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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 2003 OR [  ] 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 0-23886 CRONOS GLOBAL INCOME FUND XV, L.P.  California
(State or other jurisdiction of
incorporation or organization)
    
    94-3186624
(I.R.S. Employer Identification No.)
 One Front Street, Suite 925, San Francisco, California
(Address of principal executive offices)
    94111
(Zip Code)
 Registrants telephone number, including area code (415) 677-8990 Securities registered pursuant to Section 12(b) of the Act: Title of each class
    
    Name of each exchange on
which registeredNot Applicable
 Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTERESTS 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]. No [  ]. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.    [X] Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [  ]. No [X]. The aggregate market value of the voting stock held by non-affiliates of the
registrant is not applicable. Documents incorporated by Reference  Prospectus of Cronos Global Income Fund XV, L.P., dated December 17, 1993
included as part of Registration Statement on Form S-1 (No. 33-69356)




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CRONOS GLOBAL INCOME FUND XV, L.P. Report on Form 10-K for the Fiscal Year
Ended December 31, 2003 TABLE OF CONTENTS PAGEPART I
    
    
    3Item 1  Business
    
    
    3Item 2  Properties
    
    
    11Item 3  Legal Proceedings
    
    
    11Item 4  Submission of Matters to a Vote of Security Holders
    
    
    11PART II
    
    
    12Item 5  Market for the Registrants Common Equity and Related Stockholder Matters
    
    
    12Item 6  Selected Financial Data
    
    
    13Item 7  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 7A   Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 8  Financial Statements and Supplementary Data
    
    
    22Item 9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    35Item 9A  Controls and Procedures
    
    
    35PART III
    
    
    36Item 10  Directors and Executive Officers of the Registrant
    
    
    36Item 11  Executive Compensation
    
    
    39Item 12  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    40Item 13  Certain Relationships and Related Transactions
    
    
    40Item 14  Principal Accountant Fees and Services
    
    
    40PART IV
    
    
    42Item 15  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    42EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32
  2




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PART I 
 Item 1. Business (a) General Development of Business The Registrant is a limited partnership organized under the laws of the
State of California on August 26, 1993, for the purpose of owning and leasing
marine cargo containers, special purpose containers and container-related
equipment. The Registrant was initially capitalized with $100 and commenced
offering its limited partnership interests to the public subsequent to December
17, 1993, pursuant to its Registration Statement on Form S-1 (File No.
33-69356). On October 12, 1994, the Registrant filed a Post-Effective
Amendment to its Registration Statement on Form S-1. The offering terminated
on December 15, 1995. The Registrant raised $143,031,380 in subscription proceeds. The
following table sets forth the use of said subscription proceeds: Percentage ofAmount
    
    Gross ProceedsGross Subscription Proceeds
    
    $
    143,031,380
    
    
    
    100.0
    %Public Offering Expenses:Underwriting Commissions
    
    $
    14,303,138
    
    
    
    10.0
    %Offering and Organization Expenses
    
    $
    2,977,551
    
    
    
    2.1
    %Total Public Offering Expenses
    
    $
    17,280,689
    
    
    
    12.1
    %Net Proceeds
    
    $
    125,750,691
    
    
    
    87.9
    %Acquisition Fees
    
    $
    5,918,588
    
    
    
    4.1
    %Working Capital Reserve
    
    $
    1,460,334
    
    
    
    1.0
    %Gross Proceeds Invested in Equipment
    
    $
    118,371,769
    
    
    
    82.8
    %
 The general partner of the Registrant is Cronos Capital Corp. (CCC), a
wholly-owned subsidiary of Cronos Holdings/Investments (U.S.), Inc., a Delaware
corporation. These and other affiliated companies are ultimately wholly-owned
by The Cronos Group, a holding company registered in Luxembourg (the Parent
Company) and are collectively referred to as the Group. The activities of
the container division of the Group are managed through the Groups subsidiary
in the United Kingdom, Cronos Containers Limited (the Leasing Company). The
Leasing Company manages the leasing operations of all equipment owned by the
Group on its own behalf or on behalf of other third-party container owners,
including all programs organized by CCC. On December 1, 1993, the Leasing Company entered into a Leasing Agent
Agreement with the Registrant assuming the responsibility for all container
leasing activities. For a discussion of recent developments in the Registrants business, see
Item 7, Managements Discussion and Analysis of Financial Condition and Result
of Operations. For information concerning the containers acquired by the Registrant, see
Item 2, Properties. 3




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(b) Financial Information About Segments An operating segment is a component of an enterprise that engages in
business activities from which it may earn revenues and incur expenses, whose
operating results are regularly reviewed by the enterprises chief operating
decision maker to make decisions about resources to be allocated to the segment
and assess its performance, and about which separate financial information is
available. The Leasing Companys management operates the Registrants
container fleet as a homogenous unit and has determined that as such it has a
single reportable operating segment. The Registrant derives revenues from dry cargo containers, refrigerated
containers and tank containers. As of December 31, 2003, the Registrant
operated 23,744 twenty-foot, 8,242 forty-foot and 2,073 forty-foot high-cube
marine dry cargo containers, as well as 457 twenty-foot and 99 forty-foot
high-cube refrigerated cargo containers, and 221 twenty-four thousand-liter
tanks. A summary of gross lease revenue earned by the Leasing Company, on
behalf of the Registrant, by product, for the years ended December 31, 2003,
2002 and 2001 follows: 2003
    
    2002
    
    2001Dry cargo containers
    
    $
    10,416,781
    
    
    $
    10,521,020
    
    
    $
    11,271,255Refrigerated containers
    
    
    1,312,449
    
    
    
    1,343,686
    
    
    
    1,582,517Tank containers
    
    
    626,863
    
    
    
    599,789
    
    
    
    665,520Total
    
    $
    12,356,092
    
    
    $
    12,464,495
    
    
    $
    13,519,292
 Due to the Registrants lack of information regarding the physical
location of its fleet of containers when on lease in the global shipping trade,
it is impracticable to provide the geographic area information. Any attempt to
separate foreign operations from domestic operations would be dependent on
definitions and assumptions that are so subjective as to render the information
meaningless and potentially misleading. Accordingly, the Registrant believes
that it does not possess discernible geographic reporting segments as defined
in SFAS 131 (SFAS 131), Disclosures about Segments of an Enterprise and
Related Information. No single sub-lessee of the Leasing Company contributed more than 10% of
the Leasing Companys rental revenue earned on behalf of the Registrant during
2003, 2002 and 2001. (c) Narrative Description of Business (c)(1)(i) A marine cargo container is a reusable metal container designed
for the efficient carriage of cargo with a minimum of exposure to loss from
damage or theft. Containers are manufactured to conform to worldwide standards
of container dimensions and containership fittings adopted by the International
Standards Organization (ISO) in 1968. The standard container is either 20
long x 8 wide x 86 high (one twenty-foot equivalent unit (TEU), the
standard unit of physical measurement in the container industry) or 40 long x
8 wide x 86 high (two TEU). Standardization of the construction,
maintenance and handling of containers allows containers to be picked up,
dropped off, stored and repaired efficiently throughout the world. This
standardization is the foundation on which the container industry has
developed. Standard dry cargo containers are rectangular boxes with no moving parts,
other than doors, and are typically made of steel. They are constructed to
carry a wide variety of cargoes ranging from heavy industrial raw materials to
light-weight finished goods. Specialized containers such as refrigerated and
tank containers are utilized for the transport of temperature-sensitive goods
and for the carriage of liquid cargo. Cellular palletwide containers (CPCs)
provide shipping lines with a container with extra width for the carriage of
unitized or palletized cargoes. One of the primary benefits of containerization has been the ability of
the shipping industry to effectively lower freight rates due to the
efficiencies created by standardized intermodal containers. Containers can be
handled much more efficiently than loose cargo and are typically shipped via
several modes of transportation, including truck, rail and ship. Containers
require loading and unloading only once and remain sealed until arrival at the
final destination, significantly reducing transport time, labor and handling
costs and losses due to damage and theft. Efficient movement of containerized
cargo between ship and shore reduces the amount of time that a ship must spend
in port. The logistical advantages and reduced freight rates brought about by
containerization have been major catalysts for world trade growth since the
late 1960s, resulting in an increased demand for containers. The worlds
container fleet has grown from an estimated 270,000 TEU in 1969 to
approximately 17 million TEU by the end of 2003. 4




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The container leasing business is cyclical, and depends largely upon the
rate of growth in the volume of world trade. Benefits of Leasing The container fleets of leasing companies represent approximately 46% of
the worlds container fleet with the balance owned predominantly by shipping
lines. Shipping lines, which traditionally operate on tight profit margins,
often supplement their owned fleet of containers by leasing a portion of their
equipment from container leasing companies and, in doing so, achieve the
following financial and operational benefits:  
    
    Leasing allows the shipping lines to utilize the equipment they need
without having to make large capital expenditures;
    
    Leasing offers a shipping line an alternative source of financing in
a traditionally capital-intensive industry;
    
    Leasing enables shipping lines to expand their routes and market shares at a relatively low cost without making a permanent commitment to
support their new structure;
    
    Leasing allows shipping lines to respond to changing seasonal and
trade route demands, thereby optimizing their capital investment and
storage costs. Types of Leases On behalf of the Registrant, the Leasing Company leases the Registrants
containers primarily to shipping lines operating in major trade routes (see
Item 1(d)). Most if not all of the Registrants marine dry cargo containers
are leased pursuant to operating leases, whereby the containers are leased to
the ocean carrier on a daily basis for any desired length of time, with the
flexibility of picking up and dropping off containers at various agreed upon
locations around the world. Some of the Registrants containers may be leased
pursuant to term leases, which may have durations of one to five years.
Specialized containers are generally leased on longer-term leases because the
higher cost, value and complexity of this equipment makes it more expensive to
redeliver and lease out.  
    
    Master lease.Master leases are leases under which a customer may
lease a certain number of containers, as needed, under a general
agreement between the lessor and the lessee. Such leases provide
customers with greater flexibility by allowing customers to pick up and
drop off containers where and when needed, subject to restrictions and
availability, on pre-agreed terms. Master leases also define the number
of containers that may be returned within each calendar month, the
return locations and applicable drop-off charges. Due to the increased
flexibility they offer, master leases usually command higher per-diem
rates and generate more ancillary revenue (including pick-up, drop-off,
handling and off-hire fees) than term leases. Ocean carriers generally
use one-way leases to manage trade imbalances (where more containerized
cargo moves in one direction than another) by picking up a container in
one port and dropping it off at another location after one or more legs
of a voyage. The commercial terms of master leases are usually
negotiated annually.
    
    Term lease.Term leases are for a fixed period of time and include
both long and short-term commitments, typically varying from three to
five years. Term lease agreements may contain early termination
penalties that apply in the event of early redelivery. In most cases,
however, equipment cannot be returned prior to the expiration of the
lease. Term leases provide greater revenue stability to the lessor, but
at lower lease rates than master leases. Ocean carriers use term leases
to lower their operating costs when they have a need for identified
containers for a specified term. They differ from master leases in that
they define the number of containers to be leased and the lease term. The percentage of equipment on term leases as compared to master leases
varies widely among leasing companies, depending upon each companys leasing
strategy regarding profit margins, operating costs and cash flows. Lease rates depend on several factors including a customers financial
strength, type of lease, length of term, type and age of the equipment,
equipment replacement costs, interest rates, maintenance provided, and market
conditions. 5




