##### 
















10-K





|                                                 |  |                                                                                                             
|------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------
|(Mark One)                                       |  |                                                                                                             
|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



THE CRONOS GROUP


(Exact name of Registrant as specified in its charter)


|                                                                   |  |                                     
|------------------------------------------------------------------ |  | ------------------------------------
|LUXEMBOURG                                                         |  | NOT APPLICABLE                      
|(State or other Jurisdiction of incorporation or
    organization) |  | (I.R.S. Employer Identification No.)

5, RUE GUILLAUME KROLL, L-1882 LUXEMBOURG


(Address of principal executive offices) (zip code)


Registrants telephone number, including area codes:


(352) 26 48 36 88





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


|                             |  |                                                             
|---------------------------- |  | ------------------------------------------------------------
|Title of each class
    None |  | Name of each exchange on which registered
    Not applicable

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


Common Shares, $2 par value per share




o þ


o þ


þ o


S-K 10-K 10-K. þ


12b-2


|                          |  |                     |  |                        
|------------------------- |  | ------------------- |  | -----------------------
|Large accelerated filer o |  | Accelerated filer o |  | Non-accelerated filer þ

12b-2) o þ






|       |  |                             
|------ |  | ----------------------------
|Class  |  | Number of Shares Outstanding
|       |  |                             
|Common |  | 7,645,673                   



|                                                      |  |                           
|----------------------------------------------------- |  | --------------------------
|Document                                              |  | Form 10-K Parts           
|                                                      |  |                           
|Proxy Statement for Annual Meeting to be held in 2007 |  | Part II  Item 5, Part III









---



##### 












TABLE OF CONTENTS


The Cronos Group


|                  |                                                                                                                                |      |    |    | 
|----------------- | ------------------------------------------------------------------------------------------------------------------------------ | ---- | -- | -- | 
|                  |                                                                                                                                | Page |   
|                  |                                                                                                                                |      |   
|Introductory Note |                                                                                                                                |      | ii |   
|PART I            |                                                                                                                                |      | 1  |   
|                  | Item 1  Business                                                                                                              |      |    | 1  | 
|                  | Item 1A  Risk Factors                                                                                                         |      |    | 11 | 
|                  | Item 1B  Unresolved Staff
    Comments                                                                                        |      |    | 13 | 
|                  | Item 2  Properties                                                                                                            |      |    | 14 | 
|                  | Item 3  Legal
    Proceedings                                                                                                 |      |    | 15 | 
|                  | Item 4  Submission of
    Matters to a Vote of Security Holders                                                               |      |    | 15 | 
|PART II           |                                                                                                                                |      | 16 |   
|                  | Item 5  Market for the
    Companys Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities |      |    | 16 | 
|                  | Item 6  Selected Financial
    Data                                                                                           |      |    | 19 | 
|                  | Item 7  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations                         |      |    | 21 | 
|                  | Item 7A  Quantitative and
    Qualitative Disclosures about Market Risk                                                       |      |    | 41 | 
|                  | Item 8  Financial
    Statements and Supplementary Data                                                                       |      |    | 43 | 
|                  | Item 9  Changes In and
    Disagreements with Accountants on Accounting and Financial
    Disclosure                          |      |    | 43 | 
|                  | Item 9A  Controls and
    Procedures                                                                                          |      |    | 43 | 
|                  | Item 9B  Other
    Information                                                                                                |      |    | 43 | 
|PART III          |                                                                                                                                |      | 44 |   
|                  | Item 10  Directors and
    Executive Officers of the Group                                                                    |      |    | 44 | 
|                  | Item 11  Executive
    Compensation                                                                                           |      |    | 45 | 
|                  | Item 12  Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters               |      |    | 45 | 
|                  | Item 13  Certain
    Relationships and Related Transactions                                                                   |      |    | 46 | 
|                  | Item 14  Principal
    Accountant Fees and Services                                                                           |      |    | 46 | 
|PART IV           |                                                                                                                                |      | 47 |   
|                  | Item 15  Exhibits and
    Financial Statement Schedules                                                                       |      |    | 47 | 

i



---



##### 






INTRODUCTORY NOTE






10-K


ii



---



##### 






PART I





Item 1  Business


Introduction


(société
anonyme holding) www.cronos.com






|                        |                         |                                 |       |      |      |  |       |      |  |  |       |      |  |      |       |      |  |  |       |      | 
|----------------------- | ----------------------- | ------------------------------- | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- |  | ---- | ----- | ---- |  |  | ----- | ---- | 
|                        |                         | Cronos Fleet (in TEU thousands) |      
|                        |                         | at December 31,                 |      
|                        |                         |                                 |      
|                        |                         | 2006                            |       |      | 2005 |  |       | 2004 |  |  | 2003  |      |  | 2002 |      
|                        |                         |                                 |       |      |      |  |       |      |  |  |       |      |  |      |      
|Dry cargo containers    |                         |                                 | 377.2 |      |      |  | 393.9 |      |  |  | 399.1 |      |  |      | 370.5 |      |  |  | 364.5 |     
|Specialized containers: |                         |                                 |       |      |      |  |       |      |  |  |       |      |  |      |       |      |  |  |       |     
|                        | Refrigerated containers |                                 |       | 18.8 |      |  |       | 14.9 |  |  |       | 11.5 |  |      |       | 12.3 |  |  |       | 13.3 | 
|                        | Tank containers         |                                 |       | 6.1  |      |  |       | 4.9  |  |  |       | 3.5  |  |      |       | 2.7  |  |  |       | 2.4  | 
|                        | Dry freight specials    |                                 |       | 41.7 |      |  |       | 32.1 |  |  |       | 25.2 |  |      |       | 20.3 |  |  |       | 14.8 | 
|                        |                         |                                 |       |      |      |  |       |      |  |  |       |      |  |      |      
|Total fleet             |                         |                                 | 443.8 |      |      |  | 445.8 |      |  |  | 439.3 |      |  |      | 405.8 |      |  |  | 395.0 |     
|                        |                         |                                 |       |      |      |  |       |      |  |  |       |      |  |      |      

Proposed
Sale of the Companys Assets


8-K


8-K


1



---



##### 



10-K


Industry
Background












Company
Strategy




Operations








2



---



##### 





24-hour


Benefits
of Leasing for Shipping Lines and Other Customers






| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | Leasing provides customers with the flexibility to respond to
    rapidly changing market opportunities;                                 
|
| |  | Leasing allows customers to respond to changing seasonal and
    trade route demands, thereby optimizing their capital investment;       
|
| |  | Leasing enables shipping lines to expand their trade routes
    without making a permanent commitment to support their new
    structure;
|
| |  | Leasing gives customers access to the equipment they need
    without having to make large capital expenditures;                         
|
| |  | Leasing offers customers an alternative source of financing in a
    traditionally capital-intensive industry; and,                      
|
| |  | Leasing permits customers to benefit from the relationship
    between container manufacturers and leasing companies.                    

Fleet
Profile






|                        |                         |      |         |        |      |   |         |        |  |   |         |        |  |      |         |        |  |   |         |        | 
|----------------------- | ----------------------- | ---- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|(in thousands)          |                         | 2006 |         |        | 2005 |   |         | 2004   |  |   | 2003    |        |  | 2002 |        
|                        |                         |      |         |        |      |   |         |        |  |   |         |        |  |      |        
|Dry cargo containers    |                         | $    | 82,433  |        |      | $ | 94,638  |        |  | $ | 91,511  |        |  | $    | 80,773  |        |  | $ | 78,760  |       
|Specialized containers: |                         |      |         |        |      |   |         |        |  |   |         |        |  |      |         |        |  |   |         |       
|                        | Refrigerated containers |      |         | 26,225 |      |   |         | 19,890 |  |   |         | 20,613 |  |      |         | 20,829 |  |   |         | 21,293 | 
|                        | Tank containers         |      |         | 14,185 |      |   |         | 10,188 |  |   |         | 8,295  |  |      |         | 6,713  |  |   |         | 6,123  | 
|                        | Dry freight specials    |      |         | 19,040 |      |   |         | 14,308 |  |   |         | 11,677 |  |      |         | 9,186  |  |   |         | 7,467  | 
|                        |                         |      |         |        |      |   |         |        |  |   |         |        |  |      |        
|Total                   |                         | $    | 141,883 |        |      | $ | 139,024 |        |  | $ | 132,096 |        |  | $    | 117,501 |        |  | $ | 113,643 |       
|                        |                         |      |         |        |      |   |         |        |  |   |         |        |  |      |        

3



---



##### 







| |                     
| | --------------------
| | Dry Cargo Containers

®




| |                       
| | ----------------------
| | Specialized Containers

Refrigerated containers


Tank containers


Dry freight specials




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Cronos owns a series of patents for Cellular Palletwide
    Containers (CPCs), a specialized container of extra
    interior width designed specifically for the carriage of cargo
    on metric pallets. CPCs allow for the side-by-side stowage of
    metric pallets, which is not possible in a standard ISO
    container, thereby increasing the pallet load capacity per
    container. In addition to its leasing activity, Cronos earns CPC
    licence fee income on the sale of CPCs to third parties. A
    number of the patents expired in 2006 and the remaining twenty
    three patents expire on various dates between 2008 and 2013. The
    expiration of the 2006 patents is not expected to have a
    significant impact on the lease or sale markets for the CPC.
|
| |  | A rolltrailer is a heavy-duty chassis used for moving heavy
    cargo or containers onto and off of Roll On  Roll Off
    ships. Cronos entered the rolltrailer market in 1996 when it
    acquired a Swedish company with an existing fleet of
    rolltrailers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Open tops are primarily used to enable loading of heavy
    machinery from above the container and for the carriage of
    certain over-height cargoes that would be unsuitable for a
    standard ISO container.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Flat racks similarly are typically used for the transportation
    of heavy machinery and can be folded flat for inexpensive and
    efficient repositioning and storage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Bulkers are containers designed for the carriage of granular
    cargoes, including plastics, certain chemicals and agricultural
    products. The cargo carried by bulkers can be loaded and shipped
    in a loose state without the need for any other packaging.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



4



---



##### 





|                        |                         |                                            |         |       |      |   |         |       |  |   |       |       |  |      |       |       |  |   |       |       | 
|----------------------- | ----------------------- | ------------------------------------------ | ------- | ----- | ---- | - | ------- | ----- |  | - | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                        |                         | Cronos Fleet (in millions) at December 31, |        
|                        |                         |                                            |        
|                        |                         | 2006                                       |         |       | 2005 |   |         | 2004  |  |   | 2003  |       |  | 2002 |      
|                        |                         |                                            |         |       |      |   |         |       |  |   |       |       |  |      |      
|Dry cargo containers    |                         | $                                          | 644.2   |       |      | $ | 685.6   |       |  | $ | 711.4 |       |  | $    | 680.3 |       |  | $ | 691.3 |      
|Specialized containers: |                         |                                            |         |       |      |   |         |       |  |   |       |       |  |      |       |       |  |   |       |      
|                        | Refrigerated containers |                                            |         | 207.1 |      |   |         | 173.2 |  |   |       | 141.1 |  |      |       | 154.0 |  |   |       | 168.5 | 
|                        | Tank containers         |                                            |         | 128.3 |      |   |         | 102.8 |  |   |       | 74.3  |  |      |       | 60.7  |  |   |       | 57.2  | 
|                        | Dry freight specials    |                                            |         | 132.1 |      |   |         | 97.0  |  |   |       | 70.2  |  |      |       | 55.6  |  |   |       | 45.6  | 
|                        |                         |                                            |         |       |      |   |         |       |  |   |       |       |  |      |      
|Total fleet             |                         | $                                          | 1,111.7 |       |      | $ | 1,058.6 |       |  | $ | 997.0 |       |  | $    | 950.6 |       |  | $ | 962.6 |      
|                        |                         |                                            |         |       |      |   |         |       |  |   |       |       |  |      |      

Types
of Leases Available to Shipping Lines and Other Customers


Master leases


Term leases


Direct financing leases






5



---



##### 



Lease
Profile


|                 |                 |                                                                 |    |             |              |  |       |      |   |  |          |     |   |       |    |     |   |  |    |     |  
|---------------- | --------------- | --------------------------------------------------------------- | -- | ----------- | ------------ |  | ----- | ---- | - |  | -------- | --- | - | ----- | -- | --- | - |  | -- | --- | -
|                 |                 | Percentage of Fleet (TEU) by Lease Type as of December 31, 2006 |   
|                 |                 |                                                                 |   
|                 |                 | Product Type                                                    |   
|                 |                 |                                                                 |   
|                 |                 |                                                                 |    | Dry Freight |              |  | Total |     
|Type of Lease    |                 | Dry Cargo                                                       |    |             | Refrigerated |  |       | Tank |   |  | Specials |     |   | Fleet |   
|                 |                 |                                                                 |    |             |              |  |       |      |   |  |          |     |   |       |   
|Master           |                 |                                                                 | 49 | %           |              |  | 20    | %    |   |  | 41       | %   |   |       | 48 | %   |   |  | 48 | %  
|Term             |                 |                                                                 |    |             |              |  |       |      |   |  |          |     |   |       |    |     |   |  |    |    
|                 | - short-term(1) |                                                                 |    | 16          | %            |  |       | 17   | % |  |          | 14  | % |       |    | 17  | % |  |    | 16  | %
|                 | - long-term(2)  |                                                                 |    | 27          | %            |  |       | 57   | % |  |          | 36  | % |       |    | 23  | % |  |    | 28  | %
|Direct Financing |                 |                                                                 | 8  | %           |              |  | 6     | %    |   |  | 9        | %   |   |       | 12 | %   |   |  | 8  | %  
|                 |                 |                                                                 |    |             |              |  |       |      |   |  |          |     |   |       |   
|                 | Total           |                                                                 |    | 100         | %            |  |       | 100  | % |  |          | 100 | % |       |    | 100 | % |  |    | 100 | %
|                 |                 |                                                                 |    |             |              |  |       |      |   |  |          |     |   |       |   






|    |                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(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 that expire after 2007,
    the majority of which will expire between 2008 and 2012.



Customers






Acquisition
Policy






Repair
and Maintenance




6



---



##### 





Disposition
of Used Containers






Competition








pick-up




Insurance






7



---



##### 





Employees






Operating
Segments












Lease agreements with the Joint Venture Program, US Limited
Partnership Program, and Private Container Programs






|                                |       |      |    |     |      |  |    |      |   |  |      |     |   |      |    |     |   |  |    |     |  
|------------------------------- | ----- | ---- | -- | --- | ---- |  | -- | ---- | - |  | ---- | --- | - | ---- | -- | --- | - |  | -- | --- | -
|                                |       | 2006 |    |     | 2005 |  |    | 2004 |   |  | 2003 |     |   | 2002 |   
|                                |       |      |    |     |      |  |    |      |   |  |      |     |   |      |   
|Joint Venture Program           |       |      | 40 | %   |      |  | 31 | %    |   |  | 14   | %   |   |      | 8  | %   |   |  | 4  | %  
|US Limited Partnership Programs |       |      | 14 | %   |      |  | 18 | %    |   |  | 22   | %   |   |      | 25 | %   |   |  | 27 | %  
|Private Container Programs      |       |      | 25 | %   |      |  | 29 | %    |   |  | 32   | %   |   |      | 36 | %   |   |  | 39 | %  
|Owned Containers                |       |      | 21 | %   |      |  | 22 | %    |   |  | 32   | %   |   |      | 31 | %   |   |  | 30 | %  
|                                |       |      |    |     |      |  |    |      |   |  |      |     |   |      |   
|                                | Total |      |    | 100 | %    |  |    | 100  | % |  |      | 100 | % |      |    | 100 | % |  |    | 100 | %
|                                |       |      |    |     |      |  |    |      |   |  |      |     |   |      |   





8



---



##### 



Joint
Venture Program








| |   |                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Acquisition feesequal to 1.25% of the original cost of
    equipment acquired by the Joint Venture Program. Such fees are
    paid on or about the date of the equipment purchase and are
    recognized as income for accounting purposes by Cronos, in its
    statement of operations, on a straight line basis over the
    period of the agreement to which they relate;
|
| |  | Management feesequal to 8% of net lease revenue (gross
    lease revenue less direct operating expenses);                                                                                                                                                                                                                                                                    
|
| |  | Disposition feesequal to 5% of disposal proceeds
    providing that at the time of disposition the disposal proceeds
    exceed the net book value of the container.                                                                                                                                                                                                         

US
Limited Partnership Programs








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Acquisition feesequal to between 1.5% and 5% (depending
    on the program) of the original cost of equipment acquired by
    the partnerships. Such fees are paid on or about the date of the
    equipment purchase and are recognized as income for accounting
    purposes by Cronos, in its statement of operations, on a
    straight line basis over the period of the agreement to which
    they relate;
|
| |  | Management feesequal to 7% of gross lease revenue;                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Reimbursed administrative expensesfor certain overhead
    and operating expenses;                                                                                                                                                                                                                                                                                                                               
|
| |  | Incentive feesequal to 15% of distributable cash after
    the limited partners have received an amount equal to their
    capital contributions plus an 8%  10% cumulative
    compounded annual return on their adjusted capital contributions
    (depending on the program);                                                                                                                                
|
| |  | General partners shareequal to 5% of distributable
    cash generated by the partnerships operating activities
    and 1% of distributions from sales proceeds.                                                                                                                                                                                                                                                





Private
Container Programs




9



---



##### 







Owned
Containers






Financial
Information about Geographic Areas






10



---



##### 






Item 1A  Risk Factors




The market for the common shares of Cronos is not liquid




Cronos is subject to the cyclicality and fluctuations in
world trade




Cronos operates in a highly competitive industry




Fluctuations in shipping lines fleet mix could have an
adverse effect on the demand for leased containers




Consolidation within the shipping industry could have an
adverse effect on the profitability and financial condition of
Cronos




Lessee defaults could have an adverse effect on the
profitability and financial condition of Cronos




A shortage of third party capital could impair the ability of
Cronos to expand its fleet. Alternatively, surplus levels of
third party capital seeking investments in this industry could
have an adverse impact on demand and on lease rates.






Early termination of agreements with Managed Container
Programs could have an adverse impact on the profitability and
financial position of Cronos




11



---



##### 



Fluctuations in the residual value of containers may impact
profitability and the long-term returns generated by leased
equipment




Specialized containers could have potential mechanical,
obsolescence and other risks




There are political, economic & business risks
inherent in the global business conducted by Cronos






| |   |                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Political instability;                                                                                                                                                                                                                               
|
| |  | Economic conditions in the shipping and other industries;                                                                                                                                                                                            
|
| |  | 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;
|
| |  | 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;
|
| |  | The supply and cost of new containers:                                                                                                                                                                                                               
|
| |  | Fluctuations in inflation, interest rates and foreign exchange
    rates;                                                                                                                                                                            
|
| |  | Import and export tariffs and restrictions;                                                                                                                                                                                                          
|
| |  | Restrictions on the movement of capital;                                                                                                                                                                                                             
|
| |  | The imposition of new direct and indirect taxes in jurisdictions
    in which the Group trades;                                                                                                                                                      
|
| |  | The risk of uninsured losses with respect to the containers or
    insured losses for which insurance proceeds are inadequate;                                                                                                                       
|
| |  | The effects of strikes and labor disputes; and,                                                                                                                                                                                                      
|
| |  | Terrorist attacks and the risk of terrorist attack.                                                                                                                                                                                                  

Cronos is dependant on key personnel




Environmental risks could result in product obsolescence and
additional costs




12



---



##### 














Item 1B  Unresolved Staff Comments




13



---



##### 






Item 2  Properties






|                        |                         |            |        |         |           |  |         |        |  |  |         |        | 
|----------------------- | ----------------------- | ---------- | ------ | ------- | --------- |  | ------- | ------ |  |  | ------- | ------ | 
|                        |                         |            |        | Managed |           |  |        
|                        |                         | Owned      |        |         | Container |  |         | Total  | 
|                        |                         | Containers |        |         | Programs  |  |         | Fleet  | 
|                        |                         |            |        |         |           |  |         |        | 
|Dry cargo containers    |                         |            | 62,166 |         |           |  | 315,063 |        |  |  | 377,229 |       
|Specialized containers: |                         |            |        |         |           |  |         |        |  |  |         |       
|                        | Refrigerated containers |            |        | 4,874   |           |  |         | 13,958 |  |  |         | 18,832 | 
|                        | Tank containers         |            |        | 1,610   |           |  |         | 4,495  |  |  |         | 6,105  | 
|                        | Dry freight specials    |            |        | 16,722  |           |  |         | 24,880 |  |  |         | 41,602 | 
|                        |                         |            |        |         |           |  |         |        | 
|Total                   |                         |            | 85,372 |         |           |  | 358,396 |        |  |  | 443,768 |       
|                        |                         |            |        |         |           |  |         |        | 





|                        |                         |  |     |     | 
|----------------------- | ----------------------- |  | --- | --- | 
|Dry cargo containers    |                         |  | 93% |    
|Specialized containers: |                         |  |     |    
|                        | Refrigerated containers |  |     | 89% | 
|                        | Tank containers         |  |     | 90% | 
|                        | Dry freight specials:   |  |     | 89% | 

14



---



##### 






Item 3  Legal Proceedings


TOEMT
Litigation


8-K


8-K


8-K












| |                
| | ---------------
| | Legal Complaint

8-K









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




15



---



##### 






PART II







|         |                                                                                                                      
|-------- | ---------------------------------------------------------------------------------------------------------------------
|Item 5  | Market for the Companys Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities





|                   |                |             |   |        |     |  |   |        | 
|------------------ | -------------- | ----------- | - | ------ | --- |  | - | ------ | 
|                   |                | Price Range |  
|                   |                |             |  
|                   |                | High        |   |        | Low | 
|                   |                |             |   |        |     | 
|Calendar Year 2006 |                |             |   |        |     |  |   |       
|                   | First Quarter  |             | $ | 13.325 |     |  | $ | 12.174 | 
|                   | Second Quarter |             | $ | 13.589 |     |  | $ | 10.800 | 
|                   | Third Quarter  |             | $ | 13.500 |     |  | $ | 10.800 | 
|                   | Fourth Quarter |             | $ | 16.000 |     |  | $ | 12.800 | 
|Calendar Year 2005 |                |             |   |        |     |  |   |       
|                   | First Quarter  |             | $ | 13.879 |     |  | $ | 9.980  | 
|                   | Second Quarter |             | $ | 13.100 |     |  | $ | 10.810 | 
|                   | Third Quarter  |             | $ | 12.770 |     |  | $ | 10.350 | 
|                   | Fourth Quarter |             | $ | 12.890 |     |  | $ | 10.400 | 



|                  |  |               |      |  |      |   |      | 
|----------------- |  | ------------- | ---- |  | ---- | - | ---- | 
|                  |  | Calendar Year |     
|                  |  |               |     
|                  |  | 2006          |      |  | 2005 |  
|                  |  |               |      |  |      |  
|First Quarter     |  | $             |     |  |      | $ |     | 
|Second Quarter    |  | $             | 0.07 |  |      | $ | 0.06 | 
|Third Quarter     |  | $             | 0.07 |  |      | $ | 0.07 | 
|Fourth Quarter(1) |  | $             | 0.15 |  |      | $ | 0.14 | 




|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(1) | Declared in respect of fourth and first quarters. See additional
    disclosure herein.





