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


         [X]      Annual  Report   Pursuant  to  Section  13  or  15(d)  of  the
                  Securities  Exchange  Act of 1934 For the  fiscal  year  ended
                  December 31, 1996.

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

                       Commission file number 33-83216-01
                             -----------------------



               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 37

Total number of pages in this report:  41



<PAGE>


                                     PART I
ITEM 1.  BUSINESS

(A)  Background

     Professional  Lease  Management  Income Fund I, L.L.C.,  a Delaware Limited
Liability  Company  (Fund I or the Company)  was formed on August 22,  1994,  to
purchase,  lease,  charter,  or otherwise invest in, a diversified  portfolio of
long-lived,  low  obsolescence  capital  equipment that is  transportable by and
among  prospective  users (the  Equipment).  The  securities  represent  limited
liability company interests (the Class A Units) which are offered to the public.
The  Company's  offering  became  effective on January 23, 1995.  PLM  Financial
Services,  Inc.  (FSI) is the Manager of the Company and is the initial  Class B
Member.  The purchase price of the Class A Units was $20.00 per Class A Unit. On
May 13, 1996, the Company ceased its offering for Class A Units  ($100,000,000).
As of December 31, 1996, there were 4,999,581 Units outstanding.

The primary objectives of the Company are:

     (i)Investment  in  and  leasing  of  capital  equipment:  to  invest  in  a
diversified  leasing  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;

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

while providing:

     (iii) Cash  distributions:  to generate  cash  distributions,  which may be
substantially tax-deferred (i.e., distributions which are not subject to current
taxation) during the early years of the Company,  to investors  beginning in the
month after the minimum number of Class A Units were sold a portion of which may
represent a return of an investor's investment; and

     (iv)Growth  potential  through  reinvestment:  to  increase  the  Company's
revenue base by  reinvesting a portion of its operating  cash flow in additional
Equipment  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  Company's
portfolio does not mean that in all cases the Company's aggregate net income and
distributions will increase upon the reinvestment of operating cash flow.

     Between  the eighth  and tenth  years of  operations  of the  Company,  the
Manager  intends to begin the  dissolution  and liquidation of the Company in an
orderly  fashion,  unless the Company is terminated  earlier upon sale of all of
the equipment or by certain other events.  However, under certain circumstances,
the term of the Company  may be  extended.  In no event will the Company  extend
beyond December 31, 2010.


<PAGE>


     Table 1, below, lists cumulative  offering proceeds,  the cost of equipment
in the  Company's  portfolio,  and the  cost of  investments  in  unconsolidated
special purpose entities, at December 31, 1996:
<TABLE>

                                     TABLE 1

Use of proceeds (through December 31, 1996)

Total gross offering proceeds:                                  $    99,991,620

Equipment purchases:

<CAPTION>

Units                Type                                           Manufacturer                          Cost
-----------------------------------------------------------------------------------------------------------------------
Owned equipment held for operating leases:


   <S>   <C>                                         <C>                                            <C>            
     1   Bulk carrier marine vessel                  Hitachi Shipbuilding & Engineering Co.         $    12,256,531
     5   737-200A Stage II Commercial
            aircraft                                 Boeing                                              24,605,000
   246   Boxcars                                     Various                                              4,971,660
   325   Pressurized tank cars                       Various                                              8,489,898
   100   Covered hopper railcars                     Various                                              5,414,500
   181   Over the Road Refrigerated Trailers         Various                                              7,824,482
   450   Piggyback Trailers                          Various                                              6,771,028
                                                                                                    -------------------

         Total equipment                                                                            $   70,333,099<F1>
                                                                                                    ===================

Investments in unconsolidated special purpose entities:

   33%   Two trusts consisting of:
           Three 737-200A Stage II
              commercial aircraft                    Boeing                                              9,003,825<F2>
           Two aircraft engines                      Pratt Whitney                                         373,296<F2>
           Portfolio of rotable components           Various                                               621,879<F2>
   25%   Trust consisting of four 737-200A
           Stage II commercial aircraft              Boeing                                              5,610,000<F2>
   17%   Trust consisting of six 737-200A
           Stage II commercial aircraft              Boeing                                              4,300,000<F2>
   50%   Container feeder marine vessel              O. C. Staalskibsvaerft A/F                          3,750,000<F3>
   35%   Mobile offshore drilling unit               AT & CH de France                                   7,000,000<F4>
                                                                                                    -------------------

         Total investments                                                                          $   30,659,000<F1>
                                                                                                    ===================
<FN>

<F1> Includes  proceeds from capital  contributions  and operations  invested in
     equipment. Includes costs capitalized, subsequent to the date of purchase.

<F2> Jointly owned by Fund I and affiliated partnerships.

<F3> Jointly owned by Fund I and an affiliated partnership.

<F4> Jointly owned by Fund I, affiliated partnerships, and TEC Acquisub, Inc.

</FN>

</TABLE>

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

     The lessees of the  equipment  include,  but are not  limited to:  Canadian
Airlines,  Transportation Airline Portugal, and Norfolk Southern. As of December
31, 1996, all of the equipment was on lease except for 14 railcars.

(B)  Management of Company Equipment

The  Company  has  entered  into an  equipment  management  agreement  with  PLM
Investment  Management,  Inc.  (IMI), a wholly-owned  subsidiary of FSI, for the
management  of  equipment.  IMI has agreed to perform all services  necessary to
manage the  transportation  equipment on behalf of the Company and to perform or
contract  for  the  performance  of all  obligations  of the  lessor  under  the
Company's  leases.  In  consideration  for  its  services  and  pursuant  to the
Operating  Agreement,  IMI will be entitled to a monthly  management  fee.  (See
Financial Statements Notes 1 and 2).

(C)  Competition

(1)  Operating Leases vs. Full Payout Leases

Generally,  the  equipment  owned by the  Company is leased out on an  operating
lease basis  wherein  rents owed during the  initial  noncancelable  term of the
lease are insufficient to recover the 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 Company encounters considerable competition from lessors utilizing full
payout  leases on new  equipment,  i.e.,  leases  which have terms  equal to the
expected  economic  life of the  equipment.  Full payout  leases are written for
longer terms and for lower  monthly  rates than the Company  offers.  While some
lessees prefer the flexibility  offered by a shorter term operating lease, other
lessees  prefer  the  rate  advantages   possible  with  a  full  payout  lease.
Competitors  of the Company may write full payout leases at  considerably  lower
rates,  or larger  competitors  with a lower cost of capital may offer operating
leases at lower  rates,  and as a result,  the Company  may be at a  competitive
disadvantage.

(2)  Manufacturers and Equipment Lessors

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

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

(D)  Demand

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

The following describes the markets for the Company's equipment:

(1) Aircraft

Commercial Aircraft

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

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

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

Aircraft Engines

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

Aircraft Rotables

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

     The  Company's  rotable  parts will be available for sale or lease in 1998.
Rotables  generally  reflect the market  conditions of the aircraft they support
which for the  Company  is the Boeing  737-200  Advanced  aircraft.  Independent
forecasts  for 1997  indicate a  supply/demand  equilibrium  for these  aircraft
types.

 (2) Railcars

Pressurized Tank Cars

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

Covered Hopper (Grain) Cars

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

 (3) Marine Vessels

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

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

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

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

(4)  Mobile Offshore Drilling Units (Rigs)

Worldwide  demand for mobile offshore  drilling units ("rigs") in 1996 increased
in all sectors of the business  over the demand levels  experienced  in 1995 and
1994.  This  increase in demand spread over all  geographic  regions of offshore
drilling;  it also affected all equipment types in the offshore drilling sector.
This  increase in demand  without any increase in supply of rigs gave  increased
utilization and higher contract  dayrates in the market.  The improvement in the
market  can be  attributed  to a number  of  factors,  but  primarily  it can be
associated with continued growth worldwide in the use of oil and natural gas for
energy.  Stable prices at moderate  levels have  encouraged  such growth,  while
providing  adequate  margins for oil and natural gas  exploration and production
development.

     The  floating  rig  sector  also  has  experienced  an  improving   market.
Technological  improvements  and more  efficient  operations  have  improved the
economics of drilling and  production in the deeper water  operations  for which
floating rigs are utilized. Overall, demand for floating rigs increased from 117
rig-years in 1995 to 128 rig-years in 1996,  with no increase in supply of rigs.
The  increase  in demand and  utilization  prompted an  approximate  doubling of
contract  dayrates and an  associated  increase in floating  rig market  values.
Three floating rigs were ordered in 1996;  however,  these will not be delivered
until  late in 1998 and will  have a minimal  effect  on the  market as they are
committed to specific contracts.

