<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                                       OR

[ ]     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 0-27496

                       CRONOS GLOBAL INCOME FUND XVI, L.P.
             (Exact name of registrant as specified in its charter)


         California                                             94-3230380
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

         444 Market Street, 15th Floor, San Francisco, California 94111
            (Address of principal executive offices)            (Zip Code)

                                 (415) 677-8990
              (Registrant's telephone number, including area code)


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 .


<PAGE>   2
                       CRONOS GLOBAL INCOME FUND XVI, L.P.


                      REPORT ON FORM 10-Q FOR THE QUARTERLY
                         PERIOD ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                       PAGE
<S>      <C>                                                                           <C>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets - September 30, 1997 (unaudited) and December 31, 1996         4

         Statement of Operations for the three months ended September 30, 1997
         and 1996, the nine months ended September 30, 1997 and for the period
         March 29, 1996 (commencement of operations) to September 30, 1996
         (unaudited)                                                                   5

         Statement of Cash Flows for the nine months ended September 30, 1997
         and for the period March 29, 1996 (commencement of operations) to
         September 30, 1996 (unaudited)                                                6    

         Notes to Unaudited Financial Statements (unaudited)                           7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results 
         of Operations                                                                10


PART II - OTHER INFORMATION

Item 5.  Other Materially Important Events                                            14


Item 6.  Exhibits and Reports on Form 8-K                                             15
</TABLE>


                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements

        Presented herein are the Registrant's balance sheets as of September 30,
        1997 and December 31, 1996, statements of operations for the three
        months ended September 30, 1997 and 1996, the nine months ended
        September 30, 1997 and for the period March 29, 1996 (commencement of
        operations) to September 30, 1996, and statements of cash flows for the
        nine months ended September 30, 1997 and for the period March 29, 1996
        (commencement of operations) to September 30, 1996.


                                       3
<PAGE>   4
                                CRONOS GLOBAL INCOME FUND XVI, L.P.

                                           BALANCE SHEETS

                                            (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                September 30,           December 31,
              Assets                                                                1997                     1996
                                                                                -------------           -------------
<S>                                                                             <C>                     <C>      
Current assets:
  Cash and cash equivalents, includes $1,005,107 at September 30, 1997
     and $1,755,486 at December 31, 1996 in interest-bearing accounts           $   1,119,307           $   1,755,884
  Net lease receivables due from Leasing Company
    (notes 1 and 2)                                                                   543,951                 208,133
                                                                                -------------           -------------

        Total current assets                                                        1,663,258               1,964,017
                                                                                -------------           -------------

Container rental equipment, at cost                                                26,762,082              24,701,402
  Less accumulated depreciation                                                     2,051,507                 894,114
                                                                                -------------           -------------
    Net container rental equipment                                                 24,710,575              23,807,288
                                                                                -------------           -------------

Organizational costs, net                                                             193,084                 229,005
                                                                                -------------           -------------

                                                                                $  26,566,917           $  26,000,310
                                                                                =============           =============

        Liabilities and Partners' Capital
Current liabilities:
  Due to general partner (notes 1 and 3)                                        $        --             $      17,299
  Container rental equipment purchases payable                                           --                   341,486
                                                                                -------------           -------------

        Total current liabilities                                                        --                   358,785
                                                                                -------------           -------------

Partners' capital (deficit):
  General partner                                                                      (2,698)                 (1,820)

  Limited partners                                                                 26,569,615              25,643,345
                                                                                -------------           -------------

        Total partners' capital                                                    26,566,917              25,641,525
                                                                                -------------           -------------

                                                                                $  26,566,917           $  26,000,310
                                                                                =============           =============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>   5
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                             STATEMENT OF OPERATIONS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                             Three Months Ended
                                       -------------------------------             Nine          For the Period March 29, 1996
                                       September 30,     September 30,         Months Ended       (Commencement of Operations)
                                           1997              1996           September 30, 1997    through September, 30, 1996 
                                       ------------      ------------       ------------------   -----------------------------
<S>                                    <C>               <C>                <C>                  <C>         
                                                                                                  