16



---



##### 

















120-day


17



---



##### 



Performance Graph




COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*


Among The Cronos Group, The S&P 500 Index


And The Dow Jones US Transportation Average Index





|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        |  |  |  |  |        |  | 
|----------------------------------- |  |  | ----- | ------ |  | ----- |  |  | ----- |  |  | ----- |  | ------ | ----- |  |  | ----- | ------ |  |  |  |  | ------ |  |  |  |  | ------ |  | 
|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        | 
|                                    |  |  | 12/01 |        |  | 12/02 |  |  | 12/03 |  |  | 12/04 |  |        | 12/05 |  |  | 12/06 |       
|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        | 
|The Cronos Group                    |  |  |       | 100.00 |  |       |  |  | 75.63 |  |  |       |  | 103.51 |       |  |  |       | 216.78 |  |  |  |  | 268.80 |  |  |  |  | 341.00 |  | 
|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        | 
|S&P 500                             |  |  |       | 100.00 |  |       |  |  | 77.90 |  |  |       |  | 100.24 |       |  |  |       | 111.15 |  |  |  |  | 116.61 |  |  |  |  | 135.03 |  | 
|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        | 
|Dow Jones US Transportation Average |  |  |       | 100.00 |  |       |  |  | 88.52 |  |  |       |  | 116.71 |       |  |  |       | 149.08 |  |  |  |  | 166.45 |  |  |  |  | 182.78 |  | 
|                                    |  |  |       |        |  |       |  |  |       |  |  |       |  |        |       |  |  |       |        |  |  |  |  |        | 





©


Equity Compensation Plan
Information






18



---



##### 






Item 6  Selected Financial Data




|                                                                                            |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |         |       |  |   |         |       | 
|------------------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------- | ------- | ----- | --------------- | - | ------- | -------- | ---- | - | -------- | ----- |  | ------- | ------- | ----- |  | - | ------- | ----- | 
|                                                                                            |                                             | Years Ended December 31,              |        
|                                                                                            |                                             |                                       |        
|                                                                                            |                                             |                                       |         | 2005  |                 |   |         |          | 2002 |  
|                                                                                            |                                             | 2006                                  |         |       | (1) (2) (3) (4) |   |         | 2004 (5) |      |   | 2003 (6) |       |  | (7) (8) |        
|                                                                                            |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |        
|                                                                                            |                                             | (in thousands, except per share data) |        
|Statements of Income Data:                                                                  |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |         |       |  |   |         |      
|Gross lease revenue                                                                         |                                             | $                                     | 141,883 |       |                 | $ | 139,024 |          |      | $ | 132,096  |       |  | $       | 117,501 |       |  | $ | 113,643 |      
|Total revenues                                                                              |                                             |                                       | 151,842 |       |                 |   | 148,290 |          |      |   | 140,508  |       |  |         | 126,263 |       |  |   | 119,323 |      
|Income before cumulative effect of change in accounting
    principle(8)                    |                                             |                                       | 9,227   |       |                 |   | 7,802   |          |      |   | 8,865    |       |  |         | 4,190   |       |  |   | 2,309   |      
|Basic net income per share before cumulative effect of change in
    accounting principle   |                                             | $                                     | 1.22    |       |                 | $ | 1.06    |          |      | $ | 1.22     |       |  | $       | 0.57    |       |  | $ | 0.31    |      
|                                                                                            |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |        
|Diluted net income per share before cumulative effect of change
    in accounting principle |                                             | $                                     | 1.14    |       |                 | $ | 0.98    |          |      | $ | 1.14     |       |  | $       | 0.55    |       |  | $ | 0.31    |      
|                                                                                            |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |        
|Shares used in:                                                                             |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |         |       |  |   |         |      
|                                                                                            | - basic net income per share calculations   |                                       |         | 7,535 |                 |   |         | 7,359    |      |   |          | 7,261 |  |         |         | 7,322 |  |   |         | 7,365 | 
|                                                                                            | - diluted net income per share calculations |                                       |         | 8,119 |                 |   |         | 7,962    |      |   |          | 7,749 |  |         |         | 7,602 |  |   |         | 7,425 | 
|Cash dividends declared per common share                                                    |                                             | $                                     | 0.29    |       |                 | $ | 0.27    |          |      | $ | 0.17     |       |  | $       | 0.08    |       |  | $ | 0.04    |      
|Balance Sheet Data (at end of period):                                                      |                                             |                                       |         |       |                 |   |         |          |      |   |          |       |  |         |         |       |  |   |         |      
|Cash and cash equivalents                                                                   |                                             | $                                     | 8,498   |       |                 | $ | 15,829  |          |      | $ | 17,579   |       |  | $       | 8,432   |       |  | $ | 5,626   |      
|Total assets                                                                                |                                             |                                       | 263,199 |       |                 |   | 271,732 |          |      |   | 271,749  |       |  |         | 238,037 |       |  |   | 236,303 |      
|Long-term debt and capital lease obligations                                                |                                             |                                       | 82,407  |       |                 |   | 76,011  |          |      |   | 114,122  |       |  |         | 106,434 |       |  |   | 114,864 |      
|Total debt and capital lease obligations                                                    |                                             |                                       | 95,875  |       |                 |   | 87,780  |          |      |   | 127,953  |       |  |         | 119,205 |       |  |   | 128,950 |      
|Shareholders equity                                                                        |                                             |                                       | 85,487  |       |                 |   | 77,537  |          |      |   | 70,359   |       |  |         | 62,033  |       |  |   | 59,082  |      






|    |                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 2005, the Group recorded a charge of $4.1 million in
    connection with TOEMT related legal claims made against the
    Group.                                                                                                                                                                                                                            
|   
|(2) | In 2005, the Group recorded a gain of $1.3 million on the
    completion of the sale of the Amersham Estate and the
    distribution of the amounts due to Cronos. See
    Item 7  Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    herein.                                                                   
|   
|(3) | In 2005, the Group recognized $0.8 million of income on the
    recovery of an amount payable to a Managed Container Program.
    See Item 7  Managements Discussion
    and Analysis of Financial Condition and Results of
    Operations herein.                                                                                                        
|   
|(4) | In 2005, the Group recorded a one-time after-tax expense of
    $0.9 million relating to the restructuring of the
    Groups sales and marketing divisions. See
    Item 7  Managements Discussion and
    Analysis of Financial Condition and Results of Operations
    herein.                                                                         
|   
|(5) | In 2004, the Group reversed a $1.3 million provision that
    had originally been provided against a related party loan note
    in 1997. In December 2004, the Group concluded that the loan
    note was recoverable and would be repaid in full from the
    proceeds of the sale of the Amersham Estate. The loan note was
    repaid on February 2, 2005.
|   
|(6) | In 2003, the Group recorded a tax benefit of $2.7 million
    following the transfer of assets to an affiliate resident in a
    foreign jurisdiction. Under the prevailing tax legislation, the
    Group was able to complete the transaction without generating a
    recapture of tax depreciation. As a result, the deferred tax
    associated with     

19



---



##### 



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | these assets was credited to income. In addition, the Group
    incurred $0.5 million of breakage costs in connection with
    the refinancing of the assets.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(7) | In 2002, the Group recorded a tax benefit of $2.5 million
    as a result of a settlement with an overseas tax authority.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(8) | In December 2003, the Group adopted Interpretation No. 46
    Revised (FIN 46R), Consolidation of
    Variable Interest Entities. The Group applied FIN 46R
    to all entities that were subject to FIN 46R as of
    December 31, 2003, and determined that it was the primary
    beneficiary of a variable interest entity. Accordingly, Cronos
    applied FIN 46R by restating previously issued financial
    statements as of December 31, 2002, and for the year ended
    December 31, 2002, with a cumulative effect adjustment in
    the beginning of the first year restated.

20



---



##### 






Item 7  Managements Discussion and
Analysis of Financial Condition and Results of Operations








| |                                              
| | ---------------------------------------------
| | Overview of Primary Revenue and Expense Items

Gross lease revenue


Equipment trading revenue and expenses




Commissions, fees and other operating income includes:




| |   |                                                                                              
| | - | ---------------------------------------------------------------------------------------------
| |  | acquisition fees relating to the Managed Container Programs;                                 
|
| |  | income from direct financing leases;                                                         
|
| |  | fees earned in connection with equipment consultancy and design
    services;                
|
| |  | licence fee income earned in connection with the patented CPCs
    (see Item 1  Business);
|
| |  | fees earned on the disposal of containers owned by Managed
    Container Programs;           
|
| |  | foreign exchange gains or losses; and,                                                       
|
| |  | miscellaneous other fees and income.                                                         





21



---



##### 



Direct operating expenses




| |   |                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Activity-relatedexpenses include agents costs and depot
    costs, such as repairs, maintenance and handling;                                                                                                                                                                                           
|
| |  | Inventory-relatedexpenses relate to off-hire containers
    and comprise storage and repositioning costs. These costs are
    sensitive to the quantity of off-hire containers, the frequency
    at which containers are re-delivered and the frequency and size
    of repositioning moves undertaken;
|
| |  | Legal and otherexpenses include legal costs related to
    the recovery of containers, insurance and provisions for
    doubtful accounts.                                                                                                                                                              

Payments to Managed Container Programs


Selling, general and administrative expenses


Segment profit or loss




Overview of Funding Structure






Owned
Containers










22



---



##### 









| |                           
| | --------------------------
| | Managed Container Programs

Joint Venture Program:




| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | The revolving credit period was extended for one year until
    October 31, 2007;                                      
|
| |  | The maximum debt funding commitment increased from
    $300 million to $350 million; and,                              
|
| |  | The interest rate margin over the one month London Inter-Bank
    Offered Rate (Libor) declined from 1.625% to 1.25%.













| |   |                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------
| |  | To increase the maximum debt funding commitment from
    $350 million to $420 million; and,                             
|
| |  | To increase the maximum equity commitment of each of the equity
    holders in the Joint Venture Program to $42 million.





23



---



##### 



US Limited Partnership Programs:


Private Container Programs:




24



---



##### 





| |                
| | ---------------
| | Market Overview





| |   |                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------
| |  | Increasing the concentration levels of specialized containers;                                                                           
|
| |  | Participating in the lease market for new dry cargo containers
    as market opportunities arise;                                        
|
| |  | Funding the investment in new container equipment primarily in
    the Joint Venture Program and in the Owned Container segment;
    and,
|
| |  | Customer base diversification.                                                                                                           



| |                       
| | ----------------------
| | Specialized Containers











|                        |                         |                                  |       |      |      |   |       |      |  |   |       |      | 
|----------------------- | ----------------------- | -------------------------------- | ----- | ---- | ---- | - | ----- | ---- |  | - | ----- | ---- | 
|                        |                         | Cronos Fleet Container Additions |      
|                        |                         | For the Year Ended December, 31  |      
|                        |                         | (in millions)                    |      
|                        |                         |                                  |      
|                        |                         | 2006                             |       |      | 2005 |   |       | 2004 | 
|                        |                         |                                  |       |      |      |   |       |      | 
|Dry cargo containers    |                         | $                                | 30.6  |      |      | $ | 46.5  |      |  | $ | 81.0  |     
|Specialized containers: |                         |                                  |       |      |      |   |       |      |  |   |       |     
|                        | Refrigerated containers |                                  |       | 57.2 |      |   |       | 49.4 |  |   |       | 11.7 | 
|                        | Tank containers         |                                  |       | 29.2 |      |   |       | 30.4 |  |   |       | 14.3 | 
|                        | Dry freight specials    |                                  |       | 38.1 |      |   |       | 27.5 |  |   |       | 15.1 | 
|                        |                         |                                  |       |      |      |   |       |      | 
|Total                   |                         | $                                | 155.1 |      |      | $ | 153.8 |      |  | $ | 122.1 |     
|                        |                         |                                  |       |      |      |   |       |      | 



| |                              
| | -----------------------------
| | Market for New Dry Containers



25



---



##### 













| |                              
| | -----------------------------
| | Customer Base Diversification





| |                         
| | ------------------------
| | Existing Container Fleet



|                                    |  |      |      |   |      |  |      |      |  |  |      |  
|----------------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                    |  | 2006 |      |   | 2005 |  |      | 2004 | 
|                                    |  |      |      |   |      |  |      |      | 
|Utilization at December 31          |  |      | 92.1 | % |      |  | 90.8 | %    |  |  | 94.1 | %
|Average utilization during the year |  |      | 91.5 | % |      |  | 92.4 | %    |  |  | 91.8 | %





26



---



##### 



Year
Ended December 31, 2006 Compared to Year Ended
December 31, 2005


Overview








| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Professional fees of $1.2 million that were incurred in
    connection with the TOEMT litigation and the proposed
    transaction for the sale of the Company; and,
|
| |  | Charges of $0.4 million (net of income tax adjustments)
    recorded in connection with the implementation of restructuring
    plans.                             



Analysis and Discussion


Gross lease revenue (GLR)


Direct operating expenses


Operating segment information


|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       |         |   |   |        |         |  
|---------------------------- | ---------------------------------------- | ------- | ----- | ------- | ----------- | - | ----- | --------- | - | - | ---------- | ------- | - | ----- | ----- | ------- | - | - | ------ | ------- | -
|                             |                                          | Joint   |       |         | US Limited  |   |       | Private   |   |   |            |         |  
|                             |                                          | Venture |       |         | Partnership |   |       | Container |   |   | Owned      |         |   |      
|(in thousands)               |                                          | Program |       |         | Programs    |   |       | Programs  |   |   | Containers |         |   | Total |      
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |      
|Year Ended December 31, 2006 |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       |         |   |   |        |        
|                             | - gross lease revenue                    |         | $     | 53,812  |             |   | $     | 17,613    |   |   | $          | 40,596  |   |       | $     | 29,862  |   |   | $      | 141,883 |  
|                             | - direct operating expenses              |         |       | (4,228  | )           |   |       | (2,442    | ) |   |            | (6,680  | ) |       |       | (3,293  | ) |   |        | (16,643 | )
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |      
|                             | - net lease revenue                      |         |       | 49,584  |             |   |       | 15,171    |   |   |            | 33,916  |   |       |       | 26,569  |   |   |        | 125,240 |  
|                             | - direct financing lease income          |         |       |        |             |   |       |          |   |   |            |        |   |       |       | 1,671   |   |   |        | 1,671   |  
|                             | - payments to Managed Container Programs |         |       | (45,195 | )           |   |       | (11,356   | ) |   |            | (30,374 | ) |       |       |        |   |   |        | (86,925 | )
|                             | - container depreciation                 |         |       |        |             |   |       |          |   |   |            |        |   |       |       | (11,374 | ) |   |        | (11,374 | )
|                             | - container interest expense             |         |       |        |             |   |       |          |   |   |            |        |   |       |       | (7,208  | ) |   |        | (7,208  | )
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |      
|Segment profit               |                                          | $       | 4,389 |         |             | $ | 3,815 |           |   | $ | 3,542      |         |   | $     | 9,658 |         |   | $ | 21,404 |        
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |      

Joint Venture Program:




| |   |                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuefor this segment increased by
    $21.1 million to $49.6 million in 2006 reflecting the
    significant investment in additional equipment for the program
    including the acquisition of $73.8 million of container
    fixed assets from the Group in the latter half of 2005.
|
| |  | Payments to the Joint Venture Programincreased by
    $19.2 million, which is in line with the increase in net
    lease revenue for this segment.                                                                                                                                                 

27



---



##### 



US Limited Partnership Programs:




| |   |                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuefor this segment declined by
    $4.8 million compared to the prior year due primarily to
    the effect of the disposal of containers at the end of their
    useful economic life and the liquidation of four of the
    partnerships since September 2005.
|
| |  | Payments to US Limited Partnership Programsdeclined by
    $3.4 million when compared to 2005 which was in line with
    the change in net lease revenue.                                                                                                                     

Private Container Programs:




| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuedecreased by $6.2 million when
    compared to 2005 due primarily to the decline in the number of
    containers owned by these programs.
|
| |  | Payments to Private Container Programswere
    $5.8 million lower than in 2005. The ratio of segment
    profit to net lease revenue was 10% in each year.

Owned Containers:




| |   |                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuedeclined by $5.8 million
    reflecting the decline in the size of the owned fleet.                                 
|
| |  | Container depreciationof $11.4 million in 2006 was
    $3.5 million lower than in 2005. The primary factors for
    the decline were:



| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| | - | The effect of the sale of $73.8 million of container fixed
    assets to the Joint Venture Program in the third calendar
    quarter of 2005; and,
|
| | - | The change in estimate of useful lives for tank, rolltrailer and
    flat rack products on October 1, 2005.                                       



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Container interest expenseof $7.2 million in 2006
    was $0.9 million higher than in 2005. The increase in
    interest expense was primarily attributable to increased US
    interest rates. This was partially offset by the effect of the
    repayment of $64.2 million of debt utilizing part of the
    proceeds generated by the container fixed asset sale to the
    Joint Venture Program in August 2005.

Equipment trading revenue


Commissions, fees and other operating income




| |   |                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A decrease of $0.3 million in the level of gains recorded
    on the disposal of fixed assets reflecting a decline in the
    disposal volumes of Owned Containers and a decline in the
    container sales price; and,                       
|
| |  | A $0.3 million decrease in design and consultancy fee
    income. This reflects the completion of a major European project
    in the third quarter of 2006. This project generated
    $0.4 million in 2006 compared to $0.7 million in 2005.

Selling, general and administrative expenses




| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A decline in the level of legal costs recorded for actions
    involving TOEMT and a former chairman; and,                                                                                                
|
| |  | A reduction in the level of charges in respect of one-time
    termination benefits relating to involuntary employee
    terminations pursuant to marketing and operations department
    reorganizations.

28



---



##### 



Equity in earnings of affiliate


Income Taxes


Year
Ended December 31, 2005 Compared to Year Ended
December 31, 2004


Overview






| |   |                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A charge of $4.1 million recorded in connection with the
    TOEMT litigation;                                                                                                                                                       
|
| |  | Legal expenses of $2.4 million relating to Palatin and
    TOEMT litigation; and,                                                                                                                                                    
|
| |  | Charges of $0.9 million (including the effect of income
    taxes) in respect of one-time termination benefits relating to
    involuntary employee terminations pursuant to marketing and
    operations department reorganizations.





| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Income of $1.3 million recognized on the recovery of
    amounts owed by a related party;                                                                                            
|
| |  | The recovery of $0.8 million payable to a Private Container
    Program; and,                                                                                                        
|
| |  | The reversal of a taxation provision of $0.4 million which
    had been provided against potential withholding taxes on the
    unremitted retained earnings of certain subsidiaries.



Analysis and Discussion


Gross lease revenue (GLR)


Direct operating expenses




| |   |                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Repositioning expense declined by $1.2 million as the Group
    moved fewer containers from low to high demand locations
    reflecting the low volume of off-hire inventories and the strong
    market for container disposals; and,
|
| |  | Activity-related expenses declined by $1 million as the
    level of handling and repair work undertaken decreased in line
    with the reduced volumes of container redeliveries and off-hire
    inventories.                       

29



---



##### 



Operating segment information


|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |        |         |   |   |        |         |  
|---------------------------- | ---------------------------------------- | ------- | ----- | ------- | ----------- | - | ----- | --------- | - | - | ---------- | ------- | - | ----- | ------ | ------- | - | - | ------ | ------- | -
|                             |                                          | Joint   |       |         | US Limited  |   |       | Private   |   |   |            |         |  
|                             |                                          | Venture |       |         | Partnership |   |       | Container |   |   | Owned      |         |   |      
|(in thousands)               |                                          | Program |       |         | Programs    |   |       | Programs  |   |   | Containers |         |   | Total |       
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       
|Year ended December 31, 2005 |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |        |         |   |   |        |        
|                             | - gross lease revenue                    |         | $     | 30,637  |             |   | $     | 23,512    |   |   | $          | 47,368  |   |       | $      | 37,507  |   |   | $      | 139,024 |  
|                             | - direct operating expenses              |         |       | (2,119  | )           |   |       | (3,587    | ) |   |            | (7,250  | ) |       |        | (5,135  | ) |   |        | (18,091 | )
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       
|                             | - net lease revenue                      |         |       | 28,518  |             |   |       | 19,925    |   |   |            | 40,118  |   |       |        | 32,372  |   |   |        | 120,933 |  
|                             | - direct financing lease income          |         |       |        |             |   |       |          |   |   |            |        |   |       |        | 1,757   |   |   |        | 1,757   |  
|                             | - payments to Managed Container Programs |         |       | (26,025 | )           |   |       | (14,801   | ) |   |            | (36,177 | ) |       |        |        |   |   |        | (77,003 | )
|                             | - container depreciation                 |         |       |        |             |   |       |          |   |   |            |        |   |       |        | (14,890 | ) |   |        | (14,890 | )
|                             | - container interest expense             |         |       |        |             |   |       |          |   |   |            |        |   |       |        | (6,266  | ) |   |        | (6,266  | )
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       
|Segment profit               |                                          | $       | 2,493 |         |             | $ | 5,124 |           |   | $ | 3,941      |         |   | $     | 12,973 |         |   | $ | 24,531 |        
|                             |                                          |         |       |         |             |   |       |           |   |   |            |         |   |       |       

Joint Venture Program:




| |   |                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuefor this segment increased to
    $28.5 million in 2005 reflecting the significant investment
    in additional equipment for the program including the
    acquisition of $73.8 million of container fixed assets from
    the Group.
|
| |  | Payments to the Joint Venture Programincreased by
    $12.1 million, which is in line with the increase in net
    lease revenue for this segment.                                                                                                     

US Limited Partnership Programs:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuefor this segment decreased by
    $1.7 million compared to the prior year. GLR declined by
    $3.2 million due primarily to the effect of the disposal of
    containers at the end of their useful economic life and the
    liquidation of three of the partnerships. Direct operating
    expenses declined by $1.4 million, reflecting lower
    inventory-related and activity-related costs.
|
| |  | Payments to US Limited Partnership Programsdeclined by
    $2.9 million when compared to 2004. The ratio of segment
    profit to net lease revenue increased to 26% in 2005, from 18%
    in 2004, as the management fee attributable to the cash
    generated by the Programs increased as cash collections and
    disposal activity increased.                                                                 

Private Container Programs:




| |   |                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenueincreased by $1 million when
    compared to 2004 reflecting the decline in inventory-related and
    activity-related expenses.                                                                                                                         
|
| |  | Payments to Private Container Programswere
    $0.1 million lower than in 2004. The ratio of segment
    profit to net lease revenue increased to 10% in 2005, from 7% in
    2004. This was due to the expiration of a number of agreements
    with fixed payment terms.

