##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to  .
 Commission file number 0-27496
 CRONOS GLOBAL INCOME FUND XVI, L.P.
  California
    
    94-3230380(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
   Title of each class
    
    Name of each exchange on
which registeredNot Applicable
  UNITS OF LIMITED PARTNERSHIP INTERESTS
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ




---



##### 



CRONOS GLOBAL INCOME FUND XVI, L.P.
 Report on Form 10-K for the Fiscal Year
Ended December 31, 2006
 TABLE OF CONTENTS
 PAGEPART I
    
    
    3Item 1  Business
    
    
    3Item 1A  Risk Factors
    
    
    10Item 1B  Unresolved Staff Comments
    
    
    14Item 2  Properties
    
    
    14Item 3  Legal Proceedings
    
    
    14Item 4  Submission of Matters to a Vote of Security Holders
    
    
    14PART II
    
    
    15Item 5  Market for the Partnerships Common Equity and Related Stockholder Matters
    
    
    15Item 6  Selected Financial Data
    
    
    16Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 7A Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 8  Financial Statements and Supplementary Data
    
    
    24Item 9  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    39Item 9A  Controls and Procedures
    
    
    39Item 9B  Other Information
    
    
    39PART III
    
    
    40Item 10  Directors and Executive Officers of the Partnership
    
    
    40Item 11  Executive Compensation
    
    
    43Item 12  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    44Item 13  Certain Relationships and Related Transactions
    
    
    44Item 14  Principal Accountant Fees and Services
    
    
    45PART IV
    
    
    46Item 15  Exhibits and Financial Statement Schedules
    
    
    46EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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##### Table of Contents



PART I
 
 Item 1. Business
    Percentage ofAmount
    
    
    Gross ProceedsGross Subscription Proceeds
    
    $
    31,993,340
    
    
    
    100.0
    %Public Offering Expenses:Underwriting Commissions
    
    $
    3,199,334
    
    
    
    10.0
    %Offering and Organization Expenses
    
    $
    1,482,466
    
    
    
    4.6
    %Total Public Offering Expenses
    
    $
    4,681,800
    
    
    
    14.6
    %Net Proceeds
    
    $
    27,311,540
    
    
    
    85.4
    %Acquisition Fees
    
    $
    1,276,220
    
    
    
    4.0
    %Working Capital Reserve
    
    $
    319,933
    
    
    
    1.0
    %Unexpended Proceeds
    
    $
    190,993
    
    
    
    0.6
    %Gross Proceeds Invested in Equipment
    
    $
    25,524,394
    
    
    
    79.8
    %
     3




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Dry cargo containers
    
    $
    2,271,778
    
    
    $
    2,707,893
    
    
    $
    2,767,280Refrigerated containers
    
    
    975,704
    
    
    
    1,079,602
    
    
    
    1,220,587Tank containers
    
    
    154,421
    
    
    
    157,147
    
    
    
    152,067Total
    
    $
    3,401,903
    
    
    $
    3,944,642
    
    
    $
    4,139,934
      4




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##### Table of Contents



Benefits of Leasing
  
    
    Leasing allows the shipping lines to utilize the equipment they need without having to make
large capital expenditures;
    
    Leasing offers a shipping line an alternative source of financing in a traditionally
capital-intensive industry;
    
    Leasing enables shipping lines to expand their trade routes and market shares at a relatively
low cost without making a permanent commitment to support their new structure;
    
    Leasing allows shipping lines to respond to changing seasonal and trade route demands, thereby
optimizing their capital investment and minimizing storage costs;
    
    Leasing provides shipping lines with the flexibility to respond to rapidly changing market
opportunities as they arise without relying exclusively on their own containers;
    
    Leasing allows shipping lines to benefit from the relationship between container manufacturers
and leasing companies.
 Fleet Profile
      5




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##### Table of Contents



Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterContainers on lease:Master lease
    
    
    2,621
    
    
    
    716
    
    
    
    1,118
    
    
    
    45
    
    
    
    116
    
    
    
    26Term leaseShort
term1
    
    
    543
    
    
    
    258
    
    
    
    267
    
    
    
    1
    
    
    
    32
    
    
    
    7Long
term2
    
    
    224
    
    
    
    47
    
    
    
    55
    
    
    
    3
    
    
    
    5
    
    
    
    13Sales-type
lease
    
    
    
    
    
    
    2
    
    
    
    4
    
    
    
    3
    
    
    
    1
    
    
    
    Subtotal
    
    
    3,388
    
    
    
    982
    
    
    
    1,444
    
    
    
    52
    
    
    
    154
    
    
    
    46Containers off lease
    
    
    208
    
    
    
    193
    
    
    
    217
    
    
    
    28
    
    
    
    37
    
    
    
    5Total container
fleet
    
    
    3,596
    
    
    
    1,216
    
    
    
    1,661
    
    
    
    80
    
    
    
    191
    
    
    
    51
 
 1.

    Short term leases represent term leases that are either scheduled for
renegotiation or that may expire in 2007.2.

    Long term leases represent term leases, the majority of which will expire
between 2008 and 2011.  Types of Leases
  
    
    Master leases.Master leases are leases under which a
customer may lease a certain number of containers, as needed, under a general agreement
between the lessor and the lessee. Such leases provide customers with greater
flexibility by allowing them to pick up and drop off containers where and when needed,
subject to restrictions and availability, on pre-agreed terms. Master leases also define
the number of containers that may be returned within each calendar month, the permitted
return locations and applicable drop-off charges. Due to the increased flexibility they
offer, master leases usually command higher per-diem rates and generate more ancillary
revenue (including pick-up, drop-off, handling and off-hire fees) than term leases.
Ocean carriers generally use master 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 location after one or more legs of a voyage. The
commercial terms of master leases are usually negotiated or renewed annually.
    
