##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission file number 0-27496
 CRONOS GLOBAL INCOME FUND XVI, L.P.
  California
    
    94-3230380(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 One Front Street, Suite 925, San Francisco, California
    
    94111(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)

    Smaller reporting company
þ
 o þ




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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Report on Form 10-Q for the Quarterly Period
Ended June 30, 2008
 TABLE OF CONTENTS
 PAGEPART I  FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Unaudited Condensed Balance Sheets  June 30, 2008 and December 31, 2007
    
    
    2Unaudited Condensed Statements of Income for the three and six months ended June 30, 2008 and 2007
    
    
    3Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2008 and 2007
    
    
    4Unaudited Notes to the Condensed Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16Item 4T. Controls and Procedures
    
    
    16PART II  OTHER INFORMATION
    
    
    17Item 1. Legal Proceedings
    
    
    17Item 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 3. Defaults Upon Senior Securities
    
    
    17Item 4. Submissions of Matters to a Vote of Securities Holders
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    17EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32




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PART I  FINANCIAL INFORMATION
 
 Financial Statements
 Presented herein are Cronos Global Income Fund XVI, L.P.s (the Partnership) condensed
balance sheets as of June 30, 2008 and December 31, 2007, condensed statements of income
for the three and six months ended June 30, 2008 and 2007, and condensed statements of cash
flows for the six months ended June 30, 2008 and 2007, (collectively the Financial
Statements) prepared by the Partnership without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain information and
footnote disclosures normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the information presented not
misleading. It is suggested that these Financial Statements should be read in conjunction
with the financial statements and the notes thereto included in the Partnerships December
31, 2007 Annual Report on Form 10-K. These Financial Statements reflect, in the opinion of
the Partnership and Cronos Capital Corp. (CCC), the general partner, all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly the results
for the interim periods. The statements of income for such interim periods are not
necessarily indicative of the results for the full year.The information in this Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of the securities laws. These forward-looking statements
reflect the current view of the Partnership with respect to future events and financial
performance and are subject to a number of risks and uncertainties, many of which are
beyond the Partnerships control. All statements, other than statements of historical
facts included in this report, including the statements under Managements Discussion and
Analysis of Financial Condition and Results of Operations, regarding the Partnerships
strategy, future operations, financial position, estimated revenues, projected costs,
prospects, plans and objectives of the Partnership are forward-looking statements. When
used in this report, the words would, believe, anticipate, intend, estimate,
expect, project, and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words.
All forward-looking statements speak only as of the date of this report. The Partnership
does not undertake any obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise. Although
the Partnership believes that its plans, intentions and expectations reflected in or
suggested by the forward-looking statements made in this report are reasonable, the
Partnership can give no assurance that these plans, intentions or expectations will be
achieved. Future economic and industry trends that could potentially impact revenues and
profitability are difficult to predict.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Balance Sheets
 (Unaudited)
 June 30,
    
    
    December 31,2008
    
    
    2007AssetsCurrent assets:Cash and cash equivalents, includes $920,211 at June 30, 2008
and $816,160 at December 31, 2007 in interest-bearing
accounts
    
    $
    935,211
    
    
    $
    831,160Net lease receivables due from Leasing Agent
    
    
    392,847
    
    
    
    390,560Direct finance lease receivables, due from Leasing Agent
within one year, net
    
    
    12,735
    
    
    
    Total current assets
    
    
    1,340,793
    
    
    
    1,221,720Direct finance lease receivables, due from Leasing Agent after
one year, net
    
    
    8,090
    
    
    
    Container rental equipment, at cost
    
    
    20,403,504
    
    
    
    22,530,005Less accumulated depreciation
    
    
    (13,704,677
    )
    
    
    (14,533,680
    )Net container rental equipment
    
    
    6,698,827
    
    
    
    7,996,325Total assets
    
    $
    8,047,710
    
    
    $
    9,218,045Partners capitalPartners capital (deficit):General partner
    
    $
    48
    
    
    $
    (24,596
    )Limited partners
    
    
    8,047,662
    
    
    
    9,242,641Total partners capital
    
    $
    8,047,710
    
    
    $
    9,218,045
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Income
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net lease revenue from Leasing Agent
    
