Cronos Global Income Fund XV 10-Q 2007 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

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.

(Exact name of registrant as specified in its charter)

California	94-3186624
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

One Front Street, Suite 925, San Francisco, California 94111
(Address of principal executive offices) (Zip Code)

(415) 677-8990
(Registrant’s telephone number, including area code)

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. Yesþ No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero      Accelerated filero      Non-accelerated filerþ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yeso Noþ

CRONOS GLOBAL INCOME FUND XV, L.P.

Report on Form 10-Q for the Quarterly Period
Ended September 30, 2007

TABLE OF CONTENTS

	PAGE
PART I — FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed Balance Sheets – September 30, 2007 and December 31, 2006 (unaudited)		4
Condensed Statements of Operations for the three and nine months ended September 30, 2007 and 2006 (unaudited)		5
Condensed Statements of Cash Flows for the nine months ended September 30, 2007 and 2006 (unaudited)		6
Notes to Condensed Financial Statements (unaudited)		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		19
Item 4. Controls and Procedures		19
Item 4T. Controls and Procedures		19
PART II — OTHER INFORMATION		20
Item 1. Legal Proceedings		20
Item 1A. Risk Factors		20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 3. Defaults Upon Senior Securities		20
Item 4. Submissions of Matters to a Vote of Securities Holders		20
Item 5. Other Information		20
Item 6. Exhibits		20
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32

2

PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

Presented herein are Cronos Global Income Fund XV, L.P.’s (the “Partnership”) condensed balance sheets as of September 30, 2007 and December 31, 2006, condensed statements of operations for the three and nine months ended September 30, 2007 and 2006, and condensed statements of cash flows for the nine months ended September 30, 2007 and 2006, (collectively the “Financial Statements”) prepared by the Partnership without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these Financial Statements be read in conjunction with the financial statements and the notes thereto included in the Partnership’s December 31, 2006 Annual Report on Form 10-K. These Financial Statements reflect, in the opinion of the Partnership and Cronos Capital Corp. (“CCC”), the general partner, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The statements of operations for such interim periods are not necessarily indicative of the results for the full year.

The information in this Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the securities laws. These forward-looking statements reflect the current view of the Partnership with respect to future events and financial performance and are subject to a number of risks and uncertainties, many of which are beyond the Partnership’s control. All statements, other than statements of historical facts included in this report, including the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” regarding the Partnership’s strategy, future operations, estimated revenues, projected costs, prospects, plans and objectives of the Partnership are forward-looking statements. When used in this report, the words “would”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements speak only as of the date of this report. The Partnership does not undertake to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Although the Partnership believes that its plans, intentions and expectations reflected in or suggested by the forward-looking statements made in this report are reasonable, the Partnership can give no assurance that these plans, intentions or expectations will be achieved. Future economic and industry trends that could potentially impact revenues and profitability are difficult to predict.

3

CRONOS GLOBAL INCOME FUND XV, L.P.

Condensed Balance Sheets

(Unaudited)

	September 30,			December 31,
	2007			2006
Assets
Current assets:
Cash and cash equivalents, includes $3,057,545 at September 30, 2007 and $3,427,940 at December 31, 2006 in interest-bearing accounts	$	3,072,545		$	3,442,940
Net lease and other receivables due from Leasing Company		1,697,282			1,446,206
Total current assets		4,769,827			4,889,146
Container rental equipment, at cost		69,695,453			81,910,061
Less accumulated depreciation		(51,585,727	)		(56,999,205	)
Net container rental equipment		18,109,726			24,910,856
Total assets	$	22,879,553		$	29,800,002
Partners’ Capital
Partners’ capital (deficit):
General partner	$	4,288		$	(260,698	)
Limited partners		22,875,265			30,060,700
Total partners’ capital	$	22,879,553		$	29,800,002

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

4

CRONOS GLOBAL INCOME FUND XV, L.P.

Condensed Statements of Operations

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2007			2006			2007			2006
Net lease revenue	$	1,275,886		$	1,708,944		$	3,923,290		$	5,149,688
Other operating income (expenses):
Depreciation		(1,088,752	)		(1,313,027	)		(3,564,164	)		(4,138,798	)
Other general and administrative expenses		(44,126	)		(78,214	)		(196,208	)		(199,424	)
Net gain on disposal of equipment		255,467			144,630			768,117			209,875
		(877,411	)		(1,246,611	)		(2,992,255	)		(4,128,347	)
Income from operations		398,475			462,333			931,035			1,021,341
Other income:
Interest income		35,220			45,438			115,299			133,906
Net income	$	433,695		$	507,771		$	1,046,334		$	1,155,247
Allocation of net income:
General partner	$	79,433		$	215,336		$	514,033		$	462,783
Limited partners		354,262			292,435			532,301			692,464
	$	433,695		$	507,771		$	1,046,334		$	1,155,247
Limited partners’ per unit share of net income	$	0.05		$	0.04		$	0.07		$	0.10

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

5

CRONOS GLOBAL INCOME FUND XV, L.P.