    Term leases.Term leases are for a fixed period of time,
typically varying from three to five years. In most cases, containers cannot be
returned prior to the expiration of the lease. Term lease agreements may contain early
termination penalties that apply in the event of early redelivery. Term leases provide
greater revenue stability to the lessor, usually at lower lease rates than master
leases. Ocean carriers use term leases to lower their operating costs when they have a
need for an identified number of containers for a specified term.
 6




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##### Table of Contents




    
    Sales-type leases.Sales-type leases are long-term in
nature, usually ranging from three to seven years, and require relatively low levels of
customer service. They ordinarily require fixed payments over a defined period and
provide customers with an option to purchase the subject containers at the end of the
lease term. Per-diem rates include an element of repayment of capital and therefore are
usually higher than rates charged under either term or master leases.
    Customers
    Repair and Maintenance
   7




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Disposition of Used Containers
  Operations
      Insurance
   8




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##### Table of Contents



9




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##### Table of Contents



Item 1A. Risk Factors
    Dependence of the Container Leasing Business on the Volume of World Trade and Other Factors
 10




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##### Table of Contents



Risks of Ownership and Leasing of Special Purpose Containers
 Risk of Terrorism Involving Containers
 Other Risks of Container Leasing
 
    
    general economic conditions, such as inflation and fluctuations in general
business conditions;
    
    fluctuations in supply and demand for containers 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;
    
    increases in maintenance expenses, taxes, insurance costs, third party fees and
other expenses attributable to the operation and the maintenance of the containers that
cannot be offset by increased lease revenues from the containers;
    
    the risk of uninsured losses with respect to the containers or insured losses for
which insurance proceeds are inadequate, resulting in a possible loss of invested capital in
and any profits anticipated from such containers;
    
    the effects of strikes, labor disputes and foreign political unrest on the
Partnerships container leasing business;
    
    bankruptcies, contract disputes, or defaults in payment by sub-lessees of the
Partnerships containers resulting in uncollectible amounts and the accumulation of expenses
and off-lease time attributable to the recovery of containers, or the inability to recover
containers from such lessees;
    
    the possibility that sub-lessees of the Partnerships containers will elect to
purchase and own equipment rather than lease it from third parties, including the Leasing
Company; and
    
    loss of revenues and increases in storage expenses during periods when containers
are not being utilized.
 Effect of Operating Leases: Rental Payments are Insufficient to Return the Original
Investment in the Containers.
 11




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##### Table of Contents



Residual Value of Containers
 Competition
 No Assurance of Successful Operations.
 Defaults by Lessees
 Effect of Environmental Regulation on Refrigerated Containers
 Environmental Liability Risks
 12




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##### Table of Contents



Risk Associated with the Operations of an Equipment Leasing Business in Partnership Form
 Reliance Upon CCC and the Leasing Company.
 Dependence Upon Key Personnel.
 Conflicts of Interest
 Compensation of CCC and the Leasing Company.
 Return of Capital.
 Lack of Liquidity
 Limited Voting Rights of Limited Partners.
 Unspecified Lessees
 13




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##### Table of Contents



Limited Liability Not Clearly Established.
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  EstimatedUseful Life
    
    Average Age
    
    Average Cost20-Foot Dry Cargo Containers
    
    12-15 years
    
    10 years
    
    $
    2,29640-Foot Dry Cargo Containers
    
    12-15 years
    
    9 years
    
    $
    3,24640-Foot High-Cube Dry Cargo Containers
    
    12-15 years
    
    8 years
    
    $
    2,90520-Foot Refrigerated Containers
    
    12-15 years
    
    11 years
    
    $
    22,19840-Foot High-Cube Refrigerated Containers
    
    12-15 years
    
    11 years
    
    $
    26,86224,000-Liter Tanks
    
    12-20 years
    
    11 years
    
    $
    26,661
   
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  14




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##### Table of Contents



PART II
 
 Item 5. Market for the Partnerships Common Equity and Related Stockholder Matters
         Number of Unit Holders(b)(1) Title of Class
    
    as of December 31, 2006Units of limited partnership interests
    
    
    1,690
       15




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##### Table of Contents



Item 6. Selected Financial Data
 Year Ended December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002Net lease revenue
    
    $
    2,316,295
    
    
    $
    2,803,236
    
    
    $
    3,001,124
    
    
    $
    2,863,738
    
    
    $
    2,794,199Net income
    
    $
    196,435
    
    
    $
    916,814
    
    
    $
    947,281
    
    
    $
    794,601
    
    
    $
    671,919Limited
partners share of net
income (per
unit basis)
    
    $
    0.06
    
    
    $
    0.47
    
    
    $
    0.51
    
    
    $
    0.43
    
    
    $
    0.38Cash
distributions per unit
of limited partnership
interest
    
    $
    2.08
    
    
    $
    1.71
    
    
    $
    1.48
    
    
    $
    1.35
    
    
    $
    0.92At year-end:Total assets
    
    $
    12,013,715
    
    
    $
    15,272,387
    
    
    $
    17,213,457
    
    
    $
    20,866,156
    
    
    $
    23,177,983Partners capital
    
    $
    12,013,715
    
    
    $
    15,272,387
    
    
    $
    17,213,457
    
    
    $
    18,759,371
    
    
    $
    20,226,433
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    16




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Liquidity and Capital Resources
  th
    Cash from Operating Activities:
 Cash from Investing Activities:
 Cash from Financing Activities
 17




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##### Table of Contents



Off-Balance Sheet Arrangements
  Contractual Obligations
  Results of Operations
 Market Overview
   
    
    Activity-related expenses, including agents costs and depot costs such as repairs,
maintenance and handling.
    
    Inventory-related expenses for off-hire containers, comprising of storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers as
well as the frequency at which containers are re-delivered.
    
    Legal and other expenses, including legal costs related to the recovery of
containers and doubtful accounts, insurance and provisions for doubtful accounts.
  Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
High-Cube
    
20-Foot
    
High-Cube
    
24,000-LiterContainers on lease:Master lease
    
    
    2,621
    
    
    
    716
    
    
    
    1,118
    
    
    
    45
    
    
    
    116
    
    
    
    26Term leaseShort
term1
    
    
    543
    
    
    
    258
    
    
    
    267
    
    
    
    1
    
    
    
    32
    
    
    
    7Long
term2
    
    
    224
    
    
    
    47
    
    
    
    55
    
    
    
    3
    
    
    
    5
    
    
    
    13Sales-type
lease
    
    
    
    
    
    
    2
    
    
    
    4
    
    
    
    3
    
    
    
    1
    
    
    
    Subtotal
    
    
    3,388
    
    
    
    982
    
    
    
    1,444
    
    
    
    52
    
    
    
    154
    
    
    
    46Containers off lease
    
    
    208
    
    
    
    193
    
    
    
    217
    
    
    
    28
    
    
    
    37
    
    
    
    5Total container fleet
    
    
    3,596
    
    
    
    1,216
    
    
    
    1,661
    
    
    
    80
    
    
    
    191
    
    
    
    51
 
 1.

    Short term leases represent term leases that are either scheduled for
renegotiation or that may expire in 2007.2.

