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


[X]      ANNUAL  REPORT   PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
         SECURITIES  EXCHANGE  ACT OF 1934 FOR THE  FISCAL  YEAR  ENDED
         DECEMBER 31, 1999.

[  ]     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.
             (Exact name of registrant as specified in its charter)


         DELAWARE                                             94-3209289
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

ONE MARKET, STEUART STREET TOWER
  SUITE 800, SAN FRANCISCO, CA                                  94105-1301
(Address of principal executive offices)                        (Zip code)


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

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

Aggregate market value of voting stock:  N/A

An index of exhibits filed with this Form 10-K is located at page 26.

Total number of pages in this report:  54.



<PAGE>


                                     PART I
ITEM 1.  BUSINESS

(A)  Background

In  August  1994,  PLM  Financial  Services,   Inc.  (FSI  or  the  Manager),  a
wholly-owned subsidiary of PLM International, Inc. (PLMI International or PLMI),
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. (Fund), a Delaware
Limited  Liability  Company (the Fund).  The Fund's offering became effective on
January 23, 1995. The Fund engages in the business of investing in a diversified
equipment portfolio consisting primarily of used,  long-lived,  low-obsolescence
capital equipment that is easily transportable by and among prospective users.

The Fund's primary objectives are:

     (1) to invest in a  diversified  portfolio  of  low-obsolescence  equipment
having long lives and high residual values,  at prices that the Manager believes
to be below inherent values,  and to place the equipment on lease or under other
contractual  arrangements with creditworthy  lessees and operators of equipment.
All  transactions  over $1.0 million must be approved by the PLMI Credit  Review
Committee  (the  Committee),  which  is  made up of  members  of  PLMI's  senior
management.  In  determining a lessee's  creditworthiness,  the  Committee  will
consider,  among other factors, the lessee's financial statements,  internal and
external credit ratings, and letters of credit.

     (2) to generate cash distributions, which may be substantially tax-deferred
(i.e.,  distributions that are not subject to current taxation) during the early
years of the Fund.

     (3) to create a significant  degree of safety  relative to other  equipment
leasing investments through the purchase of a diversified  equipment  portfolio.
This  diversification  reduces the  exposure to market  fluctuations  in any one
sector. The purchase of used, long-lived,  low-obsolescence equipment, typically
at prices that are substantially  below the cost of new equipment,  also reduces
the  impact  of  economic  depreciation  and  can  create  the  opportunity  for
appreciation  in certain  market  situations,  where supply and demand return to
balance from oversupply conditions.

     (4) to increase  the Fund's  revenue base by  reinvesting  a portion of its
operating  cash flow in additional  equipment  during the first six years of the
Fund's  operation in order to grow the size of its  portfolio.  Since net income
and  distributions  are  affected  by a variety of factors,  including  purchase
prices,  lease rates,  and costs and expenses,  growth in the size of the Fund's
portfolio  does not  necessarily  mean that the Fund's  aggregate net income and
distributions will increase upon the reinvestment of operating cash flow.

The  offering of units of the Fund closed on May 13,  1996.  As of December  31,
1999, there were 4,975,321 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.

Beginning in the Fund's seventh year of operation,  which  commences  January 1,
2003, the Manager will stop  reinvesting  cash flow and surplus  funds,  if any,
less reasonable reserves, which will be distributed to the partners. Between the
eighth  and  tenth  years of  operations,  the  Manager  intends  to  begin  its
dissolution and liquidation of the Fund in an orderly  fashion,  unless the Fund
is  terminated  earlier upon sale of all of the  equipment  or by certain  other
events.  However,  under  certain  circumstances,  the  term of the  Fund may be
extended, although in no event will the Fund extend beyond December 31, 2010.


<PAGE>


Table 1, below,  lists the  equipment  and the original cost of equipment in the
Fund's  portfolio,  and the  original  cost  of  investments  in  unconsolidated
special-purpose entities, as of December 31, 1999 (in thousands of dollars):

                                     TABLE 1
<TABLE>
<CAPTION>


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

Owned equipment held for operating leases:

    <S>   <C>                                         <C>                                                <C>
      2   Anchor handling supply marine
            vessels                                   Moss Point                                     $       17,700
      1   Oil tanker marine vessel                    Hyundai                                                17,000
      1   Bulk carrier marine vessel                  Hitachi Shipbuilding & Engineering Co.                 12,256
      4   737-200A stage II commercial
             aircraft                                 Boeing                                                 20,605
    350   Pressurized tank railcars                   Various                                                 9,294
    100   Covered hopper railcars                     Various                                                 5,444
    246   Box railcars                                Various                                                 4,972
    152   Foodservice refrigerated trailers           Various                                                 7,020
    443   Piggyback trailers                          Various                                                 6,666
     99   Dry trailers                                Various                                                 1,676
     29   Refrigerated trailers                       Various                                                   834
  4,430   Marine containers                           Various                                                 9,942
                                                                                                     -------------------

          Total owned equipment held for operating leases                                            $      113,409<F1>1
                                                                                                     ===================

Investments in unconsolidated special-purpose entities:

   0.50   Trust owning an MD-82
            stage III commercial aircraft             McDonnell Douglas                              $        7,775<F2>2
   0.50   Trust owning an MD-82
            stage III commercial aircraft             McDonnell Douglas                                       6,825<F2>2
   0.50   Container cargo feeder marine
            vessel                                    O. C. Staalskibsvaerft A/F                              3,836<F2>2
                                                                                                     -------------------

              Total investments in unconsolidated special-purpose entities                           $       18,436<F1>1
 <FN>
<F1>
------------------
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.

</FN>
</TABLE>


The equipment is generally  leased under  operating  leases for a term of one to
six years.

As of December 31, 1999,  approximately  39% of the Fund's trailer equipment was
in rental facilities operated by PLM Rental,  Inc., an affiliate of the Manager,
doing  business  as PLM  Trailer  Leasing.  Rents are  reported  as  revenue  in
accordance   with  Financial   Accounting   Standards  Board  Statement  No.  13
"Accounting  for Leases".  Direct  expenses  associated  with the  equipment are
charged  directly to the Fund. An allocation of other  indirect  expenses of the
rental yard operations is charged to the Fund monthly.

The lessees of the equipment include,  but are not limited to: Norfolk Southern,
Varig South America,  Trans World Airlines,  Capital Lease, LTD., and Burlington
Northern Rail.

(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
co-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 and 2 to the audited financial statements).

(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
offers lessees relative flexibility in their equipment commitment.  In addition,
the rental  obligation  under an operating  lease need not be capitalized on the
lessee's balance sheet.

The 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  service  (including  possible
substitution  of  equipment),   training,   warranty   services,   and  trade-in
privileges.

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

(D)  Demand

The Fund currently operates in the following operating  segments:  marine vessel
leasing,  commercial  aircraft leasing,  railcar leasing,  trailer leasing,  and
marine containers leasing.  Each equipment leasing segment engages in short-term
to  mid-term  operating  leases  to a variety  of  customers.  Except  for those
aircraft leased to passenger air carriers,  the Fund's equipment and investments
are used to transport materials and commodities, rather than people.

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

(1)  Marine Vessels

The Fund owns or has investments in small to medium-sized dry bulk vessels,  oil
tankers,  and container vessels,  all of which operate in international  markets
carrying  a  variety  of  commodity-type  cargoes.  Demand  for  commodity-based
shipping is closely tied to worldwide economic growth patterns, which can affect
demand by  causing  changes  in volume on trade  routes.  The  Manager  operates
several of the Fund's vessels through spot and period charters, an approach that
provides the flexibility to adapt to changes in market conditions. The Fund also
owns anchor-handling supply vessels that operate through bareboat charters.

(a) Anchor Handling Supply Vessels

The Fund owns two United States (US)-flagged anchor-handling supply vessels used
to support rig drilling operations in the US Gulf of Mexico.  Although this type
of  vessel  can be used in  other  regions,  the US Gulf of  Mexico  is the more
desirable  market due to US maritime law which  stipulates  that only US-flagged
vessels be used in this region.

Demand for anchor-handling  vessels depends primarily on the demand for floating
drilling  services  by oil  companies.  During  1999,  demand for such  services
remained at  1997-1998  levels,  however  several  higher-capacity  vessels were
delivered during  1998-1999,  resulting in lower utilization and lease rates for
marine vessels the size owned by the Fund.

The 1999  recovery  in oil prices has led  forecasters  to expect an increase in
drilling  activity  for 2000,  as rising oil prices  improve  the  economics  of
offshore oil and gas  development.  Oil companies are expected to increase their
drilling programs during 2000,  although it is uncertain by how much.  Increases
in  capacity  brought  about by new  building  may delay a return to the  higher
utilization and lease rate levels experienced during prior to 1997.

(b) Oil Tanker Vessel

The Fund owns a small to medium-size  oil tanker that operates in  international
markets  carrying  crude oil  cargoes.  Demand  for crude oil  shipping  closely
follows  worldwide  economic growth patterns,  which can alter demand by causing
changes in volumes on trade  routes.  The  Manager  operates  the Fund's  vessel
through spot and period  charters,  an approach that provides the flexibility to
adapt to changes in market conditions.

During 1999, oil tanker markets experienced declines in charter rates and vessel
values  brought  about by volatile oil and oil product  prices,  relatively  low
growth in trade volumes, and high rates of new product tanker deliveries.  Daily
charter rates for  standard-size oil tankers were 21% lower than in 1998 and 39%
lower than in 1997.  This decline was  primarily due to a  deterioration  in oil
products trade in European markets.

Since crude oil is the source feedstock for oil products,  the products trade is
closely tied to crude oil prices. Although 1999 was a year of rising oil prices,
volatility in trading appeared to depress actual shipping volumes,  particularly
in Europe.  Although  product  imports to the United States and Japan  increased
such that the entire  worldwide  market  grew by 2.7%  during  1999,  due to the
lingering effects of the Asian recession,  shipping volumes ended the year below
the levels of 1996-1997.

Measured by deadweight tons, the oil tanker fleet grew by only 3.2% during 1999,
as overall  supply was  significantly  moderated by a 150% increase in scrapping
levels as compared to 1998. For 2000, the oil tanker fleet is expected to expand
by a 6.5% rise in new deliveries. This increase is due to the continuing effects
of high order  levels  from the  mid-1990s,  which was driven by growth in Asian
trade and the  anticipated  effects of the US Oil Pollution  Act of 1990.  Under
this Act,  tankers over 25 years old are  restricted  from trading to the United
States if they do not have double bottoms and/or double hulls  (similar,  though
somewhat less stringent  restrictions are in place within  developing  nations).
These  regulations  have the effect of inducing the  retirement of older vessels
that would otherwise continue trading.

The  combined  effects of  regulatory  restrictions  and low  charter  rates are
expected to keep scrappings at relatively high levels throughout 2000.  However,
an anticipated high rate of new tanker  deliveries will prevent much improvement
in rates and ship values  during 2000.  Should high  scrapping  levels  continue
beyond then,  this could offset  increases in new deliveries and prevent further
significant declines in freight rates and ship values.

(c) Bulk Carrier Vessels

Dry bulk shipping is a cyclical business that induces capital  investment during
periods of high freight  rates and leads to a contraction  in investment  during
periods of low rates. Currently, the industry environment is one of slow growth.
Fleet size is  relatively  stable,  the overall bulk carrier  fleet grew by less
than 1%, as measured by  deadweight  tons,  and the total number of ships shrank
slightly in 1999.

Freight  rates,  after  declining in 1998 due, in part, to the Asian  recession,
improved for dry bulk vessels of all sizes during 1999.  Freight rates increased
during  the year such that by the end of 1999,  they had  reverted  back to 1997
levels,  although these levels are still moderate by historical comparison.  The
1999 improvement was driven by increases in US grain exports as well as stronger
trade in iron ore and steel products.

Total dry bulk trade, as measured in deadweight tons, is estimated to have grown
by approximately 2% during 1999, compared to a flat year in 1998.  Forecasts for
2000 indicate that bulk trade should continue to grow, albeit at slow rates.

During 1999, ship values reversed the declines of the prior year, ending as much
as 30% above the levels seen at the  beginning  of the year for  certain  vessel
types.  This upturn in ship values was due to a general  improvement in dry bulk
trade as well as  increases  in the cost of new  building as compared to 1998. A
slow but steady rise in trade volumes,  combined with low fleet expansion,  both
of which are  anticipated  to  continue  in 2000,  may  provide  some  basis for
increases in freight  rates and ship values in the future.  For  example,  it is
believed that should growth in demand return to historic  levels of 3% annually,
this could stimulate increases in freight rates and ship values, and ultimately,
induce further investment in new building.

(d) Container Feeder Vessels

Container  vessels are used to  transport  cargo that is shipped in  containers.
When  these  vessels  move   containers   from  small  outlying  ports  to  main
transportation  hubs  serviced by regularly  scheduled  ocean  liners,  they are
called container feeder vessels.

Container vessels typically carry up to approximately  1,000 20-foot  equivalent
unit  (TEU)  containers.  For the  past  several  years,  this  trade  has  been
characterized  by growth in both  supply  and  demand,  however  in 1998,  these
patterns changed as worldwide  container shipments dropped by about 1%. In 1999,
this sector resumed growth due to some stabilization of the Asian economies.  In
the future,  containerized  shipping  is  expected to continue to grow  somewhat
faster  than  world   trade,   as  more  types  of  cargo  are   introduced   to
containerization and larger-sized vessels reduce the cost of main-line container
shipments.

After  beginning  1999 at low levels,  container  vessel  freight rates staged a
recovery late in the first quarter due to increased shipment volumes. Throughout
1999,  vessels carrying over 1,000 TEU containers  experienced  significant rate
improvement,  however,  such  improvement was limited for smaller feeder vessels
such as those owned by the Fund.  New building of feeder vessels is not expected
to undermine any potential  for rate  improvement,  as only 6.1% of the existing
fleet was on order as of the end of 1999.

(2)  Commercial Aircraft

After  experiencing  relatively robust growth over the prior four years,  demand
for commercial  aircraft softened  somewhat in 1999. Boeing and Airbus,  the two
primary manufacturers of new commercial aircraft, saw a decrease in their volume
of orders,  which  totaled 368 and 417 during  1999,  compared to 656 and 556 in
1998.  The slowdown in aircraft  orders can be partially  attributed to the full
implementation  of US Stage III environmental  restrictions,  which became fully
effective on December 31, 1999. Since these  restrictions  effectively  prohibit
the operation of noncompliant aircraft in the United States after 1999, carriers
operating  within or into the United States  either  replaced or modified all of
their  noncompliant  aircraft before the end of the year. The continued weakness
of the Asian economy has also served to slow the volume of new aircraft  orders.
However,  with the Asian economy now showing signs of recovery,  air carriers in
this region are beginning to resume their fleet building efforts.

