**UNITED
                STATES****SECURITIES
                AND EXCHANGE COMMISSION****Washington,
                D.C. 20549****___________________****FORM
                10-KSB****[X]
                Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of 1934****For
                the fiscal year ended December 31, 2005.****[********]
                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 0-28376****_______________________****PROFESSIONAL
                LEASE MANAGEMENT INCOME FUND I, L.L.C.**(Name
                of small business issuer in its charter)**Delaware                                                                                                            
                94-3209289**(State
                or other jurisdiction of incorporation or
                organization)                
                 (I.R.S. Employer Identification No.)**405
                Lexington Avenue, 67th floor, New York,
                NY            
                                         
                      
                 10174**(Address
                of principal executive
                offices)                                          
                                 
                (Zip code)Issuer's
                telephone number, including area code: (212) 682-3344**_______________________**Securities
                registered under Section 12(b) of the Exchange Act:Class
                A Units(Title
                of class)Check
                whether the Registrant is not required to file reports pursuant to
                Section
                13 or 15(d) of the Exchange Act. [ ]Check
                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 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 [ ]Check
                if there is no disclosure of delinquent filers in response to Item
                405 of
                Regulation S-B contained in this form, and no disclosure will be
                contained, to the best of the Registrant's knowledge, in definitive
                proxy
                or information statements incorporated by reference in Part III of
                this
                Form 10-KSB or any amendment to this Form 10-KSB. [ ]Indicate
                by check mark whether the Registrant is a shell company (as defined
                in
                Rule 12b-2 of the Exchange Act). [ ]Registrant's
                aggregate market value of voting stock:N/ARegistrant's
                Class A Units outstanding as of December 31, 2005 were
                4,971,311.Registrant's
                revenues for the fiscal year ended December 31, 2005 was
                $17,626,000.Transitional
                Small Business Disclosure Format: Yes [ ] No [X]







**PART
      I**





ITEM
      1.  BUSINESS





(A)  Background





In
      August
      1994, PLM Financial Services, Inc. (FSI or the Manager) filed a
      Registration Statement on Form S-1 with the Securities and Exchange Commission
      with respect to a proposed offering of 5,000,000 Class A units (the units)
      in
      Professional Lease Management Income Fund I, L.L.C., a Delaware Limited
      Liability Company (the Registrant or the Fund). The Fund's offering became
      effective on January 23, 1995.  The offering of units of the Fund closed on
      May 13, 1996. As of December 31, 2005, there were 4,971,311 units outstanding.
      The Manager contributed $100 for its Class B Member interest in the Fund. The
      Manager paid out of its own corporate funds (as a capital contribution to the
      Fund) all organization and syndication expenses incurred in connection with
      the
      offering; therefore, 100% of the net cash proceeds received by the Fund from
      the
      sale of Class A Units were used to purchase equipment and establish any required
      cash reserves. The Fund engages in the business of investing in a diversified
      equipment portfolio consisting primarily of long-lived, low-obsolescence capital
      equipment that is easily transportable by and among prospective
      users.





The
      Fund's primary objectives are:





(1)  to
      maintain a diversified portfolio of low-obsolescence equipment with long lives
      and high residual values which were purchased with the net proceeds of the
      initial Fund offering, supplemented by debt financing, and cash generated from
      operations during the investment phase of the Fund;





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





(3)  to
      selectively sell equipment when the Manager believes that, due to market
      conditions, market prices for equipment exceed inherent equipment values or
      expected future benefits from continued ownership of a particular asset.
      Proceeds from these sales, together with excess net operating cash flows from
      operations are used for distributions to the members; and





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





The
      Fund
      will terminate on December 31, 2010, unless terminated earlier upon sale of
      all
      equipment or by certain other events. The Fund may not reinvest cash flow
      generated from operations after January 1, 2003 into additional equipment.
      Excess cash, if any, less reasonable reserves, will be distributed to the
      Members.







Table
      1,
      below, lists the equipment and the original cost of equipment and capitalized
      improvements in the Fund's portfolio and the Fund's proportional share of
      equipment in entities in which the Fund has an equity investment as of December
      31, 2005 (in thousands of dollars):





**TABLE
        1**





Units
            Type
            Manufacturer
            CostOwned
                equipment held for operating leases:13,869
            Dry
                cargo marine containers
            Various
            $                 
                28,52962
            Refrigerated
                marine containers
            Various
            9761
            Double-hull
                product tanker
            Hyundai
            17,000Total
                owned equipment held for operating leases
            
            $                
                 46,505
            1





Equipment
                owned by entities in which the Fund has an equity
                investment:





0.5
            Trust
                owning an MD-82stage
                III commercial aircraft
            McDonnell
                Douglas
            $                  
                7,775
            20.5
            Trust
                owning an MD-82stage
                III commercial aircraft
            McDonnell
                Douglas
            6,825
            2Total
                equity investments
            
            $                
                14,600
            1





Equipment
      is generally leased under operating leases for a term of one to ten years except
      for the marine vessel which is usually leased for less than one year. Some
      of
      the Fund's marine containers are leased to operators of utilization-type leasing
      pools, which include equipment owned by affiliated programs and unaffiliated
      third parties. In such instances, revenues received by the Fund 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 all other equipment are based on fixed rates.





(B)  Management
      of Fund Equipment





The
      Fund
      has entered into an equipment management agreement with PLM Investment
      Management, Inc. (IMI), a wholly-owned subsidiary of FSI, for the
      management of the Fund’s equipment.  The Fund's management agreement with
      IMI is to terminate with the dissolution of the Fund unless the Class A Members
      vote to terminate the agreement prior to that date, or at the discretion of
      the
      Manager. IMI has agreed to perform all services necessary to manage the
      equipment on behalf of the Fund and to perform or contract for the performance
      of all obligations of the lessor under the Fund's leases.  In consideration
      for its services and pursuant to the Operating Agreement, IMI is entitled to
      a
      monthly management fee.  (see Notes 1, 2, and 3 to the financial
      statements)




1. Includes
      equipment and investments purchased with the proceeds from capital
      contributions, undistributed cash flow from operations, and Fund borrowings.
      Includes costs capitalized subsequent to the date of
      purchase.


2. Jointly
      owned by the Fund and an affiliated program.







(C)  Competition





(1)  Operating
      Leases Versus Full Payout Leases





Generally,
      the equipment owned by or invested in the Fund is leased out on an operating
      lease basis wherein the rents received during the initial noncancelable term
      of
      the lease are insufficient to recover the Fund’s purchase price of the
      equipment.  The short to mid-term nature of operating leases generally
      command a higher rental rate than longer-term, full payout leases and offer
      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
      Fund
      encounters considerable competition from lessors that utilize full payout leases
      on new equipment, i.e. leases that have terms equal to the expected economic
      life of the equipment.  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 may write full payout
      leases at considerably lower rates and for longer terms than the Fund offers,
      or
      larger competitors with a lower cost of capital may offer operating leases
      at
      lower rates, which may put the Fund at a competitive disadvantage.





(2)  Manufacturers
      and Equipment Lessors





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





The
      Fund
      also competes with many equipment lessors, including GATX Corporation, General
      Electric Capital Aviation Services Corporation, Textainer, and other investment
      programs that lease the same types of equipment.





(D)  Demand





The
      Fund
      currently operates in the following operating segments: marine container
      leasing, product tanker marine vessel leasing and commercial aircraft leasing.
      Each equipment leasing segment engages in short-term to mid-term operating
      leases to a variety of customers. The Fund’s equipment and investments are
      primarily used to transport materials and commodities, except for aircraft
      which
      are leased to passenger air carriers.





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





(1)
      Marine Containers





Marine
      containers are used to transport a variety of types of cargo. They typically
      travel on marine vessels but may also travel on railroads loaded on certain
      types of railcars and highways loaded on a trailer.





Demand
      for marine containers is primarily influenced by global economic
      conditions.





The
      Fund
      owns a total of 13,931 standard dry and refrigerated cargo marine containers
      acquired from 1998 to 2001. The Fund had utilization in the low 90%'s for its
      containers in 2005. Utilization on these containers is expected to remain strong
      in the low 90% range through at least the first half of 2006.





Prices
      for new marine containers have decreased up to 25% from the peak that they
      reached in early 2005 due to lower steel prices and reduced demand for new
      marine containers. There have been reports that marine container manufacturers
      have seen an increase in their inventory of unsold marine containers in recent
      months. Shipping lines have embarked on a shipbuilding program over the last
      few
      years with many new container ships being delivered in 2006 and 2007. This
      may
      result in over-capacity which could result in lower freight rates and have
      adverse implications for marine container lessors. While lease rates on the
      Fund’s marine containers have been stable for the last three years, these
      factors may lead to a decrease in lease rates in 2006.




The
      decrease in new container prices and potential decrease in lease rates could
      lead to a decrease in the sales proceeds received from the marine containers
      upon disposition.





(2)
      Product Tanker Marine Vessel





The
      Fund
      has an investment in a double-hull product tanker constructed in 1986, which
      operates in international markets carrying a variety of clean commodity-type
      cargoes. Demand for commodity-based shipping is closely tied to worldwide
      economic growth patterns, which can affect demand by causing changes in specific
      volume on trade routes. Historically, the Manager has operated the Fund's
      product tanker in the spot charter markets, carrying mostly gasoline, jet fuel,
      gas oils and similar petroleum distillates or simple chemicals or vegetable
      oils, an approach that provided the flexibility to adapt to changes in market
      conditions.





Due
      to
      strong market conditions, in the first quarter of 2006 the Fund's product tanker
      was leased for five years on a sales-type lease which will transfer ownership
      to
      the lessee at the end of the lease. At various times in the lease, the lessee
      can prepay future rents and take ownership of the vessel early. This lease
      allows the Fund to lock in the current high lease rates. This marine vessel
      will
      operate primarily in the vegetable and palm oil trades.





(3)  Commercial
      Aircraft





During
      2005, global air traffic continued to recover, driven by the long haul markets,
      especially into Asia. There was initial concern at the beginning of the year
      that continued high oil prices would lead to a slowing of economic growth,
      with
      consequential effects on air traffic. The pace of 'permanent retirement' of
      aircraft increased and new aircraft orders reached new highs.





The
      United States (US) market continued to cause most concern. Several US carriers
      are currently in bankruptcy and results of most carriers have been
      mixed.





In
      Europe, the expansion by low cost carriers continued during 2005 but at a slower
      pace. National carriers finally saw financial improvements following their
      attempts at reducing overhead and correctly structuring their product.





The
      Asian
      market continued its growth during 2005. The first quarter experienced slower
      growth in the regions affected by the tsunami catastrophe but domestic Chinese
      and intra-Asian markets experienced strong growth as well as India where
      liberalization saw the birth of several new start-ups.





For
      2006,
      the Manager believes that stabilization of fuel prices will be critical for
      the
      continued recovery in the airline industry.





The
      Fund
      has a 50% interest in two entities each owning an MD-82 Stage III commercial
      aircraft, which are on lease through the fourth quarter of 2008 to a major
      US
      carrier at above market rates. While the Manager is not aware of any specific
      liquidity problems in regards to the US lessee, the poor financial condition
      of
      the US airline industry require this lessee to be monitored
      closely.





(E)  Government
      Regulations





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





The
      new
      maritime and port security laws as passed by the United States Congress and
      other International Maritime Organizations came into full effect in July 2004.
      US Coastguard and members of Homeland Security are patrolling ports and boarding
      vessels to insure regulations are being followed. The Fund's marine vessel
      meets
      the new code and is in compliance with the necessary reporting procedures and
      precautions for pre-entry into US waters and ports. Similarly, the Fund's marine
      vessel meets port entry security regulations of foreign countries as mandated
      by
      international law.





No
      new US
      or International Regulations are scheduled to come into effect during 2005
      which
      would have a significant impact on the Fund's owned marine vessel.





As
      of
      December 31, 2005, the Fund was in compliance with the above governmental
      regulations. Typically, costs related to extensive equipment modifications
      to
      meet government regulations are passed on to the lessee of that
      equipment.





ITEM
      2.  PROPERTIES





The
      Fund
      neither owns nor leases any properties other than the equipment it has purchased
      or interests in entities which own equipment for leasing purposes. As of
      December 31, 2005, the Fund owned a portfolio of transportation and related
      equipment and investments in entities that owned transportation equipment as
      described in Item I, Table 1. The Fund acquired equipment with the proceeds
      of
      the Fund offering of $100.0 million, proceeds of debt financing of $25.0
      million, and by reinvesting a portion of its operating cash flow in additional
      equipment. The Fund does not own any real property.





The
      Fund
      maintains its principal office at 405 Lexington Avenue, 67th floor, New York,
      NY
      10174.





ITEM
      3.  LEGAL
      PROCEEDINGS





None.





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





No
      matters were submitted to a vote of the Fund's Members during the fourth quarter
      of its fiscal year ended December 31, 2005.