    Long term leases represent term leases, the majority of which will
expire between 2008 and 2011. 18




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##### Table of Contents



Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    4,553
    
    
    
    100
    %
    
    
    1,500
    
    
    
    100
    %
    
    
    1,750
    
    
    
    100
    %
    
    
    90
    
    
    
    100
    %
    
    
    300
    
    
    
    100
    %
    
    
    52
    
    
    
    100
    %Less disposals
    
    
    957
    
    
    
    21
    %
    
    
    284
    
    
    
    22
    %
    
    
    89
    
    
    
    5
    %
    
    
    10
    
    
    
    11
    %
    
    
    109
    
    
    
    36
    %
    
    
    1
    
    
    
    2
    %Remaining fleet at

December 31, 2006
    
    
    3,596
    
    
    
    79
    %
    
    
    1,216
    
    
    
    78
    %
    
    
    1,661
    
    
    
    95
    %
    
    
    80
    
    
    
    89
    %
    
    
    191
    
    
    
    64
    %
    
    
    51
    
    
    
    98
    %
  2006
    
    2005
    
    2004Fleet size (measured in
twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    9,574
    
    
    
    10,396
    
    
    
    10,775Refrigerated containers
    
    
    598
    
    
    
    676
    
    
    
    681Tank containers
    
    
    52
    
    
    
    52
    
    
    
    52Average utilization ratesDry cargo containers
    
    
    89
    %
    
    
    93
    %
    
    
    93
    %Refrigerated containers
    
    
    85
    %
    
    
    88
    %
    
    
    90
    %Tank containers
    
    
    91
    %
    
    
    92
    %
    
    
    90
    %
     19




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##### Table of Contents



Year Ended December 31, 2006 Compared to the Year Ended December 31, 2005
 Net lease revenue
 Depreciation expense
 Other general and administrative expenses
 Impairment charge
 20




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##### Table of Contents




    
    The age of the North American Dry Containers;
    
    The lack of demand for the North American Dry Containers;
    
    The cost to reposition the North American Dry Containers to high demand markets; and
    
    The strong North American container sale market.
   Net loss on disposal of equipment
 Year Ended December 31, 2005 Compared to the Year Ended December 31, 2004
 Net lease revenue
 Depreciation expense
 21




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##### Table of Contents



Other general and administrative expenses
 Net gain on disposal of equipment
 Interest expense
 Critical Accounting Policies
 Container equipment  depreciable lives
 Container equipment  valuation:
 Allowance for doubtful accounts:
 New Accounting Pronouncements
   22




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Inflation
  The Cronos Group
    23




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
 Exchange rate risk:
 
 Item 8. Financial Statements and Supplementary Data
 24




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 25




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Balance Sheets
 December 31, 2006 and 2005
 2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents, includes $1,188,374 in
2006 and
$1,033,262 in 2005 in interest-bearing accounts
    
    $
    1,203,374
    
    
    $
    1,048,262Net lease and other receivables due from Leasing
Company
    
    
    405,841
    
    
    
    360,227Total current assets
    
    
    1,609,215
    
    
    
    1,408,489Container rental equipment, at cost
    
    
    25,256,310
    
    
    
    29,463,629Less accumulated depreciation
    
    
    (14,851,810
    )
    
    
    (15,671,131
    )Net container rental equipment
    
    
    10,404,500
    
    
    
    13,792,498Container rental equipment held for sale
    
    
    
    
    
    
    71,400Total assets
    
    $
    12,013,715
    
    
    $
    15,272,387Partners CapitalPartners capital (deficit):General partner
    
    
    (39,210
    )
    
    
    (5,678
    )Limited partners
    
    
    12,052,925
    
    
    
    15,278,065Total partners capital
    
    $
    12,013,715
    
    
    $
    15,272,387
  26




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Statements of Operations
 For the years ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Net lease revenue
    
    $
    2,316,295
    
    
    $
    2,803,236
    
    
    $
    3,001,124Other operating income
(expenses):Depreciation and
amortization
    
    
    (1,689,468
    )
    
    
    (1,842,594
    )
    
    
    (1,954,528
    )Other general and
administrative expenses
    
    
    (110,848
    )
    
    
    (79,715
    )
    
    
    (70,659
    )Net (loss) gain on
disposal of equipment
    
    
    (363,720
    )
    
    
    55,821
    
    
    
    20,179Asset impairment loss
    
    
    
    
    
    
    (37,972
    )
    
    
    (2,164,036
    )
    
    
    (1,904,460
    )
    
    
    (2,005,008
    )Income from operations
    
    
    152,259
    
    
    
    898,776
    
    
    
    996,116Other income (expense):Interest income
    
    
    44,176
    
    
    
    18,038
    
    
    
    5,482Interest expense
    
    
    
    
    
    
    
    
    
    
    (54,317
    )44,176
    
    
    
    18,038
    
    
    
    (48,835
    )Net income
    
    $
    196,435
    
    
    $
    916,814
    
    
    $
    947,281Allocation of net income:General partner
    
    $
    95,599
    
    
    $
    160,010
    
    
    $
    123,918Limited partners
    
    
    100,836
    
    
    
    756,804
    
    
    
    823,363$
    196,435
    
    
    $
    916,814
    
    
    $
    947,281Limited partners per unit
share of net income
    
    $
    0.06
    
    
    $
    0.47
    
    
    $
    0.51
  27




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Statements of Partners Capital
 For the years ended December 31, 2006, 2005 and 2004
 Limited
    
    
    GeneralPartners
    
    
    Partner
    
    
    TotalBalances at January 1, 2004
    
    $
    18,803,500
    
    
    $
    (44,129
    )
    
    $
    18,759,371Net income
    
    
    823,363
    
    
    
    123,918
    
    
    
    947,281Cash distributions
    
    
    (2,372,841
    )
    
    
    (120,354
    )
    
    
    (2,493,195
    )Balances at December
31, 2004
    
    
    17,254,022
    
    
    
    (40,565
    )
    
    
    17,213,457Net income
    
    
    756,804
    
    
    
    160,010
    
    
    
    916,814Cash distributions
    
    
    (2,732,761
    )
    
    
    (125,123
    )
    
    
    (2,857,884
    )Balances at December
31, 2005
    
    
    15,278,065
    
    
    
    (5,678
    )
    
    
    15,272,387Net income
    
    
    100,836
    
    
    
    95,599
    
    
    
    196,435Cash distributions
    
    
    (3,325,976
    )
    
    
    (129,131
    )
    
    
    (3,455,107
    )Balances at December
31, 2006
    
    $
    12,052,925
    
    
    $
    (39,210
    )
    
    $
    12,013,715
  28




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Statements of Cash Flows
 For the years ended December 31, 2006, 2005 and 2004
 2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    196,435
    
    
    $
    916,814
    
    
    $
    947,281Adjustments to reconcile net
income to net cash from operating
activities:Depreciation and
amortization
    
