##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ---------------------------------------------------------------------------------------

For the quarterly period ended: June 30, 2002OR



|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|----- |  | ----------------------------------------------------------------------------------------

For the transition period from: ______________ to _______________

Commission file number: 0-24464

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.)

16, ALLÉE MARCONI, BOITE POSTALE 260, L-2120 LUXEMBOURG
(Address of principal executive offices)(zip code)

Registrants telephone number, including area codes:
(352) 453145



---



Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [   ]

The number of Common Shares outstanding as of Aug 9, 2002:

|       |  |                             
|------ |  | ----------------------------
|Class  |  | Number of Shares Outstanding
|       |  |                             
|Common |  | 7,364,580                   





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TABLE OF CONTENTS



|                               |                                                                                                |                                                           |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1  Financial Statements                                                                 
|                               |                                                                                                | Condensed Consolidated Statements of Income              
|                               |                                                                                                | Condensed Consolidated Balance Sheets                    
|                               |                                                                                                | Condensed Consolidated Statements of Cash Flows          
|                               |                                                                                                | Condensed Consolidated Statements of Shareholders Equity
|                               |                                                                                                | Notes to the Condensed Consolidated Financial Statements 
|                               | Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3  Quantitative and Qualitative Disclosures about Market Risk                           
|PART II  OTHER INFORMATION   
|                               | Item 1  Legal Proceedings                                                                    
|                               | Item 2  Changes in Securities and Use of Proceeds                                            
|                               | Item 3  Defaults Upon Senior Securities                                                      
|                               | Item 4  Submission of Matters to a Vote of Security Holders                                  
|                               | Item 5  Other Information                                                                    
|                               | Item 6  Exhibits and Reports on Form 8-K                                                     
|Signatures                    
|Exhibit Index                 
|Exhibit 99.1                  
|Exhibit 99.2                  



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##### Table of Contents



The Cronos Group

TABLE OF CONTENTS

|                               |                                                                                                        |                                                                                       |    |   
|------------------------------ | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | -- | --
|PART I  FINANCIAL INFORMATION |                                                                                                        | 1                                                                                    
|                              
|                               | ITEM 1  FINANCIAL STATEMENTS                                                                          |                                                                                       | 1 
|                              
|                               |                                                                                                        | Management Representation                                                             |    | 1 
|                               |                                                                                                        | Condensed Consolidated Statements of Income                                           |    | 2 
|                               |                                                                                                        | Condensed Consolidated Balance Sheets                                                 |    | 3 
|                               |                                                                                                        | Condensed Consolidated Statements of Cash
        Flows                               |    | 4 
|                               |                                                                                                        | Consolidated Statements of Shareholders
        Equity                               |    | 5 
|                               |                                                                                                        | Notes to the Condensed Consolidated Financial
        Statements                      |    | 6 
|                              
|                               | ITEM 2  MANAGEMENTS
        DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |                                                                                       | 13
|                              
|                               |                                                                                                        | General                                                                               |    | 13
|                               |                                                                                                        | Three Months Ended June 30, 2002 Compared
        to Three Months Ended June 30, 2001 |    | 14
|                               |                                                                                                        | Six Months Ended June 30, 2002 Compared
        to Six Months Ended June 30, 2001     |    | 16
|                               |                                                                                                        | Liquidity and Capital Resources                                                       |    | 18
|                              
|                               | ITEM 3  QUANTITATIVE AND
        QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |                                                                                       | 19
|                              
|PART II  OTHER INFORMATION    |                                                                                                        | 20                                                                                   
|                              
|                               | ITEM 1  LEGAL PROCEEDINGS                                                                             |                                                                                       | 20
|                               | ITEM 2  CHANGES IN SECURITIES
        AND USE OF PROCEEDS                                             |                                                                                       | 21
|                               | ITEM 3  DEFAULTS UPON
        SENIOR SECURITIES                                                       |                                                                                       | 21
|                               | ITEM 4  SUBMISSION OF
        MATTERS TO A VOTE OF SECURITY HOLDERS                                   |                                                                                       | 21
|                               | ITEM 5  OTHER INFORMATION                                                                             |                                                                                       | 23
|                               | ITEM 6  EXHIBITS AND REPORTS
        ON FORM 8-K                                                      |                                                                                       | 23





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##### Table of Contents



The Cronos Group




PART I  FINANCIAL INFORMATION




Item 1  Financial Statements

Management Representation

Unless the context indicates otherwise, the Company means The Cronos
Group and, where appropriate, includes its subsidiaries and predecessors, while
Cronos or the Group means The Cronos Group together with its subsidiaries
and predecessors.

The unaudited condensed consolidated interim financial statements included
herein have been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and disclosures
normally included in annual financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been condensed or omitted pursuant to such rules and regulations.

These condensed consolidated financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Companys latest Annual Report on Form 10-K.

This financial information reflects, in the opinion of management, all
adjustments necessary to present fairly, the results for the interim periods.
Such adjustments consist of only normal recurring adjustments. The results of
operations for such interim periods are not necessarily indicative of the
results to be expected for the full year.

1



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##### Table of Contents



The Cronos Group




Condensed Consolidated Statements of Income
(US dollar amounts in thousands, except per share amounts)
(Unaudited)

|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------------------ |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                     |  | Three Months Ended |        | Six Months Ended
|                                                                                     |  | June 30,           |        | June 30,        
|                                                                                     |  |                    |        |                 
|                                                                                     |  | 2002               |        | 2001             |  | 2002 |        | 2001
|                                                                                     |  |                    |        |                  |  |      |        |     
|Gross lease revenue                                                                  |  | $                  | 27,925 |                  |  | $    | 30,087 |      |  | $ | 56,254 |   |  | $ | 61,566 |  
|Equipment trading revenue                                                            |  |                    | 197    |                  |  |      |       |      |  |   | 581    |   |  |   |       |  
|Commissions, fees and other income:                                                  |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|- US Limited Partnerships                                                            |  |                    | 309    |                  |  |      | 333    |      |  |   | 620    |   |  |   | 666    |  
|- unrelated parties                                                                  |  |                    | 977    |                  |  |      | 1,375  |      |  |   | 1,945  |   |  |   | 2,287  |  
|Realized holding gain on sale of investment                                          |  |                    |       |                  |  |      |       |      |  |   |       |   |  |   | 301    |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Total revenues                                                                       |  |                    | 29,408 |                  |  |      | 31,795 |      |  |   | 59,400 |   |  |   | 64,820 |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Direct operating expenses                                                            |  |                    | 7,217  |                  |  |      | 7,930  |      |  |   | 14,974 |   |  |   | 14,550 |  
|Payments to managed container owners:                                                |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|- US Limited Partnerships                                                            |  |                    | 4,079  |                  |  |      | 4,747  |      |  |   | 8,034  |   |  |   | 10,502 |  
|- Other managed container owners                                                     |  |                    | 8,781  |                  |  |      | 9,475  |      |  |   | 17,607 |   |  |   | 19,738 |  
|Equipment trading expenses                                                           |  |                    | 151    |                  |  |      |       |      |  |   | 518    |   |  |   |       |  
|Depreciation and amortization                                                        |  |                    | 3,889  |                  |  |      | 4,022  |      |  |   | 7,738  |   |  |   | 8,078  |  
|Selling, general and administrative expenses                                         |  |                    | 3,404  |                  |  |      | 3,366  |      |  |   | 6,770  |   |  |   | 6,834  |  
|Interest expense                                                                     |  |                    | 1,659  |                  |  |      | 2,202  |      |  |   | 3,303  |   |  |   | 4,394  |  
|Income from recovery of related party loans                                          |  |                    |       |                  |  |      | (6,000 | )    |  |   |       |   |  |   | (6,000 | )
|Impairment losses                                                                    |  |                    |       |                  |  |      | 4,000  |      |  |   |       |   |  |   | 4,000  |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Total expenses                                                                       |  |                    | 29,180 |                  |  |      | 29,742 |      |  |   | 58,944 |   |  |   | 62,096 |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Income before income taxes                                                           |  |                    | 228    |                  |  |      | 2,053  |      |  |   | 456    |   |  |   | 2,724  |  
|Income taxes (benefit) provision                                                     |  |                    | (2,365 | )                |  |      | 45     |      |  |   | (2,325 | ) |  |   | 122    |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Net income                                                                           |  |                    | 2,593  |                  |  |      | 2,008  |      |  |   | 2,781  |   |  |   | 2,602  |  
|Other comprehensive income:                                                          |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|- unrealised holding loss arising during the period on
available for sale securities |  |                    |       |                  |  |      |       |      |  |   |       |   |  |   | (294   | )
|- reclassification adjustment                                                        |  |                    |       |                  |  |      |       |      |  |   |       |   |  |   | (150   | )
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Comprehensive income                                                                 |  |                    | 2,593  |                  |  |      | 2,008  |      |  |   | 2,781  |   |  |   | 2,158  |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Basic and diluted net income per common share                                        |  | $                  | 0.35   |                  |  | $    | 0.25   |      |  | $ | 0.38   |   |  | $ | 0.30   |  
|                                                                                     |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  

