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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    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.
  California
(State or other jurisdiction of 
incorporation or organization)
    
    94-3230380
(I.R.S. Employer
Identification No.)
 One Front Street, Suite 925, San Francisco, California
    
    94111(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Report on Form 10-Q for the Quarterly Period
Ended September 30, 2010
 TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATION
    
    
   1Item 1. Financial Statements
    
    
    1Unaudited Condensed Balance Sheets as of September 30, 2010 and December 31, 2009
    
    
    2Unaudited Condensed Statements of Operations for the three and nine months ended September 30, 2010 and 2009
    
    
    3Unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2010 and 2009
    
    
    4Unaudited Notes to the Condensed Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16Item 4T. Controls and Procedures
    
    
    16PART II  OTHER INFORMATION
    
    
    17Item 1. Legal Proceedings
    
    
    17Item 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. [Removed and Reserved]
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    17EX-31.1EX-31.2EX-32




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PART I  FINANCIAL INFORMATION
 
 Financial Statements
 Presented herein are Cronos Global Income Fund XVI, L.P.s (the Partnership) condensed
balance sheets as of September 30, 2010 and December 31, 2009, condensed statements of
operations for the three and nine months ended September 30, 2010 and 2009, and condensed
statements of cash flows for the nine months ended September 30, 2010 and 2009
(collectively the Financial Statements), prepared by the Partnership without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote 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 pursuant to such rules and regulations, although the
Partnership believes that the disclosures are adequate to make the information presented
not misleading. These Financial Statements should be read in conjunction with the
financial statements and the notes thereto included in the Partnerships Annual Report on
Form 10-K for the year ended December 31, 2009. These Financial Statements reflect, in the
opinion of the Partnership and Cronos Capital Corp., the general partner, all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly the results
for the interim periods. The statements of operations for such interim periods are not
necessarily indicative of the results for the full year.
 The information in this Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of the securities laws. These forward-looking statements
reflect the current view of the Partnership with respect to future events and financial
performance and are subject to a number of risks and uncertainties, many of which are
beyond the Partnerships control. All statements, other than statements of historical fact
included in this report, including the statements under Managements Discussion and
Analysis of Financial Condition and Results of Operations, regarding the Partnerships
strategy, future operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of the Partnership are forward-looking statements. When
used in this report, the words would, believe, anticipate, intend, estimate,
expect, project, and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words.
All forward-looking statements speak only as of the date of this report. The Partnership
does not undertake any obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise. Although
the Partnership believes that its plans, intentions and expectations reflected in or
suggested by the forward-looking statements made in this report are reasonable, the
Partnership can give no assurance that these plans, intentions or expectations will be
achieved. Future economic and industry trends that could potentially impact revenues and
profitability are difficult to predict.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Balance Sheets
 (Unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assets:Cash
    
    $
    484,513
    
    
    $
    650,666Net lease receivables due from Leasing Agent
    
    
    367,523
    
    
    
    182,324Direct financing lease receivable, due from Leasing Agent within one year, net
    
    
    24,418
    
    
    
    26,485Total current assets
    
    
    876,454
    
    
    
    859,475Direct financing lease receivable, due from Leasing Agent after one year, net
    
    
    51,722
    
    
    
    67,711Container rental equipment, at cost
    
    
    11,585,977
    
    
    
    13,976,467Less accumulated depreciation
    
    
    (8,950,000
    )
    
    
    (10,330,153
    )Net container rental equipment
    
    
    2,635,977
    
    
    
    3,646,314Total assets
    
    $
    3,564,153
    
    
    $
    4,573,500Partners CapitalPartners capital:General partner
    
    
    2,805
    
    
    
    1,697Limited partners
    
    
    3,561,348
    
    
    
    4,571,803Total partners capital
    
    $
    3,564,153
    
    
    $
    4,573,500
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net lease revenue from Leasing Agent
    
    $
    257,595
    
    
    $
    181,459
    
    
    $
    650,972
    
    
    $
    704,843Other operating (expenses) income:Depreciation
    
    
    (176,434
    )
    
    
    (226,548
    )
    
    
    (560,208
    )
    
    
    (732,033
    )Other general and administrative expenses
    
    
    (31,906
    )
    
    
    (33,328
    )
    
    
    (106,000
    )
    
