Montgomery Partnership
                             (A Limited Partnership)

                              Financial Statements







<PAGE>






                          INDEPENDENT AUDITORS' REPORT






The Partners
Montgomery Partnership

We have audited the  accompanying  balance sheet of the  Montgomery  Partnership
(the  Partnership)  as of  December  31,  1999  and the  related  statements  of
operations,  changes  in  partners'  capital,  and cash  flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

As described in Note 1 to the financial statements,  the Partnership is expected
to be terminated in 2001, as the marine vessel in the Partnership has been sold.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Partnership as of December
31,  1999,  and the  results of its  operations  and its cash flows for the year
ended in conformity with accounting  principles generally accepted in the United
States of America.  The accompanying 2000 and 1998 financial statements were not
audited  by us,  and  accordingly,  we  express  no opinion or any other form of
assurance on them.




SAN FRANCISCO, CALIFORNIA
June 9, 2000


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                             Montgomery Partnership
                             (A Limited Partnership)
                                 Balance Sheets
                                  December 31,
                            (in thousands of dollars)

<TABLE>
<CAPTION>



                                                                               2000                1999
  ASSETS                                                                     (unaudited)
  --------------------------------------------------------------------------------------------------------------

<S>                                                                       <C>                 <C>
  Accounts receivable                                                     $             --    $             30
  --------------------------------------------------------------------------------------------------------------
        Total assets                                                      $             --    $             30
                                                                          ======================================


  LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:
  Accounts payable and accrued expenses                                   $             --    $            290
  Due to affiliates                                                                     --                   6
  ---------------------------------------------------------------------------------------------------------------
    Total liabilities                                                                   --                 296

  Partners' capital (deficit):
  Limited partners                                                                      --                 (69 )
  General partner                                                                       --                (197 )
                                                                          ---------------------------------------
    Total partners' capital (deficit)                                                   --                (266 )
                                                                          ---------------------------------------

        Total liabilities and partners' capital                            $            --    $             30
                                                                          =======================================



</TABLE>










                 See accompanying notes to financial statements.

                             Montgomery Partnership
                             (A Limited Partnership)
                            STATEMENTS OF OPERATIONS
                        For the Years Ended December 31,
                            (in thousands of dollars)

<TABLE>
<CAPTION>

                                                                             2000        1999            1998
                                                                          (unaudited)                   (unaudited)
                                                                         ---------------------------------------------
<S>                                                                      <C>           <C>             <C>
  REVENUES

  Lease revenue                                                          $       (3)   $   2,106       $   2,466
  Interest and other income (loss)                                              240           11              (9)
  Gain on disposition of the marine vessel                                       --        3,812              --
                                                                         ---------------------------------------------
      Total revenues                                                            237        5,929           2,457
                                                                         ---------------------------------------------

  EXPENSES

  Depreciation expense                                                           --          702             911
  Marine operating expense                                                       12        1,135           1,409
  Repairs and maintenance                                                       (53)         251             500
  Insurance expense                                                             (19)         173              69
  Management fees to affiliate                                                   --          105             123
  Administrative expenses to affiliate                                           10           21              31
  Administrative expenses and other                                              16           32              25
                                                                         ---------------------------------------------
      Total expenses                                                            (34)       2,419           3,068
                                                                         ---------------------------------------------

  Net income (loss)                                                      $      271    $   3,510       $    (611)
                                                                         =============================================

</TABLE>






                 See accompanying notes to financial statements.

                             Montgomery Partnership
                             (A Limited Partnership)
              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
              For the Years Ended December 31, 2000, 1999, and 1998
                            (in thousands of dollars)
<TABLE>
<CAPTION>


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

<S>                                                                        <C>              <C>            <C>
    Partners' capital (deficit) as of December 31, 1997                    $     4,677      $  (149)       $   4,528

  Net loss                                                                        (605)          (6)            (611)

  Cash contribution                                                               (197)          (2)            (199)
                                                                           --------------------------------------------

    Partners' capital (deficit) as of December 31, 1998 (unaudited)              3,875         (157)           3,718

  Net income                                                                     3,475           35            3,510

  Cash distribution                                                             (7,419)         (75)          (7,494)
                                                                           --------------------------------------------

    Partners' deficit as of December 31, 1999                                      (69)        (197)            (266)

  Net income                                                                       268            3              271

  Cash distribution                                                                 (5)          --               (5)
                                                                           --------------------------------------------

    Partners' capital as of December 31, 2000 (unaudited)                  $       194      $  (194)       $      --
                                                                           ============================================

</TABLE>






                 See accompanying notes to financial statements.