    
    1,689,468
    
    
    
    1,842,594
    
    
    
    1,954,528Asset impairment loss
    
    
    
    
    
    
    37,972
    
    
    
    Net loss (gain) on
disposal of equipment
    
    
    363,720
    
    
    
    (55,821
    )
    
    
    (20,179
    )(Increase) decrease in
net lease and other
receivables due from
Leasing Company
    
    
    (38,472
    )
    
    
    5,246
    
    
    
    (3,599
    )Decrease in interest
payable
    
    
    
    
    
    
    
    
    
    
    (5,285
    )Total adjustments
    
    
    2,014,716
    
    
    
    1,829,991
    
    
    
    1,925,465Net cash provided by
operating activities
    
    
    2,211,151
    
    
    
    2,746,805
    
    
    
    2,872,746Cash flows from investing activities:Release of restricted deposits
    
    
    
    
    
    
    
    
    
    
    750,000Proceeds from sale of container
rental equipment
    
    
    1,399,068
    
    
    
    711,276
    
    
    
    143,764Net cash provided by
investing activities
    
    
    1,399,068
    
    
    
    711,276
    
    
    
    893,764Cash flows from financing activities:Distributions to general partner
    
    
    (129,131
    )
    
    
    (125,123
    )
    
    
    (120,354
    )Distributions to limited
partners
    
    
    (3,325,976
    )
    
    
    (2,732,761
    )
    
    
    (2,372,841
    )Total Distributions to partners
    
    
    (3,455,107
    )
    
    
    (2,857,884
    )
    
    
    (2,493,195
    )Repayments of term debt
    
    
    
    
    
    
    
    
    
    
    (2,101,500
    )Net cash used in
financing activities
    
    
    (3,455,107
    )
    
    
    (2,857,884
    )
    
    
    (4,594,695
    )Net increase (decrease) in cash and
cash equivalents
    
    
    155,112
    
    
    
    600,197
    
    
    
    (828,185
    )Cash and cash equivalents at beginning
of year
    
    
    1,048,262
    
    
    
    448,065
    
    
    
    1,276,250Cash and cash equivalents at end of year
    
    $
    1,203,374
    
    
    $
    1,048,262
    
    
    $
    448,065Supplementary disclosure of cash flow
information:Cash paid during the year for
interest
    
    $
    
    
    
    $
    
    
    
    $
    59,602
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 
 Notes to Financial Statements
 December 31, 2006, 2005 and 2004
 (1)
    
    Summary of Significant Accounting Policies
 (a)
    
    Nature of OperationsCronos Global Income Fund XVI, L.P. (the Partnership) is a limited partnership organized
under the laws of the State of California on September 1, 1995, for the purpose of owning
and leasing marine cargo containers, special purpose containers and container related
equipment worldwide to ocean carriers. The Partnerships operations are subject to the
fluctuations of world economic and political conditions. The Partnership believes that
the profitability of, and risks associated with, leases to foreign customers is generally
the same as those of domestic customers. The Partnerships leases generally require all
payments to be made in United States currency.Cronos Capital Corp. (CCC) is the general partner and, with its affiliate Cronos
Containers Limited (the Leasing Company), manages the business of the Partnership. CCC
and the Leasing Company also manage the container leasing business for other partnerships
affiliated with CCC.The Partnership commenced operations on March 29, 1996, when the minimum subscription
proceeds of $2,000,000 were received from over 100 subscribers (excluding from such count
Pennsylvania residents, CCC, and all affiliates of CCC). On February 3, 1997, CCC
suspended the offer and sale of units in the Partnership. The offering terminated on
December 27, 1997, at which time 1,599,667 limited partnership units had been sold. The
Partnership shall continue until December 31, 2015, unless terminated sooner upon the
occurrence of certain events.The Partnership has entered into its 12th year of operations and has entered its
liquidation phase, wherein CCC focuses its attention on the retirement of the remaining
equipment in the Partnerships container fleet. At December 31, 2006, approximately 82% of
the original equipment remained in the Partnerships fleet. CCC will take several factors
into consideration when examining options for the timing of the disposal of the
containers. These factors include the impact of a diminishing fleet size and current
market conditions on the level of gross lease revenue, and fixed operating costs relative
to this revenue. Parallel to these considerations will be a projected increase in
expenses for devoting significant resources to the additional reporting and compliance
requirements of Section 404 of the Sarbanes Oxley Act of 2002, which addresses a range of
corporate governance, disclosure, and accounting issues. These costs may include
increased accounting and administrative expenses for additional staffing and outside
professional services by accountants and consultants. These additional costs, depending
on their materiality, may reduce the Partnerships results from operations and therefore
negatively affect future distributions to the Limited Partners.(b)
    
    Leasing Company and Leasing Agent AgreementA Leasing Agent Agreement exist between the Partnership and the Leasing Company, whereby
the Leasing Company has the responsibility to manage the leasing operations of all
equipment owned by the Partnership. Pursuant to the Agreement, the Leasing Company is
responsible for leasing, managing and re-leasing the Partnerships containers to ocean
carriers and has full discretion over which ocean carriers and suppliers of goods and
services it may deal with. The Leasing Agent Agreement permits the Leasing Company to use
the containers owned by the Partnership, together with other containers owned or managed
by the Leasing Company and its affiliates, as part of a single fleet operated without
regard to ownership. Since the Leasing Agent Agreement meets the definition of an
operating lease in Statement of Financial Accounting Standards (SFAS) No. 13, it is
accounted for as a lease under which the Partnership is lessor and the Leasing Company is
lessee.
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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (b)
    
    Leasing Company and Leasing Agent Agreement (continued)The Leasing Agent Agreement generally provides that the Leasing Company will make payments
to the Partnership based upon rentals collected from ocean carriers after deducting direct
operating expenses and management fees to CCC and the Leasing Company. The Leasing
Company leases containers to ocean carriers, generally under operating leases which are
either master leases or term leases (mostly one to five years). Master leases do not
specify the exact number of containers to be leased or the term that each container will
remain on hire but allow the ocean carrier to pick up and drop off containers at various
locations, and rentals are based upon the number of containers used and the applicable
per-diem rate. Accordingly, rentals under master leases are all variable and contingent
upon the number of containers used. Most containers are leased to ocean carriers under
master leases; leasing agreements with fixed payment terms are not material to the
financial statements. Since there are no material minimum lease rentals, no disclosure of
minimum lease rentals is provided in these financial statements.(c)
    