    $
    370,093
    
    
    $
    436,618
    
    
    $
    814,203
    
    
    $
    886,178Other operating income (expenses):Depreciation
    
    
    (340,984
    )
    
    
    (377,445
    )
    
    
    (674,087
    )
    
    
    (770,172
    )Other general and administrative
expenses
    
    
    (39,091
    )
    
    
    (34,499
    )
    
    
    (77,166
    )
    
    
    (61,770
    )Net gain on disposal of equipment
    
    
    30,667
    
    
    
    28,500
    
    
    
    41,845
    
    
    
    33,632(349,408
    )
    
    
    (383,444
    )
    
    
    (709,408
    )
    
    
    (798,310
    )Income from operations
    
    
    20,685
    
    
    
    53,174
    
    
    
    104,795
    
    
    
    87,868Other income:Interest income
    
    
    1,103
    
    
    
    10,563
    
    
    
    4,137
    
    
    
    23,933Net income
    
    $
    21,788
    
    
    $
    63,737
    
    
    $
    108,932
    
    
    $
    111,801Allocation of net income (loss):General partner
    
    $
    41,947
    
    
    $
    49,134
    
    
    $
    70,834
    
    
    $
    75,255Limited partners
    
    
    (20,159
    )
    
    
    14,603
    
    
    
    38,098
    
    
    
    36,546$
    21,788
    
    
    $
    63,737
    
    
    $
    108,932
    
    
    $
    111,801Limited partners per unit share of
net (loss) income
    
    $
    (0.01
    )
    
    $
    0.01
    
    
    $
    0.02
    
    
    $
    0.02
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Cash Flows
 (Unaudited)
 Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007Net cash provided by operating activities
    
    $
    806,519
    
    
    $
    913,830Cash flows from investing activities:Proceeds from sale of container rental equipment
    
    
    576,799
    
    
    
    484,076Cash flows from financing activities:Distributions to general partner
    
    
    (46,190
    )
    
    
    (59,310
    )Distributions to limited partners
    
    
    (1,233,077
    )
    
    
    (1,746,304
    )Net cash used in financing activities
    
    
    (1,279,267
    )
    
    
    (1,805,614
    )Net increase (decrease) in cash and cash equivalents
    
    
    104,051
    
    
    
    (407,708
    )Cash and cash equivalents at the beginning of the period
    
    
    831,160
    
    
    
    1,203,374Cash and cash equivalents at the end of the period
    
    $
    935,211
    
    
    $
    795,666
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies
 (a)
    
    Nature of OperationsCronos Global Income Fund XVI, L.P. (the Partnership) is a limited partnership that was
organized under the laws of the State of California on September 1, 1995, for the purpose
of owning and leasing dry and specialized marine cargo containers to ocean carriers. The
Partnership commenced operations on March 29, 1996, when the minimum subscription proceeds
of $2,000,000 were received from over 100 subscribers (excluding from such count,
Pennsylvania residents, CCC, and all affiliates of CCC). On February 3, 1997, CCC
suspended the offer and sale of units in the Partnership. The offering terminated on
December 27, 1997, at which time 1,599,667 limited partnership units had been sold. The
Partnership shall continue until December 31, 2015, unless terminated sooner upon the
occurrence of certain events.Cronos Capital Corp. (CCC), the general partner and its affiliate, Cronos Containers
Limited (the Leasing Agent), manage the business of the Partnership. CCC and the
Leasing Agent also manage the container leasing business for other partnerships affiliated
with CCC.In April 2008, the Partnership commenced its 13th year of operations continued its
liquidation phase, wherein CCC focuses its attention on the retirement of the remaining
equipment in the Partnerships container fleet. At June 30, 2008, approximately 71% of the
original equipment remained in the Partnerships fleet. CCC will take several factors
into consideration when examining options for the timing of the disposal of the
containers. These factors include the impact of a diminishing fleet size and current
market conditions on the level of gross lease revenue generated, and the level of
operating costs relative to this revenue. CCC will also consider the impact of a
projected increase in expenses associated with the introduction of the additional
reporting and compliance requirements of Section 404 of the Sarbanes Oxley Act of 2002.
These additional costs, depending on their materiality, may reduce the Partnerships
results from operations and therefore negatively affect future distributions to the
Limited Partners. The Partnership is required to be in compliance with Section 404 for
the year ending December 31, 2008, however, the SEC has extended the requirement for
auditor attestation compliance to fiscal years ending on or after December 15, 2009.The Partnerships operations are subject to the fluctuations of world economic and
political conditions. The Partnership believes that the profitability of, and risks
associated with, leases to foreign customers is generally the same as those of domestic
customers. The Partnerships leases generally require all payments to be made in United
States dollars.
 (b)
    