Demand for, and values of, used commercial aircraft have been adversely affected
by the Stage III environmental  restrictions and an oversupply of older aircraft
as  manufacturers  delivered more new aircraft than the overall market required.
Boeing predicts that the worldwide fleet of jet-powered commercial aircraft will
increase  from  approximately  12,600  airplanes  as of the end of 1998 to about
13,700  aircraft by the end of 2003, an average  increase of 220 units per year.
However,  actual  deliveries  for the first two years of this  period,  1998 and
1999,  already  averaged  839 units  annually.  Although  some of the  resultant
surplus  used  aircraft  have been  retired,  the net effect has been an overall
increase  in the  number of used  aircraft  available.  This has  resulted  in a
decrease in both market  prices and lease rates for used  aircraft.  Weakness in
the  used  commercial  aircraft  market  may  be  mitigated  in  the  future  as
manufacturers  bring their new production more in line with demand and given the
anticipated continued growth in air traffic. Worldwide, demand for air passenger
services is expected  to increase at about 5% annually  and freight  services at
about 6% per year, for the foreseeable future.

This fund owns 50% of two Stage III-compliant aircraft and 100% of four Stage II
aircraft,  the latter of which are  operating  outside of the United  States and
thus are not  subject  to Stage  III  environmental  restrictions.  All of these
aircraft  remained on lease  during 1999 and were not impacted by the changes in
market conditions described above.

(3)  Railcars

(a)  Pressurized Tank Railcars

Pressurized tank cars are used to transport  primarily  liquefied  petroleum gas
(natural  gas) and  anhydrous  ammonia  (fertilizer).  The major US markets  for
natural  gas are  industrial  applications  (40% of  estimated  demand in 1998),
residential use (21%),  electrical generation (15%), and commercial applications
(14%). Within the fertilizer industry,  demand is a function of several factors,
including  the level of grain  prices,  the status of  government  farm  subsidy
programs,  amount of farming acreage and mix of crops planted, weather patterns,
farming practices, and the value of the US dollar. Population growth and dietary
trends also play an indirect role.

On an  industry-wide  basis,  North American  carloadings of the commodity group
that includes petroleum and chemicals  increased 2.5% in 1999, compared to 1998.
Correspondingly,  demand for  pressurized  tank cars remained solid during 1999,
with  utilization of this type of railcar  within the Fund remaining  above 98%.
While renewals of existing leases continue at similar rates, some cars have been
renewed for "winter only" terms of approximately  six months. As a result, it is
anticipated  that there will be more  pressurized tank cars than usual coming up
for renewal in the spring.

(b)  Covered Hopper (Grain) Railcars

Demand for covered hopper cars, which are  specifically  designed to service the
agricultural  industry,  continued to experience  weakness  during 1999.  The US
agribusiness  industry serves a domestic market that is relatively  mature,  the
future  growth of which is expected to be consistent  but modest.  Most domestic
grain rail traffic moves to food processors,  poultry  breeders,  and feed lots.
The more volatile export business, which accounts for approximately 30% of total
grain  shipments,  serves emerging and developing  nations.  In these countries,
demand for protein-rich foods is growing more rapidly than in the United States,
due to higher population growth, a rapid pace of  industrialization,  and rising
disposable income.

Within the United States,  1999 carloadings of agricultural  products  increased
4.3%,  while Canadian  carloadings of these products fell 3.4%,  resulting in an
overall  increase within North America of only 2.8% compared to 1998.  Since the
combined North American  shipments for 1998 had decreased 7.7% over the previous
year, the 1999 volume, while representing a slight increase, is still below 1997
levels. Another factor contributing to softness in the covered hopper car market
has been the large number of new cars built in the last few years. Production of
new railcars of all types is estimated to have reached  57,685 cars during 1999,
with covered hopper cars representing  19,845, or one-third,  of this total. For
those covered hopper cars whose leases expired in 1999, both  industry-wide  and
within the Fund, the combination of a lack of strong demand and an excess supply
of cars resulted in many of these expiring  leases being renewed at considerably
lower rates.

(c)  Box Railcars

Boxcars are used primarily to transport paper and paper products. Carloadings of
forest  products  decreased  2.0% in the  United  States and rose 4.3% in Canada
during 1999,  compared to 1998. However,  during 1999,  prospects for the forest
products  industry  showed signs of  improvement,  largely due to  macroeconomic
factors,  such as the beginning of an economic  recovery in Asia, some weakening
of the US dollar, and a continued strong domestic economy.  The outlook has also
improved due to  industry-specific  factors,  most  notably a major  slowdown in
capacity additions.

The Fund's boxcars continued to operate on long-term leases during 1999.



<PAGE>


(4)  Trailers

(a)  Foodservice Refrigerated Trailers

Sales  within  the  foodservice  distribution  industry,  which  represents  the
wholesale  supply  of  food  and  related  products  to  restaurants,   grocers,
hospitals,  schools,  and other purveyors of prepared food, have grown at a 4.1%
annual rate over the past five years.  Foodservice distribution sales within the
United  States are  estimated to have reached over $150 billion  during 1999 and
are expected to surpass $180 billion by 2005.

This growth is being driven by changes in consumer  demographics and lifestyles,
as more and more  consumers  demand  fresher,  more  convenient  food  products.
Increased  service demands by consumers  coupled with heightened fears over food
safety have  accelerated  the  development of new  technology  for  refrigerated
trailers  and have  caused  foodservice  distributors  to seek to upgrade  their
fleets by either  purchasing or leasing  newer,  more  technologically  advanced
trailers. More foodservice  distributors are considering leasing trailers due to
the lower  capital  outlays and  quicker  access to better  equipment  that this
option offers,  particularly in view of the current six- to twelve-month backlog
on new trailer orders.

(b)  Intermodal (Piggyback) Trailers

Intermodal  trailers are used to transport a variety of goods either by truck or
by rail. Over the past decade, intermodal trailers have been gradually displaced
by domestic  containers  as the  preferred  method of transport  for such goods.
During 1999, demand for intermodal  trailers was more volatile than usual . Slow
demand  occurred  over the first half of the year due to customer  concerns over
rail service  problems  associated  with mergers in the rail industry,  however,
demand  picked up  significantly  over the second half of the year due to both a
resolution  of these  service  problems  and the  continued  strength  of the US
economy.  Due to rise in demand  which  occurred  over the latter  half of 1999,
overall,  activity  within the  intermodal  trailer  market  declined  less than
expected for the year, as total intermodal  trailer shipments  decreased by only
approximately 1.8% compared to the prior year. Average utilization of the entire
intermodal  fleet rose from 73% in 1998 to 77% in 1999,  primarily due to demand
exceeding  available supply of intermodal trailers during the second part of the
year.

The Manager stepped up its marketing and asset management program for the Fund's
intermodal trailers during 1999.

Although the trend  towards  using  domestic  containers  instead of  intermodal
trailers is expected to  continue  in the  future,  overall  intermodal  trailer
shipments  are  forecast  to decline by only 2% to 3% in 2000,  compared  to the
prior year, due to the anticipated continued strength of the overall economy. As
such,  the  nationwide  supply of  intermodal  trailers  is  expected  to remain
essentially  in balance with demand for 2000. For the Fund's  intermodal  fleet,
the Manager will continue to seek to expand its customer  base while  minimizing
trailer downtime at repair shops and terminals.

(c)  Refrigerated Trailers

The  temperature-controlled  over-the-road  trailer  market  continued to expand
during 1999, although not as quickly as in 1998 when the market experienced very
strong  growth.  The leveling off in 1999  occurred as equipment  users began to
absorb the  increases in supply  created over the prior two years.  Refrigerated
trailer users have been actively  retiring  their older units and  consolidating
their  fleets  in  response  to  improved   refrigerated   trailer   technology.
Concurrently,  there  is a  backlog  of six to nine  months  on  orders  for new
equipment.

As a  result  of  these  changes  in  the  refrigerated  trailer  market,  it is
anticipated that trucking companies and shippers will utilize short-term trailer
leases more frequently to supplement their existing fleets.  Such a trend should
benefit the Fund, whose trailers are typically leased on a short-term basis.

(d)  Dry Trailers

The U.S. dry trailer market  remained strong during 1999, as the strong domestic
economy  resulted in heavy freight  volumes.  With  unemployment  low,  consumer
confidence high, and industrial  production  sound, the outlook for leasing this
type of trailer remains  positive,  particularly  as the equipment  surpluses of
recent  years are being  absorbed  by the  buoyant  market.  In addition to high
freight volumes, improvements in inventory turnover and tighter turnaround times
have lead to a  stronger  overall  trucking  industry  and  increased  equipment
demand.

(5)  Marine Containers

The marine container leasing market started 1999 with industry-wide  utilization
rates in the mid 70% range, down somewhat from the beginning of 1998. The market
strengthened  throughout  the year such that most  container  leasing  companies
reported utilization of 80% by the end of 1999.  Offsetting this favorable trend
was a continuation  of historically  low  acquisition  prices for new containers
acquired in the Far East,  predominantly China. These low prices put pressure on
fleetwide per diem leasing rates.

The Fund took  advantage of  attractive  purchase  prices by  acquiring  several
groups of containers  during the year. It is the Manager's belief that acquiring
containers at these historically low prices will yield strong long-terms results
for the Fund.

Industry consolidation continued in 1999 as the parent of one of the world's top
ten  container  lessors  finalized  the  outsourcing  of the  management  of its
container  fleet to a  competitor.  However,  the  Manager  believes  that  such
consolidation is a positive trend for the overall  container  leasing  industry,
and ultimately will lead to higher  industry-wide  utilization and increased per
diem rates.

(E)  Government Regulations

The use,  maintenance,  and  ownership  of equipment  are  regulated by federal,
state,  local and/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:

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

     (2) the U.S. Department of Transportation's  Aircraft Capacity Act of 1990,
     which limits or  eliminates  the  operation of  commercial  aircraft in the
     United  States  that  do not  meet  certain  noise,  aging,  and  corrosion
     criteria.  In addition,  under U.S.  Federal  Aviation  Regulations,  after
     December 31, 1999, no person may operate an aircraft to or from any airport
     in the  contiguous  United  States  unless that  aircraft has been shown to
     comply with Stage III noise levels.  The Fund has Stage II aircraft that do
     not meet  Stage III  requirements.  The cost to  install a hush kit to meet
     quieter Stage III requirements is approximately $2.0 million,  depending on
     the type of  aircraft.  The Fund's  aircraft  will  remain with the current
     lessee, which operates in a country that does not require this regulation.

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

     (4) the Federal Railroad Administration has mandated that effective July 1,
     2000, all jacketed and  non-jacketed  tank railcars must be re-qualified to
     insure tank shell  integrity.  Tank shell  thickness,  weld seams, and weld
     attachments  must be inspected  and  repaired if necessary to  re-qualify a
     tank railcar for service. The average cost of this inspection is $1,800 for
     non-jacketed  tank  railcars and $3,600 for  jacketed  tank  railcars,  not
     including any necessary repairs.  This inspection is to be performed at the
     next scheduled tank test.

As of December 31, 1999, 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.



<PAGE>


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, 1999, the Fund owned a portfolio of  transportation  and related
equipment and investments in equipment owned by  unconsolidated  special-purpose
entities (USPEs),  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  maintains its principal  office at One Market,  Steuart  Street Tower,
Suite 800, San  Francisco,  California  94105-1301.  All office  facilities  are
provided by FSI without reimbursement by the Fund.

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, 1999.

                                     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 will  increase 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,  1999,  by the  4,986
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 limited partnership interests
and,  therefore,  are generally  viewed as inefficient  vehicles for the sale of
units. Presently,  there is no public market for the units and none is likely to
develop.  To prevent the units from being considered publicly traded and thereby
to avoid taxation of the 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  intends to monitor  transfers of units in an effort to ensure that they
do not  exceed the  percentage  or number  permitted  by  certain  safe  harbors
promulgated by the Internal Revenue Service. A transfer may be prohibited if the
intended  transferee is not an U.S.  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.  The Fund may redeem a certain number of units each year under
the terms of the Fund's operating agreement. The purchase price paid by the Fund
for  outstanding  Class A Units  upon  redemption  will be  equal to 105% of the
amount  Class A  Members  paid for the  Class A Units,  less the  amount of cash
distributions  Class A Members have received relating to such Class A Units. The
price may not bear any  relationship to the fair market value of a Class A Unit.
As of December 31,  1999,  the Fund had agreed to purchase  approximately  4,000
units for an aggregate price of approximately  $49,000.  The Manager anticipates
that these units will be purchased in the first and second  quarters of 2000. As
of December 31, 1999, the Fund has purchased a cumulative  total of 24,260 Class
A units for a cost of $0.3 million.  In addition to these units, the Manager may
purchase additional units on behalf of the Fund in the future.


<PAGE>


ITEM 6.    SELECTED FINANCIAL DATA

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

                                     TABLE 2

                        For the Years Ended December 31,
         (In thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>

                                                                    1999          1998         1997          1996           1995
                                                                -------------------------------------------------------------------

Operating results:
 <S>                                        <C>               <C>              <C>               <C>            <C>
 Total revenues                             $    26,483       $   28,301       $   22,920        $   11,295     $    4,150
 Net gain on disposition of
  equipment                                          23            2,759            1,682                --             25
 Equity in net income (loss) of
  unconsolidated special-purpose
  entities                                        1,761            2,390            1,453              (256)            69
 Net income (loss)                               (2,401)           4,316           (2,052)           (2,392)          (618)

At year-end:
 Total assets                               $    80,533       $   99,635       $  108,524        $   87,755     $   62,589
 Total liabilities                               29,935           28,905           29,337             1,466          1,187
 Note payable                                    25,000           25,000           25,000                --             --

Cash distribution                           $    11,690       $   11,765       $   11,763        $    9,832     $    1,303

Cash distribution representing
 a return of capital to Class A members     $     9,930       $    7,405       $    9,998        $    8,471     $    1,180

Per weighted-average Class A unit:

Net income (loss)                           $     (0.81)<F1>1 $     0.52<F1>1  $    (0.75) <F1>1

Cash distribution                           $      1.99       $     2.00       $     2.00            Various, according to
                                                                                                       interim closings
Cash distribution representing a return
 of capital to Class A members              $      1.99       $     1.48       $     2.00





<FN>
<F1>
-------------------------------
1    After reduction of $1.7 million ($0.33 per weighted-average Class A unit)
in 1999, $1.6 million ($0.33 per weighted-average Class A unit) in 1998, and
$1.8 million ($0.35 per weighted-average Class A unit) in 1997, representing
special allocations to the Manage (see Note 1 to the financial statements).
</FN>
</TABLE>







                      (This space intentionally left blank)


<PAGE>


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

(A)  Introduction

Management's  discussion  and  analysis of  financial  condition  and results of
operations relates to the Financial  Statements of 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  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 Repricing Exposure to Current Economic Conditions

The exposure of the Fund's equipment portfolio to repricing risk occurs whenever
the  leases  for  the  equipment  expire  or are  otherwise  terminated  and the
equipment must be remarketed.  Major factors influencing the current market rate
for 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 contribution to the Fund. The Fund
experienced  re-leasing or repricing activity in 1999, primarily in its trailer,
marine vessel and railcars portfolios.

(a)  Trailers:  The Fund's  trailer  portfolio  operates  in  short-term  rental
facilities or with short-line railroad systems. The relatively short duration of
most leases in these operations exposes the trailers to considerable  re-leasing
and repricing activity.

