##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|   
|    |  | FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003                                      

OR

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|    
|     |  | FOR THE TRANSITION PERIOD FROM  TO                                                      

Commission file number 0-27496

CRONOS GLOBAL INCOME FUND XVI, L.P.

(Exact name of registrant as specified in its charter)


|                                                                          |  |                                                
|------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(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)

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

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]. No [  ].





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TABLE OF CONTENTS



|                               |                                                                                               |                                         |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | Balance Sheets                         
|                               |                                                                                               | Statements of Operations               
|                               |                                                                                               | Statements of Cash Flows               
|                               |                                                                                               | Notes to Unaudited Financial Statements
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION   
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|EXHIBIT INDEX                 
|Exhibit 31.1                  
|Exhibit 31.2                  
|Exhibit 32                    



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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.

Report on Form 10-Q for the Quarterly Period
Ended September 30, 2003

TABLE OF CONTENTS

|                                                                                              |                                                                                                      |  |      |   | 
|--------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- |  | ---- | - | 
|                                                                                              |                                                                                                      |  | PAGE
|PART I - FINANCIAL INFORMATION                                                                |                                                                                                      |  |      |  
|Item 1. Financial Statements                                                                  |                                                                                                      |  |      |  
|                                                                                              | Balance Sheets  September 30, 2003 (unaudited) and December 31, 2002                                |  |      | 4 | 
|                                                                                              | Statements of Operations for the three and nine months ended September 30, 2003 and 2002 (unaudited) |  |      | 5 | 
|                                                                                              | Statements of Cash Flows for the nine months ended September 30, 2003 and 2002 (unaudited)           |  |      | 6 | 
|                                                                                              | Notes to Financial Statements (unaudited)                                                            |  |      | 7 | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                      |  | 12   |  
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                      |  | 16   |  
|Item 4. Controls and Procedures                                                               |                                                                                                      |  | 16   |  
|PART II - OTHER INFORMATION                                                                   |                                                                                                      |  |      |  
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                      |  | 17   |  

2



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##### Table of Contents






PART I - FINANCIAL INFORMATION




Item 1. Financial Statements



| |  |  | Presented herein are the Registrants balance sheets as of September 30,
2003 and December 31, 2002, statements of operations for the three and
nine months ended September 30, 2003 and 2002, and statements of cash
flows for the nine months ended September 30, 2003 and 2002.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3



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CRONOS GLOBAL INCOME FUND XVI, L.P.




Balance Sheets

(Unaudited)

|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |              |            |            |  | 
|----------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | --------------------------------------- | --------------------------------- | ---------- | ------------- | ---------- | ------------ | ---------- | ---------- |  | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            | September 30, |            | December 31,
|                                    |                                                                                                                                       |                                |                                         |                                   |            | 2003          |            | 2002        
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                |                                         | Assets                            |            |               |            |              |            |            |  | 
|Current assets:                     |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    | Cash and cash equivalents, includes $1,225,879 at September 30, 2003
and $1,299,262 at December 31, 2002 in interest-bearing accounts |                                | $                                       | 1,415,906                         |            |               | $          | 1,561,006    |           
|                                    | Net lease receivables due from Leasing Company
(notes 1 and 2)                                                                        |                                |                                         | 270,100                           |            |               |            | 262,801      |           
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total current assets                    |                                   |            | 1,686,006     |            |              |            | 1,823,807  | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|Container rental equipment, at cost |                                                                                                                                       |                                | 31,511,295                              |                                   |            |               | 31,626,992 |             
|                                    | Less accumulated depreciation                                                                                                         |                                |                                         | (12,488,527                       | )          |               |            | (11,093,592  | )         
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       | Net container rental equipment |                                         |                                   | 19,022,768 |               |            |              | 20,533,400 |           
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|Other assets                        |                                                                                                                                       |                                | 804,852                                 |                                   |            |               | 820,776    |             
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total assets                            |                                   | $          | 21,513,626    |            |              | $          | 23,177,983 | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |              |           
|                                    |                                                                                                                                       |                                |                                         | Liabilities and partners capital |            |               |            |              |            |            |  | 
|Current liabilities:                |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    | Interest payable                                                                                                                      |                                | $                                       | 6,080                             |            |               | $          | 9,450        |           
|                                    | Current portion of equipment debt                                                                                                     |                                |                                         | 840,600                           |            |               |            | 840,600      |           
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total current liabilities               |                                   |            | 846,680       |            |              |            | 850,050    | 
|Equipment debt less current portion |                                                                                                                                       |                                | 1,471,050                               |                                   |            |               | 2,101,500  |             
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total liabilities                       |                                   |            | 2,317,730     |            |              |            | 2,951,550  | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|Partners capital (deficit):        |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    | General partner                                                                                                                       |                                |                                         | (23,377                           | )          |               |            | (34,817      | )         
|                                    | Limited partners                                                                                                                      |                                |                                         | 19,219,273                        |            |               |            | 20,261,250   |           
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total partners capital                 |                                   |            | 19,195,896    |            |              |            | 20,226,433 | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |             
|                                    |                                                                                                                                       |                                | Total liabilities and partners capital |                                   | $          | 21,513,626    |            |              | $          | 23,177,983 | 
|                                    |                                                                                                                                       |                                |                                         |                                   |            |               |            |              |           

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

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CRONOS GLOBAL INCOME FUND XVI, L.P.




