##### 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 September 30, 2007
  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.)
 
 
 þ o
  o o þ
 o þ




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



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial StatementsPresented herein are Cronos Global Income Fund XVI, L.P.s (the Partnership) condensed
balance sheets as of September 30, 2007 and December 31, 2006, condensed statements of
operations for the three and nine months ended September 30, 2007 and 2006, and condensed
statements of cash flows for the nine months ended September 30, 2007 and 2006,
(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 be read in
conjunction with the financial statements and the notes thereto included in the
Partnerships December 31, 2006 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 operations for such
interim periods are not necessarily indicative of the results for the full year.The information in this Quarterly Report on Form 10-Q contains certain forward-looking
statements within the meaning of the securities laws. These forward-looking statements
reflect the current view of the Partnership with respect to future events and financial
performance and are subject to a number of risks and uncertainties, many of which are
beyond the Partnerships control. All statements, other than statements of historical 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, 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 to update or
revise publicly any forward-looking statements, whether as a result of new information,
future events or otherwise. Although the Partnership believes that its plans, intentions
and expectations reflected in or suggested by the forward-looking statements made in this
report are reasonable, the Partnership can give no assurance that these plans, intentions
or expectations will be achieved. Future economic and industry trends that could
potentially impact revenues and profitability are difficult to predict.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Balance Sheets
 (Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents, includes $766,057 at September 30, 2007
and $1,188,374 at December 31, 2006 in interest-bearing accounts
    
    $
    781,057
    
    
    $
    1,203,374Net lease and other receivables due from Leasing Company
    
    
    433,097
    
    
    
    405,841Total current assets
    
    
    1,214,154
    
    
    
    1,609,215Container rental equipment, at cost
    
    
    23,064,236
    
    
    
    25,256,310Less accumulated depreciation
    
    
    (14,549,806
    )
    
    
    (14,851,810
    )Net container rental equipment
    
    
    8,514,430
    
    
    
    10,404,500Total assets
    
    $
    9,728,584
    
    
    $
    12,013,715Partners capitalPartners capital (deficit):General partner
    
    $
    (32,724
    )
    
    $
    (39,210
    )Limited partners
    
    
    9,761,308
    
    
    
    12,052,925Total partners capital
    
    $
    9,728,584
    
    
    $
    12,013,715
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net lease revenue
    
    $
    445,352
    
    
    $
    617,544
    
    
    $
    1,331,530
    
    
    $
    1,744,685Other operating income (expenses):Depreciation
    
    
    (353,312
    )
    
    
    (418,284
    )
    
    
    (1,123,484
    )
    
    
    (1,295,951
    )Other general and administrative expenses
    
    
    (24,739
    )
    
    
    (25,595
    )
    
    
    (86,509
    )
    
    
    (81,145
    )Net (loss) gain on disposal of equipment
    
    
    (3,405
    )
    
    
    (112,636
    )
    
    
    30,227
    
    
    
    (247,079
    )(381,456
    )
    
    
    (556,515
    )
    
    
    (1,179,766
    )
    
    
    (1,624,175
    )Income from operations
    
    
    63,896
    
    
    
    61,029
    
    
    
    151,764
    
    
    
    120,510Other income:Interest income
    
    
    8,691
    
    
    
    10,718
    
    
    
    32,624
    
    
    
    30,701Net income
    
    $
    72,587
    
    
    $
    71,747
    
    
    $
    184,388
    
    
    $
    151,211Allocation of net income:General partner
    
    $
    14,581
    
    
    $
    22,113
    
    
    $
    89,836
    
    
    $
    75,699Limited partners
    
    
    58,006
    
    
    
    49,634
    
    
    
    94,552
    
    
    
    75,512$
    72,587
    
    
    $
    71,747
    
    
    $
    184,388
    
    
    $
    151,211Limited partners per unit share of net
income
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.06
    