**PART
      II**





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





Pursuant
      to the terms of the operating agreement, the Manager is generally entitled
      to a
      1% interest in the profits and losses and 15% of cash distributions. The Manager
      will be specially allocated (i) 100% of the Fund’s organizational and offering
      cost amortization expenses and (ii) income equal to the excess of cash
      distribution over the Manager's 1% share of net profits. The effect on the
      Class
      A Members of this special income allocation will be to increase the net loss
      or
      decrease the net profits allocable to the Class A Members by an equal amount.
      After the investors receive cash distributions equal to their original capital
      contributions, the Manager's interest in the cash distributions of the Fund
      increased to 25%. With the cash distribution made in November 2005, most Class
      A
      members have now received cash distributions equal to or greater than their
      original capital contribution and thus, the Manager's share of the cash
      distribution related to these members has increased to 25%. The Manager is
      the
      sole holder of such interests.  The remaining interests in the profits and
      losses and distributions of the Fund are owned as of December 31, 2005, by
      the
      4,840 holders of Units in the Fund.





There
      are
      several secondary markets in which Class A units trade. Secondary markets are
      characterized as having few buyers for Class A units and, therefore, are
      generally viewed as inefficient vehicles for the sale of units and, as such,
      prices for the Class A units in these markets may not be indicative of the
      actual value of the units. Presently, there is no public market for the units
      and none is likely to develop.





To
      prevent the Class A units from being considered publicly traded and thereby
      to
      avoid taxation of the Fund as an association treated as a corporation under
      the
      Internal Revenue Code, the units will not be transferable without the consent
      of
      the Manager, which may be withheld in its absolute discretion. The Manager
      monitors transfers of units in an effort to ensure that they do not exceed
      the
      percentage or number permitted by certain safe harbors promulgated by the
      Internal Revenue Service. Effective January 1, 2006, the percentage of Fund
      units that may be traded in any calendar year has been reduced from five percent
      to two percent to comply with Internal Revenue Service regulations. A transfer
      may be prohibited if the intended transferee is not an US citizen or if the
      transfer would cause any portion of the units of a “Qualified Plan” as defined
      by the Employee Retirement Income Security Act of 1974 and Individual Retirement
      Accounts to exceed the allowable limit.





ITEM
                6.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS





The
      Fund's consolidated financial statements contained in the 2005 annual report
      have been prepared in accordance with the requirements for a Small Business
      Issuer as prescribed by Regulation S-B under the Securities Exchange Act of
      1934. Generally, a Small Business Issuer cannot file under Regulation S-B if
      its
      annual revenues or public float exceed $25.0 million for two consecutive years.
      The Fund qualifies as a Regulation S-B filer since both its 2005 and 2004 annual
      revenues were less than $25.0 million and its public float is less than $25.0
      million. The
      Fund
      will continue to qualify as an S-B filer through at least 2007, as its revenues
      for the year ended December 31, 2005 are less than $25.0 million.





(A)  Introduction





Management's
      discussion and analysis of financial condition and results of operations relates
      to the Financial Statements of Professional Lease Management Income Fund I,
      L.L.C. (the Fund). The following discussion and analysis of operations focuses
      on the performance of the Fund's equipment in the various segments in which
      it
      operates and its effect on the Fund's overall financial condition.





(B)  Results
      of Operations -- Factors Affecting Performance





(1)  Re-leasing
      Activity and Re-pricing Exposure to Current Economic Conditions





The
      exposure of the Fund's equipment portfolio to re-pricing risk occurs whenever
      the leases for the equipment expire or are otherwise terminated and the
      equipment must be remarketed. Major factors influencing the current market
      rate
      for the Fund's equipment include, but are not limited to, supply and demand
      for
      similar or comparable types of transport capacity, desirability of the equipment
      in the leasing market, market conditions for the particular industry segment
      in
      which the equipment is to be leased, overall economic conditions, and various
      regulations concerning the use of the equipment. Equipment that is idle or
      out
      of service between the expiration of one lease and the assumption of a
      subsequent lease can result in a reduction of operating cash flow to the Fund.
      The Fund experienced re-leasing or re-pricing activity in 2005 for its marine
      container and marine vessel portfolios.





(a)  Marine
      containers: The Fund’s marine containers are leased to operators of
      utilization-type leasing pools and, as such, are highly exposed to re-pricing
      activity. A number of the Fund’s marine containers on a fixed rate lease in 2005
      switched to a lease based on utilization during 2005. This resulted in a
      decrease of approximately 25% in lease revenue on these marine containers as
      lease rates are significantly lower today than when the fixed rate lease was
      entered into several years ago.





(b)  Marine
      vessel: The Fund’s owned marine vessel operated in the short-term leasing market
      throughout 2005. As a result of this, the Fund's marine vessel was remarketed
      several times during 2005 exposing it to re-leasing and re-pricing activity.
      In
      2006, this marine vessel was leased on a five year sales-type lease through
      2010. At the end of the lease, ownership of the marine vessel will be
      transferred to the lessee.





(2)  Equipment
      Liquidations





Liquidation
      of Fund owned equipment and equipment owned by entities in which the Fund has
      an
      equity investment, represents a reduction in the size of the equipment portfolio
      and may result in a reduction of future operating cash flow to the
      Fund.





During
      2005, the Fund disposed of owned equipment that included commercial aircraft
      and
      marine containers for total aggregate proceeds of $1.7 million. See discussion
      of discontinued operations below regarding equipment liquidations.




(3)  Nonperforming
      Lessees





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 Fund to assume additional
      costs to protect its interests under the leases, such as repossession or legal
      fees.





In
      2005,
      the lessee of two of the Fund's owned Boeing 737's declared bankruptcy. The
      Fund
      repossessed these aircraft and sold them in the fourth quarter of
      2005.





(4)  Equipment
      Valuation





The
      Fund
      evaluates long-lived assets for impairment whenever events or circumstances
      indicate that the carrying values of such assets may not be recoverable. Losses
      for impairment are recognized when the undiscounted cash flows estimated to
      be
      realized from a long-lived asset are determined to be less than the carrying
      value of the asset and the carrying amount of long-lived assets exceed its
      fair
      value. The determination of fair value for a given investment requires several
      considerations, including but not limited to, income expected to be earned
      from
      the asset, estimated sales proceeds, and holding costs excluding interest.





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





The
      Manager purchased the Fund’s equipment portfolio with capital raised from its
      initial equity offering of $100.0 million and permanent debt financing of $25.0
      million. No further capital contributions from Class A Members are permitted
      under the terms of the Fund’s operating agreement.





The
      Fund
      relies on operating cash flow to meet its operating obligations and make cash
      distributions to Members.





DISCONTINUED
      OPERATIONS





During
      2005, the Fund and several affiliated entities (collectively, the Sellers),
      entered into an Asset Purchase Agreement to sell the railcar business of the
      Sellers, which includes railcars owned and leased by the Sellers as well as
      management contracts pursuant to which the Sellers managed the railcars of
      third
      parties. The sale of the railcar business was completed on August 18, 2005.





The
      Fund
      received net proceeds of $26.8 million from the disposition of its railcar
      assets resulting in a gain on disposition of discontinued operations of $9.9
      million. The amount received by the Fund was based on the appraised value of
      the
      railcars sold by the Fund to the purchaser, as determined by an independent
      third party appraiser.





Accordingly,
      the Fund's railcar leasing operations is accounted for as a discontinued
      operation and prior periods have been restated. Assets and liabilities relating
      to the railcar leasing operations have been presented as assets held for sale
      and liabilities held for sale for all periods presented.





CONTINUING
      OPERATIONS





At
      December 31, 2005, the Fund had unrestricted cash of $4.3 million.





For
      the
      year ended December 31, 2005, the Fund generated cash from operations of $10.3
      million which included cash provided by discontinued operations of $1.5 million,
      to meet its operating obligations, pay debt and interest on the Fund's debt,
      maintain working capital reserves and make cash distributions.





During
      the year ended December 31, 2005, the Fund disposed of owned equipment for
      aggregate proceeds of $1.7 million.





Accounts
      and other receivables decreased $1.0 million in the year ended December 31,
      2005
      due to the decrease caused by the collection of $0.6 million in other
      receivables, the offsetting of a security deposit of $0.3 million against other
      receivables from a former aircraft lessee and a decrease of $0.1 million due
      to
      the timing of lease receipts.





Equity
      investments in affiliated entities decreased $0.7 million during the year ended
      December 31, 2005 due to cash distributions of $1.2 million from the equity
      investments to the Fund being partially offset by income of $0.5 million that
      was recorded by the Fund for its interests in the equity
      investments.





Other
      assets decreased $0.6 million during the year ended December 31, 2005. A
      decrease of $0.5 million was due to the cash collections received on the finance
      lease receivable and a decrease of $0.1 million was due to the amortization
      of
      debt placement fees of $36,000 and prepaid expenses of $48,000.





Accounts
      payable and accrued expenses increased $0.4 million during the year ended
      December 31, 2005 due to the timing of payments to vendors.





Due
      to
      affiliates decreased $0.1 million during the year ended December 31, 2005 due
      to
      reduced management fees owed to the affiliate caused by lower lease revenues.





Reserve
      for repairs decreased $1.6 million during the year ended December 31, 2005.
      A
      decrease of $1.3 million was due to the sale of two commercial aircraft with
      engine reserves totaling $1.3 million. These reserves were reversed and included
      as additional gain on disposition of these aircraft. Additionally, reserve
      for
      repairs decreased $0.3 million due to the cash payments for the dry-docking
      of
      the Fund's marine vessel of $0.9 million being partially offset by an increase
      of $0.6 million in the dry dock accruals for the Fund's marine
      vessel.





Lessee
      deposits and prepaid reserves decreased $0.6 million during 2005 due to the
      security deposit of $0.3 million from an aircraft lessee being offset against
      other receivables and decreased $0.3 million due to the timing of prepaid lease
      payments being received from lessees.





Note
      payable decreased $10.0 million during the year ended December 31, 2005. In
      January 2005, the Fund prepaid its outstanding note payable plus accrued
      interest of $6,000. There was no pre-payment penalty associated with the payment
      of the note payable.





During
      2005, cash distributions declared and paid totaled $35.0 million ($7.05 per
      Class A membership unit) to the Class A members and $6.3 million to the
      Manager.





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





(D)  Critical
      Accounting Policies and Estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires the Manager to
      make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements and the reported amounts of revenues and expenses
      during the reporting period. On a regular basis, the Manager reviews these
      estimates, including those related to asset lives and depreciation methods,
      impairment of long-lived assets, allowance for doubtful accounts, reserves
      related to legally mandated equipment repairs ** and
      contingencies and litigation. These estimates are based on the Manager's
      historical experience and on various other assumptions believed to be reasonable
      under the circumstances. Actual results may differ from these estimates under
      different assumptions or conditions. The Manager believes, however, that the
      estimates, including those for the above-listed items, are reasonable and that
      actual results will not vary significantly from the estimated
      amounts.





The
      Manager believes the following critical accounting policies affect the more
      significant judgments and estimates used in the preparation of the Fund's
      financial statements:





Revenue
      recognition: Revenues are generally earned by placing the equipment under
      operating leases. A portion of the Fund's marine containers are leased to
      operators of utilization-type leasing pools that include equipment owned by
      unaffiliated parties. In such instances, revenues earned by the Fund 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 Fund’s marine vessel is operating on short-term leases
      which usually have a duration of less than one year. Rents for the remaining
      equipment are based on fixed rates.





The
      Fund
      has owned trailers that were transferred into a direct finance lease during
      2004. The revenues from the direct finance lease are primarily interest income
      and are based on a monthly amortization schedule.





Asset
      lives and depreciation methods: The Fund’s primary business involves the
      purchase and subsequent lease of long-lived transportation and related
      equipment. The Manager has chosen asset lives that it believes correspond to
      the
      economic life of the related asset. Depreciation is computed using the
      double-declining balance method, taking a full month's depreciation in the
      month
      of acquisition based upon estimated useful lives of 12 years for all equipment.
      The depreciation method changes to straight line when annual depreciation
      expense using the straight-line method exceeds that calculated by the
      double-declining balance method. The Manager has chosen a deprecation method
      that it believes matches the benefit to the Fund from the asset with the
      associated costs. These judgments have been made based on the Manager’s
      expertise in each equipment segment that the Fund operates. If the asset life
      and depreciation method chosen does not reduce the book value of the asset
      to at
      least the potential future cash flows from the asset to the Fund, the Fund
      would
      be required to record an impairment loss. Likewise, if the net book value of
      the
      asset was less than the economic value, the Fund may record a gain on sale
      upon
      final disposition of the asset.





Impairment
      of long-lived assets: Whenever there is an indicator that an impairment may
      exist such as when cash-flows decrease, there are unexpected maintenance issues
      or when economic conditions deteriorate in the market the equipment operates,
      the Manager reviews the carrying value of its equipment and equity investments
      in affiliated entities to determine if the carrying value of the assets may
      not
      be recoverable in consideration of the current economic conditions. This
      requires the Manager to make estimates related to future cash flows from each
      asset as well as the determination if the deterioration is temporary or
      permanent. If these estimates or the related assumptions change in the future,
      the Fund may be required to record additional impairment charges.





Allowance
      for doubtful accounts: The Fund maintains allowances for doubtful accounts
      for
      estimated losses resulting from the inability of the lessees to make the lease
      payments. These estimates are primarily based on the amount of time that has
      lapsed since the related payments were due as well as specific knowledge related
      to the ability of the lessees to make the required payments. If the financial
      condition of the Fund’s lessees were to deteriorate, additional allowances could
      be required that would reduce income. Conversely, if the financial condition
      of
      the lessees were to improve or if legal remedies to collect past due amounts
      were successful, the allowance for doubtful accounts may need to be reduced
      and
      income would be increased.





