##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 2004 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from  to . Commission file number 0-23886 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 94111
(Address of principal executive offices)           (Zip Code) Registrants telephone number, including area code (415) 677-8990 Securities registered pursuant to Section 12(b) of the Act: 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 þ. No o. 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. þ Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). Yes o. No þ. The aggregate market value of the voting and non-voting stock held by non-affiliates of the
Registrant is not applicable, because the outstanding Partnership interests of the Registrant are
not traded on any exchange or in any inter-dealer market. 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)




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Report on Form 10-K for the Fiscal Year
Ended December 31, 2004 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, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    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
    
    
    23Item 8  Financial Statements and Supplementary Data
    
    
    23Item 9  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    37Item 9A  Controls and Procedures
    
    
    37Item 9B  Other Information
    
    
    37PART III
    
    
    38Item 10  Directors and Executive Officers of the Registrant
    
    
    38Item 11  Executive Compensation
    
    
    41Item 12  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    42Item 13  Certain Relationships and Related Transactions
    
    
    42Item 14  Principal Accountant Fees and Services
    
    
    43PART IV
    
    
    44Item 15  Exhibits and Financial Statement Schedules
    
    
    44
 2




---



##### 



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 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




---



##### 



(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, 2004, the Registrant operated 22,097 twenty-foot, 8,042 forty-foot
and 2,031 forty-foot high-cube marine dry cargo containers, as well as 442 twenty-foot and 93
forty-foot high-cube refrigerated cargo containers, and 215 twenty-four thousand-liter tank
containers. A summary of gross lease revenue earned by the Leasing Company, on behalf of the
Registrant, by product, for the years ended December 31, 2004, 2003 and 2002 follows: 2004
    
    
    2003
    
    
    2002Dry cargo containers
    
    $
    11,074,600
    
    
    $
    10,416,781
    
    
    $
    10,521,020Refrigerated containers
    
    
    1,289,032
    
    
    
    1,312,449
    
    
    
    1,343,686Tank containers
    
    
    628,824
    
    
    
    626,863
    
    
    
    599,789Total
    
    $
    12,992,456
    
    
    $
    12,356,093
    
    
    $
    12,464,495
 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 2004, 2003 and 2002. (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 dry marine cargo
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 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 ship, truck and rail. 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. 4




---



##### 



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 2004. 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 trade routes and market shares at a relatively
low cost without making a permanent commitment to support their new structure;
    Leasing allows shipping lines to respond to changing seasonal and trade route demands, thereby
optimizing their capital investment and minimizing storage costs;
    Leasing provides shipping lines with the flexibility to respond to rapidly changing market
opportunities as they arise without relying exclusively on their own containers;
    Leasing allows shipping lines to benefit from the relationship between container manufacturers
and leasing companies. 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 leases.Master leases are leases under which a customer may lease a certain number of
containers, as needed, under a general agreement between the lessor and the lessee. Such
leases provide customers with greater flexibility by allowing 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 master leases to manage trade imbalances (where more
containerized cargo moves in one direction than another) by picking up a container in one port
and dropping it off at another location after one or more legs of a voyage. The commercial
terms of master leases are usually negotiated or renewed annually.
    Term leases.Term leases are for a fixed period of time, typically varying from three to five
years. 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. 5




---



##### 



The percentage of equipment under term, master and other lease types 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. 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 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. 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 all of 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 quality. 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 (the ISO) 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 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. The Registrants tank container fleet is constructed and maintained in accordance with
international codes for the worldwide transport and storage of bulk liquids on both land and sea.
These codes include the ISO, the International Maritime Organization (IMO) standards and
recommendations and the American Society of Mechanical Engineers (the ASME) VIII Pressure Vellel
Design Code. The Registrants tank fleet may 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. 6




---



##### 



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. As of December 31, 2004, the Registrant owned 22,097 twenty-foot, 8,042 forty-foot and 2,031
forty-foot high-cube marine dry cargo containers, as well as 442 twenty-foot and 93 forty-foot
high-cube refrigerated cargo containers, and 215 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, 2004: Dry Cargo
    
    
    RefrigeratedContainers
    
    
    Containers
    
    
    Tank40-Foot
    
    
    
    
    
    
    40-Foot
    
    
    Containers20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    High-Cube
    
    
    24,000-LiterContainers on lease:Master
lease
    
    
    14,060
    
    
    
    4,262
    
    
    
    1,512
    
    
    
    284
    
    
    
    25
    
    
    
    127Term leaseShort
term1
    
    
    5,665
    
    
    
    2,323
    
    
    
    262
    
    
    
    62
    
    
    
    5
    
    
    
    31Long
term2
    
    
    1,489
    
    
    
    362
    
    
    
    166
    
    
    
    32
    
    
    
    24
    
    
    
    33Subtotal
    
    
    21,214
    
    
    
    6,947
    
    
    
    1,940
    
    
    
    378
    
    
    
    54
    
    
    
    191Containers off lease
    
    
    883
    
    
    
    1,095
    
    
    
    91
    
    
    
    64
    
    
    
    39
    
    
    
    24Total container fleet
    
    
    22,097
    
    
    
    8,042
    
    
    
    2,031
    
    
    
    442
    
    
    
    93
    
    
    
    215
   1.
    
    Short term leases represent term leases that are either scheduled for
renegotiation or that may expire in 2005.2.
    
    Long term leases represent term leases, the majority of which will expire
between 2005 and 2009. 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 decision whether to repair or sell the container accordingly. 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. 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. 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. 7




---



##### 



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 Chennai. The Leasing Company also maintains agency relationships with approximately 14 independent
agents around the world, which 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 350
independently-owned and operated depots around the world to inspect, repair, maintain and store
containers while off-hire. The Leasing Companys area offices authorize all container movements
into and out of the depot and supervise all 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 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 leasing 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 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. 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
lessee may vary. 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 8




---



##### 



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, 2004, 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. The Leasing Company, on behalf of the Registrant, competes with various container leasing
companies in the markets in which it conducts business. The container leasing companies are
essentially comprised of three broad groups. The first group includes five leasing companies that
control almost 65% of the total leased fleet. The second group, which includes the Leasing
Company, controls approximately 24% of the total leased fleet. The third group, controlling the
remaining 11%, comprises 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. (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. Since then, the environmental impact of CFCs has become increasingly prominent. On January
1, 2002, 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 refrigerant used in the Registrants refrigerated containers
could also become subject to similar governmental regulations. 9