     The most significant  trend in 1996 was the continued  consolidation of the
offshore drilling industry.  Five major mergers of offshore drilling contractors
occurred in 1996, leading to a more controlled and stable market in which higher
levels of dayrates may be maintained.  The  consolidation  of rig ownership into
fewer hands has a recognizable effect on stabilizing  dayrates in times of lower
utilization and quicker improvement in times of increasing utilization.

     Demand for floating rigs is projected by industry  participants to continue
to increase through 1997, with no significant increases in rig supply.  Dayrates
are not yet at levels  sufficiently high to justify  widespread  ordering of new
equipment.

(5) Trailers

Intermodal Trailers

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

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

Over-The-Road Refrigerated Trailers

PLM  experienced  fairly  strong  demand  levels  in 1996  for its  refrigerated
trailers.  With over 15% of the fleet in refrigerated trailers, the Company, PLM
and the Partnerships are the largest supplier of short-term rental  refrigerated
trailers in the U.S.

     In 1996, the Company  embarked on a strategy of  identifying  niche markets
and  capitalizing  on them.  Building  on PLM's  refrigeration  leadership,  the
Company  purchased new refrigerated  foodservice  distribution  trailers for the
rental operation,  and these trailers have been well received by the marketplace
to date.

(E)  Government Regulations

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

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

     (2) the U.S. Department of  Transportation's  Aircraft Capacity Act of 1990
         (which limits or eliminates the operation of commercial aircraft in the
         U.S. that do not meet certain noise, aging, and corrosion criteria);

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

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

ITEM 2.  PROPERTIES

The Company  neither owns nor leases any properties  other than the equipment it
has purchased for leasing  purposes.  At December 31, 1996,  the Company owned a
portfolio  of  transportation  equipment  as  described  in Part I, Table 1. The
Company acquired equipment with the proceeds of the Company offering through the
end of 1996.  In December of 1996,  the Company  closed a $25 million  long term
note with an institutional  investor.  The Company intends to acquire additional
equipment  in 1997 with the  proceeds of the long term note and any surplus cash
flow.

     The Company  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 Company.


<PAGE>


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  Company's  limited  partners
during the fourth quarter of its fiscal year ended December 31, 1996.










                      (This space intentionally left blank)

<PAGE>


                                     PART II

ITEM 5.  MARKET FOR THE COMPANY'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  Available
for Distributions of the Company. After the investors receive cash distributions
equal to their  original  Capital  Contributions  the  Manager's  interest  will
increase to 25%. The Manager is the sole holder of such interests.  Gross income
in each year of the Company  will be  specially  allocated to the Manager in the
amount equal to the lesser of (i) the deficit balance,  if any, in the Manager's
capital account calculated under generally accepted accounting  principles using
the straight-line method of depreciation,  and (ii) the deficit balance, if any,
in  the  Manager's   capital  account   calculated   under  Federal  income  tax
regulations. The remaining interests in the profits and losses and distributions
of the Company are owned as of December 31, 1996, by approximately 3,094 holders
of Units in the Company.















                      (This space intentionally left blank)


<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

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

                                     TABLE 2

                    For the years ended December 31, 1996 and
                     1995, and for the period from inception
                                (August 22, 1994)
                              to December 31, 1994
<TABLE>
<CAPTION>


                                                                           1996                  1995              1994
                                                                    -------------------------------------------------------

        <S>                                                          <C>                   <C>                   <C>    
        Operating results:
          Total revenues                                             $   11,295,107        $    4,149,484        $    --
          Net gain on disposition of
            equipment                                                            --                24,593             --
          Equity in net income (loss) of
            unconsolidated special purpose
            entities                                                       (255,969 )              69,619             --
          Net loss                                                       (2,392,494 )            (617,991 )           --

        At year-end:
          Total assets                                               $   87,755,105        $   62,589,016        $   100
          Total liabilities                                               1,466,544             1,187,292             --

        Cash distributions                                           $    9,832,146        $    1,302,566        $    --

        Cash distribution which represents
           a return of capital to Class A Members                    $    8,471,087        $    1,179,332        $

        Per weighted average Class A unit:

          Net loss                                                                  Various,                        N/A
          Cash distributions                                                      according to                      N/A
                                                                                    interim
          Cash distributions which represent a return of capital                    closings                        N/A


</TABLE>






<PAGE>


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

Introduction

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations relates to the Financial  Statements of Professional Lease Management
Income Fund I, L.L.C.  (the Company).  The following  discussion and analysis of
operations  focuses on the  performance  of the  Company's  equipment in various
sectors of the transportation  industry, and its effect on the Company's overall
financial condition.

Results of Operations - Factors Affecting Performance

(A)  Re-leasing and Repricing Activity

The exposure of the  Company's  equipment  portfolio to  re-pricing  risk occurs
whenever the leases for the equipment expire or are otherwise terminated and the
equipment must be remarketed.  Major factors influencing the current market rate
for transportation equipment include supply and demand for similar or comparable
types or kinds of transport capacity, desirability of the equipment in the lease
market,  market  conditions  for the  particular  industry  segment in which the
equipment is to be leased,  overall  economic  conditions both  domestically and
worldwide,  various regulations concerning the use of the equipment, and others.
The equipment  portfolio owned by the Company at December 31, 1996,  experienced
no re-pricing exposure for the year ended December 31, 1996.

(B)  Reinvestment Risk

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

     During the first six years of operations,  the Company  intends to increase
its equipment  portfolio by investing  surplus cash after  fulfilling  operating
requirements  and  payments  of  distributions  to  the  Members  in  additional
equipment.  Subsequent to the end of the reinvestment period at January 1, 2002,
the Company 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,  the receipt of funds  realized from the payment of  stipulated  loss
values on  equipment  lost or disposed of during the time it is subject to lease
agreements,  or the exercise of purchase  options  written  into  certain  lease
agreements.  Equipment  sales generally  result from  evaluations by the Manager
that  continued  ownership  of certain  equipment is either  inadequate  to meet
Company  performance goals, or that market conditions,  market values, and other
considerations indicate it is the appropriate time to sell certain equipment.

     During  1996,  the  Company  acquired  four  commercial  737-200A  Stage II
aircraft for $20.6 million,  181 refrigerated  trailers for $7.8 million and 113
railcars for $5.8 million. In addition,  the Company purchased a 25% interest in
a trust which owns four Boeing 737-200 aircraft for $5.6 million, a 50% interest
in an entity  which  owns a marine  vessel  for $3.4  million (a deposit of $0.4
million was lodged in December  of 1995) and a 35%  interest in an entity  which
owns a mobile offshore drilling unit for $7.0 million.  The remaining  interests
are owned by affiliated partnerships.

(C)  Equipment Valuation and Write-downs

In March 1995, the Financial  Accounting Standards Board (FASB) issued statement
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed  Of" (SFAS 121).  This  standard  is  effective  for years
beginning after December 15, 1995. The Company adopted SFAS 121 during 1995, the
effect  of which was not  material  as the  method  previously  employed  by the
Company was consistent  with SFAS 121. In accordance  with SFAS 121, the Company
reviews the carrying  value of its  equipment  at least  annually in relation to
expected   future   market   conditions   for  the  purpose  of  assessing   the
recoverability  of the recorded  amounts.  If projected  undiscounted cash flows
(future lease revenue plus residual  values) are less than the carrying value of
the  equipment,  a loss on  revaluation  is recorded.  No adjustments to reflect
impairment of individual  equipment  carrying  values were required for the year
ended December 31, 1996.

     As of December  31,  1996,  the Manager  estimates  the current fair market
value  of the  Company's  equipment  portfolio,  including  equipment  owned  by
unconsolidated special purpose entities, to be approximately $99.9 million.

Financial Condition - Capital Resources and Liquidity

The Company's initial  contributed capital was composed of the proceeds from its
initial offering, expected to be supplemented in March 1997 by permanent debt in
the amount of $25 million. The Company intends to rely on operating cash flow to
meet its operating obligations,  make cash distributions to Class A Unitholders,
and grow the Company's equipment portfolio through reinvestment of any remaining
surplus cash available in additional equipment.