Net lease revenue (notes 1 and 4)      $    845,974      $    474,803          $  2,277,885              $    685,769
                                                                                                  
Other operating expenses:                                                                         
   Depreciation and amortization            403,594           408,993             1,197,543                   591,295
   Other general and                                                                              
     administrative expenses                 15,785             6,591                48,546                    12,003
                                       ------------      ------------          ------------              ------------
                                            419,379           415,484             1,246,089                   603,298
                                       ------------      ------------          ------------              ------------
                                                                                                  
       Earnings from operations             426,595            59,219             1,031,796                    82,471
                                                                                                  
Other income:                                                                                     
   Interest income                           14,152            12,663                56,875                    40,537
   Net gain on disposal of equipment          3,068              --                   6,420                      --
                                       ------------      ------------          ------------              ------------
                                             17,220            12,663                63,295                    40,537
                                       ------------      ------------          ------------              ------------
                                                                                                  
       Net earnings                    $    443,815      $     71,882          $  1,095,091              $    123,008
                                       ============      ============          ============              ============
                                                                                                  
Allocation of net earnings:                                                                       
   General partner                     $     32,734      $     10,025          $     89,647              $     11,796
   Limited partners                         411,081            61,857             1,005,444                   111,212
                                       ------------      ------------          ------------              ------------
                                                                                                  
                                       $    443,815      $     71,882          $  1,095,091              $    123,008
                                       ============      ============          ============              ============
                                                                                                  
Limited partners' per unit                                                                        
  share of net earnings                $        .41      $        .06          $       1.00              $        .15
                                       ============      ============          ============              ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>   6
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                             STATEMENT OF CASH FLOWS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                         For the Period March 29, 1996,
                                                                   Nine Months Ended      (Commencement of Operations)
                                                                   September 30, 1997      through September 30, 1996
                                                                   ------------------    ------------------------------
<S>                                                                <C>                   <C>         
                                                      
Net cash provided by operating activities                              $  1,979,384              $    456,296
                                                                                              
                                                                                              
Cash flows provided by (used in) investing activities:                                        
  Proceeds from sale of container rental equipment                           12,500                      --
  Purchase of container rental equipment                                 (2,339,370)              (20,212,460)
  Acquisition fees paid to general partner                                 (117,116)               (1,010,623)
                                                                       ------------              ------------
                                                                                              
        Net cash used in investing activities                            (2,443,986)              (21,223,083)
                                                                       ------------              ------------
                                                                                              
                                                                                              
Cash flows provided by (used in) financing activities:                                        
  Capital contributions                                                   1,931,060                25,509,480
  Underwriting commissions                                                 (193,196)               (2,550,858)
  Offering and organizational expenses                                     (101,336)               (1,122,938)
  Distribution to partners                                               (1,808,503)                 (263,888)
                                                                       ------------              ------------
                                                                                              
                                                                                              
    Net cash provided by (used in) financing activities                    (171,975)               21,571,796
                                                                       ------------              ------------
                                                                                              
                                                                                              
Net increase (decrease) in cash and cash equivalents                       (636,577)                  805,009           
                                                                                              
                                                                                              
Cash and cash equivalents at January 1                                    1,755,884                       100
                                                                       ------------              ------------
                                                                                              
                                                                                              
Cash and cash equivalents at September 30                              $  1,119,307              $    805,109
                                                                       ============              ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>   7
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(1)     Summary of Significant Accounting Policies

        (a)     Nature of Operations

                Cronos Global Income Fund XVI, L.P. (the "Partnership") is a
                limited partnership organized under the laws of the State of
                California on September 1, 1995, for the purpose of owning and
                leasing marine cargo containers, special purpose containers and
                container related equipment. Cronos Capital Corp. ("CCC") is the
                general partner and, with its affiliate Cronos Containers
                Limited (the "Leasing Company"), manages and controls the
                business of the Partnership. The Partnership shall continue
                until December 31, 2015, unless sooner terminated upon the
                occurrence of certain events.