    
    $
    0.05
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Condensed Statements of Cash Flows
 (Unaudited)
 Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006Net cash provided by operating activities
    
    $
    1,276,086
    
    
    $
    1,682,479Cash flows provided by investing activities:Proceeds from sale of container rental equipment
    
    
    771,116
    
    
    
    905,557Cash flows from financing activities:Distributions to general partner
    
    
    (83,349
    )
    
    
    (101,075
    )Distributions to limited partners
    
    
    (2,386,170
    )
    
    
    (2,512,811
    )Net cash used in financing activities
    
    
    (2,469,519
    )
    
    
    (2,613,886
    )Net decrease in cash and cash equivalents
    
    
    (422,317
    )
    
    
    (25,850
    )Cash and cash equivalents at the beginning of the period
    
    
    1,203,374
    
    
    
    1,048,262Cash and cash equivalents at the end of the period
    
    $
    781,057
    
    
    $
    1,022,412
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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 organized
under the laws of the State of California on September 1, 1995, for the purpose of owning
and leasing marine cargo containers, special purpose containers and container related
equipment worldwide to ocean carriers. The Partnership believes that the profitability of,
and risks associated with, leases to foreign customers is generally the same as those of
leases to domestic customers. The Partnerships leases generally require all payments to be
made in United States currency.Cronos Capital Corp. (CCC) is the general partner and, with its affiliate Cronos
Containers Limited (the Leasing Company), manages the business of the Partnership. CCC
and the Leasing Company also manage the container leasing business for other partnerships
affiliated with CCC.The Partnership commenced operations on March 29, 1996, when the minimum subscription
proceeds of $2,000,000 were received from over 100 subscribers (excluding from such count
Pennsylvania residents, CCC, and all affiliates of CCC). On February 3, 1997, CCC suspended
the offer and sale of units in the Partnership. The offering terminated on December 27,
1997, at which time 1,599,667 limited partnership units had been sold. The Partnership
shall continue until December 31, 2015, unless sooner terminated upon the occurrence of
certain events.The Partnership has entered into its 13th year of operations and is in its
liquidation phase, wherein CCC is focusing its attention on the retirement of the remaining
equipment in the Partnerships container fleet. At September 30, 2007, approximately 76% of
the original equipment remained in the Partnerships fleet.(b)
    
    Leasing Company and Leasing Agent AgreementA Leasing Agent Agreement exists between the Partnership and the Leasing Company,
whereby the Leasing Company has the responsibility to manage the leasing operations of all
equipment owned by the Partnership. Pursuant to the Agreement, the Leasing Company is
responsible for leasing, managing and re-leasing the Partnerships containers to ocean
carriers and has full discretion over which ocean carriers, and suppliers of goods and
services it may deal with. The Leasing Agent Agreement permits the Leasing Company to use
the containers owned by the Partnership, together with other containers owned or managed by
the Leasing Company and its affiliates, as part of a single fleet operated without regard
to ownership. Since the Leasing Agent Agreement meets the definition of an operating lease
in Statement of Financial Accounting Standards (SFAS) No. 13 Accounting for Lease, it is
accounted for as a lease under which the Partnership is lessor and the Leasing Company is
lessee.The Leasing Agent Agreement generally provides that the Leasing Company will make
payments to the Partnership based upon rentals collected from ocean carriers after
deducting direct operating expenses and management fees to the Leasing Company. The Leasing
Company leases containers to ocean carriers, generally under operating leases which are
either master leases or term leases (mostly one to five years). Master leases do not
specify the exact number of containers to be leased or the term that each container will
remain on hire but allow the ocean carrier to pick up and drop off containers at various
locations, and rentals are based upon the number of containers used and the applicable
per-diem rate.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (b)
    
    Leasing Company and Leasing Agent Agreement (continued)Accordingly, rentals under master leases are all variable and contingent upon the
number of containers used. Most containers are leased to ocean carriers under master
leases; leasing agreements with fixed payment terms are not material to the financial
statements. Since there are no material minimum lease rentals, no disclosure of minimum
lease rentals is provided in these financial statements.(c)
    