     The Manager  has entered  into a joint $50  million  credit  facility  (the
"Committed Bridge Facility") on behalf of the Company, PLM Equipment Growth Fund
IV, PLM Equipment Growth Fund V, PLM Equipment Growth Fund VI, and PLM Equipment
Growth & Income Fund VII, all affiliated investment programs, TEC Acquisub, Inc.
("TECAI"),  an indirect  wholly-owned  subsidiary  of the  Manager and  American
Finance Group ("AFG"), a subsidiary of PLM  International,  which may be used to
provide interim financing of up to (i) 70% of the aggregate book value or 50% of
the aggregate net fair market value of eligible  equipment owned by an affiliate
plus (ii) 50% of unrestricted  cash held by the borrower.  The Committed  Bridge
Facility  became  available on December 20,  1993,  and became  available to the
Company on May 8, 1995,  and was amended and  restated in October 1996 to expire
on  October  31,  1997 and  increase  the  available  borrowings  for AFG to $50
million. The Company,  TECAI and the other partnerships  collectively may borrow
up to $35  million  of the  Committed  Bridge  Facility.  The  Committed  Bridge
Facility  also  provides  for a $5  million  Letter of Credit  Facility  for the
eligible  borrowers.  Outstanding  borrowings by the Company,  TECAI, AFG or PLM
Equipment  Growth Funds IV through VII reduce the amount available to each other
under the Committed  Bridge Facility.  Individual  borrowings may be outstanding
for no more than 179 days, with all advances due no later than October 31, 1997.
The  Committed  Bridge  Facility   prohibits  the  Company  from  incurring  any
additional  indebtedness.  Interest accrues at either the prime rate or adjusted
LIBOR at 2.5% at the  borrower's  option  and is set at the time of  advance  of
funds. To the extent the Company is unable to raise  sufficient  capital through
the sale of interests to repay its portion of the Committed Bridge Facility, the
Company will continue to be obligated under the Committed  Bridge Facility until
the  Company  generates  proceeds  from  operations  or the  sale  of  Equipment
sufficient  for  repayment.  Borrowings  by the  Company are  guaranteed  by the
Manager. As of March 6, 1996, PLM Equipment Growth Fund V had borrowings of $1.5
million,  AFG had $30.8  million,  and TECAI had $12.5  million  in  outstanding
borrowings.  Neither PLM  Equipment  Growth Fund IV, VI, VII, nor Fund I had any
outstanding borrowings.

     For the year ended  December 31,  1996,  the Company  generated  sufficient
operating  income to meet its operating  obligations  and pay  distributions  to
those Class A and B Unitholders.

 Results of Operations - Year over Year Comparison

(A)  Owned equipment operations

The Company  commenced  significant  operations in May 1995. As of May 13, 1996,
the Company  completed its  equity-raising  stage.  As of December 31, 1996, the
Company  had  purchased  and placed into  service  $70.4  million of  equipment,
compared to $36.2  million at December 31,  1995.  All of these  purchases  were
completed with a combination of unrestricted  cash,  interim  financing,  and an
advance from an affiliate of the Manager.  The nine day advance from the Manager
was  repaid  (including  interest  at  commercial  loan  rates) in July of 1995.
Revenues of $11.3  million  were  generated  during the year ended  December 31,
1996,  compared to $4.1 million in the same period in 1995.  The variance is due
to the Company's equipment  purchasing  activities  throughout 1996. Expenses of
$13.4  million for the year ended  December  31,  1996  consisted  primarily  of
depreciation  expense,  using the  double-declining  balance method,  and normal
operating  costs incurred as equipment is being purchased and placed in service.
Expenses for the same period in 1995 totaled $4.8 million, and also consisted of
depreciation  expense and normal  operating  costs  incurred  when  equipment is
purchased and placed in service.

(B) Equity in net loss of unconsolidated special purpose entities represents net
loss generated from the operation of  jointly-owned  assets  accounted for under
the equity method (see Note 4 to the financial statements).

As of December 31, 1996, the Company had interests in entities  which  purchased
and placed  into  service  $30.7  million of assets.  The  Company's  investment
consists of a 35%  interest in an entity which owns a mobile  offshore  drilling
unit, a 50% interest in an entity which owns a marine vessel,  a 17% interest in
a trust which owns six Boeing 737-200A aircraft, a 25% interest in a trust which
owns four  Boeing  737-200A  aircraft,  and a 33%  interest  in two trusts  (the
Trusts)  which own three  Boeing  737-200A  aircraft,  two spare Pratt & Whitney
JT8D-17A engines and a rotables package. Revenues of $6.6 million were generated
during the year ended  December  31, 1996  compared to $1.3  million in the same
period  in 1995.  The  variance  is due to the  Company's  equipment  purchasing
activities throughout 1996. Expenses of $6.8 million for the year ended December
31,  1996,  compared  to $1.2  million  in the same  period  in 1995,  consisted
primarily of depreciation expense for both periods.

     During September of 1996, an affiliated  Partnership  converted its partial
beneficial interests in the trust holding five commercial aircraft and the trust
holding  seven  commercial  aircraft  into  the  sole  ownership  of  two of the
commercial  aircraft,  resulting in a change in the beneficial interests for the
Company.  This change has no effect on the income or loss recognized in the year
ended December 31, 1996.

     The  Company's  performance  during 1996 is not  necessarily  indicative of
future periods.

Geographic Information

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

     Revenues and net operating income by geographic  region are impacted by the
time period the 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 200% declining balance method of depreciation.  The relationships
of  geographic  revenues,  net income  (loss) and net book value are expected to
significantly  change in the future as  additional  equipment  is  purchased  in
various  equipment  markets and geographic  areas. An explanation of the current
relationships is presented below:

     The Company's  equipment on lease to U.S.  domiciled  lessees accounted for
28% of the revenues generated by owned and partially owned equipment while a net
operating  loss of $0.2 million was  generated  compared to $2.4 million in loss
for the entire  Company.  The primary reason for this  relationship  is the fact
that the Company  depreciates  its rail equipment over a 15 year period versus 5
to 12 years for other  equipment  types  owned  and  leased in other  geographic
regions.  The trailers leased to U.S.  domiciled  lessees are expected to become
profitable  in the near future,  as the revenue from the trailers is expected to
exceed  the  operating  costs,  and the  depreciation  recorded  by the  Company
declines in future periods.

     The Company's  equipment leased to Canadian  domiciled  lessees consists of
railcars,  an  aircraft  and a  partial  interest  in an entity  which  owns two
aircraft.  Revenues in Canada  accounted for 23% of total  revenues  while these
operations  accounted  for $0.8  million  loss of the  $2.4  million  total  net
operating  loss for the entire  Company.  The net  operating  loss  generated in
Canada was  created  by the  shorter  depreciable  life on the  partially  owned
aircraft leased in Canada. While the aircraft in Canada generated losses for the
period,  this loss was partially offset by net operating income from the railcar
operations.  As the  depreciation  recorded  by the  Company  declines in future
periods  the  aircraft is expected  to  generate  net  operating  income for the
Company.

     One wholly owned marine vessel,  a 50% investment in an entity which owns a
marine  vessel and a 35%  investment  in an entity which owns a mobile  offshore
drilling  unit,  which were  leased in various  regions  throughout  the period,
accounted  for 22% of the  revenues  and $1.3  million of the $2.4  million  net
operating loss for the period. These marine assets,  representing 23% of the net
book value of the Company's  assets and  investments in  unconsolidated  special
purpose  entities,  generated a significant  depreciation  charge for the period
that  exceeded  the revenues  less direct  operating  costs of the  vessels.  As
depreciation charges in the future decline, the vessels are expected to generate
net income for the Company.

     European  operations  consist of partial  interests  in entities  which own
aircraft and aircraft  rotables that are generating  revenues that accounted for
21% of combined,  owned and partially owned equipment  revenues.  The net income
generated by this equipment  accounted for $1.2 million in income for the period
as lease  revenues  exceeded  depreciation  charges.  While  this  equipment  is
expected to remain profitable during the lease term expiring in January 1998 the
Company may not be able to remarket this  equipment at  comparable  rates in the
future.

     South  American  operations  consist of four aircraft  that are  generating
revenues that accounted for 6% of the total revenues and $1.9 million of the net
operating loss for the period.  The net operating loss was generated as a result
of the shorter  depreciable life on the aircraft leased in South America. As the
depreciation  recorded by the Company  declines in future periods,  the aircraft
are expected to generate net operating income for the Company.

