<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

        [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 $ 250.00

                   For the fiscal year ended December 31, 1996

                                       OR

        [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                       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                                    94-3230380
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

         444 Market Street, 15th Floor, San Francisco, California 94111
         (Address of principal executive offices)             (Zip Code)

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

          Securities registered pursuant to Section 12(b) of the Act:

                                                  Name of each exchange on
        Title of each class                           which registered
        -------------------                       ------------------------
          Not Applicable


           Securities registered pursuant to Section 12(g) of the Act:

                     UNITS OF LIMITED PARTNERSHIP INTERESTS

                                (Title of Class)

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    .
                                       ---       ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant is not applicable.

                       Documents Incorporated by Reference

<TABLE>
PART I
<S>                             <C> 
Item 1 - Business               Prospectus of Cronos Global Income Fund XVI, L.P., dated December 28, 1995
                                included as part of Registration Statement on Form S-1 (No. 33-98290) and
                                supplement thereto dated February 6, 1997

                                Certificate of Limited Partnership of Cronos Global Income Fund XVI, L.P., filed as
                                Exhibit 3.2 to the Registration Statement on Form S-1
 
                                Form of Leasing Agent Agreement with Cronos Containers Limited, filed as
                                Exhibit 10.2 to the Registration Statement on Form S-1 (No. 33-98290)

PART II
Item 9 - Changes in and         Current Reports on Form 8-K of Cronos Global Income Fund XVI, L.P., filed
         Disagreements with     February 6, 1997 and April 14, 1997, respectively, and Amendment No. 1 to Current
         Accountants on         Report on Form 8-K filed February 26, 1997.
         Accounting and
         Financial Disclosure   
</TABLE>

<PAGE>   2

                         PART I - FINANCIAL INFORMATION

Item 1. Business

    (a) General Development of Business

    The Registrant 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. The Registrant was initially capitalized with $100 and commenced
offering its limited partnership interests to the public subsequent to December
28, 1995, pursuant to its Registration Statement on Form S-1 (File No.
33-98290). The Registrant had no securities holders as defined by the Securities
and Exchange Act of 1934 as of December 31, 1995. Additionally, the Registrant
was not engaged in any trade of business during the period covered by the
report, as the offering broke initial impound on March 29, 1996. On February 3,
1997, Cronos Capital Corp. ("CCC"), the general partner, suspended the offer and
sale of units in the Registrant. Information concerning the suspended offer and
sale of units in the Registrant, is incorporated by reference to the discussion
in the Supplement dated February 6, 1997 to the Registration Statement on Form
S-1 (No. 33-98290), dated December 28, 1995 as supplemented December 27, 1996.
The offering terminates December 27, 1997.

    The Registrant raised $31,993,340 in subscription proceeds. The following
table sets forth the use of said subscription proceeds as of May 31, 1997.

<TABLE>
<CAPTION>
                                                                  Percentage of
                                                     Amount       Gross Proceeds
     <S>                                          <C>                  <C> 

     Gross Subscription Proceeds                  $31,993,340           100.0%

     Public Offering Expenses:
         Underwriting Commissions                 $ 3,199,334            10.0%
         Offering and Organization Expenses       $ 1,481,117             4.6%
                                                  -----------     -----------

         Total Public Offering Expenses           $ 4,680,451            14.6%
                                                  -----------     -----------

     Net Proceeds                                 $27,312,889            85.4%

     Acquisition Fees                             $ 1,266,834             4.0%

     Working Capital Reserve                      $   319,933             1.0%

     Unexpended Proceeds                          $   389,448             1.2%
                                                  -----------     -----------

     Gross Proceeds Invested in Equipment         $25,336,674            79.2%
                                                  ===========     ===========
</TABLE>

                                       2
<PAGE>   3

    The general partner, CCC, is a wholly-owned subsidiary of Cronos
Holdings/Investments (U.S.), Inc., a Delaware corporation, which is in turn a
wholly-owned subsidiary of The Cronos Group, a Luxembourg company. These and
other affiliated companies are ultimately wholly-owned by The Cronos Group, a
holding company registered in Luxembourg ("the Holding Company") and are
collectively referred to as the "Group". The activities of the container
division of the Group are managed through the Group's subsidiary in the United
Kingdom, Cronos Containers Limited ("the Leasing Company"). The Leasing Company
manages the leasing operations of all equipment owned or managed by the Group on
its own behalf or on behalf of other third-party container owners, including all
other programs organized by CCC.

    On October 9, 1995, the Leasing Company entered into a Leasing Agent
Agreement with the Registrant assuming the responsibility for all container
leasing activities.

    For information concerning the containers acquired by the Registrant, see
Item 2, "Properties."

    (b) Financial Information About Industry Segments

    Inapplicable.

    (c) Narrative Description of Business

    (c)(1)(i) A marine cargo container is a reusable metal container designed
for the efficient carriage of cargo with a minimum of exposure to loss from
damage or theft. Containers are manufactured to conform to worldwide standards
of container dimensions and container ship fittings adopted by the International
Standards Organization ("ISO") in 1968. The standard container is either 20'
long x 8' wide x 8'6" high (one twenty-foot equivalent unit ("TEU"), the
standard unit of physical measurement in the container industry) or 40' long x
8' wide x 8'6" high (two TEU). Standardization of the construction, maintenance
and handling of containers allows containers to be picked up, dropped off,
stored and repaired effectively throughout the world. This standardization is
the foundation on which the container industry has developed.

    Standard dry cargo containers are rectangular boxes with no moving parts,
other than doors, and are typically made of steel. They are constructed to carry
a wide variety of cargos ranging from heavy industrial raw materials to
light-weight finished goods. Specialized containers include, among others,
refrigerated containers for the transport of temperature-sensitive goods and
tank containers for the carriage of liquid cargo. Dry cargo containers
constitute approximately 87% of the worldwide container fleet. Refrigerated and
tank containers constitute approximately 6% of the worldwide container fleet,
with open-tops and other specialized containers constituting the remainder.

    One of the primary benefits of containerization has been the ability of the
shipping industry to effectively lower freight rates due to the efficiencies
created by standardized intermodal containers. Containers can be handled much
more efficiently than loose cargo and are typically shipped via several modes of
transportation, including truck, railway and ship. Containers require loading
and unloading only once and remain sealed until arrival at the final
destination, significantly reducing transport time, labor and handling costs and
losses due to damage and theft. Efficient movement of containerized cargo
between ship and shore reduces the amount of time that a ship must spend in port
and reduces the transit time of freight moves.

    The logistical advantages and reduced freight rates brought about by
containerization have been a major catalyst for world trade growth during the
last twenty-five years, which in turn has generated increased demand for
containerization. The world container fleet has grown from an estimated 270
thousand TEU in 1969 to 10 million TEU in mid-1996, and according to industry
data, growth of containerized shipping since 1987 has generally averaged two to
three times that of average GDP growth in industrialized countries.

    The rapid growth of containerization began with the standardization of
equipment sizes by international agreement in the late 1960's. Initially
confined to the highly competitive trade routes among the industrialized
nations, containerization expanded into substantially all free-world trade
routes by the early 1970's.

                                        3

<PAGE>   4

    Throughout the decade of the 1970's, conversion from break bulk shipping
methods to containers gained momentum in an environment of generally robust
growth in world trade (except during the 1975-76 world-wide recession). Both
shipping lines and container leasing companies responded to this growing market
demand with major container purchases, while container manufacturers
substantially boosted production capacity.

    During the early and mid-1980's, the container industry encountered
alternating periods of slow trade growth, creating excess container capacity,
followed by periods of economic recovery. From the late 1980s to 1991, the
container industry generally experienced a balance in supply and demand for
equipment. In 1992, companies embarked on ambitious container production
programs encouraged by positive economic forecasts and the profitability of the
industry in previous years. This produced an oversupply of containers as some of
the major world economies slipped into recession and ocean carriers and leasing
companies built up large container inventories. During 1993, container
purchasing declined, generally helping to reduce the oversupply of containers.

    During 1994 and 1995, the world's major industrialized nations emerged from
a global economic recession. Consequently, excess equipment inventories that had
resulted from the sluggish growth in world trade during 1992 and 1993, as well
as increased production capacity, were absorbed. Since 1995, the container
industry's fleet grew from a size of approximately nine million TEU to
approximately 10 million TEU, equivalent to a growth of almost 11%, representing
one of the industry's largest fleet expansions to date. The primary factor
driving demand during 1995 and 1996 has been the steady introduction of new
containership tonnage, which grew at a rate comparable to the container
industry's fleet. However, the growth in the container industry's fleet, as well
as containership tonnage, outpaced increases in worldwide containerized trade,
estimated to be approximately 8%-10% during 1995 and 6-7% during 1996. As a
result, a general surplus capacity arose, in both containership tonnage and
containers, contributing to the current recession that has impacted the
container leasing industry. Additionally, during 1995 and 1996, container prices
steadily declined to levels not seen in a decade, resulting in ocean carriers
purchasing containers for their own account, further reducing the demand for
leased containers and since mid-1995, contributing to a decline in container
utilization and per-diem rental rates throughout the container leasing industry.

    The Registrant believes that growth of containerization will continue in
subsequent years for the following reasons:

    o   Lower freight rates resulting from containerization are generating new
        cargos that previously were not economical to export. Containerization
        provides inexpensive, timely and secure transport to manufacturers
        allowing them to take advantage of regional opportunities in technology
        or labor, and to move products to different locations at various stages
        of production;

    o   Intermodal traffic is expected to continue to grow, and industrialized
        countries are continuing to improve intermodal infrastructure (i.e.,
        railways, roads and ports);

    o   Shippers continue to demand transportation of cargo by containers rather
        than break-bulk;

    o   Countries with rapidly-growing economies in emerging markets are
        continuing to build new container port facilities that accommodate an
        increased flow of containerized trade; and

    o   Recent trade agreements, such as the North American Free Trade Agreement
        ("NAFTA") and the General Agreement on Tariffs and Trade ("GATT"),
        should further stimulate world trade, and, therefore containerized
        trade.