Owned Containers:




| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Net lease revenuedeclined by $3.1 million due
    primarily to the sale of $73.8 million of container fixed
    assets to the Joint Venture Program in August 2005.
|
| |  | Container depreciationof $14.9 million in 2005 was
    $2.8 million lower than in 2004. The primary factors for
    the decline were:                              



| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | The effect of the sale of the container fixed assets to the
    Joint Venture Program in the third calendar quarter;                                                              
|
| | - | The effect of the disposal of equipment at the end of its useful
    economic life more than offset the increase in depreciation
    attributable to new container additions; and,

30



---



##### 





| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | The effect of the change in the estimate of useful lives for
    tank, rolltrailer and flat rack products on October 1,
    2005, resulted in a $0.1 million decline in depreciation
    expense.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Container interest expenseof $6.3 million in 2005
    was $1.2 million higher than in 2004. The increase in
    interest expense was primarily attributable to increased US
    interest rates. In addition, the Group incurred
    $0.2 million of breakage costs that resulted from the
    restructure of the Revolving Credit Facility. The increase in
    interest was partially offset by the effect of the repayment of
    $64.2 million of debt utilizing part of the proceeds
    generated by the container fixed asset sale to the Joint Venture
    Program.

Equipment trading revenue


Commissions, fees and other operating income




| |   |                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase of $0.7 million in the level of gains recorded
    on the disposal of fixed assets. This was due in part to the
    increased disposal proceeds realized on the sale of equipment at
    the end of its economic life;
|
| |  | A $0.6 million increase in design and consultancy fee
    income reflecting a project undertaken with a European customer;                                                                                                        
|
| |  | A $0.4 million increase in fees earned on the disposal of
    containers owned by Managed Container Programs that again
    reflected the strong market for used containers; and,                                                 
|
| |  | A $0.2 million increase in finance lease income due to an
    increase in the value of direct financing leases held by the
    Group.                                                                                             

Gain on settlement of litigation:








31



---



##### 



Selling, general and administrative expenses




| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase of $2 million in legal costs for TOEMT and
    Palatin litigation; and,                                                                                                       
|
| |  | $1.7 million of charges in respect of one-time termination
    benefits relating to involuntary employee terminations pursuant
    to marketing and operations department reorganizations.





| |   |                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A $0.6 million decline in the expense recognized for a
    stock appreciation rights plan reflecting a smaller increase in
    the Group share price in 2005 than in 2004.

Recovery of amount payable to a Managed Container
Program:












Provision for legal claims:


32



---



##### 







Equity in earnings of affiliate


Income Taxes






Liquidity and Capital Resources




Balance Sheet and Cash Flows




| |                          
| | -------------------------
| | Cash and cash equivalents



day-to








33



---



##### 











| |                
| | ---------------
| | Restricted cash





| |                              
| | -----------------------------
| | Amounts due from lessees, net







| |                                                   
| | --------------------------------------------------
| | Amounts receivable from Managed Container Programs





| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | New container equipment held for resale & Amounts
    payable to container manufacturers





| |                                           
| | ------------------------------------------
| | Other amounts payable and accrued expenses



34



---



##### 





| |                                       
| | --------------------------------------
| | Commitments to container manufacturers





| |                   
| | ------------------
| | Declared dividends









Off-Balance Sheet Arrangements, Transactions and
Obligations


Joint Venture Program.






US Limited Partnership Programs  General Partner.






35



---



##### 







Parent Guarantee under Agreements with Private Container
Programs.






Guarantees under Fixed Non-cancelable Operating Leases with
Private Container Programs.


Agreements with Private Container Programs  early
termination options.


Agreements with Private Container Programs  change
of control provisions.


36



---



##### 







Non-Container Non-cancelable Fixed Operating Leases
Obligations.


Provision for legal claims.


Joint venture with information technology company.


Contractual Obligations




|                                                                |  |                                      |         |                        |        |           |           |             |         |           |             |  |           |             |        |  |  |   |        | 
|--------------------------------------------------------------- |  | ------------------------------------ | ------- | ---------------------- | ------ | --------- | --------- | ----------- | ------- | --------- | ----------- |  | --------- | ----------- | ------ |  |  | - | ------ | 
|                                                                |  |                                      |         | Payments Due By Period |       
|                                                                |  |                                      |         |                        |       
|                                                                |  |                                      |         |                        |        | More than |          
|                                                                |  |                                      |         | Less than              |        |           |           |             | 5 Years |          
|                                                                |  |                                      |         | 1 Year                 |        |           | 1-3 Years |             |         | 3-5 Years |             |  | (2012 and |            
|                                                                |  | Total                                |         |                        | (2007) |           |           | (2008-2009) |         |           | (2010-2011) |  |           | thereafter) |       
|                                                                |  |                                      |         |                        |        |           |           |             |         |           |             |  |           |             |       
|                                                                |  | (US dollar equivalent, in thousands) |        
|Long-term debt obligations                                      |  | $                                    | 71,717  |                        |        | $         | 11,904    |             |         | $         | 31,805      |  |           | $           | 24,073 |  |  | $ | 3,935  | 
|Capital lease obligations                                       |  | $                                    | 44,981  |                        |        | $         | 7,921     |             |         | $         | 14,124      |  |           | $           | 10,319 |  |  | $ | 12,617 | 
|Fixed operating lease obligations to Managed Container Programs |  | $                                    | 14,031  |                        |        | $         | 2,494     |             |         | $         | 5,794       |  |           | $           | 5,743  |  |  |   |       | 
|Other operating lease payments                                  |  | $                                    | 3,341   |                        |        | $         | 958       |             |         | $         | 1,634       |  |           | $           | 742    |  |  | $ | 7      | 
|Term lease rental obligations to Managed Container Programs     |  | $                                    | 115,997 |                        |        | $         | 43,566    |             |         | $         | 53,753      |  |           | $           | 17,481 |  |  | $ | 1,197  | 
|Amounts payable to Managed Container Programs                   |  | $                                    | 24,171  |                        |        | $         | 24,171    |             |         |           |            |  |           |             |       |  |  |   |       | 
|Amounts payable to container manufacturers                      |  | $                                    | 34,809  |                        |        | $         | 34,809    |             |         |           |            |  |           |             |       |  |  |   |       | 
|Container purchase commitments                                  |  | $                                    | 37,704  |                        |        | $         | 37,704    |             |         |           |            |  |           |             |       |  |  |   |       | 
|                                                                |  |                                      |         |                        |        |           |           |             |         |           |             |  |           |             |       
|Total                                                           |  | $                                    | 346,751 |                        |        | $         | 163,527   |             |         | $         | 107,110     |  |           | $           | 58,358 |  |  | $ | 17,756 | 
|                                                                |  |                                      |         |                        |        |           |           |             |         |           |             |  |           |             |       

Long-term debt obligations and capital lease obligations.


37



---



##### 



Fixed non-cancelable operating lease obligations to Managed
Container Programs.


Other fixed non-cancelable operating lease payments.


Term lease rental obligations to Managed Container
Programs.


Amounts payable to Managed Container Programs.


Amounts payable to container manufacturers.


Container purchase commitments.


Critical Accounting Policies and Estimates




Container equipment  depreciable lives.




| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Refrigerated container equipment  over 12 years
    to a residual value of 15%           
|
| |  | Tanks, rolltrailers and flat racks  over
    20 years to a residual value of 10%         
|
| |  | Dry cargo and all other container equipment  over
    15 years to a residual value of 10%

Container equipment  valuation.


38



---



##### 



Deferred Taxation.




Allowance for doubtful accounts.


Goodwill.


Gross lease revenue  Managed Container
Programs.


New Accounting Pronouncements






39



---



##### 





AIR-1 AIR-1) AIR-1 AIR-1 AIR-1 accrue-in AIR-1 AIR-1






Inflation




40



---



##### 






Item 7A  Quantitative and Qualitative
Disclosures about Market Risk




|                                              |                                    |                                                              |   |          |      |  |   |        |      |  |      |        |     |      |   |        |            |  |   |       |     |  |       |        |     |  |   |        |  |  |   |        |  | 
|--------------------------------------------- | ---------------------------------- | ------------------------------------------------------------ | - | -------- | ---- |  | - | ------ | ---- |  | ---- | ------ | --- | ---- | - | ------ | ---------- |  | - | ----- | --- |  | ----- | ------ | --- |  | - | ------ |  |  | - | ------ |  | 
|                                              |                                    | Expected Maturity Date of Debt and Capital Lease Obligations |   |          |      |  |  
|                                              |                                    |                                                              |   |          |      |  |  
|                                              |                                    |                                                              |   | 2012 and |      |  |   |        | Fair | 
|                                              |                                    | 2007                                                         |   |          | 2008 |  |   | 2009   |      |  | 2010 |        |     | 2011 |   |        | thereafter |  |   | Total |     |  | Value |       
|                                              |                                    |                                                              |   |          |      |  |   |        |      |  |      |        |     |      |   |        |            |  |   |       |     |  |       |       
|                                              |                                    | (US dollar equivalent, in thousands)                         |   |          |     
|Long-term debt and capital lease obligations: |                                    |                                                              |   |          |      |  |   |        |      |  |      |        |     |      |   |        |            |  |   |       |     |  |       |        |     |  |   |        |  |  |   |       
|                                              | Variable rate US dollar facilities |                                                              | $ | 11,156   |      |  | $ | 15,715 |      |  | $    | 17,497 |     |      | $ | 24,698 |            |  | $ | 4,375 |     |  | $     | 12,918 |     |  | $ | 86,359 |  |  | $ | 86,359 | 
|                                              |                                    | average interest rate %                                      |   |          | 7.2  |  |   |        | 7.2  |  |      |        | 7.2 |      |   |        | 7.2        |  |   |       | 7.1 |  |       |        | 7.1 |  |   |        |  |  |   |        |  | 
|                                              | Variable rate Euro facilities      |                                                              | $ | 238      |      |  | $ | 249    |      |  | $    | 260    |     |      | $ | 271    |            |  | $ | 583   |     |  | $     | 469    |     |  | $ | 2,070  |  |  | $ | 2,070  | 
|                                              |                                    | average interest rate %                                      |   |          | 5.7  |  |   |        | 5.7  |  |      |        | 5.7 |      |   |        | 5.7        |  |   |       | 5.7 |  |       |        | 5.7 |  |   |        |  |  |   |        |  | 
|                                              | Fixed rate US dollar facilities    |                                                              | $ | 1,916    |      |  | $ | 1,550  |      |  | $    | 1,145  |     |      | $ | 248    |            |  | $ | 267   |     |  | $     | 70     |     |  | $ | 5,196  |  |  | $ | 5,196  | 
|                                              |                                    | average interest rate %                                      |   |          | 7.1  |  |   |        | 7.2  |  |      |        | 7.3 |      |   |        | 7.2        |  |   |       | 7.2 |  |       |        | 7.2 |  |   |        |  |  |   |        |  | 
|                                              | Fixed rate Euro facilities         |                                                              | $ | 158      |      |  | $ | 166    |      |  | $    | 175    |     |      | $ | 185    |            |  | $ | 245   |     |  | $     | 1,321  |     |  | $ | 2,250  |  |  | $ | 2,273  | 
|                                              |                                    | average interest rate %                                      |   |          | 5.6  |  |   |        | 5.6  |  |      |        | 5.6 |      |   |        | 5.6        |  |   |       | 5.6 |  |       |        | 5.6 |  |   |        |  |  |   |        |  | 

Interest rate risk:


Exchange rate risk:




Credit risk:




41



---



##### 





|                                 |                         |                                      |     |          |      |   |     |      |      |   |      |     |  |      |     |     |            |   |     |       |  |   |       |       |  |   |       |       |  |   |       |       | 
|-------------------------------- | ----------------------- | ------------------------------------ | --- | -------- | ---- | - | --- | ---- | ---- | - | ---- | --- |  | ---- | --- | --- | ---------- | - | --- | ----- |  | - | ----- | ----- |  | - | ----- | ----- |  | - | ----- | ----- | 
|                                 |                         | Expected Maturity Date               |     |          |      |   |    
|                                 |                         |                                      |     |          |      |   |    
|                                 |                         |                                      |     | 2012 and |      |   |     |      | Fair |  
|                                 |                         | 2007                                 |     |          | 2008 |   |     | 2009 |      |   | 2010 |     |  | 2011 |     |     | thereafter |   |     | Total |  |   | Value |      
|                                 |                         |                                      |     |          |      |   |     |      |      |   |      |     |  |      |     |     |            |   |     |       |  |   |       |      
|                                 |                         | (US dollar equivalent, in thousands) |    
|Direct financing leases:         |                         |                                      |     |          |      |   |     |      |      |   |      |     |  |      |     |     |            |   |     |       |  |   |       |       |  |   |       |       |  |   |       |      
|- net lease receivables (EUR)    |                         | $                                    | 330 |          |      | $ | 320 |      |      | $ | 187  |     |  | $    | 191 |     |            | $ | 165 |       |  | $ | 1,987 |       |  | $ | 3,180 |       |  | $ | 3,527 |      
|- net lease receivables (AUD)    |                         | $                                    | 356 |          |      | $ | 443 |      |      | $ | 228  |     |  | $    | 59  |     |            | $ | 43  |       |  | $ |      |       |  | $ | 1,129 |       |  | $ | 1,199 |      
|Capital lease obligations (EUR): |                         |                                      |     |          |      |   |     |      |      |   |      |     |  |      |     |     |            |   |     |       |  |   |       |       |  |   |       |       |  |   |       |      
|                                 | variable rate (EUR)     |                                      | $   | 238      |      |   | $   | 249  |      |   | $    | 260 |  |      | $   | 271 |            |   | $   | 583   |  |   | $     | 469   |  |   | $     | 2,070 |  |   | $     | 2,070 | 
|                                 | average interest rate % |                                      |     | 5.7      |      |   |     | 5.7  |      |   |      | 5.7 |  |      |     | 5.7 |            |   |     | 5.7   |  |   |       | 5.7   |  |   |       | 5.7   |  |   |       |       | 
|                                 | fixed rate (EUR)        |                                      | $   | 158      |      |   | $   | 166  |      |   | $    | 175 |  |      | $   | 185 |            |   | $   | 245   |  |   | $     | 1,321 |  |   | $     | 2,250 |  |   | $     | 2,273 | 
|                                 | average interest rate % |                                      |     | 5.6      |      |   |     | 5.6  |      |   |      | 5.6 |  |      |     | 5.6 |            |   |     | 5.6   |  |   |       | 5.6   |  |   |       | 5.6   |  |   |       |       | 

42



---



##### 






Item 8  Financial Statements and
Supplementary Data






| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | The financial statements listed in this Item 8 are set
    forth herein beginning on page F1:
|
| | Consolidated Statements of Income for the Years Ended
    December 31, 2006, 2005 and 2004;  





| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | Consolidated Statements of Shareholders Equity for the
    Years Ended December 31, 2006, 2005 and 2004;
|
| | Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2006, 2005 and 2004.          






Item 9  Changes In and Disagreements with
Accountants on Accounting and Financial Disclosure







Item 9A  Controls and Procedures


13a-15







Item 9B  Other Information




43



---



##### 






PART III





Item 10  Directors and Executive Officers
of the Group






Dennis
J. Tietz; age 54; Chairman and Chief Executive Officer






Peter
J. Younger; age 50; President and Chief Operating
Officer






Frank
P. Vaughan; age 42; Senior Vice President and Chief
Financial Officer






John
M. Foy; age 61; Senior Vice President




44



---



##### 







John
C. Kirby; age 53; Senior Vice President




Section 16(a)
Beneficial Ownership Reporting Compliance




Code
of Ethics.


www.cronos.com




| |                                 
| | --------------------------------
| | The Cronos Group                
| | c/o Cronos Capital Corp.        
| | One Front Street, Suite 925     
| | San Francisco, California, 94111
| | Attention: Investor Relations   




Item 11  Executive Compensation









|          |                                                                                                   
|--------- | --------------------------------------------------------------------------------------------------
|Item 12  | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters





45



---



##### 






Item 13  Certain Relationships and Related
Transactions







Item 14  Principal Accountant Fees and
Services







120-day


46



---



##### 






PART IV





Item 15  Exhibits and Financial Statement
Schedules






| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Report of Independent Registered Public Accounting Firm                                                 
|
| | Consolidated Balance Sheets  At December 31,
    2006 and 2005                                         
|
| | Consolidated Statements of Income for the Years Ended
    December 31, 2006, 2005 and 2004              
|
| | Consolidated Statements of Shareholders Equity for the
    Years Ended December 31, 2006, 2005 and 2004
|
| | Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2006, 2005 and 2004          
|
| | Notes to Consolidated Financial Statements                                                              





| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The financial statements of CF Leasing Ltd. have been filed in
    accordance with
    Regulation S-X as
    a 50% entity accounted for by the equity method by the Group.





| |                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following exhibits are filed herewith or are incorporated by
    reference to exhibits previously filed with the Commission. The
    Company shall furnish copies of exhibits for a reasonable fee
    (covering the expense of furnishing copies) upon request.
|
| | Previously filed material contracts that are no longer in force
    or effect and that were entered into more than two years prior
    to the date of the filing of this report are not listed in this
    index.                                                   

|       |      |                     |  |                                                                                                                                                                                                                                                                                                       
|------ | ---- | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |      | Exhibit Description
|       |      |                    
|       | 2.1  |                     |  | Asset Purchase Agreement, dated February 28, 2007
    (Asset Purchase Agreement), by and among FB
    Transportation Capital LLC, CRX Acquisition Ltd., and the
    Company (incorporated by reference to Exhibit 2.1 to the
    Companys Current Report on Form 8-K, dated
    February 28, 2007).
|       | 2.2  |                     |  | Plan of Liquidation and Dissolution of the Company (incorporated
    by reference to Annex 1 to Asset Purchase Agreement, filed as
    Exhibit 2.1 to the Companys Current Report on
    Form 8-K, dated February 28, 2007).                                                                         
|       | 2.3  |                     |  | Guarantee from Fortis Bank S.A./N.V. Cayman Islands Branch,
    dated February 28, 2007, in favor of the Company
    (incorporated by reference to Exhibit 2.2 to the
    Companys Current Report on Form 8-K, dated
    February 28, 2007).                                                         
|       | 3.1  |                     |  | Co-ordinated Articles of Incorporation (incorporated by
    reference to Exhibit 1.1 to the Companys Annual
    Report on Form 20-F for the year ended December 31,
    1997 (File No. 0-24464)).                                                                                                    
|       | 3.2  |                     |  | Policies and procedures with respect to the indemnification of
    directors and officers of the Company, as adopted by the Board
    of Directors on August 4, 1999 (incorporated by reference
    to Exhibit 3.2 to the Companys Registration Statement
    on Form S-3, dated November 24, 1999). 
|       | 10.1 |                     |  | Guarantee, dated as of July 19, 2001, by and between the
    Group and Fortis Bank N.V. (Fortis), as agent and on
    behalf of itself (incorporated by reference to
    Exhibit 10.20 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2001).                     
|       | 10.2 |                     |  | Amendment No. 1 to the Guarantee, dated as of July 19,
    2001, by and between the Group and Fortis, as agent and on
    behalf of itself (incorporated by reference to Exhibit 10.4
    to the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2003).               
|       | 10.3 |                     |  | Amendment Number 2, dated as of August 1, 2005, to the
    Amended and Restated Guarantee, dated as of July 19, 2001,
    by and among the Company, Fortis, HBU and NIB. (incorporated by
    reference to Exhibit 10.46 to the Companys Current
    Report on Form 8-K, dated August, 2005).        

47



---



##### 



|       |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ | ----- | ------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |       | Exhibit Description
|       |       |                    
|       | 10.4  |                     |  | Loan Agreement, dated as of July 19, 2001, by and between
    Cronos Finance (Bermuda) Limited (CFBL) as issuer,
    and Fortis as agent on behalf of the noteholder, and itself, as
    the initial noteholder (incorporated by reference to
    Exhibit 10.21 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2001).                                                                                                                                                                                                                                                                   
|       | 10.5  |                     |  | Amendment No. 1 to the Amended and Restated Loan Agreement
    dated as of August 6, 2001, by and between CFBL and Fortis
    (incorporated by reference to Exhibit 10.4 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                          
|       | 10.6  |                     |  | Amendment No. 2 to the Amended and Restated Loan Agreement
    dated as of November 20, 2001, by and between CFBL and
    Fortis (incorporated by reference to Exhibit 10.5 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                       
|       | 10.7  |                     |  | Amendment No. 3, dated as of September 18, 2002, to
    the Amended and Restated Loan Agreement, dated as of
    July 19, 2001, by and between CFBL and Fortis,
    (incorporated by reference to Exhibit 10.22 to the
    Companys Current Report on Form 8-K, dated
    September 18, 2002).                                                                                                                                                                                                                                                                                                                              
|       | 10.8  |                     |  | Amendment No. 4, dated as of March 7, 2003, to the
    Amended and Restated Loan Agreement, dated as of July 19,
    2001, by and between CFBL and Fortis, (incorporated by reference
    to Exhibit 10.7 to the Companys Annual Report on
    Form 10-K for the year ended December 31, 2002).                                                                                                                                                                                                                                                                                                                             
|       | 10.9  |                     |  | Amendment No. 5, dated as of September 23, 2003, to
    the Amended and Restated Loan Agreement, dated as of
    July 19, 2001, by and between CFBL and Fortis (incorporated
    by reference to Exhibit 10.1 to the Companys
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2003).                                                                                                                                                                                                                                                                                                              
|       | 10.10 |                     |  | Amended and Restated Loan Agreement, dated as of March 7,
    2003 (Loan Agreement), by and among CF Leasing Ltd.,
    a Bermuda exempted company (CF Leasing), and Fortis
    Bank (Nederland) N.V. (Fortis Bank), a Naamloze
    Vennootschaporganized and existing under the laws of The
    Netherlands, and BTM Capital Corporation (formerly BTMU Capital
    Corporation) (BMTUCC), a Delaware corporation,
    (incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                       
|       | 10.11 |                     |  | Amendment Number 1, dated as of October 15, 2003, to
    Loan Agreement, by and among CF Leasing, Fortis Bank and BTMUCC,
    (incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                                                                                                                                                                                                                                                                                                                        
|       | 10.12 |                     |  | Amendment Number 2 to Loan Agreement, dated as of March 4,
    2004, by and among CF Leasing, Fortis Bank, and BTMUCC,
    (incorporated by reference to Exhibit 10.3 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                                                                                                                                                                                                                                                                                                                           
|       | 10.13 |                     |  | Amendment Number 3 to Loan Agreement, dated as of
    April 30, 2004, by and among CF Leasing, Fortis Bank, and
    BTMUCC, (incorporated by reference to Exhibit 10.4 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                                                                                                                                                                                                                                                                                                                          
|       | 10.14 |                     |  | Amendment Number 4 to Loan Agreement, dated as of May 31,
    2004, by and among CF Leasing, Fortis Bank, and BTMUCC,
    (incorporated by reference to Exhibit 10.5 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                                                                                                                                                                                                                                                                                                                            
|       | 10.15 |                     |  | Amendment Number 5 to Loan Agreement, dated as of June 15,
    2004, by and among CF Leasing, Fortis Bank, BTMUCC, and HSH
    Nordbank AG, New York Branch (HSH), a banking
    institution organized and existing under the laws of Germany,
    (incorporated by reference to Exhibit 10.6 to the
    Companys Current Report on Form 8-K, dated September,
    2006).                                                                                                                                                                                                                                                 
|       | 10.16 |                     |  | Amendment Number 6 to Loan Agreement, dated as of June 15,
    2005, by and among CF Leasing, Fortis Bank, BTMUCC, HSH, and
    WestLB AG, a joint stock company organized and existing under
    the laws of Germany, acting through its New York Branch
    (WestLB), and NIB Capital Bank N.V.
    (NIBC), a Naamloze Vennootschap organized and
    existing under the laws of The Netherlands (Fortis Bank, BTMUCC,
    HSH, WestLB, and NIBC referred to hereinafter as the
    Lenders), (incorporated by reference to
    Exhibit 10.7 to the Companys Current Report on
    Form 8-K, dated September, 2006).
|       | 10.17 |                     |  | Amendment Number 7 to Loan Agreement, dated as of
    January 17, 2006, by and among CF Leasing, Fortis Bank, as
    agent and lender, and the other lenders, (incorporated by
    reference to Exhibit 10.8 to the Companys Current
    Report on Form 8-K, dated September, 2006).                                                                                                                                                                                                                                                                                                                                        