---



##### 



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 28, 2005, CCC had 13 employees,
consisting of 3 officers, 6 other managers and 4 clerical and staff personnel. The Leasing Company
had 31 employees, consisting of 3 officers, 10 other managers, and 18 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. Lease revenue is deemed to be earned based on the physical location of the containers while on
lease. Almost all of the Registrants lease revenue is earned from containers leased world wide to
ocean carriers. Due to the lack of information regarding the physical location of the Registrants
fleet when on lease in the global shipping trade, the Registrant believes that it does not possess
discernible geographic reporting segments. 10




---



##### 



Item 2. Properties As of December 31, 2004, the Registrant owned 22,097 twenty-foot, 8,042 forty-foot and 2,031
forty-foot high-cube marine dry cargo containers, as well as 442 twenty-foot and 93 forty-foot
high-cube refrigerated cargo containers, and 215 twenty-four thousand-liter tank containers,
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, 2004 was as
follows: EstimatedUseful Life
    
    
    Average Age
    
    
    Average Cost20-Foot Dry Cargo Containers
    
    12-15 years
    
    10 years
    
    $
    2,47440-Foot Dry Cargo Containers
    
    12-15 years
    
    10 years
    
    $
    3,97540-Foot High-Cube Dry Cargo Containers
    
    12-15 years
    
    9 years
    
    $
    4,03120-Foot Refrigerated Cargo Containers
    
    12-15 years
    
    10 years
    
    $
    19,49540-Foot High-Cube Refrigerated Cargo
Containers
    
    12-15 years
    
    11 years
    
    $
    24,25424,000-Liter Tanks
    
    12-18 years
    
    10 years
    
    $
    25,429
 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 2004,
utilization of the dry cargo and refrigerated container fleet averaged 90% and 83% respectively.
Utilization of the tank container fleet averaged 89%. During 2004, the Registrant disposed of 1,647 twenty-foot, 200 forty-foot and 42 forty-foot
high-cube marine dry cargo containers, as well as 15 twenty-foot refrigerated cargo containers, six
forty-foot high-cube refrigerated cargo containers, and six twenty-four thousand-liter tanks, at an
average net gain of $1 per container. 
 Item 3. Legal Proceedings Inapplicable. 
 Item 4. Submission of Matters to a Vote of Security Holders Inapplicable. 11




---



##### 



PART II 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (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 Number of Unit Holders(b)(1)
    

Title
of Class
    

as
of December 31, 2004Units of limited partnership interests
    
    8,016
 (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. (e) Issuer purchases of equity securities. Inapplicable. 12




---



##### 



Item 6. Selected Financial Data Year Ended December 31,2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000Net lease revenue
    
    $
    8,702,927
    
    
    $
    7,237,850
    
    
    $
    7,046,605
    
    
    $
    7,581,717
    
    
    $
    10,272,079Net income (loss)
    
    $
    681,203
    
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )
    
    $
    (48,308
    )
    
    $
    3,167,590Net income (loss) per unit of
limited partnership interest
    
    $
    0.05
    
    
    $
    (0.07
    )
    
    $
    (0.16
    )
    
    $
    (0.05
    )
    
    $
    0.37Cash distributions per unit of
limited partnership interest
    
    $
    1.17
    
    
    $
    1.22
    
    
    $
    0.92
    
    
    $
    1.14
    
    
    $
    1.31At year-end:Total assets
    
    $
    53,507,200
    
    
    $
    61,609,258
    
    
    $
    71,296,872
    
    
    $
    79,389,081
    
    
    $
    88,017,878Partners capital
    
    $
    53,507,200
    
    
    $
    61,609,258
    
    
    $
    71,296,872
    
    
    $
    79,389,081
    
    
    $
    88,017,878
   
 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




---



##### 



Liquidity and Capital Resources The Registrants primary objective is to generate cash flow from operations for distribution
to its limited partners. Aside from the initial working capital reserve retained from gross
subscription proceeds (equal to approximately 1% of such proceeds), the Registrant relies primarily
on container rental receipts to meet this objective, as well as to finance operating needs. Cash
generated from container sales proceeds are distributed to its limited partners. No credit lines
are maintained to finance working capital. Commencing in 2004, the Registrants 11th year of
operations, the Registrant began focusing its attention on the disposition of its fleet in
accordance with another of its original investment objectives, realizing the residual value of its
containers after the expiration of their economic useful lives, estimated to be between 12 to 15
years after placement in leased service. During 2005, the Registrant will begin to actively
dispose of its fleet, with cash proceeds from equipment disposals, in addition to cash from
operations, providing the cash flow for distributions to the limited partners. The decision to
dispose of containers is influenced by various factors including age, condition, suitability for
continued leasing as well as the geographical location when disposed. At that time whereby the
Registrants fleet size is reduced to approximately 20% of its original fleet size, the Registrant
expects to enter the final phase of its liquidation and wind-up stage of operations, unless
terminated sooner upon the occurrence of certain events. At December 31, 2004, the Registrants
fleet size measured approximately 86% of its original fleet size. Upon the liquidation of CCCs
interest in the Registrant, CCC shall contribute to the Registrant an aggregate amount equal to the
deficit balance in its capital account at the time of such liquidation, after giving effect to the
allocation of income or loss arising from the liquidation of the Registrants assets. 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, 2005, the Registrant has distributed, on a cash basis,
$98,624,167 in cash from operations, and $4,052,548 in cash from container sales proceeds to its
limited partners. This represents total cash basis distributions of $102,676,715 or 72% of the
limited partners original invested capital. Distributions are paid monthly based primarily on
each quarters cash flow from operations. Distributions are also affected by periodic increases or
decreases to working capital reserves, as deemed appropriate by the general partner. Sales proceeds
distributed to its partners may fluctuate in subsequent periods, reflecting the level of container
disposals. At December 31, 2004, the Registrant had $5,488,320 in cash and cash equivalents, an increase
of $1,850,382 and $1,108,808 from the cash balances at December 31, 2003 and 2002, 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 $8,399,924 during 2004, compared to
$7,217,234 and $6,714,548 during 2003 and 2002, respectively. Cash from Investing Activities: Net cash provided by investing activities was $2,233,719
during 2004, compared to $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 $8,783,261 during
2004 compared to $9,168,533 and $6,910,461 during 2003 and 2002, respectively. These amounts
represent distributions to the Registrants general and limited partners. The Registrants
continuing container disposals should produce lower operating results and consequently, lower
distributions to its partners in subsequent periods. 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 14