    The container leasing industry has been a significant contributor to the
growth of containerization, and, in 1996, had an approximately 46% share of the
total world container fleet with ocean carriers holding most of the remainder.
To an ocean carrier, the primary benefits of leasing rather than owning
containers are the following:

    o   Reduced Capital Expenditures. Leasing is an attractive option to ocean
        carriers because ownership of containers requires significant capital
        expenditures. Carriers constantly evaluate their investment strategy,
        with container purchasing competing directly with other expenditure
        requirements, such as ship purchases, ship conversions and terminal
        improvements. Container leasing allows ocean carriers to invest capital
        in assets that are more central to their business.

                                               4

<PAGE>   5

    o   Improved Asset Management. Trade flow imbalances and seasonal demands
        frequently leave ocean carriers with regional surpluses or shortages of
        containers, requiring costly repositioning of empty containers. Leasing
        companies help ocean carriers manage these trade imbalances by providing
        the inventory to service demand, reducing the costs of maintaining local
        inventories and minimizing repositioning expenses. By matching different
        carriers' container needs, leasing companies can reduce their own risks
        of container inventory imbalances and seasonality through a portfolio of
        lessees as well as variations in lease terms.

    o   Increased Container Fleet Flexibility. Ocean carriers benefit from the
        variety of lease types offered by leasing companies such as the master
        lease, long-term and short-term lease and direct financing lease. These
        various leases give ocean carriers flexibility in sizing their fleets
        while minimizing capital costs. For example, master lease agreements
        give ocean carriers the option of adjusting the size of their fleets,
        with the flexibility to pick-up and drop-off containers at various
        locations around the world.

    Dry cargo containers are the most-commonly used type of container in the
shipping industry. The Registrant's dry cargo container fleet is constructed of
all Corten(R) steel (Corten(R) roofs, walls, doors and undercarriage), a
high-tensile steel yielding greater damage and corrosion resistance than mild
steel.

    Refrigerated containers are used to transport temperature-sensitive products
such as meat, fruit, vegetables and photographic film. All of the Registrant's
refrigerated containers have high-grade stainless steel interiors. The
Registrant's 20-foot refrigerated containers have high-grade stainless steel
walls, while the Registrant's 40-foot refrigerated containers are steel framed
with aluminum outer walls to reduce weight. As with the dry cargo containers,
all refrigerated containers are designed to minimize repair and maintenance and
maximize damage resistance. The Registrant's refrigerated containers are
designed and manufactured to include the latest generation refrigeration
equipment, with modular microprocessors controlling and monitoring the
container.

    The Registrant's tank containers are constructed in compliance with
International Maritime Organization ("IMO") standards and recommendations. The
tanks purchased by the Registrant are all IMO-1 type tanks, constructed to
comply with IMO recommendations which require specific pressure ratings and
shell thicknesses. These containers are designed to carry highly-inflammable
materials, corrosives, toxics and oxidizing substances, but are also capable of
carrying non-hazardous materials and foodstuffs. They have a capacity of
21,000-24,000 liters and are insulated and equipped with steam and/or electrical
heating.

    The Registrant's containers are leased primarily to ocean-going steamship
companies operating in major trade routes (see Item 1(d)). Most if not all of
the Registrant's marine dry cargo containers are leased pursuant to operating
leases, primarily master leases, where the containers are leased to the ocean
carrier on a daily basis for any desired length of time, with the flexibility of
picking up and dropping off containers at various agreed upon locations around
the world and, secondarily, term leases (1-5 years) and one-way or round-trip
leases. Special purpose containers acquired by the Registrant, including
refrigerated and tank containers, are generally committed to term leases, where
the high cost of interchanging the higher value specialized container makes
master lease agreements less attractive to customers.

    Master lease agreements. A master lease is designed to provide greater
flexibility by allowing customers to pick-up and drop-off containers where and
when needed, subject to restrictions and availability, on pre-agreed terms. The
commercial terms of master leases are generally negotiated annually. Master
leases also define the number of containers that may be returned within each
calendar month and the return locations and applicable drop-off charges. Because
of the increased flexibility they offer, master leases usually command higher
per-diem rates and generate more ancillary fees (including pick-up, drop-off,
handling and off-hire fees) than term leases.

    Term lease agreements. Term lease agreements include short-term and
long-term leases. Long-term lease agreements define the number of containers to
be leased, the pick-up and drop-off locations, the applicable per-diem rate for
the duration of the lease and the early termination penalties that may apply in
the event of early redelivery. Ocean carriers use long-term leases when they
have a need for identified containers for a specified term. Long-term leases
usually are not terminated early by the customer and provide the Registrant with
stable and relatively predictable sources of revenue, although per-diem rates
and ancillary charges are lower under long-term leases than under master lease
agreements. Short-term lease agreements have a duration of less than one year
and include one-way, repositioning and round-trip leases. They differ from
master leases in that they define the number and the term of containers to be
leased. Ocean carriers use one-way leases to manage trade imbalances (where more
containerized cargo moves in one direction than another) by picking up a
container in one port and dropping it off at another after one or more legs of a
voyage. Except for direct financing leases, lease rates typically are highest
for short-term leases.

                                        5

<PAGE>   6

    Under these leases, customers are responsible for paying all taxes and
service charges arising from container use, maintaining the containers in good
and safe operating condition while on lease and paying for repairs upon
redelivery, other than ordinary wear and tear. Some leases provide for a "damage
protection plan" whereby lessees, for an additional payment (which may be in the
form of a higher per-diem rate), are relieved of the responsibility of paying
some of the repair costs upon redelivery of the containers. The Leasing Company
has historically provided this service on a limited basis to selected customers.
Repairs provided under such plans are carried out by the same depots, under the
same procedures, as are repairs to containers not covered by such plans.
Customers also are required to insure leased containers against physical damage
and loss, and against third party liability for loss, damage, bodily injury or
death.

    All containers are inspected and repaired when redelivered by a customer,
and customers are obligated to pay for all damage repair, excluding wear and
tear, according to standardized industry guidelines. Depots in major port areas
perform repair and maintenance which is verified by independent surveyors or the
Leasing Company's technical and operations staff.

    Before any repair or refurbishment is authorized on older containers in the
Registrant's fleet, the Leasing Company's technical and operations staff reviews
the age, condition and type of container and its suitability for continued
leasing. The Leasing Company compares the cost of such repair or refurbishment
with the prevailing market resale price that might be obtained for that
container and makes the appropriate decision whether to repair or sell the
container.

    The non-cancelable terms of the operating leases of the Registrant's
containers will not be sufficient to return to the Registrant as lessor the
purchase price of the equipment. In order to recover the original investment in
the equipment and achieve an adequate return thereon, it is necessary to renew
the lease, lease the equipment to another lessee at the end of the initial lease
term, or sell the equipment.

    The Registrant estimates that a dry cargo or refrigerated container may be
used as a leased marine cargo container for a period ranging from 10 to 15
years. Tank containers generally may be used for 12 to 18 years. The Registrant
disposes of used containers in a worldwide market for used containers in which
buyers include wholesalers, mini-storage operators, construction companies and
others. The market for used refrigerated and tank containers is not as developed
as the market for used dry cargo containers. Although used refrigerated and tank
containers will command a higher price than a dry cargo container, a dry cargo
container will bring a higher percentage of its original price. As the
Registrant's fleet ages, a larger proportion of its revenues will be derived
from selling its containers.

                                        6

<PAGE>   7

    Of the 3,477 twenty-foot, 750 forty-foot and 460 forty-foot high-cube marine
dry cargo containers, the 90 twenty-foot and 300 forty-foot refrigerated marine
cargo containers, and the 52 twenty-four thousand liter tanks owned by the
Registrant as of December 31, 1996, 2,916 twenty-foot (or 84% thereof), 430
forty-foot (or 57% thereof) and 417 forty-foot high-cube marine dry cargo
containers (or 91% thereof), 81 twenty-foot (or 90% thereof) and 221 forty-foot
refrigerated containers (or 74% thereof), and 46 twenty-four thousand liter
tanks (or 88% thereof) were on lease. The following table sets forth the
information on the lease terms with respect to the containers on lease:

<TABLE>
<CAPTION>
                                                Number of
                                                Containers
     <S>                                        <C>                          
     20-Foot Dry Cargo Containers:
       Term Leases                                 899
       Master Leases                             2,017

     40-Foot Dry Cargo Containers:
       Term Leases                                 215
       Master Leases                               215

     40-Foot High-Cube Dry Cargo Containers:
       Term Leases                                 100
       Master Leases                               317

     20-Foot Refrigerated Cargo Containers:
       Term Leases                                  40
       Master Leases                                41

     40-Foot Refrigerated Cargo Containers:
       Term Leases                                 221
       Master Leases                                --

     24,000-Liter Tank Containers:
       Term Leases                                  41
       Master Leases                                 5
</TABLE>

    The Leasing Company will make payments to the Registrant based upon rentals
collected from ocean carriers after deducting certain operating expenses
associated with the containers, such as the base management fee payable to the
Leasing Company, certain expense reimbursements to CCC, the Leasing Company, and
its affiliates, the costs of maintenance and repairs not performed by lessees,
independent agent fees and expenses, depot expenses for handling, inspection and
storage, and additional insurance.

    The Registrant's sales and marketing operations are conducted through the
Leasing Company, in the United Kingdom, with support provided by area offices
and dedicated agents located in San Francisco, California; Iselin, New Jersey;
Windsor, England; Hamburg; Antwerp; Auckland; Genoa; Singapore; Hong Kong;
Sydney; Tokyo; Taipei; Seoul; Rio de Janeiro; and Shanghai. Each of the Leasing
Company's area offices and dedicated agents is staffed with local people
familiar with the customers and language of the region. The Leasing Company's
marketing directors have been employed in the container industry in their
respective regions for an average of 16 years, building direct personal
relationships with the local ocean carriers and locally based representatives of
other ocean carriers.

    The Leasing Company also maintains agency relationships with over 40
independent agents around the world, who are generally paid a commission based
upon the amount of revenues they generate in the region or the number of
containers that are leased from their area on behalf of the Registrant. They are
located in jurisdictions where the volume of the Leasing Company's business
necessitates a presence in the area but is not sufficient to justify a
fully-functioning Leasing Company office or dedicated agent. These agents
provide marketing support to the area offices covering the region, together with
limited operational support.