48



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##### 



|       |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | ----- | ------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |       | Exhibit Description
|       |       |                    
|       | 10.18 |                     |  | Amendment Number 8 to Loan Agreement, dated as of June 14,
    2006, by and among CF Leasing, Fortis Bank, as agent and lender,
    and the other lenders, (incorporated by reference to
    Exhibit 10.9 to the Companys Current Report on
    Form 8-K, dated September, 2006).                                                                                                                                                                                                                   
|       | 10.19 |                     |  | Amendment Number 9 to Loan Agreement, dated as of
    September 29, 2006, by and among CF Leasing, Fortis Bank,
    as agent and lender, and the other lenders, (incorporated by
    reference to Exhibit 10.10 to the Companys Current
    Report on Form 8-K, dated September, 2006).                                                                                                                                                                                                             
|       | 10.20 |                     |  | Amendment Number 10 to Loan Agreement, dated as of
    October 31, 2006, by and among CF Leasing, Fortis Bank, as
    agent and lender, and the other lenders, (incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on Form 8-K, dated October 31, 2006).                                                                                                                                                                                                              
|       | 10.21 |                     |  | Amendment Number 11 to Loan Agreement, dated as of
    November 8, 2006, by and among CF Leasing Ltd, Fortis Bank,
    as agent and lender, and the other lenders, (incorporated by
    reference to Exhibit 10.1 to the Companys Current
    Report on Form 8-K, dated November 8, 2006).                                                                                                                                                                                                          
|       | 10.22 |                     |  | Management Agreement by and between CF Leasing Ltd. and Cronos
    Containers (Cayman) Limited, dated as of September 18,
    2002, (incorporated by reference Exhibit 10.23 to the
    Companys Current Report on Form 8-K, dated
    September 18, 2002).                                                                                                                                                                                                                                         
|       | 10.23 |                     |  | Amendment No. 1, dated as of March 7, 2003 to the
    Management Agreement, dated as of September 18, 2002, by
    and between the CF Leasing Ltd. and Cronos Containers (Cayman)
    Limited, (incorporated by reference to Exhibit 10.9 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2002).                                                                                                                                                                 
|       | 10.24 |                     |  | Amendment No. 2, dated as of October 15, 2003 to the
    Management Agreement, dated as of September 18, 2002, by
    and between the CF Leasing Ltd. and Cronos Containers (Cayman)
    Limited Fortis (incorporated by reference to Exhibit 10.5
    to the Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2003).                                                                                                                                                 
|       | 10.25 |                     |  | Members Agreement, dated September 18, 2002, by and between
    CF Leasing Ltd., Mees Pierson Transport & Logistics
    Holding B.V. and CEB, and joined by Cronos Containers (Cayman)
    Ltd, and by The Cronos Group (incorporated by reference to
    Exhibit 10.13 to the Companys Annual Report on Form 10-K
    for the year ended December 31, 2005).                                                                                                                                       
|       | 10.26 |                     |  | Amendment No. 1, dated as of June 15, 2004, to the
    Members Agreement, dated as of September 18, 2002, by and
    between CF Leasing Ltd., FB Aviation & Intermodal
    Finance Holding B.V. (formerly known as Mees Pierson
    Transport & Logistics Holding B.V.) and CEB, and joined
    by Cronos Containers (Cayman) Ltd, and by The Cronos Group
    (incorporated by reference to Exhibit 10.14 to the
    Companys Annual Report on Form 10-K for the year ended
    December 31, 2005).
|       | 10.27 |                     |  | Amendment No. 2, dated as of July 8, 2004, to the
    Members Agreement, dated as of September 18, 2002, by and
    between CF Leasing Ltd., FB Aviation & Intermodal
    Finance Holding B.V., and CEB, and joined by Cronos Containers
    (Cayman) Ltd, and by The Cronos Group (incorporated by reference
    to Exhibit 10.15 to the Companys Annual Report on Form
    10-K for the year ended December 31, 2005).                                                                            
|       | 10.28 |                     |  | Amendment No. 3, dated as of June 15, 2005 to the
    Members Agreement, dated September 18, 2002, among CF
    Leasing Ltd, FB Aviation & Intermodal Finance Holding
    BV and Cronos Containers (Cayman) Ltd. (incorporated by
    reference to Exhibit 10.2 to the Companys Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    2005).                                                                                                                                         
|       | 10.29 |                     |  | Amendment Number 4, dated as of August 1, 2005, to
    Members Agreement, dated as of September 18, 2002, by and
    among CF Leasing, FB Aviation & Intermodal Holding B.V.
    and Cronos Equipment (Bermuda) Limited, and joined by The Cronos
    Group (the Company). (incorporated by reference
    Exhibit 10.56 to the Companys Current Report on
    Form 8-K, dated August 1, 2005).                                                                                                    
|       | 10.30 |                     |  | Amendment Number 5, dated as of November 8, 2006, to
    Members Agreement, dated as of September 18, 2002, by and
    among CF Leasing, FB Transportation Capital LLC and Cronos
    Equipment (Bermuda) Limited, and joined by The Cronos Group,
    (incorporated by reference Exhibit 10.3 to the
    Companys Current Report on Form 8-K, dated
    November 8, 2006).                                                                                                                         

49



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##### 



|       |       |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | ----- | ------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |       | Exhibit Description
|       |       |                    
|       | 10.31 |                     |  | Amendment Number 6, dated as of November 8, 2006, to
    Members Agreement, dated as of September 18, 2002, by and
    among CF Leasing, FB Transportation Capital LLC, FB
    Aviation & Intermodal Finance Holding B.V. and Cronos
    Equipment (Bermuda) Limited, and joined by The Cronos Group,
    (incorporated by reference Exhibit 10.3 to the
    Companys Current Report on Form 8-K, dated
    November 8, 2006).
|       | 10.32 |                     |  | Collateral Agreement dated as of November 16, 2001, by and
    between CEB, CFBL and Fortis (incorporated by reference to
    Exhibit 10.6 to the Companys Annual Report on
    Form 10-K for the year ended December 31, 2001).                                                                                                                                                                                              
|       | 10.33 |                     |  | Amendment No. 1 to the Collateral Agreement dated as of
    November 16, 2001, by and between CEB, CFBL and Fortis
    (incorporated by reference to Exhibit 10.3 to
    Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2003).                                                                                                                                                                
|       | 10.34 |                     |  | Grant of Security Interest (Patents) dated as of
    November 19, 2001, by and between CEB, CFBL and Fortis
    (incorporated by reference to Exhibit 10.7 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2001).                                                                                                                                                                          
|       | 10.35 |                     |  | Amended and restated Management Agreement, dated as of
    June 15, 2004, by and between the CF Leasing Ltd. and
    Cronos Containers (Cayman) Limited. (incorporated by reference
    to Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2004).                                                                                                                               
|       | 10.36 |                     |  | Amendment No. 1, dated as of June 15, 2005 to the
    Amended and Restated Management Agreement, dated as of
    June 15, 2004, by and between CF Leasing Ltd and Cronos
    Containers (Cayman) Ltd. (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended June 30, 2005).                                                                                  
|       | 10.37 |                     |  | Third Amended and Restated Loan Agreement, dated as of
    August 1, 2005, among CFL, Fortis Bank (Nederland) N.V.
    (Fortis), NIB Capital Bank N.V. (NIB),
    and Hollandsche Bank-Unie N.V. (HBU). (incorporated
    by reference to Exhibit 10.57 to the Companys Current
    Report on Form 8-K, dated August, 2005).                                                                                            
|       | 10.38 |                     |  | Amendment No. 1, dated as of January 17, 2006 to the
    Third Amended and Restated Loan Agreement, dated as of
    August 1, 2005, among CFL, Fortis, NIB and HBU,
    (incorporated by reference to Exhibit 10.1 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2006).                                                                                                               
|       | 10.39 |                     |  | CFL Secured Note in favor of Fortis in the principal amount of
    $15,000,000, dated August 1, 2005. (incorporated by
    reference to Exhibit 10.46 to the Companys Current
    Report on Form 8-K, dated August, 2005).                                                                                                                                                                                                    
|       | 10.40 |                     |  | CFL Secured Note in favor of NIB in the principal amount of
    $15,000,000, dated August 1, 2005. (incorporated by
    reference to Exhibit 10.46 to the Companys Current
    Report on Form 8-K, dated August, 2005).                                                                                                                                                                                                       
|       | 10.41 |                     |  | CFL Secured Note in favor of HBU in the principal amount of
    $15,000,000, dated August 1, 2005. (incorporated by
    reference to Exhibit 10.46 to the Companys Current
    Report on Form 8-K, dated August, 2005).                                                                                                                                                                                                       
|       | 10.42 |                     |  | Assignment Declaration from MKB Bank Rt. to Centrál Workout
    Pénzügyi Részvénytársaság
    (Central), dated March 27, 2006, as endorsed by
    Central to Cronos Containers N.V. (CNV)
    (incorporated by reference to Exhibit 10.37 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2005).                                                                                       
|       | 10.43 |                     |  | Assignment of Assets from the Contrin Creditors (as defined
    therein), as assignors, and CNV, as assignee, dated as of
    March 21, 2006 (incorporated by reference to
    Exhibit 10.38 to the Companys Annual Report on
    Form 10-K for the year ended December 31, 2005).                                                                                                                                            
|       | 10.44 |                     |  | Engagement letter, dated as of November 8, 2006, by and
    between CF Leasing and Fortis Capital Corp., (incorporated by
    reference to Exhibit 10.5 to the Companys Current
    Report on Form 8-K, dated November 8, 2006).                                                                                                                                                                                              
|       | 10.45 |                     |  | Assignment agreement dated March 27, 2006, between MKB and
    Centrál Workout Pénzügyi Rt. (translated from the
    original Hungarian) pursuant to Exchange Rule 12b-12(d),
    (incorporated by reference to Exhibit 10.1 to the Quarterly
    Report on Form 10-Q for the quarter ended June 30,
    2006).                                                                                                                

50



---



##### 



|       |       |                     |  |                                                                                                                                                                                                          
|------ | ----- | ------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |       | Exhibit Description
|       |       |                    
|       | 10.46 |                     |  | Deed of release dated June 27, 2006, in respect of TOEMT
    litigation, (incorporated by reference to Exhibit 10.2 to
    the Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2006).   
|       | 10.47 |                     |  | Deed of Settlement dated June 27, 2006, in respect of TOEMT
    litigation, (incorporated by reference to Exhibit 10.3 to
    the Quarterly Report on Form 10-Q for the quarter ended
    June 30, 2006).



| |       |  |  |                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.48 |  |  | Stock Appreciation Rights Agreement by and between the Company
    and Peter J. Younger, dated as of October 13, 1999
    (incorporated by reference to Exhibit 10.1 to the
    Companys Registration Statement on Form S-3, dated
    November 24, 1999).                                                                                                                                      
| | 10.49 |  |  | First Amendment to Stock Appreciation Rights Agreement, dated
    February 28, 2007, by and between the Company and Peter J.
    Younger (incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on Form 8-K, dated
    February 28, 2007).                                                                                                                               
| | 10.50 |  |  | 1999 Stock Option Plan (incorporated by reference to
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8, dated February 25, 2000).                                                                                                                                                                                                                                          
| | 10.51 |  |  | Employment Agreement by and between Cronos Containers Inc. and
    John M. Foy, dated April 1, 1999, as amended on
    December 1, 1999 (incorporated by reference to
    Exhibit 10.25 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 1999).                                                                                                                 
| | 10.52 |  |  | Amendment, dated December 1, 2005, to the Employment
    Agreement between Cronos Containers Inc. and John M. Foy, dated
    April 1, 1999, as previously amended on December 1,
    1999, December 1, 2000, December 1, 2001,
    October 15, 2002 and November 5, 2002 (incorporated by
    reference to Exhibit 10.2 to the Companys Current
    Report on Form 8-K, dated December 1, 2005).
| | 10.53 |  |  | Service Agreement by and between Cronos Containers Limited and
    John C. Kirby, dated February 29, 2000 (incorporated by
    reference to Exhibit 10.18 to the Companys Annual
    Report on Form 10-K, for the year ended December 31,
    2002).                                                                                                                                            
| | 10.54 |  |  | Amendment, dated December 1, 2005, to the Service Agreement
    by and between Cronos Containers Limited and John Kirby, dated
    February 29, 2000, as previously amended on
    November 4, 2003 (incorporated by reference to
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K, dated December 1, 2005).                                                                     
| | 10.55 |  |  | Service Agreement by and between Cronos Containers Limited and
    Frank P. Vaughan, dated April 20, 2000 (incorporated by
    reference to Exhibit 10.49 and 10.50 to the Companys
    Current Report on Form 8-K, dated July 14, 2005).                                                                                                                                                       
| | 10.56 |  |  | Amendment, dated December 1, 2005, to the Service Agreement
    by and between Cronos Containers Limited and Frank P. Vaughan,
    dated April 20, 2000 (incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K, dated December 1, 2005).                                                                                                                 
| | 10.57 |  |  | Amendment to the 1999 Stock Option Plan, dated June 1, 2001
    (incorporated by reference to Exhibit 10.16 to the
    Companys Annual Report on Form 10-K for the period
    ended December 31, 2001).                                                                                                                                                                                         
| | 10.58 |  |  | Amended and Restated Employment Agreement between Cronos and
    Dennis J. Tietz, dated November 8, 2001 (incorporated by
    reference to Exhibit 10.17 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2001).                                                                                                                                            
| | 10.59 |  |  | Amendment, dated April 1, 2004, to the Employment Agreement
    between Cronos and Dennis J. Tietz, dated November 8, 2001
    (incorporated by reference to Exhibit 10.49 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2005).                                                                                                                            
| | 10.60 |  |  | Amended Employment Agreement between Cronos and Peter J.
    Younger, dated October 1, 2003 (incorporated by reference
    to Exhibit 10.26 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2003).                                                                                                                                                             
| | 10.61 |  |  | Amended and Restated Indemnification Agreement between Cronos
    and Maurice Taylor, dated November 6, 2002 (incorporated by
    reference to Exhibit 10.28 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2002).                                                                                                                                        

51



---



##### 



| |       |  |  |                                                                                                                                                                                                                                                            
| | ----- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.62 |  |  | Amended and Restated Indemnification Agreement between Cronos
    and Dennis J. Tietz, dated November 6, 2002 (incorporated
    by reference to Exhibit 10.29 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2002). 
| | 10.63 |  |  | Amended and Restated Indemnification Agreement between Cronos
    and Peter J. Younger, dated November 6, 2002 (incorporated
    by reference to Exhibit 10.30 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2002).
| | 10.64 |  |  | Indemnification Agreement between Cronos and S. Nicholas Walker,
    dated November 6, 2002 (incorporated by reference to
    Exhibit 10.31 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2002).                       
| | 10.65 |  |  | Indemnification Agreement between Cronos and Robert M. Melzer,
    dated November 6, 2002 (incorporated by reference to
    Exhibit 10.32 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2002).                         
| | 10.66 |  |  | Indemnification Agreement between Cronos Containers Limited and
    John C. Kirby, dated November 22, 2002 (incorporated by
    reference to Exhibit 10.33 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2002).    
| | 10.67 |  |  | Indemnification Agreement between Cronos Containers Inc. and
    John M. Foy, dated November 1, 2002 (incorporated by
    reference to Exhibit 10.34 to the Companys Annual
    Report on Form 10-K for the period ended December 31,
    2002).          
| | 10.68 |  |  | Stock Option Agreement between Cronos and Maurice Taylor, dated
    January 10, 2003 (incorporated by reference to
    Exhibit 10.37 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2002).                              
| | 10.69 |  |  | Stock Option Agreement between Cronos and S. Nicholas Walker,
    dated January 10, 2003 (incorporated by reference to
    Exhibit 10.38 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2002).                          
| | 10.70 |  |  | Stock Option Agreement between Cronos and Robert M. Melzer,
    dated January 10, 2003 (incorporated by reference to
    Exhibit 10.39 to the Companys Annual Report on
    Form 10-K for the period ended December 31, 2002).                            

|               |      |  |  |                                                                                                                           |  |  |  | 
|-------------- | ---- |  |  | ------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Other Exhibits |      |  |  |                                                                                                                          
|               | 21.1 |  |  | List of principal subsidiaries and affiliates at
    December 31, 2006.                                                   |  |  |  | 
|               | 23.1 |  |  | Consent of Independent Registered Public Accounting Firm dated
    March 16, 2007.                                        |  |  |  | 
|               | 31.1 |  |  | Rule 13a-14 Certification                                                                                                 |  |  |  | 
|               | 31.2 |  |  | Rule 13a-14 Certification                                                                                                 |  |  |  | 
|               | 32.1 |  |  | Certification pursuant to 18 U.S.C. § 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002. |  |  |  | 

52



---



##### 



SIGNATURES




|                     |  |                  |  |                                                                          
|-------------------- |  | ---------------- |  | -------------------------------------------------------------------------
|Date: March 16, 2007 |  | The Cronos Group
|                    
|                     |  | By:              |  | /s/ Dennis J. Tietz                                                      
|                     |  |                  |  |                                                                          
|                     |  |                  |  | Dennis J. Tietz
    Chairman of the Board and
    Chief Executive Officer



|          |  |                                                            |  |                                                                                     |  |               
|--------- |  | ---------------------------------------------------------- |  | ----------------------------------------------------------------------------------- |  | --------------
|Signature |  | Title                                                      |  | Date                                                                               
|          |  |                                                            |  |                                                                                    
|         
|By        |  | /s/ Dennis J. TietzDennis
    J. Tietz                     |  | Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer) |  | March 16, 2007
|         
|By        |  | /s/ Peter J. YoungerPeter
    J. Younger                   |  | Director, President and Chief Operating Officer                                     |  | March 16, 2007
|         
|By        |  | /s/ Frank P. VaughanFrank
    P. Vaughan                   |  | Chief Financial Officer (Principal Financial and Accounting
    Officer)            |  | March 16, 2007
|         
|By        |  | /s/ Maurice TaylorMaurice
    Taylor                       |  | Director                                                                            |  | March 16, 2007
|         
|By        |  | /s/ Stephen Nicholas
    WalkerStephen
    Nicholas Walker |  | Director                                                                            |  | March 16, 2007
|         
|By        |  | /s/ Robert M. MelzerRobert
    M. Melzer                   |  | Director                                                                            |  | March 16, 2007

53



---



##### 



FINANCIAL STATEMENTS  Item 15
(a) (1) and (a) (2)


|       |  |                                                                                                                                                                       |  |      |      | 
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|       |  |                                                                                                                                                                       |  | Page |     
|       |  |                                                                                                                                                                       |  |      |     
|(a)(1) |  | The Cronos Group                                                                                                                                                      |  |      |      | 
|       |  | Report of Independent Registered Public
    Accounting Firm                                                                                                           |  |      | F-2  | 
|       |  | Consolidated Statements of Income and
    Comprehensive Income for the Years Ended December 31, 2006,
    2005 and 2004                                               |  |      | F-3  | 
|       |  | Consolidated Balance Sheets  At
    December 31, 2006 and 2005                                                                                                       |  |      | F-4  | 
|       |  | Consolidated Statements of Cash Flows for
    the Years Ended December 31, 2006, 2005 and 2004                                                                        |  |      | F-6  | 
|       |  | Consolidated Statements of
    Shareholders Equity for the Years Ended December 31,
    2006, 2005 and 2004                                                          |  |      | F-8  | 
|       |  | Notes to Consolidated Financial
    Statements                                                                                                                        |  |      | F-9  | 
|(a)(2) |  | Financial Statement Schedules                                                                                                                                         |  |      |      | 
|       |  | The financial statements of CF Leasing Ltd.
    have been filed in accordance with Regulation S-X as a 50%
    entity accounted for by the equity method by the Group |  |      | F-42 | 



