10-Q/A 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ___________________ FORM 10-Q/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED JUNE 30, 2002 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-21806 _______________________ PLM EQUIPMENT GROWTH FUND VI (Exact name of registrant as specified in its charter) CALIFORNIA 94-3135515 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 235 3RD STREET SOUTH, SUITE 200 ST. PETERSBURG, FL 33701 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code: (727) 803-1800 _______________________ 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 ____ ---- INTRODUCTORY NOTE - This Amendment No. 1 on Form 10-Q/A to the Registrant's Form 10-Q for the quarterly period ended June 30, 2002 is being filed for the purpose of giving effect to the restatement of the Partnership's condensed statement of operations for the six months ended June 30, 2002 and the condensed balance sheet as of December 31, 2001. See Note 14 to the condensed financial statements contained herein for a summary of the significant effects of the restatement. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) CONDENSED BALANCE SHEETS (in thousands of dollars, except unit amounts) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF OPERATIONS (in thousands of dollars, except weighted-average unit amounts) (unaudited)

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE PERIOD FROM DECEMBER 31, 2000 TO JUNE 30, 2002 (in thousands of dollars) (unaudited)

See accompanying notes to unaudited condensed financial statements.

See accompanying notes to unaudited condensed financial statements. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. Opinion of Management ----------------------- In the opinion of the management of PLM Financial Services, Inc. (FSI or the General Partner), the accompanying unaudited condensed financial statements contain all adjustments necessary, consisting primarily of normal recurring accruals, to present fairly the unaudited condensed financial position of PLM Equipment Growth Fund VI (the Partnership) as of June 30, 2002 and December 31, 2001, the unaudited condensed statements of operations for the three and six months ended June 30, 2002 and 2001, the unaudited condensed statements of changes in partners' capital for the period from December 31, 2000 to June 30, 2002, and the unaudited condensed statements of cash flows for the six months ended June 30, 2002 and 2001. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from the accompanying condensed financial statements. For further information, reference should be made to the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K/A for the year ended December 31, 2001, on file at the Securities and Exchange Commission. 2. Schedule of Partnership Phases --------------------------------- The Partnership is currently in its investment phase during which the Partnership uses a portion of the cash generated from operations and proceeds from asset sales to purchase additional equipment. The General Partner believes these acquisitions may cause the Partnership to generate additional earnings and cash flow for the Partnership. The Partnership may reinvest its cash flow, surplus cash and equipment sale proceeds in additional equipment, consistent with the objectives of the Partnership, until December 31, 2004. The Partnership will terminate on December 31, 2011, unless terminated earlier upon sale of all equipment and by certain other events. 3. Reclassification ---------------- Certain amounts in the 2001 financial statements have been reclassified to conform to the 2002 presentations. 4. Cash Distributions ------------------- Cash distributions are recorded when declared and may include amounts in excess of net income that are considered a return of capital. Cash distributions are generally paid in the same quarter they are declared. For the three and six months ended June 30, 2001, cash distributions totaled $-0- and $1.4 million, respectively, or $-0- and $0.16 per weighted-average limited partnership unit, respectively. None of the cash distributions to the limited partners during the six months ended June 30, 2001, were deemed to be a return of capital. No cash distributions were paid to the limited partners during the three and six months ended June 30, 2002. 5. Transactions with General Partner and Affiliates ----------------------------------------------------- The balance due to affiliates as of June 30, 2002 included $0.1 million due to FSI and its affiliates for management fees and $1.1 million due to affiliated unconsolidated special-purpose entities (USPEs). The balance due to affiliates as of December 31, 2001 included $0.1 million due to FSI and its affiliates for management fees and $0.8 million due to affiliated USPEs. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 5. Transactions with General Partner and Affiliates (continued) ----------------------------------------------------- The Partnership's proportional share of the affiliated expenses incurred by USPEs during 2002 and 2001 is listed in the following table (in thousands of dollars):

These affiliate expenses reduced the Partnership's proportional share of the equity interest in the income of USPEs. 6. Equipment --------- Owned equipment held for operating leases is stated at cost. The components of owned equipment were as follows (in thousands of dollars):