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The terms and conditions of the Leasing Companys leases provide that
customers are responsible for paying all taxes and service charges arising from
container use, maintaining the containers in good and safe operating condition
while on lease and paying for repairs, excluding ordinary wear and tear, upon
redelivery. Some leases provide for a damage protection plan whereby
lessees, for an additional payment (which may be in the form of a higher
per-diem rate), are relieved of the responsibility of paying some of the repair
costs upon redelivery of the containers. The Leasing Company provides this
service to selected customers. Repairs provided under such plans are carried
out by the same depots, under the same procedures, as are repairs to containers
not covered by such plans. Customers also are required to insure leased
containers against physical damage and loss, and against third party liability
for loss, damage, bodily injury or death. Customers The Registrant is not dependent upon any particular customer or group of
customers of the Leasing Company. None of those customers account for more
than 10% of the Leasing Companys rental revenue earned on behalf of the
Registrant. Substantially all of the customers of the Leasing Company are
billed and pay in United States dollars. The Leasing Company sets maximum credit limits for the Registrants
customers, limiting the number of containers leased to each according to
established credit criteria. The Leasing Company continually tracks its credit
exposure to each customer. The Leasing Companys credit committee meets
quarterly to analyze the performance of the Registrants customers and to
recommend actions to be taken in order to minimize credit risks. The Leasing
Company uses specialist third party credit information services and reports
prepared by local staff to assess credit applications. The Registrant may be subject to unexpected loss in rental revenue from
sub-lessees of its containers that default under their container lease
agreements with the Leasing Company. The Registrant and Leasing Company
maintain insurance against loss or damage to the containers, loss of lease
revenue in certain cases and costs of container recovery and repair in the
event that a customer declares bankruptcy. Fleet Profile The Registrant acquired high-quality dry cargo containers manufactured to
specifications that exceed ISO standards and are designed to minimize repair
and operating costs. Dry cargo containers are the most commonly used type of container in the
shipping industry. The Registrants dry cargo container fleet is constructed
of all Corten® steel (i.e., Corten® roofs, walls, doors and undercarriage),
which is a high-tensile steel yielding greater strength, damage and corrosion
resistance than mild steel. Refrigerated containers are used to transport temperature-sensitive
products, such as meat, fruit, vegetables and photographic film. All of the
Registrants refrigerated containers have high-grade stainless steel interiors.
The majority of the Registrants 20-foot refrigerated containers have
high-grade stainless steel outer walls, while most of the Registrants 40-foot
refrigerated containers are steel framed with aluminum outer walls to reduce
weight. As with the dry cargo containers, all refrigerated containers are
designed to minimize repair and maintenance and maximize damage resistance. Tank containers are constructed in compliance with International Maritime
Organization (IMO) standards and recommendations. The tanks purchased by the
Registrant all have been IMO-1 type tanks constructed to comply with IMO
recommendations, which require specific pressure ratings and shell thickness.
These tanks are designed to carry highly flammable materials, corrosives,
toxics and oxidizing substances, but are also capable of carrying non-hazardous
materials and foodstuffs. They have a capacity of 21,000-24,000 liters and are
generally insulated and equipped with steam or electrical heating. The Registrant purchased its dry cargo containers from manufacturers in
China, South Korea, Taiwan, Indonesia, India, Turkey, Italy, Hong Kong and the
United Kingdom. The Registrants refrigerated containers were purchased mainly
from Korean manufacturers. The majority of its refrigeration units were
purchased from Carrier Transicold, the primary container refrigeration unit
supplier in the United States. The Registrants tank containers were purchased
mainly from United Kingdom manufacturers. 6




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As of December 31, 2003, the Registrant owned 23,744 twenty-foot, 8,242
forty-foot and 2,073 forty-foot high-cube marine dry cargo containers, as well
as 457 twenty-foot and 99 forty-foot high-cube refrigerated cargo containers,
and 221 twenty-four thousand-liter tanks. The following table sets forth the
number of containers on lease, by container type and lease type as of December
31, 2003: Number ofContainers on Lease20-Foot Dry Cargo Containers:Term Leases
    
    
    5,039Master Leases
    
    
    15,814Total on lease
    
    
    20,85340-Foot Dry Cargo Containers:Term Leases
    
    
    1,523Master Leases
    
    
    5,057Total on lease
    
    
    6,58040-Foot High-Cube Dry Cargo Containers:Term Leases
    
    
    470Master Leases
    
    
    1,412Total on lease
    
    
    1,88220-Foot Refrigerated Cargo Containers:Term Leases
    
    
    164Master Leases
    
    
    237Total on lease
    
    
    40140-Foot High-Cube Refrigerated Cargo Containers:Term Leases
    
    
    97Master Leases
    
    
    2Total on lease
    
    
    9924,000-Liter Tank Containers:Term Leases
    
    
    61Master Leases
    
    
    128Total on lease
    
    
    189
 The Leasing Company makes payments to the Registrant based upon rentals
collected from customers after deducting certain operating expenses associated
with the containers, such as the base management fee payable to the Leasing
Company, certain expense reimbursements payable to CCC and the Leasing Company,
the costs of maintenance and repairs not performed by lessees, independent
agent fees and expenses, depot expenses for handling, inspection and storage,
and additional insurance. Repair and Maintenance All containers are inspected and repaired when redelivered by customers,
who are obligated to pay for all damage repair, excluding wear and tear,
according to standardized industry guidelines. Some customers are relieved of
the responsibility of paying some repair costs upon redelivery of containers,
as described under Description of Business - Lease Profile. Depots in major
port areas perform repair and maintenance that is verified by either
independent surveyors or the Leasing Companys technical and operations staff. Before any repair or refurbishment is authorized on older containers in
the Registrants fleet, the Leasing Companys technical and operations staff
reviews the age, condition and type of container, and its suitability for
continued leasing. The Leasing Company compares the cost of such repair or
refurbishment with the prevailing market resale price that might be obtained
for that container and makes the appropriate decision whether to repair or sell
the container. The Leasing Company is authorized to make this decision on
behalf of the Registrant and makes this decision by applying the same standards
to the Registrants containers as to its own containers. 7




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Disposition of Used Containers The Leasing Company estimates that the period for which a container may be
used by the Registrant as a leased marine cargo container ranges from 12 to 15
years. Tank containers may generally be used for 12 to 18 years. On behalf of
the Registrant, the Leasing Company disposes of used containers in a worldwide
market in which buyers include wholesalers, mini-storage operations,
construction companies and others. Although a used refrigerated container will
command a higher price than a used dry cargo container, a dry cargo container
will achieve a higher percentage of its original price. The market for used
containers generally depends on new container prices, the quantity of
containers targeted for disposal and the overall lease market for containers at
a particular location. As the Registrants fleet ages, a larger proportion of
its revenue and cash flow may be derived from selling its containers. Operations The Registrants container sales and marketing operations are conducted
through the Leasing Company in the United Kingdom, with support provided by
area offices and dedicated agents located in San Francisco; New Jersey;
Antwerp; Genoa; Gothenburg; Hamburg; Singapore; Hong Kong; Sydney; Tokyo;
Taipei; Seoul; Rio de Janeiro; Shanghai and Madras. The Leasing Company also maintains agency relationships with approximately
20 independent agents around the world, who are generally paid a commission
based upon the amount of revenues generated in the region or the number of
containers that are leased from their area. The agents are located in
jurisdictions where the volume of the Leasing Companys business necessitates a
presence in the area but is not sufficient to justify a fully-functioning
Leasing Company office or dedicated agent. Agents provide marketing support to
the area offices covering the region, together with limited operational
support. In addition, the Leasing Company relies on the services of approximately
300 independently-owned and operated depots around the world to inspect,
repair, maintain and store containers while off-hire. The Leasing Companys
area offices authorize all container movements into and out of the depot and
supervise all repairs and maintenance performed by the depot. The Leasing
Companys technical staff sets the standards for repair of its owned and
managed fleet throughout the world and monitors the quality of depot repair
work. The depots provide a vital link to the Leasing Companys operations, as
the redelivery of a container into a depot is the point at which the container
is off-hired from one customer and repaired in preparation for re-leasing to
the next customer. The Leasing Companys global network is integrated with its computer
system and provides 24-hour communication between offices, agents and depots.
The system allows the Leasing Company to manage and control the Registrants
fleet on a global basis, providing it with the responsiveness and flexibility
necessary to service the master lease market effectively. This system is an
integral part of the Leasing Companys service, as it processes information
received from the various offices, generates billings to the Leasing Companys
lessees and produces a wide range of reports on all aspects of the Leasing
Companys leasing activities. The system records the life history of each
container, including the length of time on and off-hire and repair costs, as
well as port activity trends, leasing activity and equipment data per customer.
The operations and marketing data is fully interfaced with the finance and
accounting system to provide revenue, cost and asset information to management
and staff around the world. In recent years, the Leasing Company and other lessors have developed
certain internet-based applications. For the Leasing Company, these
applications allow customers access to make on-line product inquiries. The
Leasing Company is continuing to develop its internet-based business and will
introduce other internet options as soon as suitable applications are
identified. 8




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Insurance The Leasing Companys lease agreements typically require lessees to obtain
insurance to cover all risks of physical damage and loss of the equipment under
lease, as well as public liability and property damage insurance. However, the
precise nature and amount of the insurance carried by each ocean carrier varies
from lessee to lessee. In addition, the Registrant has purchased secondary
insurance effective in the event that a lessee fails to have adequate primary
coverage. This insurance covers liability arising out of bodily injury and/or
property damage as a result of the ownership and operation of the containers,
as well as insurance against loss or damage to the containers, loss of lease
revenue in certain cases and cost of container recovery and repair in the event
that a customer goes into bankruptcy. The Registrant believes that the nature
and the amounts of its insurance are customary in the container leasing
industry and subject to standard industry deductions and exclusions. (c)(1)(ii) Inapplicable. (c)(1)(iii) Inapplicable. (c)(1)(iv) Inapplicable. (c)(1)(v) The Registrants containers are leased globally; therefore,
seasonal fluctuations are minimal. Other economic and business factors to
which the transportation industry in general and the container leasing industry
in particular are subject, include fluctuations in general business conditions
and fluctuations in supply and demand for equipment resulting from, among other
things, obsolescence, changes in the methods or economics of a particular mode
of transportation or changes in governmental regulations or safety standards. (c)(1)(vi) The Registrant established an initial working capital reserve
of approximately 1% of subscription proceeds raised. In addition, the
Registrant may reserve additional amounts from anticipated cash distributions
to the partners to meet working capital requirements. Amounts due under master leases are calculated at the end of each month
and billed approximately six to eight days thereafter. Amounts due under
short-term and long-term leases are set forth in the respective lease
agreements and are generally payable monthly. However, payment is normally
received within 45-100 days of billing. Past due penalties are not customarily
collected from lessees and, accordingly, are not generally levied by the
Leasing Company against lessees of the Registrants containers. (c)(1)(vii) For the year ended December 31, 2003, no single sub-lessee of
the Leasing Company accounted for more than 10% of the Leasing Companys rental
income earned on behalf of the Registrant. The Registrant does not believe
that its ongoing business is dependent upon a single customer, although the
loss of one or more of its largest customers could have an adverse effect upon
its business. (c)(1)(viii) Inapplicable. (c)(1)(ix) Inapplicable. (c)(1)(x) Competition among container leasing companies is based upon
several factors, including the location and availability of inventory, lease
rates, the type, quality and condition of the containers, the quality and
flexibility of the service offered and the professional relationship between
the customer and the lessor. Other factors include the speed with which a
leasing company can prepare its containers for lease and the ease with which a
lessee believes it can do business with a lessor or its local area office. Not
all container leasing companies compete in the same market, as some supply only
dry cargo containers and not specialized containers. In addition to dry cargo
containers, refrigerated containers and tanks, the Leasing Company supplies a
wide range of dry freight special containers. 9




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The Leasing Company, on behalf of the Registrant, competes with various
container leasing companies in the markets in which it conducts business.
Mergers and acquisitions have been a feature of the container leasing industry
for over a decade and the leasing market is essentially comprised of three
broad groups: the very large companies (in TEU terms), GESeaCo, Textainer
Group, Transamerica Leasing, Triton Container International Ltd. and Interpool
Inc., who between them, with fleets of around 1 million TEU each in mid-2002,
control approximately 70% of the total leased fleet; a middle tier of
companies, which includes Cronos, possessing fleets in the 200,000 to 500,000
TEU range; and the smaller more specialized fleet operators. Ocean carriers
have a tendency to support a number of lessors simultaneously in order to
maximize competition and increase the number of available locations for
redelivery of containers. Economies of scale, worldwide operations, diversity,
size of fleet and financial strength are increasingly important to the
successful operation of a container leasing business. Additionally, as
containerization continues to grow, and as regions such as China, South America
and the Indian sub-continent generate an increasing volume of containerized
cargo, customers may demand more flexibility from leasing companies
particularly regarding the structure of leases, per-diem rates, pick-up and
drop-off locations, and the availability of containers. Some of the Leasing Companys competitors have greater financial resources
than the Leasing Company and may be more capable of offering lower per-diem
rates on a larger fleet. In the Leasing Companys experience, however, ocean
carriers will generally lease containers from more than one leasing company in
order to minimize dependence on a single supplier. Furthermore, by having as
many suppliers as possible, the carrier is able to maximize the number of
off-hires and off-hire locations available, as typically each supplier may
limit the number of containers that can be off-hired by location. The
advantage to the carrier is that this prevents the carrier from being burdened
with an excess number of off-hired containers, which incur both storage and
per-diem charges, in a low demand market. (c)(1)(xi) Inapplicable. (c)(1)(xii) Environmental Matters Countries that are signatories to the Montreal Protocol on the environment
agreed in November 1992 to restrict the use of environmentally-destructive
refrigerants, banning the production (but not use) of refrigerant gases that
are chlorofluorocarbon compounds (CFCs) beginning in January 1996. CFCs are
used in the operation, insulation and manufacture of refrigerated containers.
The environmental impact of CFCs has become increasingly prominent. On January
1, 2001, it became illegal for environmentally-destructive refrigerants to be
handled, other than for disposal, in most member countries of the European
Union. A portion of the Registrants equipment portfolio consists of special
purpose containers, primarily refrigerated containers. All of the Registrants
refrigerated containers use non-CFC refrigerant gas in the operation and
insulation of the containers. The Leasing Company has determined that a retrofit of any containers owned
by the Registrant is not necessary. In the unlikely event that retrofitting
expenses should be required, the Registrant believes they would not be material
to its results of operations. (c)(1)(xiii) The Registrant, as a limited partnership, is managed by CCC,
the general partner, and accordingly does not itself have any employees. At
February 29, 2004, CCC had 11 employees, consisting of 3 officers, 5 other
managers and 3 clerical and staff personnel and the Leasing Company had 30
employees, consisting of 2 officers, 13 other managers, and 15 clerical and
staff personnel. (d) Financial Information About Geographic Areas The Registrants business is not divided between foreign or domestic
operations. The Registrants business is the leasing of containers worldwide
to ocean carriers. To this extent, the Registrants operations are subject to
the fluctuations of world economic and political conditions. Such factors may
affect the pattern and levels of world trade. The Registrant believes that the profitability of, and risks associated
with, leases to foreign customers is generally the same as those of leases to
domestic customers. The Leasing Companys leases generally require all
payments to be made in United States currency. 10




