands)

<TABLE>
<CAPTION>



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

   <S>                                                  <C>                 <C>             <C>           
   Partners' capital at December 31, 1993               $   92,120          $   --          $   92,120    

   Net income                                                2,222             971               3,193

   Cash distributions                                      (18,449 )          (971 )           (19,420 )
                                                        ------------------------------------------------

   Partners' capital at December 31, 1994                   75,893              --              75,893

   Net income                                                1,077             968               2,045

   Repurchase of Depositary Units                             (579 )            --                (579 )

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

   Partners' capital at December 31, 1995                   58,017              --              58,017

   Net income                                               11,524             917              12,441

   Repurchase of Depositary Units                              (79 )            --                 (79 )

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

   Partners' capital at December 31, 1996               $   52,296          $   --          $   52,296   
                                                        ================================================

</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)
<TABLE>
<CAPTION>

                                                                            1996            1995           1994
                                                                        ---------------------------------------------
  <S>                                                                    <C>             <C>             <C>          
  Operating activities:
     Net income                                                          $   12,441      $   2,045       $   3,193    
     Adjustments to reconcile net income
         to net cash provided by operating activities:
       Depreciation and amortization                                         14,941         17,321          20,266
       Net gain on disposition of equipment                                 (14,199 )       (3,835 )        (4,920 )
       Equity in net loss of unconsolidated special purpose entities            116             --              --
       Changes in operating assets and liabilities, net:
         (Increase) decrease in accounts receivable, net                       (750 )        1,532          (1,010 )
         Collections on notes receivable                                        295            441             396
         Increase in prepaid expenses and other assets                         (364 )         (152 )           (24 )
        (Decrease) increase in due to affiliates                               (414 )          785             296
        (Decrease) increase in accounts payable and accrued
           expenses                                                            (294 )            7             368
         Increase in lessee deposits and reserve for repairs                    285            620              74
         Increase in restricted cash                                           (330 )          (36 )            --
                                                                         --------------------------------------------
   Net cash provided by operating activities                                 11,727         18,728          18,639
                                                                         --------------------------------------------

   Investing activities:
     Proceeds from disposition of equipment                                  29,992         18,375          14,827
     Payments for purchase of equipment                                     (21,378 )      (27,128 )          (654 )
     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                              (8,952 )           --              --
     Distributions from unconsolidated special purpose entities               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                        3,187        (12,856 )        14,173
                                                                         --------------------------------------------

   Financing activities:
     Proceeds from short-term note payable                                    8,073             --              --
     Payments of short-term note payable                                     (5,610 )           --              --
     Cash distributions paid to an affiliate                                   (917 )         (968 )          (971 )
     Cash distributions paid to the limited partners                        (17,166 )      (18,374 )       (18,449 )
     Payment for loan costs                                                    (136 )
     Repurchase of Depositary Units                                             (79 )         (579 )            --
                                                                         --------------------------------------------
   Net cash used in financing activities                                    (15,835 )      (19,921 )       (19,420 )
                                                                         --------------------------------------------

   Net (decrease) increase in cash and cash
       equivalents                                                             (921 )      (14,049 )        13,392
   Cash and cash equivalents at beginning of year (See Note 2)                5,583         20,200           6,808
                                                                         --------------------------------------------

   Cash and cash equivalents at end of year                              $    4,662      $   6,151       $  20,200  
                                                                         ============================================

   Supplemental information:
     Non-cash transfer of equipment at net book value from
       unconsolidated special purpose entities                           $    7,901             --       $      --
                                                                         ============================================
     Interest paid                                                       $    2,815      $   2,970           1,808   
                                                                         ============================================
</TABLE>

                       See accompanying notes to financial
                                  statements.


<PAGE>


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

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  April 11, 1990. The  Partnership  commenced  significant
     operations 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 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 Depositary Unit,  below). The General Partner is entitled
     to a  subordinated  incentive  fee  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.  Based on this decision,  beginning
     January 1, 1994, the Partnership may be obligated to redeem up to 2% of the
     outstanding  units each year,  subject to the General  Partner's good faith
     determination  that such redemption's  should not (i) cause the Partnership
     to be taxed as a  corporation  under  Section  7704 of the IRS Code or (ii)
     impair the capital or operations of the Partnership.  The purchase price to
     be offered by the Partnership  for the  outstanding  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, 1996 and 1995,  the  Partnership  had  repurchased  6,925 and
     43,988 Depositary Units, for $79,000 and $579,000, respectively.