    Leasing AgentThe Partnership and the Leasing Agent have entered into an agreement (the Leasing Agent
Agreement) whereby the Leasing Agent manages the leasing operations for all equipment
owned by the Partnership. In addition to responsibility for leasing and re-leasing the
equipment to ocean carriers, the Leasing Agent disposes of the containers at the end of
their useful economic life and has full discretion over which ocean carriers and suppliers
of goods and services it may deal with. The Leasing Agent Agreement permits the Leasing
Agent to use the containers owned by the Partnership, together with other containers owned
or managed by the Leasing Agent and its affiliates, as part of a single fleet operated
without regard to ownership. The Leasing Agent Agreement generally provides that the
Leasing Agent will make payments to the Partnership based upon rentals collected from
ocean carriers after deducting direct operating expenses and management fees due both to
CCC and the Leasing Agent.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (b)
    
    Leasing Agent and Leasing Agent Agreement (continued)The Leasing Agent leases containers to ocean carriers, generally under operating leases
which are either master leases or term leases (mostly one to five years) and periodically
under direct finance leases. 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 charged
and recognized based upon the number of containers used and the applicable per-diem rate.
Accordingly, rentals under master leases are variable and contingent upon the number of
containers used.Term leases are for a fixed quantity of containers for a fixed period of time, typically
varying from three to five years. In most cases, containers cannot be returned prior to
the expiration of the lease. Term lease agreements may contain early termination penalties
that apply in the event of early redelivery. Term leases provide greater revenue stability
to the lessor, usually at lower lease rates than master leases. Ocean carriers use term
leases to lower their operating costs when they have a need for an identified number of
containers for a specified term. Rentals under term leases are charged and recognized
based upon the number of containers leased, the applicable per diem rate and the length of
the lease, irrespective of the number of days which the customer actually uses the
containers.Direct finance leases are long-term in nature, usually ranging from three to seven years,
and require relatively low levels of customer service. They ordinarily require fixed
payments over a defined period and provide customers with an option to purchase the subject
containers at the end of the lease term. Per-diem rates include an element of repayment of
capital and therefore are usually higher than rates charged under either term or master
leases.
 (c)
    
    Basis of PresentationThe accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of America for
annual financial statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the interim period are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 2008. For further
information, refer to the financial statements and footnotes thereto included in the
Partnerships Annual Report on Form 10-K for the year ended December 31, 2007.(d)
    
    Use of Estimates in interim financial statementsThe preparation of interim financial statements, in conformity with US GAAP and SEC
regulations for interim reporting, requires the Partnership to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported period. The most significant
estimates relate to the carrying value of equipment including estimates relating to
depreciable lives, residual values and asset impairments. Actual results could differ from
those estimates.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (e)
    