    Basis of PresentationThese unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America (GAAP) and
regulation S-X, Article 10 under the Securities Exchange Act of 1934 for interim financial
information. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been condensed or omitted pursuant to such
rules and regulations, although the Partnership believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these financial
statements be read in conjunction with the financial statements and accompanying notes in
the Partnerships December 31, 2006 Annual Report on Form 10-K.The interim financial statements presented herewith reflect, in the opinion of
management, all adjustments of a normal recurring nature necessary to present fairly the
results for the interim periods presented. The results of operations for such interim
periods are not necessarily indicative of the results to be expected for the full year.(d)
    
    Use of EstimatesThe preparation of financial statements in conformity with GAAP requires the
Partnership to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.The significant estimates included within the financial statements are the container
rental equipments estimated useful lives and residual values, and the estimate of future
cash flows from container rental equipment operations, used to evaluate the carrying value
of container rental equipment in accordance with SFAS No. 144 Accounting for the
Impairment or Disposal of Long Lived Assets (SFAS 144).(e)
    
    Container Rental EquipmentContainer rental equipment is depreciated over a 15-year life using the straight-line basis
to its salvage value, estimated to be 10% of the original equipment cost. Depreciation
policies are also evaluated to determine whether subsequent events and circumstances
warrant revised estimates of useful lives and residual values.In accordance with SFAS No. 144, container rental equipment is considered to be impaired
if the carrying value of the asset exceeds the expected future cash flows from related
operations (undiscounted and without interest charges). If impairment is deemed to exist,
the assets are written down to fair value. An analysis projecting future cash flows from
container rental equipment operations is prepared annually, or upon material changes in
market conditions.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (e)
    
    Container Rental Equipment (continued)Current and projected utilization rates, per-diem rental rates, direct operating expenses,
fleet size and container disposals are the primary variables utilized in the analysis.
Additionally, the Partnership evaluates future cash flows and potential impairment by
container type rather than for each individual container, and as a result, future losses
could result for individual container dispositions due to various factors, including age,
condition, suitability for continued leasing, as well as the geographical location of
containers when disposed. There were no impairment charges to the carrying value of
container rental equipment for the three and nine-month periods ended September 30, 2007
and 2006.(f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners Capital
AccountsNet income or loss has been allocated between the general and limited partners in
accordance with the Partnership Agreement. The Partnership Agreement generally provides
that CCC shall at all times maintain at least a 1% interest in each item of income or loss,
including the gain arising from the sale of containers. The Partnership Agreement further
provides that the gain arising from the sale of containers be allocated first to the
partners with capital account deficit balances in an amount sufficient to eliminate any
deficit capital account balance. Thereafter, the Partnerships gains arising from the sale
of containers are allocated to the partners in accordance with their share of sale proceeds
distributed. The Partnership Agreement also provides for income (excluding the gain arising
from the sale of containers) for any period, be allocated to CCC in an amount equal to that
portion of CCCs distributions in excess of 1% of the total distributions made to both CCC
and the limited partners of the Partnership for such period, as well as other allocation
adjustments.Actual cash distributions differ from the allocations of net income or loss between the
general and limited partners as presented in these financial statements. Partnership
distributions are paid to its partners (general and limited) from distributable cash from
operations, allocated 95% to the limited partners and 5% to CCC. Distributions of sales
proceeds are allocated 99% to the limited partners and 1% to CCC. The allocations remain in
effect until such time as the limited partners have received from the Partnership aggregate
distributions in an amount equal to their capital contributions plus an 8% cumulative,
compounded (daily), annual return on their adjusted capital contributions. Thereafter, all
Partnership distributions will be allocated 85% to the limited partners and 15% to CCC.
Cash distributions from operations to CCC in excess of 5% of distributable cash will be
considered an incentive fee and will be recorded as compensation to CCC, with the remaining
distributions from operations charged to partners capital.Upon dissolution, the assets of the Partnership will be sold and the proceeds thereof
distributed as follows: (i) all of the Partnerships debts and liabilities to persons
other than CCC or the limited partners shall be paid and discharged; (ii) all of the
Partnerships debts and liabilities to CCC and the limited partners shall be paid and
discharged; and (iii) the balance of such proceeds shall be distributed to CCC and the
limited partners in accordance with the positive balances of CCC and the limited partners
capital accounts. CCC shall contribute to the Partnership an amount equal to the lesser of
the deficit balance in its capital account at the time of such liquidation, or 1.01% of the
excess of the Limited Partners capital contribution to the Partnership over the capital
contributions previously made to the Partnership by CCC after giving effect to the
allocation of income or loss arising from the liquidation of the Partnerships assets.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (2)
    