Inflation

There was no  significant  impact  on the  Company's  operations  as a result of
inflation during 1996.

Forward Looking Information

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

Outlook for the Future

Several  factors  may affect the  Company's  operating  performance  in 1997 and
beyond, including changes in the markets for the Company's equipment and changes
in the regulatory environment in which the equipment operates.

     The Company intends to use excess cash flow, after payment of expenses, and
cash distributions to acquire additional equipment during the first six years of
the Company's operations.  The Manager believes these acquisitions may cause the
Company to generate additional earnings and cash flow for the Company.

     The  Company   relies  on  operating   cash  flow  to  meet  its  operating
obligations,  make cash distributions to Class A and B Unitholders, and grow the
Company's equipment portfolio through reinvestment of any remaining surplus cash
available in additional equipment.

(1)  Repricing and Reinvestment Risk

Certain portions of the Company's  marine vessel and trailer  portfolios will be
remarketed  in  1997  as  existing  leases  expire,   exposing  the  Company  to
considerable repricing risk/opportunity. Additionally, the Manager may select to
sell certain  underperforming  equipment, or equipment whose continued operation
may become prohibitively  expensive, and thus faces reinvestment risk. In either
case,  the 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
Company performance.

(2)  Residual Risk

A portion of the total return on the Class A and B  Unitholders'  investment  in
the  Company  is  expected  to be  realized  on the sale or  liquidation  of the
Company's equipment  portfolio,  the majority of which is anticipated during the
liquidation  phase of the  Company's  operations.  The  Manager's  Credit Review
Committee  selects  equipment for acquisition  based on many factors,  including
anticipated  residual  values from the eventual  sale of that  equipment.  These
residuals  may be affected by several  factors  during the time the equipment is
held,  including  changes in regulatory  environments  in which the equipment is
operated,  the onset of  technological  obsolescence,  changes in the  equipment
markets,  perceived values for equipment at the time of sale, and others. As the
impact of any of these factors becomes  difficult to forecast with accuracy over
extended time  horizons,  the Manager  cannot  predict with  certainty  that the
anticipated residual values for equipment selected for acquisition will actually
be realized when the equipment is sold.

     Prior to the liquidation phase of the Company's operations, the Manager may
decide  to  selectively  sell  equipment  either  when  it has  determined  that
opportunities  exist to realize  significant gains on the sales; when continuing
ownership of the equipment becomes prohibitively  expensive; or when the Manager
determines  that  continuing  ownership  of  the  equipment  may  result  in the
realization of unsatisfactory  residual values. At this time, the Manager cannot
predict  when  such  occasions  may  occur,  and thus  cannot  predict  with any
certainty the impact of such events on Company operations.

(B)  Impact of Government Regulations on Future Operations

The  Manager  operates  the  Company'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
Company'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 Company of meeting regulatory compliance for the same
equipment operated between countries. Currently, the Manager has observed rising
insurance  costs to operate  certain  vessels  into U.S.  ports  resulting  from
implementation  of the U.S. Oil  Pollution Act of 1990.  Ongoing  changes in the
regulatory  environment,  both  in  the  U.S.  and  internationally,  cannot  be
predicted with any accuracy and preclude the Manager from determining the impact
of such changes on Company operations, purchases, or sale of equipment.

(C)  Distributions

     Pursuant  to  the  Fifth  Amended  and  Restated  Operating   Agreement  of
Professional Lease Management Income Fund I, L.L.C. (the Agreement), the Company
will cease to reinvest  surplus cash in  additional  equipment  beginning in its
seventh  year of  operations.  The  Manager  intends  to  pursue a  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 Company sufficient to meet its obligations and sustain a predictable
level of distributions to the Class A Unitholders.



<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

     None.












                      (This space intentionally left blank)


<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Robert N. Tidball was appointed  President and Chief  Executive  Officer of
PLM  International  in  March  1989.  At the  time  of his  appointment,  he was
Executive Vice President of PLM International.  Mr. Tidball became a director of
PLM  International in April 1989 and a member of the Executive  Committee of the
Board of  Directors of PLM  International  in September  1990.  Mr.  Tidball was
elected President of PLM Railcar Management Services,  Inc. in January 1986. Mr.
Tidball was Executive Vice President of Hunter Keith, Inc., a  Minneapolis-based
investment banking firm, from March 1984 to January 1986. Prior to Hunter Keith,
Inc., he was Vice President,  a General Manager and a Director of North American
Car  Corporation,  and a Director  of the  American  Railcar  Institute  and the
Railway Supply Association.

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

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

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

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

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

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

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

     The  directors  of the General  Partner are elected for a one-year  term or
until  their  successors  are  elected  and  qualified.   There  are  no  family
relationships  between  any  director  or any  executive  officer of the General
Partner.

ITEM 11. EXECUTIVE COMPENSATION

     The Company has no  directors,  officers or  employees.  The Company has no
pension,  profit  sharing,  retirement  or similar  benefit plan in effect as of
December 31, 1996.


<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     (a) Security Ownership of Certain Beneficial Owners

         The Manager is generally  entitled to a 15%  interest in the  Company's
         cash   distributions   and  earnings  subject  to  certain   allocation
         provisions.  After the investors  receive cash at December 31, 1996, no
         investor was known by the Manager to  beneficially  own more than 5% of
         the Units of the Company.

     (b) Security Ownership of Management

         Neither the Manager and its  affiliates  nor any  executive  officer or
         director of the Manager and its affiliates own any Units of the Company
         as of December 31, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a) Transactions with Management and Others

         During 1996,  the Company paid or accrued the following  fees to FSI or
         its affiliates:  management fees - $585,277. The Company reimbursed FSI
         and/or its affiliates  $313,036 for  administrative and data processing
         services  performed on behalf of the Company  during 1996.  The Company
         paid  Transportation  Equipment  Indemnity Company Ltd. (TEI), a wholly
         owned,  Bermuda-based  subsidiary  of  PLM  International,  $7,411  for
         insurance  coverages during 1996 substantially all of which was paid to
         third party reinsurance underwriters or placed in risk pools managed by
         TEI on behalf of affiliated  partnerships and PLM  International  which
         provide threshold  coverages on marine vessel loss of hire and hull and
         machinery damage. All pooling  arrangement funds are either paid out to
         cover applicable losses or refunded pro rata by TEI.

            During 1996, the  Unconsolidated  Special  Purpose  Entities paid or
         accrued  the  following  fees to FSI or its  affiliates  (based  on the
         Company's proportional share of ownership): management fees - $240,501;
         and administrative and data processing services - $85,261.

     (b) Certain Business Relationships

     None.

     (c) Indebtedness of Management

     None.

     (d) Transactions With Promoters

     None.


<PAGE>


                                     PART IV

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

     (a) 1.   Financial Statements

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

     (b) Reports on Form 8-K

              None.

     (c) Exhibits

      4.     Limited  Partnership  Agreement  of  Partnership,  incorporated  by
             reference to the Partnership's  Registration  Statement on Form S-1
             (Reg. No.  33-55796) which became effective with the Securities and
             Exchange Commission on May 25, 1993.

     10.1    Management Agreement between Company and PLM Investment Management,
             Inc.,  incorporated  by  reference  to the  Company'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    Second Amended and restated Warehousing Credit Agreement,  dated as
             of May 31, 1996 with First Union National Bank of North Carolina.

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

     10.4    $25,000,000 Note Agreement, dated as of December 30, 1996.

