##### Table of Contents



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 June 30, 2007
 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 þ
 o þ




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##### 



CRONOS GLOBAL INCOME FUND XVI, L.P.
 Report on Form 10-Q for the Quarterly Period
Ended June 30, 2007
 TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Balance Sheets  June 30, 2007 and December 31, 2006 (unaudited)
    
    
    4Condensed Statements of Operations for the three and six months ended June 30, 2007 and 2006 (unaudited)
    
    
    5Condensed Statements of Cash Flows for the six months ended June 30, 2007 and 2006 (unaudited)
    
    
    6Notes to Condensed Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4. Controls and Procedures
    
    
    18Item 4T. Controls and Procedures
    
    
    18PART II  OTHER INFORMATION
    
    
    19Item 1. Legal Proceedings
    
    
    19Item 1A. Risk Factors
    
    
    19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    19Item 3. Defaults Upon Senior Securities
    
    
    19Item 4. Submissions of Matters to a Vote of Securities Holders
    
    
    19Item 5. Other Information
    
    
    19Item 6. Exhibits
    
    
    19EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
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PART I  FINANCIAL INFORMATION
 
 Financial Statements
   3




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Balance Sheets
 (Unaudited)
 June 30,
    
    
    December 31,2007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents, includes $780,666 at June 30, 2007
and $1,188,374 at December 31, 2006 in interest-bearing accounts
    
    $
    795,666
    
    
    $
    1,203,374Net lease and other receivables due from Leasing Company
    
    
    374,699
    
    
    
    405,841Total current assets
    
    
    1,170,365
    
    
    
    1,609,215Container rental equipment, at cost
    
    
    23,881,283
    
    
    
    25,256,310Less accumulated depreciation
    
    
    (14,731,746
    )
    
    
    (14,851,810
    )Net container rental equipment
    
    
    9,149,537
    
    
    
    10,404,500Total assets
    
    $
    10,319,902
    
    
    $
    12,013,715Partners capitalPartners capital (deficit):General partner
    
    $
    (23,266
    )
    
    $
    (39,210
    )Limited partners
    
    
    10,343,168
    
    
    
    12,052,925Total partners capital
    
    $
    10,319,902
    
    
    $
    12,013,715
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net lease revenue
    
    $
    436,618
    
    
    $
    559,207
    
    
    $
    886,178
    
    
    $
    1,127,141Other operating income (expenses):Depreciation
    
    
    (377,445
    )
    
    
    (436,217
    )
    
    
    (770,172
    )
    
    
    (877,667
    )Other general and administrative expenses
    
    
    (34,499
    )
    
    
    (29,453
    )
    
    
    (61,770
    )
    
    
    (55,549
    )Net gain (loss) on disposal of equipment
    
    
    28,500
    
    
    
    (73,317
    )
    
    
    33,632
    
    
    
    (134,443
    )(383,444
    )
    
    
    (538,987
    )
    
    
    (798,310
    )
    
    
    (1,067,659
    )Income from operations
    
    
    53,174
    
    
    
    20,220
    
    
    
    87,868
    
    
    
    59,482Other income:Interest income
    
    
    10,563
    
    
    
    10,195
    
    
    
    23,933
    
    
    
    19,982Net income
    
    $
    63,737
    
    
    $
    30,415
    
    
    $
    111,801
    
    
    $
    79,464Allocation of net income:General partner
    
    $
    49,134
    
    
    $
    27,534
    
    
    $
    75,255
    
    
    $
    53,586Limited partners
    
    
    14,603
    
    
    
    2,881
    
    
    
    36,546
    
    
    
    25,878$
    63,737
    
    
    $
    30,415
    
    
    $
    111,801
    
    
    $
    79,464Limited partners per unit share of net
income
    
    $
    0.01
    
    
    $
    
    
    
    $
    0.02
    
    
    $
    0.02
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Cash Flows
 (Unaudited)
 Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006Net cash provided by operating activities
    
    $
    913,830
    
    
    $
    1,168,873Cash flows provided by investing activities:Proceeds from sale of container rental equipment
    
    
    484,076
    
    
    
    509,669Cash flows
from financing activities:Distributions to general partner
    
    
    (59,310
    )
    
    
    (71,435
    )Distributions to limited partners
    
    
    (1,746,304
    )
    
    
    (1,739,639
    )Net cash used in financing activities
    
    
    (1,805,614
    )
    
    
    (1,811,074
    )Net decrease in cash and cash equivalents
    
    
    (407,708
    )
    
    
    (132,532
    )Cash and cash equivalents at the beginning of the period
    
    
    1,203,374
    
    
    