    Concentrations of Credit RiskThe Partnerships financial instruments that are exposed to concentrations of credit
risk consist primarily of cash, cash equivalents and net lease receivables due from the
Leasing Company. See note 3 for further discussion regarding the credit risk associated
with cash and cash equivalents.Net lease receivables due from the Leasing Company (see notes 1(b) and 5 for discussion
regarding net lease receivables) subject the Partnership to a significant concentration of
credit risk. These net lease receivables, representing rentals earned by the Leasing
Company, on behalf of the Partnership, from ocean carriers after deducting direct
operating expenses and management fees to CCC and the Leasing Company, are remitted by the
Leasing Company to the Partnership three to four times per month. The Partnership has
historically never incurred a loss associated with the collectibility of unremitted net
lease receivables due from the Leasing Company.(d)
    
    Basis of AccountingThe 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.(e)
    
    Use of EstimatesThe financial statements are prepared in conformity with accounting principles generally
accepted in the United States of America (GAAP), which require the Partnership to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates. The most significant estimates included within
the financial statements are the container rental equipment estimated useful lives and
residual values, and the estimate of future cash flows from container rental equipment
operations, used to
determine the carrying value of container rental equipment in accordance with SFAS No.
144. Considerable judgment is required in estimating future cash flows from container
rental equipment operations. Accordingly, the estimates may not be indicative of the
amounts that may be realized in future periods. As additional information becomes
available in subsequent periods, recognition of an impairment of the container rental
equipment carrying values may be necessary based upon changes in market and economic
conditions.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (f)
    
    Allocation of Net Income or Loss, Partnership Distributions and Partners Capital
AccountsNet income or loss has been allocated between general and limited partners in accordance
with the Partnership Agreement. The Partnership Agreement generally provides that CCC
shall at all times maintain at least a 1% interest in each item of income or loss,
including the gain arising from the sale of containers. The Partnership Agreement further
provides that the gain arising from the sale of containers be allocated first to the
partners with capital account deficit balances in an amount sufficient to eliminate any
deficit capital account balance. Thereafter, the Partnerships gains arising from the sale
of containers are allocated to the partners in accordance with their share of sale
proceeds distributed. The Partnership Agreement also provides for income (excluding the
gain arising from the sale of containers) for any period, be allocated to CCC in an amount
equal to that portion of CCCs distributions in excess of 1% of the total distributions
made to both CCC and the limited partners of the Partnership for such period, as well as
other allocation adjustments.Actual cash distributions differ from the allocations of net income or loss between
the general and limited partners as presented in these financial statements. Partnership
distributions are paid to its partners (general and limited) from distributable cash from
operations, allocated 95% to the limited partners and 5% to CCC. Distributions of sales
proceeds are allocated 99% to the limited partners and 1% to CCC. The allocations remain
in effect until such time as the limited partners have received from the Partnership
aggregate distributions in an amount equal to their capital contributions plus an 8%
cumulative, compounded (daily), annual return on their adjusted capital contributions.
Thereafter, all Partnership distributions will be allocated 85% to the limited partners
and 15% to CCC. Cash distributions from operations to CCC in excess of 5% of
distributable cash will be considered an incentive fee and will be recorded as
compensation to CCC, with the remaining distributions from operations charged to partners
capital.Upon dissolution, the assets of the Partnership will be sold and the proceeds thereof
distributed as follows: (i) all of the Partnerships debts and liabilities to persons
other than CCC or the limited partners shall be paid and discharged; (ii) all of the
Partnerships debts and liabilities to CCC and the limited partners shall be paid and
discharged; and (iii) the balance of such proceeds shall be distributed to CCC and the
limited partners in accordance with the positive balances of CCC and the limited partners
capital accounts. CCC shall contribute to the Partnership, if necessary, an amount equal
to the lesser of the deficit balance in its capital account at the time of such
liquidation, or 1.01% of the excess of the Limited Partners capital contribution to the
Partnership over the capital contributions previously made to the Partnership by CCC,
after giving effect to the allocation of income or loss arising from the liquidation of
the Partnerships assets.(g)
    
    Acquisition FeesPursuant to 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.(h)
    
    Container Rental EquipmentContainer rental equipment is depreciated over a 15-year life using the straight-line
basis to a salvage value of 10% of original equipment cost. Depreciation policies are
also evaluated to determine whether subsequent events and circumstances warrant revised
estimates of useful lives.In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, container rental equipment is considered to be impaired if the
carrying value of the asset exceeds the expected future cash flows from related operations
(undiscounted and without interest charges). If impairment is deemed to exist, the assets
are written down to fair value. An analysis projecting future cash flows from container
rental equipment operations is prepared annually or upon material changes in market
conditions. Current and projected utilization rates, per-diem rental rates, direct
operating expenses, fleet size and container disposals are the primary variables utilized
by the analysis. Additionally, the Partnership evaluates future cash flows and potential
impairment by container type rather than for each individual
container, and as a result, future losses could result for individual container
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (h)
    
    Container Rental Equipment (continued)dispositions due to various
factors, including age, condition, suitability for continued leasing, as well as the
geographical location of containers when disposed.In June 2005 the Partnership recorded an impairment charge of $37,972 related to 111
forty-foot standard off-hire dry cargo containers located in North America (the North
American Dry Containers). The impairment charge was a result of CCCs and the Leasing
Company identifying a number of issues that had an impact on their carrying value.
 
    
    The age of the North American Dry Containers.
    
    The lack of regional market demand to lease the North American Dry Containers.
    
    The cost to reposition the North American Dry Containers to high demand markets.
    
    The strong North American container sale market.
   (i)
    
    Income TaxesThe Partnership is not subject to income taxes, consequently no provision for income taxes
has been made. The Partnership files federal and state an annual information tax returns,
prepared on the accrual basis of accounting. Taxable income or loss is reportable by the
partners individually.(j)
    
    Financial Statement PresentationThe 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. Certain prior year amounts in the notes to the financial statements have been reclassified
to conform to the 2006 presentation.
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##### Table of Contents



CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (1)
    
    Summary of Significant Accounting Policies (continued)
 (k)
    