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##### Table of Contents



Item 2. Properties As of December 31, 2003, the Registrant owned 23,744 twenty-foot, 8,242
forty-foot and 2,073 forty-foot high-cube marine dry cargo containers, as well
as 457 twenty-foot and 99 forty-foot high-cube refrigerated cargo containers,
and 221 twenty-four thousand-liter tanks, suitable for transporting cargo by
rail, sea or highway. The average age, manufacturers invoice cost and
estimated useful life of the Registrants containers as of December 31, 2003
was as follows: EstimatedUseful Life
    
    Average Age
    
    Average Cost20-Foot Dry Cargo Containers
    
    12-15  years
    
    9 years
    
    $
    2,47240-Foot Dry Cargo Containers
    
    12-15  years
    
    9 years
    
    $
    3,97440-Foot High-Cube Dry Cargo Containers
    
    12-15  years
    
    8 years
    
    $
    4,03120-Foot Refrigerated Cargo Containers
    
    12-15  years
    
    9 years
    
    $
    21,20140-Foot High-Cube Refrigerated Cargo
Containers
    
    12-15  years
    
    10 years
    
    $
    24,24524,000-Liter Tanks
    
    12-18  years
    
    9 years
    
    $
    25,398
 Utilization by lessees of the Registrants containers fluctuates over time
depending on the supply of and demand for containers in the Registrants
inventory locations. During 2003, utilization of the dry cargo and
refrigerated container fleet averaged 82% and 92% respectively. Utilization of
the tank container fleet averaged 85%. During 2003, the Registrant disposed of 757 twenty-foot, 223 forty-foot
and 24 forty-foot high-cube marine dry cargo containers, as well as three
twenty-foot refrigerated cargo containers, and four twenty-four thousand-liter
tanks, at an average net loss of $294 per container. 
 Item 3. Legal Proceedings Inapplicable. 
 Item 4. Submission of Matters to a Vote of Security Holders Inapplicable. 11




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##### Table of Contents



PART II 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters (a) Market Information (a)(1)(i) The Registrants outstanding units of limited partnership
interests are not traded on any market nor does an established public trading
market exist for such purposes. (a)(1)(ii) Inapplicable. (a)(1)(iii) Inapplicable. (a)(1)(iv) Inapplicable. (a)(1)(v) Inapplicable. (a)(2) Inapplicable. (c) Holders (b)(1) Number of Unit HoldersTitle of Class
    
    as of December 31, 2003Units of limited partnership interests
    
    
    8,085
 (c) Dividends Inapplicable. For the distributions made by the Registrant to its limited
partners, see Item 6, Selected Financial Data. (d) Securities authorized for issuance under equity compensation plans Inapplicable. 12




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##### Table of Contents



Item 6. Selected Financial Data Year Ended December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999Net lease revenue
    
    $
    7,237,850
    
    
    $
    7,046,605
    
    
    $
    7,581,717
    
    
    $
    10,272,079
    
    
    $
    9,652,424Net (loss) income
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )
    
    $
    (48,308
    )
    
    $
    3,167,590
    
    
    $
    2,364,087Net (loss) income per unit of
limited partnership interest
    
    $
    (0.07
    )
    
    $
    (0.16
    )
    
    $
    (0.05
    )
    
    $
    0.37
    
    
    $
    0.25Cash distributions per unit of
limited partnership interest
    
    $
    1.22
    
    
    $
    0.92
    
    
    $
    1.14
    
    
    $
    1.31
    
    
    $
    1.63At year-end:Total assets
    
    $
    61,609,258
    
    
    $
    71,296,872
    
    
    $
    79,389,081
    
    
    $
    88,017,878
    
    
    $
    94,699,419Partners capital
    
    $
    61,609,258
    
    
    $
    71,296,872
    
    
    $
    79,389,081
    
    
    $
    88,017,878
    
    
    $
    94,699,419
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations The following discussion of the Registrants historical financial
condition and results of operations should be read in conjunction with the
historical consolidated financial statements and the notes thereto and the
other financial information appearing elsewhere in this report. The information in this Annual Report on Form 10-K (the Report) contains
certain forward-looking statements within the meaning of the securities law.
These forward-looking statements reflect the current view of the Registrant and
CCC, with respect to future events and financial performance and are subject to
a number of risks and uncertainties, many of which are beyond the control of
the Registrant and CCC. All statements other than statements of historical
facts included in this Report, including statements under Managements
Discussion and Analysis of Financial Condition and Results of Operations,
regarding the Registrants strategy, future operations, financial position,
estimated revenues, projected costs, prospects, plans and objectives of the
Registrant are forward-looking statements. All forward-looking statements speak only as of the date of this Report.
The Registrant does not undertake any obligation to update or revise publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise. Although the Registrant and CCC believe that their plans,
intentions and expectations reflected in or suggested by the forward-looking
statements made in this report are reasonable, the Registrant and CCC can give
no assurance that these plans, intentions or expectations will be achieved.
Future economic, political and industry trends that could potentially impact
revenues and profitability are difficult to predict, as well as the risks and
uncertainties including, but not limited to, changes in demand for leased
containers, changes in global business conditions and their effect on world
trade, changes within the global shipping industry, the financial strength of
the shipping lines and other sub-lessees of the Registrants containers,
fluctuations in new container prices, changes in the costs of maintaining and
repairing used containers, changes in competition, changes in the ability of
the Leasing Company to maintain insurance on behalf of the Registrants
container fleet, as well as other risks detailed herein and from time to time
in the Registrants filings with the Securities and Exchange Commission. 13




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##### Table of Contents



Liquidity and Capital Resources The Registrants primary objective is to generate cash flow from
operations for distribution to its limited partners and during the initial
years of its operation, reinvest excess cash flow in additional equipment.
Aside from the initial working capital reserve retained from gross subscription
proceeds (equal to approximately 1% of such proceeds), the Registrant relies
primarily on container rental receipts to meet this objective, as well as to
finance operating needs. No credit lines are maintained to finance working
capital. Cash distributions from operations are allocated 5% to the general partner
and 95% to the limited partners. Distributions of sales proceeds are allocated
1% to the general partner and 99% to the limited partners. This sharing
arrangement will remain in place until the limited partners have received
aggregate distributions in an amount equal to their capital contributions plus
an 8% cumulative, compounded (daily) annual return on their adjusted capital
contributions. Thereafter, all distributions will be allocated 15% to the
general partner and 85% to the limited partners, pursuant to Section 6.1(b) of
the Registrants Partnership Agreement. Cash distributions from operations to
the general partner in excess of 5% of distributable cash will be considered an
incentive fee and compensation to the general partner. From inception through February 28, 2004, the Registrant has distributed,
on a cash basis, $91,204,417 in cash from operations, and $2,264,661 in cash
from container sales proceeds to its limited partners. This represents total
cash basis distributions of $93,469,078 or 65% of the limited partners
original invested capital. Distributions are paid monthly based primarily on
each quarters cash flow from operations. Monthly distributions are also
affected by periodic increases or decreases to working capital reserves, as
deemed appropriate by the general partner. At December 31, 2003, the Registrant had $3,637,938 in cash and cash
equivalents, a decrease of $741,574 and $74,149 from the cash balances at
December 31, 2002 and 2001, respectively. The Registrant invests its working
capital, as well as cash flows from operations and the sale of containers that
have not yet been distributed to CCC or its limited partners in money market
funds. Cash from Operating Activities: Net cash provided by operating activities,
primarily generated from the billing and collection of net lease revenue, was
$7,217,234 during 2003, compared to $6,714,548 during 2002. Cash from Investing Activities: Net cash provided by investing activities
was $1,209,725 and $863,338 in 2003 and 2002, respectively. These amounts
represent sales proceeds generated from the sale of rental equipment. Cash from Financing Activities: Net cash used in financing activities was
$9,168,533 during 2003 compared to $6,910,461 during 2002. These amounts
represent distributions to the Registrants general and limited partners. Off-Balance Sheet Arrangements As part of the Registrants ongoing business, the Registrant does not
participate in transactions that generate relationships with unconsolidated
entities or financial partnerships, such as entities often referred to as
structured finance or special purpose entities (SPEs), which would have been
established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes. As of December 31, 2003, the
Registrant was not involved in any material unconsolidated SPE transactions. Contractual Obligations As of December 31, 2003, the Registrant did not have any contractual
obligations or commercial commitments. 14




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##### Table of Contents



Results of Operations Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002 Pursuant to the Limited Partnership Agreement of the Registrant, all
authority to administer the business of the Registrant is vested in CCC. A
Leasing Agent Agreement (Agreement) exists between the Registrant and the
Leasing Company, whereby the Leasing Company has the responsibility to manage
the leasing operations of all equipment owned by the Registrant. Pursuant to
the Agreement, the Leasing Company is responsible for leasing, managing and
re-leasing the Registrants containers to ocean carriers, and has full
discretion over which ocean carriers and suppliers of goods and services it may
deal with. The Leasing Agent Agreement permits the Leasing Company to use the
containers owned by the Registrant, together with other containers owned or
managed by the Leasing Company and its affiliates, as part of a single fleet
operated without regard to ownership. The primary component of the Registrants results of operations is net
lease revenue. Net lease revenue is determined by deducting direct operating
expenses, management fees and reimbursed administrative expenses, from gross
lease revenues billed by the Leasing Company from the leasing of the
Registrants containers. Net lease revenue is directly related to the size,
utilization and per-diem rental rates of the Registrants fleet. Direct
operating expenses are direct costs associated with the Registrants
containers. Direct operating expenses may be categorized as follows:  
    
    Activity-related expenses include agents costs and depot costs such
as repairs, maintenance and handling.
    
    Inventory-related expenses relate to off-hire containers and comprise
storage and repositioning costs. These costs are sensitive to the
quantity of off-hire containers as well as the frequency at which
containers are re-delivered.
    