         At  December   31,  1996,   the   Partnership   agreed  to   repurchase
     approximately  120,000  Units  for  an  aggregate  price  of  approximately
     $1,171,000.  The  General  Partner  anticipates  that  these  Units will be
     repurchased in the first and second quarters of 1997.

         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  and 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 of the Partnership is managed,  under a continuing management
     agreement,  by  PLM  Investment  Management,  Inc.  (IMI),  a  wholly-owned
     subsidiary  of  FSI.  IMI  receives  a  monthly  management  fee  from  the
     Partnership  for managing the equipment  (see Note 3). FSI, in  conjunction
     with its subsidiaries,  syndicates investor programs,  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 Limited Partnerships.


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

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 (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. 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 loan for which they were
     paid. Major  expenditures  which are expected to extend the useful lives or
     reduce operating expenses for equipment are capitalized.

     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 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 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.  There were no  reductions  to the  carrying  value of  equipment
     required during 1996.

     Investments in Unconsolidated Special Purpose Entities

     The Partnership has interests in  unconsolidated  special purpose  entities
     which own transportation equipment. These interests are accounted for using
     the equity method.

         The Partnership's investment in unconsolidated special purpose entities
     includes  acquisition and lease negotiation fees paid by the Partnership to
     PLM Transportation  Equipment  Corporation (TEC). The Partnership's  equity
     interest in net income of unconsolidated special purpose entities (USPE) is
     reflected  net  of  management   fees  paid  or  payable  to  IMI  and  the
     amortization of acquisition and lease negotiation fees paid to TEC.

     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.



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

1.   Basis of Presentation  (continued)

     Net Income (Loss) and Distributions per Depositary 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  among the
     Limited  Partners  based on the number of  Depositary  Units  owned by each
     Limited  Partner and on the number of days of the year each Limited Partner
     is in the Partnership.

         Cash  distributions  are  recorded  when paid.  Cash  distributions  to
     investors in excess of net income are  considered  to represent a return of
     capital.   Cash  distributions  to  the  Limited  Partners  of  $5,642,000,
     $17,297,000 and  $16,227,000 in 1996,  1995, and 1994,  respectively,  were
     deemed to be a return of capital.

         Cash distributions of $2,785,000, $3,493,000, and $3,511,000 related to
     the fourth quarter of 1996, 1995 and 1994,  respectively,  were paid or are
     payable  during  January and February  1997,  1996,  or 1995,  depending on
     whether the individual Unitholder elected to receive a monthly or quarterly
     distribution check.

     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.

2.   Investments in Unconsolidated Special Purpose Entities (USPE)

     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.

         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 principle  differences  between the previous  accounting method and
     the equity method  relate to 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  USPE's,  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  partner's  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

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

     2.  Investments in Unconsolidated Special Purpose Entities  (continued)

     this reclassification.

         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.

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

<TABLE>
<CAPTION>
                                                         Net
                                        Total        Interest of
                                        USPE         Partnership
                                     ------------------------------

    <S>                            <C>             <C>           
    Net Investments                $      48,660   $       12,673
    Revenues                              30,337            7,054
    Net loss                              (1,692 )           (116 )

</TABLE>

         The net  investments  in USPE's  include  the  following  jointly-owned
     equipment  (and  related  assets and  liabilities)  at December 31 1996 and
     1995, (in thousands):

<TABLE>
<CAPTION>
                                                                                                             
                                                                                         1996              1995
                                                                                    --------------------------------
       <S>                                                                            <C>            <C>       
       50% interest in an entity owning a bulk carrier                                $     3,196    $    3,778
       50% interest in an entity owning a product tanker                                    2,144         2,841
       25% interest in two commercial aircraft on direct finance lease                      2,768            --
       17% interest in two trusts owning three commercial aircraft, two
                aircraft engines, and a portfolio of aircraft rotables                      4,565         5,334
       14% interest in a Trust that owns seven commercial aircraft (see below
                 note)                                                                         --         4,205
                                                                                      ----------------------------
         Net investments                                                              $    12,673    $   16,158
                                                                                      ============================
</TABLE>

         The  Partnership  had  beneficial  interests  in two  USPE's  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 which was  purchased  during  1996,  are now reported as
     owned equipment by the Partnership.