    1,048,262Cash and cash equivalents at the end of the period
    
    $
    795,666
    
    
    $
    915,730
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Notes to Unaudited Condensed Financial Statements
 Summary of Significant Accounting Policies
 (a)
    
    Nature of OperationsCronos 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 worldwide to ocean carriers. The Partnerships operations are subject to the
fluctuations of world economic and political conditions. The Partnership believes that
the profitability of, and risks associated with, leases to foreign customers is generally
the same as those of leases to domestic customers. The Partnerships leases generally
require all payments to be made in United States currency.Cronos Capital Corp. (CCC) is the general partner and, with its affiliate Cronos
Containers Limited (the Leasing Company), manages the business of the Partnership. CCC
and the Leasing Company also manage the container leasing business for other partnerships
affiliated with CCC.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, CCC, 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. The
Partnership shall continue until December 31, 2015, unless sooner terminated upon the
occurrence of certain events.The Partnership has entered into its 13th year of operations and is in its
liquidation phase, wherein CCC is focusing its attention on the retirement of the remaining
equipment in the Partnerships container fleet. At June 30, 2007, approximately 78% of the
original equipment remained in the Partnerships fleet.(b)
    
    Leasing Company and Leasing Agent AgreementA Leasing Agent Agreement exists between the Partnership and the Leasing Company,
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 Accounting for Lease, 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 the Leasing Company. The
Leasing Company leases containers to ocean carriers, generally under operating leases which
are either master leases or term leases (mostly one 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, and rentals are based upon the number of containers used and the applicable
per-diem rate.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (b)
    
    Leasing Company and Leasing Agent Agreement (continued)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.(c)
    
    Basis of PresentationThese unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP) for
interim financial information and regulation S-X, Article 10 under the Securities Exchange
Act of 1934. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP 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. It is suggested that these financial
statements be read in conjunction with the financial statements and accompanying notes in
the Partnerships December 31, 2006 Annual Report on Form 10-K.The interim financial statements presented herewith reflect, in the opinion of
management, all adjustments of a normal recurring nature necessary to present fairly the
results for the interim periods presented. The results of operations for such interim
periods are not necessarily indicative of the results to be expected for the full year.(d)
    
    Use of EstimatesThe preparation of financial statements in conformity with 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 most significant estimates included within the financial statements are the
container rental equipments estimated useful lives and residual values, and the estimate
of future cash flows from container rental equipment operations, used to evaluate the
carrying value of container rental equipment in accordance with SFAS No. 144 Accounting
for the Impairment or Disposal of Long Lived Assets.(e)
    
    Container Rental EquipmentContainer rental equipment is depreciated over a 15-year life using the straight-line basis
to its salvage value, estimated to be 10% of the original equipment cost. Depreciation
policies are also evaluated to determine whether subsequent events and circumstances
warrant revised estimates of useful lives.In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, 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 annually, or upon material changes in market conditions.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (e)
    
    Container Rental Equipment (continued)Current and projected utilization rates, per-diem rental rates, direct operating expenses,
fleet size and container disposals are the primary variables utilized in the analysis.
Additionally, the Partnership evaluates future cash flows and potential impairment by
container type rather than for each individual container, and 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 to the carrying value of
container rental equipment for the three and six-month periods ended June 30, 2007 and
2006.(f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners Capital
AccountsNet 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 its 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.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 persons
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 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 contribution 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.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (2)
    
    Net Lease and Other Receivables Due from Leasing CompanyNet lease and other 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 earned by
the Leasing Company under operating leases to ocean carriers for the containers owned by the
Partnership, as well as proceeds earned from container disposals. Net lease and other
receivables at June 30, 2007 and December 31, 2006 were as follows:
 June 30,
    
    
    December 31,2007
    
    
    2006Gross lease and other receivables
    
    $
    682,138
    
    
    $
    694,051Less:Direct operating payables and accrued expenses
    
    
    204,650
    
    
    
    203,928Base management fees payable
    
    
    39,006
    
    
    
    2,472Reimbursed administrative expenses
    
    
    10,595
    
    
    
    12,559Allowance for doubtful accounts
    
    
    53,188
    
    
    
    69,251307,439
    
    
    
    288,210Net lease and other receivables
    
    $
    374,699
    
    
    $
    405,841
 (3)
    
    Net Lease RevenueNet 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, management fees and reimbursed administrative
expenses incurred in respect of the containers specified in each operating lease agreement.
Net lease revenue for the three and six-month periods ended June 30, 2007 and 2006 was as
follows:
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Rental revenue
    