    
    (86,637
    )Net gain on disposal of equipment
    
    
    110,999
    
    
    
    76,542
    
    
    
    309,107
    
    
    
    164,178(97,341
    )
    
    
    (183,334
    )
    
    
    (357,101
    )
    
    
    (654,492
    )Net income (loss)
    
    $
    160,254
    
    
    $
    (1,875
    )
    
    $
    293,871
    
    
    $
    50,351Allocation of net income (loss):General partner
    
    $
    8,657
    
    
    $
    15,697
    
    
    $
    31,260
    
    
    $
    56,777Limited partners
    
    
    151,597
    
    
    
    (17,572
    )
    
    
    262,611
    
    
    
    (6,426
    )$
    160,254
    
    
    $
    (1,875
    )
    
    $
    293,871
    
    
    $
    50,351Limited partners per unit share of net
income (loss)
    
    $
    0.09
    
    
    $
    (0.01
    )
    
    $
    0.16
    
    
    $
    
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Cash Flows
 (Unaudited)
 Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Net cash provided by operating activities
    
    $
    496,704
    
    
    $
    719,040Cash flows from investing activities:Proceeds from sale of container rental equipment
    
    
    640,361
    
    
    
    911,574Cash flows from financing activities:Distributions to general partner
    
    
    (30,152
    )
    
    
    (56,311
    )Distributions to limited partners
    
    
    (1,273,066
    )
    
    
    (1,786,294
    )Net cash used in financing activities
    
    
    (1,303,218
    )
    
    
    (1,842,605
    )Net decrease in cash
    
    
    (166,153
    )
    
    
    (211,991
    )Cash at the beginning of the period
    
    
    650,666
    
    
    
    886,181Cash at the end of the period
    
    $
    484,513
    
    
    $
    674,190
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies
 (a)
    
    Nature of OperationsCronos Global Income Fund XVI, L.P. (the Partnership) is a limited partnership that was
organized under the laws of the State of California on September 1, 1995, for the purpose
of owning and leasing dry and specialized marine cargo containers to ocean carriers. 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, Cronos Capital Corp. (CCC), the general partner, and all
affiliates of CCC). On February 3, 1997, CCC suspended the offer and sale of units in the
Partnership. The offering terminated on December 27, 1997, at which time 1,599,667 limited
partnership units had been sold.CCC and its affiliate, Cronos Containers Limited (the Leasing Agent), manage the business
of the Partnership. CCC and the Leasing Agent also manage the container leasing business
for other partnerships affiliated with CCC.In April 2010, the Partnership commenced its 15th year of operations. The
Partnership is continuing its liquidation phase, wherein CCC focuses its attention on the
retirement of the remaining equipment in the Partnerships container fleet. At September
30, 2010, approximately 50% of the original equipment remained in the Partnerships fleet.
CCC will take several factors into consideration when examining options for the timing of
the disposal of the containers. These factors include the level of gross lease revenue
generated by the diminishing fleet, the level of costs relative to this revenue, projected
disposal proceeds on the disposition of the Partnerships containers, overall market
conditions and any foreseeable changes in other general and administrative expenses.
During the first half of 2011, CCC may distribute a request for proposal (RFP) to
prospective third party investors. The decision to distribute a RFP has not yet been taken. A RFP would seek to determine any interest such parties may have in purchasing the remaining
containers owned by the Partnership. CCC will not make any decision relating to the
final liquidation of the Partnership until any such proposals have been received and fully
evaluated.The Partnerships operations are subject to economic, political and business risks inherent
in a business environment. The Partnership believes that the profitability of, and risks
associated with, leases to foreign customers are generally the same as those to domestic
customers. The Partnerships leases generally require all payments to be made in United
States dollars.(b)
    