Statements of Operations

(Unaudited)

|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |           |         | 
|---------------------------------------------- | ----------------------------------------- | ---------------------- | ------- | ------------------ | ------- | ----------------- | ------- | ------------- | ------- | ------------- | --------- | --------- | ------- | - | --------- | --------- | ------- | 
|                                               |                                           |                        |         | Three Months Ended |         | Nine Months Ended
|                                               |                                           |                        |         |                    |         |                  
|                                               |                                           |                        |         | September 30,      |         | September 30,     |         | September 30, |         | September 30,
|                                               |                                           |                        |         | 2003               |         | 2002              |         | 2003          |         | 2002         
|                                               |                                           |                        |         |                    |         |                   |         |               |         |              
|Net lease revenue (notes 1 and 3)              |                                           | $                      | 735,475 |                    |         | $                 | 714,675 |               |         | $             | 2,156,359 |           |         | $ | 2,008,234 |          
|Other operating income (expenses):             |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               | Depreciation                              |                        |         | 484,653            |         |                   |         | 486,653       |         |               |           | 1,455,420 |         |   |           | 1,462,685 |        
|                                               | Other general and administrative expenses |                        |         | 18,497             |         |                   |         | 17,039        |         |               |           | 55,949    |         |   |           | 54,595    |        
|                                               | Net (gain) loss on disposal of equipment  |                        |         | (16,043            | )       |                   |         | 259           |         |               |           | (22,602   | )       |   |           | (9,411    | )      
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               |                                           | Income from operations |         |                    | 248,368 |                   |         |               | 210,724 |               |           |           | 667,592 |   |           |           | 500,365 | 
|Other (expense) income:                        |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               | Interest income                           |                        |         | 1,681              |         |                   |         | 5,428         |         |               |           | 8,472     |         |   |           | 16,295    |        
|                                               | Interest expense                          |                        |         | (18,644            | )       |                   |         | (30,909       | )       |               |           | (60,655   | )       |   |           | (97,682   | )      
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               |                                           |                        | (16,963 | )                  |         |                   | (25,481 | )             |         |               | (52,183   | )         |         |   | (81,387   | )        
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               |                                           | Net income             |         | $                  | 231,405 |                   |         | $             | 185,243 |               |           | $         | 615,409 |   |           | $         | 418,978 | 
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|Allocation of net income:                      |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               | General partner                           |                        | $       | 40,147             |         |                   | $       | 14,788        |         |               | $         | 91,045    |         |   | $         | 52,799    |        
|                                               | Limited partners                          |                        |         | 191,258            |         |                   |         | 170,455       |         |               |           | 524,364   |         |   |           | 366,179   |        
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|                                               |                                           | $                      | 231,405 |                    |         | $                 | 185,243 |               |         | $             | 615,409   |           |         | $ | 418,978   |          
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          
|Limited partners per unit share of net income |                                           | $                      | 0.12    |                    |         | $                 | 0.11    |               |         | $             | 0.33      |           |         | $ | 0.23      |          
|                                               |                                           |                        |         |                    |         |                   |         |               |         |               |           |           |         |   |           |          

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

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CRONOS GLOBAL INCOME FUND XVI, L.P.




Statements of Cash Flows

(Unaudited)

|                                                     |                                     |   |                   |            |               |   |            |            |  
|---------------------------------------------------- | ----------------------------------- | - | ----------------- | ---------- | ------------- | - | ---------- | ---------- | -
|                                                     |                                     |   | Nine Months Ended
|                                                     |                                     |   |                  
|                                                     |                                     |   | September 30,     |            | September 30,
|                                                     |                                     |   | 2003              |            | 2002         
|                                                     |                                     |   |                   |            |              
|Net cash provided by operating activities            |                                     | $ | 2,053,386         |            |               | $ | 1,885,028  |           
|                                                     |                                     |   |                   |            |               |   |            |           
|Cash flows provided by investing activities:         |                                     |   |                   |            |               |   |            |           
|                                                     | Proceeds from disposal of equipment |   |                   | 77,910     |               |   |            | 75,782     |  
|                                                     |                                     |   |                   |            |               |   |            |           
|Cash flows used in financing activities:             |                                     |   |                   |            |               |   |            |           
|                                                     | Repayment of term debt              |   |                   | (630,450   | )             |   |            | (630,450   | )
|                                                     | Distribution to partners            |   |                   | (1,645,946 | )             |   |            | (1,049,580 | )
|                                                     |                                     |   |                   |            |               |   |            |           
|Net cash used in financing activities                |                                     |   | (2,276,396        | )          |               |   | (1,680,030 | )         
|                                                     |                                     |   |                   |            |               |   |            |           
|Net (decrease) increase in cash and cash equivalents |                                     |   | (145,100          | )          |               |   | 280,780    |           
|Cash and cash equivalents at January 1               |                                     |   | 1,561,006         |            |               |   | 1,295,929  |           
|                                                     |                                     |   |                   |            |               |   |            |           
|Cash and cash equivalents at September 30            |                                     | $ | 1,415,906         |            |               | $ | 1,576,709  |           
|                                                     |                                     |   |                   |            |               |   |            |           

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

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CRONOS GLOBAL INCOME FUND XVI, L.P.