Condensed Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	September 30,			September 30,
	2007			2006
Net cash provided by operating activities	$	3,915,634		$	5,236,189
Cash flows from investing activities:
Proceeds from sale of container rental equipment		3,625,474			4,408,977
Investment in direct finance lease		—			(80,055	)
Proceeds collected on sales-type lease receivable		55,280			15,027
Net cash provided from investing activities		3,680,754			4,343,949
Cash flows from financing activities:
Distributions to general partner		(249,047	)		(351,939	)
Distributions to limited partners		(7,717,736	)		(10,250,585	)
Net cash used in financing activities		(7,966,783	)		(10,602,524	)
Net decrease in cash and cash equivalents		(370,395	)		(1,022,386	)
Cash and cash equivalents at the beginning of the period		3,442,940			4,711,949
Cash and cash equivalents at the end of the period	$	3,072,545		$	3,689,563

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

6

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(1) Summary of Significant Accounting Policies

(a)	Nature of Operations
	Cronos 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. 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, CCC, and all affiliates of CCC). 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 Partnership has entered into its 14th year of operations and is in its liquidation phase wherein CCC is focusing its attention on the retirement of the remaining equipment in the Partnership’s container fleet. At September 30, 2007, approximately 54% of the original equipment remained in the Partnership’s fleet.
(b)	Leasing Company and Leasing Agent Agreement
	A Leasing Agent Agreement exists 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 “Accounting for Lease”, it is accounted for as a lease under which the Partnership is lessor and the Leasing Company is lessee.
	The Leasing Agent Agreement generally provides that the Leasing Company will make payments to the Partnership based upon rentals collected from ocean carriers after deducting direct operating expenses and management fees to 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.

(Continued)

7

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(1) Summary of Significant Accounting Policies (continued)

(b)	Leasing Company and Leasing Agent Agreement (continued)
	Accordingly, rentals under master leases are all variable and contingent upon the number of containers used. Sales-type leases have fixed payment terms and provide the lessee with a purchase option. The net investment in sales-type leases represents a receivable due from the Leasing Company, net of unearned income. Unearned income, when recognized, is reflected in the Partnership’s statements of operations, providing a constant return on capital over the lease term. Unearned income is recorded as part of the net lease receivable due from the Leasing Company. 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)	Basis of Presentation
	These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and regulation S-X, Article 10 under the Securities Exchange Act of 1934 for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and accompanying notes in the Partnership’s December 31, 2006 Annual Report on Form 10-K.
	The interim financial statements presented herewith reflect, in the opinion of management, all adjustments of a normal recurring nature necessary to present fairly the results for the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year.
(d)	Use of Estimates
	The preparation of financial statements in conformity with GAAP 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 significant estimates included within the financial statements are the container rental equipment’s estimated useful lives and residual values, and the estimate of future cash flows from container rental equipment operations, used to evaluate the carrying value of container rental equipment in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long Lived Assets” (“SFAS No. 144”).
(e)	Container Rental Equipment
	Container rental equipment is depreciated over a 15-year life using the straight-line basis to its salvage value, estimated to be 10% of the original equipment cost. Depreciation policies are also evaluated to determine whether subsequent events and circumstances warrant revised estimates of useful lives and residual values.

(Continued)

8

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(1) Summary of Significant Accounting Policies (continued)

