UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 18, 2005
PLM EQUIPMENT GROWTH FUND V
(Exact name of registrant as specified in its charter)
| California | 01-19203 | 94-3104548 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 200 Nyala Farms Road | Westport CT | 06880 |
| (Address of principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code: (203)-341-0555 |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2 under the Exchange Act (17 CFR240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
On August 18, 2005, PLM Equipment Growth Fund V (“Fund V”) completed the sale of its railcar business and related assets to CIT Group Inc., a Delaware corporation (“Purchaser”). As previously reported, the sale was consummated pursuant to an Asset Purchase Agreement, dated as of August 4, 2005 (the “Asset Purchase Agreement”), by and among Purchaser, Fund V and several entities affiliated with Fund V (collectively, the “Sellers”), including PLM Rail Partners, LLC, a Delaware limited liability company (“Rail Partners”), an entity in which Fund V has a 23.0% ownership interest. The assets sold to the Purchaser include railcars owned and leased by the Sellers as well as management contracts pursuant to which Sellers manage and lease railcars owned by unaffiliated third parties. Under the terms of the Asset Purchase Agreement, Purchaser paid Sellers an aggregate gross cash purchase price of approximately $146.9 million, which included the base purchase of $119.8 million and adjustments of $27.1 million primarily consisting of an adjustment for the actual number of railcars cars manufactured and delivered to Sellers in 2005. Of the $146.9 million, Fund V received approximately $12.1 million and Rail Partners received approximately $32.3 million. The amount received by Fund V and Rail Partners was based on the appraised value of the railcars sold by Fund V and Rail Partners to Purchaser, as determined by an independent third party appraiser or for cars manufactured in 2005, the greater of appraised value or cost.
A copy of the Asset Purchase Agreement is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated in its entirety in this Item 2.01 disclosure by reference. Other than in respect of the Asset Purchase Agreement and the agreements entered into in connection therewith, there are no material relationships between Purchaser and Fund V or any of its affiliates, or any director or officer of Fund V, or any associate of such director or officer.
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The sale was completed on August 18, 2005. The unaudited pro forma financial information shown below is based on audited and unaudited historical financial statements of Fund V. The unaudited pro forma financial information presented reflects the estimated pro forma effect of the sale.
The unaudited pro forma financial statements are as follows:
| 1) | an unaudited pro forma balance sheet as of June 30, 2005 giving effect to the sale as if it had occurred on June 30, 2005 |
| 2) | an unaudited pro forma statement of income for the six months ended June 30, 2005, giving effect to the sale as of it had occurred on January 1, 2005 |
| 3) | an unaudited pro forma statement of income for the year ended December 31, 2004, giving effect to the sale as if it had occurred on January 1, 2004 |
The unaudited pro forma financial statements include preliminary assumptions and adjustments related to the sale. These pro forma adjustments have been made to illustrate the anticipated financial effect of the sale. The adjustments are based upon available information and assumptions that the general partner of Fund V believes are reasonable as of the date of this filing. Actual adjustments, however, may differ materially from the information presented. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma financial statements. The pro forma financial statements, including the notes thereto, should be read in conjunction with the historical financial statements of Fund V included in its Annual Report on Form 10-KSB for the year ended December 31, 2004 and the unaudited financial statements filed in Fund V’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2005.
The unaudited pro forma financial information presented herein is for informational purposes only. It is not intended to represent or be indicative of the results of operations or financial position that would have been reported had the sale been completed as of the dates presented. The information is not representative of future results of operations or financial position.