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

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The Cronos Group




Condensed Consolidated Balance Sheets
(US dollar amounts in thousands, except per share amounts)
(unaudited)

|                                                  |  |          |         |              |  |   |         |  
|------------------------------------------------- |  | -------- | ------- | ------------ |  | - | ------- | -
|                                                  |  | June 30, |         | December 31,
|                                                  |  | 2002     |         | 2001        
|                                                  |  |          |         |             
|Assets                                            |  |          |         |              |  |   |         |  
|Cash and cash equivalents                         |  | $        | 5,025   |              |  | $ | 4,914   |  
|Amounts due from lessees (net)                    |  |          | 24,819  |              |  |   | 22,825  |  
|Amounts receivable from container owners          |  |          | 8,137   |              |  |   | 8,675   |  
|New container equipment for resale                |  |          | 7,055   |              |  |   | 1,463   |  
|Net investment in direct financing leases         |  |          | 7,729   |              |  |   | 7,306   |  
|Container equipment (net)                         |  |          | 151,242 |              |  |   | 150,440 |  
|Other equipment (net)                             |  |          | 493     |              |  |   | 375     |  
|Restricted cash                                   |  |          | 493     |              |  |   | 452     |  
|Goodwill                                          |  |          | 11,039  |              |  |   | 11,039  |  
|Other intangible assets                           |  |          | 1,002   |              |  |   | 1,096   |  
|Other assets including prepayments                |  |          | 17,370  |              |  |   | 17,234  |  
|                                                  |  |          |         |              |  |   |         |  
|Total assets                                      |  | $        | 234,404 |              |  | $ | 225,819 |  
|                                                  |  |          |         |              |  |   |         |  
|Liabilities and shareholders equity              |  |          |         |              |  |   |         |  
|Amounts payable to container owners               |  | $        | 19,462  |              |  | $ | 16,889  |  
|Amounts payable to container manufacturers        |  |          | 11,252  |              |  |   | 12,888  |  
|Other amounts payable and accrued expenses        |  |          | 12,305  |              |  |   | 13,020  |  
|Debt and capital lease obligations                |  |          | 116,641 |              |  |   | 107,920 |  
|Current and deferred income taxes                 |  |          | 4,488   |              |  |   | 6,912   |  
|Deferred income and unamortized acquisition fees  |  |          | 5,996   |              |  |   | 6,711   |  
|                                                  |  |          |         |              |  |   |         |  
|Total liabilities                                 |  |          | 170,144 |              |  |   | 164,340 |  
|                                                  |  |          |         |              |  |   |         |  
|Shareholders equity                              |  |          |         |              |  |   |         |  
|Common shares                                     |  |          | 14,729  |              |  |   | 18,317  |  
|Additional paid-in capital                        |  |          | 47,434  |              |  |   | 49,846  |  
|Common shares held in treasury (1,793,798 shares) |  |          |        |              |  |   | (6,000  | )
|Restricted retained earnings                      |  |          | 1,832   |              |  |   | 1,832   |  
|Retained earnings (accumulated deficit)           |  |          | 265     |              |  |   | (2,516  | )
|                                                  |  |          |         |              |  |   |         |  
|Total shareholders equity                        |  |          | 64,260  |              |  |   | 61,479  |  
|                                                  |  |          |         |              |  |   |         |  
|Total liabilities and shareholders equity        |  | $        | 234,404 |              |  | $ | 225,819 |  
|                                                  |  |          |         |              |  |   |         |  

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

3



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The Cronos Group




Condensed Consolidated Statements of Cash Flows
(US dollar amounts in thousands, except per share amounts)
(Unaudited)

|                                                                |  |                  |         |      |  |   |         |  
|--------------------------------------------------------------- |  | ---------------- | ------- | ---- |  | - | ------- | -
|                                                                |  | Six Months Ended
|                                                                |  | June 30,        
|                                                                |  |                 
|                                                                |  | 2002             |         | 2001
|                                                                |  |                  |         |     
|Net cash provided by operating activities                       |  | $                | 1,294   |      |  | $ | 13,175  |  
|                                                                |  |                  |         |      |  |   |         |  
|Cash flows from investing activities                            |  |                  |         |      |  |   |         |  
|Purchase of container equipment                                 |  |                  | (5,919  | )    |  |   | (16,828 | )
|Purchase of property and other equipment                        |  |                  | (205    | )    |  |   |        |  
|Investment in direct financing lease equipment                  |  |                  | (1,028  | )    |  |   |        |  
|Proceeds from sales of container and other equipment            |  |                  | 1,335   |      |  |   | 3,326   |  
|Proceeds from sale of investment                                |  |                  |        |      |  |   | 484     |  
|                                                                |  |                  |         |      |  |   |         |  
|Net cash used in investing activities                           |  |                  | (5,817  | )    |  |   | (13,018 | )
|                                                                |  |                  |         |      |  |   |         |  
|Cash flows from financing activities                            |  |                  |         |      |  |   |         |  
|Proceeds from issuance of term debt                             |  |                  | 15,407  |      |  |   | 9,039   |  
|Repayments of term debt and capital lease obligations           |  |                  | (10,732 | )    |  |   | (11,502 | )
|Cash deposits (restricted)                                      |  |                  | (41     | )    |  |   | 79      |  
|                                                                |  |                  |         |      |  |   |         |  
|Net cash provided by (used in) financing activities             |  |                  | 4,634   |      |  |   | (2,384  | )
|                                                                |  |                  |         |      |  |   |         |  
|Net increase (decrease) in cash and cash equivalents            |  |                  | 111     |      |  |   | (2,227  | )
|Cash and cash equivalents at beginning of period                |  |                  | 4,914   |      |  |   | 6,601   |  
|                                                                |  |                  |         |      |  |   |         |  
|Cash and cash equivalents at end of period                      |  | $                | 5,025   |      |  | $ | 4,374   |  
|                                                                |  |                  |         |      |  |   |         |  
|Supplementary disclosure of cash flow information:              |  |                  |         |      |  |   |         |  
|Cash paid during the period for:                                |  |                  |         |      |  |   |         |  
|- interest                                                      |  | $                | 2,789   |      |  | $ | 4,611   |  
|- income taxes                                                  |  |                  | 208     |      |  |   | 220     |  
|Cash received during the period for:                            |  |                  |         |      |  |   |         |  
|- interest                                                      |  |                  | 27      |      |  |   | 341     |  
|- income taxes                                                  |  |                  | 107     |      |  |   | 19      |  
|Non-cash activities:                                            |  |                  |         |      |  |   |         |  
|- container equipment acquired under capital lease              |  |                  | 3,930   |      |  |   | 2,002   |  
|- direct financing lease equipment acquired under capital lease |  |                  | 116     |      |  |   |        |  
|- other fixed assets acquired under capital lease               |  |                  |        |      |  |   | 276     |  
|- recovery of related party loans                               |  |                  |        |      |  |   | 6,000   |  

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

4



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The Cronos Group




Condensed Consolidated Statements of Shareholders Equity
(US dollar amounts in thousands, except per share amounts)
(Unaudited)

Six Months Ended June 30, 2002

|                                               |  |        |        |         |  |             |        |          |  |              |        |               |  |       |       |  |  |          |        |   |  |   |        | 
|---------------------------------------------- |  | ------ | ------ | ------- |  | ----------- | ------ | -------- |  | ------------ | ------ | ------------- |  | ----- | ----- |  |  | -------- | ------ | - |  | - | ------ | 
|                                               |  |        |        |         |  |             |        |          |  |              |        |               |  |       |       |  |  | Retained |        |   |  |  
|                                               |  |        |        |         |  | Additional  |        | Common   |  | Restricted   |        | earnings      |  | Total
|                                               |  | Common |        | paid-in |  | shares held |        | retained |  | (accumulated |        | shareholders
|                                               |  | shares |        | capital |  | in treasury |        | earnings |  | deficit)     |        | equity       
|                                               |  |        |        |         |  |             |        |          |  |              |        |              
|Balance, December 31, 2001                     |  | $      | 18,317 |         |  | $           | 49,846 |          |  | $            | (6,000 | )             |  | $     | 1,832 |  |  | $        | (2,516 | ) |  | $ | 61,479 | 
|Net income                                     |  |        |        |         |  |             |        |          |  |              |        |               |  |       |       |  |  |          | 2,781  |   |  |   | 2,781  | 
|Retirement and
cancellation of
treasury shares |  |        | (3,588 | )       |  |             | (2,412 | )        |  |              | 6,000  |               |  |       |       |  |  |          |        |   |  |   |       | 
|                                               |  |        |        |         |  |             |        |          |  |              |        |               |  |       |       |  |  |          |        |   |  |   |        | 
|Balance, June 30, 2002                         |  | $      | 14,729 |         |  | $           | 47,434 |          |  | $            |       |               |  | $     | 1,832 |  |  | $        | 265    |   |  | $ | 64,260 | 
|                                               |  |        |        |         |  |             |        |          |  |              |        |               |  |       |       |  |  |          |        |   |  |   |        | 

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

5



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##### Table of Contents



The Cronos Group




Notes to the Condensed Consolidated Financial Statements
(US dollar amounts in thousands, except per share amounts)
(Unaudited)



|1. |  | The condensed consolidated financial statements include the accounts of
The Cronos Group and its subsidiaries. All material intercompany accounts
and transactions have been eliminated.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Operating segment data                                                                                                                                                                  

