PLM Equipment Growth Fund II 10QSB 2003 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 10-QSB

[X]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934

For the fiscal quarter ended March 31, 2003

[ ]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 1-10553

_______________________

PLM EQUIPMENT GROWTH FUND II

(Exact name of registrant as specified in its charter)

California	94-3041013
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
235 3rdStreet 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. YesXNo ______

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

CONDENSED BALANCE SHEETS

(in thousands of dollars, except unit amounts)

(unaudited)

	March 31,			December 31,
		2003			2002
Assets
Equipment held for operating lease, at cost	$	16,502		$	16,501
Less accumulated depreciation		(14,635	)		(14,500	)
Net equipment		1,867			2,001
Cash and cash equivalents		4,045			4,025
Accounts receivable, less allowance for doubtful accounts
of $50 in 2003 and $47 in 2002		405			412
Prepaid expenses and other assets		107			54
Total assets	$	6,424		$	6,492
Liabilities and partners’ capital
Liabilities:
Accounts payable and accrued expenses	$	316		$	307
Due to affiliates		31			33
Total liabilities		347			340
Commitments and contingencies
Partners' capital:
Limited partners (7,381,265 depositary units as of
March 31, 2003 and December 31, 2002)		6,077			6,152
General Partner		--			--
Total partners' capital		6,077			6,152
Total liabilities and partners' capital	$	6,424		$	6,492

See accompanying notes to unaudited condensed financial statements.

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

CONDENSED STATEMENTS OF OPERATIONS

(in thousands of dollars, except weighted-average unit amounts)

(unaudited)

		For the Three Months
		Ended March 31,
				2003			2002
Revenues
Lease revenue	$		577			$	641
Interest and other income			11				7
(Loss) gain on disposition of equipment			(1		)		1,227
Total revenues			587				1,875
Expenses
Depreciation			136				241
Repairs and maintenance			286				242
Equipment operating expenses			28				49
Management fees to affiliate			29				33
General and administrative expenses to affiliates			20				23
Other general and administrative expenses			160				108
Provision for (recovery of) bad debts			3				(21	)
Total expenses			662				675
Net (loss) income	$		(75		)	$	1,200
Partners' share of net (loss) income
Limited partners	$		(75		)	$	1,200
General Partner			--				--
Total	$		(75		)	$	1,200
Limited partners’ net (loss) income per weighted- average depositary unit	$		(0.01		)	$	0.16

See accompanying notes to unaudited condensed financial statements.

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

For the period from December 31, 2001 to March 31, 2003

(in thousands of dollars)

(unaudited)

	Limited			General
	Partners			Partner			Total
Partners' capital as of December 31, 2001	$	5,231		$	--	$	5,231
Net income		921			--		921
Partners' capital as of December 31, 2002		6,152			--		6,152
Net loss		(75	)		--		(75	)
Partners' capital as of March 31, 2003	$	6,077		$	--	$	6,077

See accompanying notes to unaudited condensed financial statements.

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

(unaudited)

	For the Three Months
	Ended March 31,
		2003			2002
Operating activities
Net (loss) income	$	(75	)	$	1,200
Adjustments to reconcile net (loss) income to net cash provided
by (used in) operating activities:
Depreciation		136			241
Provision for (recovery of) bad debts		3			(21	)
Loss (gain) on disposition of equipment		1			(1,227	)
Changes in operating assets and liabilities:
Accounts receivable		4			102
Prepaid expenses and other assets		(53	)		(43	)
Accounts payable and accrued expenses		9			(22	)
Due to affiliates		(2	)		(6	)
Net cash provided by operating activities		23			224
Investing activities
Payments for capitalized improvements		(4	)		--
Proceeds from disposition of equipment		1			209
Net cash (used in) provided by investing activities		(3	)		209
Net increase in cash and cash equivalents		20			433
Cash and cash equivalents at beginning of period		4,025			1,958
Cash and cash equivalents at end of period	$	4,045		$	2,391

See accompanying notes to unaudited condensed financial statements.

PLM EQUIPMENT GROWTH FUND II

(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 II (the Partnership) as of March 31, 2003 and December 31, 2002, the unaudited condensed statements of operations for the three months ended March 31, 2003 and 2002, the unaudited condensed statements of changes in partners’ capital for the period from December 31, 2001 to March 31, 2003, and the unaudited condensed statements of cash flows for the three months ended March 31, 2003 and 2002. 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 for the year ended December 31, 2002, on file at the Securities and Exchange Commission.

Effective with the filing of this quarterly report, the Partnership will file all future quarterly and annual reports as an SB filer as allowed under Regulation S-B until such point that the Partnership no longer qualifies to be an SB filer.