Notes to Unaudited Financial Statements



|(1) |  | Summary of Significant Accounting Policies
|--- |  | ------------------------------------------



| | (a) |  | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | Cronos Global Income Fund XVI, L.P. (the Partnership) is a limited
partnership organized under the laws of the State of California on
September 1, 1995, for the purpose of owning and leasing marine cargo
containers, special purpose containers and container related equipment
worldwide to ocean carriers. To this extent, the Partnerships
operations are subject to the fluctuations of world economic and
political conditions. Such factors may affect the pattern and levels of
world trade. 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 shall continue until December 31, 2015, unless sooner
terminated upon the occurrence of certain events.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |     |  | The Partnership commenced operations on March 29, 1996, when the minimum
subscription proceeds of $2,000,000 were received from over 100
subscribers (excluding from such count Pennsylvania residents, the
general partner, and all affiliates of the general partner). On February
3, 1997, CCC suspended the offer and sale of units in the Partnership.
The offering terminated on December 27, 1997, at which time 1,599,667
limited partnership units had been sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (b) |  | Leasing Company and Leasing Agent Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |     |  | A 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, it is accounted for as a lease under which the
Partnership is lessor and the Leasing Company is lessee.                                                                                                                                                          
|
| |     |  | The Leasing Agent Agreement generally provides that the Leasing
Company will make payments to the Partnership based upon rentals
collected from ocean carriers after deducting direct operating expenses
and management fees to CCC and the Leasing Company. The Leasing Company
leases containers to ocean carriers, generally under operating leases
which are either master leases or term leases (mostly 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. 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.

(Continued)

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CRONOS GLOBAL INCOME FUND XVI, L.P.

Notes to Unaudited Financial Statements



| | (c) |  | Basis of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The Partnership utilizes the accrual method of accounting. Net
lease revenue is recorded by the Partnership in each period based upon
its leasing agent agreement with the Leasing Company. Net lease revenue
is generally dependent upon operating lease rentals from operating lease
agreements between the Leasing Company and its various lessees, less
direct operating expenses and management fees due in respect of the
containers specified in each operating lease agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (d) |  | Container Rental Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |     |  | 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 is prepared each quarter
projecting future cash flows from container rental equipment operations.
Current and projected utilization rates, per-diem rental rates, direct
operating expenses, fleet size and container disposals are the primary
variables utilized by 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 nine-month periods ended September 30, 2003 and 2002.
|
| |     |  | Depreciation policies are also evaluated to determine whether subsequent
events and circumstances warrant revised estimates of useful lives.
Container rental equipment is depreciated using the straight-line basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (e) |  | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |     |  | The financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP),
which 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 estimated useful lives and
residual values, and the estimate of future cash flows from container
rental equipment operations, used to determine the adequacy of the
carrying value of container rental equipment in accordance with SFAS No.
144. Considerable judgement is required in estimating future cash flows
from container rental equipment operations. Accordingly, the estimates
may not be indicative of the amounts that may be realized in future
periods. As additional information becomes available in subsequent
periods, reserves for the impairment of the container rental equipment
carrying values may be necessary based upon changes in market and
economic conditions.                                                                                                                                                                                                                                                                                                                                                                                                                       

(Continued)

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CRONOS GLOBAL INCOME FUND XVI, L.P.

Notes to Unaudited Financial Statements



| | (f) |  | Financial Statement Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | These financial statements have been prepared without audit.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America (GAAP) have been
omitted. It is suggested that these financial statements be read in
conjunction with the financial statements and accompanying notes in the
Partnerships latest annual report on Form 10-K.
|
| |     |  | The interim financial statements presented herewith reflect all
adjustments of a normal recurring nature which are, in the opinion of
management, necessary to a fair statement of the financial condition and
results of operations for the interim periods presented. The results of
operations for such interim periods are not necessarily indicative of the
results to be expected for the full year.                                                            



|(2) |  | Net Lease Receivables Due from Leasing Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Net lease receivables due from the Leasing Company are determined by
deducting direct operating payables and accrued expenses, base management
fees payable, and reimbursed administrative expenses payable to CCC and its
affiliates from the rental billings 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
receivables at September 30, 2003 and December 31, 2002 were as follows:

|                                               |  |               |         |              |  |   |         | 
|---------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                               |  | September 30, |         | December 31,
|                                               |  | 2003          |         | 2002        
|                                               |  |               |         |             
|Gross lease receivables                        |  | $             | 731,584 |              |  | $ | 739,597 | 
|Less:                                          |  |               |         |              |  |   |         | 
|Direct operating payables and accrued expenses |  |               | 281,099 |              |  |   | 282,855 | 
|Damage protection reserve                      |  |               | 42,930  |              |  |   | 41,291  | 
|Base management fees payable                   |  |               | 77,719  |              |  |   | 96,463  | 
|Reimbursed administrative expenses             |  |               | 14,105  |              |  |   | 16,002  | 
|Allowance for doubtful accounts                |  |               | 45,631  |              |  |   | 40,185  | 
|                                               |  |               |         |              |  |   |         | 
|Net lease receivables                          |  | $             | 270,100 |              |  | $ | 262,801 | 
|                                               |  |               |         |              |  |   |         | 

(Continued)

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CRONOS GLOBAL INCOME FUND XVI, L.P.

Notes to Unaudited Financial Statements



|(3) |  | Net Lease Revenue                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Net lease revenue is determined by deducting direct operating expenses,
base management fees and reimbursed administrative expenses to CCC and its
affiliates from the rental revenue earned by the Leasing Company under
operating leases to ocean carriers for the containers owned by the
Partnership. Net lease revenue for the three and nine-month periods ended
September 30, 2003 and 2002 was as follows:

|                                    |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 
|----------------------------------- |  | ------------------ | --------- | ----------------- |  | ------------- | --------- | ------------- |  | - | --------- |  |  | - | --------- | 
|                                    |  | Three Months Ended |           | Nine Months Ended
|                                    |  |                    |           |                  
|                                    |  | September 30,      |           | September 30,     |  | September 30, |           | September 30,
|                                    |  | 2003               |           | 2002              |  | 2003          |           | 2002         
|                                    |  |                    |           |                   |  |               |           |              
|Rental revenue (note 4)             |  | $                  | 1,022,633 |                   |  | $             | 1,028,369 |               |  | $ | 3,046,858 |  |  | $ | 3,039,074 | 
|Less:                               |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 
|Rental equipment operating expenses |  |                    | 168,714   |                   |  |               | 195,075   |               |  |   | 531,594   |  |  |   | 678,626   | 
|Base management fees                |  |                    | 70,842    |                   |  |               | 71,506    |               |  |   | 212,237   |  |  |   | 210,189   | 
|Reimbursed administrative expenses  |  |                    | 47,602    |                   |  |               | 47,113    |               |  |   | 146,668   |  |  |   | 142,025   | 
|                                    |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 
|Net lease revenue                   |  | $                  | 735,475   |                   |  | $             | 714,675   |               |  | $ | 2,156,359 |  |  | $ | 2,008,234 | 
|                                    |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 



|(4) |  | Operating Segment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | An 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 its revenues from leasing marine cargo containers.
As of September 30, 2003, the Partnership operated 4,422 twenty-foot, 1,482
forty-foot and 1,733 forty-foot high-cube marine dry cargo containers, 87
twenty-foot and 297 forty-foot high-cube refrigerated cargo containers, and
52 twenty-four thousand-liter tanks. A summary of gross lease revenue, by
product, for the three and nine-month periods ended September 30, 2003 and
2002 follows:                                                                                   

|                        |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 
|----------------------- |  | ------------------ | --------- | ----------------- |  | ------------- | --------- | ------------- |  | - | --------- |  |  | - | --------- | 
|                        |  | Three Months Ended |           | Nine Months Ended
|                        |  |                    |           |                  
|                        |  | September 30,      |           | September 30,     |  | September 30, |           | September 30,
|                        |  | 2003               |           | 2002              |  | 2003          |           | 2002         
|                        |  |                    |           |                   |  |               |           |              
|Dry cargo containers    |  | $                  | 669,591   |                   |  | $             | 677,961   |               |  | $ | 2,000,205 |  |  | $ | 1,991,582 | 
|Refrigerated containers |  |                    | 316,980   |                   |  |               | 317,256   |               |  |   | 946,600   |  |  |   | 945,637   | 
|Tank containers         |  |                    | 36,062    |                   |  |               | 33,152    |               |  |   | 100,053   |  |  |   | 101,855   | 
|                        |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 
|Total                   |  | $                  | 1,022,633 |                   |  | $             | 1,028,369 |               |  | $ | 3,046,858 |  |  | $ | 3,039,074 | 
|                        |  |                    |           |                   |  |               |           |               |  |   |           |  |  |   |           | 



| |  | 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, it is impracticable to provide geographic area information.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(Continued)

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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.

Notes to Unaudited Financial Statements



|(5) |  | Equipment Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | As of September 30, 2003, the Partnerships existing term loan debt was
$2,311,650, plus estimated accrued interest of $6,080. On March 30, 2000,
the Partnership borrowed $5,043,600 under a term loan for the purpose of
acquiring additional equipment. The loan will be repaid in 11 remaining
equal quarterly installments plus interest, through May 31, 2006. Interest
accrues at the rate of 1.75% above the LIBOR rate which is calculated on the
first day of each quarterly interest period. Over the life of the loan, the
interest rates have ranged from 3.09% to 8.58%. The loan is secured by
containers owned by the Partnership, as well as any income generated in
connection with the containers including lease revenue and sales proceeds.
A restricted deposit of $750,000 is held in an account with the lender as
additional collateral and is included in Other Assets on the Balance Sheet.
|   
|    |  | As of September 30, 2003, the estimated fair value of the term loan
debt was $2,302,251. The fair value of the term loan has been calculated
using the market rates prevailing at August 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

11



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##### Table of Contents






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

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

General

A Leasing Agent Agreement exists between the Registrant and the Leasing
Company, whereby the Leasing Company has the responsibility to manage the
leasing operations of all equipment owned by the Registrant. Pursuant to the
Agreement, the Leasing Company is responsible for leasing, managing and
re-leasing the Registrant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 Registrant, 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. At September 30, 2003, 98% of the
original equipment remained in the Registrants fleet, unchanged from December
31, 2002. The following chart summarizes the composition of the Registrants
fleet (based on container type) at September 30, 2003.

|                       |  |            |       |              |  |            |       |         |  |           |       |              |  |  |    |         |  |  |     |  |  |  |    | 
|---------------------- |  | ---------- | ----- | ------------ |  | ---------- | ----- | ------- |  | --------- | ----- | ------------ |  |  | -- | ------- |  |  | --- |  |  |  | -- | 
|                       |  | Dry Cargo  |       | Refrigerated |  | Tank      
|                       |  | Containers |       | Containers   |  | Containers
|                       |  |            |       |              |  |           
|                       |  |            |       |              |  |            |       |         |  | 40-Foot   |       |              |  |  |    | 40-Foot |  |  |     | 
|                       |  | 20-Foot    |       | 40-Foot      |  | High-Cube  |       | 20-Foot |  | High-Cube |       | 24,000-Liter
|                       |  |            |       |              |  |            |       |         |  |           |       |             
|Containers on lease:   |  |            |       |              |  |            |       |         |  |           |       |              |  |  |    |         |  |  |     |  |  |  |    | 
|Master lease           |  |            | 2,769 |              |  |            | 736   |         |  |           | 811   |              |  |  | 34 |         |  |  | 79  |  |  |  | 29 | 
|Term lease (1-5
years) |  |            | 1,010 |              |  |            | 514   |         |  |           | 813   |              |  |  | 46 |         |  |  | 211 |  |  |  | 21 | 
|                       |  |            |       |              |  |            |       |         |  |           |       |              |  |  |    |         |  |  |     |  |  |  |    | 
|Subtotal               |  |            | 3,779 |              |  |            | 1,250 |         |  |           | 1,624 |              |  |  | 80 |         |  |  | 290 |  |  |  | 50 | 
|Containers off lease   |  |            | 643   |              |  |            | 232   |         |  |           | 109   |              |  |  | 7  |         |  |  | 7   |  |  |  | 2  | 
|                       |  |            |       |              |  |            |       |         |  |           |       |              |  |  |    |         |  |  |     |  |  |  |    | 
|Total container fleet  |  |            | 4,422 |              |  |            | 1,482 |         |  |           | 1,733 |              |  |  | 87 |         |  |  | 297 |  |  |  | 52 | 
|                       |  |            |       |              |  |            |       |         |  |           |       |              |  |  |    |         |  |  |     |  |  |  |    | 