(e)	Container Rental Equipment (continued)
	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 projecting future cash flows from container rental equipment operations is prepared annually, or upon material changes in market conditions. Current and projected utilization rates, per-diem rental rates, direct operating expenses, fleet size and container disposals are the primary variables utilized in the analysis. Additionally, the Partnership evaluates future cash flows and potential impairment by container type rather than for each individual container, and as a result, future losses could result for individual container dispositions due to various factors, including age, condition, suitability for continued leasing, as well as the geographical location of containers when disposed. There were no impairment charges to the carrying value of container rental equipment for the three and nine-month periods ended September 30, 2007 and 2006.
(f)	Allocation of Net Income or Loss, Partnership Distributions and Partners’ Capital Accounts
	Net income or loss has been allocated between the general and limited partners in accordance with the Partnership Agreement. The Partnership Agreement generally provides that CCC shall at all times maintain at least a 1% interest in each item of income or loss, including the gain arising from the sale of containers. The Partnership Agreement further provides that the gain arising from the sale of containers be allocated first to the partners with capital account deficit balances in an amount sufficient to eliminate any deficit capital account balance. Thereafter, the Partnership’s gains arising from the sale of containers are allocated to the partners in accordance with their share of sale proceeds distributed. The Partnership Agreement also provides for income (excluding the gain arising from the sale of containers) for any period, be allocated to CCC in an amount equal to that portion of CCC’s distributions in excess of 1% of the total distributions made to both CCC and the limited partners of the Partnership for such period, as well as other allocation adjustments.
	Actual cash distributions differ from the allocations of net income or loss between the general and limited partners as presented in these financial statements. Partnership distributions are paid to its partners (general and limited) from distributable cash from operations, allocated 95% to the limited partners and 5% to CCC. Distributions of sales proceeds are allocated 99% to the limited partners and 1% to CCC. The allocations remain in effect until such time as the limited partners have received from the Partnership aggregate distributions in an amount equal to their capital contributions plus an 8% cumulative, compounded (daily), annual return on their adjusted capital contributions. Thereafter, all Partnership distributions will be allocated 85% to the limited partners and 15% to CCC. Cash distributions from operations to CCC in excess of 5% of distributable cash will be considered an incentive fee and will be recorded as compensation to CCC, with the remaining distributions from operations charged to partners’ capital.
	Upon dissolution, the assets of the Partnership will be sold and the proceeds thereof distributed as follows: (i) all of the Partnership’s debts and liabilities to 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

(Continued)

9

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(1) Summary of Significant Accounting Policies (continued)

(f)

Allocation of Net Income or Loss, Partnership Distributions and Partners’ Capital Accounts (continued)

contribute to the Partnership, if necessary, an amount equal to the lesser of the deficit balance in its capital account at the time of such liquidation, or 1.01% of the excess of the Limited Partners’ capital distribution to the Partnership over the capital contributions previously made to the Partnership by CCC, after giving effect to the allocation of income or loss arising from the liquidation of the Partnership’s assets.

(2)

Net Lease and Other Receivables Due from Leasing Company

Net lease and other receivables due from the Leasing Company are determined by deducting direct operating payables and accrued expenses, base management fees payable, and reimbursed administrative expenses payable to CCC and its affiliates from the rental billings earned by the Leasing Company under operating leases and sales-type leases to ocean carriers for the containers owned by the Partnership, as well as proceeds earned from container disposals. Net lease and other receivables at September 30, 2007 and December 31, 2006 were as follows:

	September 30,		December 31,
	2007		2006
Gross lease and other receivables	$	2,136,872	$	2,215,917
Sales-type lease receivable (net of unearned income)		194,980		89,913
		2,331,852		2,305,830
Less:
Direct operating payables and accrued expenses		308,051		521,540
Base management fees payable (receivable)		90,235		(5,858	)
Reimbursed administrative expenses		33,601		36,537
Allowance for doubtful accounts		202,683		307,405
		634,570		859,624
Net lease and other receivables	$	1,697,282	$	1,446,206

(Continued)

10

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(3)

Net Lease Revenue

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 and sales-type lease agreements between the Leasing Company and its various lessees, less direct operating expenses, management fees and reimbursed administrative expenses incurred in respect of the containers specified in each operating lease agreement. Net lease revenue for the three and nine-month periods ended September 30, 2007 and 2006 were as follows:

	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2007		2006		2007		2006
Rental revenue	$	1,641,881	$	2,155,057	$	5,199,602	$	7,009,173
Interest income from sales-type lease		6,458		2,583		13,807		3,562
		1,648,339		2,157,640		5,213,409		7,012,735
Less:
Rental equipment operating expenses		176,658		192,823		650,551		990,876
Base management fees		109,714		149,779		360,744		484,620
Reimbursed administrative expenses
Salaries		63,743		78,345		194,331		279,767
Other payroll related expenses		6,355		5,398		28,466		34,817
General and administrative expenses		15,983		22,351		56,027		72,967
Total reimbursed administrative expenses		86,081		106,094		278,824		387,551
		372,453		448,696		1,290,119		1,863,047
Net lease revenue	$	1,275,886	$	1,708,944	$	3,923,290	$	5,149,688

(4)	Operating Segment
	An operating segment is a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and about which separate financial information is available. Management operates the Partnership’s container fleet as a homogenous unit and has determined that as such, it has a single reportable operating segment.
	The Partnership derives revenues from dry cargo, refrigerated and tank containers used by its customers in global trade routes. As of September 30, 2007, the Partnership operated 13,727 twenty-foot, 5,002 forty-foot, and 1,566 forty-foot high-cube marine dry cargo containers, as well as 183 twenty-foot and 25 forty-foot high-cube refrigerated containers, and 198 twenty-four thousand-liter tanks.