Reserves
      for repairs: The Fund accrues for legally required repairs to equipment such
      as
      dry docking for marine vessels and engine overhauls to aircraft engines over
      the
      period prior to the required repairs. The amount that is reserved is based
      on
      the Manager’s expertise in each equipment segment, the past history of such
      costs for that specific piece of equipment and discussions with independent,
      third party equipment brokers. If the amount reserved is not adequate to cover
      the cost of such repairs or if the repairs must be performed earlier than the
      Manager estimated, the Fund would incur additional repair and maintenance or
      equipment operating expenses.





Contingencies
      and litigation: The Fund is subject to legal proceedings involving ordinary
      and
      routine claims related to its business. The ultimate legal and financial
      liability with respect to such matters cannot be estimated with certainty and
      requires the use of estimates in recording liabilities for potential litigation
      settlements. Estimates for losses from litigation are disclosed if considered
      possible and accrued if considered probable after consultation with outside
      counsel. If estimates of potential losses increase or the related facts and
      circumstances change in the future, the Fund may be required to record
      additional litigation expense.





(E)  Recent
      Accounting Pronouncements





In
      December 2004, Financial Accounting Standards Board issued Statement 153,
      "Exchanges of Non-monetary Assets" (Statement 153), an amendment of Accounting
      Principles Board Opinion No. 29. Statement 153 is effective for non-monetary
      asset exchanges occurring in fiscal periods beginning after June 15, 2005.
      Statement 153 eliminates the exception to fair value for exchanges of similar
      productive assets and replaces it with a general exception for exchange
      transactions that do not have commercial substance - that is, transactions
      that
      are not expected to result in significant changes in the cash flows of the
      reporting entity.  Adoption of Statement 153 did not have a significant
      effect on the Fund's financial statements.





(F)  Results
      of Operations -- Year to Year Detail Comparison





Comparison
      of the Fund's Operating Results for the Years Ended December 31, 2005 and
      2004





(a)  Owned
      Equipment Operations





Lease
      revenues less operations support on owned equipment decreased during the year
      ended December 31, 2005, compared to the year ended December 31, 2004. Gains
      from the disposition of equipment, interest and other income and certain
      expenses such as management fees to affiliate, depreciation, general and
      administrative expenses and provision for (recovery of) bad debts relating
      to
      the operating segments (see Note 6 to the financial statements), are not
      included in the owned equipment operation discussion because they are indirect
      in nature and not a result of operations but the result of owning a portfolio
      of
      equipment. The following table presents lease revenues less operations support
      by segment (in thousands of dollars):





For
                the Years
              Ended
                December 31,2005
            
            2004Marine
                containers
            
            $
            4,262
            
            $
            4,714Marine
                vessel
            
            
            3,819
            
            
            4,652Aircraft
            
            
            408
            
            
            1,053Trailers
            
            
            (1
            )
            
            (3
            )





Marine
      containers:  Marine
      container lease revenues and operations support were $4.3 million and $42,000,
      respectively, for the year ended December 31, 2005, compared to $4.8 million
      and
      $0.1 million, respectively, during 2004. The decrease in lease revenues of
      $0.5
      million during the year ended December 31, 2005 compared to 2004 was due to
      lower lease rates earned on the Fund's marine containers due to the conversion
      of a portion of the Fund's marine containers from a fixed term lease to one
      based on utilization. As lease rates are lower today than when the fixed rate
      lease was entered into several years ago, this resulted in a decrease in lease
      revenues.





Marine
      vessel:  Marine
      vessel lease revenues and operations support were $9.6 million and $5.8 million,
      respectively, for the year ended December 31, 2005, compared to $10.7 million
      and $6.0 million, respectively, during 2004. Lease revenues decreased $1.1
      million due to this marine vessel being off-hire approximately 45 days during
      2005 while undergoing dry docking. Direct operating expenses decreased $0.2
      million which resulted from lower voyage expenses due to this marine vessel
      undergoing dry docking during 2005. A similar event did not occur during
      2004.





Aircraft:  Aircraft
      lease revenues and operations support were $ 0.6 million and $0.1 million,
      respectively, for the year ended December 31, 2005, compared to $1.1 million
      and
      $34,000, respectively, during the 2004. A decrease in contribution of $0.6
      million was due to the disposition of the Fund's aircraft during 2005 and 2004.





(b)  Interest
      and Other Income





Interest
      and other income decreased $0.3 million in the year ended December 31, 2005
      compared to 2004. During 2004, a former aircraft lessee agreed to pay $0.6
      million as a settlement for not returning leased aircraft in the condition
      required in the lease agreement which was included in other income. A similar
      event did not occur during 2005. This decrease was partially offset by increased
      interest income of $0.4 million due to higher cash balances compared to
      2004.





(c)  Indirect
      Expenses Related to Owned Equipment Operations





Total
      indirect expenses of $4.9 million for the year ended December 31, 2005 decreased
      from $5.3 million for the same period in 2004. Significant variances are
      explained as follows:





(i)  A
      $0.9
      million decrease in interest expense was due to lower average borrowings
      outstanding during the year ended December 31, 2005 compared to the same period
      in 2004. The Fund repaid its outstanding debt in full in the first quarter
      of
      2005;





(ii)  A
      $0.5
      million decrease in depreciation expense from 2004 levels reflecting a decrease
      of $0.4 million caused by the double-declining balance method of depreciation
      which results in greater depreciation in the first years an asset is owned
      and a
      decrease of $0.1 million due to disposition of equipment during 2005 and
      2004;





(iii)  General
      and administrative expenses decreased $0.4 million during the year ended
      December 31, 2005 compared to 2004. A decrease of $0.2 million was due to lower
      administrative costs relating to the return of aircraft and a decrease of $0.1
      million due to lower administrative costs;





(iv)  A
      $0.2
      million decrease in management fees to affiliate was due to lower lease revenues
      being earned during the year ended December 31, 2005 compared to 2004;
      and





(v)  Provision
      for (recovery of) bad debts decreased $1.7 million during the year ended
      December 31, 2005 compared to 2004. During 2005, provision for bad debts of
      $0.2
      million was primarily related to one aircraft lessee that declared bankruptcy.
      During 2004, recovery of bad debts of $1.5 million was due to the collection
      of
      receivables from another aircraft lessee that had been previously reserved
      for
      as a bad debt.





(d)  Net
      Gain
      on Disposition of Owned Equipment





Net
      gain
      on disposition of owned equipment for the year ended December 31, 2005 totaled
      $2.6 million which resulted from the sale of commercial aircraft and marine
      containers with a net book value of $0.3 million for proceeds of $1.7 million.
      The gain on disposition of $2.6 million included the reversal of $1.3 million
      unused engine reserves related to the sold commercial aircraft. Net gain on
      disposition of owned equipment for the year ended December 31, 2004 totaled
      $1.9
      million which resulted from the disposition of a commercial aircraft, marine
      containers, and a trailer with a net book value of $0.2 million for proceeds
      of
      $1.1 million and the reversal of $0.9 million of unused engine
      reserves.





(e)  Equity
      in
      Net Income of Equity Investments





Equity
      in
      net income of equity investments represents the Fund's share of the net income
      generated from the operation of jointly owned assets accounted for under the
      equity method of accounting. These entities are single purpose and have no
      debt
      or other financial encumbrances.





The
      following equity investments discussion is based on the Fund's proportional
      share of revenues, depreciation and general and administrative expenses in
      the
      equity investments:





As
      of
      December 31, 2005, the Fund owned interests in two trusts that each own a
      commercial aircraft. As of December 31, 2004, the Fund owned interests in two
      trusts that each own a commercial aircraft and an interest in an entity owning
      other aircraft related assets. The entity owning aircraft related assets was
      dissolved in the fourth quarter of 2005.





During
      the years ended December 31, 2005 and 2004, lease revenues of $1.2 million
      from
      the two trusts that each own a commercial aircraft were partially offset by
      depreciation expense, direct expenses, and general and administrative expenses
      of $0.7 million. During the year ended December 31, 2005, contribution from
      an
      entity owning other assets was $1,000 compared to $42,000 during the
      2004.





(f)  Income
      (Loss) from Operation of Discontinued Operations





During
      the year ended December 31, 2005, the Fund's railcar operations, which are
      being
      accounted for as a discontinued operation, generated income from operations
      of
      $0.2 million compared to a loss of $0.8 million during 2004.





(g)  Gain
      on
      Disposition of Discontinued Operations





The
      Fund
      had a gain on disposition of discontinued operations from the sale of its
      railcar assets of $9.9 million in the year ended December 31, 2005 compared
      to
      $-0- during 2004.


(h)  Net
      Income





As
      a
      result of the foregoing, the Fund had net income of $17.2 million for the year
      ended December 31, 2005, compared to net income of $7.6 million during 2004.
      The
      Fund's ability to operate and liquidate assets, secure leases, and re-lease
      those assets whose leases expire is subject to many factors. Therefore, the
      Fund's performance in the year ended December 31, 2005 is not necessarily
      indicative of future periods.





(G)  Geographic
      Information





Certain
      of the Fund’s equipment operates in international markets. Although these
      operations expose the Fund to certain currency, political, credit and economic
      risks, the Manager believes these risks are minimal or has implemented
      strategies to control the risks. Currency risks are at a minimum because all
      invoicing is conducted in United States (US) dollars. Political risks are
      minimized by avoiding countries that do not have a stable judicial system and
      established commercial business laws. Credit support strategies for lessees
      range from letters of credit supported by US banks to cash deposits. Although
      these credit support mechanisms generally allow the Fund 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 Note 7 to the financial statements for
      information on the lease revenues, net income and net book value of equipment
      in
      the various geographic regions.





Revenues
      and net operating income or loss by geographic region are impacted by the time
      period the assets are owned and the useful life ascribed to the assets 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 the double-declining balance method of depreciation. The
      relationships of geographic revenues, net income, and net book value of
      equipment are expected to change significantly in the future, as assets come
      off
      lease and decisions are made to either redeploy the assets in the most
      advantageous geographic location or sell the assets.





The
      Fund's owned equipment and partially owned equipment on lease to US-domiciled
      lessee consists of trailers and interests in entities that own aircraft. During
      2005, US lease revenues accounted for 8% of the total lease revenues from wholly
      and jointly owned equipment. This region reported a net income of $0.4
      million.





The
      Fund's owned equipment that were on lease to South American-domiciled lessees
      consisted of two aircraft. During 2005, South American lease revenues accounted
      for 3% of the total lease revenues from wholly and jointly owned equipment,
      while this region reported a net income of $2.4 million. Net income from this
      region resulted primarily from the gain on sale of owned aircraft of $2.2
      million.





The
      Fund's owned equipment on lease to lessees in the rest of the world consists
      of
      a marine vessel and marine containers. The marine vessel and marine containers
      were moved on a regular basis to locations throughout the world. During 2005,
      lease revenues from these operations accounted for 88% of the total lease
      revenues of wholly and jointly-owned owned equipment, while this region reported
      a net income of $4.7 million.





(H)  Inflation





Inflation
      had no significant impact on the Fund's operations during 2005 or
      2004.





(I)  Forward-Looking
      Information





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


(J)  Outlook
      for the Future





The
      Fund'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.





The
      ability of the Fund to realize acceptable lease rates on its equipment in the
      different equipment markets is contingent on many factors, such as specific
      market conditions and economic activity, technological obsolescence, and
      government or other regulations. The unpredictability of these factors makes
      it
      difficult for the Manager to clearly define trends or influences that may impact
      the performance of the Fund's equipment. The Manager continually monitors both
      the equipment markets and the performance of the Fund's equipment in these
      markets. The Manager may decide to reduce the Fund's exposure to equipment
      markets if it determines that it cannot operate equipment to achieve acceptable
      rates of return.





The
      Fund
      intends to use future cash flow from operations to satisfy the operating
      requirements and make cash distributions to the members.





Disposition
      of the Fund's equipment and investments in entities owning equipment may result
      in a reduction of cash flows from operations to the Fund.





Factors
      affecting the Fund’s contribution during the year 2006 and beyond
      include:





(1)  Demand
      for marine containers is closely tied to worldwide economic conditions.
      Utilization of the Fund's marine containers is expected to be in the low 90%
      range for at least the first six months of 2006. Marine container manufacturers
      have recently seen an increase in their inventory of marine containers. This
      increase may result in a decrease in utilization and lease rates earned on
      the
      Fund's marine containers;





(2)  The
      Fund’s owned marine ** vessel
      is
      a double-hull product tanker which operates in international markets carrying
      a
      variety of clean product/chemical liquid cargoes. Demand for product and
      chemical shipping is closely tied to worldwide economic growth
      patterns.





In
      2006,
      the Fund's product tanker was leased for five years on a sales-type lease.
      At
      the end of the lease, ownership will be transferred to the lessee. This marine
      vessel will operate primarily in the vegetable and palm oil trades;





(3)  Market
      demand for and used aircraft has been severely impacted by the poor financial
      condition of the airline industry.





The
      Manager believes that the commercial aviation industry is recovering from
      several years of reduced travel; however, the Manager views the recovery with
      caution as major increases in the cost of fuel has added another factor to
      the
      poor financial condition of the airlines. The Manager believes that
      stabilization of fuel prices will be critical for the recovery in the airline
      industry to continue.