    New Accounting PronouncementsIn May 2005, the FASB issued SFAS No. 154  Accounting Changes and Error Corrections  a
replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS 154). SFAS 154
requires retrospective application to prior periods financial statements of a voluntary
change in accounting principle unless it is impracticable. APB No. 20 previously required
that most voluntary changes in accounting principle be recognized by including in net
income of the period of the change, the cumulative effect of changing to the new
accounting principle. SFAS 154 is effective for accounting changes and corrections of
errors in fiscal years beginning after December 15, 2005. The Partnership adopted SFAS
154 effective January 1, 2006, with no significant impact on the financial position or
result of operations of the Partnership.In September 2006, the FASB issued SFAS No. 157  Fair Value Measurements (SFAS 157).
SFAS 157 is effective for financial statements for fiscal years beginning after November
17, 2007 and interim periods beginning after that date. Earlier adoption is encouraged,
providing no financial statements have yet been issued during the fiscal year. SFAS 157
defines fair value, the methods used to measure fair value and will require expanded
disclosures about fair value measurements. The Partnership will adopt SFAS 157 on January
1, 2008 but does not expect adoption to have a significant impact on the financial
position or result of operations of the Partnership, however, additional disclosures may
be required about the inputs used to develop the measures and the effect of certain
measures on changes in assets and liabilities for the period.In September 2006, the FASB issued FASB Staff Position No. AUG AIR-1 (FSP AIR-1)
Accounting for Planned Major Maintenance Activities which addresses the accounting for
planned major maintenance activities. FSP AIR-1 is effective for fiscal years beginning
after December 15, 2006, although earlier adoption is permitted as of the beginning of an
entitys fiscal year. The guidance in FSP AIR-1 shall be applied retrospectively for all
financial statements presented, unless it is impracticable to do so. FSP AIR-1 amends
certain provisions in the AICPA Industry Audit Guide, Audits of Airlines and the
Accounting Principles Board (APB) Opinion No. 28, Interim Financial Reporting. FSP
AIR-1 prohibits the use of the accrue-in-advance method of accounting for planned major
maintenance activities in annual and interim financial reporting periods. The Partnership
early adopted FSP AIR-1, effective January 1, 2006, with no significant impact on the
financial position or result of operations of the Partnership.In September 2006, the Securities and Exchange Commission (the SEC) issued Staff
Accounting Bulletin No. 108, Section N to Topic 1, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements (SAB
108). SAB 108 requires the evaluation of prior year misstatements using both the balance
sheet approach and the income statement approach. In the initial year of adoption, should
either approach result in quantifying an error that is material in the light of
quantitative and qualitative factors, SAB 108 guidance allows for a one-time cumulative
effect adjustment to opening retained earnings. In years subsequent to adoption,
previously undetected misstatements deemed material shall result in the restatement of
previously issued financial statements in accordance with SFAS No. 154  Accounting
Changes and Error Corrections  a replacement of APB Opinion No. 20 and FASB Statement No.
3. SAB 108 is effective for financial statements for fiscal years ending after November
15,
2006. The Partnership adopted SAB 108 in 2006 with no significant impact on the financial
position or result of its operations to the Partnership.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (2)
    
    Operating SegmentAn operating segment is a component of an enterprise that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed
by the enterprises chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and about which separate financial
information is available. Management operates the Partnerships container fleet as a
homogenous unit and has determined that as such it has a single reportable operating segment.The Partnership derives revenues from marine dry cargo , refrigerated containers and tank
containers used by its customers in global trade routes. As of December 31, 2006, the
Partnership owned 3,596 twenty-foot, 1,216 forty-foot and 1,661 forty-foot high-cube marine dry
cargo containers, as well as 80 twenty-foot and 191 forty-foot refrigerated high-cube cargo
containers, and 51 twenty-four thousand-liter tank containers. A summary of gross lease
revenue earned by the Leasing Company, on behalf of the Partnership, by product, for the years
ended December 31, 2006, 2005 and 2004 follows:
 2006
    
    
    2005
    
    
    2004Dry cargo containers
    
    $
    2,271,778
    
    
    $
    2,707,893
    
    
    $
    2,767,280Refrigerated containers
    
    
    975,704
    
    
    
    1,079,602
    
    
    
    1,220,587Tank containers
    
    
    154,421
    
    
    
    157,147
    
    
    
    152,067Total
    
    $
    3,401,903
    
    
    $
    3,944,642
    
    
    $
    4,139,934
 Due to the Partnerships lack of information regarding the physical location of its fleet of
containers when on lease in the global shipping trade, the Partnership believes that it does
not possess discernible geographic reporting segments as defined in SFAS No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information.The Partnership does not believe that its ongoing business is dependent upon a single
sub-lessee of the Leasing Company, although the loss of one or more of the Leasing Companys
sub-lessees could have an adverse effect upon its business. No singles sub-lessee generated
more than 10% of the Leasing Companys rental revenue earned on behalf of the Partnership
during 2006. Two sub-lessees of the Leasing Company, Container Equipment Leasing generated 12%
or $467,036 and APL Company Pte Ltd (APL) generated approximately 12% or $466,496 of the
Leasing Companys rental revenue earned on behalf of the Partnership during 2005. One single
sub-lessee of the Leasing Company, APL generated 11% or $451,097 of the Leasing Companys
rental revenue earned on behalf of the Partnership during 2004.(3)
    
    Cash and Cash EquivalentsCash equivalents include money market funds that invest in highly-liquid securities, such as
U.S. Treasury obligations, repurchase agreements secured by U.S. Treasury obligations, and
obligations whose principal and interest are backed by the U.S. Government. Cash equivalents
are carried at cost which approximates fair value, and 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.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (4)
    
    Net Lease and Other Receivables Due from Leasing CompanyNet lease and other receivables due from the Leasing Company are determined by deducting direct
operating payables and accrued expenses, base management fees payable, and reimbursed
administrative expenses payable to CCC and its affiliates from the rental billings earned by
the Leasing Company under operating leases to ocean carriers for the containers owned by the
Partnership as well as proceeds earned from container disposals. Net lease and other
receivables at December 31, 2006 and 2005 were as follows:
 December 31,
    
    
    December 31,2006
    
    
    2005Gross lease and other receivables
    
    $
    694,051
    
    
    $
    809,608Less:Direct operating payables and accrued expenses
    
    
    203,928
    
    
    
    349,958Base management fees payable
    
    
    2,472
    
    
    
    4,212Reimbursed administrative expenses
    
    
    12,559
    
    
    
    16,585Allowance for doubtful accounts
    
    
    69,251
    
    
    
    78,626288,210
    
    
    
    449,381Net lease and other receivables
    
    $
    405,841
    
    
    $
    360,227
 (5)
    
    Equipment DebtIn August, 2004, the Partnership prepaid the remaining term loan debt of $2,101,500,
plus accrued interest of $25,434. On March 30, 2000, the Partnership borrowed $5,043,600 under
a term loan for the purpose of acquiring additional equipment. The terms of the loan required
it to be repaid in equal quarterly installments plus interest, through May 31, 2006. Interest
accrued at the rate of 1.75% above the LIBOR rate which was calculated on the first day of each
quarterly interest period. Over the life of the loan, the interest rates have ranged from
2.87% to 8.58%. The loan was secured by containers owned by the Partnership, as well as any
income generated in connection with the containers including lease revenue and sales proceeds.(6)
    
