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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 March 31, 2009
 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.)
 
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ




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##### 



CRONOS GLOBAL INCOME FUND XVI, L.P.
 Report on Form 10-Q for the Quarterly Period
Ended March 31, 2009
TABLE OF CONTENTS
 PAGEPART I  FINANCIAL
INFORMATION
    
    
    1Item 1. Financial
Statements
    
    
    1Unaudited Condensed Balance Sheets  March 31, 2009 and December 31, 2008
    
    
    2Unaudited Condensed Statements of Income for the three months ended March 31,
2009 and 2008
    
    
    3Unaudited Condensed Statements of Cash Flows for the three months ended March
31, 2009 and 2008
    
    
    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. Submissions of Matters to a Vote of Security
Holders
    
    
    17Item 5. Other
Information
    
    
    17Item 6.
Exhibits
    
    
    17EX-31.1EX-31.2EX-32




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PART I  FINANCIAL INFORMATION
 
 Financial Statements
   1




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Balance Sheets
(Unaudited)
 March 31,
    
    
    December 31,2009
    
    
    2008AssetsCurrent assets:Cash
    
    $
    831,890
    
    
    $
    886,181Net lease receivables due from Leasing Agent
    
    
    321,692
    
    
    
    396,009Direct finance lease receivable, due from Leasing Agent within one year, net
    
    
    22,755
    
    
    
    22,382Total current assets
    
    
    1,176,337
    
    
    
    1,304,572Direct finance lease receivable, due from Leasing Agent after one year, net
    
    
    21,125
    
    
    
    21,091Container rental equipment, at cost
    
    
    17,131,699
    
    
    
    18,016,216Less accumulated depreciation
    
    
    (12,112,557
    )
    
    
    (12,517,613
    )Net container rental equipment
    
    
    5,019,142
    
    
    
    5,498,603Total assets
    
    $
    6,216,604
    
    
    $
    6,824,266Partners CapitalPartners capital:General partner
    
    
    395
    
    
    
    607Limited partners
    
    
    6,216,209
    
    
    
    6,823,659Total partners capital
    
    $
    6,216,604
    
    
    $
    6,824,266
  2




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Income
(Unaudited)
 Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Net lease revenue from Leasing Agent
    
    $
    294,764
    
    
    $
    444,110Other operating (expenses) income:Depreciation
    
    
    (257,714
    )
    
    
    (333,104
    )Other general and administrative expenses
    
    
    (25,842
    )
    
    
    (38,075
    )Net gain on disposal of equipment
    
    
    49,500
    
    
    
    11,179(234,056
    )
    
    
    (360,000
    )Income from operations
    
    
    60,708
    
    
    
    84,110Other income:Interest income
    
    
    
    
    
    
    3,033Net income
    
    $
    60,708
    
    
    $
    87,143Allocation of net income:General partner
    
    $
    21,626
    
    
    $
    28,887Limited partners
    
    
    39,082
    
    
    
    58,256$
    60,708
    
    
    $
    87,143Limited partners per unit share of net income
    
    $
    0.02
    
    
    $
    0.04
  3




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Cash Flows
(Unaudited)
 Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Net cash provided by operating activities
    
    $
    310,673
    
    
    $
    371,893Cash flows from investing activities:Proceeds from sale of container rental equipment
    
    
    303,406
    
    
    
    225,919Cash flows from financing activities:Distributions to general partner
    
    
    (21,838
    )
    
    
    (23,689
    )Distributions to limited partners
    
    
    (646,532
    )
    
    
    (633,202
    )Net cash used in financing activities
    
    
    (668,370
    )
    
    
    (656,891
    )Net decrease in cash
    
    
    (54,291
    )
    
    
    (59,079
    )Cash at the beginning of the period
    
    
    886,181
    
    
    
    831,160Cash at the end of the period
    
    $
    831,890
    
    
    $
    772,081
  4




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Notes to Unaudited Condensed Financial Statements
 Summary of Significant Accounting Policies
 Nature of Operations
     Leasing Agent
    5




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 
   Basis of Presentation
  Use of Estimates in Interim Financial Statements
   6




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Container Rental Equipment
 
 
 Allocation of Net Income or Loss, Partnership Distributions and Partners Capital
    7




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
  Net Lease Receivables Due from Leasing Agent
  March 31,
    