                The Partnership commenced operations on March 29, 1996, when the
                minimum subscription proceeds of $2,000,000 were received from
                over 100 subscribers (excluding from such count Pennsylvania
                residents, the general partner, and all affiliates of the
                general partner). On February 3, 1997, CCC suspended the offer
                and sale of units in the Partnership. The offering terminates on
                December 27, 1997.

                As of September 30, 1997, the Partnership operated 3,842
                twenty-foot, 1,048 forty-foot and 459 forty-foot high-cube
                marine dry cargo containers, 90 twenty-foot and 300 forty-foot
                refrigerated containers, and 52 twenty four thousand-liter
                tanks.


        (b)     Leasing Company and Leasing Agent Agreement

                The Partnership has entered into a Leasing Agent Agreement
                whereby the Leasing Company has the responsibility to manage the
                leasing operations of all equipment owned by the Partnership.
                Pursuant to the Agreement, the Leasing Company is responsible
                for leasing, managing and re-leasing the Partnership's
                containers to ocean carriers and has full discretion over which
                ocean carriers and suppliers of goods and services it may deal
                with. The Leasing Agent Agreement permits the Leasing Company to
                use the containers owned by the Partnership, together with other
                containers owned or managed by the Leasing Company and its
                affiliates, as part of a single fleet operated without regard to
                ownership. Since the Leasing Agent Agreement meets the
                definition of an operating lease in Statement of Financial
                Accounting Standards (SFAS) No. 13, it is accounted for as a
                lease under which the Partnership is lessor and the Leasing
                Company is lessee.

                The Leasing Agent Agreement generally provides that the Leasing
                Company will make payments to the Partnership based upon rentals
                collected from ocean carriers after deducting direct operating
                expenses and management fees to CCC and the Leasing Company. The
                Leasing Company leases containers to ocean carriers, generally
                under operating leases which are either master leases or term
                leases (mostly two to five years). Master leases do not specify
                the exact number of containers to be leased or the term that
                each container will remain on hire but allow the ocean carrier
                to pick up and drop off containers at various locations; rentals
                are based upon the number of containers used and the applicable
                per-diem rate. Accordingly, rentals under master leases are all
                variable and contingent upon the number of containers used. Most
                containers are leased to ocean carriers under master leases;
                leasing agreements with fixed payment terms are not material to
                the financial statements. Since there are no material minimum
                lease rentals, no disclosure of minimum lease rentals is
                provided in these financial statements.


                                       7
<PAGE>   8
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


        (c)     Basis of Accounting

                The Partnership utilizes the accrual method of accounting. Net
                lease revenue is recorded by the Partnership in each period
                based upon its leasing agent agreement with the Leasing Company.
                Net lease revenue is generally dependent upon operating lease
                rentals from operating lease agreements between the Leasing
                Company and its various lessees, less direct operating expenses
                and management fees due in respect of the containers specified
                in each operating lease agreement.


        (d)     Financial Statement Presentation

                These financial statements have been prepared without audit.
                Certain information and footnote disclosures normally included
                in financial statements prepared in accordance with generally
                accepted accounting procedures have been omitted. It is
                suggested that these financial statements be read in conjunction
                with the financial statements and accompanying notes in the
                Partnership's latest annual report on Form 10-K.

                The preparation of financial statements in conformity with
                generally accepted accounting principles (GAAP) requires the
                Partnership to make estimates and assumptions that affect the
                reported amounts of assets and liabilities and disclosure of
                contingent assets and liabilities at the date of the financial
                statements and the reported amounts of revenues and expenses
                during the reported period. Actual results could differ from
                those estimates.

                The interim financial statements presented herewith reflect all
                adjustments of a normal recurring nature which are, in the
                opinion of management, necessary to a fair statement of the
                financial condition and results of operations for the interim
                periods presented.