                                        7

<PAGE>   8

    In addition, the Leasing Company relies on the services of over 350
independently-owned and operated depots around the world to inspect, repair,
maintain and store containers while off-hire. The Leasing Company's area offices
authorize all container movements into and out of the depot and supervise all
repair and maintenance performed by the depot. The Leasing Company's technical
staff sets the standards for repair of its owned and managed fleet throughout
the world and monitors the quality of depot repair work. The depots provide a
vital link to the Leasing Company's operations, as the redelivery of a container
into a depot is the point at which the container is off-hired from one customer
and repaired in preparation for releasing to the next, and the point when the
Leasing Company's area offices report the container's movements onto the Leasing
Company's equipment tracking system. The Leasing Company's computer system has
the capability to accommodate future developments, such as allowing depots
access to record directly on the system the on-hire and off-hire activity of
containers delivered into the depot. It also has the capability of verifying the
terms of redelivery authorized by the area offices. These functions are
currently being performed by the Leasing Company's area offices.

    (c)(1)(ii) Inapplicable.

    (c)(1)(iii) Inapplicable.

    (c)(1)(iv) Inapplicable.

    (c)(1)(v) The Registrant's containers are leased globally, therefore,
seasonal fluctuations are minimal. Other economic and business factors to which
the transportation industry in general and the container leasing industry in
particular are subject, include fluctuations in supply and demand for equipment
resulting from, among other things, obsolescence, changes in the methods or
economics of a particular mode of transportation or changes in governmental
regulations or safety standards.

    (c)(1)(vi) The Registrant established a working capital reserve of
approximately 1% of subscription proceeds raised. In addition, the Registrant
may reserve additional amounts from anticipated cash distributions to the
partners to meet working capital requirements.

    Amounts due under master leases are calculated at the end of each month and
billed approximately six to eight days thereafter. Amounts due under short-term
and long-term leases are set forth in the respective lease agreements and are
generally payable monthly. Past due penalties are not customarily collected from
lessees, and accordingly are not generally levied by the Leasing Company against
lessees of the Registrant's containers.

    (c)(1)(vii) One lessee contributed approximately 11.2% ($210,114) of the
rental revenue earned during 1996. The Registrant does not believe that its
ongoing business is dependent upon a single customer, although the loss of one
or more of its largest customers could have an adverse effect upon its business.

    (c)(1)(viii) Inapplicable.

    (c)(1)(ix) Inapplicable.

    (c)(1)(x) Competition among container leasing companies is based upon
several factors, including the location and availability of inventory, lease
rates, the type, quality and condition of the containers, the quality and
flexibility of the service offered and the confidence in and professional
relationship with the lessor. Other factors include the speed with which a
leasing company can prepare its containers for lease and the ease with which a
lessee believes it can do business with a lessor or its local area office. The
Leasing Company believes that it, on behalf of the Registrant, competes
favorably on all of these factors.

    The Leasing Company, on behalf of the Registrant, competes with various
container leasing companies in the markets in which it conducts business,
including Genstar Container Corp., Transamerica Leasing, Triton Container
International Ltd., Textainer Corp. and others. In a series of recent
consolidations, one of the major leasing companies, as well as some smaller
ones, have been acquired by competitors. It is estimated that at the end of
1996, the ten largest leasing companies (including the Leasing Company)
represented 93% of the global leased fleet. Genstar Container Corp. and
Transamerica Leasing, the two largest container leasing companies, had
approximately 47% of the worldwide leased container fleet at the end of 1996.

                                        8

<PAGE>   9

Some of the Leasing Company's competitors have greater financial resources than
the Leasing Company and may be more capable of offering lower per-diem rates on
a larger fleet. In the Leasing Company's experience, however, ocean carriers
will generally lease containers from more than one leasing company in order to
minimize dependence on a single supplier.

In addition, not all container leasing companies compete in the same market, as
some supply only dry cargo containers and not specialized containers, while
others offer only long-term leasing.

    (c)(1)(xi) Inapplicable.

    (c)(1)(xii) Environmental Matters

    A portion of the Registrant's equipment portfolio consists of special
purpose containers, primarily refrigerated containers. Historically,
refrigerated containers have utilized a refrigerant gas which is a
chlorofluorocarbon ("CFC") compound. It is generally assumed that CFCs are
harmful to the Earth's ozone layer when released into the atmosphere. Many
nations, including the United States, have taken action, both collectively and
individually, to regulate CFCs. These nations set various targets for the
reduction in production and use of CFCs starting as early as 1993, and their
eventual elimination. There has been substantial progress recently to determine
a viable substitute for the refrigerant used in containers, such that both the
Leasing Company and the container leasing industry association have selected a
replacement refrigerant. Production of new container refrigeration units
operating with the replacement refrigerant became generally available in 1993.
All refrigerated containers purchased by the Partnership contain the new
refrigerant compound and comply with all current environmental regulations.

    Under the state and Federal laws of the United States, and possibly under
the laws of other nations, the owner of a container may be liable for
environmental damage and/or cleanup and/or other sums in the event of actual or
threatened discharge or other contamination by material in a container. This
liability may be imposed on a container owner, such as the Registrant, even if
the owner is not at fault. The Leasing Company intends, subject to availability
and prevailing market conditions, to obtain insurance on behalf of the
Registrant against these risks on such terms and in such amounts as the Leasing
Company deems reasonable. In addition, subject to availability and applicable
insurance and container industry market conditions, the Leasing Company intends
to require lessees of containers to obtain insurance which protects against
these risks and further to compel lessees to indemnify and defend the Registrant
in the case of an occurrence giving rise to possible liability under applicable
environmental laws.

    (c)(1)(xiii) The Registrant, as a limited partnership, is managed by CCC,
the general partner, and accordingly does not itself have any employees. CCC has
27 employees, consisting of 4 officers, 5 other managers and 18 clerical and
staff personnel.

    (d) Financial Information about Foreign and Domestic Operations and Export
Sales

    The Registrant's business is not divided between foreign or domestic
operations. The Registrant's business is the leasing of containers worldwide to
ocean-going steamship companies. To this extent, the Registrant's operations are
subject to the fluctuations of worldwide economic and political conditions that
may affect the pattern and levels of world trade.

    Rental income from leases to foreign customers exceeded 90% of the
Registrant's total rental income for the year 1996. The Registrant 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 Leasing
Company's leases generally require all payments to be made in United States
currency.

                                        9

<PAGE>   10

Item 2. Properties

    Pursuant to undertakings made in Section 7.2 (h) of the Partnership
Agreement in its Registration Statement No. 33- 69356, the Registrant purchased
the following types of container rental equipment through December 31, 1996:

<TABLE>
<CAPTION>
                                                             Purchased                    Registrant's
                                       Purchased from      from Container      Total      Average Cost
        Equipment Type              the General Partner    Manufacturers     Purchased    Per Container
        --------------              -------------------    --------------    ---------    -------------
     <S>                                     <C>               <C>              <C>       <C> 
     Dry Cargo Containers:
       Twenty-foot units                      --               3,477            3,477      $ 2,371
       Forty-foot units                       --                 750              750      $ 3,440
       Forty-foot high-cube units             --                 460              460      $ 3,878
     Refrigerated Cargo Containers:
       Twenty-foot units                      --                  90               90      $21,108
       Forty-foot high-cube units             --                 300              300      $25,655
     Tank Containers:
       24,000-liter units                     --                  52               52      $25,393
</TABLE>

    The aggregate purchase price (excluding acquisition fees) of the container
rental equipment acquired by the Registrant through December 31, 1996, was
$23,523,570, of which $23,182,084 was paid from the net proceeds of this
offering, and $341,486 remained payable to equipment manufacturers. Of this
equipment, $23,523,570 thereof had been acquired from third-party container
manufacturers located in Taiwan, South Korea, India, Indonesia, the People's
Republic of China, Italy, and the United Kingdom.

    Utilization by lessees of the Registrant's containers fluctuates over time
depending on the supply of and demand for containers in the Registrant's
inventory locations. During 1996, utilization of the dry cargo and refrigerated
container fleet averaged 57% and 66%, respectively.

Item 3. Legal Proceedings

    As reported by the Registrant in its Current Report on Form 8-K, filed with
the SEC on February 7, 1997, as amended February 26, 1997, on February 3, 1997,
Arthur Andersen, London, England, resigned as auditors of the Holding Company
(The Cronos Group). In its letter of resignation, Arthur Andersen states that it
was unable to obtain adequate information in response to inquiries it had made
in connection with its audit of the Holding Company for the year ended December
31, 1996. In connection with its resignation, Arthur Andersen also prepared a
report pursuant to the provisions of Section 10A(b)(2) of the Securities
Exchange Act of 1934, as amended, for filing by the Holding Company with the
SEC.

    Following the report of Arthur Andersen, the SEC, on February 10, 1997,
commenced a private investigation of the Holding Company for the purpose of
investigating the matters discussed in such report and related matters. CCC does
not believe that the focus of the SEC's investigation is upon the Registrant or
CCC. CCC is unable at this time to predict the outcome of the SEC's private
investigation of the Holding Company.

Item 4. Submission of Matters to a Vote of Security Holders

    Inapplicable.

                                       10

<PAGE>   11

                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters

    (a) Market Information

    (a)(1)(i) The Registrant's outstanding units of limited partnership
interests are not traded on any market nor does an established public trading
market exist for such purposes.

    (a)(1)(ii) Inapplicable.

    (a)(1)(iii) Inapplicable.

    (a)(1)(iv) Inapplicable.

    (a)(1)(v) Inapplicable.

    (a)(2) Inapplicable.

    (b) Holders

<TABLE>
<CAPTION>
                                                   Number of Unit Holders
    (b)(1)    Title of Class                         as of December 31, 1996
             --------------                        ------------------------
          <S>                                               <C> 
          Units of limited partnership
             interests                                      1,657
</TABLE>

    (c) Dividends

    Inapplicable. For the distributions made by the Registrant to its limited
partners, see Item 6 below, "Selected Financial Data."