    
    December 31,2009
    
    
    2008Gross lease receivables
    
    $
    563,625
    
    
    $
    607,309Less:Direct operating payables and accrued expenses
    
    
    173,359
    
    
    
    131,180Base management fees payable
    
    
    25,770
    
    
    
    30,874Reimbursed administrative expenses payable
    
    
    6,341
    
    
    
    6,421Allowance for doubtful accounts
    
    
    36,463
    
    
    
    42,825241,933
    
    
    
    211,300Net lease receivables due from Leasing Agent
    
    $
    321,692
    
    
    $
    396,009
 
  8




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Net Lease Revenue
  Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Gross lease revenue
    
    $
    455,287
    
    
    $
    583,704Interest income from direct finance lease
    
    
    2,477
    
    
    
    Less:Direct operating expenses
    
    
    111,563
    
    
    
    71,873Base management fees
    
    
    31,144
    
    
    
    40,198Reimbursed administrative expensesSalaries
    
    
    14,886
    
    
    
    20,526Other payroll related expenses
    
    
    1,755
    
    
    
    2,519General and administrative expenses
    
    
    3,652
    
    
    
    4,478163,000
    
    
    
    139,594Net lease revenue
    
    $
    294,764
    
    
    $
    444,110
 Operating Segment
   Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Dry cargo containers
    
    $
    354,604
    
    
    $
    427,096Refrigerated containers
    
    
    61,965
    
    
    
    117,036Tank containers
    
    
    38,718
    
    
    
    39,572Total
    
    $
    455,287
    
    
    $
    583,704
   9




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Limited Partners Capital
  Three Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Cash Distribution from Operations
    
    $
    359,924
    
    
    $
    406,582Cash Distribution from Sales Proceeds
    
    
    286,608
    
    
    
    226,620Total Cash Distributions
    
    $
    646,532
    
    
    $
    633,202
   10




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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 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
    
    Containers40-Foot
    
    
    
    
    
    40-Foot
    
    Tank20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    Containers
    
    TotalContainers on lease:Master lease
    
    
    1,520
    
    
    
    607
    
    
    
    985
    
    
    
    16
    
    
    
    42
    
    
    
    21
    
    
    
    3,191Term leaseShort term1
    
    
    175
    
    
    
    44
    
    
    
    67
    
    
    
    5
    
    
    
    1
    
    
    
    12
    
    
    
    304Long term2
    
    
    446
    
    
    
    147
    
    
    
    191
    
    
    
    1
    
    
    
    18
    
    
    
    13
    
    
    
    816621
    
    
    
    191
    
    
    
    258
    
    
    
    6
    
    
    
    19
    
    
    
    25
    
    
    
    1,120Subtotal
    
    
    2,141
    
    
    
    798
    
    
    
    1,243
    
    
    
    22
    
    
    
    61
    
    
    
    46
    
    
    
    4,311Containers off-hire
    
    
    459
    
    
    
    110
    
    
    
    293
    
    
    
    5
    
    
    
    18
    
    
    
    5
    
    
    
    890Total container fleet
    
    
    2,600
    
    
    
    908
    
    
    
    1,536
    
    
    
    27
    
    
    
    79
    
    
    
    51
    
    
    
    5,201
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or
that may expire on or before March 2010.2.
    
    Long term leases represent term leases, the majority of which will expire between
April 2010 and December 2019. 11




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Dry Cargo
    
    RefrigeratedContainers
    
    Containers40-Foot
    
    
    
    
    
    
    
    
    
    40-Foot
    
    Tank20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    Containers
    
    TotalUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    4,553
    
    
    
    100
    %
    
    
    1,500
    
    
    
    100
    %
    
    
    1,750
    
    
    
    100
    %
    
    
    90
    
    
    
    100
    %
    
    
    300
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %
    
    
    8,245
    
    
    
    100
    %Less disposals
    
    
    1,953
    
    
    
    43
    %
    
    
    592
    
    
    
    39
    %
    
    
    214
    
    
    
    12
    %
    
    
    63
    
    
    
    70
    %
    
    
    221
    
    
    
    74
    %
    
    
    1
    
    
    
    2
    %
    
    
    3,044
    
    
    
    37
    %Remaining fleet at
March 31, 2009
    
    
    2,600
    
    
    
    57
    %
    
    
    908
    
    
    
    61
    %
    
    
    1,536
    
    
    
    88
    %
    
    
    27
    
    
    
    30
    %
    
    
    79
    
    
    