(Continued)

11

CRONOS GLOBAL INCOME FUND XV, L.P.

Notes to Unaudited Condensed Financial Statements

(4)	Operating Segment (continued)
	A summary of gross lease revenue earned by the Leasing Company, on behalf of the Partnership, by product, for the three and nine-month periods ended September 30, 2007 and 2006 follows:

	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2007		2006		2007		2006
Dry cargo containers	$	1,362,090	$	1,831,521	$	4,381,188	$	5,990,045
Refrigerated containers		133,131		186,212		393,243		599,360
Tank containers		153,118		139,907		438,978		423,330
Total	$	1,648,339	$	2,157,640	$	5,213,409	$	7,012,735

	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.”
(5)	The Cronos Group
	At a special meeting held August 1, 2007, the shareholders of The Cronos Group (“CGH”), a Luxembourg holding company, approved the Asset Purchase Agreement with CRX Acquisition Ltd., a Bermuda exempted company (“CRX”) and FB Transportation Capital LLC, a Delaware limited liability company (“FB Transportation”) and the transactions contemplated thereunder, including CGH’s dissolution and liquidation. Under the terms of the Asset Purchase Agreement, and subject to the conditions stated therein, CGH agreed to sell all of its assets to CRX and CRX agreed to assume all of CGH’s liabilities. Closing of the sale of CGH’s assets and liabilities to CRX occurred later that same day. The container leasing business of CGH will be continued by CRX as a private company. Management of CGH, which includes members of the management of CCC, are continuing as management of CRX and acquired an equity interest in CRX. CCC is now an indirect subsidiary of CRX.

12

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion of the Partnership’s historical financial condition and results of operations should be read in conjunction with the Partnership’s December 31, 2006 Annual Report on Form 10-K and the financial statements and the notes thereto appearing elsewhere in this report.

Market Overview

     The demand for containerized trade remained favorable during the first nine months of 2007, despite continued declines in the GDP growth rate for most developed countries during the same period, and the recent credit and liquidity challenges experienced by the US and European financial markets. World containerized trade growth is forecasted to grow between 9% and 10% during 2007, indicating that globalization of the supply chain and trade liberalization have greatly stimulated the demand for containerized transport. Also contributing to the demand has been the inability of the shipping industry infrastructure to handle the increase in containerized trade, resulting in port and rail congestion, and ultimately longer turnaround times for ships and containers. As a result, the shipping lines have reduced their redeliveries of on-hire containers and have increasingly looked to container leasing in order to supplement their owned fleets of containers. In future periods, global economic growth and container trade are expected to have less of an impact on the Partnership’s operations than declining revenue from a smaller fleet as CCC continues its efforts to retire the Partnership’s remaining equipment.

     Utilization for the Partnership’s dry cargo container fleet averaged 96% and 95% for the three and nine-month periods ended September 30, 2007. In comparison, dry cargo container utilization rates averaged 95% and 92% for the three and nine-month periods ended September 30, 2006, respectively. The utilization rate for the Partnership’s refrigerated container fleet averaged 84% and 75% for the three and nine-month periods ended September 30, 2007, respectively. In comparison, refrigerated container utilization rates for the three and nine-month periods ended September 30, 2006 averaged 78% and 76%, respectively. Utilization of the Partnership’s tank container fleet averaged 97% and 95% for the three and nine-month periods ended September 30, 2007, respectively. In comparison, tank container utilization rates averaged 88% for both the three and nine-month periods ended September 30, 2006.

     The average per-diem rate for the Partnership’s dry cargo containers decreased approximately 15% and 17% for the three and nine-month periods ending September 30, 2007, when compared to the same periods in the prior year. The average per-diem rate for the Partnership’s refrigerated cargo containers during the three and nine-month periods ending September 30, 2007 decreased approximately 14% and 9%, respectively, when compared to the same periods in the prior year. The average per-diem rate for the Partnership’s tank cargo containers for the three and nine-month periods ending September 30, 2007 increased approximately 5% and 3%, respectively, when compared to the same periods in the prior year. The lease market for the Partnership’s older containers continues to be very competitive and, therefore, subject to significant pricing pressures. Unlike dry cargo containers, the refrigerated containers are built for specific market demands. As such, the markets for the leasing of refrigerated containers are narrower than the market for dry cargo containers and are subject to different trends and fluctuations than the dry cargo container market.