The
      Fund
      has an interest in two aircraft on lease to a major US airline. While the
      Manager is not aware of any specific liquidity problems in regards to this
      lessee, the poor financial condition of the US airline industry, which has
      included several bankruptcies in the last twelve months, indicate there could
      be
      collection issues related to this lessee in the future;





(4)  The
      timing and amount of future cash distributions to the Class A and Class B
      Members will be based on the cash position of the Fund and operational
      requirements. The Manager does not expect to make a cash distribution until
      the
      Fund has significant additional asset dispositions; and





(5)  Beginning
      in 2006, in order to prevent the Fund from being considered publicly traded
      and
      to avoid taxation of the Fund as an association treated as a corporation under
      the Internal Revenue Code, the Manager began limiting the number of Class A
      units to be traded to 2% per year of the total outstanding units.





Several
      other factors may affect the Fund's operating performance in 2006 and beyond,
      including changes in the markets for the Fund's equipment and changes in the
      regulatory environment in which the equipment operates.





(1)  Re-pricing
      Risk





The
      Fund's marine vessel and certain marine containers will be remarketed in 2006
      as
      existing leases expire, exposing the Fund to re-pricing risk/opportunity.





(2)  Equipment
      Liquidations





The
      Manager may elect to sell certain under-performing equipment or equipment whose
      continued operation may become prohibitively expensive. In either case, the
      Manager intends to re-lease or sell equipment at prevailing market rates;
      however, the Manager cannot predict these future rates with any certainty at
      this time, and cannot accurately assess the effect of such activity on future
      Fund performance. The proceeds from equipment dispositions will be used to
      fund
      operations and make cash distributions to the members.





(3)  Impact
      of
      Government Regulations on Future Operations





Ongoing
      changes in the regulatory environment, both in the US and internationally,
      cannot be predicted with accuracy, and preclude the Manager from determining
      the
      impact of such changes on Fund operations or sale of equipment.





The
      Manager operates the Fund'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 Fund'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 Fund of meeting regulatory compliance for the same equipment operated
      between countries.





(K)  Distribution
      Levels and Additional Capital Resources





The
      Fund's initial contributed capital was composed of the proceeds from its initial
      offering of $100.0 million, supplemented by permanent debt in the amount of
      $25.0 million. The Fund may no longer purchase equipment with cash flow from
      operations. The Manager 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. The Fund intends to rely on operating cash flow to meet its
      operating obligations and make cash distributions to its members.





Cash
      distributions when paid to the members generally consist of both a return of
      and
      a return on capital. Cash distributions do not represent and are not indicative
      of yield on investment. Actual yield on investment cannot be determined with
      any
      certainty until conclusion of the Fund and will be dependent upon the collection
      of all future contracted rent, the generation of renewal and/or re-lease rents
      and the residual value realized for each asset at its disposal.





The
      Manager believes that sufficient cash flow will be available in the future
      to
      meet Fund operating cash flow requirements.





ITEM
      7. FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA





The
      financial statements for the Fund are listed on the Index to Financial
      Statements included in Item 13(a) of this Annual Report on Form
      10-KSB.


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




(A)
            Disagreements
                with Accountants on Accounting and Financial
                Disclosures





None.





(B)
            Changes
                in Accountants





None.





ITEM
      8A.  CONTROLS
      AND PROCEDURES





(A)  Limitations
      on the Effectiveness of Controls





The
      Manager’s management, including it’s President and Chief Financial Officer
      (CFO), does not expect that our internal controls or disclosure control will
      prevent all errors and all fraud. A control system, no matter how well conceived
      and operated, can provide only reasonable, not absolute, assurance that the
      objectives of the control system are met. Further, the design of a control
      system must reflect the fact that there are resource constraints, and the
      benefits of controls must be considered relative to their costs.





Because
      of the inherent limitations in all control systems, no evaluation of control
      can
      provide absolute assurance that all control issues and instances of fraud,
      if
      any, within the Fund have been detected. These inherent limitations include
      the
      realities that judgments in decision-making can be faulty and that breakdowns
      can occur because of a simple error or mistake. Additionally, controls can
      be
      circumvented by the individual acts of some persons, collusion of two or more
      people, or by management override of the control. The design of any system
      of
      controls also is based partly on certain assumptions about the likelihood of
      future events, and there can be no assurance that any design will succeed in
      achieving its stated goals under all potential future conditions.





Notwithstanding
      the forgoing limitations, we believe that our internal controls and disclosure
      controls provide reasonable assurances that the objectives of our control system
      are met.





(B)  Quarterly
      Evaluation of the Fund’s Disclosure Controls and Internal Controls





(1)  As
      of the
      end of the period prior to the filing of this report, the Manager carried out
      an
      evaluation, under the supervision and with the participation of the Manager’s
      management, including it’s President and CFO, of the effectiveness of the design
      and operation of the Fund’s disclosure controls and procedures pursuant to Rule
      13a-14 under the Securities Exchange Act of 1934 (the “Exchange Act”). Based
      upon that evaluation, the President and CFO concluded that the Fund’s disclosure
      controls and procedures are effective in timely alerting them to material
      information relating to the Fund’s required to be included in the Fund’s
      exchange act filings.





(2)  There
      have been no significant changes in the Fund’s internal controls or in other
      factors which could significantly affect internal controls subsequent to the
      date the Manager carried out its evaluations.





ITEM
      8B.  OTHER
      INFORMATION





(A)  Reports
      on Form 8-K




(1)   Form
      8-K
      dated October 31, 2005, announcing a cash distribution to the
      members.




(2)   Form
      8-K
      dated November 15, 2005 announcing the sale of PLM Financial Services, Inc.
      and
      the announcement
      of elections of officers and appointments of directors of PLM Financial
      Services, Inc.





**PART
      III**





ITEM
                9.
            DIRECTORS
                AND EXECUTIVE OFFICERS OF PLM FINANCIAL SERVICES, INC.





As
      of the
      date of this annual report, the directors and executive officers of PLM
      Financial Services, Inc. are as follows:





Name
            Age
            PositionPaul
                M. Leand, Jr,
            39
            Chairman
                of the Board of Directors, President and Secretary ofPLM
                Financial Services, Inc.Michael
                Dockman
            42
            Director,
                PLM Financial Services, Inc.James
                G. Dolphin
            38
            Director,
                PLM Financial Services, Inc.Richard
                K Brock
            43
            Chief
                Financial Officer, PLM Financial Services,
                Inc.





Paul
      M.
      Leand, Jr, 39, was elected in November 2005 as the Chairman of the Board of
      Directors and appointed the President and Secretary of PLM
      Financial Services, Inc.(FSI) .
      Mr.
      Leand joined the predecessor of AMA Capital Partners LLC (AMA) in 1998 and
      has
      been AMA’s **** CEO
      since
      2004. Mr. Leand developed AMA’s restructuring practice in the maritime industry
      and has led many mergers and acquisitions. Mr. Leand has extensive experience
      in
      structuring leasing and debt facilities. Prior to joining AMA, Mr. Leand was
      employed at The First National Bank of Maryland where he managed the bank’s
      railroad and maritime divisions.





Michael
      Dockman, 42, was elected in November 2005 to FSI’s board of directors. Mr.
      Dockman joined AMA Capital Partners in 2005 as a Managing Director. Mr. Dockman
      is involved in merger and acquisitions and structured financings in the domestic
      transportation marketplace. Prior to joining AMA, Mr. Dockman was with Railroad
      Financial Corporation, a leading investment bank focused on the rail industry.





James
      G.
      Dolphin, 38, was elected in November 2005 to FSI’s board of directors. Mr.
      Dolphin joined AMA in 2001 and is AMA’s President. Mr. Dolphin is involved in
      AMA’s strategic advisory work in the shipping industry. Prior to joining AMA,
      Mr. Dolphin led the global freight transportation management consulting practice
      at Booz Allen Hamilton.





Richard
      K
      Brock, 43, was appointed Chief Financial Officer of PLM Financial Services,
      Inc.
      in August 2002. From June 2001 through August 2002, Mr. Brock was a consultant
      to various leasing companies including PLM Financial Services, Inc. From October
      2000 through June 2001, Mr. Brock was a Director of PLM Financial Services,
      Inc.
      Mr. Brock was appointed Vice President and Chief Financial Officer of PLM
      International, Inc. and PLM Financial Services, Inc. in January 2000, having
      served as Acting Chief Financial Officer since June 1999 and as Vice President
      and Corporate Controller of PLM International, Inc. and PLM Financial Services,
      Inc. since June 1997. Prior to June 1997, Mr. Brock served as an accounting
      manager at PLM Financial Services, Inc. beginning in September 1991 and as
      Director of Planning and General Accounting beginning in February
      1994.





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





CODE
      OF ETHICS





The
      Board
      of Directors of PLM Financial Services Inc, (“FSI”) the Manager, has adopted a
      written Code of Ethics that is applicable to the Board, executive officers
      and
      employees of PLM Financial Services Inc. FSI’s Code of Ethics is designed to
      deter wrongdoing and to promote:





-
            the
                integrity and values of FSI, including the ethical handling of actual
                or
                apparent conflicts of interest between personal and professional
                relationships;-
            compliance
                with applicable governmental laws, rules and
                regulations;-
            internal
                reporting of violations of the Code of Ethics to any member of FSI’s Board
                of Directors; and-
            accountability
                for adherence to the Code of
                Ethics.





ITEM
      10.  EXECUTIVE
      COMPENSATION





The
      Fund
      has no directors, officers, or employees.  The Fund has no pension, profit
      sharing, retirement, or similar benefit plan in effect as of December 31,
      2005.





ITEM
      11.  SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





(A)  Security
      Ownership of Certain Beneficial Owners





The
      Manager is generally entitled to a 1% interest in profits and losses and a
      15%
      interest in the Fund's cash distributions, subject to certain allocation of
      income provisions. After the investors received cash equal to their original
      capital contribution, the Manager's interest in the distributions of the Fund
      increased to 25%. With the cash distribution made in November 2005, most Class
      A
      members have now received cash distributions equal to or greater than their
      original capital contribution and thus, the Manager's share of the cash
      distribution related to these members has increased to 25%.





As
      of
      December 31, 2005, no investor was known by the Manager to beneficially own
      more
      than 5% of the units of the Fund.





(B)  Security
      Ownership of Management





Neither
      the Manager and its affiliates nor any executive officer or director of the
      Manager and its affiliates owned any units of the Fund as of December 31,
      2005.





ITEM
      12.  CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS





Transactions
      with Management and Others





During
      2005, the Fund paid or accrued the following fees to FSI or its affiliates:
      management fees - $0.7 million; and administrative and data processing services
      performed on behalf of the Fund - $0.2 million.





During
      2005, the Fund's discontinued operations paid or accrued the following fees
      to
      FSI or its affiliates: management fees, $0.2 million; and administrative and
      data processing services performed on behalf of the Fund $0.3
      million.





During
      2005, the equity investments paid or accrued the following fees to FSI or its
      affiliates (based on the Fund’s proportional share of ownership): management
      fees - $0.1 million; and administrative and data processing services - $8,000.





The
      balance due to affiliates as of December 31, 2005, of $0.2 million is due to
      FSI
      for management fees.




ITEM
      13.  EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES





(A)  1.  Financial
      Statements





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





(B)  Financial
      Statement Schedule





None.





(C)  Exhibits





4
            Operating
                Agreement of Fund, incorporated by reference to the Fund's
                Registration Statement on Form S-1 (Reg. No. 33-55796) which
                became effective with the Securities and Exchange Commission on May
                25,
                1993.10.1
            Management
                Agreement between Fund and PLM Investment Management, Inc., incorporated
                by reference to the Fund's Registration Statement on Form S-1
                (Reg. No. 33-55796) which became effective with the Securities
                and Exchange Commission on May 25, 1993.10.2
            $25.0
                Million Note Agreement, dated as of December 30, 1996, incorporated
                by
                reference to the Fund’s 1996 Annual Report on Form 10-K filed with the
                Securities and Exchange Commission on March 14, 1997.10.3
            Settlement
                Agreement between PLM Worldwide Leasing Corp. and Varig S.A. dated
                October
                11, 2002, incorporated by reference to the Fund’s Form 10-Q dated
                September 30, 2002 filed with the Securities and Exchange Commission
                on
                November 14, 2002.10.4
            Modification
                of Settlement Agreement between PLM Worldwide Leasing Corp. and Varig
                S.A.
                dated September 24, 2004, incorporated by reference to the Fund’s Form
                10-KSB dated December 31, 2004 filed with the Securities and Exchange
                Commission on March 30, 2005.14
            PLM
                Financial Services Inc. Code of Ethics incorporated by reference
                to the
                Fund’s Form 10-KSB dated December 31, 2003 filed with the Securities and
                Exchange Commission on March 29, 2004.31.1
            Certificate
                of President of the Manager pursuant to Section 302 of Sarbanes -
                Oxley
                Act of 2002.31.2
            Certificate
                of Chief Financial Officer of the Manager pursuant to Section 302
                of
                Sarbanes - Oxley Act of 2002.32.1
            Certificate
                of President of the Manager Partner pursuant to Section 906 of Sarbanes
                -
                Oxley Act of 2002.32.2
            Certificate
                of Chief Financial Officer of the Manager pursuant to Section 906
                of
                Sarbanes - Oxley Act of 2002.