                                       11

<PAGE>   12

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                                  For the period March 29, 1996
                                                   (Commencement of Operations)
                                                       to December 31, 1996
     <S>                                                  <C>         
     Net lease revenue                                    $ 1,270,940
     Net earnings                                         $   384,407
     Net earnings per unit of
          limited partnership interest                    $      0.37
     Cash distributions per unit of
          limited partnership interest                    $      0.67
     At year-end:
     Total assets                                         $26,000,310
     Partners' capital                                    $25,641,525
</TABLE>

 ......................

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Liquidity and Capital Resources

    The Registrant's primary objective is to generate cash flow from operations
for distribution to its limited partners. Aside from the initial working capital
reserve retained from gross subscription proceeds (equal to approximately 1% of
such Proceeds), the Registrant relies primarily on net lease revenue receipts to
meet this objective. No credit lines are maintained to finance working capital.

    The Registrant initiated its offering of limited partnership interests to
the public subsequent to December 28, 1995. The Registrant commenced operations
on March 29, 1996 when the minimum subscription proceeds of $2,000,000 were
obtained from at least 100 subscribers (excluding from such count, Pennsylvania
residents, the General Partner, and affiliates of the General Partner). At
December 31, 1996, the Registrant had raised $30,061,380 through the offering of
limited partnership interests, from which it had paid brokerage commissions,
reimbursed the General Partner for public offering expenses, and purchased
equipment.

    As reported in the Registrant's Current Report on Form 8-K and Amendment No.
1 to Current Report on Form 8-K, filed with the Commission on February 6, 1997
and February 26, 1997, respectively, Arthur Andersen, London, England, resigned
as auditors of The Cronos Group, a Luxembourg Corporation headquartered in
Orchard Lea, England (the "Parent Company"), on February 3, 1997.

    The Parent Company is the indirect corporate parent of Cronos Capital Corp.,
the General Partner of the Registrant. In its letter of resignation to the
Parent Company, Arthur Andersen states that it resigned as auditors of the
Parent Company and all other entities affiliated with the Parent Company. While
its letter of resignation was not addressed to the General Partner of the
Registrant, Arthur Andersen confirmed to the General Partner that its
resignation as auditors of the entities referred to in its letter of resignation
included its resignation as auditors of Cronos Capital Corp. and the Registrant.

    The Registrant retained a new auditor, Moore Stephens, P.C., on April 10,
1997, as reported in its Current Report on Form 8-K, filed April 14, 1997.

                                       12

<PAGE>   13

    The Registrant does not, at this time, have sufficient information to
respond to the concerns raised by Arthur Andersen with respect to its 1996 audit
of the Parent Company or the impact, if any, these concerns may have on the
future operating results and financial condition of the Registrant or the
General Partner's and Leasing Company's ability to manage the Registrant's
business and fleet in subsequent periods. However, the General Partner of the
Registrant does not believe, based upon the information currently available to
it, that Arthur Andersen's resignation was triggered by any concern over the
accounting policies and procedures followed by the Registrant.

    Nevertheless, pending clarification of the concerns expressed by Arthur
Andersen in its letter of resignation, clarification of the corporate governance
of the Parent Company, and the appointment of new auditors for the General
Partners and the Registrant, the General Partner suspended the offer and sale of
Units in the Registrant, effective February 3, 1997.

    Arthur Andersen's report on the financial statements of Cronos Capital
Corp., for either of the past two years, has not contained an adverse opinion or
a disclaimer of opinion, nor was any such report qualified or modified as to
uncertainty, audit scope, or accounting principles. Additionally, Arthur
Andersen's report on the balance sheet of the Registrant for the prior year, did
not contain an adverse opinion or a disclaimer of opinion, nor was any such
report qualified or modified as to uncertainty, audit scope, or accounting
principles.

    Since the Registrant's inception and the subsequent interim period preceding
Arthur Andersen's resignation, there have been no disagreements between Cronos
Capital Corp. or the Registrant and Arthur Andersen on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure.

    The Registrant's cash balances as of December 31, 1996 included the unused
proceeds of the offering, $1,032,370, together with interest earned thereon and
amounts reserved as working capital. The following table sets forth the use of
said subscription proceeds as of May 31, 1997.

<TABLE>
<CAPTION>
                                                                  Percentage of
                                                    Amount        Gross Proceeds
                                                 -----------      --------------
     <S>                                                         <C>   
     Gross Subscription Proceeds                 $31,993,340            100.0%

     Public Offering Expenses:
         Underwriting Commissions                $ 3,199,334             10.0%
         Offering and Organization Expenses      $ 1,481,117              4.6%
                                                 -----------      -----------

         Total Public Offering Expenses          $ 4,680,451             14.6%
                                                 -----------      -----------

     Net Proceeds                                $27,312,889             85.4%

     Acquisition Fees                            $ 1,266,834              4.0%

     Working Capital Reserve                     $   319,933              1.0%

     Unexpended Proceeds                         $   389,448              1.2%
                                                 -----------      -----------

     Gross Proceeds Invested in Equipment        $25,336,674             79.2%
                                                 ===========      ===========
</TABLE>

    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 payable by the Leasing Company to the
Registrant. During the Registrant's first year of operations, and pending the
build-up of the Registrant's fleet of equipment, the general partner and its
affiliates have agreed to defer the deduction of all base management fees and
reimbursable administrative expenses from the leasing receivables due to the
Registrant. At December 31, 1996, these deferred fees and expenses totaled
$226,994.

                                       13

<PAGE>   14

    To date, the Registrant has not sought a bridge loan from any unaffiliated
commercial lending source to allow the Registrant to take advantage of equipment
purchasing opportunities. The Registrant may rely upon long-term financing to
purchase a portion of its equipment. The amount of long-term borrowing secured
by the Registrant will not exceed 20% of the aggregate purchase price of the
Registrant's equipment. Once the Registrant completes its acquisition of
equipment, the Registrant intends to maintain an ongoing reserve approximately
equal to the greater of 1% of gross proceeds, or $100,000, to meet anticipated
expenses of managing the equipment. The level of reserves will vary from time to
time depending upon market conditions and the anticipated needs of the
Registrant. The Registrant will not reinvest its revenues for the purchase of
additional equipment. Pending expenditure for operations or distribution to the
partners, these amounts may be invested in short-term, liquid investments.

    Cash distributions from operations are allocated 5% to the general partner
and 95% to the limited partners. Distributions of sales proceeds are allocated
1% to the general partner and 99% to the limited partners. This sharing
arrangement will remain in place until the limited partners have received
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 distributions will be allocated 15% to the
general partner and 85% to the limited partners, pursuant to Section 6.1(b) of
the Partnership Agreement. Cash distribution from operations to the general
partner in excess of 5% of distributable cash will be considered an incentive
fee and compensation to the general partner.

    From inception through February 28, 1997, the Registrant has distributed
$633,044 in cash from operations to its limited partners, equivalent to 2% of
the Registrant's original limited partners' investment. Distributions are paid
monthly based primarily on each quarter's cash flow from operations. Monthly
distributions are also affected by periodic increases or decreases to working
capital reserves, as deemed appropriate by the general partner.

    Indicative of the cyclical nature of the container leasing business, the
container lease market has followed a general downward trend since mid-1995.
This downturn can be attributed to a fall in growth of containerized export
trade from key markets in Asia and the impact resulting from a build-up of
surplus containers at former high-demand locations. Leasing companies purchased
record amounts of containers in 1994 and 1995, while purchasing a smaller number
than ocean carriers and transport companies in 1996. During 1996, ocean carriers
and other transport companies moved away from leasing containers outright, as
declining container prices, favorable interest rates and the abundance of
available capital resulted in ocean carriers and transport companies purchasing
a larger share of equipment for their own account. This situation has
characterized the latest industry downturn. These leasing market conditions are
expected to continue throughout 1997, impacting the Registrant's liquidity and
capital resources.

Results of Operations

1996 - 1995

    The Registrant did not commence operations until March 29, 1996, therefore a
discussion of comparative periods cannot be made. For the period March 29, 1996
to December 31, 1996, the Registrant's net earnings were $384,407, comprised of
net lease revenue, less depreciation and amortization of $913,432, as well as
other general and administrative expenses and interest income.

    The Registrant's net lease revenue is determined by deducting direct
operating expenses, management fees and reimbursed administrative expenses, from
the rental revenues billed by the Leasing Company from the leasing of the
Registrant's containers. The Registrant's net lease revenue is directly related
to the size of its fleet, as well as the utilization and lease rates of the
equipment owned by the Registrant. Direct operating expenses include
repositioning costs, storage and handling expenses, agent fees and insurance
premiums, as well as provisions for doubtful accounts and repair costs for
containers covered under damage protection plans. Direct operating costs are
affected by the quantity of off-hire containers as well as the frequency at
which the containers are redelivered.

                                       14

<PAGE>   15

    The Registrant's fleet size, as measured in twenty-foot equivalent units
("TEU"), and average utilization rates at March 31, 1996, June 30, 1996,
September 30, 1996 and December 31, 1996 were as follows:

<TABLE>
<CAPTION>
                                        March 31,    June 30,  September 30,  December 31,
                                          1996         1996        1996          1996
                                        --------     --------  -------------  ------------
     <S>                                <C>           <C>          <C>          <C> 
     Fleet size (measured in 
       twenty-foot equivalent 
       units (TEU)):         
           Dry cargo containers            600        4,386        5,095        5,897
           Refrigerated containers         235          490          690          690
           Tank containers                  17           48           52           52
     Average utilization:
           Dry cargo containers           15.5%        63.4%        70.4%        79.1%
           Refrigerated containers         -  %        88.7%        52.3%        76.9%
           Tank containers                 -  %        75.0%        88.5%        88.5%
</TABLE>

    The Registrant commenced its operations during a period that was impacted by
a fall in growth of containerized export trade from key Asian markets, resulting
in sluggish container leasing market conditions. Also contributing to the
sluggish container leasing market conditions were declining container prices,
favorable interest rates and an abundance of available capital, which resulted
in ocean carriers and transport companies purchasing a larger share of
containers for their own account, reducing the demand for leased containers.
Once the demand for leased containers began to fall, per-diem rental rates were
also adversely affected. In order to counter these market conditions, the
Leasing Company implemented various marketing strategies during 1996, including
but not limited to, offering incentives to shipping companies, repositioning
containers to high demand locations and focusing towards term leases and other
leasing opportunities, including the leasing of containers for local storage.