     The sale of the Partnership’s off-hire containers is in accordance with one of the Partnership’s original investment objectives, which was to realize the residual value of its containers after the expiration of their useful lives, estimated to be between 12 and 15 years after placement in service. The sale of these containers has positively affected the Partnership’s results from operations and minimized storage and other inventory-related costs incurred for its off-hire containers. The secondary market demand for used containers remained favorable during the three and nine month periods ending September 30, 2007, resulting indirectly from the current price level for new cargo containers, as well as the demand for older, existing containers. Changes in future inventory levels, as well as significant fluctuations in new container prices, could adversely affect sales proceeds realized on the sale of the Partnership’s remaining containers.

     The price of a new twenty-foot dry cargo container varied during 2006, ending the year at approximately $2,000, an increase from approximately $1,500 at the beginning of the year. By the end of the third quarter of 2007, new twenty-foot dry cargo container prices fluctuated to $1,850. The volatility in new container pricing is expected throughout the remainder of 2007. Although the Partnership no longer purchases new containers, the price and production levels of new containers indirectly contributed to the Partnership’s results of operations by influencing the available supply of containers and utilization, the level of lease per-diems for existing older containers, as well as container sale prices realized upon their eventual disposal.

13

The Partnership’s primary lessees, the shipping lines, experienced a substantial decline in profits during 2006, as additional cargo capacity created by the delivery of new containerships resulted in a corresponding decline in freight rates. A significant number of new containerships built under various shipbuilding programs were delivered during 2006, producing an additional slot capacity of 1.85 million TEU (twenty-foot equivalent unit), an increase of approximately 55% from 2005. During 2007, supply and demand fundamentals are reported to be in favor of the shipping lines, with average containership utilization within the dominant shipping routes reported at a favorable 90%. These factors have contributed an improvement in the financial condition and operating performance of the shipping lines. Despite the improvement, the shipping lines remain challenged by downward pressures on freight rates and the continued expansion of cargo capacity. Containership capacity is forecasted to increase by approximately 47% by December 31, 2009, renewing capacity concerns for the shipping industry. The financial performance of shipping lines may eventually influence the demand for leased containers, as some shipping lines may experience financial difficulties, consolidate, or become insolvent, while others prosper. The Partnership, CCC and the Leasing Company continue to monitor the aging of lease receivables, collections and the credit exposure to various existing and new customers.

Results of Operations

     Pursuant to the Limited Partnership Agreement of the Partnership, all authority to administer the business of the Partnership is vested in CCC. A Leasing Agent Agreement (“Agreement”) exists 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.

     The primary component of the Partnership’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 Partnership’s containers. Net lease revenue is directly related to the size, utilization and per-diem rental rates of the Partnership’s fleet. Direct operating expenses are direct costs associated with the Partnership’s containers. Direct operating expenses may be categorized as follows:

• Activity-related expenses, including agent and depot costs such as repairs, maintenance and handling.

• Inventory-related expenses for off-hire containers, comprising storage and repositioning costs. These costs are sensitive to the quantity of off-hire containers as well as the frequency at which containers are re-delivered.

• Legal and other expenses, including legal costs related to the recovery of containers and doubtful accounts, insurance and provisions for doubtful accounts.

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     At September 30, 2007, approximately 54% of the original equipment remained in the Partnership’s fleet, compared to approximately 63% at December 31, 2006. The following table summarizes the composition of the Partnership’s fleet (based on container type) at September 30, 2007.

	Dry Cargo						Refrigerated				Tank
	Containers						Containers				Containers
					40-Foot				40-Foot
	20-Foot		40-Foot		High-Cube		20-Foot		High-Cube		24,000-Liter
Containers on lease:
Master lease		9,017		3,556		1,266		115		9		130
Term lease
Short term1		1,397		228		119		10		—		39
Long term2		2,827		992		101		1		9		23
Sales-type lease		24		49		5		36		6		—
Subtotal		13,265		4,825		1,491		162		24		192
Containers off lease		462		177		75		21		1		6
Total container fleet		13,727		5,002		1,566		183		25		198

1.	Short term leases represent term leases that are either scheduled for renegotiation or that may expire on or before September 2008.
2.	Long term leases represent term leases, the majority of which will expire between October 2008 and December 2011.