    Legal and other expenses include legal costs, insurance and
provisions for doubtful accounts. At December 31, 2003, approximately 91% of the original equipment remained
in the Registrants fleet, as compared to approximately 94% at December 31,
2002. The following chart summarizes the composition of the Registrants fleet
(based on container type) at December 31, 2003. Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot
    
    
    
    
    
    40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    High-Cube
    
    24,000-LiterContainers on lease:Master lease
    
    
    15,814
    
    
    
    5,057
    
    
    
    1,412
    
    
    
    237
    
    
    
    2
    
    
    
    128Term lease (1-5 years)
    
    
    5,039
    
    
    
    1,523
    
    
    
    470
    
    
    
    164
    
    
    
    97
    
    
    
    61Subtotal
    
    
    20,853
    
    
    
    6,580
    
    
    
    1,882
    
    
    
    401
    
    
    
    99
    
    
    
    189Containers off lease
    
    
    2,891
    
    
    
    1,662
    
    
    
    191
    
    
    
    56
    
    
    
    
    
    
    
    32Total container fleet
    
    
    23,744
    
    
    
    8,242
    
    
    
    2,073
    
    
    
    457
    
    
    
    99
    
    
    
    221
 Dry Cargo
    
    Refrigerated
    
    TankContainers
    
    Containers
    
    Containers40-Foot20-Foot
    
    40-Foot
    
    High-Cube
    
    20-Foot
    
    40-Foot
    
    24,000-LiterUnits
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %
    
    Units
    
    %Total purchases
    
    
    26,446
    
    
    
    100
    %
    
    
    8,751
    
    
    
    100
    %
    
    
    2,179
    
    
    
    100
    %
    
    
    463
    
    
    
    100
    %
    
    
    100
    
    
    
    100
    %
    
    
    229
    
    
    
    100
    %Less disposals
    
    
    2,702
    
    
    
    10
    %
    
    
    509
    
    
    
    6
    %
    
    
    106
    
    
    
    5
    %
    
    
    6
    
    
    
    1
    %
    
    
    1
    
    
    
    1
    %
    
    
    8
    
    
    
    3
    %Remaining fleet at
December 31, 2003
    
    
    23,744
    
    
    
    90
    %
    
    
    8,242
    
    
    
    94
    %
    
    
    2,073
    
    
    
    95
    %
    
    
    457
    
    
    
    99
    %
    
    
    99
    
    
    
    99
    %
    
    
    221
    
    
    
    97
    %
 Industry observers report that global container trade grew by an estimated
8% during 2003, contributing to favorable container leasing market conditions,
including high levels of demand for existing containers and a decline in
off-hire container inventories. As a result, the Registrant maintained a high
level of utilization for its dry containers, with an average of 82% during 2003
as compared to 75% and 67%, in 2002 and 2001, respectively. The current
leasing market contrasts sharply with container leasing market conditions
experienced during 2001, when the demand for dry cargo containers was adversely
affected by a slowdown in the global economy, contributing to lower utilization
rates and higher container inventories throughout the world. 15




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##### Table of Contents



The demand for leased containers by the global container shipping industry
has contributed to reducing off-hire inventories primarily in Asia, and to a
lesser extent in Europe and North America. In many parts of Asia and
particularly in the southeastern ports, the demand for cargo containers
continued to exceed available supplies. The preference by shipping lines to
employ leased containers to meet their container requirements also contributed
to the strong demand for leased containers during 2003. However, in response
to a favorable shipping market, there are indications of an increased
willingness by the shipping lines to purchase and finance the acquisition of
new containers at higher levels in the near future, which may impact the demand
for leased containers. Favorable shipping market conditions, combined with lower equipment costs
and short term leases for older containers, have also resulted in the shipping
lines diminishing discrimination against leasing older containers, a condition
that typically exists during periods of surplus container supply. The favorable
2003 shipping market, combined with the current shortfall of containers, has
resulted in an increase in the production of new containers during 2003 to a
level that is expected to surpass record levels of previous years. The level
of new container investment in 2004 is forecasted to equal or exceed the record
levels of 2003. The ultimate impact of the increase in new container
production on the Registrants operations is not immediately known, however, an
increase in new container availability may reduce the demand for the
Registrants older containers. Despite the benefits derived from favorable market conditions generated by
the growth in world trade and strong growth in trade volumes to and from China,
the uncertainty over the financial strength of the shipping industry remains a
concern. Shipping lines are faced with rising container imbalances in most
major trade routes and rising operating costs associated with repositioning
empty containers into high demand locations. In addition, freight rates,
despite recent increases, remaining at levels lower than those achieved during
previous years. The Registrant, CCC and the Leasing Company believe these
conditions favor the larger more established shipping lines, which have
witnessed strong recoveries in their performance over the last few years. The
Registrant, CCC and the Leasing Company continue to remain cautious, as some
shipping lines reported operating losses during 2002, while others became
insolvent during 2003. The financial impact of such losses for these shipping
lines may eventually influence the demand for leased containers as some
shipping lines may experience additional financial difficulties, consolidate or
become insolvent. Although the ultimate outcome, as well as its impact on the
container leasing industry and the Registrants results of operations, is
unknown, CCC, on behalf of the Registrant, will work closely with the Leasing
Company to monitor outstanding receivables, collections, and credit exposure to
various existing and new customers. Lastly, wide-ranging concerns remain regarding recovery of the worlds
major economies, performance of global stock markets, geopolitical concerns
arising from uncertainties within the Middle East and Asia, as well as the
recent increase in new container production, all of which may temper the
current demand for leased containers. The Registrants average fleet size and utilization rates for the years
ended December 31, 2003, 2002 and 2001 were as follows: 2003
    
    2002
    
    2001Fleet size (measured in
twenty-foot equivalent units (TEU))Dry cargo containers
    
    
    44,980
    
    
    
    46,497
    
    
    
    47,079Refrigerated containers
    
    
    657
    
    
    
    658
    
    
    
    659Tank containers
    
    
    221
    
    
    
    225
    
    
    
    225Average utilization ratesDry cargo containers
    
    
    82
    %
    
    
    75
    %
    
    
    67
    %Refrigerated containers
    
    
    92
    %
    
    
    92
    %
    
    
    92
    %Tank containers
    
    
    85
    %
    
    
    79
    %
    
    
    80
    %
 Since December 2001, the combined per-diem rental rate for the
Registrants fleet of dry cargo containers declined by approximately 12%, while
the combined per-diem rental rate for the Registrants fleet of refrigerated
containers and tank containers declined by 26% and 23%, respectively. This
decline is attributable to four main factors:  
    
    Per-diem rental rates decreased in correlation with the reduction in
new container prices;
    
    The Leasing Company converted lease agreements with several shipping
lines from master to long-term leases, providing greater revenue
stability but at lower lease rates than those earned under master
leases;
    
    The Leasing Company initiated new term leases for older equipment
resulting in lower per-diem rates, while significantly reducing off-hire
container inventory levels; and,
    
    Interest rates, which influence per-diem rental rates, declined throughout the worlds economies. 16




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##### Table of Contents



The decline in the aforementioned per-diem rental rates contributed to a
decline in gross lease revenue. However, higher utilization levels during the year contributed significantly to lower
direct operating expenses due to the reduction in storage and other
inventory-related expenses. Although per-diem rental rates have declined during the aforementioned
period, an increase in new container prices, as well as an increase in demand
for leased containers have resulted in the stabilization of per-diem rental
rates during 2003. A significant improvement in lease per-diem rates is not
expected until new container prices increase to levels much higher than those
experienced during 2003. Net lease revenuewas $7,237,850 for the year ended December 31, 2003
compared to $7,046,605 for the prior year. The increase was due to a $275,338
reduction in rental equipment operating expenses from the year ended December
31, 2002, partially offset by a $108,402 decline in gross rental revenue.
Gross rental revenue was impacted by a 4% decline in the average rental rates
for dry cargo containers during 2003, and smaller size fleet, partially offset
by an increase in fleet utilization rates. The decrease in direct operating
expense was attributable to the Registrants higher utilization rate in 2003,
and its impact on activity-based expenses such as storage and handling,
partially offset by an increase in repositioning expenses. Other components of
net lease revenue, including management fees, and reimbursed administrative
expenses, were lower by a combined $24,309 when compared to 2002, and partially
offset the decline in gross lease revenue. This decline was attributable to
the operating performance of the Registrants fleet. During 2003, the Leasing Company employed a leasing strategy that included
a repositioning program, whereby the Registrants off-hire containers in low
demand locations, primarily the U.S. East Coast and certain European locations,
were repositioned to high demand locations within Asia and other Far East
locations. The leasing Company and CCC believes that the cost of repositioning
containers is more than offset from the savings in storage and inventory
related expenses, combined with future lease revenues derived from the
containers. The Leasing Company, on behalf of the Registrant, has modified
many of its lease agreements with the shipping lines to safeguard against the
future build-up of container inventories in low demand locations. Depreciation expenseof $7,277,921 in 2003 declined by $216,968 when
compared to 2002 due to a declining fleet size. Other general and administrative expensesamounted $199,707 in 2003, an
increase of $8,613 or 5% when compared to 2002. Net loss on disposal of equipmentwas a result of the Registrants
disposal of 1,011 containers in 2003, as compared to 1,178 containers during
2002. These disposals resulted in a net loss of $296,826 during 2003, compared
to a net loss of $582,786 for 2002. The Registrant believes that the net loss
on container disposals in 2003 was a result of various factors, including the
age, condition, suitability for continued leasing, as well as the geographical
location of the containers when disposed. These factors will continue to
influence the decision to repair or dispose of a container when it is returned
by a lessee, as well as the amount of sales proceeds received and the related
gain or loss on container disposals. The level of the Registrants container
disposals in subsequent periods will also contribute to fluctuations in the net
gain or loss on disposals. Year Ended December 31, 2002 Compared to the Year Ended December 31, 2001 Net lease revenuewas $7,046,605 for the year 2002 compared to $7,581,717
for the prior year. The decrease was due to a $1,054,797 decline in gross
rental revenue partially offset by a $436,927 decrease in rental equipment
operating expenses from the year 2001. Gross rental revenue was impacted by
lower per-diem rental rates and smaller fleet size. The decrease in direct
operating expense was attributable to the Registrants higher utilization rate
in 2002, and its impact on activity based expenses such as storage and
handling. Other components of net lease revenue, including management fees,
and reimbursed administrative expenses, were lower by a combined $82,758 when
compared to the year 2001, and partially offset the decline in gross lease
revenue. This decline was attributable to the operating performance of the
Registrants fleet. Depreciation expenseof $7,494,889 in 2002 was $60,286 greater than 2001.
Effective June 1, 2001, the Registrant changed the estimated life of its rental
container equipment from an estimated 12 year life to a 15 year life, and its
estimated salvage value from 30% to 10% of original equipment cost. The effect
of these changes was an increase in depreciation expense of approximately
$147,000 in the year 2002. 17




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##### Table of Contents



Other general and administrative expenseswere $191,094 in 2002, a
decrease of $103,404 or 35% when compared to 2001. Contributing to this
decrease were declines in professional fees, costs related to investor
communications, and net exchange rate losses. Net loss on disposal of equipmentwas a result of the Registrant disposing
of 1,178 containers during 2002, as compared to 225 containers during 2001.
These disposals resulted in a net loss of $582,786 for 2002, as compared to a
net loss of $35,926 for 2001. The Registrant believes that the net loss on
container disposals in 2002 was a result of various factors including the age,
condition, suitability for continued leasing, as well as the geographic
location of the containers when disposed. Critical Accounting Policies Container
equipment  depreciable lives: The Registrants container
rental equipment is depreciated over a useful life of 15 years to a residual
value of 10%. The Registrant and CCC evaluates the period of amortization and
residual values to determine whether subsequent events and circumstances
warrant revised estimates of useful lives and residual values. Container
equipment  valuation: The Registrant and CCC review container
rental 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. The Registrant and CCC consider 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 Registrant and
CCC evaluate 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. Considerable judgment is
required in estimating future cash flows from container rental equipment
operations. Accordingly, the estimates may not be indicative of the amounts
that may be realized in future periods. As additional information becomes
available in subsequent periods, reserves for the impairment of the container
rental equipment carrying values may be necessary based upon changes in market
and economic conditions. Allowance for doubtful accounts:The Leasing Company continually tracks
the Registrants credit exposure to each of the sub-lessees of the Registrants
containers using specialist third-party credit information services and reports
prepared by its local staff to assess credit applications. The Leasing
Companys credit committee meets quarterly to analyze the performance of
existing customers and to recommend actions taken in order to minimize credit
risk. The Leasing Company derives an allowance for doubtful accounts from
specific amounts provided against known probable losses plus an additional
amount based on historical loss experience. However, the Registrants net
lease revenue may be subject to unexpected loss resulting from sub-lessees of
its containers that default under their container lease agreements with the
Leasing Company. 18




