<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _______
Commission file number 0-23886
CRONOS GLOBAL INCOME FUND XV, L.P.
(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.)
444 Market Street, 15th Floor, 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. Yes [X]. No [ ].
<PAGE> 2
CRONOS GLOBAL INCOME FUND XV, L.P.
REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Balance Sheets - June 30, 1999 (unaudited) and December 31, 1998 4
Statements of Operations for the three and six months ended
June 30, 1999 and 1998 (unaudited) 5
Statements of Cash Flows for the six months ended June 30, 1999
and 1998 (unaudited) 6
Notes to Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
PART II- OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 3. Defaults Upon Senior Securities 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Presented herein are the Registrant's balance sheets as of June 30,
1999 and December 31, 1998, statements of operations for the three and
six months ended June 30, 1999 and 1998, and statements of cash flows
for the six months ended June 30, 1999 and 1998.
3
<PAGE> 4
CRONOS GLOBAL INCOME FUND XV, L.P.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents, includes $4,792,087 at June 30, 1999
and $6,212,441 at December 31, 1998 in interest-bearing accounts $ 4,792,187 $ 6,212,541
Net lease receivables due from Leasing Company
(notes 1 and 2) 2,056,631 2,267,032
------------ ------------
Total current assets 6,848,818 8,479,573
------------ ------------
Container rental equipment, at cost 124,080,069 123,593,353
Less accumulated depreciation 31,082,708 27,539,807
------------ -------------
Net container rental equipment 92,997,361 96,053,546
------------ -------------
Organizational costs, net 1,716 35,161
------------ -------------
$ 99,847,895 $ 104,568,280
============ =============
Partners' Capital
Partners' capital (deficit):
General partner $ (22,726) 622
Limited partners 99,870,621 104,567,658
------------ ------------
Total partners' capital 99,847,895 104,568,280
------------ ------------
$ 99,847,895 $104,568,280
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
CRONOS GLOBAL INCOME FUND XV, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- --------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net lease revenue (notes 1 and 3) $2,301,935 $3,353,697 $5,079,801 $ 6,660,401
Other operating expenses:
Depreciation 1,816,010 1,826,067 3,645,857 3,653,079
Other general and administrative expenses 44,032 40,944 89,390 85,616
---------- ---------- ---------- -----------
1,860,042 1,867,011 3,735,247 3,738,695
---------- ---------- ---------- -----------
Earnings from operations 441,893 1,486,686 1,344,554 2,921,706
Other income:
Interest income 57,212 75,954 121,538 143,065
Net gain on disposal of equipment 6,075 37,994 24,098 65,685
---------- ---------- ---------- -----------
63,287 113,948 145,636 208,750
---------- ---------- ---------- -----------
Net earnings $ 505,180 $1,600,634 $1,490,190 $ 3,130,456
========== ========== ========== ===========
Allocation of net earnings:
General partner $ 135,277 $ 155,490 $ 287,181 $ 310,682
Limited partners 369,903 1,445,144 1,203,009 2,819,774
---------- ---------- ---------- -----------
$ 505,180 $1,600,634 $1,490,190 $ 3,130,456
========== ========== ========== ===========
Limited partners' per unit share of net earnings $ 0.05 $ 0.20 $ 0.17 $ 0.39
========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
CRONOS GLOBAL INCOME FUND XV, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------------
June 30, June 30,
1999 1998
--------------- ------------
<S> <C> <C>
Net cash provided by operating activities $ 5,325,492 $ 6,959,646
Cash flows provided by (used in) investing activities:
Proceeds from disposal of equipment 271,166 244,295
Purchase of container rental equipment (768,036) -
Acquisition fees paid to general partner (38,402) -
----------- -----------
Net cash provided by (used in) investing activities (535,272) 244,295
----------- -----------
Cash flows used in financing activities:
Distribution to partners (6,210,574) (6,210,573)
----------- -----------
Net increase (decrease) in cash and cash equivalents (1,420,354) 993,368
Cash and cash equivalents at January 1 6,212,541 4,789,501
----------- -----------
Cash and cash equivalents at June 30 $ 4,792,187 $ 5,782,869
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
CRONOS GLOBAL INCOME FUND XV, L.P.