---



##### 






THE CRONOS GROUP


Consolidated financial statements as of December 31,
2006 and 2005


and for the years ended December 31, 2006, 2005 and
2004


and Report of Independent Registered Public Accounting
Firm


F-1



---



##### 






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















F-2



---



##### 



THE CRONOS GROUP





CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands, except per share amounts)


|                                                                   |                                                         |      |         |        |      |   |         |        |  |   |         |        | 
|------------------------------------------------------------------ | ------------------------------------------------------- | ---- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|                                                                   |                                                         | 2006 |         |        | 2005 |   |         | 2004   | 
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Gross lease revenue                                                |                                                         | $    | 141,883 |        |      | $ | 139,024 |        |  | $ | 132,096 |       
|Equipment trading revenue                                          |                                                         |      | 4,669   |        |      |   | 2,210   |        |  |   | 4,698   |       
|Commissions, fees and other operating income:                      |                                                         |      |         |        |      |   |         |        |  |   |         |       
|                                                                   | - Related parties                                       |      |         | 721    |      |   |         | 802    |  |   |         | 953    | 
|                                                                   | - Unrelated parties                                     |      |         | 4,024  |      |   |         | 4,577  |  |   |         | 2,641  | 
|Gain on settlement of litigation                                   |                                                         |      |        |        |      |   | 1,333   |        |  |   |        |       
|Interest income                                                    |                                                         |      | 545     |        |      |   | 344     |        |  |   | 120     |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Total revenues and other income                                    |                                                         |      | 151,842 |        |      |   | 148,290 |        |  |   | 140,508 |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Direct operating expenses                                          |                                                         |      | 16,643  |        |      |   | 18,091  |        |  |   | 20,563  |       
|Payments to Managed Container Programs:                            |                                                         |      |         |        |      |   |         |        |  |   |         |       
|                                                                   | - Related parties                                       |      |         | 56,551 |      |   |         | 40,826 |  |   |         | 31,638 | 
|                                                                   | - Unrelated parties                                     |      |         | 30,374 |      |   |         | 36,177 |  |   |         | 36,323 | 
|Equipment trading expenses                                         |                                                         |      | 4,085   |        |      |   | 1,978   |        |  |   | 4,018   |       
|Amortization of intangible assets                                  |                                                         |      | 188     |        |      |   | 188     |        |  |   | 188     |       
|Depreciation                                                       |                                                         |      | 11,648  |        |      |   | 15,141  |        |  |   | 17,993  |       
|Selling, general and administrative expenses                       |                                                         |      | 20,791  |        |      |   | 21,909  |        |  |   | 18,834  |       
|Interest expense                                                   |                                                         |      | 7,358   |        |      |   | 6,186   |        |  |   | 5,178   |       
|Recovery of amount payable to Managed Container Program            |                                                         |      |        |        |      |   | (703    | )      |  |   |        |       
|Recovery of related party loan note                                |                                                         |      |        |        |      |   |        |        |  |   | (1,280  | )     
|Provision against legal claims                                     |                                                         |      |        |        |      |   | 4,100   |        |  |   |        |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Total expenses                                                     |                                                         |      | 147,638 |        |      |   | 143,893 |        |  |   | 133,455 |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Income before income taxes and equity in earnings of
    affiliate |                                                         |      | 4,204   |        |      |   | 4,397   |        |  |   | 7,053   |       
|Income taxes provision                                             |                                                         |      | (954    | )      |      |   | (864    | )      |  |   | (1,071  | )     
|Equity in earnings of unconsolidated affiliate                     |                                                         |      | 5,977   |        |      |   | 4,269   |        |  |   | 2,883   |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Net income                                                         |                                                         |      | 9,227   |        |      |   | 7,802   |        |  |   | 8,865   |       
|Other comprehensive income (loss):                                 |                                                         |      |         |        |      |   |         |        |  |   |         |       
|                                                                   | - change in fair value of forward exchange contracts    |      |         |       |      |   |         |       |  |   |         | 325    | 
|                                                                   | - change in fair value of derivatives held by affiliate |      |         | (275   | )    |   |         | 650    |  |   |         | 311    | 
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Comprehensive income                                               |                                                         | $    | 8,952   |        |      | $ | 8,452   |        |  | $ | 9,501   |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Basic net income per common share                                  |                                                         | $    | 1.22    |        |      | $ | 1.06    |        |  | $ | 1.22    |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 
|Diluted net income per common share                                |                                                         | $    | 1.14    |        |      | $ | 0.98    |        |  | $ | 1.14    |       
|                                                                   |                                                         |      |         |        |      |   |         |        | 





F-3



---



##### 



THE CRONOS GROUP





CONSOLIDATED BALANCE SHEETS


December 31, 2006 and 2005


(US dollar amounts in thousands, except per share amounts)


|                                                                                                                                          |  |      |         |  |      |   |         | 
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                                                          |  | 2006 |         |  | 2005 |  
|                                                                                                                                          |  |      |         |  |      |  
|Assets                                                                                                                                    |  |      |         |  |      |   |         | 
|Cash and cash equivalents                                                                                                                 |  | $    | 8,498   |  |      | $ | 15,829  | 
|Restricted cash                                                                                                                           |  |      | 250     |  |      |   | 4,200   | 
|Amounts due from lessees, net                                                                                                             |  |      | 30,913  |  |      |   | 28,540  | 
|Amounts receivable from Managed Container Programs, including
    amounts due from related parties of $3,025 and $3,155,
    respectively |  |      | 3,033   |  |      |   | 3,391   | 
|New container equipment for resale                                                                                                        |  |      | 35,131  |  |      |   | 38,142  | 
|Net investment in direct financing leases, including amounts due
    within twelve months of $3,493 and $4,162, respectively              |  |      | 12,222  |  |      |   | 12,678  | 
|Investment in unconsolidated affiliates                                                                                                   |  |      | 43,710  |  |      |   | 31,358  | 
|Container equipment, net of accumulated depreciation of $58,117
    and $75,493, respectively                                             |  |      | 113,081 |  |      |   | 121,988 | 
|Other equipment, net of accumulated depreciation of $2,184 and
    $1,999, respectively                                                   |  |      | 632     |  |      |   | 1,130   | 
|Goodwill                                                                                                                                  |  |      | 11,038  |  |      |   | 11,038  | 
|Other intangible assets, net                                                                                                              |  |      | 157     |  |      |   | 345     | 
|Income taxes                                                                                                                              |  |      | 282     |  |      |   |        | 
|Other assets                                                                                                                              |  |      | 4,252   |  |      |   | 3,093   | 
|                                                                                                                                          |  |      |         |  |      |  
|Total assets                                                                                                                              |  | $    | 263,199 |  |      | $ | 271,732 | 
|                                                                                                                                          |  |      |         |  |      |  



F-4



---



##### 



THE CRONOS GROUP





CONSOLIDATED BALANCE SHEETS


December 31, 2006 and 2005


(US dollar amounts in thousands, except per share amounts)


|                                                                                                                                                                      |  |      |         |   |      |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                                                                                                      |  | 2006 |         |   | 2005 |  
|                                                                                                                                                                      |  |      |         |   |      |  
|Liabilities and shareholders equity                                                                                                                                  |  |      |         |   |      |   |         |  
|Amounts payable to Managed Container Programs, including amounts
    payable to related parties of $16,042 and $15,295, respectively                                  |  | $    | 24,171  |   |      | $ | 25,462  |  
|Amounts payable to container manufacturers                                                                                                                            |  |      | 34,809  |   |      |   | 52,790  |  
|Direct operating expense payables and accruals                                                                                                                        |  |      | 4,821   |   |      |   | 5,432   |  
|Other amounts payable and accrued expenses                                                                                                                            |  |      | 7,381   |   |      |   | 11,873  |  
|Debt and capital lease obligations, including amounts due within
    twelve months of $13,468 and $11,769, respectively                                               |  |      | 95,875  |   |      |   | 87,780  |  
|Income taxes                                                                                                                                                          |  |      |        |   |      |   | 209     |  
|Deferred income taxes                                                                                                                                                 |  |      | 3,650   |   |      |   | 2,965   |  
|Deferred income and deferred acquisition fees                                                                                                                         |  |      | 7,005   |   |      |   | 7,684   |  
|                                                                                                                                                                      |  |      |         |   |      |  
|Total liabilities                                                                                                                                                     |  |      | 177,712 |   |      |   | 194,195 |  
|                                                                                                                                                                      |  |      |         |   |      |  
|                                                                                                                                                                     
|Commitments and contingencies                                                                                                                                         |  |      |         |   |      |   |         |  
|                                                                                                                                                                     
|Shareholders equity                                                                                                                                                  |  |      |         |   |      |   |         |  
|Common shares, par value $2 per share
    (25,000,000 shares authorized; shares issued and
    outstanding; 2006  7,678,073; 2005 
    7,519,959) shares 9,158,378) |  |      | 15,356  |   |      |   | 15,040  |  
|Additional paid-in capital                                                                                                                                            |  |      | 42,489  |   |      |   | 43,807  |  
|Common shares held in treasury, at cost (112,000)                                                                                                                     |  |      | (297    | ) |      |   | (297    | )
|Accumulated other comprehensive income                                                                                                                                |  |      | 605     |   |      |   | 880     |  
|Restricted retained earnings                                                                                                                                          |  |      | 1,832   |   |      |   | 1,832   |  
|Unrestricted retained earnings                                                                                                                                        |  |      | 25,502  |   |      |   | 16,275  |  
|                                                                                                                                                                      |  |      |         |   |      |  
|Total shareholders equity                                                                                                                                            |  |      | 85,487  |   |      |   | 77,537  |  
|                                                                                                                                                                      |  |      |         |   |      |  
|Total liabilities and shareholders equity                                                                                                                            |  | $    | 263,199 |   |      | $ | 271,732 |  
|                                                                                                                                                                      |  |      |         |   |      |  



F-5



---



##### 



THE CRONOS GROUP





CONSOLIDATED STATEMENTS OF CASH FLOWS


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands, except per share amounts)


|                                                                                      |                                                                          |                     |         |        |          |   |         |        |         |   |         |        |         |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------- | ------- | ------ | -------- | - | ------- | ------ | ------- | - | ------- | ------ | ------- | -
|                                                                                      |                                                                          | 2006                |         |        | 2005     |   |         | 2004   |        
|                                                                                      |                                                                          |                     |         |        |          |   |         |        |        
|Cash flows from operating activities                                                  |                                                                          |                     |         |        |          |   |         |        |         |   |         |       
|Net income                                                                            |                                                                          | $                   | 9,227   |        |          | $ | 7,802   |        |         | $ | 8,865   |       
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                          |                     |         |        |          |   |         |        |         |   |         |       
|                                                                                      | - depreciation and amortization                                          |                     |         | 11,836 |          |   |         | 15,329 |         |   |         | 18,181 |        
|                                                                                      | - increase (decrease) in unamortized acquisition fees                    |                     |         | 658    |          |   |         | (22    | )       |   |         | 218    |        
|                                                                                      | - provision for losses on accounts receivable                            |                     |         | 96     |          |   |         | 1,284  |         |   |         | 1,251  |        
|                                                                                      | - recovery of related party loan note                                    |                     |         |       |          |   |         |       |         |   |         | (1,280 | )      
|                                                                                      | - provision against legal claims                                         |                     |         |       |          |   |         | 4,100  |         |   |         |       |        
|                                                                                      | - purchase of loan note for operating purposes                           |                     |         | (3,510 | )        |   |         |       |         |   |         |       |        
|                                                                                      | - gain on disposal of fixed assets                                       |                     |         | (652   | )        |   |         | (955   | )       |   |         | (211   | )      
|                                                                                      | - undistributed equity in earnings of affiliate                          |                     |         | (5,977 | )        |   |         | (4,269 | )       |   |         | (2,883 | )      
|                                                                                      | - increase (decrease) in current and deferred income taxes               |                     |         | 194    |          |   |         | (64    | )       |   |         | 257    |        
|                                                                                      | - decrease (increase) in new container equipment for resale:             |                     |         |        |          |   |         |        |         |   |         |        |        
|                                                                                      |                                                                          | - related parties   |         |        | 137,162  |   |         |        | 67,740  |   |         |        | 64,937  |  
|                                                                                      |                                                                          | - unrelated parties |         |        | (134,151 | ) |         |        | (88,766 | ) |         |        | (71,237 | )
|                                                                                      | - decrease (increase) in amounts receivable:                             |                     |         |        |          |   |         |        |         |   |         |        |        
|                                                                                      |                                                                          | - related parties   |         |        | 130      |   |         |        | 203     |   |         |        | 19      |  
|                                                                                      |                                                                          | - unrelated parties |         |        | 2,366    |   |         |        | (1,453  | ) |         |        | 1,089   |  
|                                                                                      | - increase (decrease) in other amounts payable and accrued
    expenses: |                     |         |        |          |   |         |        |         |   |         |        |        
|                                                                                      |                                                                          | - related parties   |         |        | 747      |   |         |        | 3,553   |   |         |        | 2,401   |  
|                                                                                      |                                                                          | - unrelated parties |         |        | (7,732   | ) |         |        | 21,553  |   |         |        | 9,267   |  
|                                                                                      |                                                                          |                     |         |        |          |   |         |        |        
|Net cash provided by operating activities                                             |                                                                          |                     | 10,394  |        |          |   | 26,035  |        |         |   | 30,874  |       
|                                                                                      |                                                                          |                     |         |        |          |   |         |        |        
|Cash flows from investing activities                                                  |                                                                          |                     |         |        |          |   |         |        |         |   |         |       
|Purchase of container equipment                                                       |                                                                          |                     | (31,230 | )      |          |   | (54,837 | )      |         |   | (29,050 | )     
|Purchase of other equipment                                                           |                                                                          |                     | (145    | )      |          |   | (440    | )      |         |   | (628    | )     
|Investment in direct financing leases                                                 |                                                                          |                     | (266    | )      |          |   | (4,286  | )      |         |   | (57     | )     
|Investments in related parties                                                        |                                                                          |                     | (6,650  | )      |          |   | (11,075 | )      |         |   | (3,600  | )     
|Proceeds from sales of container and other equipment                                  |                                                                          |                     | 21,344  |        |          |   | 91,059  |        |         |   | 16,698  |       
|Decrease (increase) in restricted cash                                                |                                                                          |                     | 3,950   |        |          |   | (2,711  | )      |         |   | (456    | )     
|                                                                                      |                                                                          |                     |         |        |          |   |         |        |        
|Net cash (used in) provided by investing activities                                   |                                                                          |                     | (12,997 | )      |          |   | 17,710  |        |         |   | (17,093 | )     
|                                                                                      |                                                                          |                     |         |        |          |   |         |        |        



F-6



---



##### 






THE CRONOS GROUP


CONSOLIDATED STATEMENTS OF CASH FLOWS


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands, except per share amounts)


|                                                      |                                                                  |      |         |       |      |   |         |       |  |   |         |        | 
|----------------------------------------------------- | ---------------------------------------------------------------- | ---- | ------- | ----- | ---- | - | ------- | ----- |  | - | ------- | ------ | 
|                                                      |                                                                  | 2006 |         |       | 2005 |   |         | 2004  | 
|                                                      |                                                                  |      |         |       |      |   |         |       | 
|Cash flows from financing activities                  |                                                                  |      |         |       |      |   |         |       |  |   |         |       
|Proceeds from issuance of term debt                   |                                                                  | $    | 22,509  |       |      | $ | 49,778  |       |  | $ | 21,556  |       
|Repayments of term debt and capital lease obligations |                                                                  |      | (25,802 | )     |      |   | (95,222 | )     |  |   | (25,391 | )     
|Dividends paid                                        |                                                                  |      | (2,102  | )     |      |   | (1,688  | )     |  |   | (799    | )     
|Recovery of related party loan                        |                                                                  |      |        |       |      |   | 1,280   |       |  |   |        |       
|Issue of common stock                                 |                                                                  |      | 717     |       |      |   | 357     |       |  |   |        |       
|                                                      |                                                                  |      |         |       |      |   |         |       | 
|Net cash used in financing activities                 |                                                                  |      | (4,678  | )     |      |   | (45,495 | )     |  |   | (4,634  | )     
|                                                      |                                                                  |      |         |       |      |   |         |       | 
|Net (decrease) increase in cash and cash equivalents  |                                                                  |      | (7,331  | )     |      |   | (1,750  | )     |  |   | 9,147   |       
|Cash and cash equivalents at beginning of year        |                                                                  |      | 15,829  |       |      |   | 17,579  |       |  |   | 8,432   |       
|                                                      |                                                                  |      |         |       |      |   |         |       | 
|Cash and cash equivalents at end of year              |                                                                  | $    | 8,498   |       |      | $ | 15,829  |       |  | $ | 17,579  |       
|                                                      |                                                                  |      |         |       |      |   |         |       | 
|Supplementary disclosure of cash flow information:    |                                                                  |      |         |       |      |   |         |       |  |   |         |       
|Cash paid during the year for:                        |                                                                  |      |         |       |      |   |         |       |  |   |         |       
|                                                      | - interest                                                       |      | $       | 6,180 |      |   | $       | 5,227 |  |   | $       | 4,478  | 
|                                                      | - income taxes                                                   |      |         | 796   |      |   |         | 1,104 |  |   |         | 1,126  | 
|Cash received during the year for:                    |                                                                  |      |         |       |      |   |         |       |  |   |         |       
|                                                      | - interest                                                       |      |         | 127   |      |   |         | 345   |  |   |         | 241    | 
|                                                      | - income taxes                                                   |      |         | 36    |      |   |         | 176   |  |   |         | 312    | 
|Non-cash items:                                       |                                                                  |      |         |       |      |   |         |       |  |   |         |       
|                                                      | - container equipment acquired under capital leases              |      |         | 8,819 |      |   |         | 5,188 |  |   |         | 12,583 | 
|                                                      | - container equipment transferred to direct financing leases     |      |         | 1,989 |      |   |         | 4,082 |  |   |         | 1,097  | 
|                                                      | - direct financing lease equipment acquired under capital leases |      |         | 2,217 |      |   |         | 523   |  |   |         |       | 



F-7



---



##### 






THE CRONOS GROUP


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands, except per share amounts)


|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   |        |  
|----------------------------------- |  | ------ | ------ | ---------- | ------- | - | ------ | ----------- |  | ----- | ------------- | - | ------------ | -------- | ---- | -------- | --------- | - | ----- | ------------- |  | - | ------ | - |  | - | ------ | -
|                                    |  |        |        |            |         |   |        | Accumulated |  |       |               |   | Unrestricted |          |      |         
|                                    |  |        |        | Additional |         |   | Common |             |  | other |               |   | Restricted   |          |      | retained |           |   | Total |              
|                                    |  | Common |        |            | paid-in |   |        | shares held |  |       | comprehensive |   |              | retained |      |          | (deficit) |   |       | shareholders | 
|                                    |  | shares |        |            | capital |   |        | in treasury |  |       | (loss) income |   |              | earnings |      |          | earnings  |   |       | equity        | 
|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               | 
|Balance, December 31, 2003          |  | $      | 14,744 |            |         | $ | 46,552 |             |  | $     | (297          | ) |              | $        | (406 | )        |           | $ | 1,832 |               |  | $ | (392   | ) |  | $ | 62,033 |  
|Net income                          |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   | 8,865  |   |  |   | 8,865  |  
|Employee share grant                |  |        |        |            |         |   | 10     |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 10     |  
|Declaration of dividends            |  |        |        |            |         |   | (1,235 | )           |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | (1,235 | )
|Issue of common shares              |  |        | 20     |            |         |   | 32     |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 52     |  
|Retirement of common shares         |  |        | (1     | )          |         |   | (1     | )           |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | (2     | )
|Other comprehensive income for year |  |        |        |            |         |   |        |             |  |       |               |   |              |          | 636  |          |           |   |       |               |  |   |        |   |  |   | 636    |  
|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               | 
|Balance, December 31, 2004          |  |        | 14,763 |            |         |   | 45,358 |             |  |       | (297          | ) |              |          | 230  |          |           |   | 1,832 |               |  |   | 8,473  |   |  |   | 70,359 |  
|Net income                          |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   | 7,802  |   |  |   | 7,802  |  
|Issue of common shares              |  |        | 277    |            |         |   | 352    |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 629    |  
|Stock based compensation            |  |        |        |            |         |   | 94     |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 94     |  
|Declaration of dividends            |  |        |        |            |         |   | (1,997 | )           |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | (1,997 | )
|Other comprehensive income for year |  |        |        |            |         |   |        |             |  |       |               |   |              |          | 650  |          |           |   |       |               |  |   |        |   |  |   | 650    |  
|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               | 
|Balance, December 31, 2005          |  |        | 15,040 |            |         |   | 43,807 |             |  |       | (297          | ) |              |          | 880  |          |           |   | 1,832 |               |  |   | 16,275 |   |  |   | 77,537 |  
|Net income                          |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   | 9,227  |   |  |   | 9,227  |  
|Issue of common shares              |  |        | 316    |            |         |   | 439    |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 755    |  
|Stock based compensation            |  |        |        |            |         |   | 441    |             |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | 441    |  
|Declaration of dividends            |  |        |        |            |         |   | (2,198 | )           |  |       |               |   |              |          |      |          |           |   |       |               |  |   |        |   |  |   | (2,198 | )
|Other comprehensive income for year |  |        |        |            |         |   |        |             |  |       |               |   |              |          | (275 | )        |           |   |       |               |  |   |        |   |  |   | (275   | )
|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               | 
|Balance, December 31, 2006          |  | $      | 15,356 |            |         | $ | 42,489 |             |  | $     | (297          | ) |              | $        | 605  |          |           | $ | 1,832 |               |  | $ | 25,502 |   |  | $ | 85,487 |  
|                                    |  |        |        |            |         |   |        |             |  |       |               |   |              |          |      |          |           |   |       |               | 



F-8



---



##### 



THE CRONOS GROUP





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(US dollar amounts in thousands, except per share amounts)





1.   Nature of operations and summary of
significant accounting policies


a)  Nature of operations






















|   |                                      
|-- | -------------------------------------
|b) | Basis of accounting and consolidation







F-9



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|   |       
|-- | ------
|c) | Leases



|   |                
|-- | ---------------
|i. | Group as lessor



Operating leases with customers.






Direct financing leases with customers.






|    |                
|--- | ---------------
|ii. | Group as lessee

Operating leases.