    Leasing AgentThe Partnership and the Leasing Agent have entered into an agreement (the Leasing Agent
Agreement) whereby the Leasing Agent manages the leasing operations for all equipment
owned by the Partnership. In addition to responsibility for leasing and re-leasing the
equipment to ocean carriers, the Leasing Agent disposes of the containers at the end of
their useful economic life 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
Agent to use the containers owned by the Partnership, together with other containers owned
or managed by the Leasing Agent and its affiliates, as part of a single fleet operated
without regard to ownership. The Leasing Agent Agreement generally provides that the
Leasing Agent will make payments to the Partnership based upon rentals collected from ocean
carriers after deducting direct operating expenses and management fees due both to CCC and
the Leasing Agent.The Leasing Agent leases containers to ocean carriers, generally under operating leases
which are either master leases or term leases (mostly one to five years) and periodically
under direct finance leases.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 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 charged and recognized based upon the number
of containers used and the applicable per-diem rate. Accordingly, rentals under master
leases are variable and contingent upon the number of containers used.Term leases are for a fixed quantity of containers for a fixed period of time, typically
varying from three to five years. In most cases, containers cannot be returned prior to
the expiration of the lease. Term lease agreements may contain early termination penalties
that apply in the event of early redelivery. Term leases provide greater revenue stability
to the lessor, usually at lower lease rates than master leases. Ocean carriers use term
leases to lower their operating costs when they have a need for an identified number of
containers for a specified term. Rentals under term leases are charged and recognized
based upon the number of containers leased, the applicable per-diem rate and the length of
the lease, irrespective of the number of days which the customer actually uses the
containers.Direct financing leases are long-term in nature, usually ranging from three to seven years,
and require relatively low levels of customer service. They ordinarily require fixed
payments over a defined period and provide customers with an option to purchase the subject
containers at the end of the lease term. Per-diem rates include an element of repayment of
capital and therefore are usually higher than rates charged under either term or master
leases.(c)
    
    Basis of PresentationThe accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America
(US GAAP) for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by US GAAP for annual financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the interim period are
not necessarily indicative of the results that may be expected for the fiscal year ending
December 31, 2010. For further information, refer to the financial statements and
footnotes thereto included in the Partnerships Annual Report on Form 10-K for the year
ended December 31, 2009 filed with the Securities and Exchange Commission (SEC).(d)
    
    Use of Estimates in Interim Financial StatementsThe preparation of interim financial statements, in conformity with US GAAP and SEC
regulations for interim reporting, 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. The most significant
estimates are those relating to the carrying value of equipment, including estimates
relating to depreciable lives and residual values, and those relating to the allowance for
doubtful accounts. Actual results could differ from those estimates.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (e)
    
    Container Rental EquipmentContainer rental equipment is depreciated over a 15-year life using the straight-line basis
to its residual value of 10% of original equipment cost. The Partnership and CCC evaluates
the period of depreciation and residual values to determine whether subsequent events and
circumstances warrant revised estimates of useful lives.Container rental equipment is considered to be impaired if the carrying value of the asset
exceeds the expected future cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets are written down to fair
value. An analysis projecting future cash flows from container rental equipment operations
is prepared when indicators, such as material changes in market conditions, are present.
Indicators of a potential impairment include a sustained decrease in utilization or
operating profitability, or indications of technological obsolescence. The primary
variables utilized by the analysis are current and projected utilization rates, per-diem
rental rates, direct operating expenses, fleet size, container disposal proceeds and the
timing of container disposals. Additionally, the Partnership evaluates future cash flows
and potential impairment for its entire fleet rather than for each container type or
individual container. As a result, future losses could result for individual container
dispositions due to various factors, including age, condition, suitability for continued
leasing, as well as the geographical location of containers when disposed. There were no
impairment charges recorded against the carrying value of container rental equipment for
the three or nine-month periods ended September 30, 2010 and 2009.(f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners CapitalNet income or loss has been allocated between the general and limited partners in
accordance with the Partnership Agreement. The Partnership Agreement generally provides
that CCC shall at all times maintain at least a 1% interest in each item of income or loss,
including the gain arising from the sale of containers. The Partnership Agreement further
provides that the gain arising from the sale of containers be allocated first to the
partners with capital account deficit balances in an amount sufficient to eliminate any
deficit capital account balance. Thereafter, the Partnerships gains arising from the sale
of containers are allocated to the partners in accordance with their share of sale proceeds
distributed. The Partnership Agreement also provides for income (excluding the gain
arising from the sale of containers) for any period, be allocated to CCC in an amount equal
to that portion of CCCs distributions in excess of 1% of the total distributions made to
both CCC and the limited partners of the Partnership for such period, as well as other
allocation adjustments.Actual cash distributions differ from the allocations of net income or loss between the
general and limited partners as presented in these financial statements. Partnership
distributions are paid to the partners (general and limited) from distributable cash from
operations, allocated 95% to the limited partners and 5% to CCC. Distributions of sales
proceeds are allocated 99% to the limited partners and 1% to CCC. The allocations remain
in effect until such time as the limited partners have received from the Partnership
aggregate distributions in an amount equal to their capital contributions plus an 8%
cumulative, compounded (daily), annual return on their adjusted capital contributions.
Thereafter, all Partnership distributions will be allocated 85% to the limited partners and
15% to CCC. Cash distributions from operations to CCC in excess of 5% of distributable
cash will be considered an incentive fee and will be recorded as compensation to CCC, with
the remaining distributions from operations charged to partners capital.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Upon dissolution, the assets of the Partnership will be sold and the proceeds thereof
distributed as follows: (i) all of the Partnerships debts and liabilities to persons other
than CCC or the limited partners shall be paid and discharged; (ii) all of the
Partnerships debts and liabilities to CCC and the limited partners shall be paid and
discharged; and (iii) the balance of such proceeds shall be distributed to CCC and the
limited partners in accordance with the positive balances of CCC and the limited partners
capital accounts. CCC shall contribute to the Partnership, if necessary, an amount equal
to the lesser of the deficit balance in its capital account at the time of such
liquidation, or 1.01% of the excess of the Limited Partners capital contributions to the
Partnership over the capital contributions previously made to the Partnership by CCC, after
giving effect to the allocation of income or loss arising from the liquidation of the
Partnerships assets.
 (2)
    