Condensed segment information is provided in the tables below:

|                                              |  |              |        |           |  |            |        |       |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | ------------ | ------ | --------- |  | ---------- | ------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                              |  |              |        |           |  | Other      |        |       |  |   |         |   |  |  
|                                              |  |              |        |           |  | Managed    |        |       |  |   |         |   |  |  
|                                              |  | US Limited   |        | Container |  | Owned      |        |       |  |  
|                                              |  | Partnerships |        | Owners    |  | Containers |        | Total
|                                              |  |              |        |           |  |            |        |      
|Three months ended June 30, 2002              |  |              |        |           |  |            |        |       |  |   |         |   |  |   |         |  
|Gross lease revenue                           |  | $            | 7,002  |           |  | $          | 12,502 |       |  | $ | 8,421   |   |  | $ | 27,925  |  
|Operating profit before indirect items        |  |              | 1,034  |           |  |            | 155    |       |  |   | 2,500   |   |  |   | 3,689   |  
|Operating profit (loss)                       |  |              | 28     |           |  |            | (1,002 | )     |  |   | 1,721   |   |  |   | 747     |  
|Segment assets at end of period               |  |              | 10,217 |           |  |            | 15,599 |       |  |   | 173,659 |   |  |   | 199,475 |  
|Three months ended June 30, 2001              |  |              |        |           |  |            |        |       |  |   |         |   |  |   |         |  
|Gross lease revenue                           |  | $            | 8,494  |           |  | $          | 13,735 |       |  | $ | 7,858   |   |  | $ | 30,087  |  
|Operating profit (loss) before indirect items |  |              | 1,651  |           |  |            | 589    |       |  |   | (2,572  | ) |  |   | (332    | )
|Operating profit (loss)                       |  |              | 478    |           |  |            | (633   | )     |  |   | (3,272  | ) |  |   | (3,427  | )
|Segment assets at end of period               |  |              | 11,347 |           |  |            | 16,411 |       |  |   | 153,428 |   |  |   | 181,186 |  
|Six months ended June 30, 2002                |  |              |        |           |  |            |        |       |  |   |         |   |  |   |         |  
|Gross lease revenue                           |  | $            | 14,352 |           |  | $          | 25,198 |       |  | $ | 16,704  |   |  | $ | 56,254  |  
|Operating profit before indirect items        |  |              | 2,413  |           |  |            | 329    |       |  |   | 4,613   |   |  |   | 7,355   |  
|Operating profit (loss)                       |  |              | 349    |           |  |            | (2,028 | )     |  |   | 3,051   |   |  |   | 1,372   |  
|Segment assets at end of period               |  |              | 10,217 |           |  |            | 15,599 |       |  |   | 173,659 |   |  |   | 199,475 |  
|Six months ended June 30, 2001                |  |              |        |           |  |            |        |       |  |   |         |   |  |   |         |  
|Gross lease revenue                           |  | $            | 17,716 |           |  | $          | 28,144 |       |  | $ | 15,706  |   |  | $ | 61,566  |  
|Operating profit (loss) before indirect items |  |              | 3,384  |           |  |            | 2,162  |       |  |   | (1,859  | ) |  |   | 3,687   |  
|Operating profit (loss)                       |  |              | 1,010  |           |  |            | (293   | )     |  |   | (3,244  | ) |  |   | (2,527  | )
|Segment assets at end of period               |  |              | 11,347 |           |  |            | 16,411 |       |  |   | 153,428 |   |  |   | 181,186 |  

Reconciliation of operating profit (loss) for reportable segments to income
before income taxes:

|                                             |  |                    |      |                  |  |      |        |      |  |   |       |   |  |   |        |  
|-------------------------------------------- |  | ------------------ | ---- | ---------------- |  | ---- | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                             |  | Three Months Ended |      | Six Months Ended
|                                             |  | June 30,           |      | June 30,        
|                                             |  |                    |      |                 
|                                             |  | 2002               |      | 2001             |  | 2002 |        | 2001
|                                             |  |                    |      |                  |  |      |        |     
|Operating profit (loss)                      |  | $                  | 747  |                  |  | $    | (3,427 | )    |  | $ | 1,372 |   |  | $ | (2,527 | )
|Gain on sale of investment                   |  |                    |     |                  |  |      |       |      |  |   |      |   |  |   | 301    |  
|Selling, general and administrative expenses |  |                    | (472 | )                |  |      | (380   | )    |  |   | (822  | ) |  |   | (797   | )
|Amortization of intangible assets            |  |                    | (47  | )                |  |      | (140   | )    |  |   | (94   | ) |  |   | (253   | )
|Recovery of related party loans              |  |                    |     |                  |  |      | 6,000  |      |  |   |      |   |  |   | 6,000  |  
|                                             |  |                    |      |                  |  |      |        |      |  |   |       |   |  |   |        |  
|Income before income taxes                   |  | $                  | 228  |                  |  | $    | 2,053  |      |  | $ | 456   |   |  | $ | 2,724  |  
|                                             |  |                    |      |                  |  |      |        |      |  |   |       |   |  |   |        |  

6



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##### Table of Contents



The Cronos Group

Notes to the Condensed Consolidated Financial Statements



|3. |  | Earnings per common share (US dollar amounts in thousands, except per
share amounts)
|-- |  | ------------------------------------------------------------------------------------

The components of basic and diluted net income per share were as follows:

|                                             |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 
|-------------------------------------------- |  | ------------------ | --------- | ---------------- |  | ---- | --------- | ---- |  | - | --------- |  |  | - | --------- | 
|                                             |  | Three Months Ended |           | Six Months Ended
|                                             |  | June 30,           |           | June 30,        
|                                             |  |                    |           |                 
|                                             |  | 2002               |           | 2001             |  | 2002 |           | 2001
|                                             |  |                    |           |                  |  |      |           |     
|Net income available for common shareholders |  | $                  | 2,593     |                  |  | $    | 2,008     |      |  | $ | 2,781     |  |  | $ | 2,602     | 
|                                             |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 
|Average outstanding shares of common stock   |  |                    | 7,364,580 |                  |  |      | 7,962,513 |      |  |   | 7,364,580 |  |  |   | 8,560,445 | 
|Dilutive effect of:                          |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 
|- Executive officer common share options     |  |                    |          |                  |  |      | 29,343    |      |  |   | 22        |  |  |   | 19,360    | 
|- Warrants                                   |  |                    |          |                  |  |      | 18,119    |      |  |   |          |  |  |   | 11,410    | 
|- Non employee directors equity plan        |  |                    | 51,804    |                  |  |      | 16,374    |      |  |   | 48,531    |  |  |   | 12,096    | 
|                                             |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 
|Common stock and common stock equivalents    |  |                    | 7,416,384 |                  |  |      | 8,026,349 |      |  |   | 7,413,133 |  |  |   | 8,603,311 | 
|                                             |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 
|Basic and diluted net income per share       |  | $                  | 0.35      |                  |  | $    | 0.25      |      |  | $ | 0.38      |  |  | $ | 0.30      | 
|                                             |  |                    |           |                  |  |      |           |      |  |   |           |  |  |   |           | 



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

During the second quarter of 2002, the Group agreed to a settlement with a
foreign taxation authority. This followed a review that focused primarily on
the transfer prices under the terms of the principal trading agreements between
Cronos Group companies prior to 31 December, 1998. The Group had previously
recorded a charge of $2.9 million in this regard. As a result of the
settlement, the Group reversed $2.5 million of the tax liability in the second
quarter.



|5. |  | Amounts receivable from container owners
|-- |  | ----------------------------------------

Amounts receivable from container owners include amounts due from related
parties of $3.9 million and $4.3 million at June 30, 2002 and December 31,
2001, respectively.



|6. |  | Investments in related parties
|-- |  | ------------------------------

Investments in related parties comprise general partnership and limited
partnership investments in eight sponsored funds. These general and limited
partnership investments are accounted for using the equity method. The
subsidiary of the Company that acts as a general partner maintains insurance
for bodily injury, death and property damage for which a partnership may be
liable, and may be contingently liable for uninsured obligations of the
partnerships.

The investment in US Limited Partnerships was $nil at both June 30, 2002
and December 31, 2001.

Distributions for the limited partnership investments have exceeded the
sum of the investment in the partnerships and the profit recognized under the
equity method by a total of $1.3 million and $0.9 million at June 30, 2002 and
December 31, 2001, respectively. For these partnerships, the net balance is
included in amounts payable to container owners.



|7. |  | Container equipment
|-- |  | -------------------

Container equipment is net of accumulated depreciation of $86.5 million
and $81.2 million at June 30, 2002 and December 31, 2001, respectively.

7



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##### Table of Contents



The Cronos Group

Notes to the Condensed Consolidated Financial Statements



|8. |  | Amounts payable to container owners
|-- |  | -----------------------------------

Amounts payable to container owners include amounts payable to related
parties of $8.7 million and $8.0 million at June 30, 2002 and December 31,
2001, respectively.



|9. |  | Debt and capital lease obligations
|-- |  | ----------------------------------

Debt and capital lease obligations include amounts due within twelve
months of $15.5 million and $12.8 million at June 30, 2002 and December 31,
2001, respectively.



|10. |  | Commitments and contingencies (to be read in conjunction with Note 13 to
the Companys 2001 Consolidated Financial Statements on Form 10-K)
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|   
|i.  |  | Commitments                                                                                                                                

At June 30, 2002, the Group had outstanding orders to purchase container equipment of $1.9 million.



|ii. |  | Guarantee to US Limited Partnership
|--- |  | -----------------------------------

During 2000, the Group provided a guarantee under a $5 million third-party
loan note (the Note), with a 2006 maturity date, to a US Limited Partnership.
Under the terms of the guarantee, the Group may be liable for any principal
and interest outstanding under the terms of the Note in the event of a default
by the US Limited Partnership. At June 30, 2002, the balance outstanding under
the Note was $3.4 million.



|iii. |  | Guarantee of third-party loan & rent support agreement
|---- |  | ------------------------------------------------------

During 1996 and 1997, the Group sold equipment, which was under a direct
finance lease with a major shipping line, to a third-party for $26.3 million.
The third-party financed the acquisition of this equipment with a loan of $26.3
million, with a 2004 maturity date, to which the Group provided a first loss
guarantee for 20% of the debt. The Group can collateralize up to 50% of the
guarantee with a first security interest in additional equipment. At June 30,
2002, the balance outstanding under the loan was $7 million.