---



##### 



arrangements or other contractually narrow or limited purposes. As of December 31, 2004, the
Registrant was not involved in any material unconsolidated SPE transactions. Contractual Obligations As of December 31, 2004, the Registrant did not have any contractual obligations or commercial
commitments. Results of Operations Market Overview 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 for off-hire containers, comprising of storage and
repositioning costs. These costs are sensitive to the quantity of off-hire containers as
well as the frequency at which containers are re-delivered.
    Legal and other expenses include legal costs related to the recovery of containers
and doubtful accounts, insurance and provisions for doubtful accounts. At December 31, 2004, approximately 86% of the original equipment remained in the Registrants
fleet, as compared to approximately 91% at December 31, 2003. The following chart summarizes the
composition of the Registrants fleet (based on container type) at December 31, 2004. Dry Cargo
    
    
    RefrigeratedContainers
    
    
    Containers
    
    
    Tank40-Foot
    
    
    
    
    
    
    40-Foot
    
    
    Containers20-Foot
    
    
    40-Foot
    
    
    High-Cube
    
    
    20-Foot
    
    
    High-Cube
    
    
    24,000-LiterContainers on lease:Master lease
    
    
    14,060
    
    
    
    4,262
    
    
    
    1,512
    
    
    
    284
    
    
    
    25
    
    
    
    127Term leaseShort
term1
    
    
    5,665
    
    
    
    2,323
    
    
    
    262
    
    
    
    62
    
    
    
    5
    
    
    
    31Long
term2
    
    
    1,489
    
    
    
    362
    
    
    
    166
    
    
    
    32
    
    
    
    24
    
    
    
    33Subtotal
    
    
    21,214
    
    
    
    6,947
    
    
    
    1,940
    
    
    
    378
    
    
    
    54
    
    
    
    191Containers off lease
    
    
    883
    
    
    
    1,095
    
    
    
    91
    
    
    
    64
    
    
    
    39
    
    
    
    24Total container
fleet
    
    
    22,097
    
    
    
    8,042
    
    
    
    2,031
    
    
    
    442
    
    
    
    93
    
    
    
    215
 Dry CargoContainers
    
    
    Refrigerated
    
    
    Tank40-Foot
    
    
    Containers
    
    
    Containers20-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
    
    
    4,349
    
    
    
    16
    %
    
    
    709
    
    
    
    8
    %
    
    
    148
    
    
    
    7
    %
    
    
    21
    
    
    
    5
    %
    
    
    7
    
    
    
    7
    %
    
    
    14
    
    
    
    6
    %Remaining fleet at
December 31, 2004
    
    
    22,097
    
    
    
    84
    %
    
    
    8,042
    
    
    
    92
    %
    
    
    2,031
    
    
    
    93
    %
    
    
    442
    
    
    
    95
    %
    
    
    93
    
    
    
    93
    %
    
    
    215
    
    
    
    94
    %
   1.
    
    Short term leases represent term leases that are either scheduled for
renegotiation or that may expire in 2005.2.
    
    Long term leases represent term leases, the majority of which will expire
between 2005 and 2009. 15




---



##### 



Container trade volumes, especially within Asia-Europe and intra-Asian trade routes,
experienced substantial growth during 2004. Chinas import and export markets were a catalyst to
this growth, in addition to low global interest rates and improved investor and consumer
confidence. Economists report that Chinas 2004 exports and imports increased 35% and 36%,
respectively, over the prior year. The increase in 2004 trade volumes also contributed to stronger
container leasing market conditions and higher levels of demand for new and existing containers.
The Registrants dry cargo container utilization measured 93% at December 31, 2004, compared to 85%
and 81% at December 31, 2003 and 2002, respectively. Based on the current market for leased
containers and forecasts from industry analysts indicating continued levels of demand through 2005,
CCC and the Leasing Company do not expect a significant decline in the Registrants utilization
rates. The following table summarizes the Registrants average utilization rates and average fleet
size for each of the last three years. 2004
    
    
    2003
    
    
    2002Fleet size (measured in
twenty-foot equivalent
units (TEU))Dry cargo containers
    
    
    43,500
    
    
    
    44,980
    
    
    
    46,497Refrigerated containers
    
    
    643
    
    
    
    657
    
    
    
    658Tank containers
    
    
    219
    
    
    
    221
    
    
    
    225Average utilization ratesDry cargo containers
    
    
    90
    %
    
    
    82
    %
    
    
    75
    %Refrigerated containers
    
    
    83
    %
    
    
    92
    %
    
    
    92
    %Tank containers
    
    
    89
    %
    
    
    85
    %
    
    
    79
    %
 Container manufacturers increased production output levels in 2004 in order to meet the
increased container demand by shipping lines. Production of new containers was hampered somewhat by
steel shortages earlier in the year, contributing to stronger market conditions for leased
containers. As steel prices increased during 2004, along with the price of other materials
including wood flooring, the cost of a new twenty-foot dry cargo container also increased, from
$1,350 during the latter part of 2003, to the current price of $2,200, an amount higher than at any
time since 1995, the last time container prices peaked. As a result of the current high demand for
new container equipment, a significant reduction in the price of new containers is unlikely in the
near future. The increase in trade volumes also placed additional burdens on the worlds ports and
railroads, contributing to congestion in certain locations, particularly in the US and Europe,
therefore, increasing the turnaround time for containerships and further reducing the available
supply of containers. Within the US, port congestion on the US west coast has encouraged the
shipping of cargo directly to less-congested US east and gulf coast ports. The fact that routes
from Asia to the US east coast are 50 percent longer than to the US west coast requires shipping
lines to utilize additional containerships and a larger volume of containers over a longer period
of time. Off-hire inventories of older containers throughout the world declined, as shipping lines
employed more leased containers to meet their increasing container requirements arising from the
robust growth in containerized trade and the acceptance of new, larger containerships. This
decline in inventories has resulted in substantial decreases in storage expenses and expenditures
to reposition containers from low demand locations to locations of higher demand. Declining
inventories have also contributed to an increase in the proceeds realized on the sale of used
containers, as fewer containers were available to meet the demand of
buyers of existing containers. The Registrants dry cargo inventory of off-hire containers at
December 31, 2004 decreased approximately 56% and 67% when compared to off-hire inventories at
December 31, 2003 and 2002, respectively. The Leasing Company, on behalf of the Registrant, may
consider the disposal of the Registrants off-hire containers in locations whereby container sale
prices equal or exceed targets established by both CCC and the Leasing Company. The Leasing Company has not undertaken any major repositioning of the Registrants containers
since the first quarter of 2004, due primarily to the shortage of containership capacity. If
suitable carriers can be sourced, the Leasing Company will reposition off-hire containers from the
US east coast during 2005, thereby taking advantage of the strong demand for containers in the
Asian trade routes. The repositioning may include the Registrants containers. The objective of
each repositioning is to improve future cash flows, so that savings in storage expense, combined
with an increase in future lease revenue, exceed the cost of repositioning the containers. 16