(2)     Net Lease Receivables Due from Leasing Company

        Net lease receivables due from the Leasing Company are determined by
        deducting direct operating payables and accrued expenses, base
        management fees payable, and reimbursed administrative expenses payable
        to CCC and its affiliates from the rental billings payable by the
        Leasing Company to the Partnership under operating leases to ocean
        carriers for the containers owned by the Partnership. Net lease
        receivables at September 30, 1997 and December 31, 1996 were as follows:

<TABLE>
<CAPTION>
                                                        September 30,         December 31,
                                                             1997                 1996
                                                        ------------          ------------
<S>                                                     <C>                   <C>         
Lease receivables, net of doubtful accounts
 of $22,100 at September 30, 1997 and $7,329
 at December 31, 1996                                    $1,092,598            $  755,259
Less:
Direct operating payables and accrued expenses              317,058               302,271
Damage protection reserve                                    48,113                17,860
Base management fees                                        140,807               124,420
Reimbursed administrative expenses                           42,669               102,575
                                                         ----------            ----------

                                                         $  543,951            $  208,133
                                                         ==========            ==========
</TABLE>


                                       8
<PAGE>   9
                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(3)     Due to General Partner

        The amounts due to CCC and its affiliates at December 31, 1996 consist
        of acquisition fees.


(4)     Net Lease Revenue

        Net lease revenue is determined by deducting direct operating expenses,
        base management fees and reimbursed administrative expenses to CCC and
        its affiliates from the rental revenue billed by the Leasing Company
        under operating leases to ocean carriers for the containers owned by the
        Partnership. Net lease revenue for the three months ended September 30,
        1997 and 1996, the nine months ended September 30, 1997 and the period
        March 29, 1996 (commencement of operations) through September 30, 1996
        were as follows:


<TABLE>
<CAPTION>
                                                    Three Months Ended                Nine
                                              -------------------------------     Months Ended      For the Period March 29, 1996
                                              September 30,     September 30,     September 30,      (Commencement of Operations)
                                                  1997             1996               1997           through September 30, 1996
                                              ------------      ------------      ------------      ------------------------------
<S>                                           <C>               <C>               <C>               <C>         
                                                                                                       
Rental revenue                                $  1,137,301      $    702,215      $  3,174,034              $  1,037,710
Less:                                                                                                  
Rental equipment operating expenses                149,933           140,061           501,352                   223,262         
Base management fees                                78,989            48,783           220,689                    71,846
Reimbursed administrative expenses                  62,405            38,568           174,108                    56,833
                                              ------------      ------------      ------------              ------------
                                              $    845,974      $    474,803      $  2,277,885              $    685,769
                                              ============      ============      ============              ============
</TABLE>


(5)     Container Rental Equipment Purchases

        As of September 30, 1997, the Partnership had purchased the following
        types of container rental equipment:

<TABLE>
<CAPTION>
                                                                  Purchased from
                                                      Purchased     Container         Total
         Equipment Type                               from CCC    Manufacturers      Purchased
         --------------                               --------    -------------      ---------
<S>                                                   <C>         <C>                <C>  
         Dry Cargo Containers:
               Twenty-foot                                -          3,853           3,853
               Forty-foot                                 -          1,050           1,050
               Forty-foot high-cube                       -            460             460
         Refrigerated Cargo Containers:
               Twenty-foot                                -             90              90
               Forty-foot high-cube                       -            300             300
         Tank Containers:
               24,000-liter                               -             52              52
</TABLE>

        The aggregate purchase price (excluding acquisition fees) of the
        equipment acquired by the Partnership through September 30, 1997 was
        $25,524,394. The aggregate equipment had been acquired from third-party
        container manufacturers located in South Korea, India, the People's
        Republic of China, Thailand and the United Kingdom.


                                       9
<PAGE>   10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

It is suggested that the following discussion be read in conjunction with the
Registrant's most recent annual report on Form 10-K.

1)      Material changes in financial condition between September 30, 1997 and
        December 31, 1996.