2.Schedule of Partnership Phases

The Partnership, in accordance with its limited partnership agreement, entered its liquidation phase on January 1, 1999, and has commenced an orderly liquidation of the Partnership’s assets. The Partnership will terminate on December 31, 2006, unless terminated earlier upon the sale of all equipment or by certain other events. The General Partner may no longer reinvest cash flows and surplus funds in equipment. All future cash flows and surplus funds, if any, are to be used for distributions to partners, except to the extent used to maintain reasonable reserves. During the liquidation phase, the Partnership’s assets will continue to be recorded at the lower of the carrying amount or fair value less cost to sell.

3.Cash Distribution

Cash distributions are recorded when declared. Cash distributions are generally paid in the same quarter they are declared.Cash distributions may include amounts in excess of net income that are considered a return of capital. No cash distributions were paid to the limited partners during the three months ended March 31, 2003 and 2002.

4.Transactions with General Partner and Affiliates

The balance due to affiliates as of March 31, 2003 and December 31, 2002 of $31,000 and $33,000, respectively, is a payable due to FSI and its affiliate for management fees.

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

5.Equipment

Owned equipment held for operating leases is stated at cost. The components of owned equipment were as follows (in thousands of dollars):

		March 31,					December 31,
				2003					2002
Trailers	$		9,402			$		9,404
Railcars			7,100					7,097
			16,502					16,501
Less accumulated depreciation			(14,635		)			(14,500		)
Net equipment	$		1,867			$		2,001

As of March 31, 2003, all equipment was on lease, except for 58 railcars with an aggregate net book value of $-0-. As of December 31, 2002, all owned equipment in the Partnership’s portfolio was on lease, except for 64 railcars with an aggregate net book value of $-0-.

For the three months ended March 31, 2003, the Partnership disposed of equipment with an aggregate net book value of $2,000 for proceeds of $1,000. For the three months ended March 31, 2002, the Partnership disposed of marine containers, railcars and trailers with an aggregate net book value of $0.1 million for proceeds of $1.3 million.

6. Operating Segments

The Partnership operates or operated in three different segments: marine container leasing, trailer leasing and railcar leasing. Each equipment leasing segment engages in short-term to mid-term operating leases to a variety of customers. The following tables present a summary of the operating segments (in thousands of dollars):

For the three months ended	Trailer	Railcar	All
March 31, 2003	Leasing	Leasing	Other	1	Total

Revenues
Lease revenue	$	386		$	191	$	--		$	577
Interest income and other		--			--		11			11
Loss on disposition of equipment		--			--		(1	)		(1	)
Total revenues		386			191		10			587
Expenses
Operations support		194			100		20			314
Depreciation		131			5		--			136
Management fees to affiliate		19			10		--			29
General and administrative expenses		66			30		84			180
Provision for (recovery of) bad debts		--			4		(1	)		3
Total expenses		410			149		103			662
Net income (loss)	$	(24	)	$	42	$	(93	)	$	(75	)
Total assets as of March 31, 2003	$	2,209		$	61	$	4,154		$	6,424

1   Includes certain assets not identifiable to a particular segment, such as cash, prepaid expenses and certain accounts receivable. Also includes interest income and costs not identifiable to a particular segment, such as certain operations support and general and administrative expenses and marine container revenue and expenses.

PLM EQUIPMENT GROWTH FUND II

(A Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

6.   Operating Segments(continued)

	Marine
For the three months ended	Container	Trailer	Railcar	All
March 31, 2002	Leasing	Leasing	Leasing	Other	1	Total

Revenues
Lease revenue	$	--	$	430		$	211		$	--		$	641
Interest income and other		--		--			--			7			7
Gain on disposition of equipment		8		7			1,212			--			1,227
Total revenues		8		437			1,423			7			1,875
Expenses
Operations support		--		250			25			16			291
Depreciation		1		131			109			--			241
Management fees to affiliates		--		20			13			--			33
General and administrative expenses		--		67			25			39			131
Provision for (recovery of) bad debts		--		25			(46	)		--			(21	)
Total expenses		1		493			126			55			675
Net income (loss)	$	7	$	(56	)	$	1,297		$	(48	)	$	1,200

7.Net Income (Loss) Per Weighted-Average Depositary Unit

Net income (loss) per weighted-average depositary unit was computed by dividing net income (loss) attributable to the limited partners by the weighted-average number of depositary units deemed outstanding during the period. The weighted-average number of depositary units deemed outstanding during the three months ended March 31, 2003 and 2002 was 7,381,265.

8Liquidation

On January 1, 1999, the General Partner began the liquidation phase of the Partnership and commenced an orderly liquidation of the Partnership’s assets. Given the current economic environment, and offers received for similar types of equipment owned by the Partnership, the General Partner has determined it would not be advantageous to sell the remaining Partnership equipment at the current time. The General Partner will continue to monitor the equipment markets to determine an optimal time to sell. In the meantime, equipment will continue to be leased, and re-leased at market rates as existing leases expire. The amounts reflected for assets and liabilities of the Partnership have not been adjusted to reflect liquidation values. The equipment portfolio continues to be carried at the lower of depr eciated cost or fair value less cost to dispose. Although the General Partner estimates that there will be distributions after liquidation of assets and liabilities, the amounts cannot be accurately determined prior to actual liquidation of the equipment. Upon final liquidation, the Partnership will be dissolved.