3.   General Partner and Transactions with Affiliates

              An officer of PLM Securities  Corp. (PLM  Securities)  contributed
     $100 of the Partnership's  initial capital.  Under the equipment management
     agreement,  IMI receives a monthly  management fee  attributable  to either
     owned  equipment or interests in equipment owned by the USPE's equal to the
     lesser of (i) the fees which 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  which  is  subject  to
     operating  leases,  (B) 2% of the Gross Lease  Revenues,  as defined in the
     agreement  which is subject to full  payout net  leases,  and (C) 7% of the
     Gross Lease Revenues attributable to Equipment, if any, which is subject to
     per diem  leasing  arrangements  and thus is operated  by the  Partnership.
     Partnership  management fees of $952,000, and $1,459,000 were payable as of
     December 31, 1996 and 1995,  respectively.  The Partnership's  proportional
     share of USPE's  management  fees of  $26,000,  and $0 were  payable  as of
     December 31, 1996 and 1995,  respectively.  The Partnership's  proportional
     share of USPE's management fees expense during 1996

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

3.   General Partner and Transactions with Affiliates (continued)

     was $304,000.  An affiliate of the General  Partner was reimbursed for data
     processing  and  administrative   expenses  directly  attributable  to  the
     Partnership,  in the amount of $838,000,  $612,000,  and  $436,000,  during
     1996, 1995, and 1994, respectively. The Partnership's proportional share of
     USPE's data processing and administrative expenses was $73,000 during 1996.
     Debt  placement  fees  are  paid  to FSI in an  amount  equal  to 1% of the
     Partnership's long-term borrowings.

         The  Partnership  and USPE's  paid or  accrued  lease  negotiation  and
     equipment  acquisition  fees of $1,617,000 and $1,603,000 to TEC and WMS in
     1996 and 1995, respectively.  During 1994, the Partnership did not purchase
     any equipment; therefore, neither of these fees were required to be accrued
     or paid.  TEC is a  wholly-owned  subsidiary of FSI. WMS is a  wholly-owned
     subsidiary of PLM International. The Partnership paid $768,000, $1,015,000,
     and  $841,000 in 1996,  1995,  and 1994,  respectively,  to  Transportation
     Equipment  Indemnity  Company,  Ltd. (TEI) which provides marine  insurance
     coverage  and  other  insurance  brokerage   services.   The  Partnership's
     proportional  share of USPE's  marine  insurance  coverage  paid to TEI was
     $231,000  during  1996.  TEI is an  affiliate  of the  General  Partner.  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, 1996,  approximately 69% of the Partnership's trailer
     equipment is 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  expense  associated  with the  equipment  are charged
     directly to the Partnership.  An allocation of other direct expenses of the
     rental yard operations are billed to the Partnership monthly.

         The Partnership  owns certain  equipment in conjunction with affiliated
     partnerships.  At December 31, 1996, this equipment included an interest in
     two entities owning marine vessels,  an interest in two trusts comprised of
     three aircraft,  two aircraft engines,  and a package of aircraft rotables,
     and an interest in a trust comprised of two commercial aircraft on a direct
     finance lease. At December 31, 1995, this equipment included an interest in
     two entities owning marine vessels,  an interest in two trusts comprised of
     three aircraft,  two aircraft engines,  and a package of aircraft rotables,
     and an interest in a trust comprised of seven commercial aircraft.

        The balance  due to  affiliates  at December  31,  1996,  includes  $0.9
     million due to FSI and its affiliates and $0.3 million due from  affiliated
     investments in USPE's.  The balance due to affiliates at December 31, 1995,
     includes  $1.3 million due to FSI and its  affiliates  and $0.3 million due
     from affiliated investments in USPE's.