---



##### 



During 2004, per-diem rates for new containers increased in line with the increase in new
container costs. Per-diem rates for older containers experienced modest increases, as the lease
market for older containers remains competitive, and therefore, subject to significant pricing
pressures. Per-diem rates for older containers are expected to maintain their current level or
increase slightly over the next 12 months. The Registrants average dry cargo container per-diem
rate for 2004 increased approximately 1% in comparison to 2003. However, the Registrants average
dry cargo container per-diem rate for 2004 was lower than 2002 by approximately 3%, a result of
four main factors that transpired over the 2002 and 2003 periods:  
    Per-diem rental rates declined in response to the reduction in
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
world wide. Additionally, the combined per-diem rental rate for the Registrants fleet of refrigerated and
tank containers for 2004 compared to 2003, increased by 7% and decreased by 7%, respectively. Although favorable market conditions currently exist for container lessors, current market
conditions may negatively impact the shipping lines. Sharply rising and volatile oil prices,
combined with the increase in charter rates for ships, higher steel prices and the related increase
in new container prices, have created a concern for both the shipping lines and, therefore, the
leasing companies. Although the majority of the top 20 shipping lines have experienced strong
profit growth during 2004, other shipping lines are facing increased financial pressures,
especially those shipping lines that rely on operating their containerships via short-term
charters. Current conditions appear to favor the larger more established shipping lines, which
have witnessed increases in freight rates due to the strong demand experienced in their respective
trade routes. However, some regional intra-Asian shipping lines have struggled to remain
profitable, due primarily to the rising charter rates for ships, over capacity and lower freight
rates, and have cut back services in certain routes in an attempt to reduce rising costs.
Additionally, the delivery of new containerships in 2006 and their additional tonnage capacity will
present additional risk for the shipping lines. The Registrant, CCC and the Leasing Company
continue to monitor the aging of lease receivables, collections and the credit exposure to various
existing and new customers. The financial impact of losses from shipping lines may eventually
influence the demand for leased containers, as some shipping lines may experience additional
financial difficulties, consolidate, or become insolvent. Industry analysts are expressing concern that the current program of new shipbuilding may
create over capacity within the shipping industry once the new container ships scheduled to be
delivered during 2006 and 2007 are placed in service. Based on current orders, industry analysts
predict that the worlds containership fleet will exceed 10 million TEU by the end of 2007,
compared to less than 7 million TEU at the beginning of 2004. Over capacity may contribute to a
reduction in profitability for shipping lines, which in turn could have adverse implications for
container lessors, including a decline in the demand for leased containers and a reduction in
container per-diem rental rates. Lastly, concerns remain regarding the worlds major economies, including the volatility of oil
prices, the rate of world economic growth and the related growth of containerized trade volumes,
inflation concerns and its impact on interest rates, US trade and budget deficits, the
unpredictability of Chinas economy, performance of global stock markets, geopolitical concerns
arising from uncertainties within the Middle East and Asia, threats of terrorism, as well as new
container production levels, all of which may have an impact on the current demand for leased
containers. Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003 Net lease revenuewas $8,702,927 for the year ended December 31, 2004 compared to $7,237,850 for
the prior year. The increase was due to a $636,363 increase in gross rental revenue from the year
ended December 31, 2003, and a $911,586 reduction in rental equipment operating expenses. Gross
rental revenue was impacted by an increase in fleet utilization rates. The decrease in direct
operating expense was attributable to the Registrants higher utilization rate in 2004, and its
impact on activity-based expenses such as storage and handling, as well as a reduction in
repositioning expenses partially offset by an increase in the provision for doubtful accounts.
Other components of net lease revenue, including
management fees, and reimbursed administrative expenses, were higher by a combined $82,872 when
compared to 2003. This increase was attributable to the operating performance of the Registrants
fleet. 17




---



##### 



Depreciation expenseof $7,057,111 in 2004 declined by $220,810 when compared to 2003 due to a
declining fleet size. Other general and administrative expensesamounted $206,493 in 2004, an increase of $6,786 or
3% when compared to 2003. Net gain (loss) on disposal of equipmentwas a result of the Registrants disposal of 1,916
containers in 2004, as compared to 1,011 containers during 2003. These disposals resulted in a net
gain of $2,776 during 2004, compared to a net loss of $296,826 for 2003. The Registrant believes
that the net gain on container disposals in 2004 was a result of various factors, including the
volume of disposed containers, 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. Impairment chargeswere incurred by the Registrant in the fourth quarter of 2004 relating to
certain refrigerated containers with machinery originally supplied by a particular manufacturer
(the Sabroe Machinery). As a result of issues concerning the Sabroe Machinerys reliability for
continued use within the lease market, the lack of sufficient quantities of spare parts within the
market for required maintenance and repairs of the Sabroe Machinery, and the unwillingness of
potential lessees to lease refrigerated containers utilizing the Sabroe Machinery, CCC and the
Leasing Company concluded that off-hire inventories of the Registrants refrigerated containers
utilizing the Sabroe Machinery would be targeted for immediate sale, effective December 1, 2004.
CCC and the Leasing Company also conducted a review of the Registrants refrigerated containers
utilizing the Sabroe Machinery that were on lease at December 1, 2004. Assets to be disposed of:In December 2004, the Leasing Company committed to a plan to dispose of
52 of the Registrants refrigerated containers utilizing the Sabroe Machinery. It was concluded
that the carrying value of these containers, $539,698, exceeded fair value and accordingly, an
impairment charge of $430,548 was recorded to operations under impairment losses. It is expected
that these refrigerated containers will be disposed of over the first two quarters of 2005. Fair
value was determined by discounting future expected cash flows. Assets to be held and used:CCC and the Leasing Company conducted a review of 46 of the
Registrants refrigerated containers utilizing the Sabroe Machinery that were on lease at
December 1, 2004. It was concluded that the carrying value of these containers, $478,364,
exceeded the future cash flows expected to result from the use of these containers and their
eventual disposition, and therefore was not recoverable. Accordingly, a charge of $355,137 was
recorded to operations under impairment losses. Fair value was determined by discounting future
expected cash flows. Year Ended December 31, 2003 Compared to the Year Ended December 31, 2002 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 fleet size, 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 2004 declined by $216,968 when compared to 2003 due to a
declining fleet size. 18