ITEM
      14.  PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





The
      table
      below list principal accountant fees and services (in thousands of
      dollars):





Audit
            
            Audit
            
            Tax
            
            All
                OtherFees
            
            Related
                Fees
            
            Fees
            
            Fees





Year
                Ended December 31, 2005
            $
            113
            
            $
            --
            
            $
            --
            
            $
            --Year
                Ended December 31, 2004
            $
            70
            
            $
            --
            
            $
            --
            
            $
            --





It
      is the
      policy of the Board of Directors that it pre-approves all of the services
      described above in this Item 14.









SIGNATURES





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





The
      Fund
      has no directors or officers.  The Manager has signed on behalf of the Fund
      by duly authorized officers.





Dated:
                  March 29, 2006
              
              PROFESSIONAL
                  LEASE MANAGEMENT INCOMEFUND
                  I, L.L.C.By:
              PLM
                  Financial Services, Inc.General
                  PartnerBy:
              /s/Paul
                  M. LeandPaul
                  M. LeandPresidentBy:
              /s/
                  Richard K BrockRichard
                  K BrockChief
                  Financial Officer







CERTIFICATION





The
      undersigned hereby certifies, in their capacity as a director of the Manager
      of
      Professional Lease Management Income Fund I, L.L.C. (the Fund), that the Annual
      Report of the Fund on Form 10-KSB for the year ended December 31, 2005, fully
      complies with the requirements of Section 13(a) of the Securities Exchange
      Act
      of 1934 and that the information contained in such report fairly presents,
      in
      all material respects, the financial condition of the Fund at the end of such
      period and the results of operations of the Fund for such period.





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report has
      been
      signed below by the following directors of the Fund's Manager on the dates
      indicated.





Name
              
              
              Capacity
              
              Date/s/Paul
                  M. LeandPaul
                  M. Leand
              
              
              Director,
                  FSI
              
              March
                  29, 2006/s/Michael
                  DockmanMichael
                  Dockman
              
              
              Director,
                  FSI
              
              March
                  29, 2006/s/James
                  G. DolphinJames
                  G. Dolphin
              
              
              Director,
                  FSI
              
              March
                  29, 2006










**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I**


**(A
      Limited Liability Company)**


**INDEX
      TO FINANCIAL STATEMENTS**





(Item
      13(a))





PageReport
                of independent registered public accounting firm
            22Balance
                sheets as of December 31, 2005 and 2004
            23Statements
                of income for the years endedDecember
                31, 2005 and 2004
            24Statements
                of changes in members' equity for the years endedDecember
                31, 2005 and 2004
            25Statements
                of cash flows for the years endedDecember
                31, 2005 and 2004
            26Notes
                to financial statements
            27-40
































**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**











The
      Members


Professional
      Lease Management Income Fund I, L.L.C.:








We
      have
      audited the accompanying balance sheets of Professional Lease Management Income
      Fund I, L.L.C., a Delaware Limited Liability Company (the Fund), as of December
      31, 2005 and 2004, and the related statements of income, changes in members'
      equity, and cash flows for the years then ended. These financial statements
      are
      the responsibility of the Fund's management. Our responsibility is to express
      an
      opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. The Fund is not required
      to have, nor were we engaged to perform an audit of its internal control over
      financial reporting. Our audits included consideration of internal control
      over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Fund's internal control over financial
      reporting. Accordingly, we express no such opinion. The audits also include
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, 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 Professional Lease Management
      Income Fund I, L.L.C. at December 31, 2005 and 2004, and the results of its
      operations and its cash flows for the years then ended in conformity with
      accounting principles generally accepted in the United States of
      America.

















/s/
      Grant
      Thornton LLP





New
      York,
      New York


March
      24,
      2006

















**PROFESSIONAL
                LEASE MANAGEMENT INCOME FUND I, L.L.C.****(A
                Delaware Limited Liability Company)****BALANCE
                SHEETS****December
                31,**(in
                thousands of dollars, except unit
                amounts)








**Assets**
            
            2005
            
            2004Equipment
                held for operating leases, net
            
            $
            46,505
            
            $
            57,908Less
                accumulated depreciation
            
            
            (32,240
            )
            
            (40,329
            )Net equipment
            
            
            14,265
            
            
            17,579Cash
                and cash equivalents
            
            
            4,343
            
            
            15,646Accounts
                and other receivables, less allowance for doubtfulaccounts of $15 in 2005 and $-0- in 2004
            
            
            2,310
            
            
            3,334Equity
                investments in affiliated entities
            
            
            200
            
            
            904Other
                assets, net of accumulated amortization of$-0- in 2005 and $141 in 2004
            
            
            508
            
            
            1,111Assets
                held for sale
            
            
            27
            
            
            19,356Total assets
            
            $
            21,653
            
            $
            57,930**Liabilities
                and members’ equity**LiabilitiesAccounts
                payable and accrued expenses
            
            $
            548
            
            $
            149Due
                to affiliates
            
            
            166
            
            
            223Note
                payable
            
            
            --
            
            
            10,000Reserve
                for repairs
            
            
            198
            
            
            1,756Lessee
                deposits and prepaid revenues
            
            
            343
            
            
            948Liabilities
                held for sale
            
            
            43
            
            
            361Total liabilities
            
            
            1,298
            
            
            13,437Commitments
                and contingenciesMembers'
                equity:Class
                A members (4,971,311 units outstanding)
            
            
            20,355
            
            
            44,493Class
                B member
            
            
            --
            
            
            --Total members' equity
            
            
            20,355
            
            
            44,493Total liabilities and members' equity
            
            $
            21,653
            
            $
            57,930




See
      accompanying notes to financial statements.










**PROFESSIONAL
                LEASE MANAGEMENT INCOME FUND I, L.L.C.****(A
                Delaware Limited Liability Company)****STATEMENTS
                OF INCOME****For
                the Years Ended December 31,**(in
                thousands of dollars, except weighted-average Class A unit
                amounts)





2005
            
            2004**Revenues**Lease
                revenue
            
            $
            14,492
            
            $
            16,607Interest
                and other income
            
            
            492
            
            
            798Gain
                on disposition of equipment
            
            
            2,642
            
            
            1,873Loss
                on disposition of equipment
            
            
            --
            
            
            (2
            )Total revenues
            
            
            17,626
            
            
            19,276**Expenses**Depreciation
            
            
            2,996
            
            
            3,538Operations
                support
            
            
            6,004
            
            
            6,191Management
                fees to affiliate
            
            
            706
            
            
            953Interest
                expense
            
            
            42
            
            
            973General
                and administrative expensesto
                affiliates
            
            
            193
            
            
            98Other
                general and administrative expenses
            
            
            767
            
            
            1,222Provision
                for (recovery of) bad debts
            
            
            203
            
            
            (1,483
            )Total expenses
            
            
            10,911
            
            
            11,492Equity
                in net income of equity investments
            
            
            468
            
            
            602Income
                from continuing operations
            
            
            7,183
            
            
            8,386Discontinued
                operations:Income (loss) from operation of discontinued operations
            
            
            178
            
            
            (778
            )Gain on disposition of discontinued operations
            
            
            9,865
            
            
            --Income
                (loss) from discontinued operations
            
            
            10,043
            
            
            (778
            )Net income
            
            $
            17,226
            
            $
            7,608**Members'
                share of net income**Class
                A members
            
            $
            10,910
            
            $
            7,608Class
                B member
            
            
            6,316
            
            
            --Total
            
            $
            17,226
            
            $
            7,608Class
                A members' basic earnings (loss)per weighted-average unit:Income
                from continuing operations
            
            $
            0.17
            
            $
            1.69Income
                (loss) from operation of discontinued operations
            
            
            0.04
            
            
            (0.16
            )Gain on disposition of discontinued operations
            
            
            1.98
            
            
            --$
            2.19
            
            $
            1.53





See
      accompanying notes to financial statements.










**PROFESSIONAL
                LEASE MANAGEMENT INCOME FUND I, L.L.C.****(A
                Delaware Limited Liability Company)****STATEMENTS
                OF CHANGES IN MEMBERS' EQUITY****For
                the Years Ended December 31, 2005 and 2004**(in
                thousands of dollars)














Class
                A
            
            Class
                B
            
            TotalMembers'
                equity as of December 31, 2003
            
            $
            36,885
            
            $
            --
            
            $
            36,885Net
                income
            
            
            7,608
            
            
            --
            
            
            7,608Members'
                equity as of December 31, 2004
            
            
            44,493
            
            
            --
            
            
            44,493Net
                income
            
            
            10,910
            
            
            6,316
            
            
            17,226Cash
                distribution
            
            
            (35,048
            )
            
            (6,316
            )
            
            (41,364
            )Members'
                equity as of December 31, 2005
            
            $
            20,355
            
            $
            --
            
            $
            20,355





































See
      accompanying notes to financial statements.










**PROFESSIONAL
                LEASE MANAGEMENT INCOME FUND I, L.L.C.****(A
                Delaware Limited Liability Company)****STATEMENTS
                OF CASH FLOWS****For
                the Years Ended December 31,**(in
                thousands of dollars)








2005
            
            2004**Operating
                activities**Net
                Income (Revised)
            
            $
            17,226
            
            $
            7,608Adjustments
                to reconcile net incometo net cash provided by (used in) operating activities:Depreciation
            
            
            2,996
            
            
            3,538Amortization of debt placement costs
            
            
            36
            
            
            18Provision for (recovery of) bad debts
            
            
            203
            
            
            (1,483
            )Net gain on disposition of equipment
            
            
            (2,642
            )
            
            (1,871
            )Equity in net income from equity investments
            
            
            (468
            )
            
            (602
            )Distributions from equity investments
            
            
            1,172
            
            
            1,126Changes in operating assets and liabilities:Accounts and other receivables
            
            
            821
            
            
            1,288Other assets
            
            
            27
            
            
            774Accounts payable and accrued expenses
            
            
            399
            
            
            (361
            )Due to affiliates
            
            
            (57
            )
            
            (16
            )Reserve for repairs
            
            
            (1,558
            )
            
            84Lessee deposits and prepaid revenues
            
            
            695
            
            
            (690
            )Cash
                provided by operating activities of continuing operations
            
            
            18,850
            
            
            9,413Cash
                (used in) provided by operating activities of discontinuedoperations
            
            
            (8,551
            )
            
            2,128Net cash provided by operating activities
            
            
            10,299
            
            
            11,541**Investing
                activities**Decrease
                in restricted cash
            
            
            --
            
            
            60Collections
                on finance lease receivable
            
            
            538
            
            
            305Proceeds
                from disposition of equipment
            
            
            1,662
            
            
            1,144Cash
                provided by investing activities of continuing operations
            
            
            2,200
            
            
            1,509Cash
                provided by investing activities of discontinued
                operations
            
            
            27,562
            
            
            1,358Net cash provided by investing activities
            
            
            29,762
            
            
            2,867**Financing
                activities**Payments
                of notes payable
            
            
            (10,000
            )
            
            (3,000
            )Cash
                distribution to Class A members
            
            
            (35,048
            )
            
            --Cash
                distribution to Class B member
            
            
            (6,316
            )
            
            --Net cash used in financing activities
            
            
            (51,364
            )
            
            (3,000
            )Net
                (decrease) increase in cash and cash equivalents
            
            
            (11,303
            )
            
            11,408Cash
                and cash equivalents at beginning of period
            
            
            15,646
            
            
            4,238Cash
                and cash equivalents at end of period
            
            $
            4,343
            
            $
            15,646**Supplemental
                information**Interest
                paid
            
            $
            6
            
            $
            956





See
      accompanying notes to financial statements.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





1.  Basis
      of Presentation




Organization




Professional
      Lease Management Income Fund I, L.L.C., a Delaware Limited Laibility Company
      (the Fund), was formed on August 22, 2994, to engage in the business of owning,
      leasing, or otherwise investing in predominantly used transportation and related
      equipment.




PLM
      Financial Services, Inc. (FSI) is the Manager and Class B Member of the Fund.
      On
      November 15, 2005, PLM International, Inc., the former parent company of FSI,
      sold all the issued and outstanding shares of common stock of FSI to AMA CP
      Fund
      I Inc.





The
      Manager manages the affairs of the Fund. The Manager paid out of its own
      corporate funds (as a capital contribution to the Fund) all organization and
      syndication expenses incurred in connection with the offering; therefore, 100%
      of the net cash proceeds received by the Fund from the sale of Class A Units
      were used to purchase equipment and establish any required cash reserves. For
      its contribution, the Manager is generally entitled to a 1% interest in profits
      and losses and 15% interest in the Fund's cash distributions subject to certain
      special allocation provisions (see Net Income and Distributions below). After
      the investors receive cash distributions equal to their original capital
      contributions, the Manager's interest in the cash distributions of the Fund
      will
      increase to 25%.





The
      Fund
      will terminate on December 31, 2010, unless terminated earlier upon sale of
      all
      equipment or by certain other events. The Fund may not reinvest cash flow
      generated from operations after January 1, 2003 into additional equipment.




The
      Fund's consolidated financial statements contained in the 2005 annual report
      have been prepared in accordance with the requirements for a Small Business
      Issuer as prescribed by Regulation S-B under the Securities Exchange Act of
      1934. Generally, a Small Business Issuer cannot file under Regulation S-B if
      its
      annual revenues or public float exceed $25.0 million for two consecutive years.