|                                      |                |  |            |     |              |  |            |   |         |  |         |    |              |  |       |   |   |  |         |    |   |  |       |   |   |  |    |   |  |  |     |   |   |  |     |   |  |  |     |   |   |  |    |   |  |  |     |   |  
|------------------------------------- | -------------- |  | ---------- | --- | ------------ |  | ---------- | - | ------- |  | ------- | -- | ------------ |  | ----- | - | - |  | ------- | -- | - |  | ----- | - | - |  | -- | - |  |  | --- | - | - |  | --- | - |  |  | --- | - | - |  | -- | - |  |  | --- | - | -
|                                      |                |  | Dry Cargo  |     | Refrigerated |  | Tank      
|                                      |                |  | Containers |     | Containers   |  | Containers
|                                      |                |  |            |     |              |  |           
|                                      |                |  |            |     |              |  |            |   |         |  |         |    |              |  |       |   |   |  | 40-Foot |    |   |  |       |   |   |  |    |   |  |  |     |   |   |  |     |   |  |  |     |   |   |  |   
|                                      |                |  | 20-Foot    |     | 40-Foot      |  | High-Cube  |   | 20-Foot |  | 40-Foot |    | 24,000-Liter
|                                      |                |  |            |     |              |  |            |   |         |  |         |    |             
|                                      |                |  | Units      |     | %            |  | Units      |   | %       |  | Units   |    | %            |  | Units |   | % |  | Units   |    | % |  | Units |   | %
|                                      |                |  |            |     |              |  |            |   |         |  |         |    |              |  |       |   |   |  |         |    |   |  |       |   |  
|Total purchases                       |                |  | 4,553      |     |              |  | 100        | % |         |  | 1,500   |    |              |  | 100   | % |   |  | 1,750   |    |   |  | 100   | % |   |  | 90 |   |  |  | 100 | % |   |  | 300 |   |  |  | 100 | % |   |  | 52 |   |  |  | 100 | %
|                                      | Less disposals |  |            | 131 |              |  |            | 3 | %       |  |         | 18 |              |  |       | 1 | % |  |         | 17 |   |  |       | 1 | % |  |    | 3 |  |  |     | 3 | % |  |     | 3 |  |  |     | 1 | % |  |    |  |  |  |     |  | %
|                                      |                |  |            |     |              |  |            |   |         |  |         |    |              |  |       |   |   |  |         |    |   |  |       |   |   |  |    |   |  |  |     |   |   |  |     |   |  |  |     |   |   |  |    |   |  |  |     |  
|Remaining fleet at
September 30, 2003 |                |  | 4,422      |     |              |  | 97         | % |         |  | 1,482   |    |              |  | 99    | % |   |  | 1,733   |    |   |  | 99    | % |   |  | 87 |   |  |  | 97  | % |   |  | 297 |   |  |  | 99  | % |   |  | 52 |   |  |  | 100 | %
|                                      |                |  |            |     |              |  |            |   |         |  |         |    |              |  |       |   |   |  |         |    |   |  |       |   |   |  |    |   |  |  |     |   |   |  |     |   |  |  |     |   |   |  |    |   |  |  |     |  

Strong growth in the volume of global container trade during the nine-month
period ending September 30, 2003 contributed to favorable container leasing
market conditions, allowing the Registrant to maintain a high level of
utilization for its containers. At September 30, 2003, the Registrants
utilization for dry cargo containers measured 87%, unchanged from December 31,
2002. The demand for leased containers by the global container shipping
industry has contributed to reducing off-hire inventories primarily in Asia,
and to a lesser extent Europe and North America. In many parts of Asia and
particularly in the southeastern ports, the demand for cargo containers
continued to exceed available supplies. Also contributing to the strong demand
for leased containers during 2003 has been the preference of shipping lines to
purchase fewer containers for their own account. Due to recent operating
losses and requirements to deploy capital within other parts of their business,
including the investment in new, larger, containerships and the support of
terminal, information technology and other infrastructure requirements, funds
for new container investment have been limited. As a result, shipping lines
have strategically made the decision to employ leased containers to meet their
container requirements. However, in response to a favorable shipping market,
there are indications of an increased willingness by the shipping lines to
purchase and finance the acquisition of new containers at higher levels in the
near future, which may impact the demand for leased containers.

The favorable shipping market conditions, combined with lower cost, short term
leases for older containers, have also resulted in the shipping lines
diminishing discrimination against leasing older containers, a condition that
typically exists during periods of surplus container supply. The favorable 2003
shipping market, combined with the current shortfall of containers, is expected
to result in an increase in the production of new containers during 2003, in
comparison to 2002 and 2001
production levels. However, new container production is expected to remain
below the record container production levels achieved during 2000.