As of June 30, 2002, all owned equipment in the Partnership's portfolio was on lease except for 138 railcars and one marine container. As of December 31, 2001, all owned equipment in the Partnership's portfolio was on lease except for 118 railcars. The net book value of the off-lease equipment was $0.9 million as of June 30, 2002 and $1.2 million as of December 31, 2001. During the six months ended June 30, 2002, the Partnership disposed of marine containers and railcars, with an aggregate net book value of $0.2 million for proceeds of $0.3 million. During the six months ended June 30, 2001, the Partnership disposed of a Boeing 737-200 commercial aircraft, a marine vessel, marine containers, and a trailer with an aggregate net book value of $2.8 million, for proceeds of $3.6 million. Included in the net gain on sale of the marine vessel was the unused portion of marine vessel drydocking liability of $0.3 million. 7. Investments in Unconsolidated Special-Purpose Entities ---------------------------------------------------------- The Partnership owns equipment jointly with affiliated programs. These are single purpose entities that do not have any debt or other financial encumbrances. Ownership interest is based on the Partnership's contribution towards the cost of the equipment in the USPEs. The Partnership's proportional share of equity and income (loss) in each entity is not necessarily the same as its ownership interest. The primary reason for this difference has to do with certain fees such as management and acquisition and lease negotiation fees which vary among the owners of the USPEs. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7. Investments in Unconsolidated Special-Purpose Entities (continued) ---------------------------------------------------------- The tables below set forth 100% of the assets, liabilities, and equity of the entities in which the Partnership has an interest and the Partnership's proportional share of equity in each entity as of June 30, 2002 and December 31, 2001 (in thousands of dollars):

1 The Partnership owns a 62% interest of the Boeing 737-300 Trust that owns a stage III commercial aircraft. 2 The Partnership owns a 40% interest in the Aero California Trust that owns two stage III commercial aircraft on a direct finance lease. 3 The Partnership owns a 53% interest in the Lion Partnership that owns a product tanker. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 7. Investments in Unconsolidated Special-Purpose Entities (continued) ---------------------------------------------------------- The tables below set forth 100% of the revenues, gain on disposition of equipment, direct and indirect expenses, and net income (loss) of the entities in which the Partnership has an interest, and the Partnership's proportional share of income (loss) in each entity for the three and six months ended June 30, 2002 and 2001 (in thousands of dollars):

As of June 30, 2002 and December 31, 2001, all jointly-owned equipment in the Partnership's USPE portfolio was on lease. 1 The Partnership owns a 62% interest of the Boeing 737-300 Trust that owns a stage III commercial aircraft. 2 The Partnership owns a 40% interest in the Aero California Trust that owns two stage III commercial aircraft on a direct finance lease. 3 The Partnership owns a 53% interest in the Lion Partnership that owns a product tanker. 4 The Partnership owned a 50% interest in the Spear Partnership that owned a container feeder vessel. 5 The Partnership owned a 20% interest in the Pacific Source Partnership that owned a handymax dry bulk carrier. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 8. Operating Segments ------------------- The Partnership operates in five primary operating segments: marine vessel leasing, aircraft leasing, railcar leasing, trailer leasing and marine container leasing. Each equipment leasing segment primarily engages in short-term to mid-term operating leases to a variety of customers. The following tables present a summary of the operating segments (in thousands of dollars):

1 Includes certain assets not identifiable to a specific segment such as cash and restricted cash, certain accounts receivable, deferred charges and prepaid expenses. Also includes interest income and costs not identifiable to a particular segment, such as interest expense, and certain amortization, general and administrative and operations support expenses. 2 Includes interest income and costs not identifiable to a particular segment, such as interest expense, and certain amortization, general and administrative and operations support expenses. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 8. Operating Segments (continued) -------------------

9. Net Income (Loss) Per Weighted-Average Limited Partnership Unit ---------------------------------------------------------------------- Net income (loss) per weighted-average limited partnership unit was computed by dividing net income or loss attributable to limited partners by the weighted-average number of limited partnership units deemed outstanding during the period. The weighted-average number of limited partnership units deemed outstanding during the three and six months ended June 30, 2002 was 7,730,965 and 7,739,688, respectively. The weighted-average number of limited partnership units deemed outstanding during the three and six months ended June 30, 2001 was 8,189,463 and 8,189,464, respectively. 1 Includes interest income and costs not identifiable to a particular segment, such as interest expense, and certain amortization, general and administrative and operations support expenses. PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 10. Limited Partnership Units --------------------------- During 2001, the Partnership agreed to purchase 489,344 limited partnership units and paid $2.8 million to the purchasing agent for this purchase. The purchasing agent purchased 407,565 units as of December 31, 2001 and an additional 50,933 units during the six months ended June 30, 2002, which is reflected as a reduction in limited partnership units. Under the terms of the purchase agreement, only the units held by the owner on the date of the agreement were eligible to be purchased. The General Partner has not been able to purchase the remaining 30,846 units due to the eligible owners selling the units in the open market. The General Partner has determined that the remaining units will not be purchased and has received $0.2 million refund from the purchasing agent. 11. Debt ---- During January 2002, the Partnership prepaid the $20.0 million note payable and a prepayment penalty, included in other general and administrative expenses, of $1.0 million to prepay the existing senior note payable. Concurrent with this payment, the Partnership borrowed $15.0 million under the new $30.0 million term loan facility. The Partnership entered into two loans totaling $15.0 million that bear an interest rate between 4.38% and 4.94%. The loans made in January 2002 were based on three and twelve month LIBOR and will be adjusted to market rates at the end of the LIBOR term. All loans under this facility will be repaid over five years with equal principal plus interest payments. The Partnership made the regularly scheduled principal payments of $0.8 million to the lender of the notes during the six months ended June 30, 2002. 