In addition, under the terms of a rent support agreement, the Group is
required to deposit an amount equal to the aggregate of all rental charges
scheduled to be paid under the direct finance lease for the next twelve months
or until the end of the lease, if sooner, upon the occurrence of a continuing
event of default by the shipping line. Annual rental charges under the lease,
with a 2004 scheduled maturity date, approximate $5.1 million.



|iv. |  | Guarantee under a purchase, assignment and agency agreement
|--- |  | -----------------------------------------------------------

During 1996, the Group entered into a term lease with a lessee in the
ordinary course of business. During 1997, the containers held under the lease
were sold, and the lease was assigned, to a financial institution. As part of
this contract, the Group continues to manage the containers held under the term
lease, and invoices the lessee and collects monies on behalf of the financial
institution. Rental under the lease is approximately $0.5 million per annum of
which the Group remits $0.4 million to the financial institution as rent and
just under $0.1 million to a retention account held as security by the
institution. The remaining amount is retained by the Group as compensation for
this service.

Under the terms of the contract with the financial institution, if the
lessee fails to make payments, other than in the event of being declared
bankrupt, the Group has guaranteed that it will continue to make these payments
to the financial institution. The guarantee and agreement with the financial
institution will expire in October 2005.



|v. |  | Agreements with Other Managed Container Owners  early termination
options
|-- |  | --------------------------------------------------------------------------

Approximately 48% (based on original equipment cost) of the agreements
with Other Managed Container Owners (Agreements) contain early termination
options, whereby the container owner may terminate the Agreements if certain
performance thresholds are not achieved. At June 30, 2002, approximately 36% of the Agreements were eligible for early termination. Cronos
believes that early termination of these Agreements by the Other Managed
Container Owners is unlikely.

8



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##### Table of Contents



The Cronos Group

Notes to the Condensed Consolidated Financial Statements



|10. |  | Commitments and contingencies (continued)                                    
|--- |  | -----------------------------------------------------------------------------
|   
|vi. |  | Agreements with Other Managed Container Owners  change of control
provisions

Approximately 52% (based on original equipment cost) of Agreements with
Other Managed Container Owners provide that a change in ownership of the Group,
without the prior consent of the container owner, may constitute an event of
default under the Agreements. In substantially all of these Agreements, the
consent of the container owners may not be unreasonably withheld. In the event
that consent is not obtained, 30% of Agreements may require the Group to
transfer possession of the equipment to another equipment manager. Such
transfer of possession may result in the Group incurring certain costs. The
remaining 22% of Agreements may require the Group to purchase the equipment
from the container owners pursuant to the terms of their respective Agreements,
generally a stipulated percentage (determined by age of the equipment) of the
original cost of the equipment.



|vii. |  | Contingencies  Dispute with Contrin Holding S.A.
|---- |  | -------------------------------------------------

Since 1983, the Group has managed containers for Austrian investment
entities sponsored by companies owned or controlled by Contrin Holding S.A., a
Luxembourg holding company, and for Contrin itself (collectively, Contrin).

As described further below, the Group is in litigation with Contrin over
funds that Contrin claims to have remitted to the Group for the purchase of
containers. Contrin claims that in 1994 it transmitted $2.6 million to the
Group for the purchase of containers. The Group did not receive these funds
and believes that the funds were diverted to an account controlled by Stefan M.
Palatin, a former chairman and chief executive officer of the Group, and that
this was known or should have been known by Contrin.

In December 1997, the Group recorded a charge of $3.4 million relating to
the alleged transfer of $2.6 million, the related interest, plus the estimated
settlement costs of this and other claims by Contrin. On June 30, 2002, the
balance of this accrual was $3.0 million.

On August 8, 2000, Contrin, through an affiliate, Contrin Worldwide
Container Leasing GmbH (CWC), filed an action in the Luxembourg District
Court against the Company, seeking recovery of $2.6 million, together with
interest and costs. On January 10, 2001, the Company responded to Contrins
complaint, requesting that the District Court dismiss the proceeding for lack
of jurisdiction over the dispute, and denying Contrins claims on the merits.
Since January 10, 2001, each party has supplemented its pleadings to respond to
assertions made by the other party. The Company anticipates that a final
hearing will be held by the Court in 2003.

To preserve its rights of indemnity in the face of Contrins claims, the Group,
on June 1, 2000, filed a protective claim against Mr. Palatin and his wife. By
its claim, the Group seeks to establish that the Palatins are liable to the
Group for any liability which the Group may have to Contrin arising out of the
1994 transfers.

On July 13, 2000, Cronos also filed a protective claim against Barclays
Bank PLC (Barclays) in the High Court of Justice, London, England. Barclays
was the bank that received the $2.6 million from Contrin. By its claim, the
Group seeks a declaration that Barclays is liable to the Group for $2.6
million, plus interest and costs, arising out of Contrins 1994 transfer to an
account with Barclays in the name of Mrs. Palatin. In February 2001, the Group
obtained an order from the Court requiring the production of documents by
Barclays. The Group and Barclays have agreed to a stay of the action while the
Group evaluates the documentation produced by Barclays.

On August 2, 2001, CWC filed a separate claim against Cronos Containers
N.V. (CNV), a wholly-owned Netherlands Antilles subsidiary of the Company, in
the High Court of Justice, London, England. By its claim, Contrin asserts that
CNV, wrongfully and in violation of the container management agreement between
Contrin and CNV, failed to distribute to Contrin $0.5 million in distributions
for the second through fourth calendar quarters of 1996. Contrin seeks
recovery of this sum, plus interest.

9



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##### Table of Contents



The Cronos Group

Notes to the Condensed Consolidated Financial Statements



|10. |  | Commitments and contingencies (continued)
|--- |  | -----------------------------------------

On December 31, 2001, CNV filed its defense to CWCs claim, denying CWCs
claims and denying that CNV is liable to CWC in any amount. Concurrently with
the filing of its defense to CWCs claims, CNV filed a separate claim against
the Palatins and Klamath Enterprises, S.A. (Klamath), seeking recovery of
$0.5 million from the Palatins that CNV alleges was misappropriated from CNV by
Mr. Palatin. On April 8, 2002, Klamath filed its application with the court
seeking an order declaring that the court has no jurisdiction over Klamath or,
in the alternative, that it should exercise its discretion not to assert
jurisdiction over the Groups claims against Klamath. CNV has opposed
Klamaths application; no hearing on the application has yet been set. The
Palatins were recently served with CNVs separate claim against them, and have
yet to respond to CNVs claims.

Since September 2001, the Group and Contrin have had discussions with a
view to resolving all disputes between them. These discussions have yet to
achieve any success. During the course of the discussions, Contrin has
asserted, in addition to its claims advanced in the Luxembourg District Court
and in the High Court of Justice in England, described above, a claim to $2.6
million, including interest, as its share of the proceeds from containers
disposed of by CNV under the container management agreements between Contrin
and CNV. CNV has rejected the claim as a misinterpretation of the container
management agreements.

Contrin has also asserted an interest in the containers managed by the
Group for Transocean Equipment Manufacturing and Trading Limited (TOEMT) and
in the distributions payable with respect to such containers, as discussed
below.

Management considers that prudent provision has been made in the financial
statements for the Contrin matters noted above. There is a reasonable
possibility that a material change could occur with respect to these
commitments and contingencies within one year of the date of these financial
statements. In such an event, management estimates that possible losses could
exceed the amount accrued by $3.0 million.



|viii. |  | TOEMT
|----- |  | -----

TOEMT, which is currently in liquidation in the United Kingdom, has been
separately registered by the same name in both the United Kingdom and in the
Isle of Man. At June 30, 2002, the Group had $1.2 million in amounts payable
to TOEMT on deposit in a bank account pending clarification of the proper
claimants to the distributions payable with respect to the containers owned by
TOEMT. The information currently available to the Group is insufficient to
enable it to determine the nature or amount of the claims by the respective
companies and their creditors to the distributions available with respect to
the TOEMT containers.

As stated above, Contrin, in its discussions with the Group over a global
resolution of all disputes between the parties, has asserted a right to the
distributions being held by the Group for TOEMT. Contrin has provided the
Group with copies of default judgements Contrin secured in January and June
2001 from the Commercial Court of Vienna, Austria, against TOEMT (UK) and TOEMT
(Isle of Man), for $0.1 million and $0.4 million, respectively.
Contrin has also demanded an accounting of the Group's management of the TOEMT
containers since November 1991. Until
clarification is secured by court proceedings and/or through agreement with the
creditors of TOEMT, the Group intends to continue to set aside the
distributions due and payable by the Group on the containers it manages for
TOEMT.



|11. |  | Issued and Authorised Share Capital
|--- |  | -----------------------------------

In June 2002, the Company retired and canceled 1,793,798 shares held in
the Company by Cronos Equipment (Bermuda) Limited (CEB), a subsidiary of the
Company. In May 2001, Cronos was awarded the outstanding common shares in the
Company that were beneficially owned by a former Chairman and Chief Executive
Officer of the Company in partial consideration for amounts owed under two
promissory notes (see Item I of PART II  Legal Proceedings). Such shares had
been recorded as common shares held in treasury.