(b) Marine  vessels:  Certain of the Fund's marine vessels (wholly and partially
owned) operated in the time charter markets  throughout  1999. Time charters are
of a short  duration  (such as a single  voyage of 10 - 45  days),  or may be of
extended  duration (as much as three years) in weaker  markets.  Short  duration
charters are the dominant forms of contract.

In addition,  in 1999, one of the Fund's anchor  handling  supply marine vessels
was re-leased at a significantly  lower rate, due to soft market conditions.  If
the economic conditions remain the same, a similar trend of lower re-lease rates
will occur for the Fund's  remaining  anchor  handling  marine  vessel  when the
current lease expires in the year 2000.

(c) Railcars:  The relatively  short duration of most leases in these operations
exposes the railcars to considerable  re-leasing and repricing  activity.  Lease
revenue  decreased  $0.1  million  due to lower  re-lease  rates  for a group of
railcars  in the year ended  December  31,  1999  compared to the same period in
1998.

(2)  Equipment Liquidations and Nonperforming Lessees

Liquidation of Fund equipment and investments in unconsolidated  special-purpose
entities (USPEs),  unless accompanied by an immediate  replacement of additional
equipment earning similar rates (see  Reinvestment  Risk,  below),  represents a
reduction in the size of the  equipment  portfolio and may result in a reduction
of  contribution  to the Fund.  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. The Fund  experienced the following
in 1999:

Liquidations:  During 1999, the Fund received proceeds of $14.5 million from the
sale and disposal of trailers,  railcars and its interest in two trusts that own
a total of three commercial  aircraft,  two aircraft engines, and a portfolio of
aircraft  rotables,  and its interest in an entity that owned a mobile  offshore
drilling unit.



<PAGE>


(3)  Reinvestment Risk

Reinvestment risk occurs when; the Fund cannot generate  sufficient surplus cash
after  fulfillment of operating  obligations  and  distributions  to reinvest in
additional equipment during the reinvestment phase of Fund; equipment is sold or
liquidated for less than threshold amounts; proceeds from disposition or surplus
cash  available for  reinvestment  cannot be  reinvested at the threshold  lease
rates; or proceeds from  dispositions or surplus cash available for reinvestment
cannot be deployed in a timely manner.

During the first six years of operations  which ends December 31, 2002, the Fund
intends to  increase  its  equipment  portfolio  by  investing  surplus  cash in
additional  equipment  after  fulfilling   operating   requirements  and  paying
distributions to the Members.  Subsequent to the end of the reinvestment period,
the Fund will  continue to operate for an  additional  two years,  then begin an
orderly liquidation over an anticipated two-year period.

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

During  1999,  the Fund  acquired a group of marine  containers  for $9.9
million and a group of trailers for $1.4 million.

(4)  Equipment Valuation

In accordance  with  Financial  Accounting  Standards  Board  statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", the Manager reviews the carrying value of the Fund's  equipment
portfolio  at least  quarterly  and  whenever  circumstances  indicate  that the
carrying value of an asset may not be recoverable in relation to expected future
market  conditions  for the  purpose  of  assessing  the  recoverability  of the
recorded amounts. If the undiscounted projected future cash flows and fair value
are less than the carrying  value of the  equipment,  a loss on  revaluation  is
recorded. Reductions of $3.9 million to the carrying value of two marine vessels
were required  during 1999.  Reductions of $1.0 million to the carrying value of
partially owned equipment were required during 1998. No reductions were required
to the carrying value of equipment during 1997.

As of December 31, 1999, the Manager  estimated the current fair market value of
the Fund's equipment portfolio, including the Fund's interest in equipment owned
by  USPEs,  to be  $95.6  million.  This  estimate  is based  on  recent  market
transactions  for equipment  similar to the Fund's  equipment  portfolio and the
Fund's interest in equipment owned by USPEs. Ultimate realization of fair market
value by the Fund may differ  substantially  from the  estimate  due to specific
market conditions, technological obsolescence, and government regulations, among
other factors that the Manager cannot accurately predict.

(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,  make cash distributions
to Members,  and  increase the Fund's  equipment  portfolio  with any  remaining
available surplus cash. The total outstanding debt, currently $25.0 million, can
be increased with borrowings from the short-term Committed Bridge Facility in an
aggregate  principal  amount not to exceed the lesser of $10.0 million or 50% of
the aggregate  principal amount of the Notes outstanding at the time of issuance
and not to remain outstanding for more than 179 days.

The  Fund  intends  to rely  on  operating  cash  flow  to  meet  its  operating
obligations, make cash distributions to Class A Members, and increase the Fund's
equipment portfolio through reinvestment of any remaining surplus cash available
in additional equipment.

For the year ended  December  31,  1999,  the Fund  generated  $17.5  million in
operating  cash  (net  cash  provided  by  operating  activities  plus  minority
interests  and  non-liquidating  cash  distributions  from  USPEs)  to meet  its
operating obligations and make distributions of $11.7 million to the members.

Lessee  deposits and reserve for repairs  increased $0.8 million during the year
ended  December  31,  1999  compared to the same  period in 1998.  Reserves  for
aircraft  engine  repairs  increased  $0.6  million  due  to  additional  lessee
deposits, and security deposits increased $0.4 million due to a security deposit
from a container lessee.  Lessee prepaid deposits  decreased $0.2 million due to
fewer lessee's prepaying future lease revenue.

During the year  ended  December  31,  1999,  the Fund  purchased  4,430  marine
containers and 65 dry trailers for a total cost of $11.4 million.

During the year ended  December  31, 1999,  the Fund sold  trailers and railcars
with an aggregate net book value of $0.1 million,  for proceeds of $0.2 million.
During  1999,  the Manager  sold the Fund's 61%  interest in an entity  owning a
mobile offshore drilling unit with a net investment of $7.2 million for proceeds
of $7.2 million.  Also, during 1999, the Manager sold the Fund's 33% interest in
two  trusts  that owned a total of three  Boeing  737-200A  stage II  commercial
aircraft,  two stage II aircraft engines,  and a portfolio of aircraft rotables.
The trusts were sold for proceeds of $7.1 million for its net investment of $3.8
million.

Pursuant  to the  terms of the  operating  agreement,  beginning  in the  fourth
quarter of 1998, the Fund may, at the sole discretion of the Manager,  redeem up
to 2% of the outstanding Class A units each year. The purchase price paid by the
Fund for outstanding  Class A Units upon redemption will be equal to 105% of the
amount  Class A  Members  paid for the  Class A Units,  less the  amount of cash
distributions  Class A Members have received relating to such Class A Units. The
price may not bear any  relationship to the fair market value of a Class A Unit.
As of December 31,  1999,  the Fund had agreed to purchase  approximately  4,000
units for an aggregate price of approximately  $49,000.  The Manager anticipates
that these Class A units will be purchased  in the first and second  quarters of
2000. In addition to these units,  the Manager may purchase  additional units on
behalf of the Fund in the future.

The Fund has a $25.0  million note  payable.  The loan was funded in March 1997.
The note  bears  interest  at a fixed  rate of 7.33%  per  annum and has a final
maturity in 2006. Interest on the note is payable  semi-annually.  The note will
be repaid in five principal payments of $3.0 million on December 31, 2000, 2001,
2002, 2003, and 2004 and two principal  payments of $5.0 million on December 31,
2005, and 2006. The agreement  requires the Fund to maintain  certain  financial
covenants related to fixed-charge coverage.

The  Manager  has  entered  into a joint  $24.5  million  credit  facility  (the
Committed  Bridge  Facility) on behalf of the Fund, PLM Equipment Growth Fund VI
(EGF VI) and PLM Equipment  Growth & Income Fund VII (EGF VII),  both affiliated
investment programs;  and TEC Acquisub,  Inc. (TECAI), an indirect  wholly-owned
subsidiary of the Manager,  which may be used to provide interim financing of up
to (i) 70% of the  aggregate  book value or 50% of the aggregate net fair market
value of eligible  equipment  owned by the Fund,  plus (ii) 50% of  unrestricted
cash held by the borrower. The Fund, EGF VI, EGF VII, and TECAI collectively may
borrow  up to  $24.5  million  of the  Committed  Bridge  Facility.  Outstanding
borrowings  by one  borrower  reduce the amount  available  to each of the other
borrowers under the Committed  Bridge  Facility.  The Committed  Bridge Facility
also  provides  for a $5.0  million  Letter of Credit  Facility for the eligible
borrowers.  Individual  borrowings may be outstanding for no more than 179 days,
with all advances due no later than June 30,  2000.  Interest  accrues at either
the prime rate or adjusted LIBOR plus 1.625% at the borrower's option and is set
at the time of an advance of funds. Borrowings by the Fund are guaranteed by the
Manager.  As of December 31, 1999 and March 27, 2000,  no eligible  borrower had
any outstanding  borrowings.  The Manager  believes it will be able to renew the
Committed Bridge Facility upon its expiration with similar terms as those in the
current Committed Bridge Facility.

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.



<PAGE>


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

(1)  Comparison of the Fund's Operating Results for the Years Ended December 31,
     1999 and 1998

(a)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as  repair  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
decreased  during the year ended  December 31, 1999,  when  compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income and certain  expenses such as depreciation  and  amortization and general
and  administrative  expenses relating to the operating  segments (see Note 5 to
the audited  financial  statements),  are not  included  in the owned  equipment
operation  discussion  because they are more indirect in nature, not a result of
operations but more the result of owning a portfolio of equipment.

In September 1999, the Manager amended the corporate-by-laws of certain USPEs in
which the Fund, or any affiliated  program,  owns an interest  greater than 50%.
The amendment to the corporate-by-laws provided that all decisions regarding the
acquisition  and  disposition  of the  investment  as well as other  significant
business  decisions of that  investment  would be permitted  only upon unanimous
consent of the Fund and all the  affiliated  programs  that have an ownership in
the  investment.  As such,  although  the Fund may own a majority  interest in a
USPE, the Fund does not control its  management and thus it is appropriate  that
the equity method of accounting be used after  adoption of the  amendment.  As a
result of the amendment,  as of September 30, 1999, all jointly owned  equipment
in which the Fund owned a majority interest,  which had been consolidated,  were
reclassified  to  investments in USPEs.  Lease revenues and direct  expenses for
jointly owned equipment in which the Fund held a majority interest were reported
under the  consolidation  method of  accounting  during  the nine  months  ended
September 30, 1999 and were included with the owned  equipment  operations.  For
the three months ended December 31, 1999, lease revenues and direct expenses for
this entity is reported  under the equity method of  accounting  and is included
with the operations of the unconsolidated special-purpose entities (USPEs).

The following  table presents lease revenues less direct expenses by segment (in
thousands of dollars):
<TABLE>
<CAPTION>

                                                                                For the Years
                                                                              Ended December 31,
                                                                            1999              1998
                                                                         -----------------------------

  <S>                                                                    <C>                <C>
  Marine vessels                                                         $   4,990          $ 5,794
  Aircraft                                                                   4,028            4,525
  Mobile offshore drilling unit                                              3,494            3,936
  Railcars                                                                   3,179            3,323
  Trailers                                                                   2,976            3,263
  Marine containers                                                          1,326               --
</TABLE>

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $9.5
million and $4.5 million,  respectively,  for the year ended  December 31, 1999,
compared to $8.7 million and $2.9 million, respectively,  during the same period
of 1998.  The purchase of two marine  vessels during 1998 generated $2.0 million
in additional lease revenues in 1999.  Lease revenue  decreased $1.0 million for
two other marine  vessels due to lower  re-lease  rates  earned  during the year
ended December 31, 1999 compared to the same period in 1998. In addition,  lease
revenues  decreased  $0.2 million  during 1999 due to the drydocking of a marine
vessel for  approximately  three weeks,  during  which it was off lease.  Direct
expenses  increased $2.2 million in the year ended December 31, 1999 compared to
the same period in 1998 due to the purchase of a marine vessel at the end of the
second quarter of 1998. The increase in direct  expenses for a marine vessel was
offset,  in part,  by a decrease of $0.2 million for another  marine vessel that
was in dry-docking and thus not incurring  operating  expenses for approximately
three weeks during 1999. In addition, direct expenses decreased $0.4 million for
this marine vessel due to lower marine operating  expenses during the year ended
December 31, 1999, compared to the same period in 1998.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $4.1 million and
$29,000,  respectively,  for the year ended December 31, 1999,  compared to $4.6
million and  $42,000,  respectively,  during the same  period of 1998.  Aircraft
contribution  decreased due to the sale of an aircraft in the second  quarter of
1998.

Mobile offshore  drilling unit: Mobile offshore drilling unit lease revenues and
direct expenses were $3.6 million and $0.1 million,  respectively,  for the year
ended   December  31,  1999,   compared  to  $4.0  million  and  $0.1   million,
respectively,  during the same  period of 1998.  Lease  revenues  for the Fund's
mobile offshore drilling unit decreased $0.4 million for the year ended December
31,  1999  when  compared  to the  same  period  of 1998  due to the  change  in
accounting treatment of majority held equipment from the consolidation method of
accounting to the equity method of accounting.

Railcars:  Railcar lease revenues and direct expenses were $3.8 million and $0.6
million,  respectively,  for the year ended December 31, 1999,  compared to $4.0
million and $0.6 million,  respectively,  during the same period of 1998.  Lease
revenue  decreased  $0.1  million  due to lower  re-lease  rates  for a group of
railcars  in the year ended  December  31,  1999  compared to the same period in
1998. In addition,  lease revenue decreased $0.1 million resulting from the sale
or disposition of railcars in 1998 and 1999.

Trailers:  Trailer lease revenues and direct expenses were $3.9 million and $0.9
million,  respectively,  for the year ended December 31, 1999,  compared to $3.9
million and $0.6 million,  respectively,  during the same period of 1998. Direct
expenses  increased due to repairs  required on certain trailers during the year
ended December 31, 1999, which were not needed in the same period in 1998.

Marine  containers:  Marine  container  lease revenues were $1.3 million for the
year ended December 31, 1999. Marine container contribution increased due to the
purchase of marine containers in the second quarter of 1999.

(b)   Interest and Other Income

Interest  and other  income  decreased  $0.1  million due to lower  average cash
balances in the year ended  December  31,  1999,  compared to the same period in
1998.

(c)   Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $23.7 million for the year ended  December 31, 1999
increased from $21.6 million for the same period in 1998.  Significant variances
are explained as follows:

(i) Loss on  revaluation  of equipment  increased  $3.9 million  during the year
ended  December 31, 1999 compared to the same period in 1998. In 1999,  the Fund
reduced  the  carrying  value  of two  marine  vessels  to their  estimated  net
realizable  value.  No  revaluation  of  equipment  was required on wholly owned
equipment in 1998.

(ii) A $0.1  million  increase  in bad debt  expenses  was due to the  Manager's
evaluation of the collectibility of receivables due from certain lessees.