4.   Equipment

     The  components of equipment at December 31, 1996 and 1995,  are as follows
(in thousands):

<TABLE>
<CAPTION>

  Equipment held for operating leases:                       1996                 1995
                                                        -------------------------------------
     <S>                                                 <C>                   <C>     
     Marine vessels                                      $     52,259          $    52,259          
     Mobile offshore drilling units                                --               25,204
     Marine containers                                         24,451               28,278
     Aircraft                                                  57,205               32,903
     Rail equipment                                            11,406               11,041
     Trailers                                                   9,683                9,629
                                                         ------------------------------------
                                                              155,004              159,314
   Less accumulated depreciation                              (81,541 )            (85,564 )
                                                         ------------------------------------
                                                         ====================================
   Net equipment                                         $     73,463          $    73,750           
                                                         ====================================
</TABLE>

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

4.   Equipment  (continued)

         Revenues are earned by placing the  equipment  under  operating  leases
     which are billed  monthly or quarterly.  Some of the  Partnership's  marine
     containers and marine  vessels are leased to operators of  utilization-type
     leasing pools which include equipment owned by unaffiliated parties. Insuch
     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.

         As of December 31,  1996,  all  equipment  was on lease or operating in
     PLM-affiliated  short-term  trailer  rental yards except 14 railcars with a
     net book value of $0.2 million.  As of December 31, 1995, all equipment was
     on lease or operating in PLM-affiliated short-term trailer rental yards.

         One  commercial  aircraft  is on lease  to  Continental  Airlines  Inc.
     (Continental).  Continental  filed for  protection  under Chapter 11 of the
     U.S.  Bankruptcy  code in  December  1990.  Unpaid  past due rent  payments
     totaling  $1.4  million  were  converted  into 2  promissory  notes  by the
     Bankruptcy Court with terms of 42 and 48 equal monthly  installments,  with
     interest  accruing  at the rate of 8.64% and 12% per annum.  As of December
     31, 1996,  $27,000 was outstanding under these notes ($322,000  outstanding
     as of December 31, 1995).
     Continental remains current on all payments due under the promissory notes.

         During 1996, the Partnership disposed of a rig with a net book value of
     $10.7 million for proceeds of $21.3 million, 2 aircraft engines, 1 commuter
     aircraft, 926 marine containers, 1 trailer and 4 railcars with an aggregate
     net book value of $5.1 million for proceeds of $8.7 million.

         During 1995, the  Partnership  disposed of 1,519 marine  containers,  1
     commuter  aircraft,  1 railcar,  and 1 marine  vessel with an aggregate net
     book value of $10.0 million for proceeds of $10.6 million.  The Partnership
     also sold 97  railcars,  which were held for sale as of December  31, 1994,
     with a net book value of $1.9  million at the date of sale for  proceeds of
     $2.6 million and 1 marine vessel,  which was also held for sale, with a net
     book  value  of $4.0  million  at the  date of sale  for  proceeds  of $5.1
     million.  Included  in the gain of $2.9  million  from  sale of the  marine
     vessels,  is the unused  portion of accrued  drydocking of $1.3 million and
     commissions related to the sale.

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

         All leases  are being  accounted  for as  operating  leases  except one
     finance  lease.  Future  minimum  rentals  receivable  under  noncancelable
     operating  leases at  December  31,  1996,  for owned and  partially  owned
     equipment during each of the next five years are approximately  $14,900,000
     - 1997;  $11,200,000  - 1998;  $9,200,000  - 1999;  $7,900,000  -2000;  and
     $8,100,000 - thereafter.  Contingent  rentals based upon  utilization  were
     approximately  $3,107,000,  $4,785,000,  and $6,431,000 in 1996,  1995, and
     1994, respectively.