    Net Lease and Other Receivables Due from Leasing CompanyNet lease and other receivables due from the Leasing Company are determined by deducting
direct operating payables and accrued expenses, base management fees payable, and reimbursed
administrative expenses payable to CCC and its affiliates from the rental billings earned by
the Leasing Company under operating leases to ocean carriers for the containers owned by the
Partnership, as well as proceeds earned from container disposals. Net lease and other
receivables at September 30, 2007 and December 31, 2006 were as follows:
 September 30,
    
    
    December 31,2007
    
    
    2006Gross lease and other receivables
    
    $
    663,203
    
    
    $
    694,051Less:Direct operating payables and accrued expenses
    
    
    131,971
    
    
    
    203,928Base management fees payable
    
    
    37,139
    
    
    
    2,472Reimbursed administrative expenses
    
    
    12,347
    
    
    
    12,559Allowance for doubtful accounts
    
    
    48,649
    
    
    
    69,251230,106
    
    
    
    288,210Net lease and other receivables
    
    $
    433,097
    
    
    $
    405,841
 (3)
    
    Net Lease RevenueNet lease revenue is recorded by the Partnership in each period based upon its leasing
agent agreement with the Leasing Company. Net lease revenue is generally dependent upon
operating lease rentals from operating lease agreements between the Leasing Company and its
various lessees, less direct operating expenses, management fees and reimbursed administrative
expenses incurred in respect of the containers specified in each operating lease agreement. Net
lease revenue for the three and nine-month periods ended September 30, 2007 and 2006 was as
follows:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Rental revenue
    
    $
    656,466
    
    
    $
    839,635
    
    
    $
    2,020,913
    
    
    $
    2,589,950Less:Rental equipment operating expenses
    
    
    134,914
    
    
    
    126,624
    
    
    
    450,354
    
    
    
    534,068Base management fees
    
    
    44,764
    
    
    
    58,418
    
    
    
    139,718
    
    
    
    178,605Reimbursed administrative expensesSalaries
    
    
    23,285
    
    
    
    27,360
    
    
    
    69,282
    
    
    
    95,732Other payroll related expenses
    
    
    2,322
    
    
    
    1,886
    
    
    
    10,104
    
    
    
    11,858General and administrative expenses
    
    
    5,829
    
    
    
    7,803
    
    
    
    19,925
    
    
    
    25,002Total reimbursed administrative
expenses
    
    
    31,436
    
    
    
    37,049
    
    
    
    99,311
    
    
    
    132,592211,114
    
    
    
    222,091
    
    
    
    689,383
    
    
    
    845,265Net lease revenue
    
    $
    445,352
    
    
    $
    617,544
    
    
    $
    1,331,530
    
    
    $
    1,744,685
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Unaudited Condensed Financial Statements
 (4)
    