12



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##### Table of Contents



The
ultimate impact of the industrys increase in new container production on the
Registrants operations is not immediately known, however, an increase in new
container availability may reduce the demand for the Registrants older
containers.

Although favorable market conditions for container lessors currently exists,
the uncertainty over the financial strength of the shipping industry remains a
concern. Current conditions appear to favor the larger more established
shipping lines, which have witnessed strong recoveries in their performance.
The Registrant, CCC and the Leasing Company continue to remain cautious, as
some shipping lines reported operating losses during 2002, while others have
become insolvent during 2003. The financial impact of such losses for these
shipping lines may eventually influence the demand for leased containers as
some shipping lines may experience additional financial difficulties,
consolidate or become insolvent. Although the ultimate outcome, as well as its
impact on the container leasing industry and the Registrants results of
operations, is unknown, CCC, on behalf of the Registrant, will work closely
with the Leasing Company to monitor outstanding receivables, collections, and
credit exposure to various existing and new customers.

Lastly, wide-ranging concerns remain regarding recovery of the worlds major
economies, performance of global stock markets, geopolitical concerns arising
from uncertainties within the Middle East and Asia, as well as the recent
increase in new container production, all of which may temper the current
demand for leased containers.

The Registrants average fleet size and utilization rates for the three and
nine-month periods ended September 30, 2003 and 2002 were as follows:

|                                                                    |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |        |  
|------------------------------------------------------------------- | ----------------------- |  | ------------------ | ------ | ----------------- |  | ------------- | ------ | ------------- |  |  | ------ | - |  |  | ------ | -
|                                                                    |                         |  | Three Months Ended |        | Nine Months Ended
|                                                                    |                         |  |                    |        |                  
|                                                                    |                         |  | September 30,      |        | September 30,     |  | September 30, |        | September 30,
|                                                                    |                         |  | 2003               |        | 2002              |  | 2003          |        | 2002         
|                                                                    |                         |  |                    |        |                   |  |               |        |              
|Average fleet size (measured in
twenty-foot equivalent
units (TEU)) |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |       
|                                                                    | Dry cargo containers    |  |                    | 10,863 |                   |  |               | 10,910 |               |  |  | 10,877 |   |  |  | 10,916 |  
|                                                                    | Refrigerated containers |  |                    | 682    |                   |  |               | 684    |               |  |  | 683    |   |  |  | 685    |  
|                                                                    | Tank containers         |  |                    | 52     |                   |  |               | 52     |               |  |  | 52     |   |  |  | 52     |  
|Average Utilization                                                 |                         |  |                    |        |                   |  |               |        |               |  |  |        |   |  |  |       
|                                                                    | Dry cargo containers    |  |                    | 87     | %                 |  |               | 85     | %             |  |  | 87     | % |  |  | 80     | %
|                                                                    | Refrigerated containers |  |                    | 98     | %                 |  |               | 98     | %             |  |  | 99     | % |  |  | 97     | %
|                                                                    | Tank containers         |  |                    | 83     | %                 |  |               | 72     | %             |  |  | 74     | % |  |  | 72     | %

Per-diem rates for dry cargo containers for the three and nine-month periods
ended September 30, 2003 declined approximately 3% for each period, in
comparison to the same periods in the prior year, and is attributable to three
main factors that have taken place since 2002:



|1. |  | Per-diem rental rates decreased in correlation with the reduction of new
container prices and interest rate levels;                                                                                                
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | The Leasing Company converted lease agreements with certain shipping
lines from master to long-term lease, providing greater revenue stability
but at lower lease rates than those earned under master leases; and,
|  
|3. |  | The Leasing Company initiated new long-term leases for older equipment
resulting in lower per-diem rates, while significantly reducing off-hire
container inventory levels.                                        

Although per-diem rental rates for dry cargo containers have declined from 2002
levels, static new container prices and an increase in demand for leased
containers have resulted in the stabilization of per-diem rental rates during
2003. A significant improvement in lease per-diem rates is not expected until
new container prices increase to much higher levels.

The primary component of the Registrants results of operations is net lease
revenue. Net lease revenue is determined by deducting direct operating
expenses, management fees and reimbursed administrative expenses, from rental
revenues billed by
the Leasing Company from the leasing of the Registrants containers. Net lease
revenue is directly related to the size, utilization and per-diem rental rates
of the Registrants fleet.

(Continued)

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##### Table of Contents



Three Months Ended September 30, 2003 Compared to the Three Months Ended September 30, 2002

Net lease revenueof $735,475 for the three months ended September 30, 2003 was
$20,800 higher than in the corresponding period of 2002. The increase was
primarily due to a decline in rental equipment operating expenses of $26,361
when compared to the same three month period in 2002. Rental equipment
operating expenses declined as a result of the Registrants higher combined
fleet utilization rate and its impact on activity related expenses such as
storage, as well as reductions in repositioning costs and the provision for
doubtful accounts.

Depreciation expenseof $484,653 for the three months ended September 30, 2003
was $2,000 lower than the same period in 2002.

Other general and administrative expenseswere $18,497 in the third quarter of
2003, compared to $17,039 in the corresponding period of 2002, representing a
decrease of $1,458 or 9%.