(iii) A $1.9 million  decrease in depreciation  and  amortization  expenses from
1998 levels resulted from an approximately  $3.6 million decrease due to the use
of the  double-declining  balance  depreciation  method which results in greater
depreciation  the first years an asset is owned, an  approximately  $0.7 million
decrease as a result of the change in  accounting  treatment  of  majority  held
equipment  from the  consolidation  method of accounting to the equity method of
accounting,  and approximately  $0.2 million decrease due to the sale of certain
assets  during  1999 and  1998.  These  decreases  were  partially  offset by an
approximately $2.6 million increase in depreciation expense from the purchase of
equipment during 1999 and 1998.

(d)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the year ended  December 31, 1999
totaled  $23,000  which  resulted from the sale of railcars and trailers with an
aggregate net book value of $0.1 million, for proceeds of $0.2 million. Net gain
on  disposition  of equipment for the year ended  December 31, 1998 totaled $2.8
million,  and resulted from the sale of an aircraft, a railcar and trailers with
an aggregate net book value of $2.6 million, for proceeds of $5.4 million.

(e)  Minority Interest

Minority  interest expense  increased $0.2 million in 1999 when compared to 1998
due to a increase in net income of the entity in which the Fund owned a majority
interest.

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

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

                                               For the Years Ended
                                                  December 31,
                                               1999            1998
                                          ----------------------------

  Aircraft                                  $  1,836        $   3,834
  Mobile offshore drilling unit                  206               --
  Marine vessel                                 (281)          (1,444)
                                          -----------------------------
        Equity in Net Income of USPEs       $  1,761        $   2,390
                                          =============================

Aircraft:  As of December 31, 1999, the Fund owned  interests in two trusts that
each owns a  commercial  aircraft.  As of  December  31,  1998,  the Fund  owned
interests in two trusts that owned a commercial aircraft, and an interest in two
trusts that own a total of three commercial aircraft,  two aircraft engines, and
a portfolio  of aircraft  rotables.  During the year ended  December  31,  1999,
aircraft  lease  revenues were $2.1 million and gain from the sale of the Fund's
interest  in two trusts  that owned a total of three  commercial  aircraft,  two
aircraft  engines,  and a  portfolio  of aircraft  rotables of $3.3  million was
offset by expenses of $3.6  million.  During the year ended  December  31, 1998,
aircraft  lease  revenues were $4.3 million and gain from the sale of the Fund's
interest in two trusts that owned commercial aircraft of $6.3 million was offset
by expenses of $6.8 million.  Lease  revenues  decreased $2.5 million due to the
sale of the Fund's investment in two trusts  containing ten commercial  aircraft
in 1998, and the sale of the Fund's  investment in two trusts that owned a total
of three commercial aircraft,  two stage II aircraft engines, and a portfolio of
aircraft  rotables in 1999. The decrease in lease revenues caused by these sales
was offset,  in part,  by $0.3  million in  additional  lease  revenue  from the
purchase  of two  additional  trusts each  owning an MD-82  commercial  aircraft
during 1998. The decrease in expenses of $3.2 million was primarily due to lower
depreciation  expense resulting from an approximately  $1.6 million decrease due
to the sale of the Fund's  interest  in four  trusts and an  approximately  $2.1
million  decrease  due to the double  declining-balance  method of  depreciation
which  results in  greater  depreciation  in the first  years an asset is owned.
These increases were offset, in part, by an approximately  $0.5 million increase
in depreciation  expense due to the Fund's  investment in two additional  trusts
during 1998.

Mobile  offshore  drilling  unit:  During  1999 the Fund owned an  interest in a
mobile offshore drilling unit. During the year ended December 31, 1999, revenues
of $0.2  million were offset by the loss of $15,000 from the sale of this entity
and  administrative  expenses of $32,000.  The  increase in lease  revenues  and
expenses in 1999 as compared  to the same period in 1998 were  primarily  due to
the  change  in  accounting  treatment  for  majority  held  equipment  from the
consolidation method to the equity method.

Marine vessel:  As of December 31, 1999 and 1998, the Fund had an interest in an
entity  that owns a marine  vessel.  During the year ended  December  31,  1999,
revenues of $0.8 million were offset by depreciation and administrative expenses
of $1.1 million. During the year ended December 31, 1998, marine vessel revenues
of $0.9 million were offset by depreciation and administrative  expenses of $1.3
million, and a loss on the revaluation of a marine vessel of $1.0 million. Lease
revenue  decreased  $0.2 million in the year ended December 31, 1999 compared to
the same  period  in 1998,  due to lower  re-lease  rates as a result  of softer
market  conditions.  The  decrease was offset,  in part,  by an increase of $0.1
million in lease  revenues due to a marine vessel that the Fund owns an interest
in being  off-hire for 20 days in the year ended December 31, 1998 compared to 2
days in the same period in 1999.  Expenses decreased due to the decrease of $0.2
million  in  depreciation  expense as a result of the  double-declining  balance
method of depreciation which results in greater  depreciation in the first years
an asset is owned. Loss on revaluation of equipment of $1.0 million for the year
ended  December 31, 1998,  resulted from the Fund reducing the carrying value of
its interest in an entity owning a marine vessel to its estimated net realizable
value.  No loss on revaluation of its interest in the marine vessel was required
during the same period of 1999.

(g)  Cumulative Effect of Accounting Change

In April 1998, the American  Institute of Certified  Public  Accountants  issued
Statement of Position  98-5,  "Reporting  on the Costs of Start-Up  Activities,"
which requires costs related to start-up  activities to be expensed as incurred.
The  statement  requires  that initial  application  be reported as a cumulative
effect of a change in  accounting  principle.  The Fund adopted  this  statement
during the year ended  December 31,  1999,  at which time it took a $0.1 million
charge, related to start-up costs of the Fund.

(h)   Net Income (Loss)

As a result of the foregoing, the Fund had net loss of $2.4 million for the year
ended December 31, 1999,  compared to net income of $4.3 million during the same
period of 1998.  The Fund's  ability to acquire,  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, 1999
is not necessarily  indicative of future periods. In the year ended December 31,
1999,  the Fund  distributed  $9.9  million  to Class A  members,  or $1.99  per
weighted-average Class A unit.

(2)  Comparison of the Fund's Operating Results for the Years Ended December 31,
     1998 and 1997

(a)   Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as  repair  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
increased  during the year ended  December 31, 1998,  when  compared to the same
period of 1997.  Gains or losses from the sale of equipment and certain expenses
such as depreciation and amortization  and general and  administrative  expenses
relating  to  the  operating  segments  (see  Note 5 to  the  audited  financial
statements),  are not  included  in the  owned  equipment  operation  discussion
because they are more indirect in nature,  not a result of  operations  but more
the result of owning a portfolio of  equipment.  The  following  table  presents
lease revenues less direct expenses by segment (in thousands of dollars):

                                         For the Years Ended
                                            December 31,
                                         1998             1997
                                       ----------------------------

  Marine vessels                       $  5,794       $    2,085
  Aircraft                                4,525            4,994
  Mobile offshore drilling unit           3,936            4,989
  Railcars                                3,323            2,712
  Trailers                                3,263            3,250

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $8.7
million and $2.9 million,  respectively,  for the year ended  December 31, 1998,
compared to $3.7 million and $1.6 million, respectively,  during the same period
of 1997.  Marine vessel lease revenues and direct expenses  increased due to the
purchase  of a marine  vessel  at the end of the  second  quarter  of 1997 and a
marine vessel in each of the first and second quarters of 1998.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $4.6 million and
$42,000, respectively, during the year ended December 31, 1998, compared to $5.0
million and  $43,000,  respectively,  during the same  period of 1997.  Aircraft
contribution  decreased  due to the sale of an aircraft at the end of the second
quarter of 1998.

Mobile  offshore  drilling unit (MODU):  MODU lease revenues and direct expenses
were $4.0 million and $0.1 million,  respectively,  for the year ended  December
31, 1998, compared to $5.1 million and $0.1 million,  respectively, for the year
ended  December  31,  1997.  Lease  revenue  increased  $0.6  million and direct
expenses increased $0.1 million during 1998, compared to the same period in 1997
due to the increase of the Fund's  investment in an entity that owns a MODU late
in the first quarter of 1997. This increase in net contribution  was offset,  in
part,  by a decrease in lease  revenue of $1.6  million and a decrease in direct
expenses  of  $22,000  during  1998 as a result of the sale of one of the Fund's
MODU in the fourth  quarter of 1997 as part of the original  purchase  agreement
that gave the charterer the option to purchase the MODU.

Railcars:  Railcar lease revenues and direct expenses were $4.0 million and $0.6
million,  respectively,  for the year ended December 31, 1998,  compared to $3.4
million and $0.7 million,  respectively,  during the same period of 1997.  Lease
revenues  increased in the year ended  December  31, 1998,  compared to the same
period of 1997 due to the  purchase of  railcars  in the first  quarter of 1998.
Railcar  expenses  decreased  due to lower running  repairs  required on certain
railcars during 1997, that were not needed during 1998.

Trailers:  Trailer  revenues  and direct  expenses  were $3.9  million  and $0.6
million,  respectively,  for the year ended December 31, 1998,  compared to $3.7
million and $0.4 million,  respectively,  during the same period in 1997.  Lease
revenues  increased  during 1998, due to higher  utilization  earned on trailers
operating in the short-term  rental  facilities when compared to 1997.  Expenses
increased due to repairs  required on certain  trailers during 1998,  which were
not needed in 1997 and due to the purchase of additional trailers.

(b)   Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $21.6 million for the year ended  December 31, 1998
decreased from $23.6 million for the same period in 1997.  Significant variances
are explained as follows:

(i) A $2.6 million decrease in depreciation and amortization  expenses from 1997
levels  resulted from an  approximately  $5.6 million  decrease in  depreciation
expense due to the Fund's  double-declining  balance  depreciation method, which
results  in  greater  depreciation  in the  first  years an asset is  owned,  an
approximately  $1.9 million decrease in depreciation  expense due to the sale of
the aircraft in the second  quarter of 1998, and the sale of the MODU at the end
of 1997.  The decline was  partially  offset by an  approximately  $4.9  million
increase in depreciation  expense from the purchase of equipment during 1998 and
1997.

(ii) A $0.2 million increase in management fees to affiliate reflects the higher
levels of lease revenues in 1998, when compared to 1997.

(iii) A $0.4 million  increase in interest  expense was due to a higher  average
debt balance outstanding during 1998 compared to 1997.

(c)  Net Gain on Disposition of Owned Equipment

Net gain on the  disposition  of equipment for the year ended December 31, 1998,
totaled $2.8 million, and resulted from the sale of an aircraft,  railcars,  and
trailers with an aggregate net book value of $2.6 million,  for proceeds of $5.4
million.  Net gain on the  disposition  of equipment for the year ended December
31, 1997 totaled $1.7 million, and resulted from the sale of trailers and a MODU
with an aggregate net book value of $9.2 million, for net sale proceeds of $10.9
million.

(d)  Minority Interest

Minority  interest  expense  for the  entity in which the Fund  owned a majority
interest  increased  $0.3  million due to an increase in revenue of $0.1 million
offset by a decrease in direct and indirect expenses of $0.2 million during 1998
when compared to 1997.

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

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity method are presented as follows (in thousands of dollars):

                                                       For the Years Ended
                                                         December 31,
                                                       1998             1997
                                                    ----------------------------

  Aircraft, aircraft engines and rotable components    $   3,834      $   1,795
  Marine vessel                                           (1,444 )         (342)
                                                    ----------------------------
    Equity in net income of USPEs                      $   2,390      $   1,453
                                                    ============================

Aircraft,  aircraft engines and rotable components: As of December 31, 1998, the
Fund owned interests in two trusts that each own a commercial  aircraft,  and an
interest  in two  trusts  that  own a total of three  commercial  aircraft,  two
aircraft engines, and a portfolio of aircraft rotables. As of December 31, 1997,
the Fund owned an interest in two trusts that each own four commercial aircraft,
and an interest in two trusts that own a total of three commercial aircraft, two
aircraft engines,  and a portfolio of aircraft  rotables.  During the year ended
December 31, 1998,  lease revenues of $4.3 million and the gain from the sale of
the Fund's interest in two trusts that owned commercial aircraft of $6.3 million
were offset by depreciation, direct and administrative expenses of $6.8 million.
During the year ended  December 31, 1997,  lease revenues and expenses were $5.9
million and $4.2 million,  respectively.  Lease revenues  decreased $1.4 million
due to the  sale  of the  Fund's  investment  in  two  trusts  containing  eight
commercial  aircraft  and a decrease  of $2.0  million due to a lower lease rate
earned on certain  equipment.  The decrease in lease revenues was offset in part
by an increase in lease revenue of $1.8 million due to the Fund's  investment in
two additional  trusts owning a total of two aircraft  during 1998. The increase
in  expenses  was  due  primarily  to  depreciation  on  the  investment  in two
additional trusts during 1998, which was partially offset in part by the sale of
the Fund's interest in the two trusts.

Marine vessel:  As of December 31, 1998 and 1997, the Fund had an interest in an
entity that owns a marine vessel.  Marine vessel revenues and expenses were $0.9
million and $2.3 million,  respectively,  for the year ended  December 31, 1998,
compared to $1.2 million and $1.6 million, respectively,  during the same period
in 1997.  Lease revenues  decreased  primarily due to the marine vessel that the
Fund owns an interest in being  off-hire for 58 days in 1998  compared to 2 days
in the same period in 1997. Expenses increased due to the loss on revaluation of
equipment of $1.0 million for the year ended  December 31, 1998,  which resulted
from the Fund reducing the carrying  value of its interest in an entity owning a
marine vessel to its estimated net realizable value. There was no revaluation of
the carrying value in the interest  owning a marine vessel required during 1997.
The increase in expenses  were offset in part by the  decreases in  depreciation
expense  of  $0.1  million  due to  the  use  of  the  double-declining  balance
depreciation method, which results in greater depreciation in the first years an
asset is owned and reduced repairs and  maintenance  expenses of $0.1 million in
the year ended December 31, 1998, compared to the same period in 1997.

(f)   Net Income (Loss)

As a result of the foregoing,  the Fund's net income for the year ended December
31, 1998 was $4.3  million,  compared to a net loss of $2.1  million  during the
same period of 1997.  The Fund's  ability to  acquire,  operate,  and  liquidate
assets,  secure leases, and re-lease those assets whose leases expire is subject
to many factors,  and the Fund's performance in the year ended December 31, 1998
is not necessarily  indicative of future periods. In the year ended December 31,
1998, the Fund  distributed  $10.0 million to the Class A members,  or $2.00 per
weighted-average Class A unit.

(E)  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, with the exception of a small number of railcars operating in Canada,
is conducted in United States (U.S.)  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 U.S.  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 6 to the  audited  financial  statements  for
information  on the lease  revenues,  net income  (loss),  and net book value of
equipment in various geographic regions.

Revenues and net operating income by geographic  region are impacted by the time
period  the  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 (loss), and net book value of
equipment are expected to change significantly in the future, as assets come off
lease  and  decisions  are  made to  either  redeploy  the  assets  in the  most
advantageous geographic location or sell the assets.