    Operating SegmentAn operating segment is a component of an enterprise that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed
by the enterprises chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and about which separate financial
information is available. Management operates the Partnerships container fleet as a homogenous
unit and has determined that as such, it has a single reportable operating segment.The Partnership derives revenues from dry cargo, refrigerated and tank containers used by its
customers in global trade routes. As of September 30, 2007, the Partnership operated 3,282
twenty-foot, 1,081 forty-foot and 1,628 forty-foot high-cube marine dry cargo containers, as
well as 70 twenty-foot and 168 forty-foot high-cube refrigerated containers, and 51 twenty-four
thousand-liter tanks. A summary of gross lease revenue earned by the Leasing Company, on behalf
of the Partnership, by product, for the three and nine-month periods ended September 30, 2007
and 2006 follows:
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Dry cargo containers
    
    $
    475,589
    
    
    $
    556,507
    
    
    $
    1,465,225
    
    
    $
    1,726,180Refrigerated containers
    
    
    141,718
    
    
    
    244,704
    
    
    
    437,989
    
    
    
    746,852Tank containers
    
    
    39,159
    
    
    
    38,424
    
    
    
    117,699
    
    
    
    116,918Total
    
    $
    656,466
    
    
    $
    839,635
    
    
    $
    2,020,913
    
    
    $
    2,589,950
 Due to the Partnerships lack of information regarding the physical location of its fleet
of containers when on lease in the global shipping trade, the Partnership believes that it does
not possess discernible geographic reporting segments as defined in SFAS No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information.(5)
    
    The Cronos GroupAt a special meeting held August 1, 2007, the shareholders of The Cronos Group (CGH), a
Luxembourg holding company, approved the Asset Purchase Agreement with CRX Acquisition Ltd., a
Bermuda exempted company (CRX) and FB Transportation Capital LLC, a Delaware limited
liability company (FB Transportation) and the transactions contemplated thereunder, including
CGHs dissolution and liquidation. Under the terms of the Asset Purchase Agreement, and subject
to the conditions stated therein, CGH agreed to sell all of its assets to CRX and CRX agreed to
assume all of CGHs liabilities. Closing of the sale of CGHs assets and liabilities to CRX
occurred later that same day. The container leasing business of CGH will be continued by CRX as
a private company. Management of CGH, which includes members of the management of CCC, are
continuing as management of CRX and acquired an equity interest in CRX. CCC is now an indirect
subsidiary of CRX.
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Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Market Overview
      12




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Results of Operations
   
    
    Activity-related expenses, including agent and depot costs such as repairs,
maintenance and handling.
    
    Inventory-related expenses for off-hire containers, comprising storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers as
well as the frequency at which containers are re-delivered.
    
    Legal and other expenses, including legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts.
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Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterContainers on lease:Master lease
    
    
    2,422
    
    
    
    755
    
    
    
    1,298
    
    
    
    34
    
    
    
    102
    
    
    
    29Term leaseShort
term1
    
    
    232
    
    
    
    111
    
    
    
    147
    
    
    
    2
    
    
    
    11
    
    
    
    10Long
term2
    
    
    447
    
    
    
    127
    
    
    
    56
    
    
    
    3
    
    
    
    33
    
    
    
    12Sales-type lease
    
    
    5
    
    
    
    6
    
    
    
    4
    
    
    
    5
    
    
    
    2
    
    
    
    Subtotal
    
    
    3,106
    
    
    
    999
    
    
    
    1,505
    
    
    
    44
    
    
    
    148
    
    
    
    51Containers off lease
    
    
    176
    
    
    
    82
    
    
    
    123
    
    
    
    26
    
    
    
    20
    
    
    
    Total container fleet
    
    
    3,282
    
    
    
    1,081
    
    
    
    1,628
    
    
    
    70
    
    
    
    168
    
    
    
    51
 
 1.
    
    Short term leases represent term leases that are either scheduled for renegotiation or that
may expire on or before September 2008.2.
    