     24.     Powers of Attorney.


<PAGE>


                                   SIGNATURES

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

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


                                       PROFESSIONAL LEASE MANAGEMENT INCOME
Date:  March 12, 1997                  FUND I

                                       By:      PLM Financial Services, Inc.
                                                Manager



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



                                       By:      /s/ David J. Davis
                                                ----------------------------
                                                David J. Davis
                                                Vice President and
                                                Controller

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


Name                                    Capacity                     Date


*_________________________
J. Alec Merriam                      Director - FSI             March 12, 1997


*_________________________
Robert L. Pagel                      Director - FSI             March 12, 1997







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



/s/ Stephen Peary
---------------------
Stephen Peary
Attorney-in-Fact




<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                          (A Limited Liability Company)

                          INDEX TO FINANCIAL STATEMENTS

                                  (Item 14(a))


                                                                     Page

Report of Independent Auditors                                         24

Balance sheets as of December 31, 1996 and 1995                        25

Statement of operations for the years ended
     December 31, 1996 and 1995                                        26

Statement of changes in members'  equity for the years ended  
     December 31, 1996, 1995 and the period from 
     inception (August 22, 1994) through December 31, 1994             27

Statements of cash flows for the years ended December 31, 
     1996, 1995 and the period from inception (August 22, 1994)  
     through December 31, 1994                                         28

Notes to financial statements                                     29 - 36


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



<PAGE>


                         REPORT OF INDEPENDENT AUDITORS


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


We have audited the financial statements of Professional Lease Management Income
Fund I, L.L.C. as listed in the accompanying  index. These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Professional Lease Management
Income Fund I, L.L.C.  as of December 31, 1996 and 1995,  and the results of its
operations for the years ended December 31, 1996 and 1995 and its cash flows for
the years ended December 31, 1996 and 1995 and the period from inception (August
22, 1994)  through  December 31, 1994,  in conformity  with  generally  accepted
accounting principles.



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

SAN FRANCISCO, CALIFORNIA
February 28, 1997




<PAGE>



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                                 BALANCE SHEETS
                                  December 31,
<TABLE>


                                     ASSETS
<CAPTION>

                                                                                    1996                      1995
                                                                              ------------------------------------------
   <S>                                                                        <C>                       <C>           
   Assets:

   Equipment held for operating leases, at cost                               $    70,333,099           $   36,139,950
   Less accumulated depreciation                                                  (12,189,573 )             (2,869,535 )
                                                                              ------------------------------------------
     Net equipment                                                                 58,143,526               33,270,415

   Cash and cash equivalents                                                        1,691,650                6,803,946
   Restricted cash                                                                    223,260                6,315,548
   Investment in unconsolidated special purpose entities                           25,348,602               14,596,206
   Accounts receivable, net of allowance for doubtful accounts
     of $35,887 in 1996 and $7,835 in 1995                                          1,534,297                  797,097
   Prepaid expenses                                                                   505,298                  416,515
   Organization and offering costs, net of accumulated amortization                   308,472                  389,289
                                                                              ------------------------------------------

     Total assets                                                             $    87,755,105           $   62,589,016
                                                                              ==========================================


                         LIABILITIES AND MEMBERS' EQUITY


   Liabilities:

     Accounts payable and accrued expenses                                    $       430,133           $      664,686
     Due to affiliates                                                                162,704                  387,197
     Lessee deposits and reserves for repairs                                         873,707                  135,409
                                                                              ------------------------------------------
       Total liabilities                                                            1,466,544                1,187,292

   Subscriptions in escrow                                                                 --                6,259,500

   Members' equity:

     Class A Members (4,999,581 Units at December 31, 1996 and
       2,831,388 Units at December 31, 1995)                                       86,023,701               54,836,617
     Class B Member                                                                   264,860                  305,607
                                                                              ------------------------------------------
       Total Members' Equity                                                       86,288,561               55,142,224
                                                                              ------------------------------------------

       Total liabilities and members' equity                                  $    87,755,105           $   62,589,016
                                                                              ==========================================
</TABLE>

                       See accompanying notes to financial
                                  statements.


<PAGE>



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                             STATEMENT OF OPERATIONS
                         For the year ended December 31,
<TABLE>
<CAPTION>



                                                                                       1996                   1995
                                                                                  --------------------------------------
   <S>                                                                            <C>                    <C>         
   Revenues:

     Lease revenue                                                                $   9,939,148          $  3,991,638
     Interest and other income                                                        1,355,959               133,253
     Gain on disposition of equipment                                                        --                24,593
                                                                                  --------------------------------------
       Total revenues                                                                11,295,107             4,149,484

   Expenses:

     Depreciation and amortization                                                    9,407,974             2,916,682
     Management fees to affiliate                                                       585,277               284,376
     Repairs and maintenance                                                          1,363,040               570,919
     Marine equipment operating expenses                                                926,179               479,486
     Insurance expense to affiliate                                                       7,411                 3,860
     Other insurance expense                                                            179,998                46,416
     Interest expense                                                                     8,902               229,660
     General and administrative expenses to affiliates                                  313,036               118,114
     Other general and administrative expenses                                          639,815               187,581
                                                                                  --------------------------------------
       Total expenses                                                                13,431,632             4,837,094

   Equity in net income (loss) of unconsolidated special purpose entities              (255,969 )              69,619
                                                                                  --------------------------------------

       Net loss                                                                   $  (2,392,494 )        $   (617,991 )
                                                                                  ======================================

   Members' share of net loss:

     Class A Members                                                              $  (3,705,689 )        $   (611,811 )
     Class B Member                                                                   1,313,195                (6,180 )
                                                                                  =====================================
       Total                                                                      $  (2,392,494 )        $   (617,991 )
                                                                                  ======================================

   Cash distributions                                                             $   9,832,146          $  1,302,566
                                                                                  ======================================

</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 year ended December 31, 1996, 1995 and for the
                     period from inception (August 22, 1994)
                            through December 31, 1994

<TABLE>
<CAPTION>



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

   <S>                                                   <C>                 <C>                 <C>               
   Member's capital contributions                        $         100       $          --       $          100    
                                                        --------------------------------------------------------

   Member's equity at December 31, 1994                           100                  --                  100

   Members' capital contributions                          56,627,660           9,536,106           66,163,766

   Syndication costs                                               --          (9,101,085 )         (9,101,085 )

   Net loss                                                  (611,811 )            (6,180 )           (617,991 )

   Distributions                                           (1,179,332 )          (123,234 )         (1,302,566 )
                                                        --------------------------------------------------------

   Members' equity at December 31, 1995                    54,836,617             305,607           55,142,224

   Members' capital contributions                          43,363,860           5,068,822           48,432,682

   Syndication costs                                               --          (5,061,705 )         (5,061,705 )

   Net loss                                                (3,705,689 )         1,313,195           (2,392,494 )

   Distributions                                           (8,471,087 )        (1,361,059 )         (9,832,146 )
                                                        --------------------------------------------------------

   Members' equity at December 31, 1996                  $ 86,023,701       $     264,860       $   86,288,561 
                                                        ========================================================

</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 year ended December 31, 1996, 1995 and for the
                     period from inception (August 22, 1994)
                            through December 31, 1994
<TABLE>
<CAPTION>

      Cash flows from operating activities:                               1996                 1995             1994
                                                                    ----------------------------------------------------
        <S>                                                         <C>                  <C>                  <C>    
        Net loss                                                    $    (2,392,494 )    $      (617,991 )    $    --
        Adjustments to reconcile net loss to net cash
          provided by operating activities:
        Depreciation and amortization                                     9,407,974            2,916,682
        Gain on sale of equipment                                                --              (24,593 )
        Equity in net (income) loss unconsolidated special
          purpose entities                                                  255,969              (69,619 )
        Changes in operating assets and liabilities:
          Restricted cash                                                  (223,260 )
          Accounts receivable, net                                         (737,200 )           (869,097 )
          Prepaid expenses                                                  (88,783 )           (416,515 )
          Accounts payable and accrued expenses                            (234,553 )            664,686
          Due to affiliates                                                (224,493 )            387,197
          Lessee deposits and reserves for repairs                          738,298              207,409
                                                                    ----------------------------------------------------
      Net cash provided by operating activities                           6,501,458            2,178,159           --
                                                                    ----------------------------------------------------
      Investing activities:
        Payments to affiliates for purchase of equipment                         --          (29,707,311 )
        Payments for purchase of equipment                              (34,193,151 )         (6,464,489 )
        Investment in and equipment purchased and placed
          in unconsolidated special purpose entities                    (16,067,613 )        (14,676,987 )
        Proceeds from disposition of equipment                                   --               55,028
                                                                    ----------------------------------------------------
      Net cash used in investing activities                             (50,260,764 )        (50,793,759 )         --
                                                                    ----------------------------------------------------
      Financing activities:
        Proceeds from note payable                                               --            1,057,221
        Proceeds from note payable - affiliates                                  --            3,956,300
        Principal payments on notes payable                                      --           (1,057,221 )
        Principal payments on notes payable - affiliates                         --           (3,956,300 )
        Cash distributions to Class A Members                            (8,471,087 )         (1,179,332 )
        Cash distributions to Class B Member                             (1,361,059 )           (123,234 )
        Class A members capital contribution                             43,363,860           56,627,660          100
        (Decrease) increase in subscriptions in escrow                   (6,259,500 )          6,259,500
        Decrease (increase) in restricted cash from
           subscriptions in escrow, net                                   6,315,548           (6,315,548 )
        Distributions from unconsolidated special purpose
           entities                                                       5,059,248              150,400
                                                                    ----------------------------------------------------
                                                                    ----------------------------------------------------
      Cash provided by financing activities                              38,647,010           55,419,446          100
                                                                    ----------------------------------------------------

      Cash and cash equivalents:
      Net (decrease) increase in cash and cash equivalents               (5,112,296 )          6,803,846          100

      Cash and cash equivalents at beginning of period                    6,803,946                  100           --
                                                                    ----------------------------------------------------
      Cash and cash equivalents at end of period                    $     1,691,650      $     6,803,946      $   100
                                                                    ====================================================
      Supplemental information:
      Cash items:
        Interest paid ($8,902 paid to affiliate)                    $         8,902      $       229,660      $    --
                                                                    ====================================================
      Non cash items:
        Syndication and offering costs paid by Class B Member       $     5,068,822      $     9,536,106      $    --
                                                                    ====================================================
</TABLE>

                       See accompanying notes to financial
                                  statements.


