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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
COMMISSION FILE NUMBER: 0-23886
(Check One):
[X] Form 10-K [ ] Form 20-F [ ] Form 11-K [ ] Form 10-Q [ ] Form N-SAR
For Period Ended: December 31, 1996
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended: ______________________________________
PART I -- REGISTRANT INFORMATION
Cronos Global Income Fund XV, L.P.
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Full Name of Registrant
Former Name if Applicable
444 Market Street, 15th Floor
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Address of Principal Executive Office (Street and Number)
San Francisco, CA 94111
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City, State and Zip Code
PART II -- RULES 12b-25 (b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without reasonable effort or expense;
(b) The subject annual report, semi-annual report, transition report on
[X] Form 10-K, Form 20-F, 11-K, Form N-SAR, or portion thereof, will
be filed on or before the fifteenth calendar day following the
prescribed due date; or the subject quarterly report of transition
report on Form 10-Q, or portion thereof will be filed on or before the
fifth calendar day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
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PART III -- NARRATIVE
As reported in the Registrant's Current Report on Form 8-K, filed February 7,
1997, and Amendment No. 1 to Current Report on Form 8-K, filed February 26,
1997, Arthur Andersen, London, England, resigned as auditors of The Cronos
Group, a Luxembourg Corporation headquartered in Orchard Lea, England (the
"Parent Company"), on February 3, 1997.
The Parent Company is the indirect corporate parent of Cronos Capital Corp.,
the General Partner of the Registrant. In its letter of resignation to the
Parent Company, Arthur Andersen states that it is resigning as auditors of the
Parent Company and all other entities affiliated with the Parent Company.
While its letter of resignation is not addressed to the General Partner of the
Registrant, Arthur Andersen has confirmed to the General Partner that its
resignation as auditors of the entities referred to in its letter of
resignation includes its resignation as auditors of Cronos Capital Corp. and
the Registrant.
The Registrant has yet to retain a new auditor, and as a result, will be unable
to complete its Annual Report on Form 10-K by March 31, 1997, without
unreasonable effort or expense. The Registrant will undertake to file its
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 with the
Commission no later than 15 days after the required filing date.
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
John Kallas 415 677-8990
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under section 13 or 15(d)
of the Securities Exchange Act of 1934 or section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is
no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.
Reference is made to Exhibit I attached hereto.
Cronos Global Income Fund XV, L.P.
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(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: March 26, 1997 By Cronos Capital Corp.
The General Partner
By /s/ John Kallas
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John Kallas
Vice President/Treasurer
Principal Accounting and
Finance Officer
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EXHIBIT I
STATEMENT IN RESPONSE TO PART IV-(3)
A fall in growth of containerized export trade from key Asian markets
contributed to the container leasing market's downward trend during 1996. Also
contributing to the sluggish container leasing market conditions were declining
container prices, favorable interest rates and an abundance of available
capital which resulted in ocean carriers and transport companies purchasing a
larger share of containers for their own account, reducing the demand for
leased containers. Once the demand for leased containers began to fall,
per-diem rental rates were also adversely affected. In order to counter these
market conditions, Cronos Containers Limited (the "Leasing Company")
implemented various marketing strategies during 1996, including but not limited
to, offering incentives to shipping companies, repositioning containers to high
demand locations and focusing towards term leases and other leasing
opportunities, including the leasing of containers for local storage.
As the leasing industry's equipment moved into surplus, ocean carriers and
transport companies became increasingly selective about the age and condition
of containers taken on-hire. Many have adopted a policy of only leasing
containers of a certain age or less. It has been the Registrant's experience
that in periods of weak demand, many lessees insist on equipment three to five
years of age. Such criteria currently serves as a barrier to older equipment
being taken on-hire and did not materially impact the leasing opportunities of
the Registrant's fleet, which averaged three years of age at December 31, 1996,
or its results of operations. 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 rental revenues billed by the Leasing Company
from the leasing of the Registrant's containers and is directly related to the
size, utilization and per-diem rental rates of the Registrant's fleet.
Currently, there are no visible signs of improvement in the container leasing
market, and, hence, further downward pressure on rental rates and utilization
can be expected in 1997. As a result, these leasing market conditions should
restrain the Registrant's results from operations during 1997.