Estimates





These
      financial statements have been prepared on the accrual basis of accounting
      in
      accordance with accounting principles generally accepted in the United States
      of
      America. This requires 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 materially from these estimates.





Accounting
      for Leases





The
      Fund's leasing operations generally consist of operating leases. Under the
      operating lease method of accounting, the lessor records the leased asset at
      cost and depreciates the leased asset over its estimated useful life. Rental
      payments are recorded as revenue on a straight-line basis over the lease term
      as
      earned. Lease origination costs are capitalized and amortized over the term
      of
      the lease. The Fund occasionally leases equipment with lease terms that qualify
      for direct finance lease classification, as required by Statement of Financial
      Accounting Standards No. 13, “Accounting for Leases”.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





1.  Basis
      of Presentation (continued)





Revenue
      Recognition





Revenues
      are generally earned by placing the equipment under operating leases. A portion
      of the Fund's marine containers are leased to operators of utilization-type
      leasing pools that include equipment owned by unaffiliated and affiliated
      parties. In such instances, revenues earned by the Fund 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. Rents for the remaining equipment are based on fixed
      rates.





Depreciation
      and Amortization





Depreciation
      of equipment held for operating leases is computed on the double-declining
      balance method taking a full month's depreciation in the month of acquisition,
      based upon estimated useful lives of 12 years unless the economic life of the
      equipment is less. Certain aircraft are depreciated under the double-declining
      balance method over the lease term which approximates their economic life.
      The
      depreciation method changes to straight line when the annual depreciation
      expense using the straight-line method exceeds that calculated by the
      double-declining balance method. Major expenditures that are expected to extend
      the useful lives or reduce future operating expenses of equipment are
      capitalized and amortized over the estimated remaining life of the equipment.





Debt
      placement fees were included in other assets and were amortized over the term
      of
      the related loan using the straight-line method that approximated the effective
      interest method and are included in interest expense in the accompanying
      statements of income. (see Note 11 to the financial statements)





Equipment





Equipment
      held for operating leases is recorded at cost and depreciated over its useful
      life.





The
      Fund
      evaluates long-lived assets for impairment whenever events or circumstances
      indicate that the carrying values of such assets may not be recoverable such
      as
      when cash-flows decrease, there are unexpected maintenance issues or when
      economic conditions in which the equipment operate deteriorates. Losses for
      impairment are recognized when the undiscounted cash flows estimated to be
      realized from a long-lived asset are determined to be less than the carrying
      value of the asset and the carrying amount of long-lived assets exceeds their
      fair values. The determination of fair value for a given investment requires
      several considerations, including but not limited to, income expected to be
      earned from the asset, estimated sales proceeds, and holding costs excluding
      interest.





The
      estimate of the fair value of the Fund’s owned equipment and equipment owned by
      entities in which the Fund has an equity interest is based on the opinion of
      the
      Fund’s equipment managers using data, reasoning and analysis of prevailing
      market conditions of similar equipment, data from recent purchases, independent
      third party valuations and discounted cash flows.





Equity
      Investments in Affiliated Entities





The
      Fund
      has interests in equity investments that own transportation equipment and other
      transportation related assets. These entities do not have any debt or other
      financial encumbrances. All major business decisions for these entities must
      be
      decided by a unanimous vote of the owners. Accordingly, the Fund does not
      control these entities and these entities are accounted for using the equity
      method.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





1.  Basis
      of Presentation (continued)





The
      Fund’s interests in equity investments are managed by PLM Investment Management,
      Inc. (IMI), a wholly owned subsidiary of FSI. The Fund’s equity interest in the
      net income (loss) of equity investments is reflected net of management fees
      paid
      or payable to IMI.





Discontinued
      Operations





During
      2005, the Fund sold all of its remaining railcars. Consequently, the results
      from this operation have been classified as discontinued operations for all
      periods presented. Assets and liabilities from discontinued operations have
      been
      classified as assets and liabilities held for sale for all periods presented.
      (see Note 2 to the financial statements)





Repairs
      and Maintenance





Repairs
      and maintenance costs related to marine vessels are usually the obligation
      of
      the Fund and are charged against operations as incurred. Costs associated with
      marine vessel dry-docking are estimated and accrued ratably over the period
      prior to such dry-docking. If a marine vessel is sold and there is a balance
      in
      the dry-docking reserve account for that marine vessel, the balance in the
      reserve account is included as additional gain on disposition. Maintenance
      costs
      of aircraft and marine containers are the obligation of the lessee. To meet
      the
      maintenance requirements of aircraft airframes and engines, reserve accounts
      are
      prefunded by certain lessees over the period of the lease based on the number
      of
      hours this equipment is used, times the estimated rate to repair this equipment.
      If repairs exceed the amount prefunded by the lessee, the Fund has the
      obligation to fund and accrue the difference. If an aircraft is sold and there
      is a balance in the reserve account for repairs to that aircraft, the balance
      in
      the reserve account is included as additional gain on disposition. The aircraft
      reserve accounts and marine vessel dry-docking reserve accounts are included
      in
      the accompanying balance sheets as reserve for repairs.





Net
      Income and Distributions





The
      net
      profits and losses of the Fund are generally allocated 1% to the Class B Member
      and 99% to the Class A Members. The Class B Member or Manager will be specially
      allocated (i) 100% of the Fund’s organizational and offering cost amortization
      expenses and (ii) income equal to the excess of cash distribution over the
      Manager‘s 1% share of net profits. The effect on the Class A Members of this
      special income allocation will be to increase the net loss or decrease the
      net
      profits allocable to the Class A Members by an equal amount. During 2005, the
      Manager received a special allocation of income of $6.1 million (in 2004, a
      special allocation of loss of $0.1 million was allocated to the Manager) in
      excess of its prorata ownership share. Cash distributions of the Fund are
      generally allocated 85% to the Class A Members and 15% to the Manager and may
      include amounts in excess of net income. After the Class A members receive
      cash
      distributions equal to their original capital contributions, the Manager's
      interest in the cash distributions of the Fund will increase to 25%. With the
      distribution made in November 2005, most Class A members have now received
      cash
      distributions equal to or in excess of their original capital contributions
      and
      thus, the Manager's share of the cash distributions related to these members
      has
      increased to 25%. The Class A Members' net income (loss) is allocated among
      the
      Class A Members based on the number of Class A units owned by each member and
      on
      the number of days of the year each member is in the Fund. (see Note 8 to the
      financial statements)





Cash
      distributions are recorded when declared.





For
      the
      year ended December 31, 2005, cash distributions declared and paid totaled
      $35.0
      million to the Class A Members ($7.05 per Class A unit) and $6.3 million to
      the
      Class B Member. No cash distributions were declared or paid to the Class A
      Members or the Class B Member during 2004. (see Note 8 to the financial
      statements)







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





1.  Basis
      of Presentation (continued)





Basic
      Earnings (Loss) Per Weighted-Average Class A Unit





Basic
      earnings (loss) per weighted-average Class A unit was computed by dividing
      income from continuing operations, income (loss) from operation of discontinued
      operations and the gain on disposition of discontinued operations attributable
      to Class A members by the weighted-average number of Class A membership units
      deemed outstanding during the year. The weighted-average number of Class A
      units
      deemed outstanding during the years ended December 31, 2005 and 2004 was
      4,971,311. (see Note 8 to the financial statements) All special allocations
      of
      income to the Manager are included in basic earnings from continuing
      operations.





Cash
      and Cash Equivalents





The
      Fund
      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 value
      due
      to the short-term nature of the investments.





Accounts
      Receivable





The
      Fund
      generally invoices its lessees monthly for the lease of its equipment. The
      Fund
      reserves as bad debts any unpaid account receivable that is past due over 90
      days. The Fund will also reserve any unpaid receivable as a bad debt when
      circumstances indicate that it will not be paid, such as when the lessee goes
      into bankruptcy. Unpaid receivables are written-off only when all collection
      efforts have been exhausted.





Fair
      Value of Financial Instruments





The
      Fund's financial instruments consisted of cash and cash equivalents, accounts
      and other receivables, accounts payable and accrued expenses, due to affiliates
      and note payable. The fair value of cash and cash equivalents, accounts and
      other receivables, accounts payable and accrued expenses and due to affiliates
      approximate book value due to their short-term nature. The fair value of the
      Fund's note payable at December 31, 2004 approximated its book value as the
      fixed rate on the debt approximated the then current market rate for similar
      debt. This note payable was repaid in 2005. (see Note 11 to the financial
      statements)





Comprehensive
      Income





The
      Fund’s comprehensive income is equal to net income for the years ended December
      31, 2005 and 2004.





Statements
      of Cash Flows





In
      the
      Fund's December 31, 2005 Form 10-KSB, the Fund has reconciled to cash flow
      from
      operations beginning with the caption "Net income". In the Fund's September
      30,
      2005 filing of the Form 10-QSB, the reconciliation began with "Income from
      continuing operations".





New
      Accounting Standards





In
      December 2004, Financial Accounting Standards Board issued Statement 153,
      "Exchanges of Non-monetary Assets" (Statement 153), an amendment of Accounting
      Principles Board Opinion No. 29. Statement 153 is effective for non-monetary
      asset exchanges occurring in fiscal periods beginning after June 15, 2005.
      Statement 153 eliminates the exception to fair value for exchanges of similar
      productive assets and replaces it with a general exception for exchange
      transactions that do not have commercial substance - that is, transactions
      that
      are not expected to result in significant changes in the cash flows of the
      reporting entity.  The Manager does not believe the adoption of Statement
      153 will have a significant effect on the Fund's financial
      statements.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





1.  Basis
      of Presentation (continued)





Reclassifications





Certain
      amounts previously reported have been reclassified to conform to the 2005
      presentations. These reclassifications did not have any effect on total assets,
      total liabilities and net income.





2.  Discontinued
      Operations





During
      2005, the Fund and several affiliated entities (collectively, the Sellers),
      entered into an Asset Purchase Agreement to sell the railcar business of the
      Sellers, which included railcars owned and leased by the Sellers as well as
      management contracts pursuant to which the Sellers managed the railcars of
      third
      parties. The sale of the railcar business was completed on August 18, 2005.





The
      Fund
      received net proceeds of $26.8 million from the disposition of its railcar
      assets resulting in a gain on disposition of discontinued operations of $9.9
      million. The amount received by the Fund was based on the appraised value of
      the
      railcars sold by the Fund to the purchaser, as determined by an independent
      third party appraiser. During the third quarter of 2005, some immaterial costs
      for bonuses that were paid are included in general and administrative
      expenses.





Accordingly,
      the Fund's railcar leasing operations is accounted for as a discontinued
      operation.





Income
      (loss) from operation of discontinued operations for the years ended December
      31
      are as follows (in thousands of dollars):





2005
            
            2004RevenuesLease
                revenue
            
            $
            2,479
            
            $
            3,791Interest
                and other income
            
            
            52
            
            
            6Gain
                on disposition of equipment
            
            
            176
            
            
            664Total revenues
            
            
            2,707
            
            
            4,461ExpensesDepreciation
            
            
            1,508
            
            
            3,012Operations
                support
            
            
            295
            
            
            1,251Management
                fees to affiliate
            
            
            169
            
            
            253General
                and administrative expensesto affiliates
            
            
            305
            
            
            393General
                and administrative expenses
            
            
            289
            
            
            278(Recovery
                of) provision for bad debts
            
            
            (57
            )
            
            52Total expenses
            
            
            2,509
            
            
            5,239Income
                (loss) from operation ofdiscontinued operations
            
            $
            198
            
            $
            (778
            )Gain
                on disposition of discontinued operations
            
            $
            9,845
            
            $
            --





Assets
      and liabilities held for sale as of December 31 are as follows (in thousands
      of
      dollars):





**Assets**
            
            2005
            
            2004Equipment
                held for operating leases, net
            
            $
            --
            
            $
            19,051Accounts
                receivable, net
            
            
            27
            
            
            241Other
                assets
            
            
            --
            
            
            64Total assets held for sale
            
            $
            27
            
            $
            19,356**Liabilities**Account
                payable and other liabilities
            
            $
            43
            
            $
            300Due
                to affiliates
            
            
            --
            
            
            61Total liabilities held for sale
            
            $
            43
            
            $
            361







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**





2.  Discontinued
      Operations (continued)





Transactions
      with Manager and Affiliates - Discontinued Operations





During
      2005 and 2004, the Fund's discontinued operations incurred these types of costs
      to FSI or its affiliates; management fees and data processing and administrative
      expenses. The components of these fees and expenses incurred to FSI or its
      affiliates were as follows (in thousands of dollars):





2005
            
            2004Management
                fees
            
            $
            169
            
            $
            253Data
                processing and administrativeexpenses
            
            
            305
            
            
            393





3.  Transactions
      with Manager and Affiliates





The
      Fund's owned equipment and interests in equity investments are managed by IMI,
      under a continuing management agreement. IMI receives a monthly management
      fee
      from the Fund for managing the equipment.