	Dry Cargo																Refrigerated										Tank
	Containers																Containers										Containers
											40-Foot										40-Foot
	20-Foot					40-Foot					High-Cube					20-Foot					High-Cube					24,000-Liter
	Units		%			Units		%			Units		%			Units		%			Units		%			Units		%
Total purchases		26,446		100	%		8,751		100	%		2,179		100	%		463		100	%		100		100	%		229		100	%
Less disposals		12,719		48	%		3,749		43	%		613		28	%		280		60	%		75		75	%		31		14	%
Remaining fleet at September 30, 2007		13,727		52	%		5,002		57	%		1,566		72	%		183		40	%		25		25	%		198		86	%

Three Months Ended September 30, 2007 Compared to the Three Months Ended September 30, 2006

     Net lease revenuewas $1,275,886 for the three months ended September 30, 2007 compared to $1,708,944 for the same period in the prior year. This decline was primarily due to a $509,301 decline in gross rental revenue (a component of net lease revenue) when compared to the same period in the prior year. Gross rental revenue was impacted by the Partnership’s smaller fleet size and a 15% decline in the dry cargo container per-diem rental rates. The decline in net rental revenue was partially offset by a reduction in rental equipment expenses (a component of net lease revenue) of $16,165. The decrease in rental equipment operating expenses was attributable to the Partnership’s reduced fleet size and high utilization rate and its impact on both activity-related expenses and inventory-related expenses. These expenses were partially offset by an increase in the provision for doubtful accounts. The Partnership’s average fleet size and utilization rates for the three-month periods ended September 30, 2007 and 2006 were as follows:

	Three Months Ended
	September 30,			September 30,
	2007			2006
Fleet size (measured in twenty-foot equivalent units (TEU))
Dry cargo containers		27,590			32,517
Refrigerated containers		330			457
Tank containers		198			207
Average utilization rates
Dry cargo containers		96	%		95	%
Refrigerated containers		84	%		78	%
Tank containers		97	%		88	%

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     Other components of net lease revenue, including management fees and reimbursed administrative expenses, were lower by a combined $60,078 when compared to the same period in 2006 due to the declining fleet size and lower operating performance.

     Depreciation expenseof $1,088,752 for the three months ended September 30, 2007 declined by $224,275 when compared to the corresponding period in 2006, a direct result of the Partnership’s aging and declining fleet size.

     Other general and administrative expensesamounted to $44,126 for the three-month period ended September 30, 2007, a decrease of $34,088 or 44% when compared to the same period in 2006. This change was attributable to lower professional fees for expenses related to third-party investor administration services and bank service charges, partially offset by an increase in expense for audit services.

     Net gain on disposal of equipmentfor the three months ended September 30, 2007 and 2006 were $255,467 and $144,630, respectively. The Partnership disposed of 1,072 containers, compared to 1,157 containers during the same three-month period in 2006. The net gain on container disposals in the three-month period ended September 30, 2007 was a result of various factors, including the proceeds realized from the container disposal, age, condition, suitability for continued leasing, as well as the geographical location of the containers when disposed. These factors will continue to influence the amount of sales proceeds received and the related gain or loss on container disposals.

     The level of the Partnership’s container disposals in subsequent periods, as well as the price of steel, new container prices and the current leasing market’s impact on sales prices for existing older containers such as those owned by the Partnership, will also contribute to fluctuations in the net gain or loss on disposals. There were no reductions to the carrying value of container rental equipment due to impairment during the three-month periods ended September 30, 2007 and 2006.

Nine Months Ended September 30, 2007 Compared to the Nine Months Ended September 30, 2006

     Net lease revenuewas $3,923,290 for the nine months ended September 30, 2007 compared to $5,149,688 for the same period in the prior year. This decline was primarily due to a $1,799,326 decline in gross rental revenue (a component of net lease revenue) when compared to the same period in the prior year. Gross rental revenue was impacted by the Partnership’s smaller fleet size and a 17% decline in the dry cargo per-diem rental rate. The decline in net rental revenue was partially offset by a reduction in rental equipment operating expenses (a component of net lease revenue) of $340,325. The decrease in rental equipment operating expenses was attributable to the Partnership’s declining fleet size and a reduction in both activity-related and inventory-related expenses associated with current levels of utilization. The Partnership’s average fleet size and utilization rates for the nine-month periods ended September 30, 2007 and 2006 were as follows:

	Nine Months Ended
	September 30,			September 30,
	2007			2006
Fleet size (measured in twenty-foot equivalent units (TEU))
Dry cargo containers		28,970			34,205
Refrigerated containers		375			485
Tank containers		198			208
Average utilization rates
Dry cargo containers		95	%		92	%
Refrigerated containers		75	%		76	%
Tank containers		95	%		88	%

     Other components of net lease revenue, including management fees and reimbursed administrative expenses, were lower by a combined $232,603 when compared to the same period in 2006.