    Net Lease Receivables Due from Leasing Agent
 Net lease receivables due from Leasing Agent at September 30, 2010 and December 31, 2009
comprised:
 September 30,
    
    
    December 31,2010
    
    
    2009Gross lease receivables
    
    $
    494,942
    
    
    $
    391,120Less:Direct operating expenses payable
    
    
    75,293
    
    
    
    155,879Base management fees payable
    
    
    18,643
    
    
    
    18,860Reimbursed administrative expenses payable
    
    
    5,269
    
    
    
    6,873Allowance for doubtful accounts
    
    
    28,214
    
    
    
    27,184Net lease receivables due from Leasing Agent
    
    $
    367,523
    
    
    $
    182,324
 Included within the amount of gross lease receivables at September 30, 2010 is $116,789 in
respect of amounts owed by the Leasing Agent in relation to disposal related invoices.At September 30, 2010 and December 31, 2009, respectively, amounts of $2,218 and $1,761 were
recorded as doubtful debt expense. In addition, $677 was written-off in the three months ended
September 30, 2010; no write-offs were recorded in the three months ended September 30, 2009.
In the nine months ended September 30, 2010 and 2009, respectively, $1,188 and $5,620 were
written-off.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (3)
    
    Net Lease RevenueNet lease revenue for the three and nine-month periods ended September 30, 2010 and 2009
comprised:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Gross lease revenue
    
    $
    312,678
    
    
    $
    333,252
    
    
    $
    924,230
    
    
    $
    1,166,746Interest
income from direct financing leases
    
    
    7,999
    
    
    
    5,557
    
    
    
    25,297
    
    
    
    10,739Less:Direct operating expenses
    
    
    25,388
    
    
    
    114,312
    
    
    
    182,677
    
    
    
    330,954Base management fees
    
    
    22,409
    
    
    
    23,535
    
    
    
    65,444
    
    
    
    81,151Reimbursed administrative expensesSalaries
    
    
    11,003
    
    
    
    14,783
    
    
    
    37,364
    
    
    
    45,568Other payroll related expenses
    
    
    1,452
    
    
    
    1,215
    
    
    
    4,268
    
    
    
    4,280General and administrative expenses
    
    
    2,830
    
    
    
    3,505
    
    
    
    8,802
    
    
    
    10,68963,082
    
    
    
    157,350
    
    
    
    298,555
    
    
    
    472,642Net lease revenue
    
    $
    257,595
    
    
    $
    181,459
    
    
    $
    650,972
    
    
    $
    704,843
 (4)
    