    Damage Protection PlanThe 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. Repair costs, when incurred
by this service, are included within rental equipment operating expenses, a component of net
lease revenue. 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.
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Notes to Financial Statements
 (7)
    
    Net Lease RevenueNet lease revenue is determined by deducting direct operating expenses, base management
fees and reimbursed administrative expenses to CCC and its affiliates from the rental revenue
earned by the Leasing Company under operating leases to ocean carriers for the containers owned
by the Partnership. Net lease revenue for 2006, 2005 and 2004:
 2006
    
    
    2005
    
    
    2004Rental revenue
    
    $
    3,401,903
    
    
    $
    3,944,642
    
    
    $
    4,139,934Less:Rental equipment operating expenses
    
    
    679,399
    
    
    
    668,593
    
    
    
    638,260Base management fees (note 8)
    
    
    235,007
    
    
    
    270,813
    
    
    
    285,258Reimbursed administrative expenses
(note 8):Salaries
    
    
    122,341
    
    
    
    144,498
    
    
    
    148,638Other payroll related expenses
    
    
    15,936
    
    
    
    20,194
    
    
    
    18,699General administrative expenses
    
    
    32,925
    
    
    
    37,308
    
    
    
    47,955171,202
    
    
    
    202,000
    
    
    
    215,2921,085,608
    
    
    
    1,141,406
    
    
    
    1,138,810Net lease revenue
    
    $
    2,316,295
    
    
    $
    2,803,236
    
    
    $
    3,001,124
 (8)
    
    Compensation to General Partner and its AffiliatesBase management fees are equal to 7% of the gross lease billings from the leasing of containers
subject to leases whereby the aggregate rental payments due during the initial term of the
lease are less than the purchase price of the equipment subject to the lease. Reimbursed
administrative expenses are equal to the costs expended by CCC and its affiliates for services
necessary for the prudent operation of the Partnership pursuant to the Partnership Agreement.
The following compensation was paid or will be paid by the Partnership to CCC or its
affiliates:
 2006
    
    
    2005
    
    
    2004Base management feesLeasing Company
    
    $
    235,007
    
    
    $
    270,813
    
    
    $
    285,258Reimbursed
administrative expensesCCC
    
    
    22,208
    
    
    
    26,474
    
    
    
    27,579Leasing Company
    
    
    148,994
    
    
    
    175,526
    
    
    
    187,713171,202
    
    
    
    202,000
    
    
    
    215,292$
    406,209
    
    
    $
    472,813
    
    
    $
    500,550
  2006
    
    
    2005CCC
    
    $
    1,423
    
    
    $
    2,887Leasing Company
    
    
    13,608
    
    
    
    17,910$
    15,031
    
    
    $
    20,797
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CRONOS GLOBAL INCOME FUND XVI, L.P.
 Note to Financial Statements
 (9)
    
    Limited Partners CapitalCash distributions made to the limited partners during 2006, 2005 and 2004 included
distributions of proceeds from equipment sales in the amount of $1,079,775, $439,611 and
$106,646, respectively. These distributions, as well as cash distributions from operations,
are used in determining Adjusted Capital Contributions as defined by the Partnership
Agreement.The limited partners per unit share of capital at December 31, 2006, 2005 and 2004 was
$8, $10 and $11, respectively. This is calculated by dividing the limited partners capital at
the end of each year by 1,599,667, the total number of limited partnership units.(10)
    
    The Cronos GroupThe Cronos Group (the Parent Company) announced on February 28, 2007 the proposed sale
of the Parent Company to CRX Acquisition Ltd. (Purchaser), an affiliate of the Fortis group
of companies, which include the Parent Companys lead lender and a partner in the Parent
Companys Joint Venture Program. The Parent Company is the indirect corporate parent of CCC,
the general partner of the Partnership.The Parent Company reported the proposed sale in its 8-K report of March 2, 2007. Consummation
of the transaction requires the approval of the Parent Companys shareholders, which will be
sought at the Parent Companys 2007 annual meeting. The proxy statement for that meeting will
contain detailed disclosures regarding the transaction. As proposed, the transaction consists
of the sale of all of the Parent Companys assets to CRX and the assumption by CRX of all of
its liabilities. In connection with the proposed sale, the Parent Company will submit to its
shareholders a plan of liquidation, providing for the liquidation of the Parent Company
promptly after sale of its assets to CRX and CRXs assumption of the Parent Companys
liabilities. If approved by the Parent Companys shareholders, and the transaction closes, the
Parent Company will liquidate and dissolve, and its business will be continued by CRX as a
private company. The management of the Parent Company will continue as the management of CRX,
and members of the senior management of the Parent Company will acquire an equity interest in
the Purchaser. The Parent Company anticipates a closing of the transaction this summer.CCC does not anticipate any changes in its management, or in the Leasing Companys ability to
manage the Partnerships fleet in subsequent periods, but is unable to determine the impact, if
any, the Parent Companys sale may have on the future operating results, financial condition
and cash flows of the Partnership or CCC.
 38




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##### Table of Contents



Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
   
 Item 9B. Other Information
  39




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##### Table of Contents



PART III
 
 Item 10. Directors and Executive Officers of the Partnership
  Name
    
    OfficeDennis J. Tietz
    
    President, Chief Executive Officer and DirectorJohn Kallas
    
    Vice President, Chief Financial Officer and DirectorElinor A. Wexler
    
    Vice President/Administration, Secretary and DirectorPeter J. Younger
    
    Director
 Dennis J. Tietz
   John Kallas
  Elinor A. Wexler
  Peter J. Younger
 40




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##### Table of Contents



Name
    
    TitlePeter J. Younger
    
    President, Chief Operating Officer of TheCronos GroupJohn M. Foy
    
    Senior Vice President/Pacific RegionJohn C. Kirby
    
    Senior Vice President/North Atlantic RegionFrank P. Vaughan
    
    Director, Leasing CompanyTimothy W. Courtenay
    
    Director, Leasing Company
 Peter J. Younger
 John M. Foy
 John C. Kirby
 Frank P. Vaughan
  Timothy W. Courtenay
 41




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##### Table of Contents



Audit Committee
  Audit Committee Financial Expert
  Code of Ethics
  ir@cronos.com
 Section 16(a) Beneficial Ownership Reporting Compliance
  42




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##### Table of Contents



Item 11. Executive Compensation
    Cash Fees andName
    
    Description
    
    Distributions1)
    