<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1996

1.   Basis of Presentation

     Organization

     Professional  Lease  Management  Income Fund I, L.L.C.,  a Delaware Limited
     Liability Company (Fund I or the Company) was formed on August 22, 1994, to
     purchase,  lease,  charter, or otherwise invest in, a diversified portfolio
     of long-lived,  low obsolescence capital equipment that is transportable by
     and among  prospective  users (the  Equipment).  The  securities  represent
     limited  liability company interests (the Class A Units) which were offered
     to the public. The Company's offering became effective on January 23, 1995.
     PLM Financial Services, Inc. (FSI) is the Manager of the Company and is the
     initial Class B Member.

         On May 13,  1996,  the Company  ceased its  offering  for Class A Units
     ($100,000,000).  As of  December  31,  1996,  there  were  4,999,581  Units
     outstanding.

         At December 31, 1996, the Class B Member had capital  contributions  of
     $14,604,931 representing the cash payments for organization and syndication
     costs.  Syndication  costs of  $14,162,791  are  recorded as a reduction to
     Class B Member's equity.

         The  Manager  controls  and manages  the  affairs of the  Company.  The
     Manager will pay out of its own corporate funds (as a capital  contribution
     to the Company)  all  organization  and  syndication  expenses  incurred in
     connection with the offering; therefore, 100% of the cash proceeds received
     by the Company from the sale of Class A Units are  initially  being used to
     purchase  Equipment  and  establish  any required  cash  reserves.  For its
     contribution,  the Manager is  generally  entitled to a 15% interest in the
     Company's cash  distributions  and earnings  subject to certain  allocation
     provisions.  After the investors receive cash distributions  equal to their
     original capital contributions the Manager's interest will increase to 25%.

         Between the eighth and tenth years of  operations  of the Company,  the
     Manager  intends to begin the dissolution and liquidation of the Company in
     an orderly fashion,  unless the Company is terminated  earlier upon sale of
     all of the  equipment or by certain other  events.  However,  under certain
     circumstances,  the term of the Company may be  extended.  In no event will
     the Company extend beyond December 31, 2010.

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

     Operations

     The  equipment  of  the  Company  is  being  managed,  under  a  management
     agreement,  by  PLM  Investment  Management,  Inc.  (IMI),  a  wholly-owned
     subsidiary of the Manager.  IMI receives a monthly  management fee from the
     Company for  managing the  equipment  (See Note 2). The Manager is also the
     General  Partner  in a series of limited  partnerships  which own and lease
     transportation   equipment.   The   Manager,   in   conjunction   with  its
     subsidiaries, also sells transportation


<PAGE>


                  PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1996

1.   Basis of Presentation (continued)

     Operations (continued)

equipment  to these  partnerships  and manages  transportation  equipment  under
management agreements with the partnerships.

     Accounting for Leases

The  Company's leasing operations  generally consist of operating leases.  Under
     the operating  lease method of accounting,  the leased asset is recorded at
     cost and depreciated  over its estimated  useful life.  Rental payments are
     recorded  as  revenue  over the lease  term.  Lease  origination  costs are
     capitalized and amortized over the term of the lease.

     Depreciation and Amortization

     Depreciation of equipment held for operating leases is computed on the 200%
     declining balance method taking a full month's depreciation in the month of
     acquisition,  based upon  estimated  useful lives of 12 years for trailers,
     and marine vessels, 15 years for railcars, and 8 years, 6 years and 5 years
     for  aircraft.  The  depreciation  method is changed to straight  line when
     annual  depreciation  expense using the straight  line method  exceeds that
     calculated by the 200% declining balance method. Organization costs will be
     amortized over a 60 month period.  Major expenditures which are expected to
     extend the useful lives or reduce  future  operating  expenses of equipment
     are capitalized.

     Transportation Equipment

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

     Investments in Unconsolidated Special Purpose Entities

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

     The  Company's  equity  interest  in net income of  unconsolidated  special
     purpose  entities is reflected  net of  management  fees paid or payable to
     IMI.




<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1996

1.   Basis of Presentation (continued)

Repairs and Maintenance

     Maintenance costs are usually the obligation of the lessee. If they are not
     covered by the lessee, they are charged against operations as incurred.  To
     meet the maintenance obligations of certain aircraft airframes and engines,
     reserve accounts are prefunded by the lessee. Marine vessel drydocking is a
     periodic  required  maintenance  process that  generally  occurs every five
     years. The drydock  maintenance process generally lasts from 10 to 21 days.
     Estimated costs  associated with marine vessel  drydockings are accrued and
     charged to repair and maintenance  expense ratably over the period prior to
     such  drydocking  because  wear and  tear  occurs  over  the  same  revenue
     generating  period.  The reserve accounts are included in the balance sheet
     as prepaid deposits and reserve for repairs.

     Net Income (Loss) and Distributions per Depositary Unit

     After  giving  effect to the  special  allocations  set  forth in  Sections
     3.08(b) and 3.17 of the Company's Operating Agreement,  Net Profits and Net
     Loss shall be  allocated  1% to the Class B Members  and 99% to the Class A
     Members.  During 1996, the Manager received a special  allocation of income
     of $1,350,627.

     Cash  distributions  are  recorded  when paid and  totaled  $9,832,146  and
     $1,302,566 for 1996 and 1995,  respectively.  Cash distributions to Class A
     Unitholders in excess of net income are considered to represent a return of
     capital.  Cash  distributions  to Class A  Unitholders  of  $8,471,087  and
     $1,179,332  in 1996 and 1995,  respectively,  were deemed to be a return of
     capital.

         Cash  distributions  related to the fourth quarter  results of $621,000
     were paid or are payable during  January,  1997, to the Class A Unitholders
     of record as of December 31, 1996, for  unitholders who elected for monthly
     distributions.  Quarterly cash  distributions of  approximately  $1,077,000
     were  declared on January  25,  1997 and were paid on February  15, 1997 to
     Class A and Class B Unitholders.

Cash and Cash Equivalents

The  Company considers highly liquid investments that are readily convertible to
     known amounts of cash with  original  maturities of three months or less as
     cash equivalents.

  Restricted Cash

At   December 31, 1996,  restricted cash includes lessee security  deposits.  At
     December 31, 1995,  restricted cash represented  subscription  deposits for
     Units in escrow  which were  considered  restricted  cash until the members
     were admitted, usually the next day of the following month.

2.   Manager and Transactions with Affiliates

An   officer of PLM Securities  Corp.  (PLMS)  contributed $100 of the Company's
     initial capital. Under the equipment management agreement,  IMI, subject to
     certain reductions, is entitled to a monthly management fee attributable to
     either  owned   equipment   or   interests   in  equipment   owned  by  the
     Unconsolidated  Special Purpose  Entities (USPE) equal to the lesser of (i)
     the fees  which  would be  charged  by an  independent  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 which 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 such Equipment. Company management
     fees  of  $163,524  were  payable  at  December  31,  1996.  The  Company's
     proportional share of the USPE's

<PAGE>



                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

2.   Other Transactions with Affiliates (continued)

     management fees of $23,092 and $58,832 were payable as of December 31, 1996
     and 1995,  respectively.  The  Company's  proportional  share of the USPE's
     management  fees expense during 1996 was $240,501.  The Company  reimbursed
     FSI  $313,036 for data  processing  expenses  and  administrative  services
     performed on behalf of the Company during 1996. The Company's  proportional
     share of the USPE's administrative and data processing expenses was $85,261
     during  1996.  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 Company,  or (ii)
     50% of the "Competitive  Equipment Sale Commission," as defined, if certain
     conditions  are met.  PLMS  and TEC are  wholly-owned  subsidiaries  of the
     Manager.  In certain  circumstances,  the  Manager  will be  entitled  to a
     monthly re-lease fee for re-leasing  services  following  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.  No re-lease fee,  however,  shall be
     payable if such fee would cause the combination of the equipment management
     fee paid to IMI (see Note 1) or the re-lease  fees to exceed 7% Gross Lease
     Revenues.