12. Subsequent Events ------------------ In July 2002, PLM International, Inc. (PLMI), the parent company of FSI, reached an agreement with the lenders of the $10.0 million warehouse facility to extend the expiration date to June 30, 2003. The warehouse facility is shared by the Partnership, PLM Equipment Growth Fund V, PLM Equipment Growth & Income Fund VII, Professional Lease Management Income Fund I, LLC, and Acquisub LLC, a wholly owned subsidiary of PLMI. The facility provides for financing up to 100% of the cost of the equipment. Outstanding borrowings by one borrower reduce the amount available to each of the other borrowers under the facility. Individual borrowings may be outstanding for no more than 270 days, with all advances due no later than June 30, 2003. Interest accrues either at the prime rate or LIBOR plus 2.0% at the borrower's option and is set at the time of an advance of funds. Borrowings by the Partnership are guaranteed by PLMI. The Partnership is not liable for the advances made to the other borrowers. During July 2002, the Partnership made its regularly scheduled debt payment of $0.8 million to the lenders of the $30.0 million term loan facility. 13. Commitments and Contingencies ------------------------------- In May 2002, PLM Transportation Equipment Corp. Inc. (TEC), a wholly owned subsidiary of FSI, arranged for the lease or purchase of a total of 1,050 pressurized tank railcars by (i) partnerships and managed programs in which FSI serves as the general partner or manager and holds an ownership interest (Program Affiliates) or (ii) partnerships or managed programs in which FSI provides management services but does not hold an ownership interest or third parties (Non-Program Affiliates). These railcars will be delivered over the next three years. A leasing company affiliated with the manufacturer will acquire approximately 70% of the railcars and lease them to a Non-Program Affiliate. The remaining approximately 30% will either be purchased by other third parties to be managed by PLMI, or by the Program Affiliates. An affiliate of TEC will manage the leased and purchased railcars. Neither TEC nor its affiliate will be liable for these railcars. TEC estimates that the total value of PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 13. Commitments and Contingencies (continued) ------------------------------- purchased railcars will not exceed $26.0 million with one third of the railcars being purchased in each of 2002, 2003, and 2004. Although the General Partner has neither determined which Program Affiliates will purchase the railcars nor the timing of any purchases, it is possible the Partnership may purchase some of the railcars. The Partnership is involved as plaintiff or defendant in various legal actions incidental to its business. Management does not believe that any of these actions will be material to the financial condition or results of operations of the Partnership. 14. Restatement of Financial Statements -------------------------------------- Subsequent to the issuance of the Partnership's financial statements for the three and six month periods ended June 30, 2002 and for the year ended December 31, 2001, the General Partner determined that the accounting treatment related to the prepayment penalty and the unamortized debt placement fees on the Partnership's note payable was incorrect. The Partnership accrued the estimated penalty of $1.1 million in the third quarter of 2001 and adjusted the accrual to $1.0 million in the fourth quarter of 2001. The Partnership also accelerated $0.1 million amortization of debt placement fees in September 2001. The actual retirement of the debt occurred in January 2002. The proper accounting treatment is to expense the prepayment penalty and the unamortized debt placement fees in the period in which the debt was retired. As a result, the condensed financial statements for the six month period ended June 30, 2002 and the condensed balance sheet as of December 31, 2001 have been restated from the amounts previously reported. A summary of the significant effects of the restatement is as follows (in thousands of dollars except, weighted-average unit amounts):

PLM EQUIPMENT GROWTH FUND VI (A LIMITED PARTNERSHIP) NOTES TO CONDENSED FINANCIAL STATEMENTS 15. Recent Accounting Pronouncements ---------------------------------- In April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections" (SFAS No. 145). The provisions of SFAS No. 145 are effective for fiscal years beginning after May 15, 2002. As permitted by the pronouncement, the Partnership has elected early adoption of SFAS No. 145 as of January 1, 2002, and, accordingly, the loss on extinguishment of long-term debt in January 2002 has been reported in "Other general and administrative expenses" in the statements of operations. The Accounting Standards Executive Committee of the American Institute of Certified Public Accountants has issued an exposure draft of a proposed statement of position (SOP) entitled "Accounting for Certain Costs and Activities Related to Property, Plant and Equipment". The Partnership has historically accrued legally mandated maintenance such as marine vessel dry-docking and aircraft engine maintenance over the periods prior to the required maintenance date. If the SOP is adopted as proposed, the Partnership and USPEs would reverse all previously accrued maintenance reserves. If this proposed change were in effect at June 30, 2002, the Partnership and USPEs would have been required to reverse maintenance reserves of approximately $1.0 million. Maintenance reserves will change in 2002 as maintenance is performed and past maintenance reserves are depleted and additional reserves are recorded. If adopted in its present form, charges related to this proposed change would be taken in the first quarter of 2003 and would be reported as a cumulative effect of an accounting change, in the statements of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ------------------------------------------------------------------- RESULTS OF