---



##### 



Other general and administrative expenseswere $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
volume of disposed containers, the age, condition, suitability for continued leasing, as well as
the geographical 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
evaluate 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
quality. 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 may be subject to an unexpected loss in net lease revenue resulting from sub-lessees
of its containers that default under their container lease agreements with the Leasing Company. New Accounting Pronouncements In November 2004, the FASB issued SFAS No. 151  Inventory Costs  an amendment of ARB No.
43, Chapter 4 (SFAS 151). SFAS 151 amends the guidance in ARB No. 43, Chapter 4   Inventory
Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). SFAS 151 will not have any impact on the financial
statements of the Registrant. In December 2004, the FASB issued SFAS No. 153  Exchanges of Nonmonetary Assets  an
amendment of APB Opinion No. 29 (SFAS 153). This Statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it with a general
exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary
exchange has commercial substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange. The Registrant does not expect the introduction of SFAS
153 to have any impact on its financial statements. Inflation The Registrant believes inflation has not had a material adverse effect on the results of its
operations. 19




---



##### 



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. Risks of Ownership and Leasing of Special Purpose Containers. A portion of the Registrants
container portfolio consists of refrigerated and tank containers. Unlike dry cargo containers,
these special purpose 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 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 2003 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. 20




---



##### 



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. 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 may 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. As
of mid-2004, five leasing companies controlled approximately 65% 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. 21




---



##### 



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. In addition, when containers are recovered, the Leasing
Company may not be able to re-lease the equipment at comparable rates and at favorable lease terms. 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. 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. 22




---



##### 



Item 7A. Quantitative and Qualitative Disclosures About Market Risk Exchange rate risk:In 2004, approximately 95% of the gross lease revenues billed by the
Leasing Company on behalf of the Group, or on behalf of other third-party container owners,
including the Registrant, were billed and paid in US dollars, and approximately 84% of expenses
were incurred and paid in US dollars. For non-US dollar denominated revenues and expenses, the
Leasing Company may enter into foreign currency contracts to reduce exposure to exchange rate risk.
Of the non-US dollar direct operating expenses, the Leasing Company estimates approximately 70%
are individually small, unpredictable and were incurred in varying denominations. Thus, the
Leasing Company determined such amounts are not suitable for cost effective hedging. 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 the Registrants results of operations and
financial condition. 
 Item 8. Financial Statements and Supplementary Data 23




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2004 and 2003, and the related statements of operations,
partners capital, and cash flows for each of the three years in the period ended December 31,
2004. 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 the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The
company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances but
not for the purpose of expressing an opinion on the effectiveness of the companys internal
controls over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, 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, 2004 and 2003, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2004, in
conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP San Francisco, California
March 23, 2005 24




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. 
 Balance Sheets December 31, 2004 and 2003 2004
    
    
    2003AssetsCurrent assets:Cash and cash equivalents, includes $5,473,320 in 2004 and
$3,030,262 in 2003 in interest-bearing accounts (note 3)
    
    $
    5,488,320
    
    
    $
    3,637,938Net lease receivables due from Leasing Company
(notes 1 and 4)
    
    
    1,348,775
    
    
    
    1,124,539Total current assets
    
    
    6,837,095
    
    
    
    4,762,477Container rental equipment, at cost
    
    
    110,465,981
    
    
    
    117,502,046Less accumulated depreciation
    
    
    (63,905,026
    )
    
    
    (60,655,265
    )Net container rental equipment (note 1)
    
    
    46,560,955
    
    
    
    56,846,781Container rental equipment held for sale
    
    
    109,150
    
    
    
    Total assets
    
    $
    53,507,200
    
    
    $
    61,609,258Partners CapitalPartners capital (deficit):General partner
    
    $
    (916,725
    )
    
    $
    (835,530
    )Limited partners (note 8)
    
    
    54,423,925
    
    
    
    62,444,788Total partners capital
    
    $
    53,507,200
    
    
    $
    61,609,258
 The accompanying notes are an integral part of these financial statements. 25




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. 
 Statements of Operations For the years ended December 31, 2004, 2003 and 2002 2004
    
    
    2003
    
    
    2002Net lease revenue
(notes 1 and 6)
    
    $
    8,702,927
    
    
    $
    7,237,850
    
    
    $
    7,046,605Other operating income
(expenses):Depreciation (note 1)
    
    
    (7,057,111
    )
    
    
    (7,277,921
    )
    
    
    (7,494,889
    )Other general and
administrative
expenses
    
    
    (206,493
    )
    
    
    (199,707
    )
    
    
    (191,094
    )Net gain (loss) on
disposal of
equipment
    
    
    2,776
    
    
    
    (296,826
    )
    
    
    (582,786
    )Asset impairment loss
    
    
    (785,685
    )
    
    
    
    
    
    
    (8,046,513
    )
    
    
    (7,774,454
    )
    
    
    (8,268,769
    )Income (loss)
from operations
    
    
    656,414
    
    
    
    (536,604
    )
    
    
    (1,222,164
    )Other income:Interest income
    
    
    24,789
    
    
    
    17,523
    
    
    
    40,416Net income (loss)
    
    $
    681,203
    
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )Allocation of net
income (loss):General partner
    
    $
    298,977
    
    
    $
    (5,191
    )
    
    $
    (11,817
    )Limited partners
    
    
    382,226
    
    
    
    (513,890
    )
    
    
    (1,169,931
    )$
    681,203
    
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )Limited partners per
unit share of net
income (loss)
    
    $
    0.05
    
    
    $
    (0.07
    )
    
    $
    (0.16
    )
 The accompanying notes are an integral part of these financial statements. 26




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. 
 Statements of Partners Capital For the years ended December 31, 2004, 2003 and 2002 Limited
    
    
    GeneralPartners
    
    
    Partner
    
    
    TotalBalances at January 1, 2002
    
    $
    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
    )
    
    
    71,296,872Net 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
    )
    
    
    61,609,258Net income
    
    
    382,226
    
    
    
    298,977
    
    
    
    681,203Cash distributions
    
    
    (8,403,089
    )
    
    
    (380,172
    )
    
    
    (8,783,261
    )Balances at December 31,
2004
    
    $
    54,423,925
    
    
    $
    (916,725
    )
    
    $
    53,507,200
 The accompanying notes are an integral part of these financial statements. 27




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. 
 Statements of Cash Flows For the years ended December 31, 2004, 2003 and 2002 2004
    
    
    2003
    
    
    2002Cash flows from operating activities:Net income (loss)
    
    $
    681,203
    
    
    $
    (519,081
    )
    
    $
    (1,181,748
    )Adjustments to reconcile net
loss to net cash from operating
activities:Depreciation
    