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##### Table of Contents



New Accounting Pronouncements In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. FIN 45 elaborates on the disclosures to be made by a guarantor in
interim and annual financial statements about its obligations under certain
guarantees it has issued. The adoption of FIN 45 did not have a material
impact on the Registrants results of operations and financial condition. In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities. In December 2003, the Financial Accounting Standards Board issued
an Interpretation that clarified and modified FIN 46 (Revised
Interpretations). FIN 46 clarifies the application of Accounting Research
Bulletin No. 51, Consolidated Financial Statements (ARB 51), to certain
variable interest entities (VIEs) in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The Registrant does not expect FIN 46 to
have a material impact on its results of operations and financial condition. In May 2003, the Financial Accounting Standards Board issued SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity"( SFAS 150). This statement establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances). Many of those instruments were previously
classified as equity. This statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The
adoption of SFAS 150 did not have a material impact on its financial
statements. Inflation The Registrant believes inflation has not had a material adverse effect on
the results of its operations. Risk Factors That Could Affect Future Results Because of the following factors, as well as other variables affecting the
Registrants operating results, past financial performance may not be a
reliable indicator of future performance, and historical trends should not be
used to anticipate results or trends in future periods. Dependence of the Container Leasing Business on the Volume of World Trade
and Other Factors. Containers, particularly marine dry cargo containers, are
relatively simple, and fungible, items of capital equipment. While one
distinguishing characteristic of container leasing companies is the level of
service they provide to lessees, fundamentally the success of the container
leasing business depends upon the level of demand for leased containers. While
there is continuing demand from customers to transport their cargo in
containers rather than by break-bulk methods, this demand, in turn, largely
depends upon levels of world trade and the supply of containers relative to
demand. When the volume of world trade decreases, container leasing companies
are particularly apt to suffer since container lessees, most of which also have
their own fleets of containers, generally reduce the number of leased
containers in their fleets in favor of utilizing their fleet of owned
containers. In addition, average daily revenue per leased container unit can
decrease significantly as the volume of world trade decreases and the supply of
available containers exceeds the level of demand. Such factors can cause a
material reduction in a leasing companys revenues. Furthermore, the increased
availability of capital combined with low interest rates may provide an
incentive for shipping lines to reduce their demand for leased containers in
favor of purchasing them. As a result, the Registrants container leasing
operations could be negatively affected by future fluctuations in world trade
and other factors, including, without limitation, the supply and pricing of new
and used containers, economic conditions in the shipping industry, fluctuations
in interest rates and currency valuations, and other economic considerations
that are inherently unpredictable and beyond the control of the Registrant, CCC
and the Leasing Company. 19




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Risks of Ownership and Leasing of Special Purpose Containers. A portion
of the Registrants container portfolio consists of special purpose containers,
including refrigerated and tank containers. Unlike dry cargo containers, these
containers are built for specific market demands. As such, the markets for the
leasing of special purpose containers are narrower than the market for dry
cargo containers. In the case of tank containers, the Leasing Company, on
behalf of the Registrant, will lease to specialist operators (NVOCCs
Non-Vessel Owning Common Carriers), companies that produce and ship their own
goods (such as chemical companies and distillers), as well as ocean-going
carriers. Lessors in these markets are thus more sensitive to fluctuations in
the demand for and supply of such containers. Moreover, the ownership of
refrigerated containers entails risks of mechanical breakdown and technological
obsolescence not otherwise present in the ownership of dry cargo containers,
and in the case of tank containers (which can transport hazardous materials)
includes additional risks of environmental and tort liability. Risk of Terrorism Attack Involving Containers. Since September 11, 2001,
the worlds governments, maritime authorities, and the maritime industry, have
devoted increasing attention to enhancing the security of the global container
transport chain. These efforts have included the Maritime Transportation
Security Act of 2002 passed by Congress, and initiatives by the United States
such as the Container Security Initiative and Customs-Trade Partnership Against
Terrorism Program. Efforts to date have focused on increasing port security
and container inspections, developing and implementing a program of sealing
containers with mechanical and electronic seals from the point of loading to
final delivery of the container, identifying shippers, storing cargo
information in electronic format, and related measures. The task is immense,
and the efforts undertaken to date are preliminary. The industry is well aware
of the dire consequences should a terrorism incident occur involving the use of
a cargo container. In any such event, the impact on global trade and the world
economy could be immediate and materially adverse, specifically
impacting the Registrants operations with high insurance costs,
additional costs to implement or adopt container related security
devices and measures, and ultimately a loss of container leasing
revenue. Other Risks of Container Leasing. In addition to the factors discussed
above, the ability of the Leasing Company, on behalf of the Registrant, to keep
the Registrants containers under leases yielding revenues which, after payment
of operating expenses, provide an acceptable return may be adversely affected
by other economic and business factors to which the transportation industry in
general and the container leasing industry in particular are subject. These
factors, which generally are beyond the control of the Registrant, CCC and the
Leasing Company, include:  
    
    general economic conditions, such as inflation and fluctuations in
general business conditions;
    
    fluctuations in supply and demand for containers resulting from,
among other things, obsolescence, changes in the methods or economics of
a particular mode of transportation or changes in governmental
regulations or safety standards;
    
    increases in maintenance expenses, taxes, insurance costs, third
party fees and other expenses attributable to the operation and the
maintenance of the containers that cannot be offset by increased lease
revenues from the containers;
    
    the risk of uninsured losses with respect to the containers or
insured losses for which insurance proceeds are inadequate, resulting in
a possible loss of invested capital in and any profits anticipated from
such containers;
    
    the effects of strikes, labor disputes and foreign political unrest
on the Registrants container leasing business;
    
    bankruptcies, contract disputes, or defaults in payment by
sub-lessees of the Registrants containers resulting in uncollectible
amounts and the accumulation of expenses and off-lease time attributable
to the recovery of containers, or the inability to recover containers
from such lessees;
    
    the possibility that sub-lessees of the Registrants containers will
elect to purchase and own equipment rather than lease it from third
parties, including the Leasing Company; and loss of revenues and
increases in storage expenses during periods when containers are not
being utilized. Effect of Operating Leases: Rental Payments are Insufficient to Return
the Original Investment in the Containers.A preponderance of the containers
acquired by the Registrant are leased pursuant to Operating Leases. Under an
Operating Lease, the lessor receives aggregate rental payments in an amount
that is insufficient to recover its original investment. In order for the
Registrant to recover its investment and earn an adequate return thereon, the
Leasing Company, on behalf of the Registrant, will, on termination of the
initial leases of the Registrants containers, have to obtain renewals from the
original lessees, find new lessees or sell the containers. Operating Leases
subject the Registrant to risks of fluctuation in rental rates and lack of
demand for a particular container at the expiration of its lease. The success
of the Leasing Company in leasing the Registrants containers and keeping the
Registrants containers on lease will depend upon market conditions in the
container and equipment leasing markets, the quality of maintenance of the
containers, and other factors. 20




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Residual Value of Containers. The ultimate cash return of the
Registrants investment in its containers will depend in part on the residual
value of the containers at the point at which CCC determines that it is in the
best interest of the Registrant to sell the containers. The amount realized on
the sale of the containers will be substantially less than the price that the
Registrant paid for the containers. Generally, used containers are sold in the
non-maritime secondary market for use as temporary or permanent storage
facilities. An additional use for refrigerated containers in the secondary
market is for the temporary storage of perishable products. To a lesser
extent, such containers are sold to shipping companies and container leasing
companies for use in the maritime market. The demand for used containers
depends on a variety of factors including the location of the container at the
time of disposition, foreign currency exchange rates, and the factors discussed
above that affect the market for marine cargo containers. One factor affecting
the residual value of the containers will be the quality of maintenance
provided by the Leasing Company and the sub-lessees of the Registrants
containers. There can be no assurance that CCC will be able to arrange, on
behalf of the Registrant, for adequate maintenance of the Registrants
containers throughout their economically useful lives. The containers
residual value will also depend upon factors beyond the control of the
Registrant, CCC, the Leasing Company, or the container lessees, such as the
cost of new containers, the quantity of used containers being supplied to the
secondary market, technological advances in container construction and in
techniques of ocean transportation, and developments in world trade. Competition. The Leasing Company, on behalf of the Registrant, will be in
competition with several large international container leasing companies and
numerous smaller leasing companies. Since 1997, the industry has witnessed
significant consolidation. As of mid-2003, five leasing companies, each of
which operates a fleet of approximately one million TEU, controlled
approximately 70% of the worldwide leased container fleet. While the container
leasing market is highly competitive, the large container leasing companies as
a group might be able to exploit their greater financial resources to maintain
or enhance their market share at the expense of the competitors such as the
Registrant and Leasing Company. Defaults by Lessees. The default by a sub-lessee under a lease with the
Leasing Company may cause the Registrants containers to be returned at a time
when the Leasing Company may be unable to arrange for the re-leasing or sale of
such containers. In such event, the Registrant would lose anticipated
revenues, incur additional operating expenses, and, consequently, may be unable
to recover its investment in such containers. In addition, because the
Registrants containers will be leased outside of the United States,
repossession of containers from sub-lessees who may default under a lease could
prove difficult. Effect of Environmental Regulation on Refrigerated Containers.
Historically, refrigerated containers have utilized a refrigerant gas, which is
a chlorofluorocarbon (CFC) compound. It is generally assumed that CFCs are
harmful to the Earths ozone layer when released into the atmosphere. Many
nations, including the United States, have taken action, both collectively and
individually, to regulate CFCs. These nations have set various targets for the
reduction in production and use of CFCs, and their eventual elimination. There
has been substantial progress in securing a viable substitute for the
refrigerant used in containers. Production of new container refrigeration
units operating with the replacement refrigerant became generally available in
1993. There can be no assurance that the new refrigerant will be as effective
or as cost efficient as CFC compounds. Environmental Liability Risks. Under state and Federal laws of the United
States, and under the laws of certain other nations, the owner of a container
may be liable for environmental damage and/or cleanup costs and/or other sums
in the event of actual or threatened discharge or other contamination by
material in a container. This liability may be imposed on a container owner,
such as the Registrant, even if the owner is not at fault. It is not possible
to predict the amount of liability. The Leasing Company, on behalf of the
Registrant, intends, subject to availability and prevailing market conditions,
to obtain insurance against these risks on such terms and in such amounts as
CCC and the Leasing Company deems reasonable. In addition, subject to
availability and applicable insurance and container industry market conditions,
the Leasing Company intends to require sub-lessees of the Registrants
containers to obtain insurance which protects against these risks and further
to compel lessees to indemnify and defend the Registrant in the case of an
occurrence giving rise to possible liability under applicable environmental
laws. There can, however, be no guarantee that insurance will be available to
fully protect against environmental risk, or that CCC and the Leasing Company
will be able to allocate the risk of environmental damage to lessees of the
Registrants containers. Reliance Upon CCC and the Leasing Company.The Registrants operations
are dependent upon the ability of CCC, and its affiliate, the Leasing Company,
to arrange for the leasing, maintenance and eventual sale of containers on
behalf of the Registrant. The Registrants limited partners have no right to
take part in the day-to-day management of the Registrant; all decisions with
respect to such management will be made exclusively by CCC. 21




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Conflicts of Interest. In managing the Registrant, CCC is subject to
conflicts of interest, meaning that it is confronted with decisions whereby it
has an economic incentive to place its interests above those of the Registrant.
CCC and its affiliates, including the Leasing Company, are in the business of
managing containers for third parties, for CCCs
 existing partnerships and programs, and for their own account, and will be
subject to a conflict of interest in times of low demand for and excess supply
of such containers. The Registrants Partnership Agreement provides that
neither CCC nor its affiliates will be obligated to present any particular
investment or leasing opportunity to the Registrant, even if such opportunity
is suitable for the Registrant. 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk Exchange rate risk:In 2003, over 95% of the Registrants revenues were
billed and paid in US dollars. The Leasing Company believes that the
proportion of US dollar revenues may decrease in future years, reflecting a
more diversified customer base and lease portfolio. Approximately 80% of the
Registrants direct operating expenses in 2003 were incurred and paid in US
dollars. Of the remaining costs, approximately 72% are individually small,
unpredictable and incurred in various denominations and thus are not suitable
for cost-effective hedging. The Leasing Company may hedge a portion of the expenses that are
predictable and are principally in UK pounds sterling. As exchange rates are
outside of the control of the Registrant and Leasing Company, there can be no
assurance that such fluctuations will not adversely affect its results of
operations and financial condition. 
 Item 8. Financial Statements and Supplementary Data 22




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INDEPENDENT AUDITORS REPORT The Partners
Cronos Global Income Fund XV, L.P. We have audited the accompanying balance sheets of Cronos Global Income Fund
XV, L.P. (the Partnership) as of December 31, 2003 and 2002, and the related
statements of operations, partners capital, and cash flows for each of the
three years in the period ended December 31, 2003. These financial statements
are the responsibility of the Partnerships management. Our responsibility is
to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 2003 and
2002, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP San Francisco, California
February 13, 2004 23




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CRONOS GLOBAL INCOME FUND XV, L.P. Balance Sheets December 31, 2003 and 2002 2003
    
    2002AssetsCurrent assets:Cash and cash equivalents, includes $3,030,262 in 2003 and
$3,647,895 in 2002 in interest-bearing accounts (note 3)
    
    $
    3,637,938
    
    
    $
    4,379,512Net lease receivables due from Leasing Company
(notes 1 and 4)
    
    
    1,124,539
    
    
    
    1,346,604Total current assets
    
    
    4,762,477
    
    
    
    5,726,116Container rental equipment, at cost
    
    
    117,502,046
    
    
    
    120,475,826Less accumulated depreciation
    
    
    60,655,265
    
    
    
    54,905,070Net container rental equipment (note 1)
    
    
    56,846,781
    
    
    
    65,570,756Total assets
    
    $
    61,609,258
    
    
    $
    71,296,872Partners CapitalPartners capital (deficit):General partner
    
    $
    (835,530
    )
    