    26
    %
    
    
    51
    
    
    
    98
    %
    
    
    5,201
    
    
    
    63
    %
 Market & Industry Overview
  §
    
    a decline in revenuesas falling consumer demand resulted in a reduction in the
volume of trade for containerized goods and a corresponding decrease in freight rates;§
    
    an increase in expensesas financing costs have increased during 2008 and 2009 in
line with the disruption experienced in the financial markets, including the significant
and sudden contraction in the supply of credit;§
    
    a reduction in the level of available creditwhich may have an impact on the
ability of shipping lines to fund existing contractual commitments for new ship building
and other capital programs. In addition, existing financial facilities may become
increasingly difficult to refinance as they fall due and it is likely that, on renewal,
the cost of such facilities will increase; and§
    
    an increase in containership overcapacity, a result of the reduction in the
volume of containerized trade together with the increased capacity introduced in recent
years by significant ship building programs.
Customers are employing a number of strategies to improve their
position. This includes moves to cancel or reschedule orders for new container ships, the
cancellation and renegotiation of existing charter contracts, proposing changes to the
contracted economic terms for leased containers in certain cases and redelivering leased
containers where possible.
  §
    
    a number of shipping lines have already gone into bankruptcy and there is a risk
of further insolvencies in 2009;§
    
    container utilization levels are likely to decline as shipping lines continue to
off-hire containers. Direct operating expenses will increase in line with any increase in
inventories;§
    
    the economic terms of existing leases, including term leases, may change as
customers seek to renegotiate existing terms; and§
    
    containers may prove difficult to sell. The sale proceeds realized on the sale
of containers may decline in locations where there is a large increase in inventories. The
US dollar value of sales proceeds may decline because of the relative strengthening of the
US dollar against most major currencies.
  12




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Three Months EndedMarch 31,
    
    March 31,2009
    
    2008Fleet size (measured in twenty foot equivalent units)Dry cargo containers
    
    
    7,610
    
    
    
    8,467Refrigerated containers
    
    
    206
    
    
    
    377Tank containers
    
    
    51
    
    
    
    51Average utilization ratesDry cargo containers
    
    
    93
    %
    
    
    97
    %Refrigerated containers
    
    
    77
    %
    
    
    81
    %Tank containers
    
    
    90
    %
    
    
    96
    %
 Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008
 Overview
 Net income
 §
    
    a 13% reduction in the size of the container fleet as equipment that was
redelivered by customers was sold;§
    
    a decline in the levels of net lease revenues reflecting a reduction in the size
of the fleet, the combined effect of lower utilization and lease per-diem levels and
increased direct operating expenses; and§
    
    a decrease in depreciation expense as a result of the declining fleet size.
 Analysis and discussion
 Net lease revenue
 §
    
    a $128,417 decrease in gross lease revenue (a component of net lease revenue), of
which approximately 53% was attributable to reduction in the size of the Partnerships fleet
size and 47% was attributable to the combined effect of lower utilization rates and lower
dry cargo container per-diem rental rates;§
    
    a $39,690 increase in direct operating expenses (a component of net lease
revenue) primarily due to an increase in inventory-related expenses, in line with the
increase in inventories of off-hire containers, and an increase in legal and recovery
expenses as a result of customer insolvencies; and
 13




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§
    
    a $7,230 reduction in reimbursed administrative expenses (a component of net
lease revenue) as a result of the smaller fleet size and a decrease in expenses incurred by
CCC and its affiliates. Reimbursed administrative expenses are costs expended by CCC and
its affiliates for services necessary for the prudent operation of the Partnership pursuant
to the Limited Partnership Agreement.
 Depreciation expense
 Other general and administrative expenses
 Net gains on disposal of equipment
 Liquidity and Capital Resources
  th
   14




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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
  15




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




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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 Security Holders
  
 Other Information
  
 Exhibits
 (a)
    
    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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SIGNATURES
 
  CRONOS GLOBAL INCOME FUND XVI, L.P.By
    
    Cronos Capital Corp.The General PartnerBy
    
    /s/ Dennis J. TietzDennis J. TietzPresident and Director ofCronos Capital Corp. (CCC)Principal Executive Officer of CCCBy
    
    /s/ Frank P. VaughanFrank P. VaughanChief Financial Officer andDirector of Cronos Capital Corp. (CCC)Principal Financial and Accounting Officer of CCC
  18




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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.