OPERATIONS ------------------- (I) RESULTS OF OPERATIONS As discussed in Note 14 to the condensed financial statements included in Item 1, the Partnership has restated its condensed statement of operations for the six month period ended June 30, 2002 and the condensed balance sheet as of December 31, 2001. The following management discussion and analysis takes into account the effects of the restatement. Comparison of PLM Equipment Growth Fund VI's (the Partnership's) Operating -------------------------------------------------------------------------------- Results for the Three Months Ended June 30, 2002 and 2001 ------------------------------------------------------------------- (A) Owned Equipment Operations Lease revenues less direct expenses (defined as repairs and maintenance, equipment operating, and asset-specific insurance expenses) on owned equipment decreased during the three months ended June 30, 2002, compared to the same period of 2001. Gains or losses from the sale of equipment, interest and other income, and certain expenses such as management fees to affiliate, depreciation and amortization and general and administrative expenses relating to the operating segments (see Note 8 to the unaudited condensed financial statements), are not included in the owned equipment operation discussion because these expenses are indirect in nature and not a result of operations, but the result of owning a portfolio of equipment. The following table presents lease revenues less direct expenses by segment (in thousands of dollars):

Marine containers: Marine container lease revenues and direct expenses were $1.0 million and $11,000, respectively, for the three months ended June 30, 2002, compared to $1.2 million and $17,000, respectively, during the same quarter of 2001. The decrease in lease revenues of $0.2 million during the second quarter of 2002 compared to 2001 was due to lower lease rates earned on the Partnership's marine containers. Railcars: Railcar lease revenues and direct expenses were $0.9 million and $0.2 million, respectively, for the three months ended June 30, 2002, compared to $1.0 million and $0.3 million, respectively, during the same quarter of 2001. A decrease in railcar lease revenues of $0.1 million was due to lower re-lease rates earned on new leases as old leases expired during 2002. A decrease in railcar direct expenses of $0.1 million was due to a decrease in the repairs and maintenance of railcars compared to 2001. Aircraft and components: Aircraft lease revenues and direct expenses were $0.4 million and $-0-, respectively, for the three months ended June 30, 2002, compared to $0.3 million and $2,000, respectively, during the same period of 2001. Lease revenues increased $0.1 million during 2002 due to an MD-82 aircraft that was off-lease for one month during the second quarter of 2001 that was on-lease the full quarter of 2002. Trailers: Trailer lease revenues and direct expenses were $0.2 million and $0.1 million, respectively, for the three months ended June 30, 2002 and 2001. Marine vessels: Marine vessel contribution decreased $0.1 million during the three months ended June 30, 2002 due to the sale the Partnership's wholly-owned marine vessel during 2001. (B) Indirect Expenses Related to Owned Equipment Operations Total indirect expenses of $1.8 million for the quarter ended June 30, 2002 decreased from $2.7 million for the same period in 2001. Significant variances are explained as follows: (i) A $0.6 million decrease in depreciation and amortization expenses from 2001 levels reflects the decrease of approximately $0.1 million caused by the double-declining balance method of depreciation which results in greater depreciation in the first years an asset is owned, a decrease of $0.4 million resulting from certain assets becoming fully depreciated during 2001, and a decrease of $25,000 due to the sale of certain equipment during 2002 and 2001; (ii) A $0.3 million decrease in interest expense resulted from a decrease of $0.2 million caused by lower average borrowings outstanding and a $0.1 million decrease was due to a lower interest rate charged during 2002 compared to 2001; (iii) A $24,000 decrease in management fees was due to lower lease revenues earned by the Partnership during the three months ended June 30, 2002 compared to 2001; and (iv) A $49,000 increase in general and administrative expenses during the three months ended June 30, 2002 was primarily due to an increase in administrative services. (C) Interest and Other Income Interest and other income decreased $0.2 million during 2002. A decrease of $0.1 million was due to lower cash balances compared to 2001 and $0.1 million was due to a decrease in the interest rate earned on cash balances. (D) Gain on Disposition of Owned Equipment The gain on the disposition of owned equipment for the second quarter of 2002 totaled $0.1 million, and resulted from the sale of marine containers and railcars, with an aggregate net book value of $0.1 million for proceeds of $0.2 million. The gain on the disposition of owned equipment for the second quarter of 2001 totaled $0.5 million, and resulted from the sale of a marine vessel and marine containers with an aggregate net book value of $1.8 million, for proceeds of $2.0 million. Included in the gain on sale of the marine vessel was the unused portion of marine vessel drydocking liability of $0.3 million. (E) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities (USPEs) Equity in net income (loss) of USPEs represents the Partnership's share of the net income or loss generated from the operation of jointly owned assets accounted for under the equity method of accounting. These entities are single purpose and have no debt or other financial encumbrances. The following table presents equity in net income (loss) by equipment type (in thousands of dollars):