        The Registrant is a limited partnership organized under the laws of the
        State of California on September 1, 1995 for the purpose of owning and
        leasing marine cargo containers, special purpose containers and
        container-related equipment. The Registrant was initially capitalized
        with $100 and commenced offering its limited partnership interests to
        the public subsequent to December 28, 1995, pursuant to its Registration
        Statement on Form S-1 (File No. 33-98290). The Registrant commenced
        operations on March 29, 1996. On February 3, 1997, Cronos Capital Corp.
        ("CCC"), the general partner, suspended the offer and sale of units in
        the Registrant. Information concerning the suspended offer and sale of
        units in the Registrant is incorporated by reference to the discussion
        in the Supplement dated February 6, 1997 to the Registration Statement
        on Form S-1, dated December 28, 1995 as supplemented December 27, 1996.
        The offering terminates December 27, 1997. For the period December 28,
        1995 through February 3, 1997, the Registrant raised $31,993,340 in
        subscription proceeds. The following table sets forth the use of said
        subscription proceeds as of September 30, 1997. 

<TABLE>
<CAPTION>
                                                                    Percentage of 
                                                     Amount         Gross Proceeds
                                                     ------         --------------
<S>                                               <C>               <C>   

Gross Subscription Proceeds                       $31,993,340            100.0%

Public Offering Expenses:
    Underwriting Commissions                        3,199,334             10.0%
    Offering and Organizational Expenses            1,482,369              4.6%
                                                  -----------          -------

    Total Public Offering Expenses                  4,681,703             14.6%
                                                  -----------          -------

Net Proceeds                                       27,311,637             85.4%

Acquisition Fees                                    1,276,220              4.0%

Working Capital Reserve                               319,933              1.0%

Unexpended Proceeds                                   191,090              0.6%
                                                  -----------          -------

Gross Proceeds Invested in Equipment              $25,524,394             79.8%
                                                  ===========          =======
</TABLE>


        The Registrant's cash balances as of September 30, 1997 included
        proceeds of the offering, together with interest earned thereon, and
        amounts reserved as working capital. Net lease receivables due from the
        Leasing Company are determined by deducting direct operating payables
        and accrued expenses, base management fees payable, and reimbursed
        administrative expenses payable to CCC and its affiliates from the
        rental billings payable by the Leasing Company to the Registrant. During
        the Registrant's first year of operations, the general partner and its
        affiliates agreed to defer the deduction of all base management fees and
        reimbursable administrative expenses from the leasing receivables due to
        the Registrant. Deferral of these fees ceased during the second quarter
        of 1997. At September 30, 1997, these deferred fees and expenses totaled
        $158,000.


                                       10
<PAGE>   11
        The Registrant may rely upon financing to purchase a portion of its
        equipment. The amount of long-term borrowing secured by the Registrant
        will not exceed 20% of the aggregate purchase price of the Registrant's
        equipment. Once the Registrant completes its acquisition of equipment,
        the Registrant intends to maintain an ongoing reserve approximately
        equal to the greater of 1% of gross proceeds, or $100,000, to meet
        anticipated expenses of managing the equipment. The level of reserves
        will vary from time to time depending upon market conditions and the
        anticipated needs of the Registrant. The Registrant will not reinvest
        its revenues for the purchase of additional equipment. Pending
        expenditure for operations or distribution to the partners, these
        amounts may be invested in short-term, liquid investments.

        During 1996, ocean carriers and other transport companies moved away
        from leasing containers outright, as declining container prices,
        favorable interest rates and the abundance of available capital resulted
        in ocean carriers and transport companies purchasing a larger share of
        equipment for their own account, reducing their need for leased
        containers. Once the demand for leased containers began to fall,
        per-diem rental rates were also adversely affected. Since the beginning
        of 1997, the container leasing industry has experienced a modest
        recovery as indicated by an upward trend in container utilization. The
        impact of this trend on the utilization rates of the Registrant has been
        mixed. The Registrant's dry container utilization rate increased from
        80% at December 31, 1996 to 88% at September 30, 1997, while
        refrigerated container utilization rates increased from 77% at December
        31, 1996 to 99% at September 30, 1997. Tank container utilization also
        increased from 88% at December 31, 1996 to 90% at September 30, 1997.
        Increasing cargo volumes and continuing equipment imbalances within the
        container fleets of shipping lines and transport companies have
        re-established a need for these companies to replenish their leased
        fleets during 1997.