    As the leasing industry's equipment moved into surplus, ocean carriers and
transport companies became increasingly selective about the age and condition of
containers taken on-hire. Many have adopted a policy of only leasing containers
of a certain age or less. It has been the Registrant's experience that in
periods of weak demand, many lessees insist on equipment three to five years of
age. Such criteria currently serves as a barrier to older equipment being taken
on-hire, but did not materially impact the leasing opportunities of the
Registrant's fleet, which averaged less than one year of age at December 31,
1996, or its results of operations. Currently, there are no visible signs of
improvement in the container leasing market, and, hence, further downward
pressure on rental rates and utilization can be expected in 1997. As a result,
these leasing market conditions should restrain the Registrant's results from
operations during 1997.

1995 - 1994

Since the Registrant had not broken initial impound, had no securities holders
and was not actually engaged in any trade or business at December 31, 1995, this
discussion is considered not applicable.

Cautionary Statement

    This Annual Report on Form 10-K contains statements relating to future
results of the Registrant, including certain projections and business trends,
that are "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected as a result of certain risks and uncertainties, including but not
limited to changes in: economic conditions; trade policies; demand for and
market acceptance of leased marine cargo containers; competitive utilization and
per-diem rental rate pressures; as well as other risks and uncertainties,
including but not limited to those described in the above discussion of the
marine container leasing business under Item 7., Management's Discussion and
Analysis of Financial Condition and Results of Operations; and those detailed
from time to time in the filings of the Registrant with the Securities and
Exchange Commission.

Item 8. Financial Statements and Supplementary Data

                                       15

<PAGE>   16

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Partners
Cronos Global Income Fund XVI, L.P.:

We have audited the accompanying balance sheet of Cronos Global Income Fund XVI,
L.P., as of December 31, 1996, and the related statements of operations,
partners' capital, and cash flows for the period March 29, 1996 (Commencement of
Operations) to December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cronos Global Income Fund XVI,
L.P. as of December 31, 1996, and the results of its operations and its cash
flows for the period March 29, 1996 (Commencement of Operations) to December 31,
1996, in conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedule 1 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

                                                 Moore Stephens, P.C.
                                                 Certified Public Accountants

New York, New York,
  June 6, 1997

                                       16

<PAGE>   17

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Partners
Cronos Global Income Fund XVI, L.P.:

We have audited the accompanying balance sheet of Cronos Global Income Fund XVI,
L.P., as of December 31, 1995. This financial statement is the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Cronos Global Income Fund XVI,
L.P., as of December 31, 1995, in conformity with generally accepted accounting
principles.

                                                  Arthur Andersen LLP

San Francisco, California,
  March 15, 1996

                                       17

<PAGE>   18

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                                 BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
               Assets                                                     1996              1995
               ------                                                     ----              ----
     <S>                                                             <C>                <C>
     Current assets:
        Cash and cash equivalents, includes $1,755,486 in 1996
           and $-0- in 1995 in interest-bearing accounts (note 2)     $  1,755,884      $        100
        Net lease receivables due from Leasing Company
           (notes 1 and 4)                                                 208,133                --
                                                                      ------------      ------------

              Total current assets                                       1,964,017               100
                                                                      ------------      ------------

     Container rental equipment, at cost                                24,701,402                --
        Less accumulated depreciation                                      894,114                --
                                                                      ------------      ------------
           Net container rental equipment                               23,807,288                --
                                                                      ------------      ------------

     Organizational costs, net (note 3)                                    229,005                --
                                                                      ------------      ------------

                                                                      $ 26,000,310      $        100
                                                                      ============      ============

       Liabilities and Partners' Capital
       ---------------------------------
     Current liabilities:
        Due to general partner (notes 1 and 5)                        $     17,299      $         --
        Container rental equipment purchases payable                       341,486                --
                                                                      ------------      ------------

              Total current liabilities                                    358,785                --
                                                                      ------------      ------------

     Partners' capital (deficit):
        General partner                                                     (1,820)               --
        Limited partners (note 10)                                      25,643,345               100
                                                                      ------------      ------------

              Total partners' capital                                   25,641,525               100
                                                                      ------------      ------------

                                                                      $ 26,000,310      $        100
                                                                      ============      ============
</TABLE>

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

                                       18

<PAGE>   19

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                             STATEMENT OF OPERATIONS

                   FOR THE PERIOD MARCH 29, 1996 (COMMENCEMENT
                       OF OPERATIONS) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                    1996
                                                                    ----
     <S>                                                         <C>    
     Net lease revenue (notes 1 and 8)                           $1,270,940

     Other operating expenses:
        Depreciation and amortization (notes 1 and 3)               913,432
        Other general and administrative expenses                    24,965
                                                                 ----------
                                                                    938,397
                                                                 ----------
              Earnings from operations                              332,543

     Other income:
        Interest income                                              51,864
                                                                 ----------
              Net earnings                                       $  384,407
                                                                 ==========

     Allocation of net earnings:

        General partner                                          $   30,513
        Limited partners                                            353,894
                                                                 ----------

                                                                 $  384,407
                                                                 ==========
     Limited partners' per unit share of net earnings            $      .37
                                                                 ==========
</TABLE>

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

                                       19

<PAGE>   20

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                         STATEMENT OF PARTNERS' CAPITAL

                 FOR THE PERIOD MARCH 29, 1996 (COMMENCEMENT OF
                        OPERATIONS) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                    Limited
                                                    Partners          General
                                                   (note 10)          Partner            Total
                                                 ------------      ------------      ------------
     <S>                                         <C>               <C>               <C>  
     Balances at January 1, 1996                 $        100      $         --      $        100

     Proceeds from sale of partnership units       30,061,280             1,000        30,062,280

     Less:
        Commissions on sale of limited
           partnership units (note 9)              (3,006,138)               --        (3,006,138)
        Offering costs on sale of limited
           partnership units                       (1,132,747)               --        (1,132,747)
                                                 ------------      ------------      ------------
                                                   (4,138,885)               --        (4,138,885)
                                                 ------------      ------------      ------------
     Net earnings                                     353,894            30,513           384,407

     Cash distributions                              (633,044)          (33,333)         (666,377)
                                                 ------------      ------------      ------------

     Balances at December 31, 1996               $ 25,643,345      $     (1,820)     $ 25,641,525
                                                 ============      ============      ============
</TABLE>

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

                                       20

<PAGE>   21

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                             STATEMENT OF CASH FLOWS

                 FOR THE PERIOD MARCH, 29, 1996 (COMMENCEMENT OF
                        OPERATIONS) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                      1996
                                                                      ----
     <S>                                                       <C> 
     Cash flows from operating activities:
        Net earnings                                            $    384,407
        Adjustments to reconcile net earnings to net cash
           provided by (used in) operating activities:
              Depreciation and amortization                          913,432
              Increase in net lease receivables due from
                Leasing Company                                     (209,562)
                                                                ------------  
                Total adjustments                                    703,870
                                                                ------------  
                Net cash provided by operating activities          1,088,277
                                                                ------------

     Cash flows used in investing activities:
        Purchases of container rental equipment                  (23,182,084)
        Acquisition fees paid to general partner                  (1,159,104)
                                                                ------------  
                Net cash used in investing activities            (24,341,188)
                                                                ------------

     Cash flows provided by (used in) financing activities:
        Capital contributions                                     30,062,280
        Underwriting commissions                                  (3,006,138)
        Offering and organizational expenses                      (1,381,070)
        Distributions to partners                                   (666,377)
                                                                ------------

                Net cash provided by financing activities         25,008,695
                                                                ------------

     Net increase in cash and cash equivalents                     1,755,784

     Cash and cash equivalents at beginning at year                      100
                                                                ------------

     Cash and cash equivalents at end of year                   $  1,755,884
                                                                ============
</TABLE>

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

                                       21

<PAGE>   22

                       CRONOS GLOBAL INCOME FUND XVI, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1996 AND 1995

(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.
        Cronos Capital Corp. ("CCC") is the general partner and, with its
        affiliate Cronos Containers Limited (the "Leasing Company"), manages the
        business of the Partnership. 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 terminates December 27, 1997.

        As of December 31, 1996, the Partnership operated 3,477 twenty-foot, 750
        forty-foot and 460 forty-foot high-cube marine dry cargo containers, 90
        twenty-foot and 300 forty-foot refrigerated containers and 52 twenty
        four thousand-liter tanks.

    (b) Leasing Company and Leasing Agent Agreement

        The Partnership has entered into a Leasing Agent Agreement 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; 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.

                                       22

<PAGE>   23

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO 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.

        The preparation of financial statements in conformity with generally
        accepted accounting principles (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 reporting period. Actual results could differ
        from those estimates.


    (d) Allocation of Net Earnings and Partnership Distributions

        Net earnings have been allocated between general and limited partners in
        accordance with the Partnership Agreement.

        Actual cash distributions differ from the allocations of net earnings
        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 the general partner. Sales proceeds are
        allocated 99% to the limited partners and 1% to the general partner. 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 the general partner. Cash distribution from
        operations to the general partner in excess of 5% of distributable cash
        will be considered an incentive fee and compensation to the general
        partner.

    (e) Acquisition Fees

        Pursuant to Article IV Section 4.2 of the Partnership Agreement,
        acquisition fees paid to CCC are based on 5% of the equipment purchase
        price. These fees are capitalized and included in the cost of the rental
        equipment. The fees are payable in full from gross proceeds raised from
        the sale of limited partnership units.