    
    7,057,111
    
    
    
    7,277,921
    
    
    
    7,494,889Net (gain) loss on
disposal of equipment
    
    
    (2,776
    )
    
    
    296,826
    
    
    
    582,786Asset impairment loss
    
    
    785,685
    
    
    
    
    
    
    
    Decrease (increase) in
net lease receivables
due from Leasing
Company
    
    
    (121,299
    )
    
    
    161,568
    
    
    
    (181,379
    )Total adjustments
    
    
    7,718,721
    
    
    
    7,736,315
    
    
    
    7,896,296Net cash provided
by operating
activities
    
    
    8,399,924
    
    
    
    7,217,234
    
    
    
    6,714,548Cash flows from investing activities:Proceeds from sale of container
rental equipment
    
    
    2,233,719
    
    
    
    1,209,725
    
    
    
    863,338Cash flows from financing activitiesDistributions to general partner
    
    
    (380,172
    )
    
    
    (407,863
    )
    
    
    (325,057
    )Distributions to limited partners
    
    
    (8,403,089
    )
    
    
    (8,760,670
    )
    
    
    (6,585,404
    )(8,783,261
    )
    
    
    (9,168,533
    )
    
    
    (6,910,461
    )Net increase (decrease) in cash and
cash equivalents
    
    
    1,850,382
    
    
    
    (741,574
    )
    
    
    667,425Cash and cash equivalents at
beginning of year
    
    
    3,637,938
    
    
    
    4,379,512
    
    
    
    3,712,087Cash and cash equivalents at end of
year
    
    $
    5,488,320
    
    
    $
    3,637,938
    
    
    $
    4,379,512
 The accompanying notes are an integral part of these financial statements. 28




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. 
 Notes to Financial Statements December 31, 2004, 2003 and 2002  (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 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.The decision to dispose of containers is influenced by various factors including age,
condition, suitability for continued leasing as well as the geographical location when
disposed. At that time whereby the Partnerships fleet size is reduced to approximately
20% of its original fleet size, the Partnership expects to enter the final phase of its
liquidation and wind up of its operations, unless terminated sooner upon the occurrence of
certain events. At December 31, 2004, the Partnerships fleet size measured approximately
86% of its original fleet size.(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. 29




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (b)
    Leasing Company and Leasing Agent Agreement (continued)The Leasing Agent Agreement generally provides that the Leasing Company will make payments
to the Partnership based upon rentals collected from ocean carriers after deducting direct
operating expenses and management fees to CCC and the Leasing Company. The Leasing
Company leases containers to ocean carriers, generally under operating leases which are
either master leases or term leases (mostly one to five years). Master leases do not
specify the exact number of containers to be leased or the term that each container will
remain on hire but allow the ocean carrier to pick up and drop off containers at various
locations, and rentals are based upon the number of containers used and the applicable
per-diem rate. Accordingly, rentals under master leases are all variable and contingent
upon the number of containers used. Most containers are leased to ocean carriers under
master leases; leasing agreements with fixed payment terms are not material to the
financial statements. Since there are no material minimum lease rentals, no disclosure of
minimum lease rentals is provided in these financial statements.(c)
    Concentrations of Credit RiskThe Partnerships financial instruments that are exposed to concentrations of credit risk
consist primarily of cash, cash equivalents and net lease receivables due from the Leasing
Company. See note 3 for further discussion regarding the credit risk associated with cash
and cash equivalents.Net lease receivables due from the Leasing Company (see notes 1(b) and 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. 30




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (f)
    Allocation of Net Income or Loss, Partnership Distributions and Partners
CapitalNet 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.Upon dissolution , the assets of the Partnership will be sold and the proceeds
thereof distributed as follows: (i) all of the Partnerships debts and liabilities to
persons other than CCC or the limited partners shall be paid and discharged; (ii)
all of the Partnerships debts and liabilities to CCC and the limited partners shall
be paid and discharged; and (iii) the balance of such proceeds shall be distributed
to CCC and the limited partners in accordance with the positive balances of CCC and
the limited partners capital accounts. CCC shall contribute to the Partnership an
aggregate amount equal to the deficit balance in its capital account at the time of
such liquidation, after giving effect to the allocation of income or loss arising
from the liquidation of the Partnerships assets.(g)
    Acquisition FeesPursuant to the Partnership Agreement, acquisition fees paid to CCC are based on 5% of the
equipment purchase price. These fees are capitalized and included in the cost of the
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
for 2002.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. 31




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (h)
    Container Rental Equipment (cont.)In December 2004 the Partnership recorded impairment charges related to 98 refrigerated
containers which reduced results of operations by $785,685, or $0.11 per limited
partnership unit. The impairment charges were a result of CCCs and the Leasing Companys
review of the Partnerships refrigerated containers, specifically those with machinery
supplied by a particular manufacturer (the Sabroe Machinery). The purpose of the review
was to consider the issues concerning the Sabroe Machinerys reliability for continued use
within the lease market, the lack of sufficient quantities of spare parts within the
market for required maintenance and repairs of the Sabroe Machinery, and the unwillingness
of potential lessees to lease refrigerated containers utilizing the Sabroe Machinery, and
to identify the consequences, if any, from an accounting perspective. CCC and the Leasing
Company identified a number of issues that have had an impact on the carrying value of
certain equipment at December 1, 2004.  i.
    The current lessees of these containers have
communicated to the Leasing Company that due to very high operating costs
incurred while leasing the containers, they intend to return all of the leased
refrigerated containers utilizing the Sabroe Machinery within the next six
months.ii.
    The Leasing Company is unable to obtain sufficient
quantities of spare parts within the market for required maintenance and repairs
of the Sabroe Machinery, a direct result of the Sabroe Machinery manufacturer no
longer conducting business.iii.
    CCC and the Leasing Company has noted issues
regarding the Sabroe Machinerys reliability for continued use within the lease
market, and have deemed the containers to be beyond economical repair.  CCC and the Leasing Company considered the impact of these factors in December 2004, and
determined a change regarding the current marketing strategy for these containers was
required. CCC and the Leasing Company concluded that effective December 1, 2004, off-hire
inventories of the refrigerated containers utilizing the Sabroe Machinery would be
targeted for immediate sale. CCC and the Leasing Company also conducted a review of the
refrigerated containers utilizing the Sabroe Machinery that were on lease at December 1,
2004.  Assets to be disposed of:In December 2004, the Leasing Company committed to a plan to
dispose of 52 of the Partnerships refrigerated containers utilizing the Sabroe
Machinery. It was concluded that the carrying value of these containers, $539,698,
exceeded fair value and accordingly, an impairment charge of $430,548 was recorded to
operations under impairment losses. It is expected that these refrigerated containers
will be disposed of over the first two quarters of 2005. Fair value was determined by
discounting future expected cash flows.Assets to be held and used:CCC and the Leasing Company conducted a review of 46 of
the Partnerships refrigerated containers utilizing the Sabroe Machinery that were on
lease at December 1, 2004. It was concluded that the carrying value of these
containers, $478,364, exceeded the future cash flows expected to result from the use
of these containers and their eventual disposition, and therefore was not recoverable.
Accordingly, a charge of $355,137 was recorded to operations under impairment losses.
Fair value was determined by discounting future expected cash flows.  There were no impairment charges to the carrying value of container rental equipment
during 2003 and 2002. 32