10



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##### Table of Contents



The Cronos Group

Notes to the Condensed Consolidated Financial Statements



|12. |  | New accounting pronouncements (US dollar amounts in thousands, except per
share amounts)
|--- |  | ----------------------------------------------------------------------------------------

On January 1, 2002, the Group adopted Statement of Financial Accounting
Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, and SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

SFAS No. 142 addresses the initial recognition and measurement of
intangible assets acquired outside of a business combination and the accounting
for goodwill and other intangible assets subsequent to their acquisition. SFAS
No. 142 provides that intangible assets with finite useful lives be amortized
and that goodwill and intangible assets with indefinite lives will not be
amortized, but will rather be tested at least annually for impairment. The
impact of the adoption of SFAS No. 142 on the results of operations of the
Group may be presented as follows:

|                                                |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|----------------------------------------------- |  | ------------------ | ----- | ---------------- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|                                                |  | Three Months Ended |       | Six Months Ended
|                                                |  | June 30,           |       | June 30,        
|                                                |  |                    |       |                 
|                                                |  | 2002               |       | 2001             |  | 2002 |       | 2001
|                                                |  |                    |       |                  |  |      |       |     
|Net income:                                     |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|Reported net income                             |  | $                  | 2,593 |                  |  | $    | 2,008 |      |  | $ | 2,781 |  |  | $ | 2,602 | 
|Add back Goodwill amortization                  |  |                    |      |                  |  |      | 93    |      |  |   |      |  |  |   | 159   | 
|                                                |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|Adjusted net income                             |  | $                  | 2,593 |                  |  | $    | 2,101 |      |  | $ | 2,781 |  |  | $ | 2,761 | 
|                                                |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|Earnings per share:                             |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|Reported basic and diluted
net income per share |  | $                  | 0.35  |                  |  | $    | 0.25  |      |  | $ | 0.38  |  |  | $ | 0.30  | 
|Add back Goodwill amortization                  |  |                    |      |                  |  | $    | 0.01  |      |  |   |      |  |  | $ | 0.02  | 
|                                                |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 
|Adjusted basic and diluted
net income per share |  | $                  | 0.35  |                  |  | $    | 0.26  |      |  | $ | 0.38  |  |  | $ | 0.32  | 
|                                                |  |                    |       |                  |  |      |       |      |  |   |       |  |  |   |       | 

SFAS No. 144 supersedes SFAS No. 121, but retains its fundamental
provisions relating to the recognition and measurement of the impairment of
long-lived assets to be held and used, and the measure of long-lived assets to
be disposed of by sale.

In August 2001, the Financial Accounting Standards Board issued SFAS No.
143, Accounting for Asset Retirement Obligations, which is effective for all
fiscal years beginning after June 15, 2002. This standard requires a company
to record the fair value of a liability for an asset retirement obligation in
the period in which it is incurred, and a corresponding increase in the
carrying value of the related long-lived asset. The Group is currently
evaluating the impact that SFAS No. 143 will have on its financial statements.

In June 2002, the Financial Accounting Standards Board issued SFAS 146,
Accounting for Costs Associated with Exit or Disposal Activities, which
addresses accounting for restructuring and similar costs. SFAS 146 supersedes
previous accounting guidance, principally Emerging Issues Task Force Issue No.
94-3. The Group will adopt the provisions of SFAS 146 for restructuring
activities initiated after December 31, 2002. SFAS 146 requires that the
liability for costs associated with an exit or disposal activity be recognized
when the liability is incurred. Under Issue 94-3, a liability for an exit cost
was recognized at the date of the Companys commitment to an exit plan. SFAS
146 also establishes that the liability should initially be measured and
recorded at fair value. Accordingly, SFAS 146 may affect the timing of
recognizing future restructuring costs as well as the amounts recognized.

11



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##### Table of Contents



The Cronos Group




Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations

General

The Group generates revenues by leasing to ocean carriers marine
containers that are owned either by the Group itself or by the Groups managed
container programs (Managed Container Owners), which are comprised of US
Limited Partnerships and Other Managed Container Owners.

The following table summarizes the composition of the Cronos fleet (based
on original equipment cost) at June 30 for each of the periods indicated:

|                               |  |      |     |      |  |  |     |  
|------------------------------ |  | ---- | --- | ---- |  |  | --- | -
|                               |  | 2002 |     | 2001
|                               |  |      |     |     
|US Limited Partnerships        |  |      | 28  | %    |  |  | 32  | %
|Other Managed Container Owners |  |      | 45  | %    |  |  | 44  | %
|Owned Containers               |  |      | 27  | %    |  |  | 24  | %
|                               |  |      |     |      |  |  |     |  
|Total                          |  |      | 100 | %    |  |  | 100 | %
|                               |  |      |     |      |  |  |     |  

All containers, whether owned or managed, are operated as part of a single
fleet. The Group has discretion over which ocean carriers, container
manufacturers and suppliers of goods and services it deals with. Since the
Groups management agreements with the Managed Container Owners meet the
definition of leases in SFAS No. 13, they are accounted for in the Groups
financial statements as leases under which the container owners are lessors and
the Group is lessee. For the six months ended June 30, 2002, 79% of payments
to Managed Container Owners represented agreements which generally provided
that the amounts payable to container owners were based upon the rentals to
ocean carriers after deducting direct operating expenses and a management fee.
The remaining 21% of payments to Managed Container Owners represented
agreements under which the container owner is entitled to a fixed payment for a
specified term. Minimum lease payments on the agreements, which have fixed
payment terms are presented in Note 11 to the Groups 2001 Consolidated
Financial Statements.

The following table summarizes the composition of the Cronos fleet (in
thousands, based on twenty-foot equivalent units (TEU)), by equipment type,
at June 30 for each of the periods indicated:

|                      |                                         |  |       |     |      |  |       |     | 
|--------------------- | --------------------------------------- |  | ----- | --- | ---- |  | ----- | --- | 
|                      |                                         |  | 2002  |     | 2001
|                      |                                         |  |       |     |     
|Dry Cargo             |                                         |  | 365.4 |     |      |  | 370.2 |    
|Refrigerated          |                                         |  | 13.8  |     |      |  | 13.1  |    
|Tank                  |                                         |  | 2.3   |     |      |  | 2.0   |    
|Dry Freight Specials: |                                         |  |       |     |      |  |       |    
|                      | Cellular Palletwide Containers (CPCs) |  |       | 6.5 |      |  |       | 4.5 | 
|                      | Rolltrailer                             |  |       | 2.7 |      |  |       | 2.5 | 
|                      | Other Dry Freight Specials              |  |       | 3.6 |      |  |       | 3.0 | 
|                      |                                         |  |       |     |      |  |       |    
|Total Fleet           |                                         |  | 394.3 |     |      |  | 395.3 |    
|                      |                                         |  |       |     |      |  |       |    

During 2001, the slowdown in the global economy caused a significant
downturn in demand for dry cargo containers. Corporate failures and a cautious
business climate resulted in lower levels of capital available for equipment
purchases. Prices for new containers reached historic lows as demand declined
for new production resulting in further downward pressure on per diem rates and
container residual values. Since June 30, 2001, the combined per diem rate for
the Cronos fleet of dry cargo containers declined by approximately 16%.

12



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##### Table of Contents



The Cronos Group

In the first half of 2002, the relatively low levels of new container
production together with an improving business climate have resulted in
increased demand for existing dry cargo and specialized container equipment.
The Group has sought to exploit the improving demand by repositioning off-hire
equipment to locations of greatest demand and by pursuing leasing opportunities
through its global network of marketing resources. As a result, utilisation
for the Cronos fleet of dry cargo containers increased to 80% by the end of
June compared to 73% at the beginning of the year. Per diem rates for dry
cargo containers, although lower than in the first quarter of 2002, remained
level during the second quarter.

Container manufacturers have begun to report increased demand and
equipment prices have increased in response to this demand. Industry sources
forecast that 2002 new container production will exceed the relatively low
level of 2001 production by approximately 14%.

Cronos operates a diversified fleet of containers, including refrigerated
containers, tanks, CPCs and rolltrailers. Specialized containers account for
over 50% of the Cronos owned fleet (based on original equipment cost). Due to
their specialized nature, demand for these containers is less likely to be
affected by global economic downturns. During the second quarter of 2002,
Cronos has experienced strong demand for all specialized containers.

The following table summarizes the combined utilization of the Cronos
fleet (based on approximate original equipment cost):

|                       |  |      |    |      |  |  |    |  
|---------------------- |  | ---- | -- | ---- |  |  | -- | -
|                       |  | 2002 |    | 2001
|                       |  |      |    |     
|Utilization at June 30 |  |      | 81 | %    |  |  | 71 | %

The Group reviews its owned container equipment when changes in
circumstances require consideration as to whether the carrying value of the
equipment has become impaired, pursuant to guidance established in
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Management considers assets to be impaired if the
carrying value of the asset exceeds the future projected cash flows from
related operations (undiscounted and without interest charges). When
impairment is deemed to exist, the assets are written down to fair value or
projected discounted cash flows from related operations. The Group
periodically evaluates future cash flows and potential impairment of its fleet
by container type rather than for each individual container. Therefore, future
losses could result for individual container dispositions due to various
factors including age, condition, suitability for continued leasing, as well as
geographic location of the containers where disposed. In addition, subjective
management judgement is required in estimating future cash flows from container
operations. Accordingly, the estimates may not be indicative of the amounts
that may be realized in future periods.

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30,
2001

Gross lease revenueof $27.9 million for the three months ended June 30,
2002, was $2.2 million, or 7%, lower than in the corresponding period of 2001.
Dry cargo containers accounted for $1.8 million of the total decline as the
increase in utilization reported during 2002 was more than offset by the
reduction in per diem rates. However, some of the underlying trends are
positive when compared to 2001. For example, leasing incentives, which are
offered to lessees as an inducement to lease equipment and are a strong
indicator of demand in the marketplace, were $0.6 million lower than in the
second quarter of 2001. In addition, drop-off charges, which are earned when a
container is returned by a lessee, were $0.4 million lower when compared to the
same period in 2001.