<PAGE>



                             Montgomery Partnership
                             (A Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                        For the Years Ended December 31,
                            (in thousands of dollars)
<TABLE>
<CAPTION>


                                                                    2000          1999             1998
                                                                (unaudited)                    (unaudited)
  -----------------------------------------------------------------------------------------------------------
<S>                                                             <C>            <C>               <C>
  OPERATING ACTIVITIES

  Net income (loss)                                             $      271     $   3,510         $    (611)
  Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
    Depreciation                                                        --           702               911
    Gain on disposition of the marine vessel                            --        (3,812)               --
    Changes in operating assets and liabilities:
      Accounts receivable                                               30            70               (24)
      Prepaid expenses                                                  --            27               (12)
      Accounts payable and accrued expenses                           (290)         (114)             (159)
      Due to affiliates                                                 (6)           (2)               (2)
      Reserve for repairs                                               --          (500)               96
                                                                ---------------------------------------------
        Net cash provided by (used in) operating activities              5          (119)              199
                                                                ---------------------------------------------


  Investing activities
  Proceeds from disposition of vessel                                   --         7,613                --
                                                                -------------------------------------------
        Net cash provided by investing activities                       --         7,613                --
                                                                ---------------------------------------------

  Financing activities

  Cash distributions - limited partners                                 (5)          (75)               (2)
                                                                ---------------------------------------------
        Net cash used in financing activities                           (5)       (7,494)             (199)
                                                                ---------------------------------------------

  Net change in cash and cash equivalents                               --            --                --
  Cash and cash equivalents at beginning of year                        --            --                --
                                                                ---------------------------------------------
  Cash and cash equivalents at end of year                      $       --     $      --         $      --
                                                                =============================================
</TABLE>
















                 See accompanying notes to financial statements.


<PAGE>


                             Montgomery Partnership
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

Montgomery Partnership, a California limited partnership (the Partnership),  was
formed  during  December  1990.  The  Partnership  was formed for the purpose of
purchasing a bulk-carrier marine vessel and commenced significant  operations in
January 1991. The  Partnership  had no employees nor  operations  other than the
operation of the marine  vessel.  The  Partnership  was owned 99% by the limited
partners  and 1% by  the  General  Partner.  The  Partnership  had  two  limited
partners;  PLM Equipment Growth Fund IV (EGF IV) and PLM Equipment Growth Fund V
(EGF  V),  (the  Limited  Partners).  The  General  Partner  is  the  Montgomery
Corporation  (MC)  which is owned by EGF IV and EGF V. The  Limited  Partnership
isowned 50% by EGF IV and 50% by EGF V.

The Partnership is expected to be terminated during 2001 as the marine vessel in
the Partnership was sold December 1999.

These accompanying  financial  statements had been prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles.  This
required  management to make estimates and assumptions  that affect the reported
amounts  of  assets  and  liabilities,  disclosures  of  contingent  assets  and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those  estimates.  All amounts as of and for the years ended  December  31,
2000 and 1998 are unaudited.

     OPERATIONS

The marine vessel in the Partnership  was managed under a continuing  management
agreement by PLM Investment Management, Inc. (IMI), a wholly-owned subsidiary of
PLM  Financial  Services Inc.  (FSI).  FSI is a  wholly-owned  subsidiary of PLM
International,  Inc. (PLM International).  IMI received a monthly management fee
from  the  Partnership  for  managing  the  marine  vessel  (Note  2).  FSI,  in
conjunction  with its  subsidiaries,  sells  equipment to investor  programs and
third parties,  manages pools of transportation  equipment under agreements with
investor  programs,  and is the  general  partner  of EGF IV,  EGF V, and  other
limited partnerships.

     CASH AND CASH EQUIVALENTS

All cash generated from operations was distributed to the partners, accordingly,
the Partnership had no cash balance at December 31, 2000 and 1999.

     ACCOUNTING FOR LEASES

The marine vessel in the Partnership was leased under  operating  leases.  Under
the operating  lease method of accounting,  the leased asset is recorded at cost
and depreciated over its estimated useful life.  Rental payments are recorded as
revenue over the lease term as earned in accordance  with Statement of Financial
Accounting  Standards No. 13,  "Accounting for Leases".  Lease origination costs
were capitalized and amortized equally over 36 months.

     DEPRECIATION

Depreciation was computed using the  double-declining  balance method,  taking a
full month's  depreciation in the month of acquisition,  based upon an estimated
useful life of 12 years. The depreciation  method changed to straight-line  when
annual  depreciation  expense  using  the  straight-line  method  exceeded  that
calculated by the  double-declining  balance  method.  Acquisition  fees of $0.8
million,  that were  paid to FSI,  were  capitalized  as part of the cost of the
equipment. Major expenditures


<PAGE>


                             Montgomery Partnership
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     DEPRECIATION (CONTINUED)

that were  expected to extend the marine  vessel's  useful life or reduce future
equipment operating expenses,  were capitalized and amortized over the estimated
remaining life of the marine vessel.