Marine containers: Marine container lease revenues and direct expenses were $2.0 million and $21,000, respectively, for the six months ended June 30, 2002, compared to $2.4 million and $34,000, respectively, during the same period of 2001. The decrease in lease revenues of $0.5 million during 2002 compared to the same period of 2001 was due to lower lease rates earned on the Partnership's marine containers. Railcars: Railcar lease revenues and direct expenses were $1.8 million and $0.4 million, respectively, for the six months ended June 30, 2002, compared to $2.1 million and $0.5 million, respectively, during the same period of 2001. A decrease in railcar lease revenues of $0.3 million was primarily due to lower re-lease rates earned on new leases as old leases expired during 2002. Aircraft and components: Aircraft lease revenues and direct expenses were $0.8 million and $21,000, respectively, for the six months ended June 30, 2002, compared to $1.0 million and $9,000, respectively, during the same period of 2001. Lease revenues decreased $0.2 million during 2002 due to the reduction in the lease rate on an MD-82 aircraft as part of a new lease agreement in 2001. Trailers: Trailer lease revenues and direct expenses were $0.4 million and $0.3 million, respectively, for the six months ended June 30, 2002, compared to $0.4 million and $0.2 million, respectively, during the same period of 2001. Trailer contribution decreased $43,000 during 2002 primarily due to higher repair costs in 2002 compared to 2001. Marine vessels: Marine vessel contribution decreased $0.2 million during the six months ended June 30, 2002 due to the sale of the Partnership's wholly-owned marine vessel during 2001. (B) Indirect Expenses Related to Owned Equipment Operations Total indirect expenses of $4.4 million for the six months ended June 30, 2002 decreased from $5.7 million for the same period in 2001. Significant variances are explained as follows: (i) A $1.2 million decrease in depreciation and amortization expenses from 2001 levels reflects the decrease of approximately $0.3 million caused by the double-declining balance method of depreciation which results in greater depreciation in the first years an asset is owned, a decrease of $0.9 million resulting from certain assets being fully depreciated during 2001, and a decrease of $0.1 million due to the sale of certain equipment during 2002 and 2001. These decreases were offset, in part, by an increase in amortization expense of $0.1 million resulting from the write-off of the remaining fees associated with the pay off of the existing loan; (ii) A $0.6 million decrease in interest expense resulted from a decrease of $0.5 million caused by lower average borrowings outstanding in the six months ended June 30, 2002 compared to the same period of 2001 and a $0.1 million decrease was due to a lower interest rate charged during 2002 compared to 2001; (iii) A $0.1 million decrease in management fees was due to lower lease revenues earned by the Partnership during the six months ended June 30, 2002 compared to the same period of 2001; and (iv) A $0.6 million increase in general and administrative expenses during the six months ended June 30, 2002 was due to a $1.0 million debt prepayment penalty in the first quarter 2002 related to the Partnership's note payable that did not occur during 2001, offset, in part, by a decrease of $0.2 million due to lower professional service costs and $0.1 million resulting from lower allocations by the General Partner for office services and data processing costs. (C) Interest and Other Income Interest and other income decreased $0.3 million during 2002. A decrease of $0.2 million was due to lower cash balances compared to 2001 and $0.1 million was due to a decrease in the interest rate earned on cash balances. (D) Gain on Disposition of Owned Equipment The gain on the disposition of owned equipment for the six months ended June 30, 2002 totaled $0.1 million and resulted from the sale of marine containers and railcars, with an aggregate net book value of $0.2 million for proceeds of $0.3 million. The gain on the disposition of owned equipment for the six months ended June 30, 2001 totaled $1.1 million, and resulted from the sale of a Boeing 737-200 commercial aircraft, marine vessel, trailer, and marine containers with an aggregate net book value of $2.8 million, for proceeds of $3.6 million. Included in the gain on sale of the marine vessel was the unused portion of marine vessel drydocking liability of $0.3 million. (E) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities (USPEs) Equity in net income (loss) of USPEs represents the Partnership's share of the net income or loss generated from the operation of jointly owned assets accounted for under the equity method of accounting. These entities are single purpose and have no debt or other financial encumbrances. The following table presents equity in net income (loss) by equipment type (in thousands of dollars):

The following USPE discussion by equipment type is based on the Partnership's proportional share of lease revenues, gain on equipment dispositions, depreciation expense, direct expenses, and administrative expenses in the USPE's: Marine vessels: As of June 30, 2002 and 2001, the Partnership owned an interest in an entity that owned a marine vessel. During the six months ended June 30, 2002, lease revenues of $1.6 million were offset by depreciation expense, direct expenses, and administrative expenses of $1.6 million. During the same period of 2001, lease revenues of $3.4 million and the gain of $0.7 million from the sale of the Partnership's interest in two entities that owned marine vessels were offset by depreciation expense, direct expenses, and administrative expenses of $2.5 million. Marine vessel lease revenues decreased $1.3 million due to one marine vessel earning a lower charter rate during the six months ended June 30, 2002 compared to 2001. Additionally, lease revenues decreased $0.5 million due to the sale of the Partnership's interest in two entities that owned marine vessels during 2001. Direct expenses decreased $0.3 million during the six months ending June 30, 2002 compared to the same period in 2001 for the remaining entity owning a marine vessel due to lower operating expenses. Additionally, direct expenses decreased $0.6 million due to the sale of the Partnership's interest in two entities that owned marine vessels during 2001. Aircraft: As of June 30, 2002 and 2001, the Partnership owned an interest in two commercial aircraft on a direct finance lease and an interest in a Boeing 737-300 commercial aircraft. During the six months ending June 30, 2002, revenues of $0.7 million