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (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.(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 2004, the FASB issued SFAS No. 151  Inventory Costs  an amendment of ARB
No. 43, Chapter 4 (SFAS 151). SFAS 151 amends the guidance in ARB No. 43, Chapter 4 
Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage). SFAS 151 will not have
any impact on the financial statements of the Partnership.In December 2004, the FASB issued SFAS No. 153  Exchanges of Nonmonetary Assets  an
amendment of APB Opinion No. 29 (SFAS 153). This Statement amends Opinion 29 to
eliminate the exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the exchange. The
Partnership does not expect the introduction of SFAS 153 to have any impact on its
financial statements.  (2)
    Operating SegmentAn operating segment is a component of an enterprise that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed
by the enterprises chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance, and about which separate financial
information is available. Management operates the Partnerships container fleet as a
homogenous unit and has determined that as such it has a single reportable operating segment. 33




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (2)
    Operating Segment (continued)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, 2004, the
Partnership owned 22,097 twenty-foot 8,042 forty-foot and 2,031 forty-foot high-cube marine dry
cargo containers, as well as 442 twenty-foot and 93 forty-foot high-cube refrigerated cargo
containers, and 215 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, 2004, 2003 and 2002 follows: 2004
    
    
    2003
    
    
    2002Dry cargo containers
    
    $
    11,074,600
    
    

    $
    10,416,781
    
    
    $
    10,521,020Refrigerated containers
    
    
    1,289,032
    
    
    
    1,312,449
    
    
    
    1,343,686Tank containers
    
    
    628,824
    
    
    
    626,863
    
    
    
    599,789Total
    
    $
    12,992,456
    
    
    $
    12,356,093
    
    
    $
    12,464,495
  Due to the Partnerships lack of information regarding the physical location of its fleet of
containers when on lease in the global shipping trade, the Partnership believes that it does
not possess discernible geographic reporting segments as defined in SFAS No. 131 (SFAS 131),
Disclosures about Segments of an Enterprise and Related Information.The Partnership does not believe that its ongoing business is dependent upon a single customer,
although the loss of one or more of its largest customers could have an adverse effect upon its
business. 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 2004, 2003 and 2002.(3)
    Cash and Cash EquivalentsCash equivalents include money market funds that invest in highly-liquid securities, such
as U.S. Treasury obligations, repurchase agreements secured by U.S. Treasury obligations, and
obligations whose principal and interest are backed by the U.S. Government. Cash equivalents
are carried at cost which approximates fair value, and at times, may exceed federally insured
limits. The Partnership has not experienced any losses in such accounts and believes it is not
exposed to any significant credit risk. 34




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (4)
    Net Lease Receivables Due from Leasing CompanyNet 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, 2004 and 2003 were as follows: December 31,
    
    
    December 31,2004
    
    
    2003Gross lease receivables
    
    $
    2,704,034
    
    
    $
    2,455,335Less:Direct operating payables and accrued expenses
    
    
    736,263
    
    
    
    750,902Damage protection reserve (note 5)
    
    
    278,828
    
    
    
    207,353Base management fees payable
    
    
    85,859
    
    
    
    93,258Reimbursed administrative expenses
    
    
    61,572
    
    
    
    58,583Allowance for doubtful accounts
    
    
    192,737
    
    
    
    220,700Net lease receivables
    
    $
    1,348,775
    
    
    $
    1,124,539
  (5)
    Damage Protection PlanThe Leasing Company offers a repair service to several lessees of the Partnerships containers,
whereby the lessee pays an additional rental fee for the convenience of having the Partnership
incur the repair expense for containers damaged while on lease. This fee is recorded as
revenue when earned according to the terms of the rental contract. An accrual has been
recorded to provide for the estimated costs incurred by this service. This accrual is included
within rental equipment operating expenses, 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 RevenueNet lease revenue is determined by deducting direct operating expenses, base management fees
and reimbursed administrative expenses to CCC and its affiliates from the rental revenue earned
by the Leasing Company under operating leases to ocean carriers for the containers owned by the
Partnership. Net lease revenue for the years ended December 31, 2004, 2003 and 2002 was as
follows: 2004
    
    
    2003
    
    
    2002Rental revenue
    
    $
    12,992,456
    
    
    $
    12,356,093
    
    
    $
    12,464,495Less:Rental equipment operating expenses
    
    
    2,670,780
    
    
    
    3,582,366
    
    
    
    3,857,704Base management fees (note 7)
    
    
    898,156
    
    
    
    852,761
    
    
    
    851,979Reimbursed administrative expenses (note 7):Salaries
    
    
    497,577
    
    
    
    479,592
    
    
    
    497,295Other payroll related expenses
    
    
    62,534
    
    
    
    51,690
    
    
    
    54,386General and administrative expenses
    
    
    160,482
    
    
    
    151,834
    
    
    
    156,526Net lease revenue
    
    $
    8,702,927
    
    
    $
    7,237,850
    
    
    $
    7,046,605
 35




---



##### 



CRONOS GLOBAL INCOME FUND XV, L.P. Notes to Financial Statements  (7)
    Compensation to General Partner and its AffiliatesBase 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: 2004
    
    
    2003
    
    
    2002Base management feesCCC
    
    $
    
    
    
    $
    
    
    
    $
    Leasing Company
    
    
    898,156
    
    
    
    852,761
    
    
    
    851,979Reimbursed
administrative
expensesCCC
    
    
    92,275
    
    
    
    78,899
    
    
    
    96,287Leasing Company
    
    
    628,318
    
    
    
    604,217
    
    
    
    611,920$
    1,618,749
    
    
    $
    1,535,877
    
    
    $
    1,560,186
  The following net compensation was payable to CCC and the Leasing Company at December 31,
2004 and 2003: 2004
    