The Fund's  owned  equipment  on lease to  U.S.-domiciled  lessees  consists  of
trailers,  railcars,  and interests in entities that own aircraft.  During 1999,
U.S.  lease  revenues  accounted for 28% of the total lease revenues from wholly
and partially owned equipment,  while net loss accounted for $0.2 million of the
Fund's net loss of $2.4 million. The loss for equipment operated in the U.S. was
due primarily to the double-declining  balance method of depreciation on the two
aircraft that the Fund owns interests,  which results in greater depreciation in
the first years an asset is owned.

The Fund's owned equipment on lease to South American-domiciled lessees consists
of four aircraft.  During 1999, South American lease revenues  accounted for 14%
of the total lease  revenues from wholly and partially  owned  equipment,  while
equipment  operated  in South  America  generated  net  income  of $1.3  million
compared to the Fund's net loss of $2.4 million.

The  Fund's  equipment  on  lease  to  Canadian-domiciled  lessees  consists  of
railcars. Lease revenues in Canada accounted for 5% of total lease revenues from
wholly  and  partially-owned   equipment  while  equipment  operated  in  Canada
generated  net income of $0.5  million  compared  to the Fund's net loss of $2.4
million.

The Fund's interest in a USPE on lease to  European-domiciled  lessees consisted
of aircraft,  aircraft engines,  and aircraft rotables.  All of the equipment on
lease to the  European  lessee  was sold  during  1999  and  European  domiciled
operations  generated net income of $3.1 million compared to the Fund's net loss
of $2.4 million.  The Fund sold its interest in this USPE for a net gain of $3.3
million in 1999.

Two wholly-owned marine vessels,  marine containers,  an investment in an entity
that owns a marine  vessel and an  investment  in an entity  that owned a mobile
offshore drilling unit, which were leased in the rest of the world accounted for
53% of the lease revenues from wholly and  partially-owned  equipment  while the
net loss from equipment operated in this region accounted for a $4.7 million net
loss  compared to Fund's net loss of $2.4 million.  The primary  reason for this
relationship  is that the Fund reduced the carrying  value of two marine vessels
by $3.9 million to reflect their estimated net realizable value.

(F) Effects of Year 2000

As of March 27, 2000, the Fund has not  experienced any material Year 2000 (Y2K)
issues with either its internally  developed software or purchased software.  In
addition,  to date the Fund has not been  impacted by any Y2K problems  that may
have impacted our customers and suppliers.  The amount  allocated to the Fund by
the Manager related to Y2K issues has not been material.  The Manager  continues
to monitor its systems for any potential Y2K issues.

(G)  Inflation

Inflation had no significant  impact on the Fund's operations during 1999, 1998,
or 1997.

(H)  Forward-Looking Information

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

(I)  Outlook for the Future

Several factors may affect the Fund's operating  performance in 2000 and beyond,
including  changes in the  markets for the Fund's  equipment  and changes in the
regulatory environment in which that equipment operates.

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 some 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 make an  evaluation  to reduce  the Fund's
exposure  to those  equipment  markets  in which it  determines  that it  cannot
operate  equipment and achieve  acceptable rates of return.  Alternatively,  the
Manager may make a determination  to enter those  equipment  markets in which it
perceives  opportunities  to profit from  supply-demand  instabilities  or other
market imperfections.

The Fund  intends to use excess cash flow,  if any,  after  payment of expenses,
loan  principal  and  interest  on debt,  and  cash  distributions,  to  acquire
additional  equipment during the first six years of the Fund's  operations which
conclude  December 31, 2002. The Manager  believes that these  acquisitions  may
cause the Fund to generate additional earnings and cash flow for the Fund.

Other factors affecting the Fund's contribution in 2000 and beyond include:

1. Freight rates,  after declining in 1998 due, in part, to the Asian recession,
improved for dry bulk vessels of all sizes during 1999. Total dry bulk trade, as
measured in  deadweight  tons,  is estimated to have grown by  approximately  2%
during 1999,  compared to a flat year in 1998.  Forecasts for 2000 indicate that
bulk trade should continue to grow, albeit at slow rates.

2. In  1999,  one of the  Fund's  anchor  handling  supply  marine  vessels  was
re-leased  at a  significantly  lower rate,  due to soft market  conditions.  If
economic  conditions remain the same, lower re-lease rates are expected to occur
for the Fund's  remaining  anchor  handling marine vessel when the current lease
expires in the year 2000.

3. Rates and  utilization  dropped for oil tanker  vessels  due to the  economic
crisis in Asia.  The demand in 1999 has shown some signs of  recovery,  however,
rate recovery may take two to three years.

4. The demand for covered hopper cars has softened in the market since 1998, and
is expected to continue through 2000. The demand for the other types of railcars
has continued to be high,  however a softening in the market is expected,  which
may lead to lower utilization and lower contribution to the Fund.

Several other factors may affect the Fund's  operating  performance  in 2000 and
beyond, including changes in the markets for the Fund's equipment and changes in
the regulatory environment in which that equipment operates.

(1)  Repricing and Reinvestment Risk

Certain of the Fund's aircraft, marine vessels, railcars, marine containers, and
trailers will be remarketed in 2000 as existing leases expire, exposing the Fund
to some repricing risk/opportunity.  Additionally, the Manager may elect to sell
certain  underperforming  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 the sold or liquidated  equipment  will be redeployed to purchase
additional equipment, as the Fund is in its reinvestment phase.

(2)  Impact of Government Regulations on Future Operations

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. Currently, the Manager has observed rising insurance costs to
operate certain vessels in U.S. ports, resulting from implementation of the U.S.
Oil Pollution Act of 1990. Ongoing changes in the regulatory  environment,  both
in the United States and internationally, cannot be predicted with accuracy, and
preclude  the  Manager  from  determining  the  impact of such  changes  on Fund
operations,  purchases,  or sale  of  equipment.  Under  U.S.  Federal  Aviation
Regulations,  after  December 31, 1999,  no person may operate an aircraft to or
from any airport in the  contiguous  United States unless that aircraft has been
shown to comply with Stage III noise levels. The Fund has Stage II aircraft that
do not meet Stage III requirements. These Stage II aircraft will remain with the
current  lessee,  which  operate  in a country  that does not have  these  noise
restrictions. Furthermore, the Federal Railroad Administration has mandated that
effective  July 1, 2000,  all jacketed and  non-jacketed  tank  railcars must be
re-qualified to insure tank shell integrity.  Tank shell thickness,  weld seams,
and weld attachments must be inspected and repaired if necessary to re-qualify a
tank railcar for  service.  The average  cost of this  inspection  is $1,800 for
non-jacketed tank railcars and $3,600 for jacketed tank railcars,  not including
any necessary repairs.  This inspection is to be performed at the next scheduled
tank test.


<PAGE>


(3)  Additional Capital Resources and Distribution Levels

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 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,  make cash  distributions to limited partners,  make
debt payments,  and increase the Fund's  equipment  portfolio with any remaining
surplus cash available.

Pursuant to the Fifth Amended and Restated  Operating  Agreement of Professional
Lease Management Income Fund I, L.L.C. (the operating agreement),  the Fund will
cease to reinvest surplus cash in additional  equipment beginning in its seventh
year of operations  which commences on January 1, 2003.  Prior to that date, the
Manager intends to continue its strategy of selectively redeploying equipment to
achieve competitive  returns. By the end of the reinvestment period, the Manager
intends to have assembled an equipment portfolio capable of achieving a level of
operating  cash flow for the remaining  life of the Fund  sufficient to meet its
obligations  and sustain a  predictable  level of  distributions  to the Class A
Unitholders.

The Manager will evaluate the level of  distributions  the Fund can sustain over
extended periods of time and, together with other considerations, may adjust the
level  of  distributions  accordingly.  In the  long  term,  the  difficulty  in
predicting market conditions  precludes the Manager from accurately  determining
the impact of changing market conditions on liquidity or distribution levels.

The Fund's  permanent  debt  obligation  begins to mature in December  2000. The
Manager  believes that  sufficient cash flow will be available in the future for
repayment of debt.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Fund's  primary  market risk exposure is that of currency  risk.  72% of the
Fund's total lease revenues from  wholly-and  partially-owned  equipment in 1999
came from  non-United  States  domiciled  lessees.  Most of the  leases  require
payment in United States (U.S.) currency.  If these lessees'  currency  devalues
against the U.S. dollar, the lessees could potentially  encounter  difficulty in
making the U.S. dollar denominated lease payment.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

None.


<PAGE>


                                    PART III

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

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

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

<S>                                      <C>     <C>
Robert N. Tidball                        61      Chairman of the Board, Director, President, and Chief Executive
                                                 Officer, PLM International, Inc.;
                                                 Director, PLM Financial Services, Inc.;
                                                 Vice President, PLM Railcar Management Services, Inc.;
                                                 President, PLM Worldwide Management Services Ltd.

Randall L.-W. Caudill                    52      Director, PLM International, Inc.

Douglas P. Goodrich                      53      Director and Senior Vice President, PLM International, Inc.;
                                                 Director and President, PLM Financial Services, Inc.; President,
                                                 PLM Transportation Equipment Corporation; President, PLM Railcar
                                                 Management Services, Inc.

Warren G. Lichtenstein                   34      Director, PLM International, Inc.

Howard M. Lorber                         51      Director, PLM International, Inc.

Harold R. Somerset                       64      Director, PLM International, Inc.

Robert L. Witt                           59      Director, PLM International, Inc.

Robin L. Austin                          53      Vice President, Human Resources, PLM International, Inc. and PLM
                                                 Financial Services, Inc.

Stephen M. Bess                          53      President, PLM Investment Management, Inc.; Vice President and
                                                 Director, PLM Financial Services, Inc.

Richard K Brock                          37      Vice President and Chief Financial Officer, PLM International,
                                                 Inc. and PLM Financial Services, Inc.

Susan C. Santo                           37      Vice President, Secretary, and General Counsel, PLM
                                                 International, Inc. and PLM Financial Services, Inc.

</TABLE>

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

Randall L.-W.  Caudill was elected to the Board of Directors in September  1997.
He is  President  of  Dunsford  Hill  Capital  Partners,  a San  Francisco-based
financial  consulting firm serving emerging growth companies.  Prior to founding
Dunsford  Hill Capital  Partners,  Mr.  Caudill held senior  investment  banking
positions at Prudential  Securities,  Morgan Grenfell Inc., and The First Boston
Corporation. Mr. Caudill also serves as a director of Northwest Biotherapeutics,
Inc., VaxGen, Inc., SBE, Inc., and RamGen, Inc.

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

Warren G.  Lichtenstein  was elected to the Board of Directors in December 1998.
Mr.  Lichtenstein  is the Chief  Executive  Officer of Steel  Partners II, L.P.,
which is PLM International's  largest  shareholder,  currently owning 16% of the
Company's common stock. Additionally,  Mr. Lichtenstein is Chairman of the Board
of Aydin Corporation,  a NYSE-listed defense  electronics  concern, as well as a
director of Gateway  Industries,  Rose's Holdings,  Inc., and Saratoga  Beverage
Group,  Inc. Mr.  Lichtenstein is a graduate of the University of  Pennsylvania,
where he received a Bachelor of Arts degree in economics.

Howard M.  Lorber was elected to the Board of  Directors  in January  1999.  Mr.
Lorber is President and Chief Operating  Officer of New Valley  Corporation,  an
investment banking and real estate concern. He is also Chairman of the Board and
Chief  Executive  Officer  of  Nathan's  Famous,  Inc.,  a  fast  food  company.
Additionally,  Mr. Lorber is a director of United Capital  Corporation and Prime
Hospitality  Corporation and serves on the boards of several  community  service
organizations.  He is a graduate of Long Island University,  where he received a
Bachelor  of Arts  degree and a Masters  degree in  taxation.  Mr.  Lorber  also
received charter life  underwriter and chartered  financial  consultant  degrees
from the American  College in Bryn Mawr,  Pennsylvania.  He is a trustee of Long
Island University and a member of the Corporation of Babson College.

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

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

Robin  L.  Austin  became  Vice  President,  Human  Resources  of PLM  Financial
Services,  Inc. in 1984, having served in various capacities with PLM Investment
Management,  Inc., including Director of Operations, from February 1980 to March
1984.  From June 1970 to September 1978, Ms. Austin served on active duty in the
United  States Marine Corps and served in the United States Marine Corp Reserves
from 1978 to 1998.  She retired as a Colonel of the United  States  Marine Corps
Reserves  in 1998.  Ms.  Austin  has  served  on the Board of  Directors  of the
Marines'  Memorial  Club  and is  currently  on the  Board of  Directors  of the
International Diplomacy Council.

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

Richard K Brock was appointed Vice President and Chief Financial  Officer of PLM
International  and PLM Financial  Services,  Inc. in January 2000,  after having
served as Acting CFO since June 1999.  Mr. Brock served as Corporate  Controller
of PLM International and PLM Financial Services, Inc. beginning in June 1997, as
Director of Planning and General  Accounting  beginning in February 1994, and as
an  accounting  manager  beginning in September  1991.  Mr. Brock was a division
controller of Learning Tree International,  a technical education company,  from
February 1988 through July 1991.

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

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

ITEM 11. 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,
1999.

ITEM 12. 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 receive
         cash  equal to  their  original  capital  contribution,  the  Manager's
         interest in the  distributions  of the Fund will increase to 25%. As of
         December 31, 1999, 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, 1999.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Transactions with Management and Others

         During  1999,  management  fees to IMI  were  $1.4  million.  The  Fund
         reimbursed  FSI and/or its affiliates  $1.0 million for  administrative
         and data  processing  services  performed  on behalf of the Fund during
         1999.

         During 1999, the USPEs paid or accrued the following fees to FSI or its
         affiliates  (based  on the  Fund's  proportional  share of  ownership):
         management fees - $0.2 million;  and administrative and data processing
         services - $46,000.





<PAGE>


                                     PART IV

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

     (A) 1.   Financial Statements

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

     (B) Reports on Form 8-K

              None.

     (C) Exhibits

      4.     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    Fourth Amended and Restated Warehousing Credit Agreement,  dated as
             of December 15, 1998, with First Union National Bank,  incorporated
             by reference to the Fund's 1998 Annual  Report on Form 10-K/A filed
             with the Securities and Exchange Commission on January 5, 2000.

     10.4    First  amendment to the Fourth  Amended and Restated  Warehouse
             Credit Agreement dated December 10, 1999.

     24.     Powers of Attorney.


<PAGE>


                                   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.


                                     PROFESSIONAL LEASE MANAGEMENT INCOME
Date:  March 27, 2000                FUND I

                                     By:      PLM Financial Services, Inc.
                                              Manager



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



                                     By:      /s/ Richard K Brock
                                              Richard K Brock
                                              Chief Financial Officer

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


*_________________________
  Robert N. Tidball             Director - FSI                  March 27, 2000


*_________________________
  Douglas P. Goodrich           Director - FSI                  March 27, 2000


*_________________________
  Steven M. Bess                Director - FSI                  March 27, 2000





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




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


<PAGE>



                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                          (A Limited Liability Company)
                          INDEX TO FINANCIAL STATEMENTS

                                  (Item 14(a))


                                                                   Page

Independent auditors' report                                         29

Balance sheets as of December 31, 1999 and 1998                      30

Statements of operations for the years ended
     December 31, 1999, 1998 and 1997                                31

Statement of changes in members' equity for the years ended
     December 31, 1999, 1998, and 1997                               32

Statements of cash flows for the years ended
     December 31, 1999, 1998, and 1997                               33

Notes to financial statements                                     34-45


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



<PAGE>


                          INDEPENDENT AUDITORS' REPORT


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


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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Professional Lease Management
Income Fund I, L.L.C.  as of December 31, 1999 and 1998,  and the results of its
operations  and its cash  flows for each of the years in the  three-year  period
ended  December  31,  1999 in  conformity  with  generally  accepted  accounting
principles.