    (f) Container Rental Equipment

        In March 1995, the Financial Accounting Standards Board issued SFAS No.
        121, "Accounting for the Impairment of Long-Lived Assets and for Long
        -Lived Assets to Be Disposed Of." The Statement requires that long-lived
        assets and certain identifiable intangibles to be held and used by an
        entity be reviewed for impairment whenever events or changes in
        circumstances indicate that the carrying amount of an asset may not be
        fully recoverable. The Partnership adopted SFAS No. 121 during 1996. In
        accordance with SFAS 121, container rental equipment is carried at the
        lower of the container rental equipment's original equipment cost,
        including capitalized acquisition fees, or the estimated recoverable
        value of such equipment. There were no reductions to the carrying value
        of container rental equipment during 1996.

        Container rental equipment is depreciated over a twelve-year life on a
        straight line basis to its salvage value, estimated to be 30%.

                                       23

<PAGE>   24

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

    (g) Amortization

        The Partnership's organizational costs will be amortized over 60 months
        on a straight-line basis.

    (h) Underwriting Commissions and Offering Costs

        Underwriting commissions of 10% on the gross proceeds from sale of
        limited partnership units (not applicable to certain sales outside
        California) and other offering costs were deducted in the determination
        of net limited partnership contributions. The commissions were paid to
        Cronos Securities Corp., a wholly-owned subsidiary of CCC, and to other
        broker/dealers who participated in the offering.

     (i) Income Taxes

        The Partnership is not subject to income taxes, consequently no
        provision for income taxes has been made. The Partnership files an
        annual information tax return, prepared on the accrual basis of
        accounting.

    (j) Foreign Operations

        The Partnership's business is not divided between foreign or domestic
        operations. The Partnership's business is the leasing of containers
        worldwide to ocean-going steamship companies and does not fit the
        definition of reportable foreign operations within Financial Accounting
        Standards Board Statement No. 14 "Financial Reporting for Segments of a
        Business Enterprise." Any attempt to separate "foreign" operations from
        "domestic" operations would be dependent on definitions and assumptions
        that are so subjective as to render the information meaningless and
        potentially misleading.

    (k) Financial Statement Presentation

        The Partnership has determined that for accounting purposes the Leasing
        Agent Agreement is a lease, and the receivables, payables, gross
        revenues and operating expenses attributable to the containers managed
        by the Leasing Company are, for accounting purposes, those of the
        Leasing Company and not of the Partnership. Consequently, the
        Partnership's balance sheets and statements of operations display the
        payments to be received by the Partnership from the Leasing Company as
        the Partnership's receivables and revenues.

(2) Cash and Cash Equivalents

    Cash equivalents include highly liquid investments with a maturity of three
    months or less on their acquisition date. Accordingly, cash equivalents are
    carried at cost which approximates fair value. The Partnership maintains its
    cash and cash equivalents in accounts which, at times, may exceed federally
    insured limits. The Partnership has not experienced any losses in such
    accounts and believes it is not exposed to any significant credit risk. The
    Partnership places its cash equivalents in investment grade, short term debt
    instruments and limits the amount of credit exposure to any one commercial
    issuer.

                                       24

<PAGE>   25

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

(3) Organizational Costs, Net

    The Partnership incurred $248,324 in organizational costs during its
    offering period. Amortization of these costs was $19,319 in 1996.

(4) 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 payable by the Leasing Company to the
    Partnership under operating leases to ocean carriers for the containers
    owned by the Partnership. Net lease receivables at December 31, 1996 were as
    follows:

<TABLE>
<CAPTION>
                                                         December 31,
                                                            1996
                                                         -----------   
         <S>                                             <C> 
         Lease receivables, net of doubtful accounts
            of $7,329 in 1996                            $ 755,259
         Less:
         Direct operating payables and accrued expenses    302,271
         Damage protection reserve (note 6)                 17,860
         Base management fees                              124,420
         Reimbursed administrative expenses                102,575
                                                         ---------
                                                         $ 208,133
                                                         =========
</TABLE>

(5) Due to General Partner

    The amounts due to CCC at December 31, 1996 consisted of acquisition fees.

(6) Damage Protection Plan

    The Leasing Company offers a repair service to several lessees of the
    Partnership's containers, whereby the lessee pays an additional rental fee
    for the convenience of having the Partnership incur the repair expense for
    containers damaged while on lease. This fee is recorded as revenue when
    earned according to the terms of the rental contract. A reserve has been
    established to provide for the estimated costs incurred by this service.
    This reserve is a component of net lease receivables due from the Leasing
    Company (see note 4). The Partnership is not responsible in the event repair
    costs exceed predetermined limits, or for repairs that are required for
    damages not defined by the damage protection plan agreement.

                                       25

<PAGE>   26

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

(7) Container Rental Equipment Purchases

    As of December 31, 1996, the Partnership had purchased the following types
    of container rental equipment:

<TABLE>
<CAPTION>
                                                        Purchased from                 Partnership's
                                             Purchased    Container         Total      Average Cost
         Equipment Type                      from CCC    Manufacturers    Purchased    Per Container
         --------------                      ---------  --------------    ---------    -------------
     <S>                                        <C>           <C>            <C>          <C>  
     Dry Cargo Containers:
           Twenty-foot units                      --          3,477          3,477        $ 2,371
           Forty-foot units                       --            750            750        $ 3,440
           Forty-foot high-cube units             --            460            460        $ 3,878

     Refrigerated Cargo Containers:
           Twenty-foot units                      --             90             90        $21,108
           Forty-foot high-cube units             --            300            300        $25,655

     Tank Containers:
           24,000-liter units                     --             52             52        $25,393
</TABLE>

(8) 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 billed by the Leasing Company under
    operating leases to ocean carriers for the containers owned by the
    Partnership. Net lease revenue for the period March 29, 1996 (commencement 
    of operations) to December 31, 1996 was as follows:

<TABLE>
<CAPTION>
                                                                       1996
                                                                       ----
         <S>                                                      <C>  
         Rental revenue (note 12)                                 $1,872,653
         Less:
         Rental equipment operating expenses                         369,101
         Base management fees (note 9)                               130,037
         Reimbursed administrative expenses (note 9)                 102,575
                                                                  ----------
                                                                  $1,270,940
                                                                  ==========
</TABLE>

                                       26

<PAGE>   27

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

(9) Compensation to General Partner and its Affiliates

     Base management fees are equal to 7% of gross lease revenues attributable
     to operating leases pursuant to Section 4.3 of the Partnership Agreement.
     Reimbursed administrative expenses are equal to the costs expended by CCC
     and its affiliates for services necessary to the prudent operation of the
     Partnership pursuant to Section 4.4 of the Partnership Agreement.
     Underwriting commissions are equal to 10% of the gross subscription
     proceeds, less commissions to other broker/dealers. The following
     compensation was paid or will be paid by the Partnership to CCC or its
     affiliates:

<TABLE>
<CAPTION>
                                                                      1996
                                                                      ----
         <S>                                                      <C>  
         Base management fees                                     $  130,037
         Reimbursed administrative expenses                          102,575
         Acquisition fees                                          1,176,403
         Commission on sale of limited partnership units             601,236
                                                                  ----------
                                                                  $2,010,251
                                                                  ==========
</TABLE>

(10) Limited Partners' Capital

    The limited partners' per unit share of capital at December 31, 1996 was
    $17.06. This is calculated by dividing the limited partners' capital at the
    end of 1996 by 1,503,069, the total number of limited partnership units. The
    weighted average number of partnership units used in determining the limited
    partners' per unit share of net earnings at December 31, 1996 was 946,277.


(11) Income Taxes

    The reconciliation of net earnings as reported in the statement of
    operations and as would be reported for federal tax purposes for the year
    ended December 31, 1996 is as follows:

<TABLE>
<CAPTION>
                                                                1996
                                                                ----
     <S>                                                    <C>   
     Net earnings per statement of operations               $   384,407
     Depreciation for income tax purposes in excess
        of depreciation for financial statement purposes     (1,164,336)
     Bad debt expense for financial statement purposes
        in excess of bad debt expense for tax purposes            7,329
     Amortization for income tax purposes in excess
        of amortization for financial statement purposes        (47,550)
                                                            -----------

     Net loss for federal tax purposes                      $  (820,150)
                                                            ===========
</TABLE>

    At December 31, 1996, the tax basis of total partners' capital was
    $24,436,968.


(12) Major Lessees

    No single lessee contributed more than 10% of the rental revenue earned
    during 1996, 1995 and 1994. 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 operating lease
    agreements generally require all payments to be made in United States
    currency. The Partnership's operations are subject to the fluctuations of
    worldwide economic and political conditions that may affect the pattern and
    levels of world trade.

                                       27

<PAGE>   28

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                          NOTES TO FINANCIAL STATEMENTS

(13) Subsequent Events

    As reported in the Partnership's Current Report on Form 8-K and Amendment
    No. 1 to Current Report on Form 8-K, filed with the Commission on February
    6, 1997 and February 26, 1997, respectively, Arthur Andersen, London,
    England, resigned as auditors of The Cronos Group (the "Holding Company") on
    February 3, 1997.

    The Cronos Group is the indirect corporate parent of CCC. In its letter of
    resignation to The Cronos Group, Arthur Andersen states that it resigned as
    auditors of The Cronos Group and all other entities affiliated with The
    Cronos Group. While its letter of resignation was not addressed to CCC,
    Arthur Andersen confirmed to CCC that its resignation as auditors of the
    entities referred to in its letter of resignation included its resignation
    as auditors of CCC and the Partnership. In its letter of resignation, Arthur
    Andersen states that it was unable to obtain adequate information in
    response to inquiries it had made in connection with its audit of the
    Holding Company for the year ended December 31, 1996.

    The Partnership does not, at this time, have sufficient information to
    determine the impact, if any, that the concerns expressed by Arthur Andersen
    in its letter of resignation may have on the future operating results and
    financial condition of the Partnership or the Leasing Company's ability to
    manage the Partnership's fleet in subsequent periods. However, CCC does not
    believe, based upon the information currently available to it, that Arthur
    Andersen's resignation was triggered by any concern over the accounting
    policies and procedures followed by the Partnership.

    Arthur Andersen's report on the financial statements of CCC and the
    Partnership, for the previous year, has not contained an adverse opinion or
    a disclaimer of opinion, nor was any such report qualified or modified as to
    uncertainty, audit scope, or accounting principles.