Equipment trading revenueof $0.2 million for the three months ended June
30, 2002, represented transactions undertaken in which the Group used its
relationships with equipment manufacturers to assist third-parties to design
and acquire their own equipment and arrange for delivery to designated
locations. Equipment trading expenses represent equipment and related costs
for this activity.

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Commissions, fees and other incomefor the three months ended June 30,
2002, of $1.3 million were $0.4 million, or 25%, lower than in the second
quarter of 2001. An increase of $0.2 million in direct finance lease income
was more than offset by a $0.3 million decline in CPC license fee income, and a
total reduction of $0.3 million in acquisition and other fee income.

Direct operating expensesof $7.2 million for the three months ended June
30, 2002 were $0.7 million, or 9%, lower than in the second quarter of 2001.
Storage costs declined by $0.9 million reflecting the increased demand for dry
cargo containers when compared to the corresponding period in 2001. A $0.6
million increase in repositioning expense was primarily due to the cost of
moving off-hire dry cargo containers from the East Coast of the United States
to Korea. A $0.4 million reduction in legal expenses and provisions for
doubtful accounts was primarily due to a slight improvement in the credit
profile of a number of lessees.

Payments to managed container ownersof $12.9 million during the three
months ended June 30, 2002, were $1.4 million, or 10%, lower when compared to
the corresponding period in 2001. This decline was due to a reduction in net
lease revenue for each of these segments resulting mainly from lower per diem
rates for dry cargo containers and, in the case of the US Limited Partnership
segment, a smaller fleet size, reflecting the sale of older equipment.

Depreciation and amortizationof $3.9 million during the three months
ended June 30, 2002, was $0.1 million lower when compared to the second quarter
of 2001. A $0.2 million increase in container depreciation was more than
offset by a $0.2 million reduction in depreciation for leasehold and computer
assets together with a $0.1 million reduction in the amortization of intangible
assets due to the adoption of SFAS No. 142.

Selling, general and administrative expensesof $3.4 million in the second
quarter of 2002 were almost unchanged when compared to the corresponding period
of 2001. A $0.1 million increase in professional service expenses was offset
by a $0.1 million decrease in information technology costs.

Interest expenseof $1.7 million for the three months ended June 30, 2002,
declined by $0.5 million, or 25%, when compared to the corresponding period in
2001. The decline in interest expense attributable to the reduction in
interest rates over the course of 2001 more than offset the increase in
interest expense resulting from higher debt balances used to finance new
equipment purchases.

Income taxes:During the second quarter of 2002, the Group agreed to a
settlement with a foreign taxation authority. This followed a review that
focused primarily on the transfer prices under the terms of the principal
trading agreements between Cronos Group companies prior to 31 December, 1998.
The Group had previously recorded a charge of $2.9 million in this regard. As
a result of the settlement, the Group reversed $2.5 million of the tax
liability in the second quarter of 2002 and recorded a tax benefit of the same
amount. This benefit was partly offset by $0.1 million of income tax charges.

Income from recovery of related party loansfor the three months ended
June 30, 2001, represented the partial recovery of interest and principal
receivable under two promissory notes between the Group and Mr. Palatin. The
Group had previously made a provision against some of the amounts owed under
the promissory notes in December 1997. In May 2001, Cronos was awarded 1.8
million outstanding common shares in the Company that were beneficially owned
by Mr. Palatin in partial consideration for amounts owed under the promissory
notes. These shares were recorded as common shares in treasury. The valuation
of $6 million was based on the estimated fair value of the shares received.

Impairment chargesof $4 million for the second quarter of 2001, were
recorded against certain refrigerated containers and against loan notes
receivable from a third-party container owner.

The Group undertook a review of its refrigerated container equipment and
identified a number of issues that have had an impact on the carrying value of
certain equipment, which use the R12 refrigerant gas. As a result of the
review, management concluded that inventories of R12 equipment would be
targeted for immediate sale and that 531 containers with a carrying value of
$2.4 million exceeded fair value. Additionally, a review was conducted of 776
containers with a carrying value of $3.7 million that were on lease at June 30,
2001. It was concluded that the carrying value of these assets exceeded the
future cash flows expected to result from the use of the assets and their
eventual disposition. As a result of these reviews, an impairment charge of $2
million was recorded.

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The Group also reviewed the carrying value of loan notes receivable from a
third-party container owner in the second quarter of 2001. The carrying value
of the loan notes are measured in terms of the discounted value of projected
future net cash flows to be generated based on historical and projected trends
on per diem revenues, utilization, container disposal proceeds and funding
costs over the expected useful life of the containers. Due to the global
economic downturn, management revised the projections for per diem revenues and
utilization downwards. Based on the revised projected trends, the Group
considered that the carrying value of the loan notes due from the third-party
container owner exceeded the discounted value of the future cash flows by $2
million. Accordingly, an impairment of $2 million was recorded.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Gross lease revenueof $56.3 million for the six months ended June 30,
2002, was $5.3 million, or 9%, lower than in the corresponding period of 2001.
Gross lease revenue for dry cargo containers was $5.1 million lower than in
2001 as the reduction in per diem rates more than offset the increase in
utilization reported during 2002.

Equipment trading revenueof $0.6 million for the six months ended June
30, 2002, represented transactions undertaken in which the Group used its
relationships with equipment manufacturers to assist third-parties to design
and acquire their own equipment and arrange for delivery to designated
locations. Equipment trading expenses represent equipment and related costs
for this activity.

Commissions, fees and other incomefor the six months ended June 30, 2002,
of $2.6 million were $0.4 million, or 13%, lower when compared to the first six
months of 2001. Reductions of $0.4 million in CPC license fee income, $0.3
million in the profit recorded on the sale of fixed assets and $0.2 million in
acquisition fees were partly offset by a $0.5 million increase in direct
finance lease income.

Gain on sale of investmentof $0.3 million in the first six months of 2001
represented the sale of shares that had been held in escrow as security for a
1994 tax indemnification agreement. This agreement expired on December 31,
2000, and the shares were released in the first quarter of 2001.

Direct operating expensesof $15 million in the first six months of 2002
were $0.4 million, or 3%, higher than in the corresponding period of 2001.
Reduced storage costs of $0.8 million and increased handling and other
activity-related costs of $0.5 million reflected the increased quantity of
on-hire containers in 2002 when compared to the same period in 2001. A $1.1
million increase in repositioning expense was primarily due to the cost of
moving off-hire dry cargo containers from the East Coast of the United States
to Korea in the second quarter of 2002. The containers were placed on lease
shortly after arrival in Korea. A $0.4 million reduction in legal expenses and
provisions for doubtful accounts was primarily due to an improvement in the
credit profile of a number of lessees.

Payments to managed container ownersof $25.6 million in the first half of
2002, were $4.6 million, or 15%, lower when compared to the corresponding
period in 2001, due primarily to the decline in dry cargo container net lease
revenue for each of these segments. Payments to US Limited Partnerships of
$8.0 million in the first half of 2002 were $2.5 million lower than in the same
period of 2001. Payments to Other Managed Container Owners were $17.6 million
during the six months ended June 30, 2002, a decrease of $2.1 million, or 11%,
when compared to the same period of 2001.

Depreciation and amortizationof $7.7 million for the six months ended
June 30, 2002, was $0.3 million, or 4%, lower when compared to the
corresponding period in 2001. In 2002, depreciation expense for leasehold and
computer assets was $0.3 million lower than for the same period in 2001. This
is due to certain computer assets reaching the end of their useful life and the
relocation of the UK office to new leasehold premises in the second quarter of
2002. This was partly offset by a $0.2 million increase in container
depreciation expense reflecting the addition of new equipment. The
amortization of intangible assets declined by $0.2 million in 2002 due to the
adoption of SFAS No. 142.

Selling, general and administrative expensesof $6.8 million in the first
half of 2002, were almost unchanged when compared to the corresponding period
of 2001. A $0.2 million reduction in information technology costs was offset
by increased professional service costs.

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Interest expenseof $3.3 million for the six months ended June 30, 2002,
decreased by $1.1 million, or 25%, when compared to the corresponding period in
2001. The decline in interest expense attributable to the reduction in
interest rates over the course of 2001 more than offset the increase in
interest expense resulting from higher debt balances used to finance new
equipment purchases.

Income taxes:During the second quarter of 2002, the Group agreed to a
settlement with a foreign taxation authority. This followed a review that
focused primarily on the transfer prices under the terms of the principal
trading agreements between Cronos Group companies prior to 31 December, 1998.
The Group had previously recorded a charge of $2.9 million in this regard. As
a result of the settlement, the Group reversed $2.5 million of the tax
liability in the second quarter of 2002 and recorded a tax benefit of the same
amount. This benefit was partly offset by $0.2 million of income tax charges.

Income from recovery of related party loansfor the six months ended June
30, 2001, represented the partial recovery of interest and principal receivable
under two promissory notes between the Group and Mr. Palatin. The Group had
previously made a provision against some of the amounts owed under the
promissory notes in December 1997. In May 2001, Cronos was awarded 1.8 million
outstanding common shares in the Company that were beneficially owned by Mr.
Palatin in partial consideration for amounts owed under the promissory notes.
These shares were recorded as common shares in treasury. The valuation of $6
million was based on the estimated fair value of the shares received.

Impairment chargesof $4 million for the six months ended June 30, 2001,
were recorded against certain refrigerated containers and against loan notes
receivable from a third-party container owner.