were offset by depreciation expense, direct expenses and administrative expenses of $0.9 million. During the same period of 2001, revenues of $0.8 million were offset by depreciation expense, direct expenses and administrative expenses of $1.5 million. Revenues earned by the trust that owns two commercial aircraft on a direct finance lease decreased $0.2 million due to the leases for the aircraft in the trust being renegotiated at a lower rate. This decrease was partially offset by an increase of $0.1 million earned by the trust owning a Boeing 737-300 commercial aircraft due to a new lease going into effect at a higher rate. Depreciation expense, direct expenses, and administrative expenses decreased $0.6 million during the six months ended June 30, 2002 due to required repairs and maintenance of $0.5 million to the Boeing 737-300 during 2001 that were not required during 2002 and lower depreciation expense of $0.1 million caused by the double-declining balance method of depreciation which results in greater depreciation in the first years an asset is owned. (F) Net Income (Loss) As a result of the foregoing, the Partnership's net loss for the six months ended June 30, 2002 was $0.3 million, compared to a net income of $1.7 million during the same period of 2001. The Partnership's ability to acquire, operate, and liquidate assets, secure leases and re-lease those assets whose leases expire is subject to many factors. Therefore, the Partnership's performance in the six months ended June 30, 2002 is not necessarily indicative of future periods. (II) CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, the General Partner reviews these estimates including those related to asset lives and depreciation methods, impairment of long-lived assets, allowance for doubtful accounts, reserves related to legally mandated equipment repairs and contingencies and litigation. These estimates are based on the General Partner's historical experience and on various other assumptions believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The General Partner believes, however, that the estimates, including those for the above-listed items, are reasonable and that actual results will not vary significantly from the estimated amounts. The General Partner believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Partnership's financial statements: Asset lives and depreciation methods: The Partnership's primary business involves the purchase and subsequent lease of long-lived transportation and related equipment. The General Partner has chosen asset lives that it believes correspond to the economic life of the related asset. The General Partner has chosen a deprecation method that it believes matches the benefit to the Partnership from the asset with the associated costs. These judgments have been made based on the General Partner's expertise in each equipment segment that the Partnership operates. If the asset life and depreciation method chosen does not reduce the book value of the asset to at least the potential future cash flows from the asset to the Partnership, the Partnership would be required to record a loss on revaluation. Likewise, if the net book value of the asset was reduced by an amount greater than the economic value has deteriorated, the Partnership may record a gain on sale upon final disposition of the asset. Impairment of long-lived assets: On a regular basis, the General Partner reviews the carrying value of its equipment and investments in USPEs to determine if the carrying value of the assets may not be recoverable, in consideration of the current economic conditions, in accordance with the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" and Accounting Principals Board Opinion No. 18 "Equity Method of Accounting for Investments in Common Stock". This requires the General Partner to make estimates related to future cash flows from each asset as well as the determination if the deterioration is temporary or permanent. If these estimates or the related assumptions change in the future, the Partnership may be required to record additional impairment charges. Allowance for doubtful accounts: The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of the lessees to make the lease payments. These estimates are primarily based on the amount of time that has lapsed since the related payments were due as well as specific knowledge related to the ability of the lessees to make the required payments. If the financial condition of the Partnership's lessees were to deteriorate, additional allowances could be required that would reduce income. Conversely, if the financial condition of the lessees were to improve or if legal remedies to collect past due amounts were successful, the allowance for doubtful accounts may need to be reduced and income would be increased. Reserves for repairs: The Partnership accrues for legally required repairs to equipment such as dry docking for marine vessels and engine overhauls to aircraft engines over the period prior to the required repairs. The amount that is reserved for is based on the General Partner's expertise in each equipment segment, the past history of such costs for that specific piece of equipment and discussions with independent, third party equipment brokers. If the amount reserved for is not adequate to cover the cost of such repairs or if the repairs must be performed earlier than the General Partner estimated, the Partnership would incur additional repair and maintenance or equipment operating expenses. Contingencies and litigation: The Partnership is subject to legal proceedings involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are made after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Partnership may be required to record additional litigation expense. (III) FINANCIAL CONDITION -- CAPITAL RESOURCES, LIQUIDITY, AND DISTRIBUTIONS For the six months ended June 30, 2002, the Partnership generated $3.9 million in operating cash (net cash provided by operating activities plus non-liquidating cash distributions from USPEs) to meet its operating obligations, pay debt and interest payments and maintain working capital reserves. During the six months ended June 30, 2002, the Partnership disposed of owned equipment and received aggregate