    $
    666,093
    
    
    $
    843,282
    
    
    $
    1,364,447
    
    
    $
    1,750,315Less:Rental equipment operating expenses
    
    
    150,078
    
    
    
    182,578
    
    
    
    315,441
    
    
    
    407,444Base management fees
    
    
    46,577
    
    
    
    58,224
    
    
    
    94,954
    
    
    
    120,187Reimbursed administrative expensesSalaries
    
    
    22,648
    
    
    
    30,075
    
    
    
    45,996
    
    
    
    68,373Other payroll related expenses
    
    
    3,390
    
    
    
    4,710
    
    
    
    7,782
    
    
    
    9,972General and administrative expenses
    
    
    6,782
    
    
    
    8,488
    
    
    
    14,096
    
    
    
    17,198Total reimbursed administrative
expenses
    
    
    32,820
    
    
    
    43,273
    
    
    
    67,874
    
    
    
    95,543229,475
    
    
    
    284,075
    
    
    
    478,269
    
    
    
    623,174Net lease revenue
    
    $
    436,618
    
    
    $
    559,207
    
    
    $
    886,178
    
    
    $
    1,127,141
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (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 assess its performance, and about which separate financial
information is available. Management operates the Partnerships container fleet as a
homogenous unit and has determined that as such, it has a single reportable operating segment.The Partnership derives revenues from dry cargo, refrigerated and tank containers used by its
customers in global trade routes. As of June 30, 2007, the Partnership operated 3,379
twenty-foot, 1,121 forty-foot and 1,646 forty-foot high-cube marine dry cargo containers, as
well as 75 twenty-foot and 178 forty-foot high-cube refrigerated containers, and 51 twenty-four
thousand-liter tanks. A summary of gross lease revenue earned by the Leasing Company, on
behalf of the Partnership, by product, for the three and six-month periods ended June 30, 2007
and 2006 follows:
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Dry cargo containers
    
    $
    483,989
    
    
    $
    558,181
    
    
    $
    989,636
    
    
    $
    1,169,672Refrigerated containers
    
    
    143,664
    
    
    
    244,130
    
    
    
    296,271
    
    
    
    502,149Tank containers
    
    
    38,440
    
    
    
    40,971
    
    
    
    78,540
    
    
    
    78,494Total
    
    $
    666,093
    
    
    $
    843,282
    
    
    $
    1,364,447
    
    
    $
    1,750,315
 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 as defined in SFAS No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information.(5)
    
    The Cronos GroupThe Cronos Group (Parent Company), a Luxembourg holding company, is the indirect parent of
CCC, the general partner of the Partnership. The Parent Company announced on February 28, 2007
that it had entered into an Asset Purchase Agreement (Asset Purchase Agreement) with CRX
Acquisition Ltd., a Bermuda exempted company (CRX) and FB Transportation Capital LLC, a
Delaware limited liability company (FB Transportation). Under the terms of the Asset
Purchase Agreement, and subject to the conditions stated therein, the Parent Company agreed to
sell all of its assets to CRX and CRX agreed to assume all of the Parent Companys liabilities.
CRX and FB Transportation are affiliates of or associated with the Fortis group of companies,
which include the Parent Companys lead lender and a partner in the Parent Companys Joint
Venture Program.At a special meeting held August 1, 2007, Parent Companys shareholders approved the Asset
Purchase Agreement and the transactions contemplated thereunder, including Parent Companys
dissolution and liquidation. Closing of the sale of the Parent Companys assets and
liabilities to CRX occurred later that same day. The container leasing business of the Parent
Company will be continued by CRX as a private company. Management of the Parent Company, which
includes members of the management of CCC, are continuing as management of CRX and are
acquiring an equity interest in CRX.CCC is now an indirect subsidiary of CRX. There have been no changes to the management of CCC
or to the management of the Leasing Company as a result of the Parent Companys sale of its
assets to CRX and CRXs assumption of the Parent Companys liabilities. However, CCC is unable
to determine the impact, if any, of CRXs
acquisition of the Parent Companys business upon the future operating results, financial
condition, and cash flows of the Partnership or CCC.
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Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Market Overview
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Results of Operations
   
    
    Activity-related expenses, including agent 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.
    