    During the Partnership's previous fiscal year and the subsequent interim
    period preceding Arthur Andersen's resignation, there have been no
    disagreements between CCC or the Partnership and Arthur Andersen on any
    matter of accounting principles or practices, financial statement
    disclosure, or auditing scope or procedure.

    The Partnership retained a new auditor, Moore Stephens, P.C., on April 10,
    1997, as reported in its current report on Form 8-K, filed April 14, 1997.

    In connection with its resignation, Arthur Andersen also prepared a report
    pursuant to the provisions of Section 10A(b)(2) of the Securities Exchange
    Act of 1934, as amended, for filing by the Holding Company with the
    Securities and Exchange Commission (the "SEC"). Following the report of
    Arthur Andersen, the SEC, on February 10, 1997, commenced a private
    investigation of the Holding Company for the purpose of investigating the
    matters discussed in such report and related matters. The Partnership does
    not believe that the focus of the SEC's investigation is upon the
    Partnership or CCC. CCC is unable to predict the outcome of the SEC's
    private investigation of the Holding Company.

                                       28

<PAGE>   29

                                                                      Schedule 1

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                 SCHEDULE OF REIMBURSED ADMINISTRATIVE EXPENSES
                       PURSUANT TO ARTICLE IV SECTION 4.4
                          OF THE PARTNERSHIP AGREEMENT

                 FOR THE PERIOD MARCH 29, 1996 (COMMENCEMENT OF
                        OPERATIONS) TO DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                     1996
                                                                     ---- 
     <S>                                                           <C>     
     Salaries                                                      $ 47,366
     Other payroll related expenses                                   8,986
     General and administrative expenses                             46,223
                                                                   --------

        Total reimbursed administrative expenses                   $102,575
                                                                   ========
</TABLE>

                  See report of independent public accountants

                                       29

<PAGE>   30

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

    The Registrant's discussion regarding the resignation of its certifying
accountant is included in the Registrant's Report on Form 8-K, dated February 3,
1997 and filed February 6, 1997 and Amendment No. 1 to the Registrant's Report
on Form 8-K, dated February 3, 1997 and filed February 26, 1997, incorporated
herein by reference.

    The Registrant retained a new auditor, Moore Stephens, P.C., on April 10,
1997, as reported in its Current Report on Form 8-K, filed April 14, 1997.

                                       30

<PAGE>   31
 
                                    PART III

Item 10. Directors and Executive Officers of the Registrant

    The Registrant, as such, has no officers or directors, but is managed by
CCC, the general partner. The officers and directors of CCC at June 4, 1997, are
as follows:

<TABLE>
<CAPTION>
         Name                              Office
-------------------     -----------------------------------------------------
<S>                     <C>
Dennis J. Tietz         President, Chief Executive Officer, and Director
John P. McDonald        Vice President/Sales
Elinor Wexler           Vice President/Administration and Secretary
John Kallas             Vice President/Treasurer and Chief Financial Officer
Laurence P. Sargent     Director
Stefan M. Palatin       Director
</TABLE>

    DENNIS J. TIETZ  Mr. Tietz, 44, as President and Chief Executive Officer, is
responsible for the general management of CCC. From 1986 until August 1992, Mr.
Tietz was responsible for the organization, marketing and after-market support
of CCC's investment programs. Mr. Tietz is also President and a director of
Cronos Securities Corp. Mr. Tietz was a regional manager for CCC, responsible
for various container leasing activities in the U.S. and Europe from 1981 to
1986. Prior to joining CCC in December 1981, Mr. Tietz was employed by Trans
Ocean Leasing Corporation as Regional Manager based in Houston, with
responsibility for all leasing and operational activities in the U.S. Gulf.

    Mr. Tietz holds a B.S. degree in Business Administration from San Jose State
University and is a Registered Securities Principal with the NASD.

    JOHN P. MCDONALD  Mr. McDonald, 35, was elected Vice President - National
Sales Manager of CCC in August 1992, with responsibility for marketing CCC's
investment programs. Since 1988, Mr. McDonald had been Regional Marketing
Manager for the Southwestern U.S. From 1983 to 1988, Mr. McDonald held a number
of container leasing positions with CCC, the most recent of which was as Area
Manager for Belgium and the Netherlands, based in Antwerp.

    Mr. McDonald holds a B.S. degree in Business Administration from Bryant
College, Rhode Island. Mr. McDonald is also a Vice President of Cronos
Securities Corp.

    ELINOR A. WEXLER  Ms. Wexler, 48, was elected Vice President -
Administration and Secretary of CCC in August 1992. Ms. Wexler has been employed
by the General Partner since 1987, and is responsible for investor services,
compliance and securities registration. From 1983 to 1987, Ms. Wexler was
Manager of Investor Services for The Robert A. McNeil Corporation, a real estate
syndication company, in San Mateo, California. From 1971 to 1983, Ms. Wexler
held various positions, including securities trader and international research
editor, with Nikko Securities Co., International, based in San Francisco.

    Ms. Wexler attended the University of Oregon, Portland State University and
the Hebrew University of Jerusalem, Israel. Ms. Wexler is also Vice President
and Secretary of Cronos Securities Corp. and a Registered Principal with the
NASD.

    JOHN KALLAS  Mr. Kallas, 34, was elected Vice President/Treasurer and Chief
Financial Officer of CCC in December 1993 and is directly responsible for CCC's
accounting operations and reporting activities. Mr. Kallas has held various
accounting positions since joining CCC in 1989, including Controller, Director
of Accounting and Corporate Accounting Manager. From 1985 to 1989, Mr. Kallas
was an accountant with KPMG Peat Marwick, San Francisco, California.

    Mr. Kallas holds a B.S. degree in Business Administration from the
University of San Francisco and is a certified public accountant. Mr. Kallas is
also Treasurer of Cronos Securities Corp.

                                       31

<PAGE>   32

    LAURENCE P. SARGENT  Mr. Sargent, 67, joined the Board of Directors of CCC
in 1991. Mr. Sargent was a founder of Leasing Partners International ("LPI") and
served as its Managing Director from 1983 until 1991. From 1977 to 1983, Mr.
Sargent held a number of positions with Trans Ocean Leasing Corporation, the
last of which was as a director of its refrigerated container leasing
activities. From 1971 to 1977, Mr. Sargent was employed by SSI Container
Corporation (later Itel Container International), ultimately serving as Vice
President / Far East. Prior to that, Mr. Sargent was a Vice President of Pacific
Intermountain Express, a major U.S. motor carrier, responsible for its bulk
container division. Mr. Sargent holds a B.A. degree from Stanford University.
Mr. Sargent also serves as a director of the Institute of International
Container Lessors ("IICL"), an industry trade association. Mr. Sargent is also a
director of Cronos Securities Corp.

    Mr. Sargent retired as Deputy Chairman of the Group as of January 1, 1996 .
He will remain a director of CCC, The Cronos Group, as well as other various
subsidiaries of The Cronos Group.

    STEFAN M. PALATIN  Mr. Palatin, 43, joined the Board of Directors of CCC in
January 1993. Mr. Palatin is Chairman and CEO of The Cronos Group, and was a
founder of LPI in 1983. From 1980 to 1991, Mr. Palatin was an executive director
of the Contrin Group, which has provided financing to the container leasing
industry, as well as other business ventures, and has sponsored limited
partnerships organized in Austria. From 1977 to 1980, Mr. Palatin was a
consultant to a number of companies in Austria, including Contrin. From 1973 to
1977, Mr. Palatin was a sales manager for Generali AG, the largest insurance
group in Austria.

    Mr. Palatin, who is based in Austria, holds a Doctorate in Business
Administration from the University of Economics and World Trade in Vienna. Mr.
Palatin is also a director of The Cronos Group.

    The key management personnel of the Leasing Company at June 4, 1997, were as
follows:

<TABLE>
<CAPTION>
          Name                                       Title
--------------------------       ----------------------------------------------
<S>                              <C> 
Steve Brocato                    President
Peter J. Younger                 Vice President/Chief Financial Officer
John M. Foy                      Vice President/Americas
Nico Sciacovelli                 Vice President/Europe, Middle East and Africa
Harris H. T. Ho                  Vice President/Asia Pacific
David Heather                    Vice President/Technical Services
John C. Kirby                    Vice President/Operations
J. Gordon Steel                  Vice President/Tank Container Division
</TABLE>

    STEVE BROCATO  Mr. Brocato, 44, was elected President of the Leasing
Company's container division in June 1997, replacing Mr. Nigel J. Stribley, and
is based in the United Kingdom. Mr. Brocato has held various positions since
joining Cronos including, Vice president - Corporate Affairs and Director of
Marketing - Refrigerated Containers for Cronos in North and South America. Prior
to joining Cronos, Mr. Brocato was a Vice President for ICCU Containers from
1983 to 1985 and was responsible for dry cargo container marketing and
operations for the Americas. From 1981 to 1983, he was regional manager for
Trans Ocean leasing Ltd.

    PETER J. YOUNGER  Mr. Younger, 40, was elected Chief Financial Officer of
The Cronos Group in March, 1997, replacing Mr. A. Darrell Ponniah, and is based
in the United Kingdom. Mr. Younger was appointed Vice President and Controller
of Cronos in 1991. He joined IEA in 1987 and served as Director of Accounting
and the Vice President and Controller, based in San Francisco. Prior to 1987,
Mr. Younger was a certified public accountant and a principal with the
accounting firm of Johnson, Glaze and Co. in Salem, Oregon. Mr. Younger holds a
B.S. degree in Business Administration from Western Baptist College.

                                       32

<PAGE>   33

    JOHN M. FOY  Mr. Foy, 51, is directly responsible for the Leasing Company's
lease marketing and operations in North America, Central America, and South
America, and is based in San Francisco. From 1985 to 1993, Mr. Foy was Vice
President/Pacific with responsibility for dry cargo container lease marketing
and operations in the Pacific Basin. From 1977 to 1985 Mr. Foy was Vice
President of Marketing for Nautilus Leasing Services in San Francisco with
responsibility for worldwide leasing activities. From 1974 to 1977, Mr. Foy was
Regional Manager for Flexi-Van Leasing, a container lessor, with responsibility
for container leasing activities in the Western United States. Mr. Foy holds a
B.A. degree in Political Science from University of the Pacific, and a Bachelor
of Foreign Trade from Thunderbird Graduate School of International Management.