Net gain on disposal of equipmentwas a result of the Registrant disposing of
13 containers during the three-month period ended September 30, 2003.
Similarly, four containers were disposed of during the same period in 2002.
These disposals resulted in a net gain of $16,043 compared to a net loss of
$259 for the three-month periods ended September 30, 2003 and 2002,
respectively. The Registrant believes that the net gain on container disposals
in the three-month period ended September 30, 2003 was a result of various
factors including the volume of disposed containers, age, condition,
suitability for continued leasing, as well as the geographical location of the
containers when disposed. These factors will continue to influence the
decision to repair or dispose of a container when it is returned by a lessee,
as well as the amount of sales proceeds received and the related gain or loss
on container disposals. The level of the Registrants container disposals in
subsequent periods will also contribute to fluctuations in the net gain or loss
on disposals. There were no reductions to the carrying value of container
rental equipment due to impairment during the three-month periods ended
September 30, 2003 and 2002.

Nine Months Ended September 30, 2003 Compared to the Nine Months Ended
September 30, 2002

Net lease revenueof $2,156,359 for the nine months ended September 30, 2003
was $148,125 higher than in the corresponding period of 2002. The increase was
primarily due to a decline in rental equipment operating expenses of $147,032
from the same period in 2002. Contributing to the decrease in rental equipment
operating expenses were lower repositioning, repair and maintenance, storage,
and handling costs.

Depreciation expenseof $1,455,420 for the nine months ended September 30, 2003
was $7,265 lower than the same period in 2002.

Other general and administrative expenseswere $55,949 in the first nine months
of 2003, compared to $54,595 in the corresponding period of 2002, representing
a increase of $1,354 or 2%.

Net gain on disposal of equipmentwas a result of the Registrant disposing of
36 containers during the nine-month period ended September 30, 2003 as compared
to 16 containers disposed of during the same period in 2002. These disposals
resulted in a net gain of $22,602 and $9,411 for the nine-month periods ended
September 30, 2003 and 2002, respectively. The Registrant believes that the
net gain on container disposals in the nine-month period ended September 30,
2003 was a result of various factors including the volume of disposed
containers, age, condition, suitability for continued leasing, as well as the
geographical location of the containers when disposed. These factors will
continue to influence the decision to repair or dispose of a container when it
is returned by a lessee, as well as the amount of sales proceeds received and
the related gain or loss on container disposals. The level of the Registrants
container disposals in subsequent periods will also contribute to fluctuations
in the net gain or loss on disposals. There were no reductions to the carrying
value of container rental equipment due to impairment during the nine-month
periods ended September 30, 2003 and 2002.

(Continued)

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##### Table of Contents



Liquidity and Capital Resources

Cash from Operating Activities:Net cash provided by operating activities was
$2,053,386 and $1,885,028 during the first nine months of 2003 and 2002,
respectively, primarily generated from the billing and collection of net lease
revenue.

Cash from Investing Activities:Net cash provided by investing activities
during the nine-month periods ended September 30, 2003 and 2002 included sales
proceeds generated from the sale of rental equipment of $77,910 and $75,782,
respectively.

Cash from Financing Activities:Net cash used in financing activities was
$2,276,396 during the first nine months of 2003. This amount was comprised of
distributions to the Registrants general and limited partners totaling
$1,645,946, and the repayment of the Registrants term debt in the amount of
$630,450. In comparison, during the first nine months of 2002, net cash used
in financing activities was $1,680,030. This amount was comprised of
distributions to the Registrants general and limited partners totaling
$1,049,580 and the repayment of term debt totaling $630,450. The loan, due to
expire in the year 2006, is scheduled to be repaid in 11 remaining quarterly
installments from the Registrants cash generated from operations.

Capital Resources

Capital Resources:Aside from the initial working capital reserve retained
from the gross subscription proceeds (equal to approximately 1% of such
proceeds), the Registrant relied primarily on container rental receipts to
service its term debt, make distributions to its general and limited partners,
and finance current operating needs. Quarterly distributions are also affected
by periodic increases or decreases to working capital reserves, as deemed
appropriate by CCC, to ensure cash reserves on hand are sufficient to meet the
Registrants operating requirements. No credit lines are maintained to finance
working capital.

Critical Accounting Policies

Container equipment  depreciable lives:Container rental equipment is
depreciated over a useful life of 15 years to a residual value of 10%. The
Registrant re-evaluates the period of amortization and residual values to
determine whether subsequent events and circumstances warrant revised estimates
of useful lives and residual values.

Container equipment  valuation:The Registrant reviews container rental
equipment when changes in circumstances require consideration as to whether the
carrying value of the equipment has become impaired, pursuant to guidance
established in SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. The Registrant considers assets to be impaired if the
carrying value of the asset exceeds the future projected cash flows from
related operations (undiscounted and without interest charges). When
impairment is deemed to exist, the assets are written down to fair value or
projected discounted cash flows from related operations. The Registrant
periodically evaluates future cash flows and potential impairment of its fleet
by container type rather than for each individual container. Therefore, future
losses could result for individual container dispositions due to various
factors including age, condition, suitability for continued leasing, as well as
geographic location of the containers where disposed. Considerable judgment is
required in estimating future cash flows from container rental equipment
operations. Accordingly, the estimates may not be indicative of the amounts
that may be realized in future periods. As additional information becomes
available in subsequent periods, reserves for the impairment of the container
rental equipment carrying values may be necessary based upon changes in market
and economic conditions.

Inflation

The Registrant believes inflation has not had a material adverse effect on the
results of its operations.

(Continued)

15



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##### Table of Contents






Item 3. Quantitative and Qualitative Disclosures About Market Risk

Exchange rate risk:Substantially all of the Registrants revenues are billed
and paid in US dollars and a significant portion of costs are billed and paid
in US dollars. The Leasing Company believes that the proportion of US dollar
revenues may decrease in future years, reflecting a more diversified customer
base and lease portfolio. Of the remaining costs, the majority are
individually small, unpredictable and incurred in various denominations and
thus are not suitable for cost effective hedging.