The
      equipment management agreement requires the payment of a monthly management
      fee
      attributable to either owned equipment or interests in equipment owned by the
      entities in which the Fund has an equity investment to be paid to IMI in an
      amount equal to the lesser of (i) the fees that would be charged by an
      independent third party for similar services for similar equipment or (ii)
      the
      sum of (A) for that equipment for which IMI provides only basic equipment
      management services, (a) 2% of the gross lease revenues attributable to
      equipment which is subject to full payout net leases, (b) 5% of the gross lease
      revenues attributable to equipment that is subject to operating leases, and
      (B)
      for that equipment for which IMI provides supplemental equipment management
      services, 7% of the gross lease revenues attributable to equipment for which
      IMI
      provides both management and additional services.





In
      certain circumstances, the Manager will be entitled to a monthly re-lease fee
      for re-leasing services following the expiration of the initial lease, charter
      or other contract for certain equipment equal to the lesser of (a) the fees
      which would be charged by an independent third party for comparable services
      for
      comparable equipment or (b) 2% of gross lease revenues derived from such
      re-lease, provided, however; that no re-lease fee shall be payable if such
      fee
      would cause the combination of the equipment management fee paid to IMI and
      the
      re-lease fees with respect to such transactions to exceed 7% of gross lease
      revenues.





During
      the liquidation phase of the Fund, PLM Transportation Equipment Corp. (TEC),
      a
      wholly-owned subsidiary of the Manager, will be entitled to receive an equipment
      liquidation fee equal to the lesser of (i) 3% of the sales price of equipment
      sold on behalf of the Fund, or (ii) 50% of the "Competitive Equipment Sale
      Commission," as defined in the agreement, if certain conditions are met. The
      Manager does not anticipate that the conditions required to earn this fee will
      be met.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





3.  Transactions
      with Manager and Affiliates (continued)





During
      the years ended December 31, 2005 and 2004, FSI or its affiliates were paid
      or
      accrued management fees and the Fund reimbursed FSI or its affiliates for data
      processing and administrative expenses. The components of these expenses paid
      or
      accrued to FSI or its affiliates were as follows (in thousands of
      dollars):





Owned
                Equipment
            
            Equity
                Investments2005
            
            2004
            
            2005
            
            2004Management
                fees
            
            $
            706
            
            $
            953
            
            $
            57
            
            $
            62Data
                processing and administrativeexpenses
            
            
            193
            
            
            98
            
            
            8
            
            
            6





The
      Fund
      had equity investments in affiliated entities that own equipment and other
      assets during 2005 and 2004. (see Note 5 to the financial
      statements)





The
      balance due to affiliates as of December 31, 2005 and 2004 of $0.2 million
      is
      due to FSI for management fees.





4.  Equipment





The
      components of owned equipment as of December 31 are as follows (in thousands
      of
      dollars):





Equipment
                Held for Operating Leases
            
            2005
            
            2004Marine
                containers
            
            $
            29,505
            
            $
            30,414Marine
                vessel
            
            
            17,000
            
            
            17,000Aircraft
            
            
            --
            
            
            10,49446,505
            
            
            57,908Less
                accumulated depreciation
            
            
            (32,240
            )
            
            (40,329
            )Net equipment
            
            $
            14,265
            
            $
            17,579





Equipment
      held for operating leases is stated at cost less depreciation and any reductions
      to the carrying value.





As
      of
      December 31, 2005 and 2004, all owned equipment in the Fund’s equipment
      portfolio was on lease.





During
      2005, the Fund disposed of two commercial aircraft and marine containers with
      a
      net book value of $0.3 million for proceeds of $1.7 million, and reversed $1.3
      million of unused engine reserves related to the sold commercial aircraft which
      resulted in a total gain on disposition of $2.6 million.





During
      2004, the Fund disposed of a commercial aircraft, marine containers, and a
      trailer with a net book value of $0.2 million for proceeds of $1.1 million
      and
      reversed $0.9 million of unused engine reserves related to the sold aircraft
      which resulted in a gain on disposition of $1.9 million.





Future
      minimum rentals under non-cancelable operating leases, as of December 31, 2005,
      for owned equipment held for operating leases during each of the next five
      years
      and thereafter is $-0- million in 2006 and thereafter. The Fund's marine
      containers are leased to operators of utilization-type leasing pools and the
      Fund's marine vessel is being leased on a sales type lease (see Note 14 to
      the
      financial statements). Per diem and short-term rentals consisting of utilization
      rate lease payments included in revenues amounted to approximately $13.3
      million, and $11.3 million in 2005 and 2004, respectively.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





5.  Equity
      Investments in Affiliated Entities





The
      Fund
      owns equipment and other assets jointly with affiliated programs. These are
      single purpose entities that do not have any debt or other financial
      encumbrances. The accounting policies followed by the entities in which the
      Fund
      has an equity investment are substantially the same as the Fund's accounting
      policies.





Ownership
      interest is based on the Fund’s contribution towards the cost of the assets in
      the equity investments. The Fund’s proportional share of equity and income
      (loss) in each entity is not necessarily the same as its ownership interest.
      The
      primary reason for this is that certain fees such as management and acquisition
      and lease negotiation fees vary among the owners of the equity investments.
      The
      Fund’s equity interest in the net income (loss) of equity investments is
      reflected net of management fees paid or payable.





The
      tables below set forth 100% of the assets, liabilities, and equity of the
      entities in which the Fund has an interest and the Fund’s proportional share of
      equity in each entity as of December 31, 2005 and 2004 (in thousands of
      dollars):





TWA
            
            TWAS/N
                49183
            
            MD-82As
                of December 31, 2005
            
            
            Trust
                1
            
            
            Trust
                2
            
            
            Total





AssetsEquipment less accumulated depreciation
            
            $
            --
            
            $
            419Total assets
            
            $
            --
            
            $
            419LiabilitiesDue to affiliates
            
            $
            5
            
            $
            5Total liabilities
            
            
            5
            
            
            5Equity
            
            
            (5
            )
            
            414Total liabilities and equity
            
            $
            --
            
            $
            419Fund’s
                share of equity
            
            $
            (2
            )
            $
            202
            
            $
            200




TWA
            
            TWA
            
            PLMS/N
                49183
            
            MD-82
            
            WorldwideAs
                of December 31, 2004
            
            
            Trust
                1
            
            
            Trust
                2
            
            
            Leasing
                Corp. 3
            
            
            Total





AssetsEquipment
                less accumulated depreciation
            
            $
            --
            
            $
            1,677
            
            $
            --Cash
                and cash equivalents
            
            
            --
            
            
            --
            
            
            140Accounts
                receivable
            
            
            50
            
            
            49
            
            
            2,228Other
                assets
            
            
            --
            
            
            --
            
            
            4Total assets
            
            $
            50
            
            $
            1,726
            
            $
            2,372LiabilitiesAccounts
                payable
            
            $
            --
            
            $
            --
            
            $
            2,205Due
                to affiliates
            
            
            8
            
            
            8
            
            
            --Total liabilities
            
            
            8
            
            
            8
            
            
            2,205Equity
            
            
            42
            
            
            1,718
            
            
            167Total liabilities and equity
            
            $
            50
            
            $
            1,726
            
            $
            2,372Fund’s
                share of equity
            
            $
            21
            
            $
            841
            
            $
            42
            
            $
            904




1
            The
                Fund owns a 50% interest in the TWA S/N 49183 Trust that owns an
                MD-82
                stage III commercial aircraft.


2  
      The Fund owns a 50% interest in the TWA MD-82 Trust that owns an MD-82 stage
      III
      commercial aircraft.


3  
      The Fund owned a 25% interest in PLM Worldwide Leasing Corp. that was formed
      in
      1995 and dissolved in 2005 that owned aircraft related assets.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





5.  Equity
      Investments in Affiliated Entities (continued)





The
      tables below set forth 100% of the lease revenues and interest and other income,
      depreciation expense, general and administrative expenses, and net income (loss)
      of the entities in which the Fund has an interest, and the Fund‘s proportional
      share of income (loss) in each entity for the years ended December 31, 2005
      and
      2004 (in thousands of dollars):





TWA
            
            TWA
            
            PLMS/N
                49183
            
            MD-82
            
            WorldwideFor
                the year ended December 31, 2005
            
            
            Trust
                1
            
            
            Trust
                2
            
            
            Leasing
                Corp. 3
            
            
            Total





Lease
                revenues and interest and other income
            
            $
            1,152
            
            $
            1,153
            
            $
            601Less:
                Depreciation expense
            
            
            --
            
            
            1,258
            
            
            --General and administrative expenses
            
            
            71
            
            
            71
            
            
            590Net income (loss)
            
            $
            1,081
            
            $
            (176
            )
            $
            11Fund’s
                share of net income (loss)
            
            $
            541
            
            $
            (74
            )
            $
            1
            
            $
            468








TWA
            
            TWA
            
            PLMS/N
                49183
            
            MD-82
            
            WorldwideFor
                the year ended December 31, 2004
            
            
            Trust1
            
            
            Trust2
            
            
            Leasing
                Corp.3
            
            
            Total





Lease
                revenues and interest and other income
            
            $
            1,250
            
            $
            1,249Less:
                Depreciation expense
            
            
            --
            
            
            1,258General and administrative expenses
            
            
            74
            
            
            74Net income (loss)
            
            $
            1,176
            
            $
            (83
            )Fund’s
                share of net income (loss)
            
            $
            588
            
            $
            (28
            )
            $
            42
            
            $
            602





As
      of
      December 31, 2005 and 2004, all equipment owned by the Fund’s equity investments
      were on lease.





All
      leased equipment owned by entities in which the Fund has an equity interest
      is
      being accounted for as operating leases. The Fund’s proportionate share of
      future minimum rent under noncancelable leases as of December 31, 2005 for
      the
      jointly owned equipment during each of the next five years and thereafter is
      approximately $1.2 million in 2006; $1.2 million in 2007; $1.0 million in 2008;
      and none thereafter.





PLM
      Worldwide Leasing Corp. was dissolved during the fourth quarter of
      2005.





6.  Operating
      Segments





The
      Fund
      operates or operated in four primary operating segments: marine container
      leasing, aircraft leasing, marine vessel leasing, and trailer leasing. Each
      equipment leasing segment engages in short-term to mid-term operating leases
      to
      a variety of customers.




1
            The
                Fund owns a 50% interest in the TWA S/N 49183 Trust that owns an
                MD-82
                stage III commercial aircraft.


2  
      The Fund owns a 50% interest in the TWA MD-82 Trust that owns an MD-82 stage
      III
      commercial aircraft.


3. 
      The Fund owned a 25% interest in PLM Worldwide Leasing Corp. that was formed
      in
      1995 and dissolved in 2005 that owned aircraft related assets.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





6.  Operating
      Segments (continued)





The
      Manager evaluates the performance of each segment based on profit or loss from
      operations before interest expense and certain general and administrative and
      operations support expenses. The segments are managed separately due to
      different business strategies for each operation. The accounting policies of
      the
      Fund’s operating segments are the same as described in Note 1, Basis of
      Presentation. There were no intersegment revenues for the years ended December
      31, 2005 and 2004.





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





Marine
            
            
            
            
            
            MarineFor
                the year ended
            
            Vessel
            
            Aircraft
            
            Trailer
            
            ContainerDecember 31, 2005
            
            Leasing
            
            Leasing
            
            Leasing
            
            Leasing
            
            Other1
            
            TotalRevenuesLease
                revenue
            
            $
            9,637
            
            $
            551
            
            $
            --
            
            $
            4,304
            
            $
            --
            
            $
            14,492Interest
                income and other income
            
            
            4
            
            
            12
            
            
            (17
            )
            
            --
            
            
            493
            
            
            492Gain
                on disposition of equipment
            
            
            --
            
            
            2,240
            
            
            --
            
            
            402
            
            
            --
            
            
            2,642Total revenues
            
            
            9,641
            
            
            2,803
            
            
            (17
            )
            
            4,706
            
            
            493
            
            
            17,626ExpensesDepreciation
            
            
            949
            
            
            --
            
            
            --
            
            
            2,047
            
            
            --
            
            
            2,996Operations
                support
            
            
            5,818
            
            
            143
            
            
            1
            
            
            42
            
            
            --
            
            
            6,004Management
                fees to affiliate
            
            
            481
            
            
            (16
            )
            
            26
            
            
            215
            
            
            --
            
            
            706Interest
                expense
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            42
            
            
            42General
                and administrative expenses
            
            
            88
            
            
            94
            
            
            --
            
            
            --
            
            
            778
            
            
            960Provision
                for bad debts
            
            
            15
            
            
            188
            
            
            --
            
            
            --
            
            
            --
            
            
            203Total expenses
            
            
            7,351
            
            
            409
            
            
            27
            
            
            2,304
            
            
            820
            
            
            10,911Equity
                in net income of equityinvestments
            
            
            --
            
            
            468
            
            
            --
            
            
            --
            
            
            --
            
            
            468Income
                (loss) from continuing operations
            
            $
            2,290
            
            $
            2,862
            
            $
            (44
            )
            $
            2,402
            
            $
            (327
            )
            $
            7,183Total
                assets as of December 31, 2005
            
            $
            5,573
            
            $
            200
            
            $
            --
            
            $
            11,361
            
            $
            4,519
            
            $
            21,653





Marine
            
            
            
            
            