    Container Rental EquipmentContainer rental equipment is depreciated over a 15-year life using the straight-line basis
to its residual value of 10% of original equipment cost. Depreciation policies are also
evaluated to determine whether subsequent events and circumstances warrant revised
estimates of useful lives. Residual values are only revised downwards.In accordance with Statement of Financial Accounting Standards (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 of projected future cash flows from container rental equipment operations is
prepared annually, or upon material changes in market conditions. The primary variables
utilized in the analysis are current and projected utilization rates, per-diem rental
rates, direct operating expenses, fleet size, container disposal proceeds and the timing of
container disposals. Additionally, the Partnership evaluates future cash flows and
potential impairment for its entire container fleet rather than for each container type or
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 recorded against the carrying value of container rental equipment for
the six-month periods ended June 30, 2008 and 2007.(f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners CapitalNet income or loss has been allocated between the general and limited partners in
accordance with the Partnership Agreement. The Partnership Agreement generally provides
that CCC shall at all times maintain at least a 1% interest in each item of income or loss,
including the gain arising from the sale of containers. The Partnership Agreement further
provides that the gain arising from the sale of containers be allocated first to the
partners with capital account deficit balances in an amount sufficient to eliminate any
deficit capital account balance. Thereafter, the Partnerships gains arising from the sale
of containers are allocated to the partners in accordance with their share of sale proceeds
distributed. The Partnership Agreement also provides for income (excluding the gain
arising from the sale of containers) for any period, be allocated to CCC in an amount equal
to that portion of CCCs distributions in excess of 1% of the total distributions made to
both CCC and the limited partners of the Partnership for such period, as well as other
allocation adjustments.Actual cash distributions differ from the allocations of net income or loss between the
general and limited partners as presented in these financial statements. Partnership
distributions are paid to its partners (general and limited) from distributable cash from
operations, allocated 95% to the limited partners and 5% to CCC. Distributions of sales
proceeds are allocated 99% to the limited partners and 1% to CCC. The allocations remain
in effect until such time as the limited partners have received from the Partnership
aggregate distributions in an amount equal to their capital contributions plus an 8%
cumulative, compounded (daily), annual return on their adjusted capital contributions.
Thereafter, all Partnership distributions will be allocated 85% to the limited partners and
15% to CCC. Cash distributions from operations to CCC in excess of 5% of distributable
cash will be considered an incentive fee and will be recorded as compensation to CCC, with
the remaining distributions from operations charged to partners capital.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners Capital
(continued)Upon dissolution, the assets of the Partnership will be sold and the proceeds thereof
distributed as follows: (i) all of the Partnerships debts and liabilities to persons other
than CCC or the limited partners shall be paid and discharged; (ii) all of the
Partnerships debts and liabilities to CCC and the limited partners shall be paid and
discharged; and (iii) the balance of such proceeds shall be distributed to CCC and the
limited partners in accordance with the positive balances of CCC and the limited partners
capital accounts. CCC shall contribute to the Partnership an amount equal to the lesser of
the deficit balance in its capital account at the time of such liquidation, or 1.01% of the
excess of the Limited Partners capital contribution to the Partnership over the capital
contributions previously made to the Partnership by CCC after giving effect to the
allocation of income or loss arising from the liquidation of the Partnerships assets.(g)
    
    Accounting pronouncements adopted during the periodOn February 15, 2007 the Financial Accounting Standards Board (FASB) issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115 (SFAS 159). This standard permits an entity to
choose to measure many financial instruments and certain other items at fair value. The
unrealized gains and losses on items for which the fair value option has been elected will
be reported in earnings at each subsequent reporting date. The fair value option: (a) may
be applied instrument by instrument, with a few exceptions, such as investments otherwise
accounted for by the equity method; (b) is irrevocable (unless a new election date occurs);
and (c) is applied only to entire instruments and not to portions of instruments. On
January 1, 2008 the Partnership adopted SFAS 159, however, the Partnership has elected not
to use the fair value option for any of its existing financial assets and liabilities and
consequently, adoption had no impact.In September 2006 the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157),
which provides a single definition of fair value, establishes a framework for the
measurement of fair value and expands disclosure about the use of fair value to measure
assets and liabilities. SFAS 157 is effective for fiscal years beginning after November 15,
2007, and for interim periods within those fiscal years. In February 2008, the FASB issued
FSP 157-2, Effective Date of FASB Statement No. 157, which permits a one-year deferral
for the implementation of SFAS 157 with regard to non-financial assets and liabilities that
are not recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). The Partnership elected to defer adoption of SFAS 157 for such
items and does not currently anticipate that adoption for non-financial assets and
liabilities in 2009 will have a material impact to the financial statements. The
Partnership adopted the effective provisions of SFAS 157 as of January 1, 2008. There was
no impact to the condensed interim financial statements upon adoption. At June 30, 2008,
the Partnership did not have any financial assets
or liabilities that were subject to the expanded disclosures regarding fair value
measurements, consequently adoption had no disclosure impact.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (h)
    