        Although there has been an improvement in container utilization rates,
        per-diem rental rates continue to remain under pressure as a result of
        the following factors: start-up leasing companies offering new
        containers and low rental rates in an effort to break into the leasing
        market; established leasing companies reducing rates to very low levels;
        and a continuing oversupply of containers. The recent volatility of the
        Hong Kong and other Asian financial markets and its impact on trade,
        shipping, and container leasing, especially intra-Asia and Asia-Europe
        routes, has yet to be determined. While these conditions could impact
        the Registrant's financial condition and operating performance through
        the remainder of 1997 and first half of 1998, the Registrant is well
        positioned to take advantage of further improvements in the container
        leasing market.


2)      Material changes in the results of operations between the three-month
        periods ended September 30, 1997 and 1996, the nine-month period ended
        September 30, 1997 and the period March 29, 1996 (commencement of
        operations) to September 30, 1996.

        Net lease revenue for the three and nine-month periods ended September
        30, 1997 was $845,974 and $2,277,885, respectively, an increase of
        approximately 44% and 70% from the same three month period in the prior
        year and the period March 29, 1996 (commencement of operations) to
        September 30, 1996, respectively. Gross rental revenue (a component of
        net lease revenue) for the three and nine-month periods ended September
        30, 1997 was $1,137,301 and $3,174,034, respectively, reflecting an
        increase of 62% and 206% from the same three month period in the prior
        year and the period March 29, 1996 (commencement of operations) to
        September 30, 1996, respectively. During 1997, gross lease revenue was
        primarily impacted by an increase in fleet size and utilization rates.
        The average dry container per-diem rental rate for the three and
        nine-month periods ended September 30, 1997 declined 4% when compared to
        the same three month period in the prior year and the period March 29,
        1996 (commencement of operations) to September 30, 1996. Average
        refrigerated container per-diem rental rates for the three month period
        ended September 30, 1997 declined 11%, when compared to the same period
        in the prior year. While, average refrigerated container per-diem rental
        rates for the nine month period ended September 30, 1997 remained
        unchanged when compared to the period March 29, 1996 (commencement of
        operations) to September 30, 1996. Average tank container per-diem
        rental rates for the three month period ended September 30, 1997
        decreased 6% when compared to the same period in the prior year.
        However, average tank container per-diem rental rate for the nine month
        period ended September 30, 1997 increased 28% when compared to the
        period March 29, 1996 (commencement of operations) to September 30,
        1996.


                                       11
<PAGE>   12
        The Registrant's average fleet size and utilization rates for the
        three-month periods ended September 30, 1997 and 1996, the nine-month
        period ended September 30, 1997 and the period March 29, 1996
        (commencement of operations) to September 30, 1996 were as follows:

<TABLE>
<CAPTION>
                                                   Three Months Ended       
                                            --------------------------------           Nine           For the Period  March 29, 1996
                                            September 30,      September 30,       Months Ended        (Commencement of Operations)
                                                1997               1996          September 30, 1997      through September 30, 1996
                                            -------------      -------------     ------------------   -----------------------------
<S>                                        <C>                 <C>               <C>                  <C>  

Average Fleet Size (measured in
  twenty-foot equivalent units (TEU))
    Dry cargo containers                      6,862                6,522                6,749                      4,324
    Refrigerated cargo containers               690                  623                  690                        386
    Tank containers                              52                   58                   52                         45
Average Utilization                                                                                               
    Dry cargo containers                         88%                  62%                  84%                        49%
    Refrigerated cargo containers                99%                  67%                  96%                        65%
    Tank containers                              91%                  71%                  88%                        51%
</TABLE>

        Rental equipment operating expenses were 13% and 16% of the Registrant's
        gross lease revenue during the three and nine-month periods ended
        September 30, 1997, respectively, as compared to 20% and 22% during the
        three month period ended September 30, 1996, and for the period March
        29, 1996 (commencement of operations) to September 30, 1996,
        respectively. These decreases were largely attributable to a reduction
        in costs associated with higher utilization levels, including storage,
        handling and repositioning. Direct operating expenses also include agent
        fees and insurance premiums, as well as provisions for doubtful accounts
        and repair costs for containers covered under damage protection clauses.
        Direct operating costs are affected by the quantity of off-hire
        containers as well as the frequency at which the containers are
        redelivered.