            MarineFor
                the year ended
            
            Vessel
            
            Aircraft
            
            Trailer
            
            ContainerDecember 31, 2004
            
            Leasing
            
            Leasing
            
            Leasing
            
            Leasing
            
            Other1
            
            TotalRevenuesLease
                revenue
            
            $
            10,698
            
            $
            1,087
            
            $
            27
            
            $
            4,795
            
            $
            --
            
            $
            16,607Interest
                income and other income
            
            
            --
            
            
            656
            
            
            --
            
            
            --
            
            
            142
            
            
            798Gain
                (loss) on disposition of equipment
            
            
            --
            
            
            1,660
            
            
            (2
            )
            
            213
            
            
            --
            
            
            1,871Total revenues
            
            
            10,698
            
            
            3,403
            
            
            25
            
            
            5,008
            
            
            142
            
            
            19,276ExpensesDepreciation
            
            
            1,028
            
            
            --
            
            
            --
            
            
            2,510
            
            
            --
            
            
            3,538Operations
                support
            
            
            6,046
            
            
            34
            
            
            30
            
            
            81
            
            
            --
            
            
            6,191Management
                fees to affiliate
            
            
            535
            
            
            124
            
            
            54
            
            
            240
            
            
            --
            
            
            953Interest
                expense
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            973
            
            
            973General
                and administrative expenses
            
            
            75
            
            
            324
            
            
            37
            
            
            --
            
            
            884
            
            
            1,320Recovery
                of bad debts
            
            
            --
            
            
            (1,482
            )
            
            (1
            )
            
            --
            
            
            --
            
            
            (1,483
            )Total expenses
            
            
            7,684
            
            
            (1,000
            )
            
            120
            
            
            2,831
            
            
            1,857
            
            
            11,492Equity
                in net income of equityinvestments
            
            
            --
            
            
            602
            
            
            --
            
            
            --
            
            
            --
            
            
            602Income
                (loss) from continuing operations
            
            $
            3,014
            
            $
            5,005
            
            $
            (95
            )
            $
            2,177
            
            $
            (1,715
            )
            $
            8,386Total
                assets as of December 31, 2004
            
            $
            6,358
            
            $
            1,907
            
            $
            605
            
            $
            13,933
            
            $
            35,127
            
            $
            57,930




1
            Includes
                certain assets not identifiable to a specific segment such as cash
                and
                cash equivalents, certain accounts receivables and other assets and
                assets
                held for sale. Also includes certain interest income and costs not
                identifiable to a particular segment, such as certain general and
                administrative expenses.








**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





7.  Geographic
      Information





The
      Fund
      owns equipment that is leased and operated internationally. All of the Fund's
      leasing transactions are denominated in United States dollars. Gains or losses
      resulting from foreign currency transactions are included in the results of
      operations and are not material.





The
      Fund
      leases or leased its aircraft and trailers to lessees domiciled in two
      geographic regions: United States and South America. The marine vessel and
      marine containers are leased to multiple lessees in different regions that
      move
      the equipment on a regular basis to locations throughout the world.





The
      table
      below sets forth lease revenue information from continuing operations by
      geographic region for the owned equipment grouped by domicile of the lessees
      for
      the years ended December 31, (in thousands of dollars):





Owned
                EquipmentRegion
            
            2005
            
            2004United
                States
            
            $
            --
            
            $
            27South
                America
            
            
            551
            
            
            1,087Rest
                of the world
            
            
            13,941
            
            
            15,493Lease
                revenues
            
            $
            14,492
            
            $
            16,607





The
      following table sets forth income (loss) information from continuing operations
      by region for owned equipment and equity investments in affiliated entities
      for
      the years ended December 31, are as follows (in thousands of
      dollars):





Owned
                Equipment
            
            Equity
                InvestmentsRegion
            
            2005
            
            2004
            
            2005
            
            2004United
                States
            
            $
            (44
            )
            $
            (95
            )
            $
            468
            
            $
            602South
                America
            
            
            2,394
            
            
            4,404
            
            
            --
            
            
            --Rest
                of the world
            
            
            4,692
            
            
            5,191
            
            
            --
            
            
            --Regional income
            
            
            7,042
            
            
            9,500
            
            
            468
            
            
            602Administrative
                and other
            
            
            (327
            )
            
            (1,716
            )
            
            --
            
            
            --Income
                from continuing operations
            
            $
            6,715
            
            $
            7,784
            
            $
            468
            
            $
            602





The
      net
      book value of owned equipment and equity investments in affiliated entities
      from
      continuing operations at December 31, are as follows (in thousands of
      dollars):





Owned
                Equipment
            
            Equity
                InvestmentsRegion
            
            2005
            
            2004
            
            2005
            
            2004United
                States
            
            $
            --
            
            $
            --
            
            $
            200
            
            $
            904Rest
                of the world
            
            
            14,265
            
            
            17,579
            
            
            --
            
            
            --Net
                book value
            
            $
            14,265
            
            $
            17,579
            
            $
            200
            
            $
            904





8.  Basic
      Earnings (Loss) Per Weighted-Average Class A Unit





Basic
      earnings or loss per weighted-average Class A unit was computed by dividing
      income from continuing operations, income (loss) from operation of discontinued
      operations and the gain on disposition of discontinued operations attributable
      to Class A members by the weighted-average number of Class A units deemed
      outstanding during the year. The weighted-average number of Class A units deemed
      outstanding during the years ended December 31, 2005 and 2004 was 4,971,311 units.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





8.  Basic
      Earnings (Loss) Per Weighted-Average Class A Unit (continued)





All
      special allocations of income or loss to the Manager are included in the
      calculation of basic earnings from continuing operations.





Basic
      earnings or loss per weighted average Class A unit from continuing operations,
      operations of discontinued operations, gain on disposition of discontinued
      operations and any special allocations to the Class A members are based on
      the
      following for the years ended December 31 (in thousands of dollars, except
      weighted-average Class A unit amounts):





2005
            
            2004Attributable
                to Class A members:Basic
                income from continuing operations
            
            $
            7,183
            
            $
            8,386Special
                allocation of loss
            
            
            (6,316
            )
            
            --Income
                from continuing operations attributable to
              Class A members
            
            
            867
            
            
            8,386Income
                (loss) from operation ofdiscontinued operations
            
            
            178
            
            
            (778
            )Gain
                on disposition of discontinued operations
            
            
            9,865
            
            
            --Net
                income
            
            $
            10,910
            
            $
            7,608Weighted
                average Class A units outstanding
            
            
            4,971,311
            
            
            4,971,311Basic
                earnings per weighted average Class A unit:Income
                from continuing operations
            
            $
            0.17
            
            $
            1.69Income
                (loss) from operation ofdiscontinued operations
            
            
            0.04
            
            
            (0.16
            )Gain
                on disposition of discontinued operations
            
            
            1.98
            
            
            --Net
                income per weighted average Class A unit
            
            $
            2.19
            
            $
            1.53





9.  Accounts
      and Other Receivables





Accounts
      and other receivables represent balances due from current or former lessees
      for
      unpaid balances incurred from leasing Fund owned equipment. The components
      of
      accounts and other receivables as of December 31 were as follows (in thousands
      of dollars):





2005
            
            2004Trade
                accounts receivables
            
            $
            2,325
            
            $
            2,472Other
                receivables
            
            
            --
            
            
            862Allowance
                for doubtful accounts
            
            
            (15
            )
            
            --$
            2,310
            
            $
            3,334





At
      December 31, 2004, the balance in other receivable was due from a former
      aircraft lessee for past due lease payments and in settlement for returning
      aircraft in a condition not in accordance with the lease agreement. During
      2005,
      $0.6 million of the other receivable was paid with the remaining balance of
      $0.3
      million being offset against a security deposit from the lessee.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





10.  Other
      Assets





The
      components of the other assets, net, as of December 31 are as follows (in
      thousands of dollars):





2005
            
            2004Inventory
            
            $
            272
            
            $
            253Prepaid
                expenses
            
            
            231
            
            
            279Other
                assets
            
            
            5
            
            
            5Finance
                lease receivable
            
            
            --
            
            
            538Debt
                placement fees, net
            
            
            --
            
            
            36$
            508
            
            $
            1,111





In
      the
      fourth quarter of 2005, the lessee prepaid the outstanding balance on the
      finance lease receivable.





11.  Debt





In
      December 1996, the Fund entered into an agreement to issue a $25.0 million
      long-term note to an institutional investor. The loan was funded in March 1997.
      The note bore interest at a fixed rate of 7.33% per annum and had a maturity
      in
      2006. Interest on the note was payable semi-annually. The remaining note balance
      of $10.0 million as of December 31, 2004 was due in two principal payments
      of
      $5.0 million on December 31, 2005 and 2006.  The Fund's notes payable,
      which had a balance of $10.0 million at December 31, 2004, was
      collateralized by substantially all of the Fund's cash, accounts receivable
      and
      equipment.  During January 2005, the Fund prepaid its outstanding note
      payable of $10.0 million plus accrued interest of $6,000. There was no
      pre-payment penalty associated with the prepayment of the note payable. The
      cash
      for the payment came from operations and equipment dispositions. The Fund
      expensed the remaining unamortized portion of debt placement fees of $36,000
      related to the note payable concurrently with the payment of the debt.





12.  Concentrations
      of Credit Risk





For
      the
      years ended December 31, 2005 and 2004, the Fund’s customer that accounted for
      10% or more of the total revenues for the owned equipment and jointly owned
      equipment was Capital Leasing (16% in 2005 and 17% in 2004) which is in the
      marine container leasing segment.





As
      of
      December 31, 2005 and 2004, the Fund’s customers that accounted for 10% or more
      of the total accounts and other receivables for the owned equipment and jointly
      owned equipment were Capital Leasing (39% in 2005 and 28% in 2004) and Cronos
      Group (16% in 2005 and 10% in 2004) both of which are in the marine container
      leasing segment, Stena Bulk LLC (44% in 2005 and 27% in 2004) which is in the
      marine vessel leasing segment, and Varig South America (21% in 2004) which
      was
      in the aircraft leasing segment.





As
      of
      December 31, 2005 and 2004, the Manager believed the Fund had no other
      significant concentrations of credit risk that could have a material adverse
      effect on the Fund.





13.  Income
      Taxes





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





As
      of
      December 31, 2005 and 2004, the financial statement carrying amount of assets
      and liabilities was approximately $8.9 million and $5.5 million, respectively,
      lower than the federal income tax basis of such assets and liabilities and
      the
      Fund's income was approximately $3.4 million and $8.5 million, respectively,
      higher than the federal income tax basis. These differences are primarily due
      to
      the tax treatment of depreciation, equipment reserves, provisions for bad debts,
      lessees’ prepaid deposits, and of underwriting commissions and syndication
      costs.







**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**


**(A
      Delaware Limited Liability Company)**


**NOTES
      TO FINANCIAL STATEMENTS**





13.  Income
      Taxes (continued)





To
      prevent the Class A units from being considered publicly traded and thereby
      to
      avoid taxation of the Fund as an association treated as a corporation under
      the
      Internal Revenue Code, the units will not be transferable without the consent
      of
      the Manager, which may be withheld in its absolute discretion. The Manager
      monitors transfers of units in an effort to ensure that they do not exceed
      the
      percentage or number permitted by certain safe harbors promulgated by the
      Internal Revenue Service. Effective January 1, 2006, the percentage of Fund
      units that may be traded in any calendar year has been reduced from five percent
      to two percent to comply with Internal Revenue Service regulations. A transfer
      may be prohibited if the intended transferee is not an US citizen or if the
      transfer would cause any portion of the units of a “Qualified Plan” as defined
      by the Employee Retirement Income Security Act of 1974 and Individual Retirement
      Accounts to exceed the allowable limit.





14.  Subsequent
      Event





In
      January 2006, the Fund's owned marine vessel was leased on a sales-type lease
      with a five year lease term. Total principal and interest payments under this
      lease will aggregate $25.7 million which are payable over the term of the lease.
      Such payments include interest payments of $7.7 million. This transaction
      resulted in a gain on sale of approximately $13.8 million which will be
      reflected in the Fund's first quarter 2006 financial statements.











**PROFESSIONAL
      LEASE MANAGEMENT INCOME FUND I, L.L.C.**





**INDEX
      OF EXHIBITS**








Exhibit
            
            Page4.
            
            Operating
                Agreement of Fund.
            *10.
            1
            Management
                Agreement between Fund and PLM Investment
            *Management,
                Inc.10.
            2
            $25.0
                Million Note Agreement, dated as of December 30, 1996.
            *10.
            3
            Settlement
                Agreement between PLM Worldwide Leasing Corp. and VarigS.A.
                dated October 11, 2002.
            *10.
            4
            Modification
                of Settlement Agreement between PLM Worldwide Leasing Corp. and Varig
                S.A.
                dated September 24, 2004.
            *14.
            
            PLM
                Financial Services Inc. Code of Ethics.
            *31.
            1
            Certificate
                of President of the Manager pursuant to Section 302 of Sarbanes -
                Oxley
                Act of 2002.
            4231.
            2
            Certificate
                of Chief Financial Officer of the Manager pursuant to Section 302
                of
                Sarbanes - Oxley Act of 2002.
            4332.
            1
            Certificate
                of President of the Manager pursuant to Section 906 of Sarbanes -
                Oxley
                Act of 2002.
            4432.
            2
            Certificate
                of Chief Financial Officer of the Manager pursuant to Section 906
                of
                Sarbanes - Oxley Act of 2002.
            45




*Incorporated
      by reference. See page 18 of this report