1   Includes certain assets not identifiable to a particular segment, such as cash and prepaid expenses. Also includes interest income and costs not identifiable to a particular segment, such as certain operations support and general and administrative expenses.

ITEM 2.    .MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS

(I)RESULTS OF OPERATIONS

Comparison of the PLM Equipment Growth Fund II’s (the Partnership's) Operating Results for the Three Months Ended March 31, 2003 and 2002

(A)Owned Equipment Operations

Lease revenues less direct expenses (defined as repairs and maintenance and equipment operating expenses) on owned equipment decreased during the first quarter of 2003 compared to the same quarter of 2002. Gains or losses from the sale of equipment, interest and other income and certain expenses such as depreciation and general and administrative expenses relating to the operating segments (see Note 6 to the unaudited condensed financial statements), are not included in the owned equipment operation discussion because they are indirect in nature and not a result of operations but the result of owning a portfolio of equipment. The following table presents lease revenues less direct expenses by segment (in thousands of dollars):

	For the Three Months
	Ended March 31,
	2003		2002
Trailers	$	192	$	180
Railcars		91		186

Trailers:Trailer lease revenues and direct expenses were $0.4 million and $0.2 million, respectively, for the first quarter of 2003, compared to $0.4 million and $0.3 million, respectively, during the same quarter of 2002. Trailer lease revenue decreased $44,000 in the three months ended March 31, 2003 compared to the same period of 2002 due to lower utilization on the Partnership’s trailer fleet. Direct expenses decreased $0.1 million due to decreased repairs to the trailer portfolio.

Railcars: Railcar lease revenues and direct expenses were $0.2 million and $0.1 million, respectively, for the first quarter of 2003, compared to $0.2 million and $25,000, respectively, during the same quarter of 2002. Direct expenses increased $0.1 million due to increased repairs to the railcar portfolio.

(B)Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses were $0.3 million for the first quarter of 2003 compared to $0.4 million in the first quarter of 2002. Significant variances among the types of indirect expenses are explained as follows:

                (i)   A $0.1 million decrease in depreciation expense from 2002 levels reflects the effect of asset dispositions in 2003 and 2002.

(ii)  A $49,000 increase in the general and administrative expenses was due to increased professional services costs.

(C)(Loss) Gain on Disposition of Owned Equipment

Loss on disposition of equipment in the first quarter of 2003 totaled $1,000. Gain on disposition of equipment in the first quarter of 2002 totaled $1.2 million, and resulted from the disposition of marine containers, railcars and trailers with an aggregate net book value of $0.1 million for proceeds of $1.3 million.

(D)Net (Loss) Income

As a result of the foregoing, the Partnership's net loss was $0.1 million for the first quarter of 2003, compared to net income of $1.2 million during the first quarter of 2002. The Partnership's ability to operate and liquidate assets, secure leases, and re-lease those assets whose leases expire is subject to many factors, and the Partnership's performance in the first quarter of 2003 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 PLM Financial Services, Inc. (FSI or 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, and contingencies and litigation. These estimates are based on the General Partner’s historical experience and on various other assumptions belie ved 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 undiscounted future cash flows from the asset to the Partnership, the Partnership would be required to record an impairmen t. 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: Whenever there is an indicator that an impairment may exist, the General Partner reviews the carrying value of equipment to determine if the carrying value of the asset may not be recoverable in consideration of current economic conditions. This requires the General Partner to make estimates related to future undiscounted 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 an impairment loss.

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.

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 disclosed if considered possible and accrued if considered probable after consultation with 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 AND LIQUIDITY

For the three months ended March 31, 2003, the Partnership generated $23,000 in operating cash to meets its obligations.

During the three months ended March 31, 2003, the Partnership disposed of equipment and received proceeds of $1,000.

Prepaid expenses and other assets increased $0.1 million during the three months ended March 31, 2003 due to the payment of an annual insurance premium in the first quarter of 2003.

The General Partner has not planned any expenditures, nor is it aware of any contingencies that would cause the Partnership to require any additional capital.

The Partnership is in its active liquidation phase. As a result, the size of the Partnership's remaining equipment portfolio and, in turn, the amount of net cash flows from operations will continue to become progressively smaller as assets are sold. Significant asset sales may result in special distributions to the partners.