         The Company paid $7,411 in 1996 to Transportation  Equipment  Indemnity
     Company  Ltd.  (TEI) which  provides  marine  insurance  coverage and other
     insurance  brokerage  services to the Company.  The Company's  proportional
     share of USPE's  marine  insurance  coverage  paid to TEI was $1,472 during
     1996.  TEI is an affiliate of the Manager.  A substantial  portion of these
     amounts was paid to third party reinsurance  underwriters or placed in risk
     pools  managed  by  TEI  on  behalf  of  affiliated  partnerships  and  PLM
     International  which provide  threshold  coverages on marine vessel loss of
     hire and hull and  machinery  damage.  All  pooling  arrangement  funds are
     either paid out to cover applicable losses or refunded pro rata by TEI.

3.   Equipment

     The components of equipment are as follows (in thousands):
<TABLE>
<CAPTION>

                                                     1996               1995
                                               ------------------------------------

   <S>                                         <C>                 <C>          
   Rail equipment                              $   18,876,058      $  13,112,390
   Aircraft                                        24,605,000          4,000,000
   Marine vessel                                   12,256,531         12,256,532
   Trailers                                        14,595,510          6,771,028
                                               ------------------------------------
                                                   70,333,099         36,139,950
   Less accumulated depreciation                  (12,189,573 )       (2,869,535 )
                                               ------------------------------------

   Net equipment                               $   58,143,526      $  33,270,415
                                               ====================================
</TABLE>

         Revenues are earned by placing the  equipment  under  operating  leases
     which are  generally  billed  monthly or quarterly.  The  Company's  marine
     vessel is leased to an operator  of  utilization-type  leasing  pools which
     include  equipment  owned  by  unaffiliated  parties.  In  such  instances,
     revenues  received by the  Company  consist of a  specified  percentage  of
     revenues generated by leasing the equipment to sublessees,  after deducting
     certain  direct  operating  expenses  of the  pooled  equipment.  Rents for
     railcars are based on mileage traveled or a fixed rate; rents for all other
     equipment are based on fixed rates.

         During the year ended  December 31, 1996,  the Company  purchased  four
     737-200A Stage II commercial  aircraft,  181 refrigerated  trailers and 113
     railcars for $34.2 million.



<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 1996

3.   Equipment (continued)

         As of December 31, 1996,  all  equipment in the Company  portfolio  was
     either on lease or operating in  PLM-affiliated  short-term  trailer rental
     facilities  except for 14 railcars  with a carrying  value of $333,000.  At
     December 31, 1995,  all  equipment in the Company  portfolio  was either on
     lease or operating in PLM-affiliate short-term trailer rental facilities.

         All leases are being accounted for as operating leases.  Future minimum
     rent under  noncancelable  leases at  December  31, 1996 during each of the
     next five years are approximately  $18,691,000 - 1997;  $10,561,000 - 1998;
     $8,694,000 - 1999; $8,148,000 - 2000; and $6,355,000 - 2001 and thereafter.

        Periodically,  PLM  International  Inc.,  (PLM) will purchase  groups of
     assets whose ownership may be allocated among  affiliated  partnerships and
     PLM.  Generally  in these  cases,  only  assets  that are on lease  will be
     purchased by the affiliated  partnerships.  PLM will  generally  assume the
     ownership  and  remarketing  risks  associated  with  off-lease  equipment.
     Allocation of the purchase  price will be  determined  by a combination  of
     third party industry  sources,  and recent  transactions  or published fair
     market value references. During 1996, PLM realized $0.7 million of gains on
     the sale of 69  off-lease  railcars  purchased by PLM as part of a group of
     assets in 1994 which had been  allocated to PLM Equipment  Growth Funds IV,
     VI, VII, Professional Lease Management Income Fund I, L.L.C. and PLM. These
     assets were  included in assets held for sale at December 31, 1995.  During
     1995,  PLM realized $1.3 million in gains on sales of railcars and aircraft
     purchased  by PLM in 1994 and 1995 as part of a group of  assets  which had
     been allocated to EGFs IV, V, VI, VII, Fund I, and PLM.

         The  Company  owns  certain  equipment  which is  leased  and  operated
     internationally.  A  limited  number  of  the  Company'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  Company  leases its  aircraft,  railcars  and  trailers to lessees
     domiciled in four geographic regions:  United States,  Canada,  Europe, and
     South  America.  The  vessel is leased to  multiple  lessees  in  different
     regions  who  operate  the vessel  worldwide.  The  tables  below set forth
     geographic  information  about the  Company's  equipment  and the Company's
     proportional  interest in equipment owned by special purpose entities.  The
     Company  accounts for  proportional  interest in equipment using the equity
     method. The geographic  information is grouped by domicile of the lessee as
     of and for the year ended December 31, 1996 and 1995:

<TABLE>
<CAPTION>

                                                                                   Investment in Unconsolidated
                                                                                     Special Purpose Entities
                                                          Owned
                                             ---------------------------------    -------------------------------
                                                 1996               1995              1996               1995
                                             --------------------------------------------------------------------
     <S>                                      <C>              <C>                <C>               <C>           
     Revenues:
       Various                                $ 2,668,536      $  1,491,972       $    925,948      $         --  
       United States                            4,572,914         2,082,312                 --                --
       Canada                                   1,731,181           417,354          2,109,784            78,400
       Europe                                          --                --          3,529,926         1,176,634
       South America                              966,517                --                 --                --
                                             ====================================================================
     Total revenues                           $ 9,939,148      $  3,991,638       $  6,565,658      $  1,255,034  
                                             ====================================================================

</TABLE>




<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

3.   Equipment (continued)

         The following table sets forth  Identifiable  income (loss) information
by region :
<TABLE>
<CAPTION>

                                                                                     Investment in Unconsolidated
                                                            Owned                      Special Purpose Entities
                                              ----------------------------------    --------------------------------
                                                   1996               1995              1996               1995
                                              ----------------------------------------------------------------------
      <S>                                      <C>               <C>                <C>               <C>            
      Income (loss):
        Various                                $   (774,488 )    $   (442,731 )     $   (515,558 )    $         --   
        United States                              (201,018 )         197,288                 --                --
        Canada                                      128,229            (2,724 )         (896,260 )         (41,045 )
        Europe                                           --                --          1,155,849           110,664
        South America                            (1,918,227 )              --                 --                --
                                              ----------------------------------------------------------------------
      Total identifiable income (loss)           (2,765,504 )        (248,167 )         (255,969 )          69,619
        Administrative and other                    628,979          (439,443 )               --                --
                                              ----------------------------------------------------------------------
      Total net income (loss)                  $ (2,136,525 )    $   (687,610 )     $   (255,969 )    $     69,619   
                                              ======================================================================
</TABLE>

         The net book  value  of  owned  assets  and the net  investment  in the
     unconsolidated  special purpose  entities at December 31, 1996 and 1995 are
     as follows:
<TABLE>
<CAPTION>

                                                                                         Investment in Unconsolidated
                                                             Owned                         Special Purpose Entities
                                               -----------------------------------    -----------------------------------
                                                    1996                1995               1996               1995
                                               --------------------------------------------------------------------------
         <S>                                   <C>                 <C>                <C>                <C>             
         Net book value:
           Various                             $   9,220,776       $  11,064,923      $   9,916,538      $     377,987   
           United States                          26,400,747          16,365,304                 --                 --
           Canada                                  4,664,333           5,840,188          6,665,213          4,108,555
           Europe                                         --                  --          8,766,851         10,109,664
           South America                          17,857,670                  --                 --                 --
                                               --------------------------------------------------------------------------
         Total equipment                       $  58,143,526       $  33,270,415      $  25,348,602      $  14,596,206   
                                               ==========================================================================
</TABLE>

     For 1996 and 1995, one lessee,  Transportes Aeroes  Portugueses,  accounted
     for more than 10% of the  Company's  revenues.  The total amount of revenue
     accounted  for by this lessee was $3.5 million or 21% of total  revenues in
     1996 and $1.2  million or 22% of total  revenues in 1995.  Thus,  the lease
     revenues are not reported in Lease Revenue in the Statement of  Operations,
     but,  rather are  reported  net in Equity in net  income of  unconsolidated
     special purpose entities.  Such  concentration of revenues are not unusual,
     given the early  stage of the equity  raising  period and are  expected  to
     decrease in the future to the extent additional equipment is acquired using
     proceeds from the Company's sale of limited liability company interests.