        As reported in the Registrant's Current Report on Form 8-K and Amendment
        No. 1 to Current Report on Form 8-K, filed with the Commission on
        February 7, 1997 and February 26, 1997, respectively, Arthur Andersen,
        London, England, resigned as auditors of The Cronos Group, a Luxembourg
        Corporation headquartered in Orchard Lea, England (the "Parent
        Company"), on February 3, 1997.

        The Parent Company is the indirect corporate parent of Cronos Capital
        Corp., the general partner of the Registrant. In its letter of
        resignation to the Parent Company, Arthur Andersen states that it
        resigned as auditors of the Parent Company and all other entities
        affiliated with the Parent Company. While its letter of resignation was
        not addressed to the general partner or the Registrant, Arthur Andersen
        confirmed to the general partner that its resignation as auditors of the
        entities referred to in its letter of resignation included its
        resignation as auditors of Cronos Capital Corp. and the Registrant.
        Following Arthur Andersen's resignation, the Parent Company subsequently
        received notification from the Securities and Exchange Commission that
        it was conducting a private investigation of the Parent Company
        regarding the events and circumstances leading to Arthur Andersen's
        resignation. The results of this investigation are still pending.
        Accordingly, the Registrant does not, at this time, have sufficient
        information to determine the impact, if any, that the Securities and
        Exchange Commission investigation of the Parent Company and the concerns
        expressed by Arthur Andersen in its letter of resignation may have on
        the future operating results and financial condition of the Registrant
        or the Leasing Company's ability to manage the Registrant's fleet in
        subsequent periods. However, the general partner of the Registrant does
        not believe, based upon the information currently available to it, that
        Arthur Andersen's resignation was triggered by any concern over the
        accounting policies and procedures followed by the Registrant.


                                       12
<PAGE>   13
        Arthur Andersen's report on the financial statements of Cronos Capital
        Corp. and the Registrant, for either of the previous two years, has not
        contained an adverse opinion or a disclaimer of opinion, nor was any
        such report qualified or modified as to uncertainty, audit scope, or
        accounting principles. During the Registrant's previous two fiscal years
        and the subsequent interim period preceding Arthur Andersen's
        resignation, there have been no disagreements between Cronos Capital
        Corp. or the Registrant and Arthur Andersen on any matter of accounting
        principles or practices, financial statement disclosure, or auditing
        scope or procedure.

        The Registrant retained a new auditor, Moore Stephens, P.C. ("Moore
        Stephens") on April 10, 1997, as reported in the Registrant's Current
        Report on Form 8-K, filed April 14, 1997.

        The President of the Leasing Company, a subsidiary of the Parent
        Company, along with two marketing Vice Presidents, resigned in June
        1997. These vacancies were filled by qualified, long-time employees who
        average over 15 years of experience in the container leasing industry,
        therefore providing continuity in the management of the Leasing Company.
        The Registrant and general partner do not believe these changes will
        have a material impact on the future operating results and financial
        condition of the Registrant.


        Cautionary Statement

        This Quarterly Report on Form 10-Q contains statements relating to
        future results of the Registrant, including certain projections and
        business trends, that are "forward-looking statements" as defined in the
        Private Securities Litigation Reform Act of 1995. Actual results may
        differ materially from those projected as a result of certain risks and
        uncertainties, including but not limited to changes in: economic
        conditions; trade policies; demand for and market acceptance of leased
        marine cargo containers; competitive utilization and per-diem rental
        rate pressures; as well as other risks and uncertainties, including but
        not limited to those described in the above discussion of the marine
        container leasing business under Item 2., Management's Discussion and
        Analysis of Financial Condition and Results of Operations; and those
        detailed from time to time in the filings of Registrant with the
        Securities and Exchange Commission.