Gross rental revenue, a component of net lease revenue, increased from
$17,861,828 in 1995 to $21,596,882 in 1996, an increase of 17% from the prior
year. During 1996, gross rental revenue was primarily impacted by the
Registrant's increase in fleet size resulting from the investment of the
remaining unexpended offering proceeds. Average dry cargo container per-diem
rental rates declined approximately 6% when compared to the prior year.
However, average refrigerated and tank container per-diem rental rates
increased 5% and 3%, respectively, when compared to the prior year.
The Registrant's fleet size, as measured in twenty-foot equivalent units
("TEU"), and average utilization rates at December 31, 1996 and December 31,
1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Fleet size (measured in twenty-foot
equivalent units (TEU))
Dry cargo containers 46,510 39,157
Refrigerated containers 663 363
Tank containers 229 165
Average utilization
Dry cargo containers 80.6% 83.2%
Refrigerated containers 90.8% 96.9%
Tank containers 87.3% 98.2%
</TABLE>
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The Registrant disposed of 115 twenty-foot, 19 forty-foot and 10 forty-foot
high-cube marine dry cargo containers during 1996, as compared to 54
twenty-foot and 13 forty-foot marine dry cargo containers during 1995. The
decision to repair or dispose of a container is made when it is returned by a
lessee. This decision is influenced by various factors including the age,
condition, suitability for continued leasing, as well as the geographical
location of the container when disposed. These factors also influence the
amount of sales proceeds received and the related gain on container disposals.
As reported in the Registrant's Current Report on Form 8-K and Amendment No.
1 to Current Report on Form 8-K, filed with the Commission on February 7, 1997
and February 26, 1997, respectively, Arthur Andersen, London, England, resigned
as auditors of The Cronos Group, a Luxembourg Corporation headquartered in
Orchard Lea, England (the "Parent Company"), on February 3, 1997.
The Parent Company is the indirect corporate parent of Cronos Capital Corp.,
the General Partner of the Registrant. In its letter of resignation to the
Parent Company, Arthur Andersen states that it resigned as auditors of the
Parent Company and all other entities affiliated with the Parent Company.
While its letter of resignation was not addressed to the General Partner of the
Registrant, Arthur Andersen confirmed to the General Partner that its
resignation as auditors of the entities referred to in its letter of
resignation included its resignation as auditors of Cronos Capital Corp. and
the Registrant.
The Registrant does not, at this time, have sufficient information to
respond to the concerns raised by Arthur Andersen with respect to its 1996
audit of the Parent Company or the impact, if any, these concerns may have on
the future operating results and financial condition of the Registrant or the
Leasing Company's ability to manage the Registrant's fleet in subsequent
periods. However, the General Partner of the Registrant does not believe,
based upon the information currently available to it, that Arthur Andersen's
resignation was triggered by any concern over the accounting policies and
procedures followed by the Registrant.
Arthur Andersen's report on the financial statements of Cronos Capital Corp.
and the Registrant, for either of the past two years, has not contained an
adverse opinion or a disclaimer of opinion, nor was any such report qualified
or modified as to uncertainty, audit scope, or accounting principles.
During the Registrant's two most recent fiscal years and the subsequent
interim period preceding Arthur Andersen's resignation, there have been no
disagreements between Cronos Capital Corp. or the Registrant and Arthur
Andersen on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
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CRONOS GLOBAL INCOME FUND XV, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 (UNAUDITED), 1995 (AUDITED), AND THE
PERIOD FEBRUARY 22, 1994 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1994 (AUDITED)
<TABLE>
<CAPTION>
1996 1995 1994
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<S> <C> <C> <C>
Net lease revenue $14,160,889 $12,596,190 $3,862,148
Other operating expenses:
Depreciation and amortization 7,526,317 5,459,259 1,561,826
Other general and administrative expenses 168,146 93,551 40,532
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7,694,463 5,552,810 1,602,358
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Earnings from operations 6,466,426 7,043,380 2,259,790
Other income (expenses):
Interest income 687,741 217,039 12,728
Net gain on disposal of equipment 108,491 39,967 8,714
Interest expense - (765,750) (409,623)
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796,232 (508,744) (388,181)
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Net earnings $ 7,262,658 $ 6,534,636 $1,871,609
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Allocation of net earnings:
General partner $ 811,254 $ 317,218 $ 72,779
Limited partners 6,451,403 6,217,418 1,798,830
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$ 7,262,657 $ 6,534,636 $1,871,609
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Limited partners' per unit share of net earnings $ 0.90 $ 1.54 $ 1.56
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</TABLE>