proceeds of $0.3 million. Accounts receivable decreased $0.5 million during the six months ended June 30, 2002 due to the timing of cash receipts. Investments in USPEs decreased $1.6 million during the six months ended June 30, 2002 due to cash distributions of $1.2 million from the USPEs to the Partnership and a $0.3 million loss that was recorded by the Partnership for its equity interests in the USPEs. Accounts payable decreased $0.1 million during the six months ended June 30, 2002 due to the timing of cash payments. During January 2002, the Partnership prepaid the $20.0 million note payable outstanding on December 31, 2001 and a prepayment penalty, included in other general and administrative expenses, of $1.0 million to prepay the existing senior note payable. Concurrent with this payment, the Partnership borrowed $15.0 million under the new $30.0 million term loan facility. The Partnership made its scheduled principal payment of $0.8 million under the new notes payable during the six months ended June 30, 2002 and another payment of $0.8 million during July 2002. The Partnership is scheduled to make a quarterly debt payment of $0.8 million to the lenders of the notes payable at the beginning of each quarter. The cash for each payment will come from operations and equipment dispositions. In May 2002, PLM Transportation Equipment Corp. Inc. (TEC), a wholly owned subsidiary of FSI, arranged for the lease or purchase of a total of 1,050 pressurized tank railcars by (i) partnerships and managed programs in which FSI serves as the general partner or manager and holds an ownership interest (Program Affiliates) or (ii) partnerships or managed programs in which FSI provides management services but does not hold an ownership interest or third parties (Non-Program Affiliates). These railcars will be delivered over the next three years. A leasing company affiliated with the manufacturer will acquire approximately 70% of the railcars and lease them to a Non-Program Affiliate. The remaining approximately 30% will either be purchased by other third parties to be managed by PLM International, Inc. (PLMI), or by the Program Affiliates. An affiliate of TEC will manage the leased and purchased railcars. Neither TEC nor its affiliate will be liable for these railcars. TEC estimates that the total value of purchased railcars will not exceed $26.0 million with one third of the railcars being purchased in each of 2002, 2003, and 2004. Although the General Partner has neither determined which Program Affiliates will purchase the railcars nor the timing of any purchases, it is possible the Partnership may purchase some of the railcars. In July 2002, PLMI, the parent company of FSI, reached an agreement with the lenders of the $10.0 million warehouse facility to extend the expiration date to June 30, 2003. The warehouse facility is shared by the Partnership, PLM Equipment Growth Fund V, PLM Equipment Growth & Income Fund VII, Professional Lease Management Income Fund I, LLC, and Acquisub LLC, a wholly owned subsidiary of PLMI. The facility provides for financing up to 100% of the cost of the equipment. Outstanding borrowings by one borrower reduce the amount available to each of the other borrowers under the facility. Individual borrowings may be outstanding for no more than 270 days, with all advances due no later than June 30, 2003. Interest accrues either at the prime rate or LIBOR plus 2.0% at the borrower's option and is set at the time of an advance of funds. Borrowings by the Partnership are guaranteed by PLMI. The Partnership is not liable for the advances made to the other borrowers. As of August 13, 2002, the Partnership had no borrowings outstanding under this facility and there were no other borrowings outstanding under this facility by any other eligible borrower. (IV) RECENT ACCOUNTING PRONOUNCEMENTS In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical Corrections" (SFAS No. 145). The provisions of SFAS No. 145 are effective for fiscal years beginning after May 15, 2002. As permitted by the pronouncement, the Partnership has elected early adoption of SFAS No. 145 on January 1, 2002, and, accordingly, the loss on extinguishment of long-term debt in January 2002 has been reported in "Other general and administrative expenses" in the statements of operations. The Accounting Standards Executive Committee of the American Institute of Certified Public Accountants has issued an exposure draft of a proposed statement of position (SOP) entitled "Accounting for Certain Costs and Activities Related to Property, Plant and Equipment". The Partnership has historically accrued legally mandated maintenance such as marine vessel dry-docking and aircraft engine maintenance over the periods prior to the required maintenance date. If the SOP is adopted as proposed, the Partnership and USPEs would reverse all previously accrued maintenance reserves. If this proposed change were in effect at June 30, 2002, the Partnership and USPEs would have been required to reverse maintenance reserves of approximately $1.0 million. Maintenance reserves will change in 2002 as maintenance is performed and past maintenance reserves are depleted and additional reserves are recorded. If adopted in its present form, charges related to this proposed change would be taken in the first quarter of 2003. (V) OUTLOOK FOR THE FUTURE Several factors may affect the Partnership's operating performance during the remainder of 2002 and beyond, including changes in the markets for the Partnership's equipment and changes in the regulatory environment in which that equipment operates. The Partnership's operation of a diversified equipment portfolio in a broad base of markets is intended to reduce its exposure to volatility in individual equipment sectors. Other factors affecting the Partnership's contribution during the remainder of 2002 and beyond include: (1) The cost of new marine containers have been at historic lows for the past several years which has caused downward pressure on per diem lease rates for this type of equipment; (2) Railcar loadings in North America for the six months ended June 30, 2002 were below those of 2001. This decrease has led to lower utilization and lower contribution to the Partnership as existing leases expire and renewal