    NICO SCIACOVELLI  Mr. Sciacovelli, 47, was elected Vice President - Europe,
Middle East and Africa in June 1997, replacing Mr. Geoffrey Mornard. Mr.
Sciacovelli is directly responsible for the Leasing Company's lease marketing
and operations in Europe, the Middle East and Africa and is based in Italy.
Since joining Cronos in 1983, Mr. Sciacovelli served as Area Director and Area
Manager for Southern Europe. Prior to joining Cronos, Mr. Sciacovelli was a
Sales Manager at Interpool Ltd.

    HARRIS H. T. HO  Mr. Ho, 39, was elected Vice President - Asia Pacific in
June 1997, replacing Mr. Danny Wong. Mr. Ho is directly responsible for the
Leasing Company's lease marketing and operations in Asia, Australia and the
Indian sub-continent and is based in Hong Kong. Since joining Cronos in 1990,
Mr. Ho served as Area Director, Hong Kong and China. Prior to joining Cronos,
Mr. Ho was a Manager at Sea Containers Pacific Ltd and Sea Containers Hong Kong
Limited from 1981 to 1990, responsible for container marketing within Asia. From
1978 to 1981, Mr. Ho was Senior Equipment Controller for Hong Kong Container
Line. Mr. Ho holds a Diploma of Management Studies in Marketing from The Hong
Kong Polytechnic and The Hong Kong Management Association.

    DAVID HEATHER  Mr. Heather, 49, is responsible for all technical and
engineering activities of the fleet managed by the Leasing Company. Mr. Heather
was Technical Director for LPI, based in the United Kingdom, from 1986 to 1991.
From 1980 to 1986, Mr. Heather was employed by ABC Containerline NV as Technical
Manager with technical responsibility for the shipping line's fleet of dry
cargo, refrigerated and other specialized container equipment. From 1974 to
1980, Mr. Heather was Technical Supervisor for ACT Services Ltd., a shipping
line, with responsibility for technical activities related to refrigerated
containers. Mr. Heather holds a Marine Engineering Certificate from Riversdale
Marine Technical College in England.

    JOHN C. KIRBY  Mr. Kirby, 43, is responsible for container purchasing,
contract and billing administration, container repairs and leasing-related
systems, and is based in the United Kingdom. Mr. Kirby joined CCC in 1985 as
European Technical Manager and advanced to Director of European Operations in
1986, a position he held with CCC, and later the Leasing Company, until his
promotion to Vice President/Operations of the Leasing Company in 1992. From 1982
to 1985, Mr. Kirby was employed by CLOU Containers, a container leasing company,
as Technical Manager based in Hamburg, Germany. Mr. Kirby acquired a
professional engineering qualification from the Mid-Essex Technical College in
England.

    J. GORDON STEEL  Mr. Steel, 64, is directly responsible for the overall
lease marketing activity for the Leasing Company's Tank Container Division. From
1990 to 1992, Mr. Steel held the position of Director/General Manager for
Tiphook Container's Tank Division. From 1977 to 1990, Mr. Steel held various
managerial positions, involving manufacturing and transportation of hazardous
materials, with Laporte Industries and ICI, major chemical distribution
companies. Mr. Steel is a qualified Chemical Engineer and attended the Associate
Royal Technical College in Scotland.

                                       33

<PAGE>   34

Item 11. Executive Compensation

    The Registrant commenced monthly distributions to its partners (general and
limited) from distributable cash from operations beginning in the second quarter
of 1996. Such distributions are allocated 95% to the limited partners and 5% to
the general partner. Sales proceeds will be allocated 99% to the limited
partners and 1% to the general partner. The allocations will remain in effect
until such time as the limited partners have received from the Registrant
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 the general partner.

    The Registrant will not pay or reimburse CCC or the Leasing Company for any
remuneration payable by them to their executive officers, directors or any other
controlling persons. However, the Registrant will reimburse the general partner
and the Leasing Company for certain services pursuant to Section 4.4 of the
Partnership Agreement. These services include but are not limited to (i)
salaries and related salary expenses for services which could be performed
directly for the Registrant by independent parties, such as legal, accounting,
transfer agent, data processing, operations, communications, duplicating and
other such services; (ii) performing administrative services necessary to the
prudent operations of the Registrant.

    The following table sets forth the fees the Registrant paid (on a cash
basis) to CCC or the Leasing Company ("CCL") for the year ended December 31,
1996.

<TABLE>
<CAPTION>
                                                                               Cash Fees and
       Name                          Description                               Distributions
       ----                ---------------------------------------------       -------------  
       <S>                 <C>                                                  <C>    

       1) CCC              Acquisition fee - equal to 5% of the                 $1,159,104
                             purchase price of containers acquired
                             by the Registrant pursuant to Section 4.2
                             of the Limited Partnership Agreement

       2) CCL              Base management fees - equal to 7% of gross          $    5,617
                             lease revenues attributable to operating
                             leases pursuant to Section 4.3 of the
                             Limited Partnership Agreement

       3) CCC              Reimbursed administrative expenses                           --
                             equal to the costs expended by
          CCL                CCC and its affiliates for services                        --
                             necessary to the prudent operation
                             of the Registrant pursuant to Section 4.4 of
                             the Limited Partnership Agreement

       4) CCC              Interest in Fund - 5% of distributions of            $   33,333
                             distributable cash for any quarter pursuant
                             to Section 6.1 of the Limited Partnership
                             Agreement

       5) Cronos           Underwriting Commissions - equal to 10%              $  601,236
          Securities         of the gross subscription proceeds, less
          Corp. (a           commissions to other broker/dealers
          wholly-owned       pursuant to Section 4.1 of the Limited
          subsidiary of      Partnership Agreement
          CCC)
</TABLE>

                                       34

<PAGE>   35

Item 12. Security Ownership of Certain Beneficial Owners and Management -
         (Continued)

    (a) Security Ownership of Certain Beneficial Owners

    There is no person or "group" of persons known to management of CCC to be
the beneficial owner of more than five percent of the outstanding units of
limited partnership interests of the Registrant.

    (b) Security Ownership of Management

    The Registrant has no directors or officers. It is managed by CCC. CCC owns
five units, representing 0.000003% of the total amount of units outstanding.

    (c) Changes in Control

    Inapplicable.

Item 13. Certain Relationships and Related Transactions

    (a) Transactions with Management and Others

    The Registrant's only transactions with management and other related parties
during 1996 were limited to those fees paid or amounts committed to be paid (on
an annual basis) to CCC, the general partner, and its affiliates. See Item 11,
"Executive Compensation," herein.

    (b) Certain Business Relationships

    Inapplicable.

    (c) Indebtedness of Management

    Inapplicable.

    (d) Transactions with Promoters

    Inapplicable.

                                       35

<PAGE>   36

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

    (a)1. Financial Statements

<TABLE>
<CAPTION>
                                                                       Page
     <S>                                                              <C> 
     The following financial statements of the Registrant are 
     included in Part II, Item 8:

     Reports of Independent Public Accountants ....................   16,17

     Balance Sheets - December 31, 1996 and 1995 ..................      18

     Statement of operations - for the period March 29, 1996
     (commencement of operations) to December 31, 1996 ............      19

     Statement of partners' capital - for the period March 29, 1996
     (commencement of operations) to December 31, 1996 ............      20

     Statement of cash flows - for the period March 29, 1996
     (commencement of operations) to December 31, 1996 ............      21

     Notes to financial statements ................................      22

     Schedule of Reimbursed Administrative Expenses ...............      29
</TABLE>

    All other schedules are omitted as the information is not required or the
information is included in the financial statements or notes thereto.

                                       36

<PAGE>   37

    (a)3. Exhibits

<TABLE>
<CAPTION>
Exhibit
   No.                              Description                                  Method of Filing
-------------------------------------------------------------------              ---------------- 
  <S>        <C>                                                                 <C> 
  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      ***

  27         Financial Data Schedule                                             Filed with this document
</TABLE>

    (b) Reports on Form 8-K

        The Registrant filed a Report on Form 8-K, February 6, 1997 and
        Amendment No. 1 to Report on Form 8-K, February 26, 1997, reporting the
        resignation in the Registrant's certifying accountant.

        The Registrant filed a Report on Form 8-K, April 14, 1997, reporting the
        appointment of the Registrant's successor certifying accountant.

-------------
*       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)

                                       37

<PAGE>   38

                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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/  JOHN KALLAS
                                      ----------------------------------------
                                      John Kallas
                                      Vice President/Treasurer
                                      Principal Finance and Accounting Officer

Date:     June 16, 1997

    Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Cronos
Capital Corp., the general partner of the Registrant, in the capacities and on
the dates indicated:

<TABLE>
          Signature                                Title                                 Date
<S>                                   <C>                                           <C> 
  /s/  DENNIS J. TIETZ                  President and Director of                    June 16, 1997
-----------------------------             Cronos Capital Corp.             
Dennis J. Tietz                       ("CCC") (Principal Executive                  
                                           Officer of CCC)

   /s/  JOHN KALLAS                       Vice President/Treasurer                   June 16, 1997
-----------------------------              (Principal Finance and
John Kallas                              Accounting Officer of CCC)

   /s/  LAURENCE P. SARGENT                   Director of CCC                        June 16, 1997
-----------------------------
Laurence P. Sargent
</TABLE>

                            SUPPLEMENTAL INFORMATION

    The Registrant's annual report will be furnished to its limited partners on
or about July 18, 1997. Copies of the annual report will be concurrently
furnished to the Commission for information purposes only, and shall not be
deemed to be filed with the Commission.

<PAGE>   39

                                  EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
   No.                              Description                                  Method of Filing
--------     ----------------------------------------------------------------    ----------------
  <S>        <C>                                                                 <C>  
 
  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      ***

  27         Financial Data Schedule                                             Filed with this document
</TABLE>

----------------
*       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)