    Accounting pronouncements not yet adoptedIn May 2008 the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles (SFAS 162). SFAS 162 identifies the sources of accounting principles and the
framework for selecting the principles to be used in the preparation of financial
statements of nongovernmental entities that are presented in conformity with generally
accepted accounting principles. SFAS 162 is effective 60 days following the SECs approval
of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning
of Present Fairly in Conformity With Generally Accepted Accounting Principles. The
Partnership does not believe adoption of SFAS 162 will have an impact on the financial
statements.
 (2)
    
    Net Lease Receivables Due from Leasing Agent
  June 30,
    
    
    December 31,2008
    
    
    2007Gross lease receivables
    
    $
    629,093
    
    
    $
    599,208Less:Direct operating payables and accrued expenses
    
    
    140,603
    
    
    
    115,694Base management fees payable
    
    
    31,095
    
    
    
    35,913Reimbursed administrative expenses
    
    
    10,480
    
    
    
    9,622Allowance for doubtful accounts
    
    
    54,068
    
    
    
    47,419236,246
    
    
    
    208,648Net lease receivables due from Leasing Agent
    
    $
    392,847
    
    
    $
    390,560
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Net Lease Revenue
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Gross lease revenue
    
    $
    545,287
    
    
    $
    666,093
    
    
    $
    1,128,991
    
    
    $
    1,364,447Less:Direct operating expenses
    
    
    108,113
    
    
    
    150,078
    
    
    
    179,987
    
    
    
    315,441Base management fees
    
    
    37,484
    
    
    
    46,577
    
    
    
    77,682
    
    
    
    94,954Reimbursed administrative
expensesSalaries
    
    
    22,750
    
    
    
    22,648
    
    
    
    43,275
    
    
    
    45,996Other payroll related expenses
    
    
    2,234
    
    
    
    3,390
    
    
    
    4,753
    
    
    
    7,782General and administrative
expenses
    
    
    4,613
    
    
    
    6,782
    
    
    
    9,091
    
    
    
    14,096Total reimbursed administrative
expenses
    
    
    29,597
    
    
    
    32,820
    
    
    
    57,119
    
    
    
    67,874175,194
    
    
    
    229,475
    
    
    
    314,788
    
    
    
    478,269Net lease revenue
    
    $
    370,093
    
    
    $
    436,618
    
    
    $
    814,203
    
    
    $
    886,178
 Operating Segment
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Dry cargo containers
    
    $
    420,345
    
    
    $
    483,989
    
    
    $
    847,440
    
    
    $
    989,636Refrigerated containers
    
    
    77,943
    
    
    
    143,664
    
    
    
    194,979
    
    
    
    296,271Tank containers
    
    
    46,999
    
    
    
    38,440
    
    
    
    86,572
    
    
    
    78,540Total
    
    $
    545,287
    
    
    $
    666,093
    
    
    $
    1,128,991
    
    
    $
    1,364,447
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 Limited Partners Capital
  Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007Cash Distribution from Operations
    
    $
    793,168
    
    
    $
    979,797Cash Distribution from Sales Proceeds
    
    
    439,909
    
    
    
    766,507Total Cash Distributions
    
    $
    1,233,077
    
    
    $
    1,746,304
   11




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##### Table of Contents



Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Results of Operations
 Overview
    Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterContainers on lease:Master lease
    
    
    2,222
    
    
    
    741
    
    
    
    1,206
    
    
    
    26
    
    
    
    63
    
    
    
    20Term leaseShort term1
    
    
    309
    
    
    
    79
    
    
    
    68
    
    
    
    5
    
    
    
    5
    
    
    
    11Long term2
    
    
    372
    
    
    
    122
    
    
    
    181
    
    
    
    7
    
    
    
    31
    
    
    
    14681
    
    
    
    201
    
    
    
    249
    
    
    
    12
    
    
    
    36
    
    
    
    25Subtotal
    
    
    2,903
    
    
    
    942
    
    
    
    1,455
    
    
    
    38
    
    
    
    99
    
    
    
    45Containers off lease
    
    
    117
    
    
    
    53
    
    
    
    123
    
    
    
    14
    
    
    
    27
    
    
    
    6Total container fleet
    
    
    3,020
    
    
    
    995
    
    
    
    1,578
    
    
    
    52
    
    
    
    126
    
    
    
    51
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or that
may expire on or before June 2009.2.
    
    Long term leases represent term leases, the majority of which will expire between July 2009
and December 2019.  
    