    
    2003CCC
    
    $
    7,854
    
    
    $
    6,020Leasing Company
    
    
    139,577
    
    
    
    145,821$
    147,431
    
    
    $
    151,841
  (8)
    Limited Partners CapitalCash distributions made to the limited partners during 2004, 2003 and 2002 included
distributions of proceeds from equipment sales in the amount of $1,460,109, $1,251,523 and
$506,568, 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, 2004, 2003 and 2002 was $8, $9,
and $10, 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. 36




---



##### 



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 procedures
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. 
 Item 9B. Other Information Inapplicable. 37




---



##### 



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 28, 2005, 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, 52, 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
in December 1998 and appointed Chairman of the Board of Directors in March 1999. Mr. Tietz is also
President and a director of Cronos Securities Corp. From 1986 until his appointment as Chief
Executive Officer of The Cronos Group, 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. Mr. Tietz served as Chairman of the International
Institute of Container Lessors for its 2001 fiscal year, and currently sits on the Executive
Committee of the Institutes Board of Directors. John KallasMr. Kallas, 42, as Vice President, Chief Financial Officer of CCC, is responsible
for managed container investment programs, treasury and CCCs financial operations. Mr. Kallas
joined the Board of Directors of CCC in November, 2000. Mr. Kallas has been employed by CCC since
1989, and 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, 56, as Vice President  Administration and Secretary of CCC is
responsible for investor services, compliance and securities registration. Ms. Wexler joined the
Board of Directors of CCC in June 1997 and has been employed by CCC since 1987. 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, 59, was elected to the Board of Directors of CCC in April 1999. See key
management personnel of the Leasing Company for further information. 38




---



##### 



The key management personnel of the Leasing Company and its affiliates at February 28, 2005,
were as follows: Name
    

TitlePeter J. Younger
    
    Chief Operating Officer/Chief Financial OfficerJohn M. Foy
    
    Senior Vice President/Pacific RegionNico Sciacovelli
    
    Senior Vice President/South Atlantic RegionJohn C. Kirby
    
    Senior Vice President/North Atlantic Region
 Peter J. YoungerMr. Younger, 48, as Chief Operating and Financial Officer of The Cronos
Group, is responsible for the operating activities of The Cronos Group and its subsidiaries. Mr.
Younger was re-elected to the Board of Directors of The Cronos Group at the 2004 annual meeting of
The Cronos Groups shareholders. Mr. Younger will serve as a director until the 2007 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. Mr. Younger has been employed by Cronos since 1987 and is based in San Francisco. Mr.
Younger has held various accounting and financial positions since joining Cronos in 1987, including
Vice President of Finance for the Leasing Company, located in the UK, and 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, 59, as Senior Vice President, is directly responsible for the Leasing
Companys lease marketing operations in the Pacific region covering the US west coast, Asia,
Australia and New Zealand. Mr. Foy joined Cronos in 1985 and is based in San Francisco. 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, 55, as Senior Vice President, is directly responsible for
the Leasing Companys lease marketing operations in the South Atlantic region, including Southern
Europe, South America, the Middle East, Africa and the Indian sub-continent. Mr. Sciacovelli joined
Cronos in 1983 and is based in Italy. Since joining Cronos in 1983, Mr. Sciacovelli served as
Director and Area Manager for Southern Europe, the Middle east and Africa. Prior to joining
Cronos, Mr. Sciacovelli was a Sales Manager for Interpool Ltd., a container and chassis lessor. John C. KirbyMr. Kirby, 51, as Senior Vice President, is directly responsible for the Leasing
Companys lease marketing operations in the North Atlantic region, including Northern Europe, the
US east coast, and Scandinavia. Mr. Kirby is also responsible for the Leasing Companys corporate
operations and is involved with container purchasing, contract and billing administration,
container repairs and leasing-related systems. Mr. Kirby joined CCC in 1985 and is based in the
United Kingdom. Since joining Cronos in 1985, Mr. Kirby served as European Technical Manager,
Director of European Operations and Senior Vice President/Operations of the Leasing Company. From
1982 to 1985, Mr. Kirby was a Technical Manager with CLOU Containers, a container leasing company
based in Hamburg, Germany. Mr. Kirby acquired a professional engineering qualification from the
Mid-Essex Technical College in England. 39




---



##### 



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. 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) 677-8990ir@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, 2004, no reports of beneficial ownership under Section 16(a) of the
Securities Exchange Act of 1934, as amended, were filed with the SEC. 40




---



##### 



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, 2004. 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
    
    $
    905,5552)
    
    CCC
CCL
    
    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
    
    $
$
    90,441
627,1643)
    
    CCC
    
    Interest in Fund  5% of distributions of
distributable cash for any quarter
pursuant to Section 6.1 of the Limited
Partnership Agreement
    
    $
    380,172
 41




---



##### 



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 2004 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. 42




---



##### 



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, 2004. 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 $47,028 and $46,797 during the fiscal years ending December 31, 2004 and 2003,
respectively, for these audit services. Audit-Related Fees The Registrant did not incur audit-related fees during the fiscal years ending December 31,
2004 and 2003. Typically, audit-related fees, if incurred, would consist of fees for accounting
consultations and other attestation services. Tax Fees The Registrant did not incur tax fees during the fiscal years ending December 31, 2004 and
2003. 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, 2004 and 2003. 43




---



##### 



PART IV 
 Item 15. Exhibits and Financial Statement Schedules Page(a)1. Financial StatementsIndependent Auditors Report
    
    
    24(a)2. The following financial statements of the Registrant are included in Part II, Item 8:Balance Sheets  as of December 31, 2004 and 2003
    
    
    25Statements of Operations  for the years ended December 31, 2004, 2003 and 2002
    
    
    26Statements of Partners Capital  for the years ended December 31, 2004, 2003 and 2002
    
    
    27Statements of Cash Flows  for the years ended December 31, 2004, 2003 and 2002
    
    
    28Notes to Financial Statements
    
    
    29
 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
****
   *
    
    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. 44




---



##### 



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. 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 24, 2005 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. TietzDennis J. Tietz
    
    President and Director of
Cronos Capital Corp.
(CCC) (Principal Executive
Officer of CCC)
    
    March 24, 2005/s/ John Kallas
John Kallas
    
    Chief Financial Officer and
Director of
Cronos Capital Corp. (CCC)
(Principal Financial and
Accounting Officer of CCC)
    
    March 24, 2005/s/ Elinor A.
Wexler
Elinor A. Wexler
    
    Vice President-Administration,
Secretary and Director of
Cronos Capital Corp.
    
    March 24, 2005




---



##### 



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
****
   *
    
    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.