    Legal and other expenses, including legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts.
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Dry Cargo
    
    
    Refrigerated
    
    
    TankContainers
    
    
    Containers
    
    
    Containers40-Foot
    
    
    
    
    
    
    40-Foot20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    High-Cube
    
    
    24,000-LiterContainers on lease:Master lease
    
    
    2,470
    
    
    
    749
    
    
    
    1,250
    
    
    
    48
    
    
    
    106
    
    
    
    28Term leaseShort term 1
    
    
    222
    
    
    
    107
    
    
    
    159
    
    
    
    2
    
    
    
    9
    
    
    
    8Long term 2
    
    
    472
    
    
    
    147
    
    
    
    66
    
    
    
    3
    
    
    
    34
    
    
    
    14Sales-type lease
    
    
    2
    
    
    
    6
    
    
    
    4
    
    
    
    5
    
    
    
    1
    
    
    
    Subtotal
    
    
    3,166
    
    
    
    1,009
    
    
    
    1,479
    
    
    
    58
    
    
    
    150
    
    
    
    50Containers off lease
    
    
    213
    
    
    
    112
    
    
    
    167
    
    
    
    17
    
    
    
    28
    
    
    
    1Total container fleet
    
    
    3,379
    
    
    
    1,121
    
    
    
    1,646
    
    
    
    75
    
    
    
    178
    
    
    
    51
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or
that may expire on or before June 2008.2.
    
    Long term leases represent term leases, the majority of which will expire between July 2008
and December 2011. Dry Cargo
    
    
    Refrigerated
    
    
    TankContainers
    
    
    Containers
    
    
    Containers40-Foot
    
    
    
    
    
    
    
    
    
    
    40-Foot20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    High-Cube
    
    
    24,000-LiterUnits
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %
    
    
    Units
    
    
    %Total purchases
    
    
    4,553
    
    
    
    100
    %
    
    
    1,500
    
    
    
    100
    %
    
    
    1,750
    
    
    
    100
    %
    
    
    90
    
    
    
    100
    %
    
    
    300
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %Less disposals
    
    
    1,174
    
    
    
    26
    %
    
    
    379
    
    
    
    25
    %
    
    
    104
    
    
    
    6
    %
    
    
    15
    
    
    
    17
    %
    
    
    122
    
    
    
    41
    %
    
    
    1
    
    
    
    2
    %Remaining fleet at
June 30, 2007
    
    
    3,379
    
    
    
    74
    %
    
    
    1,121
    
    
    
    75
    %
    
    
    1,646
    
    
    
    94
    %
    
    
    75
    
    
    
    83
    %
    
    
    178
    
    
    
    59
    %
    
    
    51
    
    
    
    98
    %
 Three Months Ended June 30, 2007 Compared to the Three Months Ended June 30, 2006
 Net lease revenue
 Three Months EndedJune 30,
    
    June 30,2007
    
    2006Fleet size (measured in twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,026
    
    
    
    9,629Refrigerated containers
    
    
    440
    
    
    
    644Tank containers
    
    
    51
    
    
    
    52Average utilization ratesDry cargo containers
    
    
    89
    %
    
    
    89
    %Refrigerated containers
    
    
    80
    %
    
    
    84
    %Tank containers
    
    
    97
    %
    
    
    88
    %
 14




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##### Table of Contents



Depreciation expense
 Other general and administrative expenses
 Net gain on disposal of equipment
  Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006
 Net lease revenue
  Six Months EndedJune 30,
    
    June 30,2007
    
    2006Fleet size (measured in twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,138
    
    
    
    9,727Refrigerated containers
    
    
    447
    
    
    
    655Tank containers
    
    
    51
    
    
    
    52Average utilization ratesDry cargo containers
    
    
    88
    %
    
    
    88
    %Refrigerated containers
    
    
    79
    %
    
    
    85
    %Tank containers
    
    
    95
    %
    
    
    89
    %
  15




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##### Table of Contents



Depreciation expense
 Other general and administrative expenses
 Net gain on disposal of equipment
  Liquidity and Capital Resources
  th
  16




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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 in accordance with SFAS 144
Accounting for the Impairment or Disposal of Long Lived Assets
    
    Allowance for doubtful accounts
  Inflation
  The Cronos Group
  17




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##### Table of Contents



Quantitative and Qualitative Disclosures About Market Risk
 Exchange rate risk
 
 Controls and Procedures
   
 Controls and Procedures
  18




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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
  
 Submissions of Matters to a Vote of Securities Holders
  
 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. 19




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##### Table of Contents



SIGNATURES
  CRONOS GLOBAL INCOME FUND XVI, L.P.
By     Cronos Capital Corp.
          The General PartnerBy
    /s/ Dennis J. TietzDennis J. TietzPresident and Director of
Cronos Capital Corp. (CCC)
Principal Executive Officer of CCCBy
    /s/ John KallasJohn KallasChief Financial Officer and
Director of Cronos Capital Corp. (CCC)
Principal Financial and Accounting Officer of CCC  20




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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.