    $
    (422,478
    )Limited partners (note 8)
    
    
    62,444,788
    
    
    
    71,719,350Total partners capital
    
    $
    61,609,258
    
    
    $
    71,296,872
 The accompanying notes are
an integral part of these financial statements. 24




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CRONOS GLOBAL INCOME FUND XV, L.P. Statements of Operations For the years ended December 31, 2003, 2002 and 2001 2003
    
    2002
    
    2001Net lease revenue (notes 1 and 6)
    
    $
    7,237,850
    
    
    $
    7,046,605
    
    
    $
    7,581,717Other operating expenses:Depreciation (note 1)
    
    
    7,277,921
    
    
    
    7,494,889
    
    
    
    7,434,603Other general and administrative expenses
    
    
    199,707
    
    
    
    191,094
    
    
    
    294,498Net loss on disposal of equipment
    
    
    296,826
    
    
    
    582,786
    
    
    
    35,9267,774,454
    
    
    
    8,268,769
    
    
    
    7,765,027Loss from operations
    
    
    (536,604
    )
    
    
    (1,222,164
    )
    
    
    (183,310
    )Other income:Interest income
    
    
    17,523
    
    
    
    40,416
    
    
    
    135,002Net loss
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )
    
    $
    (48,308
    )Allocation of net loss:General partner
    
    $
    (5,191
    )
    
    $
    (11,817
    )
    
    $
    329,493Limited partners
    
    
    (513,890
    )
    
    
    (1,169,931
    )
    
    
    (377,801
    )$
    (519,081
    )
    
    $
    (1,181,748
    )
    
    $
    (48,308
    )Limited partners per unit share of net loss
    
    $
    (0.07
    )
    
    $
    (0.16
    )
    
    $
    (0.05
    )
 The accompanying notes are an integral part of these financial statements. 25




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CRONOS GLOBAL INCOME FUND XV, L.P. Statements of Partners Capital For the years ended December 31, 2003, 2002 and 2001 Limited
    
    GeneralPartners
    
    Partner
    
    TotalBalances at January 1, 2001
    
    
    88,017,194
    
    
    
    684
    
    
    
    88,017,878Net (loss) income
    
    
    (377,801
    )
    
    
    329,493
    
    
    
    (48,308
    )Cash distributions
    
    
    (8,164,708
    )
    
    
    (415,781
    )
    
    
    (8,580,489
    )Balances at December 31, 2001
    
    
    79,474,685
    
    
    
    (85,604
    )
    
    
    79,389,081Net loss
    
    
    (1,169,931
    )
    
    
    (11,817
    )
    
    
    (1,181,748
    )Cash distributions
    
    
    (6,585,404
    )
    
    
    (325,057
    )
    
    
    (6,910,461
    )Balances at December 31, 2002
    
    
    71,719,350
    
    
    
    (422,478
    )
    
    
    71,296,872
    )Net loss
    
    
    (513,890
    )
    
    
    (5,191
    )
    
    
    (519,081
    )Cash distributions
    
    
    (8,760,672
    )
    
    
    (407,861
    )
    
    
    (9,168,533
    )Balances at December 31, 2003
    
    $
    62,444,788
    
    
    $
    (835,530
    )
    
    $
    61,609,258
 The accompanying notes are an integral part of these financial statements. 26




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CRONOS GLOBAL INCOME FUND XV, L.P. Statements of Cash Flows For the years ended December 31, 2003, 2002 and 2001 2003
    
    2002
    
    2001Cash flows from operating activities:Net loss
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )
    
    $
    (48,308
    )Adjustments to reconcile net loss to net cash from
operating activities:Depreciation
    
    
    7,277,921
    
    
    
    7,494,889
    
    
    
    7,434,603Net loss on disposal of equipment
    
    
    296,826
    
    
    
    582,786
    
    
    
    35,926Decrease (increase) in net lease receivables
due from Leasing Company
    
    
    161,568
    
    
    
    (181,379
    )
    
    
    285,920Total adjustments
    
    
    7,736,315
    
    
    
    7,896,296
    
    
    
    7,756,449Net cash provided by operating activities
    
    
    7,217,234
    
    
    
    6,714,548
    
    
    
    7,708,141Cash flows from investing activities:Proceeds from sale of container rental equipment
    
    
    1,209,725
    
    
    
    863,338
    
    
    
    457,631Cash flows from financing activitiesDistributions to partners
    
    
    (9,168,533
    )
    
    
    (6,910,461
    )
    
    
    (8,580,490
    )Net (decrease) increase in cash and cash equivalents
    
    
    (741,574
    )
    
    
    667,425
    
    
    
    (414,718
    )Cash and cash equivalents at beginning of year
    
    
    4,379,512
    
    
    
    3,712,087
    
    
    
    4,126,805Cash and cash equivalents at end of year
    
    $
    3,637,938
    
    
    $
    4,379,512
    
    
    $
    3,712,087
 The accompanying notes are an integral part of these financial statements. 27




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CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements December 31, 2003, 2002 and 2001  (1)
    
    Summary of Significant Accounting Policies  (a)
    
    Nature of OperationsCronos Global Income Fund XV, L.P. (the Partnership) is a limited
partnership organized under the laws of the State of California on
August 26, 1993, for the purpose of owning and leasing marine cargo
containers, special purpose containers and container related equipment
worldwide to ocean carriers. To this extent, the Partnerships
operations are subject to the fluctuations of world economic and
political conditions. Such factors may affect the pattern and levels of
world trade. The Partnership believes that the profitability of, and
risks associated with, leases to foreign customers is generally the same
as those of leases to domestic customers. The Partnerships leases
generally require all payments to be made in United States currency.Cronos Capital Corp. (CCC) is the general partner and, with its
affiliate Cronos Containers Limited (the Leasing Company), manages the
business of the Partnership. CCC and the Leasing Company also manage
the container leasing business for other partnerships affiliated with
CCC. The Partnership shall continue until December 31, 2012, unless
terminated sooner upon the occurrence of certain events.The Partnership commenced operations on February 22, 1994, when the
minimum subscription proceeds of $2,000,000 were received from over 100
subscribers (excluding from such count Pennsylvania residents, the
general partner, and all affiliates of the general partner). The
Partnership offered 7,500,000 units of limited partnership interest at
$20 per unit or $150,000,000. The offering terminated on December 15,
1995, at which time 7,151,569 limited partnership units had been sold.(b)
    
    Leasing Company and Leasing Agent AgreementA Leasing Agent Agreement exist between the Partnership and
the leasing Company, whereby the Leasing Company has the
responsibility to manage the leasing operations of all equipment
owned by the Partnership. Pursuant to the Agreement, the Leasing
Company is responsible for leasing, managing and re-leasing the
Partnerships containers to ocean carriers and has full discretion
over which ocean carriers and suppliers of goods and services it
may deal with. The Leasing Agent Agreement permits the Leasing
Company to use the containers owned by the Partnership, together
with other containers owned or managed by the Leasing Company and
its affiliates, as part of a single fleet operated without regard
to ownership. Since the Leasing Agent Agreement meets the
definition of an operating lease in Statement of Financial
Accounting Standards (SFAS) No. 13, it is accounted for as a lease
under which the Partnership is lessor and the Leasing Company is
lessee.The Leasing Agent Agreement generally provides that the Leasing
Company will make payments to the Partnership based upon rentals
collected from ocean carriers after deducting direct operating
expenses and management fees to CCC and the Leasing Company. The
Leasing Company leases containers to ocean carriers, generally
under operating leases which are either master leases or term
leases (mostly one to five years). Master leases do not specify
the exact number of containers to be leased or the term that each
container will remain on hire but allow the ocean carrier to pick
up and drop off containers at various locations, and rentals are
based upon the number of containers used and the applicable
per-diem rate. Accordingly, rentals under master leases are all
variable and contingent upon the number of containers used. Most
containers are leased to ocean carriers under master leases;
leasing agreements with fixed payment terms are not material to the
financial statements. Since there are no material minimum lease
rentals, no disclosure of minimum lease rentals is provided in
these financial statements. 28




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##### Table of Contents



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (c)
    
    Concentrations of Credit RiskThe Partnerships financial instruments that are exposed to
concentrations of credit risk consist primarily of cash, cash
equivalents and net lease receivables due from the Leasing Company. See
note 3 for further discussion regarding the credit risk associated with
cash and cash equivalents.Net lease receivables due from the Leasing Company (see notes 1(b) and 4
for discussion regarding net lease receivables) subject the Partnership
to a significant concentration of credit risk. These net lease
receivables, representing rentals earned by the Leasing Company, on
behalf of the Partnership, from ocean carriers after deducting direct
operating expenses and management fees to CCC and the Leasing Company,
are remitted by the Leasing Company to the Partnership three to four
times per month. The Partnership has historically never incurred a loss
associated with the collectibility of unremitted net lease receivables
due from the Leasing Company.(d)
    
    Basis of AccountingThe Partnership utilizes the accrual method of accounting. Net lease
revenue is recorded by the Partnership in each period based upon its
leasing agent agreement with the Leasing Company. Net lease revenue is
generally dependent upon operating lease rentals from operating lease
agreements between the Leasing Company and its various lessees, less
direct operating expenses and management fees due in respect of the
containers specified in each operating lease agreement.(e)
    
    Use of EstimatesThe financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP),
which requires the Partnership to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from those estimates.The most significant estimates included within the financial statements
are the container rental equipment estimated useful lives and residual
values, and the estimate of future cash flows from container rental
equipment operations, used to determine the adequacy of the carrying
value of container rental equipment in accordance with SFAS No. 144.
Considerable judgment is required in estimating future cash flows from
container rental equipment operations. Accordingly, the estimates may
not be indicative of the amounts that may be realized in future periods.
As additional information becomes available in subsequent periods,
reserves for the impairment of the container rental equipment carrying
values may be necessary based upon changes in market and economic
conditions. 29




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CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (f)
    
    Allocation of Net Income or Loss and Partnership DistributionsNet income or loss has been allocated between general and
limited partners in accordance with the Partnership Agreement.Actual cash distributions differ from the allocations of net income or
loss between the general and limited partners as presented in these
financial statements. Partnership distributions are paid to its
partners (general and limited) from distributable cash from
operations, allocated 95% to the limited partners and 5% to the
general partner. Distributions of sales proceeds are allocated 99%
to the limited partners and 1% to the general partner. The
allocations remain in effect until such time as the limited
partners have received from the Partnership aggregate distributions
in an amount equal to their capital contributions plus an 8%
cumulative, compounded (daily), annual return on their adjusted
capital contributions. Thereafter, all Partnership distributions
will be allocated 85% to the limited partners and 15% to the
general partner. Cash distributions from operations to the general
partner in excess of 5% of distributable cash will be considered an
incentive fee and will be recorded as compensation to the general
partner, with the remaining distributions from operations charged
to partners capital.(g)
    
    Acquisition FeesPursuant to the Partnership Agreement, acquisition fees paid to CCC are
based on 5% of the equipment purchase price. These fees are capitalized
and included in the cost of the container rental equipment.(h)
    
    Container Rental EquipmentContainer rental equipment is depreciated using the straight-line
method. Depreciation policies are also evaluated to determine whether
subsequent events and circumstances warrant revised estimates of useful
lives. Effective June 1, 2001, the estimated depreciable life was
changed from a twelve-year life to a fifteen-year life and the estimated
salvage value was changed from 30% to 10% of the original equipment
cost. The effect of these changes is an increase to depreciation
expense of approximately $147,000 and $208,000 for 2002 and 2001,
respectively.SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, was adopted by the Partnership effective January 1, 2002,
without a significant impact on its financial statements. In accordance
with SFAS No. 144, container rental equipment is considered to be
impaired if the carrying value of the asset exceeds the expected future
cash flows from related operations (undiscounted and without interest
charges). If impairment is deemed to exist, the assets are written down
to fair value. An analysis is prepared each quarter projecting future
cash flows from container rental equipment operations. Current and
projected utilization rates, per-diem rental rates, direct operating
expenses, fleet size and container disposals are the primary variables
utilized by the analysis. Additionally, the Partnership evaluates
future cash flows and potential impairment by container type rather than
for each individual container, and as a result, future losses could
result for individual container dispositions due to various factors,
including age, condition, suitability for continued leasing, as well as
the geographical location of containers when disposed. There were no
impairment charges to the carrying value of container rental equipment
during 2003, 2002 and 2001.(i)
    
    Income TaxesThe Partnership is not subject to income taxes, consequently no
provision for income taxes has been made. The Partnership files federal
and state annual information tax returns, prepared on the accrual basis
of accounting. Taxable income or loss is reportable by the partners
individually. 30