/s/ KPMG LLP
SAN FRANCISCO, CALIFORNIA
March 17, 2000




<PAGE>



               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)
<TABLE>
<CAPTION>



                                                                                         1999                   1998
                                                                                     -------------------------------------
     Assets

     <S>                                                                                       <C>              <C>
     Equipment held for operating leases                                             $    103,709          $    122,626
     Less accumulated depreciation                                                        (45,183)              (44,350)
                                                                                     -------------------------------------
       Net equipment                                                                       58,526                78,276

     Cash and cash equivalents                                                             11,597                 3,720
     Restricted cash                                                                          453                    --
     Accounts receivable, less of allowance for doubtful accounts
       of $65 in 1999 and $43 in 1998                                                       2,007                 1,876
     Investments in unconsolidated special-purpose entities                                 7,717                15,224
     Debt placement fees, less accumulated amortization
         of $52 in 1999 and $34 in 1998                                                       125                   143
     Organization and offering costs, less accumulated amortization
         of $310 in 1998                                                                       --                   132
     Prepaid expenses and other assets                                                        108                   264
                                                                                     -------------------------------------
              Total assets                                                           $     80,533          $     99,635
                                                                                     =====================================

     Liabilities, minority interest, and member's equity

     Liabilities
     Accounts payable and accrued expenses                                           $        458          $        465
     Due to affiliates                                                                        656                   400
     Lessee deposits and reserves for repairs                                               3,821                 3,040
     Note payable                                                                          25,000                25,000
                                                                                     -------------------------------------
       Total liabilities                                                                   29,935                28,905
                                                                                     -------------------------------------

     Minority interest                                                                         --                 5,705

     Members' equity
     Class A members (4,975,321 and 4,999,581 Units at December 31,
         1999 and 1998, respectively)                                                      50,598                64,893
     Class B member                                                                            --                   132
                                                                                     -------------------------------------
         Total members' equity                                                             50,598                65,025
                                                                                     -------------------------------------
          Total liabilities, minority interest, and members' equity                  $     80,533          $     99,635
                                                                                     =====================================
</TABLE>

















                See accompanying notes to financial statements.


<PAGE>



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

<TABLE>
<CAPTION>


                                                                  1999                 1998               1997
                                                             -------------------------------------------------------
  Revenues

  <S>                                                        <C>                 <C>                 <C>
  Lease revenue                                              $       26,113      $       25,149      $     20,833
  Interest and other income                                             347                 393               405
  Net gain on disposition of equipment                                   23               2,759             1,682
                                                             -------------------------------------------------------
    Total revenues                                                   26,483              28,301            22,920
                                                             -------------------------------------------------------

  Expenses

  Depreciation and amortization                                      14,849              16,774            19,347
  Repairs and maintenance                                             2,633               2,024             1,414
  Equipment operating expenses                                        3,142               2,069               995
  Insurance expense to affiliate                                         --                 (14)               24
  Other insurance expense                                               428                 312               419
  Management fees to affiliate                                        1,396               1,368             1,125
  Interest expense                                                    1,833               1,833             1,418
  General and administrative expenses to affiliates                     952                 966               925
  Other general and administrative expenses                             721                 715               729
  Provision for (recovery of) bad debt expense                           38                 (23)               --
  Loss on revaluation of equipment                                    3,931                  --                --
                                                             -------------------------------------------------------
    Total expenses                                                   29,923              26,024            26,396
                                                             -------------------------------------------------------

  Minority interest                                                    (590)               (351)              (29)

  Equity in net income of unconsolidated special-
    purpose entities                                                  1,761               2,390             1,453
                                                             -------------------------------------------------------

  Net income (loss) before cumulative effect of
    accounting change                                                (2,269)              4,316            (2,052)

  Cumulative effect of accounting change                               (132)                 --                --
                                                             -------------------------------------------------------

  Net income (loss)                                          $       (2,401)    $         4,316      $     (2,052)
                                                             =======================================================

  Members' share of net income (loss)

  Class A members                                            $       (4,029)    $         2,595      $     (3,728)
  Class B member                                                      1,628               1,721             1,676
                                                             ------------------------------------------------------
  Total                                                      $       (2,401)     $        4,316      $     (2,052)
                                                             =======================================================
  Net income (loss) per weighted-average
    Class A unit                                             $        (0.81)     $        0.52       $      (0.75)
                                                             =======================================================

  Cash distribution                                          $       11,690      $      11,765       $     11,763
                                                             =======================================================
  Cash distribution per weighted-average
    Class A unit                                             $         1.99      $        2.00       $       2.00
                                                             =======================================================

</TABLE>


                 See accompanying notes to financial statements.


<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                     STATEMENT OF CHANGES IN MEMBERS' EQUITY
              For the Years Ended December 31, 1999, 1998, and 1997
                            (in thousands of dollars)

<TABLE>
<CAPTION>



                                                           Class A              Class B              Total
                                                       ---------------------------------------------------------

  <S>                                                  <C>                  <C>                 <C>
    Members' equity as of December 31, 1996            $       86,024       $         265       $       86,289

  Net income (loss)                                            (3,728)              1,676               (2,052)

  Cash distributions                                           (9,998)             (1,765)             (11,763)
                                                       ---------------------------------------------------------

    Members' equity as of December 31, 1997                    72,298                 176               72,474

  Net income                                                    2,595               1,721                4,316

  Cash distributions                                          (10,000)             (1,765)             (11,765)
                                                        --------------------------------------------------------
    Members' equity as of December 31, 1998                    64,893                 132               65,025

  Net income (loss)                                            (4,029)              1,628               (2,401)

  Purchase of Class A units                                      (336)                 --                 (336)

  Cash distributions                                           (9,930)             (1,760)             (11,690)
                                                       ---------------------------------------------------------
    Members' equity as of December 31, 1999            $       50,598       $          --       $       50,598
                                                       =========================================================



</TABLE>























                 See accompanying notes to financial statements.


<PAGE>



               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)
<TABLE>

     Operating activities                                                       1999           1998           1997
                                                                            -------------------------------------------
     <S>                                                                    <C>            <C>            <C>
     Net income (loss)                                                      $   (2,401)    $    4,316     $   (2,052)
     Adjustments to reconcile net income (loss) to net cash
           provided by operating activities:
       Depreciation and amortization                                            14,849         16,774         19,347
       Loss on revaluation of equipment                                          3,931             --             --
       Net gain on dispositions of equipment                                       (23)        (2,759)        (1,682)
       Cumulative effect of accounting change                                      132             --             --
       Equity in net income of unconsolidated special
           purpose entities                                                     (1,761)        (2,390)        (1,453)
       Changes in operating assets and liabilities:
         Restricted cash                                                          (453)            --            223
         Accounts receivable, net                                                 (131)           173           (513)
         Prepaid expenses and other assets                                         156             77            164
         Accounts payable and accrued expenses                                      (3)          (132)           167
         Due to affiliates                                                         276            115            122
         Lessee deposits and reserve for repairs                                   781          1,321            846
         Minority interest                                                        (676)        (1,008)        (1,425)
                                                                            -------------------------------------------
               Net cash provided by operating activities                        14,677         16,487         13,744
                                                                            -------------------------------------------

     Investing activities
     Payments for purchase of equipment                                        (11,397)       (27,477)       (24,444)
     Equipment acquisition deposits                                                 --             --           (920)
     Investment in and equipment purchased and placed
           in unconsolidated special-purpose entities                               --        (13,917)          (683)
     Liquidation distributions from unconsolidated special-
           purpose entities                                                     14,282         10,385             --
     Distributions from unconsolidated special-purpose entities                  2,173          7,184          4,092
     Proceeds from disposition of equipment                                        168          5,380         10,901
                                                                            -------------------------------------------
              Net cash provided by (used in) investing activities                5,226        (18,445)       (11,054)
                                                                            -------------------------------------------

     Financing activities
     Proceeds from note payable                                                     --             --         25,000
     (Decrease) increase due to affiliates                                          --         (1,736)         1,736
     Cash distributions to Class A members                                      (9,930)       (10,000)        (9,998)
     Cash distributions to Class B member                                       (1,760)        (1,765)        (1,765)
     Purchase of Class A units                                                    (336)            --             --
     Debt placement fees                                                            --             --           (176)
                                                                            -------------------------------------------
           Net cash (used in) provided by financing activities                 (12,026)       (13,501)        14,797
                                                                            -------------------------------------------

     Net increase (decrease) in cash and cash equivalents                        7,877        (15,459)        17,487
     Cash and cash equivalents at beginning of year                              3,720         19,179          1,692
                                                                            -------------------------------------------
                                                                            ===========================================
     Cash and cash equivalents at end of year                               $   11,597     $    3,720     $   19,179
                                                                            ===========================================

     Supplemental information
     Interest paid                                                          $    1,833     $    1,833     $    1,418
                                                                            ===========================================
</TABLE>







                 See accompanying notes to financial statements.


<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

1.   Basis of Presentation

     Organization

     Professional  Lease  Management  Income Fund I, L.L.C.,  a Delaware Limited
     Liability  Company  (Fund) was formed on August 22, 1994,  to engage in the
     business of owning,  leasing,  or otherwise investing in predominately used
     transportation and related equipment. PLM Financial Services, Inc. (FSI) is
     the  Manager  of  the  Fund.  FSI  is  a  wholly-owned  subsidiary  of  PLM
     International, Inc. (PLM International).

     On May 13,  1996,  the Fund ceased its  offering  for Class A Units.  As of
     December 31, 1999, there were 4,975,321 Units outstanding.

     The Fund will  terminate on December 31, 2010,  unless  terminated  earlier
     upon sale of all  equipment or by certain  other  events.  Beginning in the
     Fund's seventh year of operations,  which commences on January 1, 2003, the
     Manager will stop  purchasing  additional  equipment.  Excess cash, if any,
     less reasonable reserves,  will be distributed to the members.  Between the
     eighth  and tenth  years of  operations,  the  Manager  intends to begin an
     orderly liquidation of the Fund's assets.

     The Manager (Class B Member)  controls and 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  initially used to
     purchase  equipment and  established  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  (Loss)  and
     Distributions  Per Class A Unit,  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  operating  agreement  includes  a  redemption   provision.   Upon  the
     conclusion of the 30-month period immediately  following the termination of
     the offering,  which was in November  1998,  the Fund may, at the Manager's
     sole  discretion,  redeem up to 2% of the outstanding  units each year. The
     purchase  price  paid by the  Fund  for  outstanding  Class  A  Units  upon
     redemption will be equal to 105% of the amount Class A Members paid for the
     Class A Units, less the amount of cash  distributions  Class A Members have
     received  relating  to such  Class A  Units.  The  price  may not  bear any
     relationship to the fair market value of a Class A Unit. As of December 31,
     1999,  the  Fund  agreed  to  purchase  approximately  4,000  units  for an
     aggregate price of  approximately  $49,000.  The Manager  anticipates  that
     these units will be purchased in the first and second quarters of 2000. The
     Manager may purchase additional units on behalf of the Fund in the future.

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

     Operations

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



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

1.   Basis of Presentation (continued)

     Accounting for Leases

     The Fund's leasing operations  generally consist of operating leases. Under
     the operating  lease method of accounting,  the leased asset is recorded at
     cost and depreciated  over its estimated  useful life.  Rental payments are
     recorded  as  revenue  over the lease  term as earned  in  accordance  with
     Statement of Financial Accounting Standards No. 13, "Accounting for Leases"
     (SFAS 13). Lease  origination  costs are capitalized and amortized over the
     term of the lease.

     Depreciation and Amortization

     Depreciation  of  transportation  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 15 years for  railcars,  and 12 years for most other types of equipment.
     Certain aircraft are depreciated under the double-declining  balance method
     over the lease term which approximate their economic life. The depreciation
     method is changed to straight-line when annual  depreciation  expense using
     the  straight-line  method exceeds that calculated by the  double-declining
     balance  method.  Debt  placement  fees are amortized  over the term of the
     related loan (see Note 7). 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.

     Transportation Equipment

     In  accordance  with  the  Financial   Accounting  Standards  Board  issued
     Statement No. 121,  "Accounting for the Impairment of Long-Lived Assets and
     for Long-Lived  Assets to Be Disposed Of", the Manager reviews the carrying
     value of the Fund's equipment at least quarterly and whenever circumstances
     indicate  that the  carrying  value of an asset may not be  recoverable  in
     relation to expected future market  conditions for the purpose of assessing
     recoverability  of the recorded amount.  If projected  undiscounted  future
     cash  flows  and  fair  value  are  less  than  the  carrying  value of the
     equipment,  a loss on revaluation is recorded based upon the estimated fair
     value of the asset. Reductions of $3.9 million to the carrying value of two
     marine vessels were required during 1999. Reductions of $1.0 million to the
     carrying  value of the Fund's  interest in an entity owning a marine vessel
     was required during 1998. No reductions were required to the carrying value
     of wholly and partially-owned equipment during 1997.

     Equipment  held for operating  leases is stated at cost less any reductions
     to the carrying value as required by SFAS 121.

     Investments in Unconsolidated Special-Purpose Entities

     The Fund has interests in unconsolidated  special-purpose  entities (USPEs)
     that own transportation equipment. The Fund owned a majority interest in an
     entity that owned a mobile  offshore  drilling unit. In September 1999, the
     Manager amended the  corporate-by-laws  of certain USPEs in which the Fund,
     or any affiliated program, owns an interest greater than 50%. The amendment
     to  the  corporate-by-laws   provided  that  all  decisions  regarding  the
     acquisition and disposition of the investment as well as other  significant
     business  decisions  of  that  investment  would  be  permitted  only  upon
     unanimous consent of the Fund and all the affiliated  programs that have an
     ownership in the investment.  As such, although the Fund may own a majority
     interest in a USPE, the Fund does not control its management and thus it is
     appropriate  that the equity method of accounting be used after adoption of
     the amendment.  As a result of the amendment, as of September 30, 1999, all
     jointly owned equipment in which the Fund owned a majority interest,  which
     had  been   consolidated,   were  reclassified  to  investments  in  USPEs.
     Accordingly,  as of December  31,  1999,  the balance  sheet  reflects  all
     investments in USPEs on an equity basis.



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

1.   Basis of Presentation (continued)

     Investments in Unconsolidated Special-Purpose Entities (continued)

     The  Fund's  interests  in USPEs are  managed  by IMI.  The  Fund's  equity
     interest in the net income  (loss) of USPEs is reflected  net of management
     fees paid or payable to IMI.