     MARINE VESSEL

In accordance with the Financial Accounting Standards Board's Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed  Of", FSI reviewed the carrying  value of the  Partnership's  marine
vessel  at  least  quarterly,  and  whenever  circumstances  indicated  that the
carrying  value of this asset may not be  recoverable  in  relation  to expected
future market  conditions,  for the purpose of assessing  recoverability  of the
recorded  amounts.  If  projected  undiscounted  future  cash flows and the fair
market value of the marine vessel was less than the carrying value of the marine
vessel,  a loss on  revaluation  would have been  recorded.  No reduction to the
carrying value of the marine vessel was required during 2000, 1999, or 1998.

     REPAIRS AND MAINTENANCE

Repair and maintenance costs were generally the obligation of the Partnership.

     NET INCOME (LOSS) AND CASH DISTRIBUTION TO LIMITED PARTNERS

The net income (loss) and cash  distributions  of the Partnership were generally
allocated  99% to the limited  partners and 1% to the General  Partner.  The net
income  (loss) and cash  distributions  were  allocated to the limited  partners
based on their percentage of ownership in the Partnership.  The limited partners
99% share of net income (loss) and cash  distributions were allocated 50% to EGF
IV and 50% to EGF V.

Cash distributions were recorded when paid.

     COMPREHENSIVE INCOME (LOSS)

The Partnership's net income (loss) was equal to comprehensive income (loss) for
the year ended December 31, 2000, 1999, and 1998.

2.   GENERAL PARTNER

MC contributed $100 of the  Partnership's  initial capital.  MC was owned by two
shareholders,  EGF IV owned 50% and EGF V owned 50%.  Dividends were paid to the
shareholders annually, when declared,  based on the percentage of ownership each
shareholder owns.

3.   TRANSACTIONS WITH AFFILIATES

Under the equipment  management  agreement,  IMI, subject to certain reductions,
receives a monthly  management fee  attributable to owned equipment equal to the
lesser of (i) the fees that would be charged by an  independent  third party for
similar  services for similar  equipment or (ii) 5% of the gross lease  revenues
attributable to equipment that is subject to operating leases. The Partnership's
management  fee  expense  to  affiliate  was $0,  $0.1  million,  $0.1  million,
respectively,  during 2000,  1999,  and 1998.  The  Partnership  reimbursed  FSI
$10,000, $21,000, and $31,000 during 2000, 1999, and

<PAGE>



                             Montgomery Partnership
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000

3.   TRANSACTIONS WITH AFFILIATES (CONTINUED)

1998,  respectively,  for data processing and  administrative  expenses directly
attributable to the Partnership.

Partnership  management  fees  payable to IMI was $-0- and $6,000 as of December
31, 2000 and 1999, respectively.

4.       MARINE VESSEL ON LEASE

During 1999, the Partnership  sold the marine vessel with net book value of $3.8
million for proceeds of $7.6 million.

The  Partnership's  marine  vessel was leased to operators  of  utilization-type
leasing pools that include  equipment  owned by  unaffiliated  parties.  In such
instances,  revenues earned by the Partnership consist of a specified percentage
of the total  revenues  generated by leasing the pooled  equipment to sublessees
after deducting certain direct operating expenses of the pooled equipment.

The marine vessel lease was being accounted for as an operating lease. There are
no future minimum rentals under non-cancelable  leases at December 31, 2000. Per
diem and  short-term  rentals  consisting  of  utilization  rate lease  payments
included in lease revenues  amounted to $-0- in 2000,  $2.1 million in 1999, and
$2.5 million in 1998.

5.   GEOGRAPHIC INFORMATION

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

6.   INCOME TAXES

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

As of  December  31,  2000,  there were no  temporary  differences  between  the
financial statements carrying value of assets and the income tax basis.

7.   CONCENTRATIONS OF CREDIT RISK

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

No single lessee  accounted for more than 10% of the  consolidated  revenues for
the years ended  December  31,  2000,  1999,  or 1998.  CO. TBN by Messrs.  Apex
Marine,  New York purchased the marine vessel from the  Partnership and the gain
from the sale accounted for 64% of total consolidated revenues during 1999.

As of December 31, 2000, the General  Partner  believes the  Partnership  had no
other  significant  concentrations  of credit  risk that  could  have a material
adverse effect on the Partnership.