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     Depreciation expenseof $3,564,164 for the nine months ended September 30, 2007 declined by $574,634 when compared to the corresponding period in 2006, a direct result of the Partnership’s aging and declining fleet size.

     Other general and administrative expensesamounted to $196,208 for the nine month period ended September 30, 2007, a decrease of $3,216 or 2% when compared to the same period in 2006. This change was attributable to lower professional fees for expenses related to third-party investor administration services and bank service charges, partially offset by an increase in expense for audit services.

     Net gain on disposal of equipmentfor the nine months ended September 30, 2007 and 2006 were $768,117 and $209,875, respectively. The Partnership disposed of 3,396 containers, compared to 3,919 containers during the same nine-month period in 2006. The net gain on container disposals in the nine-month period ended September 30, 2007 was a result of various factors, including the proceeds realized from the container disposal, age, condition, suitability for continued leasing, as well as the geographical location of the containers when disposed. There were no reductions to the carrying value of container rental equipment due to impairment during the nine-month periods ended September 30, 2007 and 2006.

Liquidity and Capital Resources

     During the Partnership’s first 10 years of operations, the Partnership’s primary objective was 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 Partnership 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 2005, the Partnership’s 11th year of operations, the Partnership 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 15 years after placement in leased service.

     In February 2007, the Partnership entered into its 14th year of operations. Accordingly, it will continue its liquidation phase. At September 30, 2007, approximately 54% of the original equipment remained in the Partnership’s fleet. CCC will take several factors into consideration when examining options for the timing of the disposal of the containers. These factors include the impact of a diminishing fleet size and current market conditions on the level of gross lease revenue, and fixed operating costs relative to this revenue. Parallel to these considerations will be a projected increase in expenses for devoting significant resources to the additional reporting and compliance requirements of Section 404 of the Sarbanes Oxley Act of 2002, which addresses a range of corporate governance, disclosure, and accounting issues. The Partnership is required to be in compliance with Section 404 on December 31, 2008. These costs may include increased accounting and administrative expenses for additional staffing and outside professional services by accountants and consultants. These additional costs, depending on their materiality, may reduce the Partnership’s results from operations and therefore negatively affect future distributions to the Limited Partners. Upon the liquidation of CCC’s interest in the Partnership, CCC shall contribute to the Partnership, if necessary, an amount equal to the lesser of the deficit balance in its capital account at the time of such liquidation, or 1.01% of the excess of the Limited Partners’ capital contribution to the Partnership over the capital contributions previously made to the Partnership by CCC, after giving effect to the allocation of income or loss arising from the liquidation of the Partnership’s assets.

     Distributions are paid monthly, based primarily on each quarter’s cash flow from operations. Monthly distributions are also affected by periodic increases or decreases to working capital reserves, as deemed appropriate by CCC. Cash distributions from operations are allocated 5% to CCC and 95% to the limited partners. Distributions of sales proceeds are allocated 1% to CCC 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 CCC and 85% to the limited partners, pursuant to Section 6.1(b) of the Partnership’s Partnership Agreement.

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     At September 30, 2007, the Partnership had $3,072,545 in cash and cash equivalents, a decrease of $370,395 from cash balances at December 31, 2006. The Partnership 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. At September 30, 2007, the Partnership had an additional $30,000 as part of its working capital for estimated expenses related to the ultimate sale of its remaining containers, final liquidation of its remaining assets and subsequent dissolution.

     Cash from Operating Activities:Net cash provided by operating activities, primarily generated from the billing and collection of net lease revenue, was $3,915,634 during the nine months ended September 30, 2007, compared to $5,236,189 for the same nine-month period in 2006.

     Cash from Investing Activities:Net cash provided by investing activities was $3,680,754 during the nine months ended September 30, 2007, compared to $4,343,949 in the corresponding period of 2006. These amounts represent sales proceeds generated from the sale of container rental equipment and proceeds collected from sales-type lease receivables.

     Cash from Financing Activities: Net cash used in financing activities was $7,966,783 during the nine months ended September 30, 2007, compared to $10,602,524 during the nine months ended September 30, 2006. These amounts represent distributions to the Partnership’s general and limited partners. The Partnership’s continuing container disposals should produce lower operating results, and consequently, lower distributions to its partners in subsequent periods.