    Long term leases represent term leases, the majority of which will expire between October
2008 and December 2011. Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    4,553
    
    
    
    100
    %
    
    
    1,500
    
    
    
    100
    %
    
    
    1,750
    
    
    
    100
    %
    
    
    90
    
    
    
    100
    %
    
    
    300
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %Less disposals
    
    
    1,271
    
    
    
    28
    %
    
    
    419
    
    
    
    28
    %
    
    
    122
    
    
    
    7
    %
    
    
    20
    
    
    
    22
    %
    
    
    132
    
    
    
    44
    %
    
    
    1
    
    
    
    2
    %Remaining fleet at
September 30, 2007
    
    
    3,282
    
    
    
    72
    %
    
    
    1,081
    
    
    
    72
    %
    
    
    1,628
    
    
    
    93
    %
    
    
    70
    
    
    
    78
    %
    
    
    168
    
    
    
    56
    %
    
    
    51
    
    
    
    98
    %
 Three Months Ended September 30, 2007 Compared to the Three Months Ended September 30, 2006
 Net lease revenue
 Three Months EndedSeptember 30,
    
    September 30,2007
    
    2006Fleet size (measured in twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    8,822
    
    
    
    9,474Refrigerated containers
    
    
    418
    
    
    
    590Tank containers
    
    
    51
    
    
    
    52Average utilization ratesDry cargo containers
    
    
    93
    %
    
    
    91
    %Refrigerated containers
    
    
    82
    %
    
    
    87
    %Tank containers
    
    
    98
    %
    
    
    92
    %
 14




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##### Table of Contents



Depreciation expense
 Other general and administrative expenses
 Net loss on disposal of equipment
  Nine Months Ended September 30, 2007 Compared to the Nine Months Ended September 30, 2006
 Net lease revenue
 Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006Fleet size (measured in twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,034
    
    
    
    9,644Refrigerated containers
    
    
    437
    
    
    
    633Tank containers
    
    
    51
    
    
    
    52Average utilization ratesDry cargo containers
    
    
    90
    %
    
    
    89
    %Refrigerated containers
    
    
    80
    %
    
    
    86
    %Tank containers
    
    
    96
    %
    
    
    90
    %
  15




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##### Table of Contents



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




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##### Table of Contents



Cash from Operating Activities:
 Cash from Investing Activities:
 Cash from Financing Activities
 Critical Accounting Policies
  
    
    Container equipment  depreciable lives and residual values
    
    Container equipment  recoverability and valuation in accordance with SFAS 144
Accounting for the Impairment or Disposal of Long Lived Assets
    
    Allowance for doubtful accounts
  Inflation
  The Cronos Group
  17




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##### Table of Contents



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




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Legal Proceedings
  
 Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults Upon Senior Securities
  
 Submissions of Matters to a Vote of Securities Holders
  
 Other Information
  
 Exhibits
  ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement, amended
and restated as of December 28, 1995
    
    *3(b)
    
    Certificate of Limited Partnership
    
    **10
    
    Form of Leasing Agent Agreement with
Cronos Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document
****
 
 *
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated December
28, 1995, included as part of Registration Statement on Form S-1 (No. 33-98290)**
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-98290)***
    
    Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No.
33-98290)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of 2002, other than as
required by Section 906, is not to be deemed filed with the Commission or subject to the
rules and regulations promulgated by the Commission under the Securities Exchange Act of 1934,
as amended, or to the liabilities of Section 18 of said Act. 19




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##### Table of Contents



SIGNATURES
  CRONOS GLOBAL INCOME FUND XVI, L.P.By
    
    Cronos Capital Corp.The General PartnerBy
    
    /s/ Dennis J. Tietz

Dennis J. TietzPresident and Director ofCronos Capital Corp. (CCC)Principal Executive Officer of CCCBy
    
    /s/ John Kallas

John KallasChief Financial Officer andDirector of Cronos Capital Corp. (CCC)Principal Financial and Accounting Officer of CCC
  20




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##### Table of Contents



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