The Group undertook a review of its refrigerated container equipment and
identified a number of issues that have had an impact on the carrying value of
certain equipment, which use the R12 refrigerant gas. As a result of the
review, management concluded that inventories of R12 equipment would be
targeted for immediate sale and that 531 containers with a carrying value of
$2.4 million exceeded fair value. Additionally, a review was conducted of 776
containers with a carrying value of $3.7 million that were on lease at June 30,
2001. It was concluded that the carrying value of these assets exceeded the
future cash flows expected to result from the use of the assets and their
eventual disposition. As a result of these reviews, an impairment charge of $2
million was recorded.

The Group also reviewed the carrying value of loan notes receivable from a
third-party container owner in the second quarter of 2001. The carrying value
of the loan notes are measured in terms of the discounted value of projected
future net cash flows to be generated based on historical and projected trends
on per diem revenues, utilization, container disposal proceeds and funding
costs over the expected useful life of the containers. Due to the global
economic downturn, management revised the projections for per diem revenues and
utilization downwards. Based on the revised projected trends, the Group
considered that the carrying value of the loan notes due from the third-party
container owner exceeded the discounted value of the future cash flows by $2
million. Accordingly, an impairment of $2 million was recorded.

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Liquidity and Capital Resources

The funding sources available to the Group and its consolidated
subsidiaries include operating cash flow and borrowings.

The Groups operating cash flow is derived from lease revenues generated
by the Groups container fleet and fee revenues from its managed container
programs and other parties. Operating cash flow is utilized to meet costs
relating to day-to-day fleet support, payments to Managed Container Owners,
selling, general and administrative expenses, interest expense, servicing the
current portion of long-term borrowings and financing a portion of certain debt
funded equipment acquisitions.

Operating cash flow is largely dependent upon the timely collections of
lease revenues from shipping lines. Based on loss experience for the last nine
years, bad debts have approximated 1% of lease revenues. The Group monitors
the aging of lease receivables, collections and the credit status of existing
and potential customers. In the current economic climate there is a risk that
some shipping lines may experience financial difficulty. Any resultant
material increase in the level of bad debts could potentially impair the
ability of the Group to meet its operating commitments.

At June 30, 2002, the Group had $128.6 million of available container
borrowing facilities under which $116 million was outstanding. In addition,
the Group had $1.7 million of credit facilities under which $0.6 million was
outstanding. The credit facilities are available, if required, for operating
cash flow purposes.

Cash Flow Statements for the Six Months ended June 30, 2002 and 2001

Cash from Operating Activities:Net cash provided by operating activities
was $1.3 million and $13.2 million during the first six months of 2002 and
2001, respectively. In 2002, the cash provided by operating activities
represented earnings from operations, which were partly offset by a $5.6
million increase in new container equipment for resale. The net cash generated
in 2001 reflected a decrease in container equipment for resale, resulting from
the sale of $8 million of container equipment to a new managed container owner
program, and a decrease in amounts due from lessees. This was offset by a $3.6
million decrease in amounts payable to container manufacturers.

Cash from Investing Activities:Net cash used in investing activities was
$5.8 million in the first six months of 2002, reflecting the acquisition of
$6.1 million of container and other equipment and an investment of $1 million
in direct finance lease equipment. This was partly offset by $1.3 million of
proceeds from the sale of container equipment. Net cash used in investing
activities was $13 million in the first half of 2001. The acquisition of $16.8
million of container equipment was partly offset by proceeds of $3.3 million
from the sale of container equipment and proceeds from the sale of investments
of $0.5 million.

Cash from Financing Activities:Net cash provided by financing activities
was $4.6 million during the first six months of 2002. Proceeds from the
issuance of new term debt of $15.4 million was partly offset by the repayment
of $10.7 million of debt and capital lease obligations. In the first six
months of 2001, the Group borrowed $9 million of new term debt and repaid $11.5
million of debt and capital lease obligations.

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Capital Resources

The Group purchases new containers for its own account and for resale to
Managed Container Owners and other parties. At June 30, 2002, the Group owed
container manufacturers $11.3 million for equipment, of which $3.5 million is
scheduled to be funded in the third quarter of 2002, utilizing available
container funding facilities. Of the remaining $7.8 million of equipment, the
Group has designated $7.1 million for sale to Managed Container Owners in the
third quarter.

In addition, the Group had outstanding orders to purchase container
equipment at June 30, 2002 of $1.9 million. These orders relate to containers
to be financed by the Group using available container funding facilities.

The Group believes that it has sufficient capital resources to support its
operating and investing activities.




Item 3  Quantitative and Qualitative Disclosures about Market Risk

Interest rate risk:Outstanding borrowings are subject to interest rate
risk. Approximately 84% of total borrowings had floating interest rates at
June 30, 2002. The Group conducted an analysis of borrowings with variable
interest rates to determine their sensitivity to interest rate changes. In
this analysis, the same change was applied to the current balance outstanding,
leaving all other factors constant. It was found that if a 10% increase were
applied to variable interest rates, the expected effect would be to reduce
annual cash flows by $0.4 million.

Exchange rate risk:Substantially all of the Groups revenues are billed
and paid in US dollars and a significant portion of costs are billed and paid
in US dollars. Of the remaining costs, the majority are individually small,
unpredictable and incurred in various denominations and thus are not suitable
for cost effective hedging. By reference to the first six months of 2002, it
is estimated that for every 10% incremental decline in the value of the US
dollar against various foreign currencies, the effect would be to reduce annual
cash flows by $0.9 million in any given year.

As exchange rates are outside of the control of the Group, there can be no
assurance that such fluctuations will not adversely effect its results of
operations and financial condition.

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PART II  OTHER INFORMATION




Item 1  Legal Proceedings

Dispute with the Contrin Group

The Group manages containers for investment entities sponsored by or
affiliated with Contrin. Approximately 1% (measured by TEUs) of the Groups
fleet of containers is owned by Contrin. The Group is in litigation with
Contrin over funds that Contrin claims to have remitted to Cronos for the
purchase of additional containers. Contrin claims that in 1994 it transmitted
$2.6 million to Cronos for the purchase of containers. The Group did not
receive these funds and believes that the funds were diverted to an account
controlled by Mr. Palatin, and that this was known or should have been known by
Contrin.

On August 8, 2000, Contrin, through its affiliate, CWC, filed an action in
the Luxembourg District Court against the Company, seeking recovery of $2.6
million, together with interest and costs. On January 10, 2001, the Company
responded to CWCs complaint, (i) requesting that the District Court dismiss
the proceeding for lack of jurisdiction over the dispute, and (ii) denying
Contrins claims on the merits. Since January 10, 2001, each party has
supplemented its pleadings to respond to assertions made by the other party.
The Company anticipates that a final hearing will be held by the Court in 2003.

To preserve its rights of indemnity in the face of Contrins claims, the
Group, on June 1, 2000, filed a protective claim in the High Court of Justice,
London, England, against Mr. Palatin and his wife. By its claim, the Group
seeks to establish that the Palatins are liable to the Group for any liability
which the Group may have to Contrin arising out of the 1994 transfers. On
March 29, 2001, the Group secured a freezing injunction from the High Court
of Justice in aid of its claim against the Palatins. By the injunction, the
Palatins are prohibited from selling, charging, or otherwise disposing of their
interest in an estate the Group believes is beneficially owned by the Palatins
in Amersham, England. The injunction also extends to Klamath, a Panamanian
company and the record owner of the estate. The Palatins have contested the
jurisdiction of the High Court of Justice over them, and have filed an
affidavit with the Court asserting that the estate is owned by Pontino S.A., a
Panamanian company, in which they disclaim any interest. The Group believes
that the High Court of Justice has jurisdiction to hear its claim against the
Palatins and that their disclaimer of any beneficial interest in the Amersham
estate is not credible. The Palatins have filed their application with the
Court contesting the jurisdiction of the Court over them or, in the
alternative, have requested a stay of any further prosecution of the action
pending resolution of a criminal proceeding pending in Vienna, Austria, against
Mr. Palatin. The Group anticipates that a hearing on the Palatins motion will
be heard in the fall of 2002.

On April 8, 2002, Klamath filed its application with the court seeking an
order declaring that the Court has no jurisdiction over Klamath or, in the
alternative, that it should exercise its discretion not to assert jurisdiction
over the Groups claims against Klamath. The Group has opposed Klamaths
application. The hearing on Klamaths application will be heard at the same
time as the hearing on the Palatins motion, described above.

On July 13, 2000, the Group also filed a protective claim against Barclays
in the High Court of Justice, London, England. Barclays was the bank that
received the $2.6 million from Contrin. By its claim, the Group seeks a
declaration that Barclays is liable to the Group for $2.6 million, plus
interest and costs, arising out of Contrins 1994 transfer to an account with
Barclays in the name of Mrs. Palatin. In February 2001, the Group obtained an
order from the Court requiring the production of documents by Barclays. The
Group and Barclays have agreed to a stay of the action while the Group
evaluates the documentation produced by Barclays.

On August 2, 2001, CWC filed a separate claim against CNV in the High
Court of Justice, London, England. By its claim, CWC asserts that CNV,
wrongfully and in violation of the container management agreement between CWC
and CNV, failed to distribute to CWC $0.5 million in distributions for the
second through fourth calendar quarters of 1996. CWC seeks recovery of this
sum, plus interest.