NOTES TO UNAUDITED 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. Cronos Capital Corp. ("CCC") is the general partner and,
with its affiliate Cronos Containers Limited (the "Leasing Company"),
manages the business of the Partnership. The Partnership shall
continue until December 31, 2012, unless sooner terminated upon the
occurrence of certain events.
The Partnership commenced operations on February 22, 1994, when the
minimum subscription proceeds of $2,000,000 were received from over
100 subscribers (excluding from such count Pennsylvania residents, the
general partner, and all affiliates of the general partner). The
Partnership offered 7,500,000 units of limited partnership interest at
$20 per unit or $150,000,000. The offering terminated on December 15,
1995, at which time 7,151,569 limited partnership units had been
purchased.
As of June 30, 1999, the Partnership owned and operated 26,002
twenty-foot, 8,653 forty-foot and 1,813 forty-foot high-cube marine
dry cargo containers, as well as 458 twenty-foot and 99 forty-foot
marine refrigerated cargo containers and 225 twenty-four
thousand-liter tanks.
(b) Leasing Company and Leasing Agent Agreement
The Partnership has entered into a Leasing Agent Agreement whereby the
Leasing Company has the responsibility to manage the leasing
operations of all equipment owned by the Partnership. Pursuant to the
Agreement, the Leasing Company is responsible for leasing, managing
and re-leasing the Partnership's containers to ocean carriers and has
full discretion over which ocean carriers and suppliers of goods and
services it may deal with. The Leasing Agent Agreement permits the
Leasing Company to use the containers owned by the Partnership,
together with other containers owned or managed by the Leasing Company
and its affiliates, as part of a single fleet operated without regard
to ownership. Since the Leasing Agent Agreement meets the definition
of an operating lease in Statement of Financial Accounting Standards
(SFAS) No. 13, it is accounted for as a lease under which the
Partnership is lessor and the Leasing Company is lessee.
The Leasing Agent Agreement generally provides that the Leasing
Company will make payments to the Partnership based upon rentals
collected from ocean carriers after deducting direct operating
expenses and management fees to CCC and the Leasing Company. The
Leasing Company leases containers to ocean carriers, generally under
operating leases which are either master leases or term leases (mostly
two 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; 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.
(Continued)
7
<PAGE> 8
CRONOS GLOBAL INCOME FUND XV, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(c) Basis of Accounting
The 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.
(d) Financial Statement Presentation
These financial statements have been prepared without audit. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
procedures have been omitted. It is suggested that these financial
statements be read in conjunction with the financial statements and
accompanying notes in the Partnership's latest annual report on Form
10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles (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 interim financial statements presented herewith reflect all
adjustments of a normal recurring nature which are, in the opinion of
management, necessary to a fair statement of the financial condition
and results of operations for the interim period presented.
(2) Net Lease Receivables Due from Leasing Company
Net lease receivables due from the Leasing Company are determined by
deducting direct operating payables and accrued expenses, base management
fees payable, and reimbursed administrative expenses payable to CCC and its
affiliates from the rental billings payable by the Leasing Company to the
Partnership under operating leases to ocean carriers for the containers
owned by the Partnership. Net lease receivables at June 30, 1999 and
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- ------------
<S> <C> <C>
Lease receivables, net of doubtful accounts of $917,843
at June 30, 1999 and $812,601 at December 31, 1998 $3,641,448 $ 4,152,599
Less:
Direct operating payables and accrued expenses 971,717 1,125,832
Damage protection reserve 254,544 352,089
Base management fees 286,948 326,781
Reimbursed administrative expenses 71,608 80,865
---------- -----------
$2,056,631 $ 2,267,032
========== ===========
</TABLE>
(Continued)
8
<PAGE> 9
CRONOS GLOBAL INCOME FUND XV, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(3) Net Lease Revenue
Net lease revenue is determined by deducting direct operating expenses,
base management fees and reimbursed administrative expenses to CCC and its
affiliates from the rental revenue billed by the Leasing Company under
operating leases to ocean carriers for the containers owned by the
Partnership. Net lease revenue for the three and six-month periods ended
June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ------------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Rental revenue (note 4) $4,040,346 $ 5,031,476 $8,475,729 $ 10,073,615
Less:
Rental equipment operating expenses 1,229,830 1,087,909 2,350,523 2,139,729
Base management fees 273,582 342,617 578,735 690,466
Reimbursed administrative expenses 234,999 247,253 466,670 583,019
---------- ------------ ---------- ------------
$2,301,935 $ 3,353,697 $5,079,801 $ 6,660,401
========== ============ ========== ============
</TABLE>
(4) Operating Segment
The Financial Accounting Standards Board has issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information,"
which changes the way public business enterprises report financial and
descriptive information about reportable operating 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. Management operates the Partnership's container fleet as a
homogenous unit and has determined, after considering the requirements of
SFAS No. 131, that as such it has a single reportable operating segment.