Critical Accounting Policies

     The Partnership’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. The Partnership has identified three policies as being significant because they require the Partnership to make subjective and/or complex judgments about matters that are inherently uncertain. These policies include the following:

• Container equipment – depreciable lives and residual values

• Container equipment – recoverability and valuation in accordance with SFAS 144 “Accounting for the Impairment or Disposal of Long Lived Assets”

• Allowance for doubtful accounts

     The Partnership, in consultation with its audit committee, has reviewed and approved these significant accounting policies which are further described in the Partnership’s 2006 Annual Report on Form 10-K.

Inflation

     The Partnership believes inflation has not had a material adverse effect on the results of its operations.

The Cronos Group

     For a discussion of the recent change in control of The Cronos Group, the indirect parent company of CCC, the general partner of the Partnership, see note 5 to the condensed financial statements of the Partnership, included in Item 1, herein.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

     Exchange rate risk:Substantially all of the Partnership’s revenues are billed and paid in US dollars and a significant portion of costs are billed and paid in US dollars. The Leasing Company believes that the proportion of US dollar revenues may decrease in future years, reflecting a more diversified customer base and lease portfolio. Of the non-US dollar direct operating expenses, the majority are individually small, unpredictable and incurred in various 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 Partnership and Leasing Company, there can be no assurance that such fluctuations will not adversely affect the Partnership’s results of operations and financial condition. The Partnership believes it does not have significant exposure to other forms of market risk.

Item 4.Controls and Procedures

     The principal executive and principal financial officers of CCC have evaluated the disclosure controls and procedures of the Partnership as of the end of the period covered by this quarterly 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 Partnership that are designed to ensure that information required to be disclosed by the Partnership 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 Partnership’s disclosure controls and procedures were effective such that the information required to be disclosed by the Partnership in this quarterly 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 has been no change in the Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the fiscal quarter ended September 30, 2007, that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

Item 4T.Controls and Procedures

     Not applicable.

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PART II — OTHER INFORMATION

Item 1.Legal Proceedings

     Not applicable.

Item 1A.Risk Factors

There are no material changes from the risk factors as previously disclosed in the Partnership’s December 31, 2006 Form 10-K in response to Item 1A to Part I of Form 10-K.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

     Not applicable.

Item 3.Defaults Upon Senior Securities

     Not applicable.

Item 4.Submissions of Matters to a Vote of Securities Holders

     Not applicable.

Item 5.Other Information

     Not applicable.

Item 6.Exhibits

(a) Exhibits

Exhibit
No.	Description	Method of Filing
3(a)	Limited Partnership Agreement, amended and restated as of December 15, 1993	*
3(b)	Certificate of Limited Partnership	**
10	Form of Leasing Agent Agreement with Cronos Containers Limited	***
31.1	Rule 13a-14 Certification	Filed with this document
31.2	Rule 13a-14 Certification	Filed with this document
32	Section 1350 Certification	Filed with this document
		****

*	Incorporated by reference to Exhibit “A” to the Prospectus of the Partnership dated December 17, 1993, included as part of Registration Statement on Form S-1 (No. 33-69356)
**	Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No. 33-69356)
***	Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No. 33-69356)
****	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.

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SIGNATURES

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

CRONOS GLOBAL INCOME FUND XV, L.P.
By	Cronos Capital Corp.
	The General Partner
By	/s/ Dennis J. Tietz
	Dennis J. Tietz
	President and Director of Cronos Capital Corp. (“CCC”)
	Principal Executive Officer of CCC
By	/s/ John Kallas
	John Kallas
	Chief Financial Officer and
	Director of Cronos Capital Corp. (“CCC”)
	Principal Financial and Accounting Officer of CCC

Date: November 13, 2007

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EXHIBT INDEX

Exhibit
No.	Description	Method of Filing
3(a)	Limited Partnership Agreement, amended and restated as of December 15, 1993	*
3(b)	Certificate of Limited Partnership	**
10	Form of Leasing Agent Agreement with Cronos Containers Limited	***
31.1	Rule 13a-14 Certification	Filed with this document
31.2	Rule 13a-14 Certification	Filed with this document
32	Section 1350 Certification	Filed with this document ****

*	Incorporated by reference to Exhibit “A” to the Prospectus of the Partnership dated December 17, 1993, included as part of Registration Statement on Form S-1 (No. 33-69356)
**	Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (No. 33-69356)
***	Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (No. 33-69356)
****	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.