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On December 31, 2001, CNV filed its defense to CWCs claim, denying CWCs
claims and denying that CNV is liable to CWC in any amount. Concurrently with
the filing of its defense to CWCs claims, CNV filed a separate claim against
the Palatins and Klamath, seeking recovery of $0.5 million from the Palatins
that CNV alleges was misappropriated from CNV by Mr. Palatin. Mr. Palatin has
yet to respond to CNVs claim. On April 8, 2002, Klamath filed its application
with the court seeking an order declaring that the court has no jurisdiction
over Klamath or, in the alternative, that it should exercise its discretion not
to assert jurisdiction over the Groups claims against Klamath. CNV has
opposed Klamaths application; no hearing on the application has yet been set.
The Palatins were recently served with CNVs separate claim against them, and
have yet to respond to CNVs claims; their counsel has indicated that the
Palatins will challenge the jurisdiction of the Court over them.

Collection of Palatin Notes

On May 8, 2001, the Massachusetts Superior Court entered its judgement
against Mr. Palatin and Klamath, affirming the default judgement secured on
February 8, 2000 in the New York State Supreme Court by CEB against Mr. Palatin
in the amount of $6.6 million. The Court further ordered the Groups transfer
agent to cancel 1,793,798 outstanding common shares of the Company owned of
record by Klamath (the Klamath Shares), beneficially owned by Mr. Palatin, in
partial satisfaction of the New York State Supreme Court judgement, and to
transfer the Klamath Shares on the books and records of the transfer agent to
CEB. The Groups transfer agent promptly canceled the Klamath Shares and
issued a new stock certificate for 1,793,798 common shares of the Company to
CEB. The Court also ordered Mr. Palatin and Klamath to pay CEBs fees and
expenses, including attorneys fees, incurred in securing the final judgement.

As of May 8, 2001, the amount owed by Mr. Palatin to CEB under the New
York judgement totaled $7.3 million, representing the amount of the judgement
($6.6 million) plus interest thereon at 9% per annum. The Group reduced the
amount owed by Mr. Palatin to CEB under the judgement by $6 million as a result
of the cancelation of the Klamath Shares, leaving a balance due under the
judgement of $1.3 million as of May 8, 2001.

On November 23, 2001, CEB filed its claim against Mr. Palatin in the High
Court of Justice, London, England, for the purpose of collecting the remaining
balance due to CEB under the New York judgement. CEB will seek to enforce the
claim against the estate that the Group believes is beneficially owned by Mr.
Palatin in Amersham, England. Service of the claim upon Mr. Palatin, through
his U.K. counsel, was effected on June 25, 2002. Mr. Palatin has yet to
respond to the claim, but his counsel has indicated that he will challenge the
jurisdiction of the Court over him.




Item 2  Changes in Securities and Use of Proceeds

Not applicable




Item 3  Defaults Upon Senior Securities

Not applicable




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

The Companys 2002 annual meeting of shareholders was held on Wednesday,
June 12, 2002, in Luxembourg. The record date of the meeting was fixed by the
Board of Directors of the Company at April 15, 2002. As of the record date,
the Company had outstanding 7,364,580 common shares.

The holders of 7,016,212 common shares of the Company were represented at
the 2002 annual meeting of the shareholders in person or by proxy, thus
constituting a quorum of the shareholders for the meeting. The following sets
forth the results of the shareholder voting on the matters submitted to the
shareholders at the annual meeting.

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|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------- |  | -----------------------------------------------------------------
|Election Item |  | Vote                                                                                                                                                                                                                                                                    |  | Count                                              
|              |  |                                                                                                                                                                                                                                                                         |  |                                                    
|1.            |  | Elect two directors.                                                                                                                                                                                                                                                    |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  | The nominees were:                                                                                                                                                                                                                                                      |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  | S. Nicholas Walker                                                                                                                                                                                                                                                      |  | For                                                 |  | 7,007,662                                                        
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  | Authority withheld                                  |  | 8,550                                                            
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  | Robert M. Melzer                                                                                                                                                                                                                                                        |  | For                                                 |  | 7,007,662                                                        
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  | Authority withheld                                  |  | 8,550                                                            
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|2.            |  | Approve an amendment to the
        Companys Articles of Incorporation re-authorizing the Companys
        share capital, which is set at US$50,000,000 and represented by 25,000,000
        common shares.                                                          |  | For
        Against
        Abstain
        No Vote |  | 6,876,412
          134,650
          5,150
          -0-        
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|3.            |  | Approve an amendment to the
        Companys Articles of Incorporation, confirming the authority of
        the Board of Directors of the Company to suppress preemptive rights with
        respect to the issuance or reservation for issuance of its common shares. |  | For
        Against
        Abstain
        No Vote |  | 3,461,505
          1,209,650
          5,150
          2,339,907
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|              |  |                                                                                                                                                                                                                                                                         |  |                                                     |  |                                                                  
|4.            |  | Retire and cancel 1,793,798
        common shares held by a subsidiary of the Company and previously owned
        of record by Klamath Enterprises S.A.                                                                                                                |  | For
        Against
        Abstain
        No Vote |  | 4,674,855
          1,300
          150
          2,339,907      

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The Cronos Group

|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------- |  | ------------------------------------------------------------
|Election Item |  | Vote                                                                                                                                                                                                                                                                                                                           |  | Count                                              
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                    
|5.            |  | Grant authority to the Board
        of Directors of the Company to adopt and implement, from time to time,
        a common share repurchase program.                                                                                                                                                                         |  | For
        Against
        Abstain
        No Vote |  | 4,668,205
          7,950
          150
          2,339,907 
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|6.            |  | Grant authority to the Board
        of Directors to grant common shares of the Company to officers and employees
        in lieu, in whole or in part, of cash bonuses awarded to officers and
        employees.                                                                                                             |  | For
        Against
        Abstain
        No Vote |  | 6,311,645
          137,650
          566,917
          -0- 
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|7.            |  | Approve the appointment of
        Deloitte & Touche S.A. as the Companys independent auditors for
        the year ending December 31, 2002 for both the consolidated and unconsolidated
        accounts, and grant of authorization to the Board of Directors to fix
        the compensation of the independent auditors. |  | For
        Against
        Abstain
        No Vote |  | 7,014,412
          1,650
          150
          -0-       
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|8.            |  | Approve the consolidated and
        unconsolidated financial statements of the Company for the year ended
        December 31, 2001 and the reports of the Companys independent
        auditors and Board of Directors thereon.                                                                                             |  | For
        Against
        Abstain
        No Vote |  | 6,989,312
          6,650
          20,250
          -0-    
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|              |  |                                                                                                                                                                                                                                                                                                                                |  |                                                     |  |                                                             
|9.            |  | Discharge of the following
        directors of the Company pursuant to Article 74 of Luxembourgs
        Companies Law from the execution of their mandate for the year ended December 31,
        2001: Dennis J. Tietz, Peter J. Younger, Maurice Taylor, Charles Tharp,
        S. Nicholas Walker and Robert M. Melzer.  |  | For
        Against
        Abstain
        No Vote |  | 5,926,312
          14,650
          1,075,250
          -0-

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The Cronos Group

|              |  |                                                                                                                         |  |                                                     |  |                                                            
|------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------- |  | -----------------------------------------------------------
|Election Item |  | Vote                                                                                                                    |  | Count                                              
|              |  |                                                                                                                         |  |                                                    
|10.           |  | Approve the allocation of
        the profit/loss reported by the Company for the year ended December 31,
        2001. |  | For
        Against
        Abstain
        No Vote |  | 5,913,412
          7,650
          1,095,150
          -0-

The election of the two nominees for director required the approval, in
person or by proxy, of the holders of a majority of the issued and outstanding
common shares of the Company; proposals number 2, 3, and 4 to amend the
Companys Articles of Incorporation re-authorizing the share capital,
confirming the authority of the Board of the Company to suppress preemptive
rights, and approving the retirement and cancellation of the common shares
previously owned of record by Klamath Enterprises S.A. required the approval of
the holders of at least two-thirds of the shares present in person or
represented by proxy at the meeting; and the balance of the proposals submitted
to the shareholders required the approval of the holders of a majority of the
shares present in person or represented by proxy at the meeting. The proxy
distributed to each shareholder of the Company stated that, for shareholders
returning a proxy and not giving any direction as to a particular proposal, the
shares represented thereby would be voted by the management proxies forthe
proposal.

Based upon the foregoing, each of managements two candidates for director
was elected to the Board, to serve for the term set forth in the proxy
statement, and each of the other proposals submitted to the shareholders by
management was approved.




Item 5  Other Information

Not applicable




Item 6  Exhibits and Reports on Form 8-K

(a)  Exhibits

99.1 Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K

On May 23, 2002, a Current Report on Form 8-K was filed by the Company
announcing the grant of common shares of the Company to certain eligible
employees and agents.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

THE CRONOS GROUP

|          |  |                      |  |                                                                                                                       |  |            
|--------- |  | -------------------- |  | --------------------------------------------------------------------------------------------------------------------- |  | -----------
|SIGNATURE |  | TITLE                |  | DATE                                                                                                                 
|          |  |                      |  |                                                                                                                      
|          |  |                      |  |                                                                                                                       |  |            
|By        |  | /s/ PETER J. YOUNGER |  | Director, Chief Operating Officer,                                                                                    |  | Aug 9, 2002
|          |  | Peter J. Younger     |  | Chief Financial Officer and
          Chief Accounting Officer
          (Principal Financial and Accounting Officer) |  |            

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The Cronos Group

Exhibit Index

|       |  |                                                                                                                   |  |      |    | 
|------ |  | ----------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|Number |  | Exhibit                                                                                                           |  | Page
|       |  |                                                                                                                   |  |     
|99.1   |  | Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. |  |      | 26 | 
|      
|99.2   |  | Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. |  |      | 27 | 

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