     Repairs and Maintenance

     Repair and  maintenance  costs  related to marine  vessels,  railcars,  and
     trailers  are  usually  the  obligation  of the  Fund  and are  accrued  as
     incurred. Costs associated with marine vessel dry-docking are estimated and
     accrued  ratably  over the period  prior to such  dry-docking.  Maintenance
     costs of aircraft and marine  containers  are the obligation of the lessee.
     To meet the  maintenance  requirements  of certain  aircraft  airframes and
     engines,  reserve  accounts are  prefunded by the lessee 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.  In certain  instances,  if the aircraft is sold and there is a
     balance in the reserve account for repairs to that aircraft, the balance in
     the reserve  account is  reclassified  as additional  sales  proceeds.  The
     aircraft  reserve accounts and marine vessel  dry-docking  reserve accounts
     are  included  in the  balance  sheet as lessee  deposits  and  reserve for
     repairs.

     Net Income (Loss) and Distributions per Unit

     The net profits and losses of the Fund are  generally  allocated  1% to the
     Class B  Members  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 1999,  the Manager  received a special
     allocation of income of $1.7 million ($1.6 million in 1998 and $1.8 million
     in 1997). 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 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 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.

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

     Cash  distributions  to Class A  Unitholders  in excess of net  income  are
     considered a return of capital.  Cash  distributions to Class A Unitholders
     of $9.9 million,  $7.4 million,  and $10.0 million in 1999, 1998, and 1997,
     respectively, were deemed to be a return of capital.

     Cash distributions relating to the fourth quarters of 1999, 1998, and 1997,
     of $1.7 million for each year,  were paid during the first quarter of 2000,
     1999, and 1998, respectively.

     Net Income (Loss) Per Weighted-Average Class A Unit

     Net  income  (loss)  per  weighted-average  Class A unit  was  computed  by
     dividing  net  income  (loss)  attributable  to  Class  A  members  by  the
     weighted-average  number of Class A units  deemed  outstanding  during  the
     period.  The  weighted-average  number of Class A units deemed  outstanding
     during  the years  ended  December  31,  1999 and 1998 were  4,982,336  and
     4,999,581, respectively.



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999

1.   Basis of Presentation (continued)

     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 market value due to the short-term nature of the investments.

     Restricted Cash

     As of December  31,  1999,  restricted  cash  represented  lessee  security
     deposits held by the Fund.

     Comprehensive Income

     The Fund's net income (loss) is equal to comprehensive income for the years
     ended December 31, 1999, 1998, and 1997.

     Reclassification

     Certain amounts in the 1998 financial  statements have been reclassified to
     conform to the 1999 presentation.

2.   Manager and Transactions with Affiliates

     An  officer of PLM  Securities  Corp.,  a  wholly-owned  subsidiary  of the
     Manager,  contributed  the $100 of the Fund's  initial  capital.  Under the
     equipment  management  agreement,   IMI,  subject  to  certain  reductions,
     receives a monthly management fee attributable to either owned equipment or
     interests  in  equipment  owned by the USPEs equal to the lesser of (i) the
     fees that  would be  charged  by an  independent  third  party for  similar
     services for similar  equipment  or (ii) the sum of (A) 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.  Fund  management  fees of $0.2
     million  were  payable at  December  31, 1999 and 1998,  respectively.  The
     Fund's  proportional  share  of the  USPE's  management  fee  payable  were
     $31,000,  and $40,000 as of December 31, 1999 and 1998,  respectively.  The
     Fund's  proportional  share of USPE management fees was $0.2 million,  $0.2
     million,  and $0.3 million during 1999, 1998, and 1997,  respectively.  The
     Fund reimbursed FSI $1.0 million,  $1.0 million,  and $0.9 million for data
     processing expenses and other  administrative  services performed on behalf
     of the Fund during 1999, 1998, and 1997. The Fund's  proportional  share of
     the USPE's  administrative and data processing expenses reimbursable to FSI
     was 46,000,  $0.1 million and $0.1 million  during  1999,  1998,  and 1997,
     respectively.

     The Fund  paid  $2,000  and  $24,000  in 1998 and  1997,  respectively,  to
     Transportation  Equipment  Indemnity  Company,  Ltd. (TEI),  which provided
     marine insurance coverage for Fund equipment and other insurance  brokerage
     services.  TEI was an affiliate of the Manager. No fees for owned equipment
     were  paid to TEI in  1999.  During  1998,  the  Fund  received  a  $16,000
     loss-of-hire insurance refund from TEI due to lower claims from the insured
     Fund and other insured affiliated  programs.  The Fund's proportional share
     of USPE's marine insurance  coverage paid to TEI was $10,000 during 1997. A
     substantial  portion  of this  amount was paid to  third-party  reinsurance
     underwriters  or was  placed  in risk  pools  managed  by TEI on  behalf of
     affiliated programs and PLM International which provide threshold coverages
     on marine  vessel loss of hire and hull and machinery  damage.  All pooling
     arrangement  funds  are  either  paid out to  cover  applicable  losses  or
     refunded  pro rata by TEI.  The  Fund's  proportional  share of a refund of
     $5,000 was received during 1998, from lower  loss-of-hire  insurance claims
     from the insured USPEs and other insured affiliated  programs.  During 1999
     and 1998, TEI did not provide the same level of insurance coverage as had

<PAGE>



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

2.   Manager and Transactions with Affiliates (continued)

     been provided during 1997.  These services were provided by an unaffiliated
     third party. PLMI liquidated TEI during the first quarter of 2000.

     Transportation Equipment Corporation (TEC) will also 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
     certainconditions are met. TEC is a wholly-owned subsidiary of the Manager.
     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.

     As of December 31, 1999,  approximately 39% of the Fund's trailer equipment
     was in rental facilities operated by PLM Rental,  Inc., an affiliate of the
     Manager,  doing  business as PLM  Trailer  Leasing.  Rents are  reported as
     revenue in accordance with SFAS No. 13. Direct expenses associated with the
     equipment  are charged  directly  to the Fund.  An  allocation  of indirect
     expenses of the rental yard operations is charged to the Fund monthly.

     The  Fund  had  an  interest  in  certain  equipment  in  conjunction  with
     affiliated programs during 1999, 1998, and 1997 (see Note 4).

     The balance  due to  affiliates  as of December  31,  1999,  included  $0.2
     million due to FSI and its affiliates for management  fees and $0.5 million
     due to affiliated  USPEs.  The balance due to affiliates as of December 31,
     1998,  included $0.2 million due to FSI and its  affiliates  for management
     fees.

3.   Equipment

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

  Equipment Held for Operating Leases                   1999              1998
  -----------------------------------          ---------------------------------

  Marine vessels                               $       37,256    $       46,957
  Aircraft                                             20,605            20,605
  Railcars                                             19,710            19,920
  Trailers                                             16,196            14,788
  Marine containers                                     9,942                --
  Mobile offshore drilling unit                            --            20,356
                                               ---------------------------------
                                                      103,709           122,626
  Less accumulated depreciation                       (45,183)          (44,350)
                                               ---------------------------------
    Net equipment                              $       58,526    $       78,276
                                               =================================

     Revenues  are earned  under  operating  leases.  The  majority of rents for
     railcars are based on a fixed rate; in some cases they are based on mileage
     traveled, rents for all other equipment are based on fixed rates.

     During September 1999,  certain equipment in which the Fund held a majority
     ownership was reclassified to investments in USPEs (see Note 4).



<PAGE>



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999

3.   Equipment (continued)

     Equipment  held for operating  leases is stated at cost less any reductions
     to the carrying value as required by SFAS 121.  During 1999,  reductions to
     the carrying value of marine vessels of $3.9 million were required.

     As of December 31, 1999,  all owned  equipment  in the Fund  portfolio  was
     either on lease or operating in  PLM-affiliate  short-term  trailer  rental
     yards except for six railcars with a carrying value of $0.1 million.  As of
     December 31, 1998, all owned  equipment in the Fund portfolio was either on
     lease or operating in PLM-affiliated short-term trailer rental yards except
     for 3 railcars with a carrying value of $37,000.

     During the year ended December 31, 1999,  the Fund  purchased  4,430 marine
     containers  and 65 dry trailers for a total cost of $11.4  million.  During
     the year ended  December 31,  1998,  the Fund  purchased  39 railcars,  two
     marine vessels (a deposit of $0.9 million was paid in December 1997 for the
     purchase of one of these marine vessels) and a hush kit for an aircraft for
     a total of $28.4 million.

     During  the year  ended  December  31,  1999,  the Fund sold  trailers  and
     railcars with an aggregate net book value of $0.1 million,  for proceeds of
     $0.2  million.  During the year ended  December 31, 1998,  the Fund sold an
     aircraft,  trailers and railcars with a net book value of $2.6 million, for
     proceeds of $5.4 million.

     All owned  equipment on lease is being  accounted for as operating  leases.
     Future minimum rent under noncancelable operating leases as of December 31,
     2000 for the  owned  equipment  during  each of the  next  five  years  are
     approximately $8.7 million,  2000; $7.0 million,  2001; $5.6 million, 2002;
     $1.9  million,  2003,  $1.6  million,  2004  and  $1.5  million,  2005  and
     thereafter.  Per diem and short-term rentals consisting of utilization rate
     lease payments included in revenues amounted to approximately $3.3 million,
     $3.5 million and $4.0 million in 1999, 1998 and 1997, respectively.

4.   Investments in Unconsolidated Special Purpose Entities

     The Fund owns equipment jointly with affiliated programs.

     In September  1999, the Manager  amended the  corporate-by-laws  of certain
     USPEs in which  the  Fund,  or any  affiliated  program,  owns an  interest
     greater than 50%. The amendment to the corporate-by-laws  provided that all
     decisions  regarding the  acquisition  and disposition of the investment as
     well as other  significant  business  decisions of that investment would be
     permitted  only upon  unanimous  consent of the Fund and all the affiliated
     programs that have an ownership in the  investment.  As such,  although the
     Fund may own a majority  interest in a USPE,  the Fund does not control its
     management and thus it is appropriate  that the equity method of accounting
     be used after adoption of the amendment.  As a result of the amendment,  as
     of September 30, 1999, all jointly owned  equipment in which the Fund owned
     a majority  interest,  which had been  consolidated,  were  reclassified to
     investments  in USPEs.  Accordingly,  as of December 31, 1999,  the balance
     sheet reflects all investments in USPEs on an equity basis.



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999

4.   Investments in Unconsolidated Special Purpose Entities (continued)

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

                                                                                 1999                     1998
                                                                          ---------------------------------------------

     <S>                                                                   <C>                      <C>
     50% interest in a trust owning an MD-82 commercial aircraft           $         4,784          $         6,441
     50% interest in a trust owning an MD9-82 stage III commercial
               aircraft                                                              1,773                    3,342
     50% interest in a trust owning a cargo marine vessel                            1,024                    1,265
     25% interest in a trust that owned four 737-200A stage II
               commercial aircraft                                                      76                      137
     25% interest in a trust that owned four 737-200A stage II
               commercial aircraft                                                      60                      110
     33% interest in two trusts that owned a total of three
               737-200A stage II commercial aircraft, two stage II
               aircraft engines, and a portfolio of aircraft rotables                   --                    3,929
                                                                          ---------------------------------------------
         Net investments                                                   $         7,717          $        15,224
                                                                          =============================================
</TABLE>

     As of December 31, 1999 and 1998, all jointly-owned equipment in the Fund's
     USPE portfolio was on lease.

     During  1999,  the Manager  sold the Fund's 61%  interest in an entity that
     owned a mobile  offshore  drilling unit. The Fund's interest in this entity
     was  sold for  proceeds  of $7.2  million  for its net  investment  of $7.2
     million. Also, during 1999, the Manager sold the Fund's 33% interest in two
     trusts  that owned a total of three  Boeing  737-200A  stage II  commercial
     aircraft,  two stage II  aircraft  engines,  and a  portfolio  of  aircraft
     rotables.  The trusts were sold for  proceeds  of $7.1  million for its net
     investment of $3.8 million.

     The  Fund had  interests  in two  USPEs  that own  multiple  aircraft  (the
     Trusts).  These Trusts contain  provisions under certain  circumstances for
     allocating specific aircraft to the beneficial owners.  During 1998, in one
     of these Trusts, the Fund sold the commercial aircraft assigned to it, with
     a net book value of $2.3 million, for proceeds of $5.9 million. Also during
     the same period,  in another trust,  the Fund sold the commercial  aircraft
     assigned to it, with a net book value of $1.8 million, for proceeds of $4.5
     million.

     During  1998,  the Fund  purchased  a 50%  interest  in a MD-82  stage  III
     commercial aircraft for $6.8 million (a deposit of $0.7 million was paid in
     December  of 1997)  and a 50%  interest  in a MD-82  stage  III  commercial
     aircraft for $7.8 million.

     The following summarizes the financial  information for the special-purpose
     entities  and the Fund's  interests  therein as of and for the years  ended
     December 31, 1999, 1998, and 1997 (in thousands of dollars):
<TABLE>
<CAPTION>


                               1999                        1998                         1997
                             ---------                   ----------                   ----------
                                        Net                          Net                          Net
                         Total      Interest of       Total      Interest of      Total        Interest
                         USPEs          Fund          USPEs          Fund         USPEs         of Fund
                     -------------------------    -------------------------------------------------------

<S>                  <C>             <C>          <C>         <C>              <C>         <C>
Net investments      $   26,320      $    7,717   $  35,630   $       15,224   $  59,369   $      16,486
Lease revenues            4,314           3,124      13,601            5,200      24,283           7,125
Net income                7,282           1,761      14,377            2,390      10,831           1,453


</TABLE>


<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999

4.   Investments in Unconsolidated Special Purpose Entities (continued)

     All partially  owned equipment on lease is being accounted for as operating
     leases.  Future  minimum rent under  noncancelable  operating  leases as of
     December 31, 1999 for the partially owned equipment during each of the next
     five years are approximately $2.1 million,  2000; $2.1 million,  2001; $2.1
     million,  2002; $0.9 million,  2003, $0.9 million,  2004, and $0.9 million,
     2005 and thereafter.

5.   Operating Segments

     The Fund operates or operated in five primary operating segments:  aircraft
     leasing,  mobile  offshore  drilling  unit (MODU)  leasing,  marine  vessel
     leasing,  trailer  leasing,  and railcar  leasing.  Each equipment  leasing
     segment engages in short-term to mid-term  operating leases to a variety of
     customers.