    CCL
    
    Base management fees - equal to 7%
of gross lease billings from the leasing of containers subject to leases whereby the aggregate rental payments due during the initial term of the lease are less than the purchase price of the equipment subject to the lease pursuant to Section 4.3 of the Limited Partnership Agreement
    
    $
   236,7472)
    
    CCC
    
    Reimbursed administrative expenses equal  to the costs expended by CCC and its affiliates for services necessary to the prudent operation of the Partnership
    
    $
    23,672CCL
    
    pursuant to Section 4.4 of the Limited Partnership Agreement
    
    $
    151,5563)
    
    CCC
    
    Interest in Fund - 5% of distributions of distributable cash for any quarter pursuant to Section 6.1 of the Limited Partnership Agreement
    

    $
    129,131
 43




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
         
 Item 13. Certain Relationships and Related Transactions
         44




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
  Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  45




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Page(1)
    
    Financial StatementsReport of Independent Registered Public Accounting Firm
    
    25(2)
    
    The following financial statements of the Partnership are included in Part II, Item 8:Balance Sheets  as of December 31, 2006 and 2005
    
    26Statements of Operations  for the years ended December 31, 2006, 2005 and 2004
    
    27Statements of Partners Capital  for the years ended December 31, 2006, 2005 and 2004
    
    28Statements of Cash Flows  for the years ended December 31, 2006, 2005 and 2004
    
    29Notes to Financial Statements
    
    30
  46




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##### Table of Contents



ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the
Partnership, amended and restated as of
December 28, 1995
    
    (a)3(b)
    
    Certificate of Limited Partnership
    
    (b)10
    
    Form of Leasing Agent Agreement with Cronos
Containers Limited
    
    (c)10.1
    
    Note Purchase Agreement, dated as of March
30, 2000, by and between the Partnership
(the Company), Cronos Containers Limited
(the Guarantor) and IBJ Whitehall Business
Credit Corporation (the Purchaser)
    
    (d)10.2
    
    Guarantee, dated as of March 30, 2000, by
and between the Guarantor, the Company and
the Purchaser
    
    (e)10.3
    
    Secured note, dated as of March 30, 2000, by
and between the Company and the Purchaser
    
    (f)10.4
    
    Pledge and Security Agreement, dated as of
March 30, 2000, by and between the
Partnership (the Debtor) and IBJ Whitehall
Business Credit Corporation (the Secured
Party)
    
    (g)31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document
(h)
 
 (a)
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated
December 28, 1995, included as part of Registration Statement on Form S-1 (No. 33-98290)(b)
    
    Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No.
33-98290)(c)
    
    Incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form S-1 (No. 33-98290)(d)
    
    Incorporated by reference to Exhibit 10.1 to the Report on Form 10-Q of
the Partnership for the quarterly period ended March 31, 2000(e)
    
    Incorporated by reference to Exhibit 10.2 to the Report on Form 10-Q
of the Partnership for the quarterly period ended March 31, 2000(f)
    
    Incorporated by reference to Exhibit 10.3 to the Report on Form 10-Q
of the Partnership for the quarterly period ended March 31, 2000(g)
    
    Incorporated by reference to Exhibit 10.4 to the Report on Form 10-Q
of the Partnership for the quarterly period ended March 31, 2000(h)
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act
of 2002, other than as required by Section 906, is not to be deemed filed with the
Commission or subject to the rules and regulations promulgated by the Commission under the
Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of said Act. 47




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##### Table of Contents



SIGNATURES
  CRONOS GLOBAL INCOME FUND XVI, L.P.By
    
    Cronos Capital Corp.The General PartnerBy
    
    /s/Dennis J. TietzDennis J. TietzPresident and Director of Cronos Capital Corp.(CCC)Principal Executive Officer of CCCDate: March 16, 2007
  Signature
    
    Title
    
    Date/s/ Dennis J. Tietz

Dennis J. Tietz
    
    President and Director of
Cronos Capital Corp.
(CCC) (Principal Executive
Officer of CCC)
    
    March 16, 2007/s/ John Kallas

John Kallas
    
    Chief Financial Officer and
Director of
Cronos Capital Corp. (CCC)
(Principal Financial and
Accounting Officer of CCC)
    
    March 16, 2007/s/ Elinor A. Wexler

Elinor A. Wexler
    
    Vice President-Administration,
Secretary and Director of
Cronos Capital Corp.
    
    March 16, 2007




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##### Table of Contents



Exhibit Index
 ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the
Partnership, amended and restated as of
December 28, 1995
    
    (a)3(b)
    
    Certificate of Limited Partnership
    
    (b)10
    
    Form of Leasing Agent Agreement with Cronos
Containers Limited
    
    (c)10.1
    
    Note Purchase Agreement, dated as of March
30, 2001, by and between the Partnership
(the Company), Cronos Containers Limited
(the Guarantor) and IBJ Whitehall Business
Credit Corporation (the Purchaser)
    
    (d)10.2
    
    Guarantee, dated as of March 30, 2000, by
and between the Guarantor, the Company and
the Purchaser
    
    (e)10.3
    
    Secured note, dated as of March 30, 2000, by
and between the Company and the Purchaser
    
    (f)10.4
    
    Pledge and Security Agreement, dated as of
March 30, 2000, by and between the
Partnership (the Debtor) and IBJ Whitehall
Business Credit Corporation (the Secured
Party)
    
    (g)31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certification
    
    Filed with this document
(h)
 
 (a)
    
    Incorporated by reference to Exhibit A to the Prospectus of the Partnership dated
December 28, 1995, included as part of Registration Statement on Form S-1 (No. 33-98290)(b)
    
    Incorporated by reference to Exhibit 3.2 to the Registration
Statement on Form S-1 (No. 33-98290)(c)
    
    Incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form S-1 (No. 33-98290)(d)
    
    Incorporated by reference to Exhibit 10.1 to the Report on Form
10-Q of the Partnership for the quarterly period ended March 31, 2000(e)
    
    Incorporated by reference to Exhibit 10.2 to the Report on Form
10-Q of the Partnership for the quarterly period ended March 31, 2000(f)
    
    Incorporated by reference to Exhibit 10.3 to the Report on Form
10-Q of the Partnership for the quarterly period ended March 31, 2000(g)
    
    Incorporated by reference to Exhibit 10.4 to the Report on Form
10-Q of the Partnership for the quarterly period ended March 31, 2000(h)
    
    This certification, required by Section 906 of the Sarbanes-Oxley
Act of 2002, other than as required by Section 906, is not to be deemed filed with the
Commission or subject to the rules and regulations promulgated by the Commission under
the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 of
said Act.