                                       13
<PAGE>   14
                           PART II - OTHER INFORMATION


Item 5. Other Materially Important Events

        Equipment Acquisitions

        Pursuant to its undertakings made in its Registration Statement No.
        33-98290, Section 7.2 (h) of the Partnership Agreement, the Registrant
        had purchased the following types of equipment as of September 30, 1997:

<TABLE>
<CAPTION>
                                                         Purchased from               Registrant's
                                              Purchased      Container      Total     Average Cost
         Equipment Type                        from CCC   Manufacturers    Purchased  Per Container
         --------------                       ---------  --------------    ---------  -------------
<S>                                           <C>        <C>               <C>        <C>    
         Dry Cargo Containers:
               Twenty-foot                        -          3,853         3,853       $ 2,369
               Forty-foot                         -          1,050         1,050       $ 3,520
               Forty-foot high-cube               -            460           460       $ 3,878
         Refrigerated Cargo Containers:
               Twenty-foot                        -             90            90       $21,108
               Forty-foot high-cube               -            300           300       $25,655
         Tank Containers:
               24,000-liter                       -             52            52       $25,394
</TABLE>


        The aggregate purchase price (excluding acquisition fees) of the
        equipment acquired by the Registrant through September 30, 1997 was
        $25,524,394. The aggregate equipment had been acquired from third-party
        container manufacturers located in South Korea, India, the People's
        Republic of China, Thailand and the United Kingdom.


                                       14
<PAGE>   15
                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)     Exhibits


<TABLE>
<CAPTION>
        Exhibit
           No.                            Description                             Method of Filing
        -------                           -----------                             ----------------

<S>               <C>                                                             <C>         
          3(a)    Limited Partnership Agreement of the Registrant,                *
                  amended and restated as of December 28, 1996

          3(b)    Certificate of Limited Partnership of the Registrant            **

          10      Form of Leasing Agent Agreement with Cronos Containers          ***
                  Limited

          27      Financial Data Schedule                                         Filed with this document
</TABLE>


(b)     Reports on Form 8-K

        No reports on Form 8-K were filed by the Registrant during the quarter
        ended September 30, 1997.




----------

*       Incorporated by reference to Exhibit "A" to the Prospectus of the
        Registrant dated December 28, 1996, included as part of Registration
        Statement on Form S-1 (No. 33-98290)

**      Incorporated by reference to Exhibit 3.2 to the Registration Statement
        on Form S-1 (No. 33-98290)

***     Incorporated by reference to Exhibit 10.2 to the Registration Statement
        on Form S-1 (No. 33-98290)


                                       15
<PAGE>   16
                                   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 thereunto duly authorized.



                                      CRONOS GLOBAL INCOME FUND XVI, L.P.

                                      By  Cronos Capital Corp.
                                          The General Partner



                                      By  /s/ JOHN KALLAS
                                          ------------------------------------
                                          John Kallas
                                          Vice President, Treasurer
                                          Principal Finance & Accounting Officer



Date:  November 10, 1997


                                       16
<PAGE>   17
                                  EXHIBIT INDEX



<TABLE>
<CAPTION>
        Exhibit
           No.                            Description                             Method of Filing
        -------                           -----------                             ----------------

<S>               <C>                                                             <C>         
          3(a)    Limited Partnership Agreement of the Registrant,                *
                  amended and restated as of December 28, 1996

          3(b)    Certificate of Limited Partnership of the Registrant            **

          10      Form of Leasing Agent Agreement with Cronos Containers          ***
                  Limited

          27      Financial Data Schedule                                         Filed with this document
</TABLE>




----------

*       Incorporated by reference to Exhibit "A" to the Prospectus of the
        Registrant dated December 28, 1996, included as part of Registration
        Statement on Form S-1 (No. 33-98290)

**      Incorporated by reference to Exhibit 3.2 to the Registration Statement
        on Form S-1 (No. 33-98290)

***     Incorporated by reference to Exhibit 10.2 to the Registration Statement
        on Form S-1 (No. 33-98290)


                                       17