         The  Partnership  owns certain  equipment  which is leased and operated
     internationally.  A limited number of the  Partnership's  transactions  are
     denominated in a foreign currency. Gains or losses

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

4.   Equipment  (continued)

     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 who operate the marine vessels and marine containers worldwide. The
     tables below set forth geographic information about the Partnership's owned
     equipment and investments in USPE's grouped by domicile of the lessee as of
     and for the years ended December 31, 1996, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>

                                   Investments
                                   in U.S.P.E.                Owned Equipment
                                 ---------------- --------------------------------------

                Region              1996            1996          1995           1994
       ------------------------- ------------    ---------------------------------------
       <S>                       <C>             <C>            <C>           <C>       
       Revenues:
         United States           $      --       $  7,806       $  6,666      $   7,734 
         Canada                      1,509          1,821            892            713
         South America                  --            763             --             --
         Asia                           --          1,062          2,556          3,080
         Australia                      --             --            258             --
         Europe                      1,765            493          1,671          1,083
         Rest of the world           3,780         16,818         22,255         26,147
                                 ============    =========================================
       Total revenues            $   7,054       $ 28,763       $ 34,298      $  38,757 
                                 ============    =========================================
</TABLE>

         The  following  table  sets  forth   identifiable   net  income  (loss)
     information by region for the owned  equipment and  investments in USPE for
     the years ended December 31, 1996, 1995 and 1994 (in thousands):

<TABLE>
<CAPTION>

                                                     Investments
                                                     in U.S.P.E.                Owned Equipment
                                                    ---------------- --------------------------------------

                        Region                        1996           1996           1995           1994
       ------------------------------------------  -----------    -----------------------------------------
       <S>                                         <C>            <C>            <C>            <C>      
       Net income (loss):
         United States                             $      --      $   1,543      $   2,142      $   1,680
         Canada                                         (753 )         (555 )          (75 )          125
         South America                                    --         (1,419 )           --             --
         Asia                                             --         10,715            114             58
         Australia                                        --             --            646             --
         Europe                                          490          3,190            410            284
         Mexico                                           (2 )           --             --          5,152
         Rest of the world                               149          2,500          2,085         (1,143 )
                                                   -----------    -----------------------------------------
       Total identifiable income (loss)                 (116 )       15,974          5,322          6,156
         Administrative and other                         --         (3,417 )       (3,277 )       (2,963 )
                                                   ===========    =========================================
       Total net income (loss):                    $    (116 )    $  12,557      $   2,045      $   3,193
                                                   ===========    =========================================

</TABLE>






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

4.   Equipment  (continued)

         The net book value of these assets at December 31, 1996,  1995 and 1994
are as follows (in thousands):
<TABLE>

                                                Investments
                                                in U.S.P.E.                             Owned Equipment
                                          ------------------ ------------------------------------------------------

                    Region                  1996           1995             1996            1995            1994
         ------------------------------ -----------------------------   ---------------------------------------------
         <S>                            <C>            <C>                <C>           <C>             <C>            
         Net book value:
           United States                $        --    $        --        $  20,465     $    24,971     $    15,355    
           Canada                                --          4,205           14,065           2,187           2,106
           South America                         --             --           13,909              --              --
           Mexico                             2,768             --               --              --              --
           Asia                                  --             --               --          11,540          13,849
           Europe                             4,565          5,334               --           3,377           4,052
           Rest of the world                  5,340          6,619           25,024          31,675          52,528
                                        -----------------------------    ---------------------------------------------
                                             12,673         16,158           73,463          73,750          87,890
         Equipment held for sale                 --             --               --              --           6,082
                                        =============================    =============================================
                                        $    12,673    $    16,158        $  73,463     $    73,750     $    93,972    
                                        =============================    =============================================
</TABLE>

         The lessees  accounting  for 10% or more of the total  revenues  during
     1996 and 1995 were Halla Merchant  Marine  Company,  Ltd.  (11.6% in 1995),
     Chembulk Trading,  Inc. (12.2% in 1996; 11.1% in 1995),  During 1994, there
     were no lessees which accounted for 10% or more of the total revenues.

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  B727-200
     aircraft for $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 are to be received over a five-year  period,
     which commenced in December of 1995.

         The  components  of the net  investment  in  direct  finance  lease  at
     December 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>

                                                                  1996               1995
                                                             ---------------------------------
   <S>                                                       <C>                <C>          
   Total minimum lease payments                              $   2,978,000      $   3,738,000
   Residual value                                                  125,000            125,000
   Less: Unearned income                                          (821,000 )       (1,226,000 )
                                                             =================================
                                                             $   2,282,000      $   2,637,000
                                                             =================================
</TABLE>

         Future  minimum  rentals  receivable  under the direct finance lease at
     December 31,  1996,  for the next five years are  approximately  $760,000 -
     1997; $760,000 - 1998; $760,000 - 1999; and $698,000 -2000.