F-10



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)








Capital leases.




|   |                                       
|-- | --------------------------------------
|d) | Equipment trading revenue and expenses





|   |                                             
|-- | --------------------------------------------
|e) | Commissions, fees and other operating income







|   |             
|-- | ------------
|f) | Income taxes



F-11



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|   |                            
|-- | ---------------------------
|g) | Net income per common share







|                                                    |                                       |      |           |         |      |   |           |         |  |   |           |         | 
|--------------------------------------------------- | ------------------------------------- | ---- | --------- | ------- | ---- | - | --------- | ------- |  | - | --------- | ------- | 
|                                                    |                                       | 2006 |           |         | 2005 |   |           | 2004    | 
|                                                    |                                       |      |           |         |      |   |           |         | 
|Net income available for common shareholders        |                                       | $    | 9,227     |         |      | $ | 7,802     |         |  | $ | 8,865     |        
|                                                    |                                       |      |           |         |      |   |           |         | 
|Weighted average outstanding shares of common stock |                                       |      | 7,535,227 |         |      |   | 7,358,950 |         |  |   | 7,260,852 |        
|Dilutive effect of:                                 |                                       |      |           |         |      |   |           |         |  |   |           |        
|                                                    | - 1998 stock option                   |      |           | 198,215 |      |   |           | 187,183 |  |   |           | 113,627 | 
|                                                    | - warrants                            |      |           |        |      |   |           |        |  |   |           | 74,757  | 
|                                                    | - 1999 stock option plan              |      |           | 202,154 |      |   |           | 262,772 |  |   |           | 137,105 | 
|                                                    | - non-employee directors equity plan |      |           | 107,182 |      |   |           | 134,528 |  |   |           | 163,365 | 
|                                                    | - 2005 equity incentive plan          |      |           | 76,147  |      |   |           | 18,500  |  |   |           |        | 
|                                                    |                                       |      |           |         |      |   |           |         | 
|Common shares and common share equivalents          |                                       |      | 8,118,925 |         |      |   | 7,961,933 |         |  |   | 7,749,706 |        
|                                                    |                                       |      |           |         |      |   |           |         | 
|Basic net income per share                          |                                       | $    | 1.22      |         |      | $ | 1.06      |         |  | $ | 1.22      |        
|                                                    |                                       |      |           |         |      |   |           |         | 
|Diluted net income per share                        |                                       | $    | 1.14      |         |      | $ | 0.98      |         |  | $ | 1.14      |        
|                                                    |                                       |      |           |         |      |   |           |         | 





h)  Cash equivalents




i)   Allowance for doubtful accounts




j)   New container equipment for
resale




F-12



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




k)  Investments








l)   Consolidation of variable interest
entities




m)  Container equipment






| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | Refrigerated container equipment  over 12 years
    to a residual value of 15%               
|
| |  | Tanks, rolltrailers and flat racks  over
    20 years to a residual value of 10%             
|
| |  | Dry cargo and all remaining container equipment  over
    15 years to a residual value of 10%



n)  Other equipment




o)  Restricted cash




F-13



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


p)  Goodwill and other intangible assets






q)  Translation of foreign currencies






r)   Stock-based compensation








F-14



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|                              |                                                                                                                |      |   |       |      |  |   |       |  
|----------------------------- | -------------------------------------------------------------------------------------------------------------- | ---- | - | ----- | ---- |  | - | ----- | -
|                              |                                                                                                                | 2005 |   |       | 2004 | 
|                              |                                                                                                                |      |   |       |      | 
|Net income:                   |                                                                                                                |      |   |       |      |  |   |      
|                              | - as reported                                                                                                  |      | $ | 7,802 |      |  | $ | 8,865 |  
|                              | - add stock-based employee compensation included in
    reported net income, net of related tax effects        |      |   |      |      |  |   | 3     |  
|                              | - deduct stock-based compensation expense computed in
    accordance with SFAS 123, net of related tax effects |      |   |      |      |  |   | (21   | )
|                              |                                                                                                                |      |   |       |      | 
|                              | - pro forma                                                                                                    |      | $ | 7,802 |      |  | $ | 8,847 |  
|                              |                                                                                                                |      |   |       |      | 
|Basic net income per share:   |                                                                                                                |      |   |       |      |  |   |      
|                              | - as reported                                                                                                  |      | $ | 1.06  |      |  | $ | 1.22  |  
|                              | - pro forma                                                                                                    |      | $ | 1.06  |      |  | $ | 1.22  |  
|Diluted net income per share: |                                                                                                                |      |   |       |      |  |   |      
|                              | - as reported                                                                                                  |      | $ | 0.98  |      |  | $ | 1.14  |  
|                              | - pro forma                                                                                                    |      | $ | 0.98  |      |  | $ | 1.14  |  

s)   Accounting for warrants




t)   Asset impairment




u)  Fair value of financial instruments




F-15



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




v)   Derivative financial
instruments




.


w)  New pronouncements






AIR-1 AIR-1) AIR-1 AIR-1 AIR-1 AIR-1 accrue-in AIR-1 AIR-1




F-16



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






2.   Selling, general &
administrative expenses




3.   Operating segment data












F-17



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |         |  
|---------------------------------------- | ---------------------------------------- | ------- | ------ | ------- | ----------- | - | ----- | --------- | - | - | ---------- | ------- | - | ----- | ------- | ------- | - | - | ------- | ------- | -
|                                         |                                          |         |        | US      |             |   |       |           |   |   |           
|                                         |                                          | Joint   |        |         | Limited     |   |       | Private   |   |   |            |         |  
|                                         |                                          | Venture |        |         | Partnership |   |       | Container |   |   | Owned      |         |   |      
|                                         |                                          | Program |        |         | Programs    |   |       | Programs  |   |   | Containers |         |   | Total |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Year ended December 31, 2006             |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|Items directly attributable to segments: |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|                                         | - gross lease revenue                    |         | $      | 53,812  |             |   | $     | 17,613    |   |   | $          | 40,596  |   |       | $       | 29,862  |   |   | $       | 141,883 |  
|                                         | - direct operating expenses              |         |        | (4,228  | )           |   |       | (2,442    | ) |   |            | (6,680  | ) |       |         | (3,293  | ) |   |         | (16,643 | )
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|                                         | net lease revenue                        |         |        | 49,584  |             |   |       | 15,171    |   |   |            | 33,916  |   |       |         | 26,569  |   |   |         | 125,240 |  
|                                         | - direct financing lease income          |         |        |        |             |   |       |          |   |   |            |        |   |       |         | 1,671   |   |   |         | 1,671   |  
|                                         | - payments to Managed Container Programs |         |        | (45,195 | )           |   |       | (11,356   | ) |   |            | (30,374 | ) |       |         |        |   |   |         | (86,925 | )
|                                         | - container depreciation                 |         |        |        |             |   |       |          |   |   |            |        |   |       |         | (11,374 | ) |   |         | (11,374 | )
|                                         | - container interest expense             |         |        |        |             |   |       |          |   |   |            |        |   |       |         | (7,208  | ) |   |         | (7,208  | )
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Segment profit                           |                                          | $       | 4,389  |         |             | $ | 3,815 |           |   | $ | 3,542      |         |   | $     | 9,658   |         |   | $ | 21,404  |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Total assets                             |                                          | $       | 59,838 |         |             | $ | 6,110 |           |   | $ | 10,947     |         |   | $     | 186,304 |         |   | $ | 263,199 |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Expenditure for segment assets           |                                          | $       | 6,761  |         |             | $ | 36    |           |   | $ | 84         |         |   | $     | 27,580  |         |   | $ | 34,461  |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        

|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |         |         |   |   |         |         |  
|---------------------------------------- | ---------------------------------------- | ------- | ------ | ------- | ------------ | - | ----- | --------- | - | - | ---------- | ------- | - | ----- | ------- | ------- | - | - | ------- | ------- | -
|                                         |                                          |         |        | US      |              |   |       |           |   |   |           
|                                         |                                          | Joint   |        |         | Limited      |   |       | Private   |   |   |            |         |  
|                                         |                                          | Venture |        |         | Partnerships |   |       | Container |   |   | Owned      |         |   |      
|                                         |                                          | Program |        |         | Programs     |   |       | Programs  |   |   | Containers |         |   | Total |        
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        
|Year ended December 31, 2005             |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|Items directly attributable to segments: |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|                                         | - gross lease revenue                    |         | $      | 30,637  |              |   | $     | 23,512    |   |   | $          | 47,368  |   |       | $       | 37,507  |   |   | $       | 139,024 |  
|                                         | - direct operating expenses              |         |        | (2,119  | )            |   |       | (3,587    | ) |   |            | (7,250  | ) |       |         | (5,135  | ) |   |         | (18,091 | )
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        
|                                         | net lease revenue                        |         |        | 28,518  |              |   |       | 19,925    |   |   |            | 40,118  |   |       |         | 32,372  |   |   |         | 120,933 |  
|                                         | - direct financing lease income          |         |        |        |              |   |       |          |   |   |            |        |   |       |         | 1,757   |   |   |         | 1,757   |  
|                                         | - payments to Managed Container Programs |         |        | (26,025 | )            |   |       | (14,801   | ) |   |            | (36,177 | ) |       |         |        |   |   |         | (77,003 | )
|                                         | - container depreciation                 |         |        |        |              |   |       |          |   |   |            |        |   |       |         | (14,890 | ) |   |         | (14,890 | )
|                                         | - container interest expense             |         |        |        |              |   |       |          |   |   |            |        |   |       |         | (6,266  | ) |   |         | (6,266  | )
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        
|Segment profit                           |                                          | $       | 2,493  |         |              | $ | 5,124 |           |   | $ | 3,941      |         |   | $     | 12,973  |         |   | $ | 24,531  |        
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        
|Total assets                             |                                          | $       | 43,041 |         |              | $ | 7,772 |           |   | $ | 12,504     |         |   | $     | 208,415 |         |   | $ | 271,732 |        
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        
|Expenditure for segment assets           |                                          | $       | 11,172 |         |              | $ | 74    |           |   | $ | 150        |         |   | $     | 69,385  |         |   | $ | 80,781  |        
|                                         |                                          |         |        |         |              |   |       |           |   |   |            |         |   |       |        

F-18



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |         |  
|---------------------------------------- | ---------------------------------------- | ------- | ------ | ------- | ----------- | - | ----- | --------- | - | - | ---------- | ------- | - | ----- | ------- | ------- | - | - | ------- | ------- | -
|                                         |                                          |         |        | US      |             |   |       |           |   |   |           
|                                         |                                          | Joint   |        |         | Limited     |   |       | Private   |   |   |            |         |  
|                                         |                                          | Venture |        |         | Partnership |   |       | Container |   |   | Owned      |         |   |      
|                                         |                                          | Program |        |         | Programs    |   |       | Programs  |   |   | Containers |         |   | Total |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Year ended December 31, 2004             |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|Items directly attributable to segments: |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |         |         |   |   |         |        
|                                         | - gross lease revenue                    |         | $      | 16,349  |             |   | $     | 26,671    |   |   | $          | 47,442  |   |       | $       | 41,634  |   |   | $       | 132,096 |  
|                                         | - direct operating expenses              |         |        | (1,058  | )           |   |       | (5,012    | ) |   |            | (8,359  | ) |       |         | (6,134  | ) |   |         | (20,563 | )
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|                                         | net lease revenue                        |         |        | 15,291  |             |   |       | 21,659    |   |   |            | 39,083  |   |       |         | 35,500  |   |   |         | 111,533 |  
|                                         | - direct financing lease income          |         |        |        |             |   |       |          |   |   |            |        |   |       |         | 1,547   |   |   |         | 1,547   |  
|                                         | - payments to Managed Container Programs |         |        | (13,963 | )           |   |       | (17,675   | ) |   |            | (36,323 | ) |       |         |        |   |   |         | (67,961 | )
|                                         | - container depreciation                 |         |        |        |             |   |       |          |   |   |            |        |   |       |         | (17,716 | ) |   |         | (17,716 | )
|                                         | - container interest expense             |         |        |        |             |   |       |          |   |   |            |        |   |       |         | (5,076  | ) |   |         | (5,076  | )
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Segment profit                           |                                          | $       | 1,328  |         |             | $ | 3,984 |           |   | $ | 2,760      |         |   | $     | 14,255  |         |   | $ | 22,327  |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Total assets                             |                                          | $       | 21,117 |         |             | $ | 8,542 |           |   | $ | 11,519     |         |   | $     | 230,571 |         |   | $ | 271,749 |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        
|Expenditure for segment assets           |                                          | $       | 3,686  |         |             | $ | 120   |           |   | $ | 219        |         |   | $     | 46,648  |         |   | $ | 50,673  |        
|                                         |                                          |         |        |         |             |   |       |           |   |   |            |         |   |       |        



|                                                               |  |      |         |   |      |   |         |      |  |   |         |  
|-------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                               |  | 2006 |         |   | 2005 |   |         | 2004 | 
|                                                               |  |      |         |   |      |   |         |      | 
|Segment profit                                                 |  | $    | 21,404  |   |      | $ | 24,531  |      |  | $ | 22,327  |  
|Equipment trading revenue                                      |  |      | 4,669   |   |      |   | 2,210   |      |  |   | 4,698   |  
|Unallocated commissions, fees and other operating income       |  |      | 3,074   |   |      |   | 3,622   |      |  |   | 2,047   |  
|Interest income                                                |  |      | 545     |   |      |   | 344     |      |  |   | 120     |  
|Equipment trading expenses                                     |  |      | (4,085  | ) |      |   | (1,978  | )    |  |   | (4,018  | )
|Amortization of intangible assets                              |  |      | (188    | ) |      |   | (188    | )    |  |   | (188    | )
|Non container depreciation                                     |  |      | (274    | ) |      |   | (251    | )    |  |   | (277    | )
|Selling, general and administrative expenses                   |  |      | (20,791 | ) |      |   | (21,909 | )    |  |   | (18,834 | )
|Non container interest credit/ (expense)                       |  |      | (150    | ) |      |   | 80      |      |  |   | (102    | )
|Gain on settlement of litigation                               |  |      |        |   |      |   | 1,333   |      |  |   |        |  
|Recovery of amount payable to Managed Container Program        |  |      |        |   |      |   | 703     |      |  |   |        |  
|Provision against legal claims                                 |  |      |        |   |      |   | (4,100  | )    |  |   |        |  
|Recovery of related party loan note                            |  |      |        |   |      |   |        |      |  |   | 1,280   |  
|                                                               |  |      |         |   |      |   |         |      | 
|Income before income taxes and equity in earnings of affiliate |  | $    | 4,204   |   |      | $ | 4,397   |      |  | $ | 7,053   |  
|                                                               |  |      |         |   |      |   |         |      | 

F-19



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|                                            |                                                            |      |         |         |      |   |         |         |  |   |         |         | 
|------------------------------------------- | ---------------------------------------------------------- | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                            |                                                            | 2006 |         |         | 2005 |   |         | 2004    | 
|                                            |                                                            |      |         |         |      |   |         |         | 
|Revenues directly attributable to segments: |                                                            |      |         |         |      |   |         |         |  |   |         |        
|                                            | - gross lease revenue                                      |      | $       | 141,883 |      |   | $       | 139,024 |  |   | $       | 132,096 | 
|                                            | - direct financing lease income                            |      |         | 1,671   |      |   |         | 1,757   |  |   |         | 1,547   | 
|                                            |                                                            |      |         |         |      |   |         |         | 
|                                            |                                                            |      | 143,554 |         |      |   | 140,781 |         |  |   | 133,643 |        
|Other revenues:                             |                                                            |      |         |         |      |   |         |         |  |   |         |        
|                                            | - equipment trading revenue                                |      |         | 4,669   |      |   |         | 2,210   |  |   |         | 4,698   | 
|                                            | - unallocated commissions, fees and other operating income |      |         | 3,074   |      |   |         | 3,622   |  |   |         | 2,047   | 
|                                            | - interest income                                          |      |         | 545     |      |   |         | 344     |  |   |         | 120     | 
|                                            | - gain on settlement of litigation                         |      |         |        |      |   |         | 1,333   |  |   |         |        | 
|                                            |                                                            |      |         |         |      |   |         |         | 
|Total revenues                              |                                                            | $    | 151,842 |         |      | $ | 148,290 |         |  | $ | 140,508 |        
|                                            |                                                            |      |         |         |      |   |         |         | 





|                        |                           |      |         |        |      |   |         |        |  |   |         |        | 
|----------------------- | ------------------------- | ---- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|                        |                           | 2006 |         |        | 2005 |   |         | 2004   | 
|                        |                           |      |         |        |      |   |         |        | 
|Dry cargo containers    |                           | $    | 82,433  |        |      | $ | 94,638  |        |  | $ | 91,511  |       
|Specialized containers: |                           |      |         |        |      |   |         |        |  |   |         |       
|                        | - refrigerated containers |      |         | 26,225 |      |   |         | 19,890 |  |   |         | 20,613 | 
|                        | - tank containers         |      |         | 14,185 |      |   |         | 10,188 |  |   |         | 8,295  | 
|                        | - dry freight specials    |      |         | 19,040 |      |   |         | 14,308 |  |   |         | 11,677 | 
|                        |                           |      |         |        |      |   |         |        | 
|Gross lease revenue     |                           | $    | 141,883 |        |      | $ | 139,024 |        |  | $ | 132,096 |       
|                        |                           |      |         |        |      |   |         |        | 



|            |  |      |     |   |      |  |     |      |  |  |     |  
|----------- |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|            |  | 2006 |     |   | 2005 |  |     | 2004 | 
|            |  |      |     |   |      |  |     |      | 
|Europe      |  |      | 46  | % |      |  | 42  | %    |  |  | 44  | %
|Australasia |  |      | 36  | % |      |  | 37  | %    |  |  | 33  | %
|Other       |  |      | 18  | % |      |  | 21  | %    |  |  | 23  | %
|            |  |      |     |   |      |  |     |      | 
|Total       |  |      | 100 | % |      |  | 100 | %    |  |  | 100 | %
|            |  |      |     |   |      |  |     |      | 



F-20



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|   |             
|-- | ------------
|4. | Income taxes



|       |  |      |       |   |      |   |       |      |  |   |        |  
|------ |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|       |  | 2006 |       |   | 2005 |   |       | 2004 | 
|       |  |      |       |   |      |   |       |      | 
|US     |  | $    | (53   | ) |      | $ | 1,159 |      |  | $ | (1,437 | )
|Non US |  |      | 4,257 |   |      |   | 3,238 |      |  |   | 8,490  |  
|       |  |      |       |   |      |   |       |      | 
|       |  | $    | 4,204 |   |      | $ | 4,397 |      |  | $ | 7,053  |  
|       |  |      |       |   |      |   |       |      | 



|                                 |            |      |     |     |      |   |      |      |   |   |       |     |  
|-------------------------------- | ---------- | ---- | --- | --- | ---- | - | ---- | ---- | - | - | ----- | --- | -
|                                 |            | 2006 |     |     | 2005 |   |      | 2004 |  
|                                 |            |      |     |     |      |   |      |      |  
|Current taxes:                   |            |      |     |     |      |   |      |      |   |   |       |    
|                                 | US Federal |      | $   |    |      |   | $    | 9    |   |   | $     | 11  |  
|                                 | US State   |      |     | 2   |      |   |      | 5    |   |   |       | (15 | )
|                                 | Non US     |      |     | 73  |      |   |      | 968  |   |   |       | 706 |  
|                                 |            |      |     |     |      |   |      |      |  
|                                 |            |      | 75  |     |      |   | 982  |      |   |   | 702   |    
|                                 |            |      |     |     |      |   |      |      |  
|Deferred taxes:                  |            |      |     |     |      |   |      |      |   |   |       |    
|                                 | US Federal |      |     | 119 |      |   |      | (86  | ) |   |       | (25 | )
|                                 | US State   |      |     | (62 | )    |   |      | 96   |   |   |       | 51  |  
|                                 | Non US     |      |     | 822 |      |   |      | (128 | ) |   |       | 343 |  
|                                 |            |      |     |     |      |   |      |      |  
|                                 |            |      | 879 |     |      |   | (118 | )    |   |   | 369   |    
|                                 |            |      |     |     |      |   |      |      |  
|Total provision for income taxes |            | $    | 954 |     |      | $ | 864  |      |   | $ | 1,071 |    
|                                 |            |      |     |     |      |   |      |      |  



|                                                                       |  |      |       |   |      |   |       |      |  |   |        |  
|---------------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                                                       |  | 2006 |       |   | 2005 |   |       | 2004 | 
|                                                                       |  |      |       |   |      |   |       |      | 
|US Tax at 34%                                                          |  | $    | 1,429 |   |      | $ | 1,495 |      |  | $ | 2,398  |  
|Difference between US statutory rate and other taxed
    jurisdictions |  |      | 270   |   |      |   | 334   |      |  |   | 467    |  
|US state taxes (net of federal tax benefit)                            |  |      | (60   | ) |      |   | 101   |      |  |   | 36     |  
|Effect of non-taxed income at US federal rate of 34%                   |  |      | (797  | ) |      |   | (603  | )    |  |   | (2,305 | )
|Valuation allowance                                                    |  |      | 112   |   |      |   | (551  | )    |  |   | 547    |  
|Other                                                                  |  |      |      |   |      |   | 88    |      |  |   | (72    | )
|                                                                       |  |      |       |   |      |   |       |      | 
|Actual tax provision                                                   |  | $    | 954   |   |      | $ | 864   |      |  | $ | 1,071  |  
|                                                                       |  |      |       |   |      |   |       |      | 

F-21



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|                                                                              |  |      |        |   |      |   |        |  
|----------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                                              |  | 2006 |        |   | 2005 |  
|                                                                              |  |      |        |   |      |  
|Assets                                                                        |  |      |        |   |      |   |        |  
|Acquisition fees                                                              |  | $    | 177    |   |      | $ | 533    |  
|Losses carried forward                                                        |  |      | 1,640  |   |      |   | 1,278  |  
|Partnership income taxable in different periods for book and tax
    purposes |  |      | 475    |   |      |   | 1,038  |  
|Disallowed interest expense carried forward (no expiry date)                  |  |      | 1,188  |   |      |   | 1,234  |  
|Alternative minimum tax credit (no expiry date)                               |  |      | 22     |   |      |   | 22     |  
|Other                                                                         |  |      | 933    |   |      |   | 877    |  
|Valuation allowance                                                           |  |      | (3,587 | ) |      |   | (3,475 | )
|                                                                              |  |      |        |   |      |  
|Total deferred income tax assets                                              |  |      | 848    |   |      |   | 1,507  |  
|                                                                              |  |      |        |   |      |  
|Liabilities                                                                   |  |      |        |   |      |   |        |  
|Depreciation                                                                  |  |      | 4,498  |   |      |   | 4,472  |  
|                                                                              |  |      |        |   |      |  
|Net deferred income tax liabilities                                           |  | $    | 3,650  |   |      | $ | 2,965  |  
|                                                                              |  |      |        |   |      |  



|                    |  |   |       | 
|------------------- |  | - | ----- | 
|2007                |  | $ | 6     | 
|2008                |  |   | 54    | 
|2009                |  |   | 26    | 
|2010                |  |   | 172   | 
|2011                |  |   | 15    | 
|2012 and thereafter |  |   | 1,367 | 
|                    |  |   |      
|Total               |  | $ | 1,640 | 
|                    |  |   |      







F-22



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|   |                         
|-- | ------------------------
|5. | Amounts due from lessees



| |                    
| | -------------------
| | a)  Group as lessor







|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2007                |  | $ | 60,508  | 
|2008                |  |   | 44,836  | 
|2009                |  |   | 31,266  | 
|2010                |  |   | 18,198  | 
|2011                |  |   | 6,944   | 
|2012 and thereafter |  |   | 1,522   | 
|                    |  |   |        
|Total               |  | $ | 163,274 | 
|                    |  |   |        





| |                                    
| | -----------------------------------
| | b)  Allowance for doubtful accounts



|                                |  |      |       |   |      |   |       |      |  |   |        |  
|------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                |  | 2006 |       |   | 2005 |   |       | 2004 | 
|                                |  |      |       |   |      |   |       |      | 
|Beginning of year               |  | $    | 3,364 |   |      | $ | 2,246 |      |  | $ | 2,296  |  
|Provision for doubtful accounts |  |      | 96    |   |      |   | 1,284 |      |  |   | 1,251  |  
|Write-offs, net of recoveries   |  |      | (257  | ) |      |   | (166  | )    |  |   | (1,301 | )
|                                |  |      |       |   |      |   |       |      | 
|End of year                     |  | $    | 3,203 |   |      | $ | 3,364 |      |  | $ | 2,246  |  
|                                |  |      |       |   |      |   |       |      | 