leases are negotiated; (3) Marine vessel freight rates are dependent upon the overall condition of the international economy. Freight rates earned by the Partnership's marine vessel began to decrease during the latter half of 2001 and continued through the first six months of 2002. This trend is expected to continue during the latter half of 2002 or until international economies stabilize and begin to improve; (4) The airline industry began to see lower passenger travel during 2001. The tragic events on September 11, 2001 worsened the situation. As a result of this and the general turmoil in the airline industry, the Partnership has had to renegotiate leases on its owned aircraft and partially owned aircraft on a direct finance lease during 2001 that will result in a decrease in revenues during 2002. In addition, these events have had a negative impact on the fair market value of the Partnership's owned and partially owned aircraft. Although no revaluations were required during 2002 to these aircraft, the General Partner does not expect these aircraft values to return to their previous value in the foreseeable future; and (5) Industry wide utilization of inter-modal trailers decreased 12% in the six months ended June 30, 2002 compared to the 2001. This has led to lower utilization of the Partnership's trailers. The ability of the Partnership to realize acceptable lease rates on its equipment in the different equipment markets is contingent on many factors, such as specific market conditions and economic activity, technological obsolescence, and government or other regulations. The unpredictability of some of these factors, or of their occurrence, makes it difficult for the General Partner to clearly define trends or influences that may impact the performance of the Partnership's equipment. The General Partner continually monitors both the equipment markets and the performance of the Partnership's equipment in these markets. The General Partner may decide to reduce the Partnership's exposure to equipment markets in which it determines it cannot operate equipment to achieve acceptable rates of return. Alternatively, the General Partner may make a determination to enter equipment markets in which it perceives opportunities to profit from supply/demand instabilities or other market imperfections The Partnership may reinvest its cash flow, surplus cash, and equipment sale proceeds in additional equipment, consistent with the objectives of the Partnership, until December 31, 2004. The General Partner believes that these acquisitions may cause the Partnership to generate additional earnings and cash flow for the Partnership. Surplus funds, if any, less reasonable reserves, may be distributed to the partners. The Partnership will terminate on December 31, 2011, unless terminated earlier upon sale of all equipment and by certain other events. The Partnership intends to use cash flow from operations to satisfy its operating requirements, pay loan principal and interest on debt, and pay cash distributions to the partners. (VI) FORWARD-LOOKING INFORMATION Except for the historical information contained herein, this Form 10-Q/A 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-Q/A should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q/A. The Partnership's actual results could differ materially from those discussed here. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------------- The Partnership's primary market risk exposure is that of currency devaluation risk. During the six months ended June 30, 2002, 69% of the Partnership's total lease revenues from wholly- and partially-owned equipment came from non-United States domiciled lessees. Most of the Partnership's leases require payment in United States (US) currency. If these lessees' currency devalues against the US dollar, the lessees could potentially encounter difficulty in making the US dollar denominated lease payments. PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ------------------------------------- (a) Exhibits -------- 10.1 Third amendment to the Warehouse Credit Agreement, dated July 11, 2002, incorporated by reference to the Partnership's Form 10-Q dated June 30, 2002 filed with the Securities and Exchange Commission on August 14, 2002. 10.2 May 2002 purchase agreement between PLM Transportation Equipment Corp., Inc. and Trinity Tank Car, Inc., incorporated by reference to the Partnership's Form 10-Q dated September 30, 2002 filed with the Securities and Exchange Commission on November 14, 2002. (b) Reports on Form 8-K ---------------------- On August 5, 2002, the Partnership filed Form 8-K acknowledging the receipt of a mini-tender offer. ------ CONTROL CERTIFICATION ---------------------- I, James A. Coyne, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of PLM Equipment Growth Fund VI; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: December 4, 2002 By: /s/ James A. Coyne --------------------- James A. Coyne President ------ CONTROL CERTIFICATION ---------------------- I, Richard K Brock, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of PLM Equipment Growth Fund VI; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: December 4, 2002 By: /s/ Richard K Brock ---------------------- Richard K Brock Chief Financial Officer (Principal Financial Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PLM EQUIPMENT GROWTH FUND VI By: PLM Financial Services, Inc. General Partner Date: December 4, 2002 By: /s/ Richard K Brock ---------------------- Richard K Brock Chief Financial Officer CERTIFICATION The undersigned hereby certifies, in their capacity as an officer of the General Partner of PLM Equipment Growth Fund VI (the Partnership), that the Quarterly Report of the Partnership on Form 10-Q/A for the period ended June 30, 2002, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition of the Partnership at the end of such period and the results of operations of the Partnership for such period. PLM EQUIPMENT GROWTH FUND VI By: PLM Financial Services, Inc. General Partner Date: December 4, 2002 By: /s/ James A. Coyne --------------------- James A. Coyne President Date: December 4, 2002 By: /s/ Richard K Brock ---------------------- Richard K Brock Chief Financial Officer

PLM EQUIPMENT GROWTH FUND VI 10-Q/A