PLM EQUIPMENT GROWTH FUND V |
(A Limited Partnership) |
Pro Forma Condensed Balance Sheet |
As of June 30, 2005 |
| (in thousands of dollars) |
| (unaudited) |
| | | | | | | | | | |
| | | | | Asset | | | | | |
Assets | | As Reported | | Disposition | | Notes | | Pro Forma | |
| | | | | | | | | | |
| Equipment held for operating leases, at cost | | $ | 32,818 | | $ | (12,964 | ) | | (a | ) | $ | 19,854 | |
| Less accumulated depreciation | | | (21,787 | ) | | 1,995 | | | (a | ) | | (19,792 | ) |
| Net equipment | | | 11,031 | | | (10,969 | ) | | | | | 62 | |
| | | | | | | | | | | | | | |
| Cash and cash equivalents | | | 4,542 | | | 11,877 | | | (b | ) | | 16,419 | |
| Restricted cash | | | 376 | | | -- | | | | | | 376 | |
| Accounts and other receivables, net of allowance | | | | | | | | | | | | | |
| for doubtful accounts | | | 208 | | | -- | | | | | | 208 | |
| Equity investments in affiliated entities | | | 8,954 | | | 2,296 | | | (c | ) | | 11,250 | |
| Other assets, net of accumulated amortization | | | 436 | | | -- | | | | | | 436 | |
| | | | | | | | | | | | | | |
| Total assets | | $ | 25,547 | | $ | 3,204 | | | | | $ | 28,751 | |
| | | | | | | | | | | | | | |
Liabilities and partners’ capital | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 162 | | $ | -- | | | | | $ | 162 | |
| Due to affiliates | | | 28 | | | -- | | | | | | 28 | |
| Non-recourse debt | | | 605 | | | -- | | | | | | 605 | |
| Lessee deposits | | | 223 | | | -- | | | | | | 223 | |
| Total liabilities | | | 1,018 | | | -- | | | | | | 1,018 | |
| | | | | | | | | | | | | | |
| Commitments and contingencies | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Partners' capital | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Limited partners | | | 24,529 | | | 3,204 | | | (d | ) | | 27,733 | |
| General Partner | | | - | | | -- | | | | | | - | |
| Total partners' capital | | | 24,529 | | | 3,204 | | | | | | 27,733 | |
| | | | | | | | | | | | | | |
| Total liabilities and partners' capital | | $ | 25,547 | | $ | 3,204 | | | | | $ | 28,751 | |
(a) This adjustment reflects the reduction in cost and accumulated depreciation of the owned railcars due to the sale.
(b) This adjustment reflects the net cash proceeds received after sale expenses from the sale of owned railcars.
(c) This adjustment reflects the increase in equity investments in affiliated entities due to the sale of railcars in PLM Rail Partners, LLC in which Fund V has an equity investment.
(d) This adjustment reflects the net gain on disposal of owned railcars and from railcars in PLM Rail Partners, LLC.
PLM EQUIPMENT GROWTH FUND V |
(A Limited Partnership) |
Pro Forma Condensed Statement of Income |
For the Six Months Ended June 30, 2005 |
| (in thousands of dollars except weighted-average limited partnership unit amounts) |
| (unaudited) |
| | | | | | | | |
| | | | | Asset | | | |
Revenues | | As Reported | | Disposition (a) | | Pro Forma | |
| | | | | | | | |
| Lease revenue | | $ | 1,151 | | $ | (692 | ) | $ | 459 | |
| Interest and other income | | | 123 | | | (13 | ) | | 110 | |
| Gain on disposition of equipment | | | 1,351 | | | -- | | | 1,351 | |
| Total revenues | | | 2,625 | | | (705 | ) | | 1,920 | |
| | | | | | | | | | | |
Expenses | | | | | | | | | | |
| | | | | | | | | | | |
| Depreciation and amortization | | | 701 | | | (693 | ) | | 8 | |
| Operations support | | | 15 | | | (9 | ) | | 6 | |
| Management fees to affiliate | | | 73 | | | (46 | ) | | 27 | |
| Interest expense | | | 145 | | | (145 | ) | | -- | |
| General and administrative expenses to affiliates | | | 75 | | | (52 | ) | | 23 | |
| Other general and administrative expenses | | | 296 | | | (7 | ) | | 289 | |
| Provision for bad debts | | | 24 | | | (24 | ) | | -- | |
| Total expenses | | | 1,329 | | | (976 | ) | | 353 | |
| | | | | | | | | | | |
| Equity in net loss of equity investments | | | (914 | ) | | 140 | | | (774 | ) |
| | | | | | | | | | | |
| Net income | | $ | 382 | | $ | 411 | | $ | 793 | |
| | | | | | | | | | | |
Partners’ share of net income | | | | | | | | | | |
| | | | | | | | | | | |
| Limited partners | | $ | 159 | | $ | 411 | | $ | 570 | |
| General Partner | | | 223 | | | -- | | | 223 | |
| | | | | | | | | | | |
| Total | | $ | 382 | | $ | 411 | | $ | 793 | |
| | | | | | | | | | | |
| Limited partners' net income per | | | | | | | | | | |
| weighted-average limited partnership unit | | $ | 0.02 | | $ | 0.05 | | $ | 0.07 | |
(a) To eliminate the revenues and expenses attributable to the sold assets.