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CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (j)
    
    Financial Statement PresentationThe Partnership has determined that, for accounting purposes, the
Leasing Agent Agreement is a lease, and the receivables, payables, gross
revenues and operating expenses attributable to the containers managed
by the Leasing Company are, for accounting purposes, those of the
Leasing Company and not of the Partnership. Consequently, the
Partnerships balance sheets and statements of operations display the
payments to be received by the Partnership from the Leasing Company as
the Partnerships receivables and revenues.(k)
    
    New Accounting PronouncementsIn November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45 (FIN 45), Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. FIN 45 elaborates on the disclosures to be
made by a guarantor in interim and annual financial statements about its
obligations under certain guarantees it has issued. The adoption of FIN
45 did not have a material impact on the Partnerships results of
operations and financial condition.In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities. In December 2003, the Financial Accounting Standards Board
issued an Interpretation that clarified and modified FIN 46 (Revised
Interpretations). FIN 46 clarifies the application of Accounting
Research Bulletin No. 51, Consolidated Financial Statements (ARB 51),
to certain variable interest entities (VIEs) in which equity investors
do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other
parties. The Partnership has not entered into any material arrangements
with VIEs and does not expect FIN 46 to have a material impact on its
results of operations and financial condition.In May 2003, the Financial Accounting Standards Board issued SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity. This statement establishes standards
for how an issuer classifies and measures certain financial instruments
with characteristics of both liabilities and equity. It requires that
an issuer classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. This statement is
effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. The adoption of SFAS 150
did not have a material impact on its financial statements. 31




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CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (2)
    
    Operating Segment  An operating segment is a component of an enterprise that engages in
business activities from which it may earn revenues and incur expenses,
whose operating results are regularly reviewed by the enterprises chief
operating decision maker to make decisions about resources to be allocated
to the segment and assess its performance, and about which separate
financial information is available. Management operates the Partnerships
container fleet as a homogenous unit and has determined that as such it has
a single reportable operating segment.The Partnership derives revenues from dry cargo containers, refrigerated
containers and tank containers used by its customers in global trade routes.
As of December 31, 2003, the Partnership owned 23,744 twenty-foot 8,242
forty-foot and 2,073 forty-foot high-cube marine dry cargo containers, as
well as 457 twenty-foot and 99 forty-foot high-cube refrigerated cargo
containers, and 221 twenty-four thousand-liter tanks. A summary of gross
lease revenue earned by the Leasing Company, on behalf of the Partnership,
by product, for the years ended December 31, 2003, 2002 and 2001 follows: 2003
    
    2002
    
    2001Dry cargo containers
    
    $
    10,416,781
    
    
    $
    10,521,020
    
    
    $
    11,271,255Refrigerated containers
    
    
    1,312,449
    
    
    
    1,343,686
    
    
    
    1,582,517Tank containers
    
    
    626,863
    
    
    
    599,789
    
    
    
    665,520Total
    
    $
    12,356,093
    
    
    $
    12,464,495
    
    
    $
    13,519,292
  Due to the Partnerships lack of information regarding the physical location
of its fleet of containers when on lease in the global shipping trade, the
Partnership believes that it does not possess discernible geographic
reporting segments as defined in SFAS No. 131 (SFAS 131), Disclosures
about Segments of an Enterprise and Related Information.No single sub-lessee of the Leasing Company contributed more than 10% of the
Leasing Companys rental revenue earned on behalf of the Partnership during
2003, 2002 and 2001.  (3)
    
    Cash and Cash Equivalents  Cash equivalents include money market funds that invest in
highly-liquid first-tier securities, such as U.S. Treasury obligations,
repurchase agreements secured by U.S. Treasury obligations, and obligations
whose principal and interest are backed by the U.S. Government. Cash
equivalents are carried at cost which approximates fair value, and at times,
may exceed federally insured limits. The Partnership has not experienced
any losses in such accounts and believes it is not exposed to any
significant credit risk. 32




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CRONOS GLOBAL INCOME FUND
XV, L.P.
Notes to Financial Statements  (4)
    
    Net Lease Receivables Due from Leasing Company  Net lease receivables due from the Leasing Company are determined by
deducting direct operating payables and accrued expenses, base management
fees payable, and reimbursed administrative expenses payable to CCC and its
affiliates from the rental billings earned by the Leasing Company to the
Partnership under operating leases to ocean carriers for the containers
owned by the Partnership as well as proceeds earned from container
disposals. Net lease receivables at December 31, 2003 and 2002 were as
follows: December 31,
    
    December 31,2003
    
    2002Gross lease receivables
    
    $
    2,455,335
    
    
    $
    2,726,745Less:Direct operating payables and accrued expenses
    
    
    750,902
    
    
    
    762,191Damage protection reserve (note 5)
    
    
    207,353
    
    
    
    149,189Base management fees payable
    
    
    93,258
    
    
    
    157,222Reimbursed administrative expenses
    
    
    58,583
    
    
    
    60,727Allowance for doubtful accounts
    
    
    220,700
    
    
    
    250,812Net lease receivables
    
    $
    1,124,539
    
    
    $
    1,346,604
  (5)
    
    Damage Protection Plan  The Leasing Company offers a repair service to several lessees of the
Partnerships containers, whereby the lessee pays an additional rental fee
for the convenience of having the Partnership incur the repair expense for
containers damaged while on lease. This fee is recorded as revenue when
earned according to the terms of the rental contract. An accrual has been
recorded to provide for the estimated costs incurred by this service. This
accrual is a component of net lease receivables due from the Leasing Company
(see note 4). The Partnership is not responsible in the event repair costs
exceed predetermined limits, or for repairs that are required for damages
not defined by the damage protection plan agreement.  (6)
    
    Net Lease Revenue  Net lease revenue is determined by deducting direct operating expenses, base
management fees and reimbursed administrative expenses to CCC and its
affiliates from the rental revenue earned by the Leasing Company under
operating leases to ocean carriers for the containers owned by the
Partnership. Net lease revenue for the years ended December 31, 2003, 2002
and 2001 was as follows: 2003
    
    2002
    
    2001Rental revenue
    
    $
    12,356,093
    
    
    $
    12,464,495
    
    
    $
    13,519,292Less:Rental equipment operating expenses
    
    
    3,582,366
    
    
    
    3,857,704
    
    
    
    4,294,631Base management fees (note 7)
    
    
    852,761
    
    
    
    851,979
    
    
    
    927,711Reimbursed administrative expenses (note 7):Salaries
    
    
    479,592
    
    
    
    497,295
    
    
    
    481,289Other payroll related expenses
    
    
    51,690
    
    
    
    54,386
    
    
    
    48,818General and administrative expenses
    
    
    151,834
    
    
    
    156,526
    
    
    
    185,126Net lease revenue
    
    $
    7,237,850
    
    
    $
    7,046,605
    
    
    $
    7,581,717
 33




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CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (7)
    
    Compensation to General Partner and its Affiliates  Base management fees are equal to 7% of gross lease revenues attributable to
operating leases pursuant to the Partnership Agreement. Reimbursed
administrative expenses are equal to the costs expended by CCC and its
affiliates for services necessary for the prudent operation of the
Partnership pursuant to the Partnership Agreement. The following
compensation was paid or will be paid by the Partnership to CCC or its
affiliates: 2003
    
    2002
    
    2001Base management fees
    
    $
    852,761
    
    
    $
    851,979
    
    
    $
    927,711Reimbursed administrative expenses
    
    
    683,116
    
    
    
    708,207
    
    
    
    715,233$
    1,535,877
    
    
    $
    1,560,186
    
    
    $
    1,642,944
  (8)
    
    Limited Partners Capital  Cash distributions made to the limited partners during 2003, 2002 and 2001
included distributions of proceeds from equipment sales in the amount of
$1,251,523, $506,568 and $327,781, respectively. These distributions, as
well as cash distributions from operations, are used in determining
Adjusted Capital Contributions as defined by the Partnership Agreement.The limited partners per unit share of capital at December 31, 2003, 2002
and 2001 was $9, $10, and $11, respectively. This is calculated by dividing
the limited partners capital at the end of each year by 7,151,569 the total
number of limited partnership units. 34




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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Inapplicable. 
 Item 9A. Controls and Procedures The principal executive and principal financial officers of CCC have
evaluated the disclosure controls and procedures of the Registrant
as of the end of the period covered by this report. As used herein, the term
disclosure controls and procedures has the meaning given to the term by Rule
13a-15 under the Securities Exchange Act of 1934, as amended (Exchange Act),
and includes the controls and other procedures of the Registrant that are
designed to ensure that information required to be disclosed by the Registrant
in the reports that it files with the SEC under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SECs rules and forms. Based upon their evaluation, the principal executive
and principal financial officers of CCC have concluded that the Registrants
disclosure controls and were effective such that the
information required to be disclosed by the Registrant in this report is
recorded, processed, summarized and reported within the time periods specified
in the SECs rules and forms applicable to the preparation of this report
and is accumulated and communicated to CCCs management,
including CCCs principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding
required disclosures. There have been no significant changes in the Registrants internal
controls or in other factors that could significantly affect the Registrants
internal controls subsequent to the evaluation described above conducted by
CCCs principal executive and financial officers. 35




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PART III 
 Item 10. Directors and Executive Officers of the Registrant The Registrant, as such, has no officers or directors, but is managed by
CCC, the general partner. The officers and directors of CCC at February 29,
2004, are as follows: Name
    
    OfficeDennis J. Tietz
    
    President, Chief Executive Officer and DirectorJohn Kallas
    
    Vice President, Chief Financial Officer and DirectorElinor A. Wexler
    
    Vice President/Administration, Secretary and DirectorJohn M. Foy
    
    Director
 Dennis J. TietzMr. Tietz, 51, as President and Chief Executive Officer,
is responsible for the general management of CCC. Mr. Tietz was appointed
Chief Executive Officer of The Cronos Group, indirect corporate parent of CCC,
in December 1998 and elected Chairman of the Board of Directors in March 1999.
Mr. Tietz is also President and a director of Cronos Securities Corp. From
1986 until August 1992, Mr. Tietz was responsible for the organization,
marketing and after-market support of CCCs investment programs. Mr. Tietz was
a regional manager for CCC, responsible for various container leasing
activities in the U.S. and Europe from 1981 to 1986. Prior to joining CCC in
December 1981, Mr. Tietz was employed by Trans Ocean Leasing Corporation as
Regional Manager based in Houston, with responsibility for all leasing and
operational activities in the U.S. Gulf. Mr. Tietz holds a B.S. degree in Business Administration from San Jose
State University and is a Registered Securities Principal with the NASD. John KallasMr. Kallas, 41, was elected Vice President, Chief Financial
Officer of CCC in November, 2000. Mr. Kallas also joined the Board of
Directors of CCC in November, 2000. Mr. Kallas has been employed by CCC since
1989, and is responsible for managed container investment programs, treasury,
and CCCs financial operations. Mr. Kallas has held various accounting
positions since joining Cronos including Controller, Director of Accounting and
Corporate Accounting Manager. From 1985 to 1989, Mr. Kallas was an accountant
with KPMG Peat Marwick, San Francisco. Mr. Kallas holds a Masters degree in Finance and Business Administration
from St. Marys College, a B.S. degree in Business Administration/Accounting
from the University of San Francisco and is a certified public accountant. Elinor A. WexlerMs. Wexler, 55, was elected Vice President -
Administration and Secretary of CCC in August 1992. Ms. Wexler joined the
Board of Directors of CCC in June 1997. Ms. Wexler has been employed by CCC
since 1987, and is responsible for investor services, compliance and securities
registration. From 1983 to 1987, Ms. Wexler was Manager of Investor Services
for The Robert A. McNeil Corporation, a real estate syndication company, in San
Mateo, California. From 1971 to 1983, Ms. Wexler held various positions,
including securities trader and international research editor, with Nikko
Securities Co., International, based in San Francisco. Ms. Wexler attended the University of Oregon, Portland State University
and the Hebrew University of Jerusalem, Israel. Ms. Wexler is also Vice
President and Secretary of Cronos Securities Corp. and a Registered Principal
with the NASD. John M. FoyMr. Foy, 58, was elected to the Board of Directors of CCC in
April 1999. See key management personnel of the Leasing Company for further
information. 36




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The key management personnel of the Leasing Company and its affiliates at
February 29, 2004, were as follows: Name
    