The Partnership derives its revenues from owning and leasing marine cargo
containers. As of June 30, 1999, the Partnership operated 26,002
twenty-foot, 8,653 forty-foot and 1,813 forty-foot high-cube marine dry
cargo containers, as well as 458 twenty-foot and 99 forty-foot marine
refrigerated cargo containers and 225 twenty four thousand-liter tanks. A
summary of gross lease revenue, by product, for the three and six-month
periods ended June 30, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ------------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Dry cargo containers $3,360,415 $4,279,612 $7,065,614 $ 8,619,166
Refrigerated containers 506,339 491,950 1,034,271 969,257
Tank containers 173,592 259,914 375,844 485,192
---------- ---------- ---------- -----------
Total $4,040,346 $5,031,476 $8,475,729 $10,073,615
========== ========== ========== ===========
</TABLE>
(Continued)
9
<PAGE> 10
CRONOS GLOBAL INCOME FUND XV, L.P.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(4) Operating Segment - (continued)
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, it is impracticable to provide the geographic area information
required by SFAS No. 131. 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.
10
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
It is suggested that the following discussion be read in conjunction with
the Registrant's most recent annual report on Form 10-K.
1) Material changes in financial condition between June 30, 1999 and
December 31, 1998.
At June 30, 1999, the Registrant had $4,792,187 in cash and cash
equivalents, a decrease of $1,420,354 from the December 31, 1998 cash
balances. During the first six months of 1999, the Registrant expended
$806,438 of cash generated from equipment sales to purchase additional
containers. At June 30, 1999, the Registrant had approximately $273,000 in
cash generated from equipment sales reserved as part of its cash balances.
Throughout the remainder of 1999, the Registrant expects to continue using
cash generated from equipment sales to purchase and replace containers
which have been lost or damaged beyond repair.
The Registrant's cash distribution from operations for the second quarter
of 1999 was 8.25% (annualized) of the limited partners' original capital
contributions, unchanged from the first quarter of 1999. These
distributions are directly related to the Registrant's results from
operations and may fluctuate accordingly.
The sentiment with respect to the container industry's slump over the past
two years has turned more favorable in recent months as evidence suggests a
turnaround is underway with respect to Asia's economic crisis. In recent
months, economic reforms in Asia, as well as in Latin America, have begun
to produce gradual improvement in terms of world trade, and there are
preliminary indications that containerized trade volumes from North America
and Europe to Asia, in particular, may be stabilizing. In addition,
intra-Asian trade, which also has stagnated since the Asia financial crisis
began nearly two years ago, has shown increased activity in recent months.
These favorable signs, however, have yet to produce any significant
positive impact on the Registrant's operating performance. In spite of the
reduced redelivery of on-hire equipment by the ocean carriers, per-diem
rental rates, which declined sharply over the past two years, have
continued to soften as a result of competitive market conditions, decreased
demand and high inventories.
The Registrant continues to take advantage of its strong marketing
resources in order to seek out leasing opportunities during this period in
which seasonal factors are also influencing the increased demand. At the
same time, it has identified specific strategies intended to strengthen
on-hire volumes and enhance utilization of the container fleet. The
short-term objective is to improve utilization by offering greater leasing
incentives and actively moving surplus, off-hire equipment to higher-demand
locations. While this short-term strategy will increase repositioning
expenses, it may also minimize those expenses related to handling and
storing off-hire containers. These measures will also provide the
longer-term advantage of placing the containers where the demand is
greatest.
2) Material changes in the results of operations between the three and
six-month periods ended June 30, 1999 and 1998.