F-23



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|   |                                          
|-- | -----------------------------------------
|6. | Net investment in direct financing leases



|                   |                       |             |        |       |              |   |       |                |  |   |        |       | 
|------------------ | --------------------- | ----------- | ------ | ----- | ------------ | - | ----- | -------------- |  | - | ------ | ----- | 
|                   |                       | Net Lease   |        |       | Unearned     |   |       | Minimum Future | 
|                   |                       | Receivables |        |       | Lease Income |   |       | Lease Rentals  | 
|                   |                       |             |        |       |              |   |       |                | 
|December 31, 2006: |                       |             |        |       |              |   |       |                |  |   |        |      
|                   | - 2007                |             |        | 3,493 |              |   |       | 1,363          |  |   |        | 4,856 | 
|                   | - 2008                |             |        | 3,153 |              |   |       | 902            |  |   |        | 4,055 | 
|                   | - 2009                |             |        | 2,246 |              |   |       | 574            |  |   |        | 2,820 | 
|                   | - 2010                |             |        | 1,075 |              |   |       | 373            |  |   |        | 1,448 | 
|                   | - 2011                |             |        | 309   |              |   |       | 298            |  |   |        | 607   | 
|                   | - 2012 and thereafter |             |        | 1,946 |              |   |       | 1,007          |  |   |        | 2,953 | 
|                   |                       |             |        |       |              |   |       |                | 
|Total              |                       | $           | 12,222 |       |              | $ | 4,517 |                |  | $ | 16,739 |      
|                   |                       |             |        |       |              |   |       |                | 



|   |                                   
|-- | ----------------------------------
|7. | New container equipment for resale



|                                                          |                                           |      |         |          |      |   |         |         |   |   |        |         |  
|--------------------------------------------------------- | ----------------------------------------- | ---- | ------- | -------- | ---- | - | ------- | ------- | - | - | ------ | ------- | -
|                                                          |                                           | 2006 |         |          | 2005 |   |         | 2004    |  
|                                                          |                                           |      |         |          |      |   |         |         |  
|Beginning of year                                         |                                           | $    | 38,142  |          |      | $ | 17,116  |         |   | $ | 10,816 |        
|Container purchases                                       |                                           |      | 138,785 |          |      |   | 107,587 |         |   |   | 89,618 |        
|Container disposals:                                      |                                           |      |         |          |      |   |         |         |   |   |        |        
|                                                          | - sold to US Limited Partnership Programs |      |         | (3,890   | )    |   |         | (3,594  | ) |   |        | (3,239  | )
|                                                          | - sold to the Joint Venture Program       |      |         | (133,272 | )    |   |         | (64,146 | ) |   |        | (61,698 | )
|                                                          | - sold to Private Container Programs      |      |         | (891     | )    |   |         | (17,015 | ) |   |        | (14,890 | )
|                                                          | - sold to other parties                   |      |         | (3,693   | )    |   |         | (1,034  | ) |   |        | (3,413  | )
|Transferred to long-term ownership of container equipment |                                           |      | (50     | )        |      |   | (772    | )       |   |   | (78    | )      
|                                                          |                                           |      |         |          |      |   |         |         |  
|End of year                                               |                                           | $    | 35,131  |          |      | $ | 38,142  |         |   | $ | 17,116 |        
|                                                          |                                           |      |         |          |      |   |         |         |  





|   |                                          
|-- | -----------------------------------------
|8. | Consolidation of variable interest entity





F-24



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|   |                               
|-- | ------------------------------
|9. | Investments in related parties

|                                        |  |      |        |  |      |   |        | 
|--------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                        |  | 2006 |        |  | 2005 |  
|                                        |  |      |        |  |      |  
|Investment in Joint Venture Program     |  | $    | 43,658 |  |      | $ | 31,341 | 
|Other investments                       |  |      | 52     |  |      |   | 17     | 
|                                        |  |      |        |  |      |  
|Investment in unconsolidated affiliates |  | $    | 43,710 |  |      | $ | 31,358 | 
|                                        |  |      |        |  |      |  



|                                                      |  |      |        |   |      |   |        |      |  |   |        | 
|----------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | 
|                                                      |  | 2006 |        |   | 2005 |   |        | 2004 | 
|                                                      |  |      |        |   |      |   |        |      | 
|Beginning of year                                     |  | $    | 31,358 |   |      | $ | 15,364 |      |  | $ | 8,570  | 
|Investment in joint ventures                          |  |      | 6,650  |   |      |   | 11,075 |      |  |   | 3,600  | 
|Equity in earnings of affiliates                      |  |      | 5,977  |   |      |   | 4,269  |      |  |   | 2,883  | 
|Change in fair value of interest rate swap agreements |  |      | (275   | ) |      |   | 650    |      |  |   | 311    | 
|                                                      |  |      |        |   |      |   |        |      | 
|End of year                                           |  | $    | 43,710 |   |      | $ | 31,358 |      |  | $ | 15,364 | 
|                                                      |  |      |        |   |      |   |        |      | 







F-25



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)










|                                      |  |              |        | 
|------------------------------------- |  | ------------ | ------ | 
|                                      |  | % Investment |       
|US Limited Partnership Program        |  | Holding      |       
|                                      |  |              |       
|IEA Income Fund XII, L.P.             |  |              | 0.001% | 
|Cronos Global Income Fund XIV, L.P.   |  |              | 0.002% | 
|Cronos Global Income Fund XV, L.P.    |  |              | 0.001% | 
|Cronos Global Income Fund XVI, L.P.   |  |              | 0.003% | 
|Cronos Containers Partners I, L.P.    |  |              | 0.013% | 
|Cronos Global Income Fund XVIII, L.P. |  |              | 0.014% | 



F-26



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


10. Container and other equipment




|                           |  |   |          |  
|-------------------------- |  | - | -------- | -
|Cost                       |  |   |          |  
|Balance, December 31, 2004 |  | $ | 294,575  |  
|Additions                  |  |   | 64,457   |  
|Disposals                  |  |   | (161,551 | )
|                           |  |   |         
|Balance, December 31, 2005 |  |   | 197,481  |  
|Additions                  |  |   | 25,036   |  
|Disposals                  |  |   | (51,319  | )
|                           |  |   |         
|Balance, December 31, 2006 |  | $ | 171,198  |  
|                           |  |   |         
|Accumulated depreciation   |  |   |          |  
|Balance, December 31, 2004 |  | $ | 127,991  |  
|Depreciation expense       |  |   | 14,890   |  
|Disposals                  |  |   | (67,388  | )
|                           |  |   |         
|Balance, December 31, 2005 |  | $ | 75,493   |  
|Depreciation expense       |  |   | 11,374   |  
|Disposals                  |  |   | (28,750  | )
|                           |  |   |         
|Balance, December 31, 2006 |  | $ | 58,117   |  
|                           |  |   |         
|Book value                 |  |   |          |  
|December 31, 2006          |  | $ | 113,081  |  
|                           |  |   |         
|December 31, 2005          |  | $ | 121,988  |  
|                           |  |   |         





F-27



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


11. Goodwill and intangible assets




|                                          |  |          |        |  |         |   |       |       |  |   |        | 
|----------------------------------------- |  | -------- | ------ |  | ------- | - | ----- | ----- |  | - | ------ | 
|                                          |  | Goodwill |        |  | Patents |   |       | Total | 
|                                          |  |          |        |  |         |   |       |       | 
|Cost                                      |  |          |        |  |         |   |       |       |  |   |        | 
|Balance, December 31, 2006, 2005 and 2004 |  | $        | 16,231 |  |         | $ | 2,096 |       |  | $ | 18,327 | 
|                                          |  |          |        |  |         |   |       |       | 
|Accumulated amortization                  |  |          |        |  |         |   |       |       |  |   |        | 
|Balance, December 31, 2004                |  | $        | 5,193  |  |         | $ | 1,563 |       |  | $ | 6,756  | 
|Amortization expense                      |  |          |       |  |         |   | 188   |       |  |   | 188    | 
|                                          |  |          |        |  |         |   |       |       | 
|Balance, December 31, 2005                |  |          | 5,193  |  |         |   | 1,751 |       |  |   | 6,944  | 
|Amortization expense                      |  |          |       |  |         |   | 188   |       |  |   | 188    | 
|                                          |  |          |        |  |         |   |       |       | 
|Balance, December 31, 2006                |  | $        | 5,193  |  |         | $ | 1,939 |       |  | $ | 7,132  | 
|                                          |  |          |        |  |         |   |       |       | 
|Book value                                |  |          |        |  |         |   |       |       |  |   |        | 
|December 31, 2006                         |  | $        | 11,038 |  |         | $ | 157   |       |  | $ | 11,195 | 
|                                          |  |          |        |  |         |   |       |       | 
|December 31, 2005                         |  | $        | 11,038 |  |         | $ | 345   |       |  | $ | 11,383 | 
|                                          |  |          |        |  |         |   |       |       | 



i.   Goodwill














F-28



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


ii.  Patents






12. Hedging transactions and derivative financial
instruments






13. Other assets




|                                                        |  |      |       |  |      |   |       | 
|------------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                                                        |  | 2006 |       |  | 2005 |  
|                                                        |  |      |       |  |      |  
|Prepaid expenses                                        |  | $    | 1,175 |  |      | $ | 834   | 
|Unamortized loan origination fees                       |  |      | 939   |  |      |   | 1,276 | 
|Computer software development costs for internal use    |  |      | 842   |  |      |   |      | 
|Deposits for leasehold properties and other items       |  |      | 310   |  |      |   | 286   | 
|Sales tax receivables                                   |  |      | 218   |  |      |   | 77    | 
|Amounts receivable under equipment trading transactions |  |      |      |  |      |   | 78    | 
|Other                                                   |  |      | 768   |  |      |   | 542   | 
|                                                        |  |      |       |  |      |  
|Total                                                   |  | $    | 4,252 |  |      | $ | 3,093 | 
|                                                        |  |      |       |  |      |  

14. Debt and lease obligations






F-29



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)








|                                  |                 |      |        |        |      |                    |        |                    |  |  |  |                 | 
|--------------------------------- | --------------- | ---- | ------ | ------ | ---- | ------------------ | ------ | ------------------ |  |  |  | --------------- | 
|                                  |                 |      |        |        |      | Interest Rate % at |       
|                                  |                 | 2006 |        |        | 2005 |                    |        | December 2006/2005 | 
|                                  |                 |      |        |        |      |                    |        |                    | 
|Debt:                             |                 |      |        |        |      |                    |        |                    |  |  |  |                
|                                  | - floating rate |      | $      | 56,229 |      |                    | $      | 54,065             |  |  |  | 6.2-7.4/5.3-6.5 | 
|                                  | - fixed rate    |      |        | 3,782  |      |                    |        | 4,702              |  |  |  | 7.2-7.4/6.8     | 
|Obligations under capital leases: |                 |      |        |        |      |                    |        |                    |  |  |  |                
|                                  | - floating rate |      |        | 32,200 |      |                    |        | 26,300             |  |  |  | 5.7-7.4/4.0-6.4 | 
|                                  | - fixed rate    |      |        | 3,664  |      |                    |        | 2,713              |  |  |  | 5.6-6.4/6.4     | 
|                                  |                 |      |        |        |      |                    |        |                    | 
|Total                             |                 | $    | 95,875 |        |      | $                  | 87,780 |                    |  |  |  |                
|                                  |                 |      |        |        |      |                    |        |                    | 

a)   Debt








F-30



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)




|                      |  |   |        | 
|--------------------- |  | - | ------ | 
|- 2007                |  | $ | 7,808  | 
|- 2008                |  |   | 12,374 | 
|- 2009                |  |   | 13,665 | 
|- 2010                |  |   | 21,278 | 
|- 2011                |  |   | 1,374  | 
|- 2012 and thereafter |  |   | 3,512  | 
|                      |  |   |       
|Total                 |  | $ | 60,011 | 
|                      |  |   |       

b)  Capital lease obligations






|                      |  |           |        |  |          |   |       |       |  |   |        | 
|--------------------- |  | --------- | ------ |  | -------- | - | ----- | ----- |  | - | ------ | 
|                      |  | Principal |        |  | Interest |   |       | Total | 
|                      |  |           |        |  |          |   |       |       | 
|- 2007                |  | $         | 5,660  |  |          | $ | 2,261 |       |  | $ | 7,921  | 
|- 2008                |  |           | 5,307  |  |          |   | 1,887 |       |  |   | 7,194  | 
|- 2009                |  |           | 5,412  |  |          |   | 1,518 |       |  |   | 6,930  | 
|- 2010                |  |           | 4,124  |  |          |   | 1,190 |       |  |   | 5,314  | 
|- 2011                |  |           | 4,096  |  |          |   | 909   |       |  |   | 5,005  | 
|- 2012 and thereafter |  |           | 11,265 |  |          |   | 1,352 |       |  |   | 12,617 | 
|                      |  |           |        |  |          |   |       |       | 
|Total                 |  | $         | 35,864 |  |          | $ | 9,117 |       |  | $ | 44,981 | 
|                      |  |           |        |  |          |   |       |       | 



c)   Operating leases  Group as
lessee








F-31



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|                      |  |            |         |       |           |   |        |          |  |   |         | 
|--------------------- |  | ---------- | ------- | ----- | --------- | - | ------ | -------- |  | - | ------- | 
|                      |  |            |         | Fixed |           |   | Total  |         
|                      |  | Contingent |         |       | Operating |   |        | Minimum  | 
|                      |  | Lease      |         |       | Leases    |   |        | Lease    | 
|                      |  | Payments   |         |       | Payments  |   |        | Payments | 
|                      |  |            |         |       |           |   |        |          | 
|- 2007                |  | $          | 43,566  |       |           | $ | 3,452  |          |  | $ | 47,018  | 
|- 2008                |  |            | 31,999  |       |           |   | 5,367  |          |  |   | 37,366  | 
|- 2009                |  |            | 21,754  |       |           |   | 2,061  |          |  |   | 23,815  | 
|- 2010                |  |            | 12,433  |       |           |   | 6,267  |          |  |   | 18,700  | 
|- 2011                |  |            | 5,048   |       |           |   | 218    |          |  |   | 5,266   | 
|- 2012 and thereafter |  |            | 1,197   |       |           |   | 7      |          |  |   | 1,204   | 
|                      |  |            |         |       |           |   |        |          | 
|Total                 |  | $          | 115,997 |       |           | $ | 17,372 |          |  | $ | 133,369 | 
|                      |  |            |         |       |           |   |        |          | 

15. Deferred income and deferred acquisition fees




|                          |  |      |       |  |      |   |       | 
|------------------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                          |  | 2006 |       |  | 2005 |  
|                          |  |      |       |  |      |  
|Advance billings          |  | $    | 3,026 |  |      | $ | 4,363 | 
|Deferred acquisition fees |  |      | 3,979 |  |      |   | 3,321 | 
|                          |  |      |       |  |      |  
|                          |  | $    | 7,005 |  |      | $ | 7,684 | 
|                          |  |      |       |  |      |  



|                      |  |   |       | 
|--------------------- |  | - | ----- | 
|- 2007                |  | $ | 663   | 
|- 2008                |  |   | 485   | 
|- 2009                |  |   | 411   | 
|- 2010                |  |   | 377   | 
|- 2011                |  |   | 346   | 
|- 2012 and thereafter |  |   | 1,697 | 
|                      |  |   |      
|Total                 |  | $ | 3,979 | 
|                      |  |   |      

F-32



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


16.  Commitments and contingencies


i.   Commitments




ii.  Parent Guarantee under Agreements with
Private Container Programs








iii.  Guarantees under fixed non-cancelable
operating leases




iv.  Agreements with Private Container
Programs  early termination options




F-33



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


v.   Agreements with Private Container
Programs  change of control provisions




vi.  Joint Venture Program  change of
control provisions




vii. TOEMT




viii. Legal complaint


8-K




F-34



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|    |              
|--- | -------------
|17. | Common shares

|                           |  |      |           |  |      |  |           |      |  |  |           |  
|-------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | -
|                           |  | 2006 |           |  | 2005 |  |           | 2004 | 
|                           |  |      |           |  |      |  |           |      | 
|Common shares outstanding: |  |      |           |  |      |  |           |      |  |  |           |  
|At beginning of year       |  |      | 7,407,959 |  |      |  | 7,269,349 |      |  |  | 7,260,080 |  
|New common shares issued   |  |      | 158,114   |  |      |  | 138,610   |      |  |  | 9,769     |  
|Common shares retired      |  |      |          |  |      |  |          |      |  |  | (500      | )
|                           |  |      |           |  |      |  |           |      | 
|At end of year             |  |      | 7,566,073 |  |      |  | 7,407,959 |      |  |  | 7,269,349 |  
|                           |  |      |           |  |      |  |           |      | 













F-35



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)










18.  Stock-Based Compensation




a)     Stock Options




|   |                                                 
|-- | ------------------------------------------------
|i. | Summary of Stock Option Activity under all Plans

|                           |  |                                  |          |          |          |   |       |         |          |  |          |   |  |          |       |  |          |  |         |  |  |   |       | 
|-------------------------- |  | -------------------------------- | -------- | -------- | -------- | - | ----- | ------- | -------- |  | -------- | - |  | -------- | ----- |  | -------- |  | ------- |  |  | - | ----- | 
|                           |  | For the Years Ended December 31, |         
|                           |  |                                  |         
|                           |  | 2006                             |          |          | 2005     |   |       | 2004    |         
|                           |  |                                  |          |          |          |   |       |         |         
|                           |  |                                  |          | Weighted |          |   |       |         | Weighted |  |          |   |  | Weighted |      
|                           |  |                                  |          | Average  |          |   |       |         | Average  |  |          |   |  | Average  |      
|                           |  | Share                            |          |          | Exercise |   |       | Share   |          |  | Exercise |   |  | Share    |       |  | Exercise | 
|                           |  | Options                          |          |          | Price    |   |       | Options |          |  | Price    |   |  | Options  |       |  | Price    | 
|                           |  |                                  |          |          |          |   |       |         |          |  |          |   |  |          |       |  |          | 
|Outstanding on January 1   |  |                                  | 902,504  |          |          | $ | 4.741 |         |          |  | 980,504  |   |  | $        | 4.732 |  |          |  | 980,504 |  |  | $ | 4.732 | 
|Granted                    |  |                                  |         |          |          |   |      |         |          |  |         |   |  |          |      |  |          |  |        |  |  |   |      | 
|Exercised                  |  |                                  | (147,126 | )        |          | $ | 5.041 |         |          |  | (78,000  | ) |  | $        | 4.591 |  |          |  |        |  |  |   |      | 
|                           |  |                                  |          |          |          |   |       |         |          |  |          |   |  |          |       |  |          | 
|Outstanding on December 31 |  |                                  | 755,378  |          |          | $ | 4.683 |         |          |  | 902,504  |   |  | $        | 4.741 |  |          |  | 980,504 |  |  | $ | 4.732 | 
|                           |  |                                  |          |          |          |   |       |         |          |  |          |   |  |          |       |  |          | 
|Exercisable on December 31 |  |                                  | 755,378  |          |          | $ | 4.683 |         |          |  | 902,000  |   |  | $        | 4.741 |  |          |  | 913,918 |  |  | $ | 4.73  | 
|                           |  |                                  |          |          |          |   |       |         |          |  |          |   |  |          |       |  |          | 









|    |                  
|--- | -----------------
|ii. | 1998 stock option



F-36



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|     |                       
|---- | ----------------------
|iii. | 1999 stock option plan





|    |                                       
|--- | --------------------------------------
|iv. | The non-employee directors equity plan









F-37



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


a i).


|                           |  |                                  |        |          |           |   |      |            |          |  |           |   |  |            |      |  |           |  |        |   |  |   |      | 
|-------------------------- |  | -------------------------------- | ------ | -------- | --------- | - | ---- | ---------- | -------- |  | --------- | - |  | ---------- | ---- |  | --------- |  | ------ | - |  | - | ---- | 
|                           |  | For the Years Ended December 31, |       
|                           |  |                                  |       
|                           |  | 2006                             |        |          | 2005      |   |      | 2004       |         
|                           |  |                                  |        |          |           |   |      |            |         
|                           |  |                                  |        | Weighted |           |   |      |            | Weighted |  |           |   |  | Weighted   |     
|                           |  |                                  |        | Average  |           |   |      |            | Average  |  |           |   |  | Average    |     
|                           |  | Directors                       |        |          | Grant     |   |      | Directors |          |  | Grant     |   |  | Directors |      |  | Grant     | 
|                           |  | Stock                            |        |          | Date Fair |   |      | Stock      |          |  | Date Fair |   |  | Stock      |      |  | Date Fair | 
|                           |  | Units                            |        |          | Value     |   |      | Units      |          |  | Value     |   |  | Units      |      |  | Value     | 
|                           |  |                                  |        |          |           |   |      |            |          |  |           |   |  |            |      |  |           | 
|Outstanding on January 1   |  |                                  | 24,115 |          |           | $ | 3.47 |            |          |  | 84,725    |   |  | $          | 4.00 |  |           |  | 94,494 |   |  | $ | 4.09 | 
|Granted                    |  |                                  |       |          |           |   |     |            |          |  |          |   |  |            |     |  |           |  |       |   |  |   |     | 
|Converted                  |  |                                  | (9,988 | )        |           | $ | 3.34 |            |          |  | (60,610   | ) |  | $          | 4.21 |  |           |  | (9,769 | ) |  | $ | 4.88 | 
|                           |  |                                  |        |          |           |   |      |            |          |  |           |   |  |            |      |  |           | 
|Outstanding on December 31 |  |                                  | 14,127 |          |           | $ | 3.56 |            |          |  | 24,115    |   |  | $          | 3.47 |  |           |  | 84,725 |   |  | $ | 4.00 | 
|                           |  |                                  |        |          |           |   |      |            |          |  |           |   |  |            |      |  |           | 
|Convertible on December 31 |  |                                  | 14,127 |          |           | $ | 3.56 |            |          |  | 24,115    |   |  | $          | 3.47 |  |           |  | 19,288 |   |  | $ | 4.89 | 
|                           |  |                                  |        |          |           |   |      |            |          |  |           |   |  |            |      |  |           | 





|   |                          
|-- | -------------------------
|b) | Stock appreciation rights





c)     Stock Grant




F-38



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)


d)     2005 equity incentive
plan






i.     Non vested shares








| |                             
| | ----------------------------
| | Summary of non-vested shares

|                           |  |        |        |          |       |   |       |       |  |   |          |   |  |       |        |  |       |   |       |  |  |   |     | 
|-------------------------- |  | ------ | ------ | -------- | ----- | - | ----- | ----- |  | - | -------- | - |  | ----- | ------ |  | ----- | - | ----- |  |  | - | --- | 
|                           |  | 2006   |        |          | 2005  |  
|                           |  |        |        |          |       |  
|                           |  |        |        | Weighted |       |   |       |       |  |   | Weighted |   |  |      
|                           |  |        |        | Average  |       |   |       |       |  |   | Average  |   |  |      
|                           |  |        |        | Grant    |       |   |       |       |  |   | Grant    |   |  |      
|                           |  | Non-   |        |          | Date  |   |       | Total |  |   | Non-     |   |  | Date  |        |  | Total |  
|                           |  | vested |        |          | Fair  |   |       | Fair  |  |   | vested   |   |  | Fair  |        |  | Fair  |  
|                           |  | Shares |        |          | Value |   |       | Value |  |   | Shares   |   |  | Value |        |  | Value |  
|                           |  |        |        |          |       |   |       |       |  |   |          |   |  |       |        |  |       |  
|Outstanding on January 1   |  |        | 37,000 |          |       | $ | 11.07 |       |  | $ | 410      |   |  |       |       |  |       | $ |      |  |  | $ |    | 
|Granted                    |  |        | 48,600 |          |       |   | 12.92 |       |  |   | 628      |   |  |       | 37,000 |  |       |   | 11.07 |  |  |   | 410 | 
|Converted                  |  |        | (6,000 | )        |       |   | 11.07 |       |  |   | (67      | ) |  |       |       |  |       |   |      |  |  |   |    | 
|                           |  |        |        |          |       |   |       |       |  |   |          |   |  |       |        |  |       |  
|Outstanding on December 31 |  |        | 79,600 |          |       | $ | 12.20 |       |  | $ | 971      |   |  |       | 37,000 |  |       | $ | 11.07 |  |  | $ | 410 | 
|                           |  |        |        |          |       |   |       |       |  |   |          |   |  |       |        |  |       |  



ii.     Directors stock
units






F-39



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






19.  Restricted retained earnings




20.  Related party transactions




i




ii


iii




|    |                  
|--- | -----------------
|21. | Subsequent events

8-K


F-40



---



##### 



THE CRONOS GROUP


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands, except per share amounts)






|    |                                     
|--- | ------------------------------------
|22. | Quarterly financial data (unaudited)

|                                    |  |     |        |  |     |   |        |     |  |   |        |  |  |   |        | 
|----------------------------------- |  | --- | ------ |  | --- | - | ------ | --- |  | - | ------ |  |  | - | ------ | 
|                                    |  | 1st |        |  | 2nd |   |        | 3rd |  |   | 4th    | 
|                                    |  |     |        |  |     |   |        |     |  |   |        | 
|2006 quarterly financial data       |  |     |        |  |     |   |        |     |  |   |        |  |  |   |        | 
|Total revenues                      |  | $   | 38,180 |  |     | $ | 38,069 |     |  | $ | 37,813 |  |  | $ | 37,780 | 
|Net income                          |  | $   | 2,559  |  |     | $ | 2,493  |     |  | $ | 2,753  |  |  | $ | 1,422  | 
|Basic net income per common share   |  | $   | 0.34   |  |     | $ | 0.33   |     |  | $ | 0.36   |  |  | $ | 0.19   | 
|Diluted net income per common share |  | $   | 0.32   |  |     | $ | 0.31   |     |  | $ | 0.34   |  |  | $ | 0.17   | 

|                                           |  |     |        |  |     |   |        |     |  |   |        |  |  |   |        |  
|------------------------------------------ |  | --- | ------ |  | --- | - | ------ | --- |  | - | ------ |  |  | - | ------ | -
|                                           |  | 1st |        |  | 2nd |   |        | 3rd |  |   | 4th    | 
|                                           |  |     |        |  |     |   |        |     |  |   |        | 
|2005 quarterly financial data              |  |     |        |  |     |   |        |     |  |   |        |  |  |   |        |  
|Total revenues                             |  | $   | 36,534 |  |     | $ | 38,177 |     |  | $ | 36,663 |  |  | $ | 36,916 |  
|Net income (loss)                          |  | $   | 3,629  |  |     | $ | 3,477  |     |  | $ | 2,193  |  |  | $ | (1,497 | )
|Basic net income (loss) per common share   |  | $   | 0.50   |  |     | $ | 0.47   |     |  | $ | 0.30   |  |  | $ | (0.21  | )
|Diluted net income (loss) per common share |  | $   | 0.46   |  |     | $ | 0.44   |     |  | $ | 0.27   |  |  | $ | (0.19  | )



|    |                                                   
|--- | --------------------------------------------------
|23. | Items affecting fourth quarter results (unaudited)











F-41



---



##### 



CF LEASING LTD.