     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  following  tables  present a summary  of the  operating  segments  (in
     thousands of dollars):
<TABLE>
<CAPTION>

                                                                 Marine
                                          Aircraft    MODU       Vessel   Trailer    Railcar     All
    For the Year Ended December 31, 1999  Leasing    Leasing    Leasing   Leasing    Leasing   Other<F1>1   Total
    ------------------------------------  -------    -------    -------   -------    -------   ------       -----

    Revenues
      <S>                                  <C>       <C>        <C>       <C>        <C>       <C>        <C>
      Lease revenue                        $ 4,057   $  3,560   $  9,501  $  3,864   $  3,804  $  1,327   $ 26,113
      Interest income and other                 38         --          5        --          9       295        347
      Net gain on disposition
        of equipment                            --         --         --         8         15        --         23
                                          -------------------------------------------------------------------------
        Total revenues                       4,095      3,560      9,506     3,872      3,828     1,622     26,483

    Costs and expenses
      Operations support                        29         66      4,511       888        625        84      6,203
      Depreciation and amortization          2,571      1,748      6,012     1,481      1,739     1,298     14,849
      Interest expense                          --         --         --        --         --     1,833      1,833
      Management fees to affiliate             203        178        475       224        250        66      1,396
      General and administrative expenses       34         75         59       758         71       676      1,673
      Provision for bad debt expense            --         --         --        25         13        --         38
      Loss on revaluation of equipment          --         --      3,931        --         --        --      3,931
                                          -------------------------------------------------------------------------
        Total costs and expenses             2,837      2,067     14,988     3,376      2,698     3,957     29,923
                                          -------------------------------------------------------------------------
    Minority interest                           --       (590)        --        --         --        --       (590)
    Equity in net income (loss) of USPEs     1,836        206       (281)       --         --        --      1,761
                                          -------------------------------------------------------------------------
    Net income (loss) before cumulative
    effect
        of accounting change                 3,094      1,109     (5,763)      496      1,130    (2,335)    (2,269)
    Cumulative effect of accounting             --         --         --        --         --      (132)      (132)
    change
                                          =========================================================================
        Net income (loss)                  $ 3,094   $  1,109   $ (5,763) $    496   $  1,130  $ (2,467 ) $ (2,401)
                                          =========================================================================

    Total assets as of December 31, 1999   $ 10,952  $     --   $ 27,407  $  9,513   $ 11,339  $ 21,322   $ 80,533
                                          =========================================================================


<FN>
<F1>
---------------------------
1    Includes interest income and costs not identifiable to a particular segment
such as amortization expense, interest expense, certain operations support, and
general and administrative expenses.  Also includes the lease revenue of $1.3
million, depreciation expense of $1.3 million, and management fee of $0.2
million for marine containers.
</FN>
</TABLE>

<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

5.       Operating Segments (continued)
<TABLE>
<CAPTION>

                                                                 Marine
                                          Aircraft    MODU       Vessel   Trailer    Railcar     All
    For the Year Ended December 31, 1998  Leasing    Leasing    Leasing   Leasing    Leasing   Other<F2>2   Total
    ------------------------------------  -------    -------    -------   -------    -------   ------       -----

    Revenues
      <S>                                  <C>       <C>        <C>       <C>        <C>       <C>        <C>
      Lease revenue                        $ 4,567   $  4,046   $  8,684  $  3,894   $  3,958  $     --   $ 25,149
      Interest income and other                 13         --         13        --         19       348        393
      Net gain on disposition
        of equipment                         2,710         --         --         9         40        --      2,759
                                          -------------------------------------------------------------------------
        Total revenues                       7,290      4,046      8,697     3,903      4,017       348     28,301

    Expenses
      Operations support                        42        110      2,890       631        634        84      4,391
      Depreciation and amortization          4,624      2,798      5,490     1,738      2,018       106     16,774
      Interest expense                          --         --         --        --         --     1,833      1,833
      Management fee                           213        202        434       256        263        --      1,368
      General and administrative expenses       67         47        121       805         63       578      1,681
      Provision for (recovery of) bad            2         --         --        11        (36)       --        (23)
    debt
                                          -------------------------------------------------------------------------
        Total costs and expenses             4,948      3,157      8,935     3,441      2,942     2,601     26,024
                                          -------------------------------------------------------------------------
    Minority interest                           --       (351)        --        --         --        --        (35)
    Equity in net income (loss) of USPEs     3,834         --     (1,444)       --         --        --      2,390
                                          -------------------------------------------------------------------------
                                          =========================================================================
    Net income (loss)                      $ 6,176   $    538   $ (1,682) $    462   $  1,075  $ (2,253)  $  4,316
                                          =========================================================================

    Total assets as of December 31, 1998   $20,387   $ 14,392   $ 37,916  $  8,682   $ 13,109  $  5,149   $ 99,635
                                          =========================================================================


                                                                 Marine
                                          Aircraft    MODU       Vessel   Trailer    Railcar     All
    For the Year Ended December 31, 1997  Leasing    Leasing    Leasing   Leasing    Leasing    Otherz<F2>2 Total
    ------------------------------------  -------    -------    -------   -------    -------    ------      -----

    Revenues
      Lease revenue                        $ 5,037   $  5,059   $  3,690  $  3,670   $  3,377  $     --   $ 20,833
      Interest income and other                 14         --         --        --          1       390        405
      Net gain on disposition
        of equipment                            --      1,675         --         7         --        --      1,682
                                          -------------------------------------------------------------------------
        Total revenues                       5,051      6,734      3,690     3,677      3,378       390     22,920

    Expenses
      Operations support                        43         70      1,606       420        666        47      2,852
      Depreciation and amortization          8,007      4,670      2,363     2,059      2,143       105     19,347
      Interest expense                          --         --         --        --         --     1,418      1,418
      Management fee                           203        253        185       248        216        20      1,125
      General and administrative expenses       21         85         72       861        129       486      1,654
                                          -------------------------------------------------------------------------
        Total costs and expenses             8,274      5,078      4,226     3,588      3,154     2,076     26,396
                                          -------------------------------------------------------------------------
    Minority interest                           --        (29)        --        --         --        --        (29)
    Equity in net income (loss) of USPEs     1,795         --       (342)       --         --        --      1,453
                                          -------------------------------------------------------------------------
    Net income (loss)                      $ (1,428) $  1,627   $   (878) $     89   $    224  $ (1,686)  $ (2,052)
                                          =========================================================================

    Total assets as of December 31, 1997   $ 26,291  $ 16,808   $ 19,657  $ 10,432   $ 14,150  $ 21,186   $ 108,524
                                          =========================================================================
<FN>
<F2>
------------------
2    Includes interest income and costs not identifiable to a particular segment
such as amortization expense, interest expense, certain operations support, and
general and administrative epxenses.
</FN>
</TABLE>




<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

6.   Geographic Information

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

     The Fund leases its aircraft, railcars and trailers to lessees domiciled in
     four geographic regions: United States, South America,  Canada, and Europe.
     The marine vessels, mobile offshore drilling unit and marine containers are
     leased to multiple  lessees in different  regions who operate the equipment
     worldwide.

     The following table sets forth lease revenue  information by region for the
     owned  equipment and  investments in USPEs for the years ended December 31,
     are as follows (in thousands of dollars):
<TABLE>
<CAPTION>

                                        Owned Equipment                           Investments in USPEs
                          ---------------------------------------------------------------------------------------
           Region            1999            1998            1997           1999           1998           1997
    -------------------------------------------------------------------------------------------------------------

<S>                       <C>             <C>            <C>             <C>            <C>            <C>
      United States       $   6,187       $   6,172      $    6,296      $   2,123      $   1,783      $      --
      South America           4,057           4,567           4,057             --             --             --
      Canada                  1,480           1,680           1,731             --            945          2,405
      Europe                     --              --              --             --          1,560          3,530
      Rest of the world      14,389          12,730           8,749          1,001            912          1,190
                          =======================================================================================
       Lease revenues     $  26,113       $  25,149      $   20,833      $   3,124      $   5,200      $   7,125
                          =======================================================================================
</TABLE>

     The  following  table sets forth income  (loss)  information  by region for
     owned  equipment and  investments in USPEs for the years ended December 31,
     are as follows (in thousands of dollars):
<TABLE>
<CAPTION>

                                       Owned Equipment                           Investments in USPEs
                           -------------------------------------------------------------------------------------
            Region            1999           1998           1997          1999           1998           1997
     -----------------------------------------------------------------------------------------------------------

       <S>                 <C>            <C>            <C>          <C>            <C>
       nited States       $    1,150      $  1,070       $    214     $   (1,317)     $  (3,037)     $      --
       South America           1,258         2,342         (2,446)            --             --             --
       Canada                    476           466            (28)            22          6,718            142
       Europe                     --            --             --          3,131            153          1,653
       Rest of the world      (4,598)          300          1,204            (75)        (1,444)          (342)
                           -------------------------------------------------------------------------------------
     Regional
         Income (loss)        (1,714)        4,178         (1,056)         1,761          2,390          1,453
       Administrative
         and other            (2,448)       (2,252)        (2,449)           --             --             --
                           -------------------------------------------------------------------------------------
                           =====================================================================================
     Net income (loss)     $  (4,162)     $  1,926       $ (3,505)    $    1,761      $   2,390      $   1,453
                           =====================================================================================

</TABLE>


     The  net  book  value  of  owned  assets  and  the  net  investment  in the
     unconsolidated  special-purpose entities at December 31, are as follows (in
     thousands of dollars):
<TABLE>
<CAPTION>

                                           Owned Equipment                            Investments in USPEs
                              ------------------------------------------    ------------------------------------------
               Region            1999           1998           1997            1999           1998           1997
       ---------------------------------------------------------------------------------------------------------------

         <S>                  <C>            <C>            <C>              <C>           <C>            <C>
         United States        $  14,432      $  15,751      $  24,901        $  6,559      $   9,782      $      --
         South America            3,857          6,429         10,022              --             --          4,006
         Canada                   5,450          6,040          2,102             136            248          4,614
         Europe                      --             --             --              --          3,929          5,180
         Rest of the world       34,787         50,056         32,145           1,022          1,265          2,686
                              ========================================================================================
       Net book value         $  58,526      $  78,276      $  69,170        $  7,717      $  15,224      $  16,486
                              ========================================================================================
</TABLE>



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

7.   Notes Payable

     In December  1996,  the Fund  entered  into an  agreement  to issue a $25.0
     million  long-term  note  to an  institutional  investor.  The  note  bears
     interest  at a fixed  rate of 7.33% per annum and has a final  maturity  in
     2006.  Interest  on the note is  payable  semi-annually.  The note  will be
     repaid in five  principal  payments of $3.0  million on December  31, 2000,
     2001,  2002,  2003, and 2004 and two principal  payments of $5.0 million on
     December 31, 2005,  and 2006.  The agreement  requires the Fund to maintain
     certain financial  covenants related to fixed-charge  coverage The loan was
     funded in March 1997. The Manager estimates,  based on recent transactions,
     that the fair value of the $25.0 million fixed-rate note is $25.7 million.

     The Manager has entered into a joint $24.5  million  credit  facility  (the
     Committed Bridge Facility) on behalf of the Fund, PLM Equipment Growth Fund
     VI (EGF VI) and PLM  Equipment  Growth & Income  Fund VII (EGF  VII),  both
     affiliated investment programs; and TEC Acquisub, Inc. (TECAI), an indirect
     wholly-owned  subsidiary  of the  Manager,  which  may be used  to  provide
     interim  financing of up to (i) 70% of the  aggregate  book value or 50% of
     the  aggregate  net fair market  value of eligible  equipment  owned by the
     Fund,  plus (ii) 50% of unrestricted  cash held by the borrower.  The Fund,
     EGF VI, EGF VII, and TECAI  collectively  may borrow up to $24.5 million of
     the  Committed  Bridge  Facility.  Outstanding  borrowings  by one borrower
     reduce  the  amount  available  to each of the  other  borrowers  under the
     Committed Bridge Facility.  The Committed Bridge Facility also provides for
     a $5.0  million  Letter  of Credit  Facility  for the  eligible  borrowers.
     Individual  borrowings may be outstanding  for no more than 179 days,  with
     all advances due no later than June 30,  2000.  Interest  accrues at either
     the prime rate or adjusted LIBOR plus 1.625% at the  borrower's  option and
     is set at the  time of an  advance  of  funds.  Borrowings  by the Fund are
     guaranteed by the Manager.  As of December 31, 1999,  no eligible  borrower
     had any outstanding borrowings under this facility. The Manager believes it
     will be able to renew the Committed  Bridge  Facility  upon its  expiration
     with similar terms as those in the current Committed Bridge Facility.

8.   Concentrations of Credit Risk

     The  Fund's  customers  that  accounted  for  10%  or  more  of  the  total
     consolidated revenues for the owned equipment and partially owned equipment
     during  1999,  1998,  and 1997  were  TAP Air  Portugal  (12% in 1997)  and
     Canadian Airlines  International  (11% in 1997). No single lessee accounted
     for more than 10% of the consolidated  revenues for the year ended December
     31, 1999 or 1998. In 1999, however, Casino Express Air purchased the Fund's
     33%  interest  in two trusts  that owned a total of three  Boeing  737-200A
     stage  II  commercial  aircraft,  two  stage  II  aircraft  engines,  and a
     portfolio of aircraft rotables and the gain from the sale accounted for 10%
     of total  consolidated  revenues from wholly and partially owned equipment.
     In 1998, Triton Aviation Services, Ltd. purchased three commercial aircraft
     from  the  Fund and the  gain  from  the  sale  accounted  for 23% of total
     consolidated  revenues from wholly and partially owned equipment.  In 1997,
     Hercules Rig  Corporation,  also a lessee,  purchased  the mobile  offshore
     drilling unit that they were leasing from the Fund.  The lease revenues and
     the gain from the sale  accounted  for 11% of total  consolidated  revenues
     during 1997.

     As of December  31, 1999 and 1998,  the  Manager  believes  the Fund had no
     significant  concentrations  of credit  risk  that  could  have a  material
     adverse effect on the Fund.



<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1999

9.   Income Taxes

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

     As of December 31, 1999,  the federal income tax basis were higher than the
     financial  statement  carrying  values of certain assets and liabilities by
     approximately  $31.3 million,  primarily due to differences in depreciation
     methods,  equipment  reserves,  provisions for bad debts,  lessee's prepaid
     deposits, and the tax treatment of syndication costs.

10.  Cumulative Effect of Accounting Change

     In April 1998,  the  American  Institute of  Certified  Public  Accountants
     issued  Statement  of Position  98-5,  "Reporting  on the Costs of Start-Up
     Activities,"  which  requires  costs  related to start-up  activities to be
     expensed as incurred.  The statement  requires that initial  application be
     reported as a cumulative  effect of a change in accounting  principle.  The
     Fund adopted this statement during the first quarter of 1999, at which time
     it took a $0.1  million  charge,  related to start-up  costs of Fund.  This
     charge had the effect of reducing net income per  weighted-average  Class A
     unit by $0.02 for the year ended December 31, 1999.

11.  Subsequent Event

     During  January  2000,  the Fund  purchased  a group of  trailers  for $0.2
     million.  In addition,  the Fund purchased a group of marine containers for
     $4.8 million  during  February  2000.  Also,  the Fund purchased a group of
     marine containers for $5.0 during March 2000.








                     (This space intentionally left blank.)

<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                                INDEX OF EXHIBITS


  Exhibit                                                                Page

    4.     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    Fourth Amended and restated Warehousing Credit Agreement,
           dated as of December 15, 1998, with First Union National Bank   *

   10. 4   First amendment to the Fourth Amended and Restated Warehouse
           Credit Agreement dated December 10, 1999.                    47-51

   24.     Powers of Attorney.                                          52-54





--------------------

* Incorporated by reference. See page 26 of this report.