    Activity-related expenses, including agent and depot costs such as repairs,
maintenance and handling;
    
    Inventory-related expenses for off-hire containers, comprising storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers
as well as the frequency at which containers are re-delivered and the frequency and size
of repositioning moves undertaken; and
    
    Legal and other expenses, including legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts.
 12




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##### Table of Contents



Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    4,553
    
    
    
    100
    %
    
    
    1,500
    
    
    
    100
    %
    
    
    1,750
    
    
    
    100
    %
    
    
    90
    
    
    
    100
    %
    
    
    300
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %Less disposals
    
    
    1,533
    
    
    
    34
    %
    
    
    505
    
    
    
    34
    %
    
    
    172
    
    
    
    10
    %
    
    
    38
    
    
    
    42
    %
    
    
    174
    
    
    
    58
    %
    
    
    1
    
    
    
    2
    %Remaining fleet atJune 30, 2008
    
    
    3,020
    
    
    
    66
    %
    
    
    995
    
    
    
    66
    %
    
    
    1,578
    
    
    
    90
    %
    
    
    52
    
    
    
    58
    %
    
    
    126
    
    
    
    42
    %
    
    
    51
    
    
    
    98
    %
  §
    
    The Leasing Agent extended certain expiring leases at lower rental rates;§
    
    Off hire containers were placed on leases at rates that, although they resulted in a
reduction in the average per-diem rental rates, also significantly lowered inventory
levels; and§
    
    The overall lease market for the Partnerships older containers continues to be very
competitive and, therefore, subject to significant pricing pressures.
   Six Months EndedJune 30,
    
    June 30,2008
    
    2007Fleet size (measured in twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    8,371
    
    
    
    9,138Refrigerated containers
    
    
    356
    
    
    
    447Tank containers
    
    
    51
    
    
    
    51Average utilization ratesDry cargo containers
    
    
    97
    %
    
    
    88
    %Refrigerated containers
    
    
    80
    %
    
    
    79
    %Tank containers
    
    
    93
    %
    
    
    95
    %
  13




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##### Table of Contents



Three Months Ended June 30, 2008 Compared to the Three Months Ended June 30, 2007
 Overview
 Net income
 Analysis and discussion
 Net lease revenue
 Depreciation expense
 Other general and administrative expenses
 Net gains on disposal of equipment
  Six Months Ended June 30, 2008 Compared to the Six Months Ended June 30, 2007
 Overview
 Net income
 §
    
    a decline in gross lease revenue, in line with the reduction in the size of the
fleet; and§
    
    a decline in direct operating expenses and a slight increase in the level of gains
recorded on the disposal of equipment at the end of its useful maritime life.
 Analysis and discussion
 Net lease revenue
 Depreciation expense
 14




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##### Table of Contents



Other general and administrative expenses
 Net gains on disposal of equipment
 Liquidity and Capital Resources
  th
   Cash from Operating Activities:
 Cash from Investing Activities:
 Cash from Financing Activities
 15




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##### Table of Contents



Critical Accounting Policies
  
    
    Container equipment  depreciable lives and residual values
    
    Container equipment  recoverability and valuation in accordance with SFAS 144
Accounting for the Impairment or Disposal of Long Lived Assets
    
    Allowance for doubtful accounts
  Inflation
  
 Quantitative and Qualitative Disclosures About Market Risk
 Exchange rate risk
 
 Controls and Procedures
  
 Controls and Procedures
  16




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Legal Proceedings
  
 Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults Upon Senior Securities
  
 Submissions of Matters to a Vote of Securities Holders
  
 Other Information
  
 Exhibits
  ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended
and restated as of December 28, 1995
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document ****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated December
28, 1995, included as part of Registration Statement on Form S-1 (No. 33-98290)**
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-98290)***
    
    Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No.
33-98290)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as
required by Section 906, is not to be deemed filed with the Commission or subject to the
rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act. 17




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##### Table of Contents



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




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended
and restated as of December 28, 1995
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document 
****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated December
28, 1995, included as part of Registration Statement on Form S-1 (No. 33-98290)**
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-98290)***
    
    Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No.
33-98290)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as
required by Section 906, is not deemed to be filed with the Commission or subject to the
rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act.