Net lease revenue for the three and six-month periods ended June 30, 1999
was $2,301,935 and $5,079,801, respectively, a decrease of 31% and 24%,
respectively, from the same periods in the prior year. Gross rental revenue
(a component of net lease revenue) for the three and six-month periods
ended June 30, 1999 was $4,040,346 and $8,475,729, respectively, reflecting
a decline of 20% and 16%, respectively, from the same periods in the prior
year. Gross lease revenue was primarily impacted by lower per-diem rental
rates. Dry cargo container average per-diem rental rates for the three and
six-month periods ended June 30, 1999 declined 7% and 6%, respectively,
when compared to the same periods in the prior year. Refrigerated container
average per-diem rental rates for the three and six-month periods ended
June 30, 1999 declined 12% and 7%, respectively, when compared to the same
three and six-month periods in the prior year. Tank container average
per-diem rental rates for the three and six-month periods ended June 30,
1999 declined 7% and 5%, respectively, when compared to the same periods in
the prior year.
11
<PAGE> 12
The Registrant's average fleet size and utilization rates for the three and
six-month periods ended June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Average fleet size (measured in twenty-foot
equivalent units (TEU))
Dry cargo containers 46,957 46,621 46,761 46,656
Refrigerated containers 659 663 659 663
Tank containers 226 227 226 227
Average Utilization
Dry cargo containers 70% 81% 70% 81%
Refrigerated containers 91% 92% 93% 89%
Tank containers 71% 90% 73% 89%
</TABLE>
Rental equipment operating expenses were 30% and 28%, respectively, of the
Registrant's gross lease revenue during the three and six-month periods
ended June 30, 1999, as compared to 22% and 21%, respectively, of the
Registrant's gross lease revenue during the three and six-month periods
ended June 30, 1998. This increase was largely attributable to an increase
in costs associated with lower utilization, including handling, storage and
repositioning.
The Registrant disposed of 44 twenty-foot, nine forty-foot and two
forty-foot high-cube marine dry cargo as well as four twenty four-thousand
liter tank containers during the second quarter of 1999, as compared to 23
twenty-foot and 11 forty-foot marine dry cargo containers during the second
quarter of 1998. 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.
Year 2000
The Registrant relies upon the financial and operational systems provided
by the Leasing Company and its affiliates, as well as the systems provided
by other independent third parties to service the three primary areas of
its business: investor processing/maintenance; container leasing/asset
tracking; and accounting finance. The Leasing Company's computer systems
have undergone modifications in order to render the systems ready for the
Year 2000. The Leasing Company has completed a detailed inventory of all
software and hardware systems and has identified all components that need
to be modified. The Leasing Company has completed all the necessary changes
and testing in a dedicated Year 2000 environment. The Leasing Company
anticipates that all compliant code will be live by the end of August 1999.
The Leasing Company has contacted all of its critical business suppliers
and has been advised that their systems are Year 2000 compliant. The
Leasing Company has also confirmed the compliance of its suppliers'
products through its own extensive testing. Expenses associated with
addressing Year 2000 issues are being recognized as incurred. Management
has not yet assessed the Year 2000 compliance expense but does not
anticipate the costs incurred to date or to be incurred in the future by
the Leasing Company and its affiliates to be in excess of $500,000. None of
the costs incurred with respect to Year 2000 compliance will be borne by
the Registrant. The Leasing Company believes it will be able to resolve any
major Year 2000 issues. The Leasing Company is aware of the implications of
a Year 2000 computer system failure and is currently in the process of
developing its contingency plans. While management believes the possibility
of a Year 2000 system failure to be remote, if the Leasing Company's
internal systems or those of its critical business suppliers fail, the
Leasing Company's consolidated financial position, liquidity or results of
operations may be adversely affected.
12
<PAGE> 13
Cautionary Statement
This Quarterly Report on Form 10-Q contains statements relating to future
results of the Registrant, including certain projections and business
trends, that are "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those projected as a result of certain risks and
uncertainties, including but not limited to changes in: economic
conditions; trade policies; demand for and market acceptance of leased
marine cargo containers; competitive utilization and per-diem rental rate
pressures; as well as other risks and uncertainties, including but not
limited to those described in the above discussion of the marine container
leasing business under Item 2., Management's Discussion and Analysis of
Financial Condition and Results of Operations; and those detailed from time
to time in the filings of Registrant with the Securities and Exchange
Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As the Registrant has previously reported, in February 1997, its
former outside auditors, Arthur Andersen LLP ("Arthur Andersen"),
resigned as auditors to The Cronos Group (the "Parent Company"), its
subsidiaries, and all other entities affiliated with the Parent
Company, including the Registrant. The Parent Company is the indirect
corporate parent of CCC, the managing general partner of the
Registrant. CCC 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 reports on the financial statements of CCC and the
Registrant, for years preceding 1996, had not contained an adverse
opinion or a disclaimer of opinion, nor were any such reports
qualified or modified as to uncertainty, audit scope, or accounting
principles.