The Leasing Company may hedge a portion of the expenses that are predictable
and are principally in UK pounds sterling. As exchange rates are outside of
the control of the Registrant and Leasing Company, there can be no assurance
that such fluctuations will not adversely affect its results of operations and
financial condition.

Interest rate risk: Outstanding borrowings are subject to interest rate risk.
At September 30, 2003, 100% of total borrowings had floating interest rates.
The Registrant conducted an analysis of variable interest rate borrowing to
determine its sensitivity to interest rate changes. In this analysis, the same
change was applied to the current balance outstanding, leaving all other
factors constant. It was found that if a 10% increase were applied to market
rates, the expected effect would not significantly reduce annual cash flows of
the Registrant.




Item 4. Controls and Procedures

The principal executive and principal financial officers of CCC have evaluated
the disclosure controls and procedures of the Registrant within 90 days prior
to the filing of this quarterly report. As used herein, the term disclosure
controls and procedures has the meaning given to the term by Rule 13a-14 under
the Securities Exchange Act of 1934, as amended (Exchange Act), and includes
the controls and other procedures of the Registrant that are designed to ensure
that information required to be disclosed by the Registrant in the reports that
it files with the SEC under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms.
Based upon their evaluation, the principal executive and principal financial
officers of CCC have concluded that the Registrants disclosure controls and
procedures provide reasonable assurance that the information required to be
disclosed by the Registrant in this report is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms
applicable to the preparation of this report.

There have been no significant changes in the Registrants internal controls or
in other factors that could significantly affect the Registrants internal
controls subsequent to the evaluation described above conducted by CCCs
principal executive and financial officers.

16



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##### Table of Contents






PART II - OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K



|(a) |  | Exhibits
|--- |  | --------

|        |  |                                                                                               |  |                              
|------- |  | --------------------------------------------------------------------------------------------- |  | -----------------------------
|Exhibit |  |                                                                                               |  |                              
|No.     |  | Description                                                                                   |  | Method of Filing             
|        |  |                                                                                               |  |                              
|3(a)    |  | Limited Partnership Agreement of the Registrant,
amended and restated as of December 28, 1995 |  | *                            
|        |  |                                                                                               |  |                              
|3(b)    |  | Certificate of Limited Partnership of the Registrant                                          |  | **                           
|        |  |                                                                                               |  |                              
|10      |  | Form of Leasing Agent Agreement with Cronos Containers Limited                                |  | ***                          
|        |  |                                                                                               |  |                              
|31.1    |  | Rule 13a-14 Certification                                                                     |  | Filed with this document     
|        |  |                                                                                               |  |                              
|31.2    |  | Rule 13a-14 Certification                                                                     |  | Filed with this document     
|        |  |                                                                                               |  |                              
|32      |  | Section 1350 Certifications                                                                   |  | Filed with this document
****



|(b) |  | Reports on Form 8-K                                                                             
|--- |  | ------------------------------------------------------------------------------------------------
|   
|    |  | No reports on Form 8-K were filed by the Registrant during the quarter ended
September 30, 2003.



---

|*    |  | Incorporated by reference to Exhibit A to the Prospectus of the
Registrant 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)                                                                                                                                                                                                                                                   
|    
|**** |  | These certifications, 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

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

| |  |                                     |  |                                                       
| |  | ----------------------------------- |  | ------------------------------------------------------
| |  | CRONOS GLOBAL INCOME FUND XVI, L.P.
| |  |                                     |  |                                                       
| |  | By                                  |  | Cronos Capital Corp.                                  
| |  |                                     |  | The General Partner                                   
| |  |                                     |  |                                                       
| |  | By                                  |  | /s/ Dennis J. Tietz                                   
| |  |                                     |  |                                                       
| |  |                                     |  | Dennis J. Tietz                                       
| |  |                                     |  | President and Director of Cronos Capital Corp. (CCC)
| |  |                                     |  | Principal Executive Officer of CCC                    
| |  |                                     |  |                                                       
| |  | By                                  |  | /s/ John Kallas                                       
| |  |                                     |  |                                                       
| |  |                                     |  | John Kallas                                           
| |  |                                     |  | Chief Financial Officer and                           
| |  |                                     |  | Director of Cronos Capital Corp. (CCC)              
| |  |                                     |  | Principal Financial and Accounting Officer of CCC     

Date: November 12, 2003

18



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##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                               |  |                              
|------- |  | --------------------------------------------------------------------------------------------- |  | -----------------------------
|Exhibit |  |                                                                                               |  |                              
|No.     |  | Description                                                                                   |  | Method of Filing             
|        |  |                                                                                               |  |                              
|3(a)    |  | Limited Partnership Agreement of the Registrant,
amended and restated as of December 28, 1995 |  | *                            
|        |  |                                                                                               |  |                              
|3(b)    |  | Certificate of Limited Partnership of the Registrant                                          |  | **                           
|        |  |                                                                                               |  |                              
|10      |  | Form of Leasing Agent Agreement with Cronos Containers Limited                                |  | ***                          
|        |  |                                                                                               |  |                              
|31.1    |  | Rule 13a-14 Certifications                                                                    |  | Filed with this document     
|        |  |                                                                                               |  |                              
|31.2    |  | Rule 13a-14 Certifications                                                                    |  | Filed with this document     
|        |  |                                                                                               |  |                              
|32      |  | Section 1350 Certifications                                                                   |  | Filed with this document
****



---

|*    |  | Incorporated by reference to Exhibit A to the Prospectus of the
Registrant 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.