Financial statements as of December 31, 2006 and 2005


and for the years ended December 31, 2006, 2005 and
2004


and Report of Independent Registered Public Accounting
Firm


F-42



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















F-43



---



##### 



CF LEASING LTD.


BALANCE SHEETS


December 31, 2006 and 2005


(US dollar amounts in thousands)


|                                                                                                                             |  |      |         |  |      |   |         | 
|---------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                                             |  | 2006 |         |  | 2005 |  
|                                                                                                                             |  |      |         |  |      |  
|Assets                                                                                                                       |  |      |         |  |      |   |         | 
|Cash and cash equivalents                                                                                                    |  | $    | 4,658   |  |      | $ | 4,143   | 
|Restricted cash                                                                                                              |  |      | 4,694   |  |      |   | 2,834   | 
|Amounts receivable from a related party                                                                                      |  |      | 10,345  |  |      |   | 7,502   | 
|Net investment in direct financing leases, including amounts due
    within twelve months of $10,877 and $7,800 respectively |  |      | 36,729  |  |      |   | 28,919  | 
|Container equipment, net of accumulated depreciation of $37,737
    and $18,029 respectively                                 |  |      | 306,352 |  |      |   | 210,652 | 
|Other assets                                                                                                                 |  |      | 6,075   |  |      |   | 5,191   | 
|                                                                                                                             |  |      |         |  |      |  
|Total assets                                                                                                                 |  | $    | 368,853 |  |      | $ | 259,241 | 
|                                                                                                                             |  |      |         |  |      |  
|                                                                                                                            
|Liabilities and shareholders equity                                                                                         |  |      |         |  |      |   |         | 
|Amounts payable to a related party                                                                                           |  |      | 829     |  |      |   | 537     | 
|Other amounts payable and accrued expenses                                                                                   |  |      | 226     |  |      |   | 437     | 
|Loan notes issued to affiliate and other parties                                                                             |  |      | 280,483 |  |      |   | 195,583 | 
|                                                                                                                             |  |      |         |  |      |  
|Total liabilities                                                                                                            |  |      | 281,538 |  |      |   | 196,557 | 
|                                                                                                                             |  |      |         |  |      |  
|Shareholders equity                                                                                                         |  |      |         |  |      |   |         | 
|Common shares, par value $1 per share (24,000 shares
    authorised, issued and outstanding)                                 |  |      | 24      |  |      |   | 24      | 
|Capital contributions                                                                                                        |  |      | 56,769  |  |      |   | 43,469  | 
|Accumulated other comprehensive income                                                                                       |  |      | 1,209   |  |      |   | 1,761   | 
|Retained earnings                                                                                                            |  |      | 29,313  |  |      |   | 17,430  | 
|                                                                                                                             |  |      |         |  |      |  
|Total shareholders equity                                                                                                   |  |      | 87,315  |  |      |   | 62,684  | 
|                                                                                                                             |  |      |         |  |      |  
|Total liabilities and shareholders equity                                                                                   |  | $    | 368,853 |  |      | $ | 259,241 | 
|                                                                                                                             |  |      |         |  |      |  



F-44



---



##### 



CF LEASING LTD.


STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands)


|                                                      |  |      |        |   |      |   |        |      |  |   |        | 
|----------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | 
|                                                      |  | 2006 |        |   | 2005 |   |        | 2004 | 
|                                                      |  |      |        |   |      |   |        |      | 
|Container investment revenue                          |  | $    | 45,138 |   |      | $ | 25,940 |      |  | $ | 14,042 | 
|Fees and other income                                 |  |      | 4,608  |   |      |   | 2,929  |      |  |   | 1,560  | 
|                                                      |  |      |        |   |      |   |        |      | 
|Total revenues and other income                       |  |      | 49,746 |   |      |   | 28,869 |      |  |   | 15,602 | 
|                                                      |  |      |        |   |      |   |        |      | 
|Depreciation                                          |  |      | 21,181 |   |      |   | 11,860 |      |  |   | 5,969  | 
|Selling, general and administrative expenses          |  |      | 168    |   |      |   | 142    |      |  |   | 164    | 
|Interest expense                                      |  |      | 16,514 |   |      |   | 8,312  |      |  |   | 3,703  | 
|                                                      |  |      |        |   |      |   |        |      | 
|Total expenses                                        |  |      | 37,863 |   |      |   | 20,314 |      |  |   | 9,836  | 
|                                                      |  |      |        |   |      |   |        |      | 
|Net income                                            |  |      | 11,883 |   |      |   | 8,555  |      |  |   | 5,766  | 
|Other comprehensive income:                           |  |      |        |   |      |   |        |      |  |   |        | 
|Change in fair value of interest rate swap agreements |  |      | (552   | ) |      |   | 1,299  |      |  |   | 624    | 
|                                                      |  |      |        |   |      |   |        |      | 
|Comprehensive income                                  |  | $    | 11,331 |   |      | $ | 9,854  |      |  | $ | 6,390  | 
|                                                      |  |      |        |   |      |   |        |      | 



F-45



---



##### 



CF LEASING LTD.


STATEMENTS OF CASH FLOWS


For the years ended December 31, 2006, 2005 and 2004


(US dollar amounts in thousands)


|                                                                                      |                                                                   |      |          |        |      |   |          |        |   |   |         |        |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ---- | -------- | ------ | ---- | - | -------- | ------ | - | - | ------- | ------ | -
|                                                                                      |                                                                   | 2006 |          |        | 2005 |   |          | 2004   |  
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Cash flows from operating activities                                                  |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|Net income                                                                            |                                                                   | $    | 11,883   |        |      | $ | 8,555    |        |   | $ | 5,766   |       
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|                                                                                      | - Depreciation                                                    |      |          | 21,181 |      |   |          | 11,860 |   |   |         | 5,969  |  
|                                                                                      | - Gain on disposal of fixed assets                                |      |          | (717   | )    |   |          | (406   | ) |   |         | (185   | )
|                                                                                      | - (Increase) decrease in amounts receivable                       |      |          |        |      |   |          |        |   |   |         |        |  
|                                                                                      | - related parties                                                 |      |          | (3,395 | )    |   |          | (4,766 | ) |   |         | (1,386 | )
|                                                                                      | - unrelated parties                                               |      |          | 7,844  |      |   |          | 8,973  |   |   |         | 1,020  |  
|                                                                                      | - Increase (decrease) in amounts payable to unrelated
    parties |      |          |        |      |   |          |        |   |   |         |        |  
|                                                                                      | - related parties                                                 |      |          | 292    |      |   |          | 311    |   |   |         | (47    | )
|                                                                                      | - unrelated parties                                               |      |          | (211   | )    |   |          | 181    |   |   |         | 180    |  
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Net cash provided by operating activities                                             |                                                                   |      | 36,877   |        |      |   | 24,708   |        |   |   | 11,317  |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Cash flows from investing activities                                                  |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|Purchase of container equipment                                                       |                                                                   |      | (124,196 | )      |      |   | (122,454 | )      |   |   | (49,644 | )     
|Investment in equipment acquired for direct financing leases                          |                                                                   |      | (14,743  | )      |      |   | (20,226  | )      |   |   | (12,760 | )     
|Increase in restricted cash deposits                                                  |                                                                   |      | (1,860   | )      |      |   | (1,888   | )      |   |   | (525    | )     
|Proceeds from sales of container equipment                                            |                                                                   |      | 6,237    |        |      |   | 3,638    |        |   |   | 566     |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Net cash used in investing activities                                                 |                                                                   |      | (134,562 | )      |      |   | (140,930 | )      |   |   | (62,363 | )     
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Cash flows from financing activities                                                  |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|Proceeds from issuance of term debt                                                   |                                                                   |      | 84,900   |        |      |   | 96,200   |        |   |   | 44,541  |       
|Capital contributions                                                                 |                                                                   |      | 13,300   |        |      |   | 22,150   |        |   |   | 7,150   |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Net cash provided by financing activities                                             |                                                                   |      | 98,200   |        |      |   | 118,350  |        |   |   | 51,691  |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Net increase in cash and cash equivalents                                             |                                                                   |      | 515      |        |      |   | 2,128    |        |   |   | 645     |       
|Cash and cash equivalents at beginning of year                                        |                                                                   |      | 4,143    |        |      |   | 2,015    |        |   |   | 1,370   |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Cash & Cash equivalents at end of year                                                |                                                                   | $    | 4,658    |        |      | $ | 4,143    |        |   | $ | 2,015   |       
|                                                                                      |                                                                   |      |          |        |      |   |          |        |  
|Supplementary disclosure of cash flow information:                                    |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|Cash paid during the year for:                                                        |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|                                                                                      | - interest                                                        |      | $        | 15,420 |      |   | $        | 7,557  |   |   | $       | 3,380  |  
|Cash received during the year for:                                                    |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|                                                                                      | - interest                                                        |      | $        | 234    |      |   | $        | 49     |   |   |         |       |  
|Non-cash items:                                                                       |                                                                   |      |          |        |      |   |          |        |   |   |         |       
|                                                                                      | - container equipment transferred to direct finance leases        |      | $        | 1,795  |      |   | $        | 1,216  |   |   | $       | 353    |  
|                                                                                      | - change in fair value of interest rate swap agreements           |      | $        | (552   | )    |   | $        | 1,299  |   |   | $       | 624    |  



F-46



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##### 



CF LEASING LTD.


STATEMENTS OF SHAREHOLDERS EQUITY


For the years ended December 31, 2006, 2005, and 2004


(US dollar amounts in thousands)


|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |        |  |  |   |        |  
|----------------------------------------------- |  | ------ | -- |  | ------------- | ----------- | ------ | ------------- |  | - | -------- | - |  | ------------- | ------ |  |  | - | ------ | -
|                                                |  |        |    |  |               | Accumulated |        |               |  |   |         
|                                                |  |        |    |  |               | Other       |        |               |  |   | Total    |  
|                                                |  | Common |    |  | Capital       |             |        | Comprehensive |  |   | Retained |   |  | Shareholders |       
|                                                |  | Shares |    |  | Contributions |             |        | (Loss) Income |  |   | Earnings |   |  | Equity        |       
|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |       
|Balance, December 31, 2003                      |  | $      | 24 |  |               | $           | 14,169 |               |  | $ | (162     | ) |  | $             | 3,109  |  |  | $ | 17,140 |  
|Capital contributions                           |  |        |    |  |               |             | 7,150  |               |  |   |          |   |  |               |        |  |  |   | 7,150  |  
|Net income                                      |  |        |    |  |               |             |        |               |  |   |          |   |  |               | 5,766  |  |  |   | 5,766  |  
|Increase in fair value of financial derivatives |  |        |    |  |               |             |        |               |  |   | 624      |   |  |               |        |  |  |   | 624    |  
|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |       
|Balance, December 31, 2004                      |  | $      | 24 |  |               | $           | 21,319 |               |  | $ | 462      |   |  | $             | 8,875  |  |  | $ | 30,680 |  
|Capital contributions                           |  |        |    |  |               |             | 22,150 |               |  |   |          |   |  |               |        |  |  |   | 22,150 |  
|Net income                                      |  |        |    |  |               |             |        |               |  |   |          |   |  |               | 8,555  |  |  |   | 8,555  |  
|Increase in fair value of financial derivatives |  |        |    |  |               |             |        |               |  |   | 1,299    |   |  |               |        |  |  |   | 1,299  |  
|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |       
|Balance, December 31, 2005                      |  | $      | 24 |  |               | $           | 43,469 |               |  | $ | 1,761    |   |  | $             | 17,430 |  |  | $ | 62,684 |  
|Capital contributions                           |  |        |    |  |               |             | 13,300 |               |  |   |          |   |  |               |        |  |  |   | 13,300 |  
|Net income                                      |  |        |    |  |               |             |        |               |  |   | 11,883   |   |  |               | 11,883 |  |  |   |        |  
|Decrease in fair value of financial derivatives |  |        |    |  |               |             |        |               |  |   | (552     | ) |  |               |        |  |  |   | (552   | )
|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |       
|Balance, December 31, 2006                      |  | $      | 24 |  |               | $           | 56,769 |               |  | $ | 1,209    |   |  | $             | 29,313 |  |  | $ | 87,315 |  
|                                                |  |        |    |  |               |             |        |               |  |   |          |   |  |               |       

F-47



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##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS


(US dollar amounts in thousands)


1.   Summary of significant accounting
policies




a)  Nature of operations










b)  Basis of accounting






c)   Leases


Operating leases.


F-48



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)










Direct financing leases with customers.




d)  Fees and other income




e)   Taxation




f)   Cash and cash equivalents




g)  Container equipment






| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | Refrigerated container equipment  over 12 years
    to a residual value of 15%               
|
| |  | Tanks, rolltrailers and flat racks  over
    20 years to a residual value of 10%             
|
| |  | Dry cargo and all remaining container equipment  over
    15 years to a residual value of 10%

F-49



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)






h)  Asset impairment




i)   Fair value of financial
instruments




j)   Derivative financial
instruments






F-50



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)




k)  Translation of foreign currencies






l)   Restricted cash




m)  New Pronouncements






F-51



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)


2.   Net investment in direct financing
leases




|                    |  |             |        |  |              |         |       |              |  |   |        | 
|------------------- |  | ----------- | ------ |  | ------------ | ------- | ----- | ------------ |  | - | ------ | 
|                    |  |             |        |  |              | Minimum |      
|                    |  | Net Lease   |        |  | Unearned     |         |       | Future Lease | 
|                    |  | Receivables |        |  | Lease Income |         |       | Rentals      | 
|                    |  |             |        |  |              |         |       |              | 
|2007                |  | $           | 10,877 |  |              | $       | 3,406 |              |  | $ | 14,283 | 
|2008                |  |             | 8,939  |  |              |         | 2,269 |              |  |   | 11,208 | 
|2009                |  |             | 7,511  |  |              |         | 1,363 |              |  |   | 8,874  | 
|2010                |  |             | 4,450  |  |              |         | 749   |              |  |   | 5,199  | 
|2011                |  |             | 3,104  |  |              |         | 368   |              |  |   | 3,472  | 
|2012 and thereafter |  |             | 1,848  |  |              |         | 29    |              |  |   | 1,877  | 
|                    |  |             |        |  |              |         |       |              | 
|Total               |  | $           | 36,729 |  |              | $       | 8,184 |              |  | $ | 44,913 | 
|                    |  |             |        |  |              |         |       |              | 



|   |                             
|-- | ----------------------------
|3. | Container investment revenue





|                    |  |   |        | 
|------------------- |  | - | ------ | 
|2007                |  | $ | 32,793 | 
|2008                |  |   | 25,046 | 
|2009                |  |   | 17,874 | 
|2010                |  |   | 11,300 | 
|2011                |  |   | 4,899  | 
|2012 and thereafter |  |   | 1,170  | 
|                    |  |   |       
|Total               |  | $ | 93,082 | 
|                    |  |   |       

F-52



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)


4.   Container equipment


|                           |  |   |         |  
|-------------------------- |  | - | ------- | -
|Cost                       |  |   |         |  
|Balance, December 31, 2004 |  | $ | 114,451 |  
|Additions                  |  |   | 122,454 |  
|Disposals                  |  |   | (8,224  | )
|                           |  |   |        
|Balance, December 31, 2005 |  |   | 228,681 |  
|Additions                  |  |   | 116,146 |  
|Disposals                  |  |   | (8,788  | )
|                           |  |   |        
|Balance, December 31, 2006 |  | $ | 336,039 |  
|                           |  |   |        
|Accumulated depreciation   |  |   |         |  
|Balance, December 31, 2004 |  | $ | 9,945   |  
|Depreciation expense       |  |   | 11,860  |  
|Disposals                  |  |   | (3,776  | )
|                           |  |   |        
|Balance, December 31, 2005 |  |   | 18,029  |  
|Depreciation expense       |  |   | 21,181  |  
|Disposals                  |  |   | (1,473  | )
|                           |  |   |        
|Balance, December 31, 2006 |  | $ | 37,737  |  
|                           |  |   |        
|Book value                 |  |   |         |  
|December 31, 2006          |  | $ | 298,302 |  
|                           |  |   |        
|December 31, 2005          |  | $ | 210,652 |  
|                           |  |   |        



5.   Other assets




|                                    |  |      |       |  |      |   |       | 
|----------------------------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                                    |  | 2006 |       |  | 2005 |  
|                                    |  |      |       |  |      |  
|Unamortised loan origination fees   |  | $    | 4,605 |  |      | $ | 3,418 | 
|Fair value of financial derivatives |  |      | 1,209 |  |      |   | 1,761 | 
|Other                               |  |      | 261   |  |      |   | 12    | 
|                                    |  |      |       |  |      |  
|Total                               |  | $    | 6,075 |  |      | $ | 5,191 | 
|                                    |  |      |       |  |      |  

6.   Debt




F-53



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)








|                             |  |      |         |  |      |                    |         |                         |  |  |                  | 
|---------------------------- |  | ---- | ------- |  | ---- | ------------------ | ------- | ----------------------- |  |  | ---------------- | 
|                             |  |      |         |  |      | Interest Rate % at |        
|                             |  | 2006 |         |  | 2005 |                    |         | December 31, 2006/ 2005 | 
|                             |  |      |         |  |      |                    |         |                         | 
|Floating rate debt           |  | $    | 137,447 |  |      | $                  | 98,372  |                         |  |  | 6.9/ 6.0         | 
|Fixed rate debt (see note 7) |  |      | 143,036 |  |      |                    | 97,211  |                         |  |  | 4.8-7.3/ 3.9-6.3 | 
|                             |  |      |         |  |      |                    |         |                         | 
|Total debt                   |  | $    | 280,483 |  |      | $                  | 195,583 |                         |  |  |                  | 
|                             |  |      |         |  |      |                    |         |                         | 



|                    |  |   |         | 
|------------------- |  | - | ------- | 
|2007                |  | $ | 25,560  | 
|2008                |  |   | 25,924  | 
|2009                |  |   | 25,924  | 
|2010                |  |   | 25,924  | 
|2011                |  |   | 25,924  | 
|2012 and thereafter |  |   | 151,227 | 
|                    |  |   |        
|Total               |  | $ | 280,483 | 
|                    |  |   |        

7.   Derivative accounting policies






F-54



---



##### 



CF LEASING LTD.


NOTES TO THE FINANCIAL STATEMENTS (continued)


(US dollar amounts in thousands)








8.   Related party transactions




|                              |  |      |         |  |      |   |        |      |  |   |        | 
|----------------------------- |  | ---- | ------- |  | ---- | - | ------ | ---- |  | - | ------ | 
|                              |  | 2006 |         |  | 2005 |   |        | 2004 | 
|                              |  |      |         |  |      |   |        |      | 
|CAY:                          |  |      |         |  |      |   |        |      |  |   |        | 
|Container acquisitions        |  | $    | 134,009 |  |      | $ | 63,260 |      |  | $ | 61,698 | 
|Other container related costs |  |      | 3,240   |  |      |   | 886    |      |  |   |       | 
|                              |  |      |         |  |      |   |        |      | 
|Total                         |  | $    | 137,249 |  |      | $ | 64,146 |      |  | $ | 61,698 | 
|                              |  |      |         |  |      |   |        |      | 





|                                                                |  |      |        |  |      |   |        |      |  |   |        | 
|--------------------------------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                                |  | 2006 |        |  | 2005 |   |        | 2004 | 
|                                                                |  |      |        |  |      |   |        |      | 
|Container investment revenue earned from CAY                    |  | $    | 45,138 |  |      | $ | 25,940 |      |  | $ | 14,042 | 
|Fortis interest expense (acting as agent for the loan facility) |  |      | 16,514 |  |      |   | 8,312  |      |  |   | 3,703  | 

9.   Amounts receivable from a related
party




10. Amount payable to a related party






F-55