During the Registrant's fiscal year ended December 31, 1995, and the
subsequent interim period preceding Arthur Andersen's resignation,
there were no disagreements between CCC or the Registrant and Arthur
Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
In connection with its resignation, Arthur Andersen prepared a report
pursuant to Section 10A of the Securities Exchange Act of 1934, as
amended, for filing by the Parent Company with the Securities and
Exchange Commission ("SEC"). As a result of the Arthur Andersen
report, the SEC commenced an investigation of the Parent Company on
February 10, 1997. The purpose of the investigation has been to
determine whether the Parent Company and persons associated with the
Parent Company violated the federal securities laws administered by
the SEC. The Registrant does not believe that the focus of the SEC's
investigation is upon the Registrant or CCC.
Current management of the Parent Company has been in discussions with
the staff of the SEC with a view to settling the investigation. The
Parent Company is hopeful of reaching a settlement of the
investigation by the end of 1999.
Item 3. Defaults Upon Senior Securities
See Item 5. Other Information.
Item 5. Other Information
In 1993, the Parent Company negotiated a credit facility with several
banks for the use by the Parent Company and its subsidiaries,
including CCC. At December 31, 1998, approximately $33,110,000 in
principal indebtedness was outstanding under that credit facility
(none of which had been borrowed by the Registrant). As a party to
that credit facility, CCC was jointly and severally liable for the
repayment of all principal and interest owed under the credit
facility. On August 2, 1999, all outstanding amounts under the credit
facility were repaid through the establishment of a new credit
facility with two financial institutions. CCC is not a party to the
new loan agreement. The Parent Company has guaranteed up to $10
million of amounts borrowed under the new credit facility and, as
partial security for this guarantee, the Parent Company has pledged
all of the capital stock held by it in Cronos Holding/Investments
(U.S.), Inc., a Delaware corporation that, in turn, owns all of the
outstanding capital stock of CCC.
The Registrant is not a borrower under the new credit facility
established by the Parent Company, and neither the containers nor the
other assets of the Registrant have been pledged as collateral under
the new credit facility.
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------- --------------------------------------------------------------- ------------------------
<S> <C> <C>
3(a) Limited Partnership Agreement of the Registrant, amended *
and restated as of December 15, 1993
3(b) Certificate of Limited Partnership of the Registrant **
10 Form of Leasing Agent Agreement with Cronos Containers ***
Limited
27 Financial Data Schedule Filed with this document
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended June 30, 1999.
- ----------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant 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)
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
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
Date: August 16, 1999
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
------- --------------------------------------------------------------- ------------------------
<S> <C> <C>
3(a) Limited Partnership Agreement of the Registrant, amended *
and restated as of December 15, 1993
3(b) Certificate of Limited Partnership of the Registrant **
10 Form of Leasing Agent Agreement with Cronos Containers ***
Limited
27 Financial Data Schedule Filed with this document
</TABLE>
- ----------------
* Incorporated by reference to Exhibit "A" to the Prospectus of the
Registrant 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)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT JUNE 30, 1999 (UNAUDITED) AND THE STATEMENT OF OPERATIONS FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED AS PART OF ITS
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,792,187
<SECURITIES> 0
<RECEIVABLES> 2,056,631
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,848,818
<PP&E> 124,080,069
<DEPRECIATION> 31,082,708
<TOTAL-ASSETS> 99,847,895
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 99,847,895
<TOTAL-LIABILITY-AND-EQUITY> 99,847,895
<SALES> 0
<TOTAL-REVENUES> 5,079,801
<CGS> 0
<TOTAL-COSTS> 3,735,247
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,490,190
<EPS-BASIC> 0
<EPS-DILUTED> 0
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