PLM EQUIPMENT GROWTH FUND V |
(A Limited Partnership) |
Pro Forma Condensed Statement of Income |
For the Year Ended December 31, 2004 |
| (in thousands of dollars except weighted-average limited partnership unit amounts) |
| (unaudited) |
| | | | | | | | |
| | | | | Asset | | | |
Revenues | | As Reported | | Disposition (a) | | Pro Forma | |
| | | | | | | | |
| Lease revenue | | $ | 2,842 | | $ | (1,660 | ) | $ | 1,182 | |
| Interest and other income | | | 1,068 | | | (28 | ) | | 1,040 | |
| Gain on disposition of equipment | | | 1,097 | | | -- | | | 1,097 | |
| Total revenues | | | 5,007 | | | (1,688 | ) | | 3,319 | |
| | | | | | | | | | | |
Expenses | | | | | | | | | | |
| | | | | | | | | | | |
| Depreciation and amortization | | | 2,033 | | | (1,478 | ) | | 555 | |
| Operations support | | | 528 | | | (286 | ) | | 242 | |
| Management fees to affiliate | | | 219 | | | (110 | ) | | 109 | |
| Interest expense | | | 202 | | | (202 | ) | | -- | |
| General and administrative expenses to affiliates | | | 385 | | | (156 | ) | | 229 | |
| Other general and administrative expenses | | | 1,375 | | | (136 | ) | | 1,239 | |
| Impairment loss on equipment | | | 183 | | | (183 | ) | | -- | |
| Recovery of bad debts | | | (1,317 | ) | | 21 | | | (1,296 | ) |
| Total expenses | | | 3,608 | | | (2,530 | ) | | 1,078 | |
| | | | | | | | | | | |
| Equity in net loss of equity investments | | | (774 | ) | | 243 | | | (531 | ) |
| | | | | | | | | | | |
| Net income | | $ | 625 | | $ | 1,085 | | $ | 1,710 | |
| | | | | | | | | | | |
Partners’ share of net income | | | | | | | | | | |
| | | | | | | | | | | |
| Limited partners | | $ | 625 | | $ | 1,085 | | $ | 1,710 | |
| General Partner | | | -- | | | -- | | | -- | |
| | | | | | | | | | | |
| Total | | $ | 625 | | $ | 1,085 | | $ | 1,710 | |
| | | | | | | | | | | |
| Limited partners' net income per | | | | | | | | | | |
| weighted-average limited partnership unit | | $ | 0.07 | | $ | 0.13 | | $ | 0.20 | |
(a) To eliminate the revenues and expenses attributable to the sold assets.
SIGNATURES
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 hereunto duly authorized.
| | PLM Equipment Growth Fund V By PLM Financial Services, Inc. Its General Partner |
| | By: /s/ Richard K Brock |
| Date: August 24, 2005 | Richard K Brock Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. Description
| 10.1 | Asset Purchase Agreement dated as of August 4, 2005, by and among CIT Group Inc. and MILPI Holdings, LLC, Rail Investors I LLC, Rail Investors II LLC, Transportation Equipment-PLM, LLC, PLM Investment Management, Inc., PLM Transportation Equipment Corporation, PLM Equipment Growth Fund V, PLM Equipment Growth Fund VI, PLM Equipment Growth & Income Fund VII, Professional Lease Management Income Fund I, LLC, PLM Equipment Growth Fund Canada Limited, PLM Investment Fund LLC, PLM Rail Partners, LLC, PLM Rail V, LLC, and Acquisub, LLC |