4.   Investments in Unconsolidated Special Purpose Entities

     During  1996,  the Company  purchased a 25%  interest in a trust which owns
     four Boeing  737-200  aircraft for $5.6  million,  and a 50% interest in an
     entity  which  owns a marine  vessel  for $3.4  million  (a deposit of $0.4
     million  was lodged in  December  of 1995) and a 35%  interest in an entity
     which  owns a  drilling  marine  vessel  for $7.0  million.  The  remaining
     interests are owned by affiliated  partnerships.  During 1995,  the Company
     purchased a 14% (17% at December 31,  1996)  interest in a trust which owns
     seven Boeing 737-200A aircraft for $4.3 million, and 33% in two trusts (the
     Trusts) which own three 1983 Boeing 737-200A aircraft,  equipped with Pratt
     & Whitney JT8D-17A engines,  two spare Pratt & Whitney JT8D-17A engines and
     a rotables package for $10.0 million.  The remaining interests are owned by
     affiliated partnerships.

     The Company  accounts for  investments in  unconsolidated  special  purpose
entities using the equity method.


<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

  4. Investments in Unconsolidated Special Purpose Entities (continued)

     The net investments in unconsolidated  special purpose entities include the
     following jointly-owned equipment (and related assets and liabilities):
<TABLE>
<CAPTION>

                                                                             December 31,             December 31,
           % Ownership    Equipment                                              1996                     1995
        ---------------------------------------------------------------------------------------------------------------

               <S>        <C>                                              <C>                      <C>            
               33%        Two trusts consisting of:
                            Three 737-200A Stage II
                               commercial aircraft
                            Two aircraft engines
                            Portfolio of rotable components                $     8,766,851          $    10,109,664
               14%        Trust consisting of seven 737-200A
                            Stage II commercial aircraft (see
                            note below)                                                 --                4,108,555
               17%        Trust consisting of six 737-200A
                            Stage II commercial aircraft (see
                            note below)                                          2,683,784                       --
               25%        Trust consisting of four 737-200A
                            Stage II commercial aircraft                         3,981,429                       --
               35%        Drilling marine vessel                                 6,906,103                       --
               50%        Cargo marine vessel                                    3,010,435                  377,987
                                                                         ----------------------------------------------
                          Total investments                                $    25,348,602          $    14,596,206
                                                                         ==============================================
</TABLE>

     The Company has beneficial  interest in two unconsolidated  special purpose
     entities  that own multiple  aircraft (the  Trusts).  These Trusts  contain
     provisions,  under certain circumstances,  for allocating specific aircraft
     to the beneficial owners.  During September 1996, PLM Equipment Growth Fund
     V, an affiliated  partnership  which also has a beneficial  interest in the
     Trust,  renegotiated  its senior loan agreement and was required,  for loan
     collateral  purposes,  to withdraw the aircraft  designated  to it from the
     Trust. The result was to restate the percentage  ownership of the remaining
     beneficial  owners of the Trusts beginning  September 30, 1996. This change
     has no effect on the income or loss  recognized in the year ended  December
     31, 1996.

     The following summarizes the financial  information for the special purpose
     entities and the Company's  interests therein as of and for the years ended
     December 31, 1996 and 1995:
<TABLE>
<CAPTION>

                                                         Total Numbers                     Net Interest of Company
                                               -----------------------------------    -----------------------------------
                                                    1996                1995               1996               1995
                                               --------------------------------------------------------------------------

         <S>                                   <C>                  <C>               <C>                <C>              
         Net assets                            $  80,845,706        $ 59,388,644      $  25,348,602      $  14,596,206    
         Revenues                                 24,675,879           4,777,472          6,565,658          1,255,034
         Net Income (loss)                        (3,071,146 )        (1,021,162 )         (255,969 )           69,619

</TABLE>


<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I
                         (A Limited Liability Company)
                         NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

5.   Notes Payable

     In  December  1996,  the  Company  entered  into an  agreement  to  issue a
     long-term note totaling $25 million to one 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 Company to maintain
     certain financial covenants related to fixed-charge coverage. Proceeds from
     the sale of the note will be used to fund additional equipment acquisitions
     during the first and second quarters of 1997.

         The Manager has entered into a joint $50 million  credit  facility (the
     "Committed Bridge Facility") on behalf of the Company, PLM Equipment Growth
     Fund IV, PLM Equipment Growth Fund V, PLM Equipment Growth Fund VI, and PLM
     Equipment Growth & Income Fund VII, all affiliated investment programs, TEC
     Acquisub,  Inc.  ("TECAI"),  an  indirect  wholly-owned  subsidiary  of the
     Manager  and  American   Finance  Group   ("AFG"),   a  subsidiary  of  PLM
     International,  which may be used to provide interim financing of up to (i)
     70% of the  aggregate  book value or 50% of the  aggregate  net fair market
     value  of  eligible  equipment  owned  by an  affiliate  plus  (ii)  50% of
     unrestricted  cash held by the  borrower.  The  Committed  Bridge  Facility
     became  available on December 20, 1993, and became available to the Company
     on May 8, 1995,  and was amended and  restated in October 1996 to expire on
     October 31,  1997 and  increase  the  available  borrowings  for AFG to $50
     million.  The Company,  TECAI and the other  partnerships  collectively may
     borrow up to $35 million of the Committed  Bridge  Facility.  The Committed
     Bridge  Facility also provides for a $5 million  Letter of Credit  Facility
     for the eligible borrowers.  Outstanding borrowings by the Company,  TECAI,
     AFG or PLM  Equipment  Growth  Funds  IV  through  VII  reduce  the  amount
     available to each other under the  Committed  Bridge  Facility.  Individual
     borrowings may be outstanding  for no more than 179 days, with all advances
     due no later than October 31, 1997. The Committed Bridge Facility prohibits
     the Company from incurring any additional indebtedness. Interest accrues at
     either the prime rate or adjusted  LIBOR at 2.5% at the  borrower's  option
     and is set at the time of  advance of funds.  To the extent the  Company is
     unable to raise  sufficient  capital through the sale of interests to repay
     its portion of the Committed Bridge Facility,  the Company will continue to
     be  obligated  under  the  Committed  Bridge  Facility  until  the  Company
     generates proceeds from operations or the sale of Equipment  sufficient for
     repayment.  Borrowings by the Company are guaranteed by the Manager.  As of
     December 31,  1996,  PLM  Equipment  Growth Fund V had  borrowings  of $2.5
     million,  PLM  Equipment  Growth Fund VI had $1.3  million,  PLM  Equipment
     Growth and Income Fund VII had $2.0  million,  AFG had $26.9  million,  and
     TECAI had $4.1 million in  outstanding  borrowings.  Neither PLM  Equipment
     Growth Fund IV nor the Company had any outstanding borrowings.

6.   Income Taxes

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

         As  of  December  31,  1996,   there  were  temporary   differences  of
     approximately $5,152,000 between the financial statement carrying values of
     certain assets and  liabilities and the income tax basis of such assets and
     liabilities,  primarily  due to  differences  in  depreciation  methods and
     equipment reserves.




<PAGE>


                   PROFESSIONAL LEASE MANAGEMENT INCOME FUND I

                                INDEX OF EXHIBITS


  Exhibit                                                                 Page

    4.     Operating Agreement of Partnership.                              *

   10.1    Management Agreement between Company and                         *
           PLM Investment Management, Inc.

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

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

   10.4    $25,000,000 Note Agreement, dated as of December 30, 1996.       *

   24.     Powers of Attorney.                                          38-41



* Incorporated by reference.  See page 18 of this report.