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

6.   Notes Payable (continued)

     to the lenders and to amend the loan repayment schedule from 16 consecutive
     equal quarterly  installments to 20 consecutive quarterly installments with
     lower  principle  payments  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

         During 1996, the loan required  interest-only  quarterly  payments at a
     rate of approximately  LIBOR plus 1.2 percent per annum (6.825% at December
     31, 1996). During 1995, the loan required interest-only  quarterly payments
     at a rate of  approximately  LIBOR plus 1.5 percent  per annum  (7.4375% at
     December 31, 1995). 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  million  credit
     facility (the "Committed  Bridge  Facility") on behalf of the  Partnership,
     PLM Equipment  Growth Fund IV, PLM Equipment  Growth Fund VI, PLM Equipment
     Growth & Income 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 Inc.,
     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 October 31, 1996, to
     expire on October 31, 1997 and increased the available  borrowings  for AFG
     to $50 million.  The Partnership,  TECAI, Fund I and the other partnerships
     collectively may borrow up to $35 million of the Committed Bridge Facility.
     The Committed  Bridge  Facility  also  provides for a $5 million  Letter of
     Credit Facility for the eligible borrowers.  Outstanding borrowings by Fund
     I,  TECAI,  AFG or PLM  Equipment  Growth  Funds IV through  VII reduce the
     amount  available  to each  other  under  the  Committed  Bridge  Facility.
     Individual  borrowings may be outstanding  for no more than 179 days,  with
     all  advances  due no later than October 31,  1997.  The  Committed  Bridge
     Facility   prohibits  the   Partnership   from   incurring  any  additional
     indebtedness.  Interest  accrues at either the prime rate or adjusted LIBOR
     plus 2.5% at the  borrowers  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, 1996,  the  Partnership  had borrowings of $2.5 million,
     PLM  Equipment  Growth Fund VI had $1.3 million,  PLM Equipment  Growth and
     Income Fund VII had $2.0 million, AFG had $26.9 million, and TECAI had $4.1
     million in outstanding borrowings. Neither PLM Equipment Growth Fund IV nor
     Fund I had any outstanding borrowings.

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.

         At December 31, 1996, there were temporary differences of approximately
     $15,426,000  between the financial  statement carrying values of assets and
     liabilities   and  the  federal   income  tax  bases  of  such  assets  and
     liabilities, principally due to the differences in depreciation methods.

8.   Subsequent Event

        PLM  International  (PLMI) along with FSI, IMI, TEC and PLM  Securities,
     and  collectively  with PLMI, FSI, IMI, TEC and PLM  Securities,  (the "PLM
     Entities"), were named as defendants in a class action lawsuit filed in the
     Circuit Court of Mobile County,  Mobile,  Alabama, Case No. CV-97-251.  The
     PLM Entities  received  service of the complaint on February 10, 1997,  and
     pursuant to an  extension of time granted by  plaintiffs'  attorneys,  have
     sixty days to respond to the complaint. PLM

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

8.   Subsequent Event continued)

     International is currently  reviewing the substance of the allegations with
     its counsel,  and believes the  allegations to be completely  without merit
     and intends to defend this matter vigorously.

        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  sponsored  by PLM
     Securities,  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 "PLM Growth Funds").  The
     complaint  purports  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 for breach of third party
     beneficiary  contracts against and in violation of the National Association
     of  Securities  Dealers  (NASD)  rules of fair  practice by PLM  Securities
     alone.

         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 PLM Entities for improper sales and
     marketing practices,  mismanagement of the PLM Growth Funds, and concealing
     such mismanagement from investors in the PLM 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.


















                      (this space intentionally left blank)


<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                                   *

    10.4  Second Amended and restated Warehousing Credit Agreement, 
          dated as of May 31, 1996 with First Union National Bank 
          of North Carolina                                                *

    10.5  Amendment No. 1 to Second Amended and restated 
          Warehousing Credit Agreement, dated as of November 5, 1996 
          with First Union National Bank of North Carolina                 *

    24.   Powers of Attorney.                                              *


* Incorporated by reference.  See page 23 of this report.