    Operating SegmentAn operating segment is a component of an enterprise that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed
by the enterprises chief operating decision maker to make decisions about resources to be
allocated to the segment and to assess its performance, and about which separate financial
information is available. CCC and the Leasing Agent operate the Partnerships container fleet
as a homogenous unit and have determined that as such, it has a single reportable operating
segment.A summary of gross lease revenue earned by each Partnership container type for the periods
ended September 30, 2010 and 2009 follows:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Dry cargo containers
    
    $
    256,673
    
    
    $
    256,508
    
    
    $
    741,088
    
    
    $
    899,779Refrigerated containers
    
    
    20,587
    
    
    
    40,908
    
    
    
    73,426
    
    
    
    154,391Tank containers
    
    
    35,418
    
    
    
    35,836
    
    
    
    109,716
    
    
    
    112,576Total
    
    $
    312,678
    
    
    $
    333,252
    
    
    $
    924,230
    
    
    $
    1,116,746
 Due to the Partnerships lack of information regarding the physical location of its fleet
of containers when on lease in the global shipping trade, the Partnership believes that it does
not possess discernible geographic reporting segments.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (5)
    
    Limited Partners CapitalCash distributions made to the limited partners for the nine-month periods ended September 30,
2010 and 2009 were as follows:
 Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Cash distributions from operations
    
    $
    406,579
    
    
    $
    899,812Cash distributions from sales proceeds
    
    
    866,487
    
    
    
    886,482Total cash distributions
    
    $
    1,273,066
    
    
    $
    1,786,294
 These distributions are used in determining Adjusted Capital Contributions as defined by the
Partnership Agreement.The limited partners per unit share of capital at September 30, 2010 and December 31, 2009,
was $2.23 and $2.86, respectively. This is calculated by dividing the limited partners
capital at the end of September 30, 2010, and December 31, 2009, by 1,599,667, the total number
of outstanding limited partnership units.
 (6)
    
    Cronos Ltd.Cronos Ltd. (Cronos), a Bermuda exempted company, is the parent of CCC, the general partner
of the Partnership. On July 28, 2010, Cronos consummated several transactions with investment
funds affiliated with Kelso & Company, L.P. (Kelso), a private equity firm based in New York.
Pursuant to the transactions, affiliated investment funds of Kelso acquired a majority
interest in Cronos through a newly-organized holding company, Cronos Holding Company Ltd., a
Bermuda exempted company.In connection with the transactions with Kelso, Dennis J. Tietz has retired as a director of
CCC. Messrs. Younger, Vaughan, and Kallas remain as directors of CCC, and CCC remains a
wholly-owned subsidiary of Cronos.
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Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Results of Operations
 Partnership Overview
   
    
    Activity-related expenses, including agent costs and depot costs such as repairs,
maintenance and handling;
    
    Inventory-related expenses for off-hire containers, comprising storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers
as well as the frequency at which containers are re-delivered and the frequency and size
of repositioning moves undertaken; and
    
    Legal and other expenses, including legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts.
  Dry Cargo
    
    
    RefrigeratedContainers
    
    
    Containers
    
    
    Tank Containers

    
    
    TotalContainer on lease:Master lease
    
    
    4,313
    
    
    
    37
    
    
    
    15
    
    
    
    4,365Term leaseShort term1
    
    
    168
    
    
    
    1
    
    
    
    13
    
    
    
    182Long term2
    
    
    1,223
    
    
    
    18
    
    
    
    13
    
    
    
    1,2541,391
    
    
    
    19
    
    
    
    26
    
    
    
    1,436Subtotal
    
    
    5,704
    
    
    
    56
    
    
    
    41
    
    
    
    5,801Containers off-hire
    
    
    86
    
    
    
    7
    
    
    
    8
    
    
    
    101Total container fleet
    
    
    5,790
    
    
    
    63
    
    
    
    49
    
    
    
    5,902
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or
that may expire on or before September 2011.2.
    