(IV) OUTLOOK FOR THE FUTURE

The Partnership is in its liquidation phase. Given the current economic environment, and offers received for similar types of equipment owned by the Partnership, the General Partner has determined it would not be advantageous to sell the remaining Partnership equipment at the current time. The General Partner will continue to monitor the equipment markets to determine an optimal time to sell. In the meantime, equipment will continue to be leased, and re-leased at market rates as existing leases expire. Although the General Partner estimates that there will be distributions to the partners after final disposal of assets and settlement of liabilities, the amounts cannot be accurately determined prior to actual disposal of the equipment.

Sale decisions may cause the operating performance of the Partnership to decline over the remainder of its life. The liquidation phase will end on December 31, 2006, unless the Partnership is terminated earlier upon sale of all of the equipment or by certain other events.

Several factors may affect the Partnership's operating performance in the remainder of 2003 and beyond, including changes in the markets for the Partnership's equipment and changes in the regulatory environment in which that equipment operates.

Liquidation of the Partnership’s equipment represents a reduction in the size of the equipment portfolio and may result in a reduction of contribution to the Partnership. Other factors affecting the Partnership’s contribution in 2003 and beyond include:

1. Industry-wide chemical shipments, a key driver for the demand for the types of railcars which are the core of Partnership's fleet, were up 4% in the first quarter of 2003 compared to the same period of last year, although the growth in comparable shipments slowed in March. Looking at other leading indicators, rail’s modal share increased slightly to 42%. North American railcar manufacturing capacity utilization, as reported by the Federal Reserve, was 75%, flat with the fourth quarter of 2002 and same period of last year. Full service leasing held its share of the overall leasing market; and overall industry-wide railcar utilization has been on a slightly positive trend since the third quarter of 2002. While the demand for railcars by key industry shippers in the most important commodity markets for the Partnership's car types hit the trough in the middle of 2002, the speed of recovery has been retarded by the uncertainties caused by the war in Iraq and a continued workout of idle railcar inventories.

2. Utilization of intermodal trailers owned by the Partnership was 54% in the three months ended March 31, 2003 which was approximately the same as the three months ended March 31, 2002. Industry-wide utilization of intermodal trailers was 48% in the three months ended March 31, 2003 compared to 53% in the same period of 2002. As the Partnership’s trailers are smaller than many shippers prefer, the General Partner expects utilization to decline over the next few years.

3. The General Partner has seen an increase in insurance premiums on its equipment portfolio and is finding it more difficult to place the coverage. Premiums for the equipment types owned by the Partnership have increased over 25%. The increase in premiums caused by the increase in rate will be partially mitigated by the reduction in the value of the Partnership equipment portfolio caused by the events of September 11, 2001 and other economic factors. The General Partner has also experienced an increase in the deductible required to obtain coverage. This may have a negative impact on the Partnership in the event of an insurance claim.

4. The General Partner expects audit fees to increase during 2003 due to additional audit and accounting requirements resulting from Sarbanes-Oxley. The General Partner cannot estimate the amount of the increase in this fee at this point.

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 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 those equipment markets in which it determines that it cannot operate equipment and achieve acceptable rates of return.

The Partnership intends to use cash flow from operations and proceeds from disposition of equipment to satisfy its operating requirements, maintain working capital reserves, and pay cash distributions to the unitholders.

(V)FORWARD-LOOKING INFORMATION

Except for historical information contained herein, this Form 10-QSB 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-QSB should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-QSB. The Partnership’s actual results could differ materially from those discussed here.

ITEM 3.CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, evaluations were carried out under the supervision and with the participation of the General Partner’s management, including its President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934). Based upon those evaluations, the President and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. No significant changes have been made in the Partnership’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluations.

PART II¾OTHER INFORMATION

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

(a)Exhibits

None.

                                 (b)   Reports on Form 8-K

None.

CONTROL CERTIFICATION

I, James A. Coyne, certify that:

1.I have reviewed this quarterly report on Form 10-QSB of PLM Equipment Growth Fund II.

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;

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;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this quarterly report is prepared;

b)evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c)presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and board of Managers:

a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 12, 2003                                                          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-QSB of PLM Equipment Growth Fund II.

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;

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;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this quarterly report is prepared;

b)evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c)presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and board of Managers:

a)all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.The registrant’s other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 12, 2003                                                             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 there unto duly authorized.

PLM EQUIPMENT GROWTH FUND II

                                                                                                                By:   PLM Financial Services, Inc.

                                                                                             General Partner

Date: May 12, 2003                                                       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 II (the Partnership), that the Quarterly Report of the Partnership on Form 10-QSB for the period ended March 31, 2003, 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 II

                                                                                                               By:   PLM Financial Services, Inc.

                                                                                          General Partner

Date: May 12, 2003                                                      By:/s/ James A. Coyne   

James A. Coyne

President

Date: May 12, 2003                                                      By:/s/ Richard K Brock   

                                                                                       Richard K Brock

                                                                                      Chief Financial Officer