    TitlePeter J. Younger
    
    Chief Operating Officer/Chief Financial OfficerJohn M. Foy
    
    Senior Vice President/AmericasNico Sciacovelli
    
    Senior Vice President/Europe, Middle East and AfricaJohn C. Kirby
    
    Senior Vice President/Operations
 Peter J. YoungerMr. Younger, 47, was elected to the Board of Directors of
The Cronos Group on January 13, 2000. Mr. Younger will serve as a director
until the 2004 annual meeting and his successor is elected and takes office.
Mr. Younger was appointed as Chief Operating Officer of The Cronos Group on
August 4, 2000, and its Chief Financial Officer in March 1997. From 1991 to
1997, Mr. Younger served as Vice President of Finance for the Leasing Company,
located in the UK. From 1987 to 1991 Mr. Younger served as Vice President and
Controller for CCC in San Francisco. Prior to 1987, Mr. Younger was a
certified public accountant and a principal with the accounting firm of
Johnson, Glaze and Co. in Salem, Oregon. Mr. Younger holds a B.S. degree in
Business Administration from Western Baptist College, Salem, Oregon. John M. FoyMr. Foy, 58, is directly responsible for the Leasing Companys
lease marketing and operations in North America, Central America, and South
America, and is based in San Francisco. From 1985 to 1993, Mr. Foy was Vice
President/Pacific with responsibility for dry cargo container lease marketing
and operations in the Pacific Basin. From 1977 to 1985 Mr. Foy was Vice
President of Marketing for Nautilus Leasing Services in San Francisco with
responsibility for worldwide leasing activities. From 1974 to 1977, Mr. Foy
was Regional Manager for Flexi-Van Leasing, a container lessor, with
responsibility for container leasing activities in the Western United States.
Mr. Foy holds a B.A. degree in Political Science from University of the
Pacific, and a Bachelor of Foreign Trade from Thunderbird Graduate School of
International Management. Nico SciacovelliMr. Sciacovelli, 54, was elected Senior Vice President -
Europe, Middle East and Africa in June 1997. Mr. Sciacovelli is directly
responsible for the Leasing Companys lease marketing and operations in Europe,
the Middle East and Africa and is based in Italy. Since joining Cronos in
1983, Mr. Sciacovelli served as Area Director and Area Manager for Southern
Europe. Prior to joining Cronos, Mr. Sciacovelli was a Sales Manager at
Interpool Ltd. John C. KirbyMr. Kirby, 50, is responsible for container purchasing,
contract and billing administration, container repairs and leasing-related
systems, and is based in the United Kingdom. Mr. Kirby joined CCC in 1985 as
European Technical Manager and advanced to Director of European Operations in
1986, a position he held with CCC, and later the Leasing Company, until his
promotion to Senior Vice President/Operations of the Leasing Company in 1992.
From 1982 to 1985, Mr. Kirby was employed by CLOU Containers, a container
leasing company, as Technical Manager based in Hamburg, Germany. Mr. Kirby
acquired a professional engineering qualification from the Mid-Essex Technical
College in England. Audit Committee The Registrant is governed by CCC pursuant to the terms and provisions of
its Partnership Agreement. The business of CCC, in turn, is supervised by its
board of directors, consisting of Dennis J. Tietz, John Kallas, Elinor A.
Wexler and John M. Foy. All of the members of CCCs board of directors are
officers of CCC and therefore are not independent as defined by the rules of
the SEC. The board of directors of CCC oversees the accounting and financial
reporting processes of the Registrant and the audits of the financial
statements of the Registrant. Audit Committee Financial Expert The board of directors of CCC has determined that John Kallas, a member of
CCCs board, qualifies as an audit committee financial expert within the
meaning of the rules of the SEC. CCCs board has made this judgment by reason
of Mr. Kallas experience and training, described above in Mr. Kallas
biography, under the listing of officers and directors of CCC. Because Mr.
Kallas is an officer of CCC, he is not considered independent within the
meaning of the rules of the SEC. 37




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Code of Ethics CCC has adopted a Code of Ethics (the Code) that applies to the senior
officers of CCC, including the officers identified above. The Code is designed
to promote honest and ethical conduct by such officers in their management of
the business of CCC, including its activities as general partner of the
Registrant; the full and fair disclosure in the reports and documents CCC
prepares for and on behalf of the Registrant; and compliance with applicable
governmental laws, rules, and regulations. The Code provides a mechanism for
the reporting of violations of the Code and measures to enforce adherence to
the Code. A copy of the Code may be requested, without charge, from: Cronos Capital Corp.
The General Partner
Attention: Corporate Secretary
One Front Street, Suite 925
San Francisco, CA 94111
(415) 677-8990
ir@cronos.com Section 16(a) Beneficial Ownership Reporting Compliance The Registrant has followed the practice of reporting acquisitions and
dispositions of the Registrants units of limited partnership interests by CCC,
its general partner. As CCC did not acquire or dispose of any of the
Registrants units of limited partnership interests during the fiscal year
ended December 31, 2003, no reports of beneficial ownership under Section 16(a)
of the Securities Exchange Act of 1934, as amended, were filed with the SEC. 38




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Item 11. Executive Compensation Partnership distributions are paid to its partners (general and limited)
from distributable cash from operations, allocated 95% to the limited partners
and 5% to the general partner. Distributions of sales proceeds are allocated
99% to the limited partners and 1% to the general partner. The allocations
remain in effect until such time as the limited partners have received from the
Partnership aggregate distributions in an amount equal to their capital
contributions plus an 8% cumulative, compounded (daily), annual return on their
adjusted capital contributions. Thereafter, all Partnership distributions will
be allocated 85% to the limited partners and 15% to the general partner. The Registrant will not pay or reimburse CCC or the Leasing Company for
any remuneration payable by them to their executive officers, directors or any
other controlling persons. However, the Registrant will reimburse the general
partner and the Leasing Company for certain services pursuant to the
Partnership Agreement. These services include but are not limited to (i)
salaries and related salary expenses for services which could be performed
directly for the Registrant by independent parties, such as legal, accounting,
transfer agent, data processing, operations, communications, duplicating and
other such services; (ii) performing administrative services necessary to the
prudent operations of the Registrant. The following table sets forth the fees the Registrant paid (on a cash
basis) to CCC or the Leasing Company (CCL) for the year ended December 31,
2003. Cash Fees andName
    
    Description
    
    Distributions1)
    


    CCL
    
    Base management fees - equal to 7% of
gross lease revenues attributable to
operating leases pursuant to Section 4.3
of the Limited Partnership Agreement
    
    $
    916,7242)
    
    CCCCCL
    
    Reimbursed administrative expenses
- equal to the costs expended by CCC and
its affiliates for services necessary to
the prudent operation of the Registrant
pursuant to Section 4.4 of the Limited
Partnership Agreement
    
    $
$
    80,268
604,9923)
    
    CCC
    
    Interest in Fund  5% of distributions of
distributable cash for any quarter
pursuant to Section 6.1 of the Limited
Partnership Agreement
    
    $
    407,861
 39




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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) Security Ownership of Certain Beneficial Owners There is no person or group of persons known to the management of CCC to
be the beneficial owner of more than five percent of the outstanding units of
limited partnership interests of the Registrant. (b) Security Ownership of Management The Registrant has no directors or officers. It is managed by CCC. CCC
owns five units, representing 0.00007% of the total amount of units
outstanding. (c) Changes in Control Inapplicable. 
 Item 13. Certain Relationships and Related Transactions (a) Transactions with Management and Others The Registrants only transactions with management and other related
parties during 2003 were limited to those fees paid or amounts committed to be
paid (on an annual basis) to CCC, the general partner, and its affiliates. See
Item 11, Executive Compensation, herein. (b) Certain Business Relationships Inapplicable. (c) Indebtedness of Management Inapplicable. (d) Transactions with Promoters Inapplicable. 
 Item 14. Principal Accountant Fees and Services CCC, on behalf of the Registrant has appointed Deloitte & Touche LLP as
the Registrants independent auditor for the fiscal year ending December 31,
2003. CCCs board of directors has the authority to pre-approve audit related
and non-audit services on behalf of the Registrant, that are not prohibited by
law, to be performed by the Registrants independent auditors. Audit Fees Audit fees represent fees for professional services provided in connection
with the audit of the Registrants financial statements and review of its
quarterly financial statements and audit services provided in connection with
its statutory or regulatory filings. The Registrant incurred fees of $46,797
and $42,548 during the fiscal years ending December 31, 2003 and 2002,
respectively, for these audit services. Audit-Related Fees The Registrant did not incur audit-related fees during the fiscal years
ending December 31, 2003 and 2002. Typically, audit-related fees, if incurred,
would consist of fees for accounting consultations and other attestation
services. 40




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Tax Fees The Registrant did not incur tax fees during the fiscal years ending
December 31, 2003 and 2002. Typically, tax fees, if incurred, would consist of
fees for compliance services, tax advice and tax planning. All Other Fees The Registrant did not incur any other fees for services provided by its
independent auditor during the fiscal years ending December 31, 2003 and 2002. 41




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PART IV 
 Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K Page(a) 1.
    
    Financial StatementsIndependent Auditors Report
    
    23(a) 2.
    
    The following financial statements of the Registrant are included in Part II, Item 8:Balance Sheets  as of December 31, 2003 and 2002
    
    24Statements of Operations  for the years ended December 31, 2003, 2002 and 2001
    
    25Statements of Partners Capital  for the years ended December 31, 2003, 2002 and 2001
    
    26Statements of Cash Flows  for the years ended December 31, 2003, 2002 and 2001
    
    27Notes to Financial Statements
    
    28
 All schedules are omitted as the information is not required or the
information is included in the financial statements or notes thereto. (a)3. Exhibits ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the Registrant,
amended and restated as of September 12, 1988
    
    *3(b)
    
    Certificate of Limited Partnership of the Registrant
    
    **10
    
    Form of Leasing Agent Agreement with Cronos
Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certifications
    
    Filed with this document****
  (b)
    
    Reports on Form 8-KNo reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 2003.    *
    
    Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated September 12, 1988, included as part of Registration
Statement on Form S-1 (No. 33-23321)**
    
    Incorporated by reference to Exhibit 3.4 to the Registration Statement on
Form S-1 (No. 33-23321)***
    
    Incorporated by reference to Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-42697)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of
2002, other than as required by Section 906, is not to be deemed filed
with the Commission or subject to the rules and regulations promulgated by
the Commission under the Securities Exchange Act of 1934, as amended, or
to the liabilities of Section 18 of said Act. 42




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. CRONOS GLOBAL INCOME FUND XV, L.P.By
    
    Cronos Capital Corp.The General PartnerBy
    
    /s/ Dennis J. TietzDennis J. TietzPresident and Director of Cronos Capital Corp. (CCC)Principal Executive Officer of CCC
 Date: March 26, 2004 Pursuant to the requirement of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Cronos
Capital Corp., the managing general partner of the Registrant, in the
capacities and on the dates indicated: Signature
    
    Title
    
    Date/s/ Dennis J. Tietz
    
    President and Director of
    
    March 26, 2004Cronos Capital Corp.Dennis J. Tietz
    
    (CCC) (Principal ExecutiveOfficer of CCC)/s/ John Kallas
    
    Chief Financial Officer andDirector of
    
    March 26, 2004John Kallas
    
    Cronos Capital Corp. (CCC)(Principal Financial andAccounting Officer of CCC)/s/ Elinor A. Wexler
    
    Vice President-Administration,Secretary and Director of
    
    March 26, 2004Elinor A. Wexler
    
    Cronos Capital Corp.
 Supplemental Information The Registrants annual report will be furnished to its limited partners
on or about April 30, 2004. Copies of the annual report will be concurrently
furnished to the Commission for information purposes only, and shall not be
deemed to be filed with the Commission.




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Exhibit Index ExhibitNo.
    
    Description
    
    Method of Filing3(a)
    
    Limited Partnership Agreement of the Registrant,
amended and restated as of September 12, 1988
    
    *3(b)
    
    Certificate of Limited Partnership of the Registrant
    
    **10
    
    Form of Leasing Agent Agreement with Cronos
Containers Limited
    
    ***31.1
    
    Rule 13a-14 Certification
    
    Filed with this document31.2
    
    Rule 13a-14 Certification
    
    Filed with this document32
    
    Section 1350 Certifications
    
    Filed with this document****
  (b)
    
    Reports on Form 8-KNo reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 2003.    *
    
    Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated September 12, 1988, included as part of Registration
Statement on Form S-1 (No. 33-23321)**
    
    Incorporated by reference to Exhibit 3.4 to the Registration Statement on
Form S-1 (No. 33-23321)***
    
    Incorporated by reference to Exhibit 10.2 to the Registration Statement
on Form S-1 (No. 33-42697)****
    
    This certification, required by Section 906 of the Sarbanes-Oxley Act of
2002, other than as required by Section 906, is not to be deemed filed
with the Commission or subject to the rules and regulations promulgated by
the Commission under the Securities Exchange Act of 1934, as amended, or
to the liabilities of Section 18 of said Act.