    Long term leases represent term leases that will expire after September 2011. 11




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##### Table of Contents



Dry Cargo Containers
    
    
    Refrigerated Containers
    
    
    Tank Containers
    
    
    TotalTEU
    
    
    %
    
    
    TEU
    
    
    %
    
    
    TEU
    
    
    %
    
    
    TEU
    
    
    %Total purchases
    
    
    11,053
    
    
    
    100
    %
    
    
    690
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %
    
    
    11,795
    
    
    
    100
    %Less disposals
    
    
    5,263
    
    
    
    48
    %
    
    
    627
    
    
    
    91
    %
    
    
    3
    
    
    
    6
    %
    
    
    5,893
    
    
    
    50
    %Remaining fleet at
September 30, 2010
    
    
    5,790
    
    
    
    52
    %
    
    
    63
    
    
    
    9
    %
    
    
    49
    
    
    
    94
    %
    
    
    5,902
    
    
    
    50
    %
 Market & Industry Overview
     Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Average fleet size (measured in TEUs)Dry cargo containers
    
    
    6,082
    
    
    
    7,345Refrigerated containers
    
    
    79
    
    
    
    173Tank containers
    
    
    50
    
    
    
    51Utilization rates for combined fleetAverage for the period
    
    
    90
    %
    
    
    83
    %At end of period
    
    
    98
    %
    
    
    80
    %
 12




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##### Table of Contents



Three Months Ended September 30, 2010 Compared to the Three Months Ended September 30, 2009
 Overview
 Net income
 
    
    The Partnership experienced stronger market conditions for leased containers;
    
    Depreciation expense was lower than in the prior year, as the Partnership continued
to sell equipment that had reached the end of its useful economic life for maritime
leasing; and
    
    The level of gains recorded on equipment disposals increased.
 Analysis and discussion
 Net lease revenue
 
    
    a $88,924, or 78%, decline in direct operating expenses as a result of the increase
in utilization and corresponding decline in inventories of off-hire equipment, which
resulted in a reduction in both activity-related and inventory-related expenses,
partially offset by
    
    a $20,574 reduction in gross lease revenue (a component of net lease revenue), that
was attributable to the reduction in the Partnerships fleet size.
  Depreciation expense
 Other general and administrative expenses
 Net gain on disposal of equipment
 Nine Months Ended September 30, 2010 Compared to the Nine Months Ended September 30, 2009
 Overview
 Net income
 
    
    The Partnership experienced stronger market conditions for leased containers;
    
    Depreciation expense was lower than in the prior year, as the Partnership continued
to sell equipment that had reached the end of its useful economic life for maritime
leasing; and
    
    The level of gains recorded on equipment disposals increased.
 13




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##### Table of Contents



Analysis and discussion
 Net lease revenue
 
    
    a $242,516 decrease in gross lease revenue (a component of net lease revenue), which
was attributable to the reduction in Partnerships fleet size. This was offset to some
extent by the increase in gross lease revenue generated by the increased volume of
on-lease containers; and
    
    a $148,277 decline in direct operating expenses as a result of the increase in
utilization and corresponding reduction in inventories of off-hire equipment, which
resulted in the reduction of both activity-related and inventory-related expenses.
  Depreciation expense
 Other general and administrative expenses
 Net gain on disposal of equipment
 Liquidity and Capital Resources
   14




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##### Table of Contents



Cash from Operating Activities:
 Cash from Investing Activities:
 Cash from Financing Activities
 Critical Accounting Policies
  
    
    Container equipment  depreciable lives and residual values.
    
    Container equipment  recoverability and valuation.
    
    Allowance for doubtful accounts.
  Inflation
  15




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##### Table of Contents



Quantitative and Qualitative Disclosures About Market Risk
 Exchange rate risk
 Credit risk:
 
 Controls and Procedures
  
 Controls and Procedures
   16




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Legal Proceedings
  
 Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults Upon Senior Securities
  
 [Removed and Reserved]
 
 Other Information
  
 Exhibits
  ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended
and restated as of December 28, 1995
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated December
28, 1995, 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)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as
required by Section 906, is not to be deemed filed with the Commission or subject to the
rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act. 17




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##### Table of Contents



SIGNATURES
  CRONOS GLOBAL INCOME FUND XVI, L.P.By
    Cronos Capital Corp.The General PartnerBy
    /s/ Peter J. YoungerPeter J. YoungerPresident and Chief Executive Officer of Cronos
Capital Corp. (CCC)
Principal Executive Officer of CCC By
    /s/ Frank P. VaughanFrank P. VaughanChief Financial Officer and
Director of Cronos Capital Corp. (CCC)
Principal Financial and Accounting Officer of CCC  18




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended
and restated as of December 28, 1995
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated December
28, 1995, 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)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as
required by Section 906, is not deemed to be filed with the Commission or subject to the
rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act.